Tuesday, December 29, 2009

Malaysian Insider/Straits Times: An introspective Malaysia ponders its economic future

An introspective Malaysia ponders its economic future

Malaysian Insider: KUALA LUMPUR, Dec 29 — As the year draws to a close, there is a rare mood of introspection in Malaysia over its economic future.

The debate was sparked by senior officials, who highlighted in unusually blunt terms the country’s economic stagnation.

Leaders as diverse as Second Finance Minister Ahmad Husni Hanadzlah, former minister-in-charge of macro-economic development Effendi Norwawi and respected economists have aired highly critical views.

What’s more surprising is the prominence local newspapers have given to these unvarnished views. To Malaysia-watchers who track these things, the change in tone has been quite remarkable.

The government rarely highlights downbeat economic news.

Even as the world went into a tailspin last year, it put on a brave front. The ‘Malaysia Boleh’ (Malaysian Can) spirit of the boom years of the 1990s seemed hard to shake off.

The current debate was stirred by the government’s promise to create a “new economic model” to haul Malaysia out of the middle-income league in which it has been stuck for 15 years.

Prime Minister Najib Razak last week said the model would be disclosed by February next year, two months later than the original deadline.

It is intended to raise Malaysia to a high-income economy with a per capita income of at least US$15,000 (RM51,450). Malaysia is now classified as an upper middle-income economy with a per capita income of US$7,000.

Very little is known about this new model as the government has spoken about it only in vague terms so far. But the little that has emerged suggests that the government agrees with the expert views now being aired.

Economic experts say Malaysia’s rapid growth in the 1990s will not return without intensive reforms, for the growth was not driven by productivity gains, which would have made it sustainable.

Instead, it was driven by cheap foreign labour, with little effort made to move the country up the value chain to higher-level economic activities.

Malaysia lagged as the world raced ahead, and there is now fear that it may not be able to pull itself together.

Here is a sample of recent views:

Professor Mohamed Ariff, executive director of the Malaysian Institute of Economic Research: “Ironically, the long-term vision was undermined by a short-sighted growth strategy, which was pursued single-mindedly with a high premium on short-term growth at the expense of long-run goals. Malaysia had inadvertently shot itself in the foot.”

Former Cabinet minister Effendi Norwawi: “Our economic survival and competitiveness are at risk. We must try new ways to get new results and overcome the haunting problems of implementation with the same old people, systems and processes.”

Oxford-educated Umno Youth chief Khairy Jamaluddin: “We spent the last two decades of the last century piggybacking on growth in the region, benefiting from massive investments especially from Japan and created local conglomerates via privatisation. It created a solid base for us to take our economy to the next level, up the value chain and all that jazz. Except we didn’t.”

Recently-released economic data paints a bleak picture.

A paper published by the Economic Planning Unit shows a 26 per cent gap between Malaysia’s current national wealth and the set target. By next year, Malaysia should have a gross domestic product of RM694 billion, but it is estimated to come in at around RM514 billion.

Private sector participation has fallen to below 10 per cent of GDP, compared with 30 per cent before the Asian financial crisis in 1998.

The good news about such government-led pessimism is that it usually heralds the rollout of painful reforms. That is a time-tested way of preparing the ground, and was artfully utilised before fuel subsidies were slashed.

But the bad news, as Effendi noted, is that Malaysia has had too many “new ideas” that have never gone the distance.

“Our history is littered with glaring examples where great ideas just didn’t take off from the drawing board,” he said.

A major problem is the political risk that comes with economic reforms.

Rebuilding an economy based on competition, merit, transparency and productivity will mean cutting some of the cosy links between politics and the economy.

Malaysia’s economy is very closely tied to the government and politics. Reforms will, thus, be seen as a zero-sum game to some.

As Khairy noted in an article for the Edge weekly: “...reactionary voices dominate the debate with emotional blackmail and heightened racial rhetoric.

“Yet, this is the single most important transformation that needs to take place —for the Establishment, in its entirety, to embrace a new world view of competition, merit, transparency and diligence.”

So far, Datuk Seri Najib has been cautious. He has taken a big risk in abolishing quotas for Malay ownership of public-listed companies so as to encourage private firms to grow and to woo foreign investment. But transparency, including the lack of open tenders, is still lacking in vast sectors of the economy.

Many ideas have been floated about Malaysia’s comparative advantages — notably in oil and gas, and agriculture — and on what the new economy should focus.

