Martin Wolf: Two faces of liberal democracy

By Martin Wolf

Published: July 20 2004 20:23 | Last Updated: July 20 2004 20:23

.l { visibility: hidden; display: block; } The most important fact about our world is the inequality of states. By this I do not mean the vast differences in size between, say, a Finland and a United States, but the gulf in effectiveness between both and a Nigeria or a Pakistan. 　 var html = getInAdHTML("box",FTSite,FTSection,FTPage,FTIndustry); document　.write　(html); 　 This was the starting point for the Hayek lecture, which I gave to the London-based Institute of Economic Affairs last week. That lecture in turn built on a central theme of my recent book Why Globalization Works (Yale University Press). Many of the world's states are, I argued, incapable of providing the requirements of a civilised existence, let alone of a dynamic market economy. States provide the institutions upon which complex market economies depend. They also decide the policies that determine how well private agents are able to identify and exploit economic opportunities. When states do a good job, prosperity soars. When they do a bad job or disappear altogether they create black holes; places from which little else but desperate people, a few natural resources and capital flight emerge. Today's successful states have benefited from a virtuous upward spiral of prosperity. Meanwhile, many societies seem stuck in a vicious spiral. Low standards of living mean limited ability to provide the necessary public goods. Education is inadequate and ill-health rife. Ambitious people then too often view politics as the way to extract the wealth unavailable in normal economic activity. This is the route to the historically common "plunder state". What are the chances these vicious spirals can be turned around? Examination of the history of the west suggests there were three elements in the birth of good states: competition, consent and morality. Competition among states works by imposing heavy penalties on any government that tyrannises over its subjects. In the European middle ages, for example, rulers gave charters of rights to cities to encourage the development of commerce, aware that communities of merchants might otherwise move to the realms of rivals. Consent works through representative institutions and the rule of law. Both bind the actions of the sovereign in the interests of the governed. Today's evolved form is constitutional democracy. Any democracy that survives must be constitutional. Otherwise, one has post-colonial democracy: "one man, one vote, once". Finally, moral reform works by defining the boundaries between the activities of the market and the state or as Jane Jacobs, the Canadian author, has described it, between the "commercial" and the "guardian" syndromes. At its heart is the distinction between business people, who may sell their wares to the highest bidder but not use force, and judges, soldiers, policemen and politicians, who may not sell to the highest bidder but may use force. Fortunately, these three forces are at work in today's world. It is because of regulatory competition, broadly defined, that the Soviet Union collapsed and Deng Xiaoping decided to turn China into a vast Hong Kong. Democracy is also on the march: in the last two decades of the 20th century, 81 countries moved in the direction of representative political institutions. Finally, efforts to improve the quality of administrative and of judicial institutions are being undertaken, with varying degrees of success, everywhere. Above all the contemporary advanced democracies exist and correspondingly exert a powerful, if often detested, influence. Yet while many countries are now making good progress, notably in east Asia, others, notably in sub-Saharan Africa, are not. The world is full of failing and predatory states (with the latter often ending up as the former). Even when that is not the case, well-intentioned states often find it difficult to make credible commitments to good policies that in turn will encourage the entrepreneurship and attract the inward investment upon which a virtuous circle of development can successfully build. The second of these is the easier challenge to solve. It is hard for Lilliputian subjects to bind their sovereign, who is to them a giant Gulliver. This is why multilateral treaties among states and international jurisdictional integration can be so valuable. Gulliver can bind himself through agreements not with Lilliputians, but with other Gullivers. If states were credibly and predictably beneficent, there would be little need for such agreements, except to provide international public goods. But states, alas, are not. They are short-sighted and prone to capture by self-seeking domestic interest groups. That is why reciprocal bargaining on trade liberalisation has proved so valuable to today's advanced countries. It is also why it is in the self-interest of developing countries to participate in such negotiations as a way of binding themselves in the interests of their own people. Such integration has also been the most beneficial outcome of the European Union, with its mandated freedom of movement for labour, capital, goods and services. Yet jurisdictional integration only works between functioning and reasonably well-intentioned states. This leaves open the harder question of what to do for states that are barely functioning or are in the grips of murderous, incompetent or murderously incompetent tyrannies. Aid, the evidence suggests, works well only in countries with tolerable policies and institutions. It can push countries along the upward spiral, but not put them upon it. In some cases outside intervention will be needed, either to remove tyrants or re-establish a minimum of order. This increasingly recognised need has created a nostalgia for empire. But traditional empires are unworkable - and unnecessary - in present conditions. What is needed instead is for the wealthy countries to act through the multilateral institutions, particularly the United Nations, thereby gaining the legitimacy they need both on the ground and with one another. The market and the state are two sides of one coin. Classical liberals underestimate the importance of the latter, just as dirigistes underestimate the importance of the former. It is through the balance they have struck between markets and the state that advanced liberal democracies have triumphed. Today, however, states are dysfunctional in too much of the world we live in. Where they fail, so do markets. Rectifying this is the greatest challenge we now confront.

