Economic Reform

It's strange how "scandal" gets defined these days in Washington. At the moment, everyone is screaming about the "scandal" of the Internal Revenue Service scrutinizing conservative nonprofits before granting them tax-exempt status. Here are the genuine scandals in this affair: Political organizations are being allowed to masquerade as charities to avoid taxes and keep their donors secret, and the IRS has allowed them to do this for years. The bottom line first: The IRS hasn't done nearly enough over the years to rein in the subversion of the tax law by political groups claiming a tax exemption that is not legally permitted for campaign activity.

It's time for South Korea to face facts: The Kaesong experiment has failed. The ideologically motivated joint business venture with North Korea known as the Kaesong industrial complex is not economically viable, nor has it achieved any of its political objectives. To protest recent sanctions against it, the North pulled its workers out this month and locked out workers from the South. Seoul tried to engage North Korea to resolve the dispute, coupled with an uncharacteristic deadline and a warning of "grave consequences.

The Clinton Administration on Thursday officially recognized Ernesto Zedillo as Mexico's next president, as Treasury Secretary Lloyd Bentsen delivered a congratulatory letter to the "President-Elect of the United Mexican States" along with an invitation for Zedillo to visit the White House in the fall. Zedillo won the most votes in Mexico's hard-fought presidential election Aug. 21, but he will not be named president-elect until after the new Mexican Congress meets Nov. 1. to ratify the results.

Pyongyang again disappointed those predicting it was about to change its ways. For months, experts and major media organizations have proclaimed imminent economic reform, even declaring that "North Korea has virtually abandoned the planned economy. " A rare second Supreme People's Assembly this year could only mean codification of free-market principles, or so it was argued. Yet the legislative assembly came and went in late September with nary a whisper of economic reform. What went wrong?

For the first time since the recession began more than two years ago, Los Angeles city officials have formally acknowledged that City Hall has tended to impede--rather than promote--economic development. "Economic development concerns are addressed in a piecemeal manner, are often reactive and are administered ineffectually," begins a report by William R. McCarley, the city's chief legislative analyst.

Bravo to The Times and Tom Falvey for his article (Opinion, Feb. 22), "Saving Trees and Saving Us from Peril of World Debt." It's the most succinct and intelligent article I've seen to date in the popular press about a subject that will become one of the most important issues of the 1990s--economic restructuring. Avoiding the negative tone of a prophet of doom, Falvey begins to suggest that economic reform--even revolutionary new economic thinking--is tied to our very survival as human beings.

King Abdullah II accepted the resignation of the government and appointed a new prime minister seen as a keen supporter of economic reform. The appointee, economist Ali Abu Ragheb, will form a new Cabinet. In a message to outgoing Prime Minister Abdul Raouf Rawabdeh on state-run Jordan Television, the king expressed his appreciation to the previous government. Rawabdeh's resignation was widely expected after parliament criticized the government's progress on political and economic reforms.

Will the Middle East, so beleaguered by open warfare, come to embrace open markets? With some hesitation, one of the region's major business leaders believes the answer is yes. Naguib Sawiris, chairman of Orascom Telecom Holding, is busily expanding his Cairo-based firm, which owns cellular telephone networks in many lands, including Iraq. His brother Onsi, who heads Orascom Construction, the largest cement producer in the region, is also doing well.

Riders traveling on the "New Freedom Bus" stopped at sites in Long Beach on Tuesday as part of their monthlong cross-country campaign against welfare reform and poverty called Economic Human Rights Campaign '98. "We know you can't change things in one day," said Long Beach activist Pamela Foster of the Barton Hills Neighborhood Organization. "But we want to just shake things up a bit."

Argentine President Raul Alfonsin, in a nationally televised speech Friday, announced a sweeping monetary and economic reform package to turn back runaway inflation and end automatic wage and price hikes. "The reform plan is not to save a government," Alfonsin declared, "it is to save a political system, a life style and to recover national ambition and pride."

NEW DELHI - After months of criticism over policy malaise, the Indian government on Friday announced a series of bold economic reforms allowing significant foreign investment in the retail, aviation and broadcasting sectors. The moves, aimed at invigorating the economy, would allow investment from abroad of up to 51% in supermarkets and chain stores such as Wal-Mart, up to 49% in aviation, up to 71% in broadcasting and up to 49% in parts of the electrical power industry. In addition, New Delhi announced plans to sell its stake in several public service companies dealing in oil, copper and aluminum.