We’ll have to wait till February for the details, but the government could seize on the country’s rare introspective mood to get its message across now. — The Straits Times

Monday, December 21, 2009

Mohd Effendi Norwawi: We must fix our weaknesses

We must fix our weaknesses

Our economic survival and competitiveness are at risk. We must try new ways to get new results and overcome the haunting problems of implementation with the same old people, systems and processes.
FROM his Budget speech, it is clear that our Prime Minister has a deep appreciation of the challenges faced by the nation today. He has also articulated well the actions that must be taken to overcome the challenges.
He will reinforce this soon with the announcement of a new economic model. This would be so timely – but the point I intend to make here is, this new economic model will not succeed unless it is accompanied by a new and bold implementation model.

Without a new implementation model, this new economic model idea will suffer the same tragic fate of the many “new ideas” in the past that have never made the distance, mostly because of breakdown at the implementation level.
This time, we must succeed or we will perish in the competition! The challenges we face today are more serious than we think. All the danger signs are there:
1. Private sector participation as engine of growth has dwindled to below 10% of our GDP from 30% of GDP at its highest.
2. Foreign and domestic investment has declined significantly. Outflow of capital – RM117bil for 2008 and RM54bil for the first half of 2009.
3. Here’s a wake-up call! In 1980, of the total FDI inflow into South-east Asia, 35.4% went to Malaysia – less than 1% went to Vietnam. In 2008, from the total FDI inflow into South-east Asia (US$59.9bil), the amount that went to Malaysia and Vietnam are about the same (US$8bil). Is it a foregone conclusion now that Vietnam will soon overtake Malaysia in attracting FDI?
4. Our per capita income ratio with South Korea used to be 1:1 in 1980. Now the ratio is doubled to 2:1, leaving Malaysia far behind.
5. In the 10 years post-crisis of 1997/98, per capita income of South Korea has grown by 104.3% – Malaysia only achieved an increase of 68.4%.
6. In 30 years, the Chinese economy has expanded 15.4 times – compared with Malaysia at only five times!
7. On the World Bank Index “Ease of Doing Business 2010”, Malaysia is ranked 20 out of 183 countries. Sounds okay on the surface – but if you look deeper into critical indicators such as “Dealing with Construction Permits” and “Starting a Business”, our standing is at 109 and 88 respectively out of 183. It’s not so okay.
It’s high time we fix this – it can be done! But not with the same people and same procedure and process and not with the same old implementation model!
8. On the World Bank Knowledge Economy Index (KEI), which is a measurement of our readiness to support a knowledge economy, our KEI in 1995 was 6.12. in 2008 our KEI was 6.07 – no change.
In fact, we slid! Average KEI of the top five countries is 9.41.
9. In 2008, 2.062 million unskilled foreign workers entered Malaysia. (This is the official figure, what is the unofficial?) In the last seven years, entry of unskilled foreign workers have increased by 300%, and they have formed 30% of our work force!
10. On the other hand, entry of skilled workers and professionals into the country has dwindled by nearly 60% (85,000 in 2000 to 35,000 in 2007)! At the same time, we see an alarming number of Malaysian professionals migrating to other countries.
11. Coming up to 2010, our GDP growth is estimated to be 26% below our original 2020 target – our per capita income will be 52% below this same target!
12. We have been in this middle-income group of countries for 15 years now – the risk of being trapped there is increasing. We have to double our per capita income in the next 10 years just to meet the minimum level of the high-income countries. To reach our original 2020 target, we need to treble our per capita income. A tall order!
I’m highlighting this in the sincere hope that Malaysians can see and feel the seriousness of the situation. Even more serious is how these weaknesses can reinforce each other to drag us down even further. Malaysia must wake up. The Prime Minister clearly wants to change things – he is loud and clear about how we can’t go on being just “Business As Usual” anymore. But he can’t succeed on his own – he deserves the support of every loyal Malaysian who has big dreams for this country.
Where do we go from here? Well, I believe the Prime Minister is clear about what he wants to do under his three strategies:
1. Driving the nation towards a higher income economy
2. Ensuring holistic and sustainable development
3. Focusing on the well-being of the rakyat
These are great ideas. But as we know, Malaysia is never short of ideas. Our history is littered with glaring examples where these great ideas just didn’t take off from the drawing board (K-economy idea was mooted in the 1990s). What happened?
We are great with ideas but we are just not great at implementing! Hence my very point – the new economic model will join the congested graveyard of many other great ideas – unless we come out with a new implementation model to go with it! We are not going to get new results with the same people, doing things the same old ways.
So here are my suggestions:
I’d like to focus on the Prime Minister’s strategy number 1 – driving the nation towards a high-income economy.