By Hans-Werner Sinn

Published: July 12 2004 18:45 | Last Updated: July 12 2004 18:45

.l { visibility: hidden; display: block; } There will be more migration in Europe, but it will be "bad" migration as well as "good". 　 var html = getInAdHTML("box",FTSite,FTSection,FTPage,FTIndustry); document　.write　(html); 　 "Good" migration is driven by wage and productivity differences. "Bad" migration is driven by the generosity of the welfare state. Germany's new immigration law, adopted last week, makes it easier for highly skilled people from outside the European Union to immigrate. They would earn above average income and would not be a burden on the state. That is good migration. But the new draft EU constitutional treaty and the new EU directive on freedom of movement, which took effect on April 29 and will have to be implemented into national law within two years, could open the gates for the "bad" kind - welfare migration. Until now, there have been only two significant types of welfare migration in Europe. First, immigrant workers have participated in the host country's redistribution of wealth from rich to poor. As low earners, their taxes and social security contributions have not covered the cost of the public transfers and the infrastructure from which they have benefited. Second, foreign workers have migrated indirectly into the welfare system by crowding out native-born workers, pushing them into unemployment. By providing unemployment benefits and welfare, EU states have fixed wages for simple labour above the market clearing level. That has stimulated excessive migration and prevented the decline of wages that would have created new jobs for the migrants. Native-born workers have preferred to sit in the chair the welfare state offered them instead of entering low-wage competition. The directive on free movement will make a third type of welfare migration possible: the immigration of inactive people. Every EU citizen will have the right to a residence permit for up to five years in any member state. After that, he or she will receive the right to permanent residence, with full social protection. Although there are safeguards against welfare abuse in the first five years - migrants must prove they have health insurance and the necessary "resources" - there are none against claims after that period. At that point, migrants will have the right to permanent residence - and full welfare benefits - even if they have no health insurance or resources. The country of residence will even make benefits available before the five years end if the immigrant falls on hard times for reasons out of his or her control. The directive makes clear needy people must not be expelled simply because they require welfare and welfare recipients should not be expelled unless they become an unreasonable burden on the state. The extension of these rights has coincided with the accession of the east European countries to the EU, which is itself likely to affect migration flows. Today, the wage rate in these accession countries is one-seventh of the west German rate and between one-quarter and one-third of west German social assistance for a family of four - now ?1,550 ($1,924) per month. This gap will not narrow quickly. As a result, some countries, such as Germany and Austria, have opted to prohibit labour migration during a transition period that is initially set at two years but may be extended up to 2010. However, this ban does not apply to inactive people. Germany, which in the past has absorbed two-thirds of all east Europeans entering the EU, is likely to become the primary destination for the additional welfare migrants enabled by the new directive. The resulting situation is grotesque: immigration of working people is made more difficult in Germany and Austria, while immigration of inactive people is made easier - two more reasons for western companies to relocate to eastern Europe or elsewhere. The likely consequence of immigration via these three channels is that the welfare systems of west European countries will be eroded. Benefits will be cut because none of these countries wants to become a destination for welfare migrants. This outcome could still be averted if EU member states adopt a "workfare" system - where, except for the disabled, welfare is redirected to those who work - and another constitution is agreed. This new constitution would limit the right to immigrate into the welfare system. It would allow workers to receive tax-financed benefits only after a delay, and oblige inactive migrants to receive welfare benefits from their home countries in perpetuity. The problem is that such an overhaul of the EU constitution is now possible only if the treaty is rejected by one or more countries. The writer is professor of economics and public finance at Munich University and president of the Ifo Institute for Economic Research