With Francois Hollande's election as France's first Socialist president in 17 years, Europe now must deal with a major leader who has promised to push a different approach to resolving the continent's debt crisis. Hollande's message, that the German insistence on austerity must be tempered with plans to stimulate economic growth, helped propel him to a decisive win Sunday over incumbent President Nicolas Sarkozy, with nearly 52% of the vote. Hollande, 57, is expected to take over May 15 from Sarkozy, who became the first sitting French leader to lose a reelection bid in more than 30 years.

The aftershocksfrom the sacking last week of a powerful Communist Party secretary are still rattling China, injecting an element of turmoil into a transition the government had hoped would showcase the stability of its political system. State media reported this week that 3,300 party cadres from the security apparatus would be sent to Beijing for ideological retraining. The order was unusual enough, but even more so was the fact that the report omitted mention of internal security czar Zhou Yongkang, who heads the Political and Legislative Affairs Committee that is recalling the cadres.

Even a politician with the survival skills of Silvio Berlusconi proved, in the end, to be no match for the power of global financial markets. The beleaguered Italian prime minister bowed to the reality of international pressure and withering domestic support Tuesday, promising to resign once Parliament passes a reform package of cuts aimed at reining in a runaway debt crisis. The question now is whether Berlusconi's departure would be enough to arrest the decline in Italy's perilous financial condition, which has moved the front line of Europe's debt crisis from peripheral countries such as Greece and Ireland to one of its central economies.

Last week, Cuban President Raul Castro endorsed sweeping economic reforms, proposed term limits for government and Communist Party officials, and conceded that the party's failure to groom a new generation of leaders will make it harder to find a successor. The proposed reforms could usher in major changes. For the first time since the 1959 revolution, the government would allow Cubans to own and sell houses and cars. Taxis, barbershops, restaurants and other privately run businesses would be allowed to expand and hire workers.

With a huge military parade and amid high public expectation, Cuba's ruling Communists on Saturday convened an extraordinary congress that will shape much of the island nation's future. The Cuban Communist Party opened its four-day gathering — its first in 14 years and only the sixth meeting since the revolution 52 years ago — to examine and endorse crucial economic reforms launched by President Raul Castro. The congress will also appoint a new team of party leaders, with Castro at the helm but, possibly, with a smattering of less-familiar faces as Cubans begin to contemplate a Cuba without Raul and his brother, Fidel, the leader of the revolution.

Soviet President Mikhail S. Gorbachev told workers in the industrial city of Sverdlovsk that falling production had convinced him that economic reforms must be speeded up, the official Tass news agency reported Friday. His remarks were reported the same day statistics were released saying Soviet industrial production amounted to $381 billion in the first quarter of 1990, down 1.2% from a year ago.

The Chinese Communist Party, in a recently released major policy statement, said it will gradually eliminate controls on most prices and adopt other market-oriented reforms. But it said it would oppose the kind of broad economic restructuring that would place China on a path to capitalism. The party document calls for less use of Soviet-style central planning and increasing reliance on markets.

Less than two blocks away from where anti-government protesters clash daily with supporters of Yemeni President Ali Abdullah Saleh, children in green uniforms ambled home from school. Women hung their laundry on sundrenched rooftops, and a shopkeeper restocked pink soda and biscuits in neat rows. Despite nearly two weeks of often violent protest in Yemen, including shootings Tuesday night that left two anti-government protesters dead, according to an ambulance driver, life for most people in this dusty, Arab capital hardly feels revolutionary.

Pakistan's ruling party Friday authorized a sweeping overhaul of the country's Cabinet that probably will mean a marked reduction in the number of ministers, a response to critics who have called the bloated government's size an impediment to economic reform. International lenders and opposition leaders have been keeping up pressure on the ruling Pakistan People's Party to slash the size of Prime Minister Yousuf Raza Gilani's Cabinet, a bulky roster of 52 ministers and advisors. World lending groups such as the International Monetary Fund provide billions of dollars in loans that help keep the country's fragile economy from collapsing, but they are now demanding a tax overhaul and spending cuts in return for their financial assistance.