We are seeing encouraging results from the National Key Results Areas (NKRA) initiative, and the establishment of Pemandu to drive the six NKRAs – reducing crime, combating corruption, expanding access to quality and affordable education, raising the standard of living of low-income groups, strengthening infrastructure in rural and remote areas and improving public transport.
Clearly the six NKRAs are “people-centric”, in line with the Prime Minister’s pledge of “people first”.
Building on this initial success, I propose another initiative – similar to NKRA and Pemandu – except this initiative will focus on national economic transformation. We can call it MyTEN. MyTEN will be dedicated to this number 1 strategy – to transform Malaysia into a high-income economy.
I suggest the commissioning of a dedicated executing team to be responsible for implementing MyTEN. This team must comprise professionals and experts operating on a comprehensive plan with clear KPIs and mandated and empowered to transcend ministries’ and agencies’ “turf” and boundaries. They must have the most capable leader Malaysia can find, and be directly under the charge of the Prime Minister. They must have the clout to demolish obstacles and resistance and to make things happen.
To start with, I recommend the MyTEN team be tasked to deliver the following strategic results:
1. New sources of growth – to determine new economic areas of high potential where Malaysia can focus on and gain global dominance. Again, this has been mooted many times before, proving the point it can only happen if we have a dedicated team of professionals entrusted and empowered to execute this programme.
2. To stimulate private sector investment – foreign and domestic. Initiatives here would include priorities such as:
a) To effectively operationalise public-private sector partnership;
b) To redefine Government’s role in business and walk the talk that Government has no business to be in business; and
c) To produce a new generation of business entrepreneurs on merit and competitiveness and move Malaysia away from the “patronage and rent-seeking legacy”.
3. To accelerate Malaysia’s transformation into a knowledge economy anchored by innovation and quality human capital. This would include successfully executing sound strategies to make Malaysia a high-wage economy. An important part of this would be to turn Malaysia into a destination of choice for global talent.
Global talent is critical to our economic growth and innovation. We know our “brain-gain” and “MM2H” did not deliver the real desired results. This is another example why we need a new implementation model – this programme must be undertaken by new well-trained, well-motivated people with new mindsets, applying new systems, processes and best practices to succeed this time around.
To succeed, MyTEN must be launched as a major national agenda like the NKRA and we have to get every Malaysian, both from the public and private sector, to be on board. This must be a 1Malaysia agenda.
It is always worrying that all these high aspirations of the Prime Minister and the nation will in the end land on the desk of an officer who may not have a full appreciation as to how critical these programmes are to the survival of our country and who might not respond with the necessary sense of urgency.
Another key to the new implementation model is engaging the private sector whenever we can.
One has to be concerned with the rapidly increasing operating expenditure of the Government (from RM80bil five years ago to RM140bil now).
The Government should get an independent and objective analysis to determine government programmes that can be better done by the private sector and let them do it.
For example, I can see how we should engage the GLCs and private sector to take over many of the Agriculture Ministry’s programmes. Only they can bring the real culture of commercialisation to our farmers. It’s a matter of working out the business deals with these GLCs and private companies so they can be profitable in these privatised ventures. The Government can then save billions from doing this themselves (and mostly not as successfully).
We have success models in Sime Darby and their Northern Corridor corn project and Khazanah on their aquaculture and papaya projects. Why don’t we upscale them?
Repeat: we must try new ways to get new results. I think this is why the word “innovation” appeared everywhere in our Prime Minister’s Budget speech. The government must redefine its role, and this will require a new public sector mindset to let go to the private sector at every appropriate opportunity where there is clearly a net gain for the country.
To drive our nation’s economy, we need the most important economic force – the return of confidence!
I’m certain that what will generate this return is if there is belief that there will be real change this time – that the country is serious and has the will and ability to deal with all its challenges. I don’t think that there is any doubt about the Prime Minister’s seriousness, will and ability. But the doubt will be about the old haunting problem of implementation – that is, new ideas but done by the same old people and with their same old systems and processes, with little sense of urgency.
I know I’ll be commenting again on future government budgets… not so far away, I hope to be able to say we are now not just a nation of great ideas, but are also great implementors!
 Datuk Seri Mohd Effendi Norwawi is the founder and executive chairman of Encorp Bhd; he regards his seven years in the Cabinet as national service.