By Mervyn Davies
Published: July 4 2004 20:55 | Last Updated: July 4 2004 20:55


There was much excitement in May when Thaksin Shinawatra, the billionaire Thai prime minister, announced his intention of taking a 30 per cent share in Liverpool Football Club. It was the kind of global Asian business deal that would have seemed outlandish just a few years ago. But now westerners are realising just how big Asia's corporate ambitions are.

Ten years ago, no one would have imagined that Hutchison Whampoa of Hong Kong would be selling mobile phones or beauty products to British teenagers. Five years ago, the idea that a British bookmaker would be advertising in Chinese at UK football grounds to reach Chinese fans watching by satellite would have seemed bizarre. But those things have happened. The moment when Asian companies will become truly global forces is closer than many think.

Asia's companies are already big and growing rapidly. Yue Yuen, for example, started in 1988 in China's Pearl River delta region; now it is the world's largest branded footwear manufacturer. Such is the dependence of the global supply chain on southern China that, if there were a major earthquake tomorrow in that region, within a month many American stores would have little or nothing to sell.

Companies such as China's Legend and Samsung of South Korea have used the classic model of building up capital by exploiting their huge domestic and regional markets.

Big Asian companies are also leapfrogging ahead by using technology. Infosys and TCS, for example, have expanded their information technology business from India and east Asia into Europe and the Americas. The companies are also acquiring and developing global brands. Singapore Airlines is now marketing aggressively to the west. Esprit is a leading brand for young adults in Europe and America, but has its headquarters in Hong Kong. The next step is for Asian companies to accelerate the move from selling products to the west to buying assets there.

So how will big Asian companies go truly global? First, they need to assess what distinguishes their approach from that of western competitors, and how they can turn it to their advantage globally. What is their sustainable competitive advantage? And what can they learn from Europe and America?

They may well follow the Japanese model: building on a large domestic market, then turning a market advantage based on price to one based on quality, reliability and technological prowess, before finally taking on American corporate icons in their own backyard. The challenges today are different. But a lot of the fundamental strategic issues are similar.

Growth in Asian companies is a product of economic growth in their home markets. The pace is fast; gross domestic product in developing Asian economies is expected to grow by more than 7 per cent this year. Most economies in the region have typically relied on exports to lead growth, but governments and banks are working together to stimulate consumer demand.

Companies also need a domestic culture that enables entrepreneurs to flourish. Most Asian countries still have only part of the mix. Malaysia has the technological infrastructure but lacks the depth of competition. India has the brainpower but could strengthen the regulatory framework.

Finally, Asia still has to develop, rather than just acquire, global brands. This is partly a question of just how "Asian" Asian companies want their image to be. Do they confront western prejudices and turn them to their advantage, as the Japanese did? Or do they expand while not really letting western consumers know what they are doing, like Hutchison, or the Dickson group of companies, which bought London's Harvey Nichols?

It is hard to imagine a global Chinese brand of athletic shoes or beer. But, in the 1970s, nobody imagined Japanese brands would dominate consumer electronics - let alone stand for quality and be cool.

All these developments are going to demand profound adjustments in both east and west. For Asia, they will mean adopting international standards on transparency and governance. For the west, the adaptation could be more psychologically challenging. How will people react when big British or American companies face takeovers by Asian competitors? We will have to accept that globalisation really does mean globalisation and does not apply just to western companies.

Perceptions do change, as they did towards Japanese products. The challenge for Asia's companies is to accelerate that shift and exploit it. European and American companies should not run from the change in the business order. Economic growth and changing regulatory environments - the very conditions fuelling the expansion of Asian companies - are providing huge opportunities for western companies bold enough to grasp them.

The writer is group chief executive of Standard Chartered plc

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아시아 기업들은 강력한 내수경기 활성화와 수출주도형 경제모형 전략으로 매년 괄목할만한 성장을 거듭하고 있다. 최근에는 수출뿐만이 아니라 서구의 기업, 자산 및 브랜드를 공격적으로 사들이기 시작했다. 이것은 무엇을 뜻하는가?

세계화는 서구에 의해서 시작되었지만, 서구만의 세계화가 아니라 아시아에도 동일하게 적용될 수 있다. 즉 동서양의 대결 구도가 아닌 강자만이 살아남는 무한경쟁이 바로 현재의 세계화인 것이다.

- 현석 생각

By Edward Alden
Published: July 1 2004 21:14 | Last Updated: July 1 2004 21:14

 
The International Consumer Electronics show held each year in Las Vegas is the biggest event of its kind, attracting more than 130,000 visitors who come to see and buy the latest in flat screens, hand-held personal computers and CD players. Nearly 20,000 of those arrive from abroad, representing a big potential market for US electronics companies.

But this year, more than one in five of the potential overseas customers did not make it because they could not get a visa to travel to the US, according to a study by the US Consumer Electronics Association. Almost 60 per cent of the international visitors who required visas said they faced difficulties.

Gary Shapiro, president of the association, says the cost of such lost opportunities is enormous. "This occurs even if they have been repeat business visitors to the US who have not violated our immigration policies or laws," he says. "The result is lost business opportunities for tens of thousands of entrepreneurial American companies."

Electronics companies are not alone in their complaints. At the China Textile and Apparel trade show in New York two weeks ago, a third of the booths were empty. Chinese officials said that nearly half the 420 Chinese executives who applied for visas to show their products at the event were turned down. Before 2001, more than 80 per cent of visa applicants for the same event were approved.

"A lot of these people went for their consulate interviews and they were rejected with no explanations whatsoever," says Richard Gould of Specialty Trade Shows, who co-organised the event with Chinese textile organisations. "It's really an enigma to us."
 

Visa restrictions designed to stop terrorists entering the US nearly claimed an unlikely victim last year: Ahn Shi-hyun, one of South Korea's most promising young women golfers. Read
   

Nearly three years after the September 11 attacks, US companies are complaining that the cost of border measures aimed at keeping terrorists out of the country is becoming unacceptably high. A coalition of US business groups has released a survey estimating that US manufacturing companies have lost as much as $30bn over the past two years as a result of visa delays that have kept foreign buyers out of the US and prevented companies from moving employees efficiently. That follows similar complaints from universities, hospitals and the US tourist industry, all of which say they have been badly hurt by new security procedures.

"The changes since September 11 have had a huge impact on our clients," says Elizabeth Stern, who heads the business immigration group at Shaw Pittman, a law firm in Washington. "There has always been a tension between business needs and security policies. But that has now become a very significant gap."

Few deny the importance of better border controls. None of the September 11 hijackers who came to the US had properly filled out a visa application, at least 13 were never interviewed by US consular officers, and three had remained in the country long after their visas had expired.

The report last month of the bipartisan commission investigating the plot revealed how critical border considerations had been in al-Qaeda's planning. The plot's earliest leaders - Khalid al Mihdhar and Nawaf al Hazmi - were named because they already possessed US visas. Most of the hijackers were Saudi citizens because it was easier for them to get US visas.

But the costs of securing the border have also been immense. At a conference organised in June by the US commerce department, foreign business travellers complained bitterly about what they say is the increasingly unfriendly face that the US presents to those who want to travel there. Many say they are inclined to do business elsewhere if they have the choice. "This has put US companies at a tremendous disadvantage compared to foreign companies," says Lynn Shotwell, legal counsel for the American Council on International Personnel.

US government officials acknowledge that many problems emerged after September 11 as Washington tried to plug the holes in the border. Stung by the revelations over the lax treatment of visa applications for some of the hijackers, the State Department ordered mandatory background checks on more than 200,000 potential travellers annually to the US, and began requiring personal interviews at embassies for all visa applicants. The new requirements affected not only travellers from Arab and Muslim countries, but also Chinese, Indians, Russians and others who were studying or doing business in a wide range of fields deemed sensitive to national security, such as aerospace, chemicals, biotechnology and advanced computers.