Thursday, December 10, 2009

Barack Obama's Nobel Peace speech

Obama’s Nobel Peace prize Speech, Oslo, December 10, 2009

Following is the prepared text of President Obama's speech at the Nobel Peace Prize ceremony in Oslo on Wednesday, as released by the White House:

Your Majesties, Your Royal Highnesses, Distinguished Members of the Norwegian Nobel Committee, citizens of America, and citizens of the world:

I receive this honor with deep gratitude and great humility. It is an award that speaks to our highest aspirations – that for all the cruelty and hardship of our world, we are not mere prisoners of fate. Our actions matter, and can bend history in the direction of justice.

And yet I would be remiss if I did not acknowledge the considerable controversy that your generous decision has generated. In part, this is because I am at the beginning, and not the end, of my labors on the world stage. Compared to some of the giants of history who have received this prize – Schweitzer and King; Marshall and Mandela – my accomplishments are slight. And then there are the men and women around the world who have been jailed and beaten in the pursuit of justice; those who toil in humanitarian organizations to relieve suffering; the unrecognized millions whose quiet acts of courage and compassion inspire even the most hardened of cynics. I cannot argue with those who find these men and women – some known, some obscure to all but those they help – to be far more deserving of this honor than I.

But perhaps the most profound issue surrounding my receipt of this prize is the fact that I am the Commander-in-Chief of a nation in the midst of two wars. One of these wars is winding down. The other is a conflict that America did not seek; one in which we are joined by forty three other countries – including Norway – in an effort to defend ourselves and all nations from further attacks.

Still, we are at war, and I am responsible for the deployment of thousands of young Americans to battle in a distant land. Some will kill. Some will be killed. And so I come here with an acute sense of the cost of armed conflict – filled with difficult questions about the relationship between war and peace, and our effort to replace one with the other.

These questions are not new. War, in one form or another, appeared with the first man. At the dawn of history, its morality was not questioned; it was simply a fact, like drought or disease – the manner in which tribes and then civilizations sought power and settled their differences.

Over time, as codes of law sought to control violence within groups, so did philosophers, clerics, and statesmen seek to regulate the destructive power of war. The concept of a "just war" emerged, suggesting that war is justified only when it meets certain preconditions: if it is waged as a last resort or in self-defense; if the forced used is proportional, and if, whenever possible, civilians are spared from violence.

For most of history, this concept of just war was rarely observed. The capacity of human beings to think up new ways to kill one another proved inexhaustible, as did our capacity to exempt from mercy those who look different or pray to a different God.

Wars between armies gave way to wars between nations – total wars in which the distinction between combatant and civilian became blurred. In the span of thirty years, such carnage would twice engulf this continent. And while it is hard to conceive of a cause more just than the defeat of the Third Reich and the Axis powers, World War II was a conflict in which the total number of civilians who died exceeded the number of soldiers who perished.

In the wake of such destruction, and with the advent of the nuclear age, it became clear to victor and vanquished alike that the world needed institutions to prevent another World War. And so, a quarter century after the United States Senate rejected the League of Nations – an idea for which Woodrow Wilson received this Prize – America led the world in constructing an architecture to keep the peace: a Marshall Plan and a United Nations, mechanisms to govern the waging of war, treaties to protect human rights, prevent genocide, and restrict the most dangerous weapons.

In many ways, these efforts succeeded. Yes, terrible wars have been fought, and atrocities committed. But there has been no Third World War. The Cold War ended with jubilant crowds dismantling a wall. Commerce has stitched much of the world together. Billions have been lifted from poverty. The ideals of liberty, self-determination, equality and the rule of law have haltingly advanced. We are the heirs of the fortitude and foresight of generations past, and it is a legacy for which my own country is rightfully proud.

A decade into a new century, this old architecture is buckling under the weight of new threats. The world may no longer shudder at the prospect of war between two nuclear superpowers, but proliferation may increase the risk of catastrophe. Terrorism has long been a tactic, but modern technology allows a few small men with outsized rage to murder innocents on a horrific scale.

Moreover, wars between nations have increasingly given way to wars within nations. The resurgence of ethnic or sectarian conflicts; the growth of secessionist movements, insurgencies, and failed states; have increasingly trapped civilians in unending chaos. In today's wars, many more civilians are killed than soldiers; the seeds of future conflict are sewn, economies are wrecked, civil societies torn asunder, refugees amassed, and children scarred.

I do not bring with me today a definitive solution to the problems of war. What I do know is that meeting these challenges will require the same vision, hard work, and persistence of those men and women who acted so boldly decades ago. And it will require us to think in new ways about the notions of just war and the imperatives of a just peace.

We must begin by acknowledging the hard truth that we will not eradicate violent conflict in our lifetimes. There will be times when nations – acting individually or in concert – will find the use of force not only necessary but morally justified.