The result was enormous delays that left some would-be visitors waiting months for their applications to be decided. Visa applications to the US dropped precipitously as stories spread worldwide of how hard it had become to get permission to visit the US. "Basically the whole system broke down," admits Janice Jacobs, deputy assistant secretary of state for consular affairs.

The complaints have been wide-ranging. Boeing, the aircraft maker, has faced numerous hurdles getting visas for foreign pilots to train on its aircraft before they are delivered to overseas companies. US machine tool makers have lost sales because Chinese buyers are not allowed into the US to inspect the products. Amway, the US direct marketing group, moved its 2004 convention from Los Angeles to Japan because of the difficulty of securing visas for the 8,000 Korean participants (see below). The loss to the US economy from this was $18m.

Larger companies have made significant adjustments to accommodate the delays and difficulties in obtaining visas for employees and customers. "We've gotten much better at planning ahead because we have to," says Michael Rosenfeld, executive counsel for Walt Disney. He says that the company has on several occasions run into problems, even in the case of high-profile actors. "Whether you're a movie star or a computer programmer, they're running everyone through the same security checks," adds Mr Rosenfeld.

Nearly three-quarters of the companies sampled in the business groups' survey had experienced problems processing business visas, while 60 per cent said they had suffered some material costs due to the delays. A slim majority of the companies surveyed said the problems were worse now than a year ago.

US officials say that perception belies the improvements they have made. Average waiting times for visa applicants have fallen from 67 days in 2002 to 30 days or less in 2004 as the government has increased resources to clear the backlog. Overall visa applications were up 12.6 per cent in the first five months of this year and business and tourist visas were up 23 per cent.

But the efforts to cut back on delays are intended largely as stop-gap measures. Washington is hoping that technology will allow it to find the still elusive balance between security and openness. The long-term plan is to move from an archaic system that relied on occasional face-to-face interviews or random background checks to the creation of a "virtual border" that will use advanced information technologies to identify risks with more precision and thoroughness.

"We are about halfway through the revolutionary changes that are possible in determining how a traveller is admitted to our country," says Stewart Verdery, assistant secretary for policy and planning in the Department of Homeland Security, who has overall responsibility for border controls.

The first elements of that new system, known as US-Visit, are already in place. Since January, all visa-holders arriving at US airports have had their photographs and fingerprints taken before entering the country. The information is checked against both terrorist and criminal watch lists. The initial efforts have been surprisingly successful, and have not resulted in significant delays. US officials say that the additional time needed for each individual is about 15 seconds.

From September, all travellers from Europe, Japan and other countries where visas are not required will also have to give fingerprints and photographs. By the end of this year, the US wants to have in place similar checks at the 50 busiest land borders.

By the end of 2005, the goal is to create a comprehensive system of exit controls as well, so that the US will not only know when visitors arrive, but whether they have left in the time authorised by their visas. In addition, the US is pressing other countries to adopt biometric passports - passports with the holder's fingerprint encoded in the document as a way to prevent fraudulent use. Over time, Washington wants to build up profiles of foreign travellers that will allow authorities to perform more sophisticated risk assessments and make decisions more rapidly about who should be allowed in and who should be turned away.

Mr Verdery says that, as the new systems are put into place, many of the time-consuming background checks can be phased out. The US-Visit scheme has also allowed the US to end a controversial temporary programme that required fingerprints only of visitors from Muslim countries. He says improvements in biometric identification, the consolidation of US terrorist watch lists and the sharing of data within the US government and with foreign governments "are making it much more likely we're going to be able to identify a terrorist or a criminal, and as these develop the need for more omnibus policies should subside". He says: "We're trying to go to a more individualised view, and it's the biometrics that will allow us to do that."

Homeland security officials say that the goal of the new technologies is not to find the balance between security and openness but to make the choice obsolete. "It's not about achieving a balance. It's about accomplishing both of those goals at the same time," says Jim Williams, director of US-Visit. He argues that the improvements in technology will make the country more secure while reducing the likelihood of targeting innocent people. "Good people are hurt when we do not share information," he says, citing the recent case of a high-ranking Mexican car industry executive who had his visa confiscated by US border officials when his name, a common one, matched against US watch lists. If the US had a comprehensive biometric database, he says, "this would not have happened".

Even critics of the new US border control measures agree that technological solutions are likely to be the only way to enhance security without causing severe economic disruption. But there are fears that the costs could increase further before Washington gets the new system right.

The system has yet to operate during the busy summer travel season, yet by December is to be extended to the land borders, which handle 80 per cent of travellers to the US. The technology also remains unproven on the scale in which Washington hopes to deploy it. The homeland security department awarded a contract - worth up to $10bn - to a team led by Accenture to help design, implement and support the final system. "This is an open-ended, ill-defined government contract that is huge in size," says David Garrity, director of research for Caris and Company.

Business leaders along the huge US-Mexico border argue that the system will be unworkable on that scale and could cripple cross-border business. Gerry Schwebel, vice-president of the International Bank of Commerce in Laredo, Texas, says that about 700,000 vehicles cross into the US each month at the port of Laredo, and that even a 15-second delay in processing each entry could result in massive backlogs.

He has not been persuaded by the arguments of Washington officials that technology will be the answer. "The basic message we're getting is 'trust us and please do not rock the boat'. I can't take that chance." Mr Schwebel was recently accompanied on a flight from Mexico to the US by a Mexican businessman who was a frequent US traveller. When they arrived, his friend was fingerprinted and photographed, and three times the computer rejected his entry. Finally, the puzzled border official shut down and re-booted the computer. It worked properly at the fourth attempt.

Mr Schwebel notes sourly: "That's the technology we're relying on."

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Red carpet rolled up for South Koreans
By Andrew Ward

Visa restrictions designed to stop terrorists entering the US nearly claimed an unlikely victim last year: Ahn Shi-hyun, one of South Korea's most promising young women golfers.

The 19-year-old almost missed a prestigious tournament in Alabama because her invitation to play came too late for her to obtain a visa. Fortunately, the US embassy in Seoul agreed to rush through Ms Ahn's application. For thousands of other frustrated South Koreans, however, there is no short cut to the protracted and often humiliating process of securing permission to visit the Land of the Free.

Among the victims are the business travellers and tourists that help make South Korea one of the US's biggest economic partners and strongest allies, with two-way trade last year of almost $60bn. William Oberlin, president of the American Chamber of Commerce in Korea, told a committee of senators last year that visa restrictions were damaging ties between the two countries. South Korean business leaders, he said, were "beginning to question whether America truly wants their business".

As the fifth-largest source of visitors to the US, South Korea has been among the countries worst hit by tougher visa rules introduced after the September 11 2001 terrorist attacks. Unlike citizens of the UK, Japan, Germany and France, South Koreans need a visa to go the US. As a result, the American embassy in Seoul handle s more visa applications than any other US mission in the world.

Before September 11, it took two to five days to obtain a visa in Seoul. Since then, the wait has ballooned to between one and two months. The delays worsened last year, when the proportion of visa applicants having to take personal interviews rose from 35 per cent to 70 per cent

Mr Oberlin believes the $20bn that South Korean tourists spend in the US each year is at "significant risk" as Koreans balk at the bothersome procedures they are put through. "Travel agents tell us America is an increasingly difficult destination to sell," he told senators. "Where other countries seem to be rolling out the red carpet, . . . the welcome mat for America is looking very frayed."

The number of South Koreans studying in the US is also down, with universities in other English-speaking countries, such as the UK, Canada and Australia, the grateful beneficiaries of America's lost tuition fees.

However, the biggest concern is the impact on business. According to Mr Oberlin, a leading US technology company nearly lost a multi-million-dollar contract b ecause processing visa applications by representatives of its South Korean client took eight weeks. A top US financial institution also told him that international clients were increasingly requesting meetings in London or Frankfurt rather than the US to avoid visa problems.

The obstacles faced by South Korean visitors to the US are all the more perplexing since the country is among Washington's strongest military allies and a supporter of its war against terrorism. As one of the world's most homogenous nations, without any terrorist group known to be operating on its soil, South Korea and its people would rank near the bottom of any list of threats to the US.

Mr Oberlin told senators that the case exposed the weaknesses of an inflexible visa policy that treats every visitor as a potential terrorist. He said: "The reality in Korea is that due to increased security and a 'one size fits all approach' we are losing business, we are losing tourists, we are losing students and more importantly, we are losing friends and influence at a time when America can ill afford the loss."
 

By Mark Huband, Security Correspondent
Published: June 29 2004 21:58 | Last Updated: June 29 2004 21:58

Counter-terrorism chiefs in the US, Britain and Australia are aiming to build a global intelligence-sharing structure that will allow security services to assess threats and issue warnings continuously across all time zones.

The new system is intended to allow each country to benefit from the daytime collection and assessment of information on the threat from groups affiliated to al-Qaeda.

Security services in the different time zones will assess information received from the other services and then pass on updated assessments in an unbroken flow.

"The step change has been in the intelligence sharing because no one country can understand al-Qaeda," said a senior security official involved in creating the new system.

Extensive intelligence sharing on terrorism and other issues between the three countries is already routine. But al-Qaeda's fragmented structure has intensified the focus on local terrorist cells whose cross- border links have become increasingly difficult to identify.

The foundation of the system will be the new terrorism assessment centres the three countries have established. In the aftermath of the bombing of a nightclub in Bali on October 12 2002, which killed 199 people, including many Australians, several security services blamed a lack of intelligence co-ordination for having limited the sharing of information available before the bombings.

Part of the UK response was the creation of the Joint Terrorism Analysis Centre, through which all information on the terrorist threat to the UK or UK interests abroad now passes.

The US followed the UK's lead by creating the Terrorist Threat Integration Center in May 2003, and Australia with the creation of the National Threat Assessment Centre last October. All three centres have brought together staff from government departments ranging from transport to secret intelligence.

The aim has been to maximise the range of experience and allow threat assessments to be tailored to the needs of different economic and other sectors.

Britain's JTAC grew out of a 20-person terrorism assessment centre that operated within MI5, the security service. The new centre, which has its offices at MI5 headquarters and is handling 30,000 items of terrorism- related intelligence annually, now has a staff of 100, of whom about a third are MI5 officers.

NTAC, its Australian equivalent, draws on a similar range of staff and established a round-the-clock operational ability on June 1. John Brennan, TTIC director, told the commission investigating the September 11 terrorist attacks that the US centre now had direct access to 14 US government databases and planned to create access to 10 more information networks.

The number of terrorist-related suspicious bank transaction reports in the UK has fallen since 2001 even though the overall number of suspicious reports is rising, a conference was told on Tuesday, writes Jane Croft. All suspicious activity reports must be sent to the National Criminal Intelligence Service by the banks.

The reports are aimed at helping NCIS root out possible money launderers, organised crime and financiers of terrorism.

Delegates at a British Bankers' Association conference were told by a speaker from one of the largest retail banks that the volume of terrorist-related suspicious bank transactions fell to 486 last year against 719 in 2001.

However, the overall number of reports - which also detect other activities like money laundering - have risen from 31,000 in 2001 to about 100,000 last year.

The speaker also said that 400 court production orders were made in 2003 in England and Wales against UK banks.

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테러리즘이 세계적 정보네트워크 형성을 촉발시키고 있다. 이는 우연한 것이 아니며 세계화가 진행되면 당연히 나타날 수 밖에 없는 국제범죄에 대항하기 위해서는 필연적인 결과라 할 수 있다.

한가지 생각해 볼 점이 있는데, 미국은 정보를 공유하고자 한다는 점이다. 이유야 여러가지가 있겠지만 정보를 공유하는 이유는 역설적이게도 자기들이 필요한 정보를 미국은 갖고 있지 못하며 독자적으로 모으는데도 한계가 있기 때문이다. 세계최고의 정보력을 가진 미국조차도 정보가 없는 상황이 알케에다 사건에서 나타나고 있다. - 현석 생각