I make this statement mindful of what Martin Luther King said in this same ceremony years ago – "Violence never brings permanent peace. It solves no social problem: it merely creates new and more complicated ones." As someone who stands here as a direct consequence of Dr. King's life's work, I am living testimony to the moral force of non-violence. I know there is nothing weak –nothing passive – nothing naïve – in the creed and lives of Gandhi and King.

But as a head of state sworn to protect and defend my nation, I cannot be guided by their examples alone. I face the world as it is, and cannot stand idle in the face of threats to the American people. For make no mistake: evil does exist in the world. A non-violent movement could not have halted Hitler's armies. Negotiations cannot convince al Qaeda's leaders to lay down their arms. To say that force is sometimes necessary is not a call to cynicism – it is a recognition of history; the imperfections of man and the limits of reason.

I raise this point because in many countries there is a deep ambivalence about military action today, no matter the cause. At times, this is joined by a reflexive suspicion of America, the world's sole military superpower.

Yet the world must remember that it was not simply international institutions – not just treaties and declarations – that brought stability to a post-World War II world. Whatever mistakes we have made, the plain fact is this: the United States of America has helped underwrite global security for more than six decades with the blood of our citizens and the strength of our arms. The service and sacrifice of our men and women in uniform has promoted peace and prosperity from Germany to Korea, and enabled democracy to take hold in places like the Balkans.

We have borne this burden not because we seek to impose our will. We have done so out of enlightened self-interest – because we seek a better future for our children and grandchildren, and we believe that their lives will be better if other peoples' children and grandchildren can live in freedom and prosperity.

So yes, the instruments of war do have a role to play in preserving the peace. And yet this truth must coexist with another – that no matter how justified, war promises human tragedy. The soldier's courage and sacrifice is full of glory, expressing devotion to country, to cause and to comrades in arms. But war itself is never glorious, and we must never trumpet it as such.

So part of our challenge is reconciling these two seemingly irreconcilable truths – that war is sometimes necessary, and war is at some level an expression of human feelings. Concretely, we must direct our effort to the task that President Kennedy called for long ago. "Let us focus," he said, "on a more practical, more attainable peace, based not on a sudden revolution in human nature but on a gradual evolution in human institutions."

What might this evolution look like? What might these practical steps be?

To begin with, I believe that all nations – strong and weak alike – must adhere to standards that govern the use of force. I – like any head of state – reserve the right to act unilaterally if necessary to defend my nation. Nevertheless, I am convinced that adhering to standards strengthens those who do, and isolates – and weakens – those who don't.

The world rallied around America after the 9/11 attacks, and continues to support our efforts in Afghanistan, because of the horror of those senseless attacks and the recognized principle of self-defense. Likewise, the world recognized the need to confront Saddam Hussein when he invaded Kuwait – a consensus that sent a clear message to all about the cost of aggression.

Furthermore, America cannot insist that others follow the rules of the road if we refuse to follow them ourselves. For when we don't, our action can appear arbitrary, and undercut the legitimacy of future intervention – no matter how justified.

This becomes particularly important when the purpose of military action extends beyond self defense or the defense of one nation against an aggressor. More and more, we all confront difficult questions about how to prevent the slaughter of civilians by their own government, or to stop a civil war whose violence and suffering can engulf an entire region.

I believe that force can be justified on humanitarian grounds, as it was in the Balkans, or in other places that have been scarred by war. Inaction tears at our conscience and can lead to more costly intervention later. That is why all responsible nations must embrace the role that militaries with a clear mandate can play to keep the peace.

America's commitment to global security will never waiver. But in a world in which threats are more diffuse, and missions more complex, America cannot act alone. This is true in Afghanistan. This is true in failed states like Somalia, where terrorism and piracy is joined by famine and human suffering. And sadly, it will continue to be true in unstable regions for years to come.

The leaders and soldiers of NATO countries – and other friends and allies – demonstrate this truth through the capacity and courage they have shown in Afghanistan. But in many countries, there is a disconnect between the efforts of those who serve and the ambivalence of the broader public. I understand why war is not popular. But I also know this: the belief that peace is desirable is rarely enough to achieve it. Peace requires responsibility. Peace entails sacrifice. That is why NATO continues to be indispensable. That is why we must strengthen UN and regional peacekeeping, and not leave the task to a few countries. That is why we honor those who return home from peacekeeping and training abroad to Oslo and Rome; to Ottawa and Sydney; to Dhaka and Kigali – we honor them not as makers of war, but as wagers of peace.

Let me make one final point about the use of force. Even as we make difficult decisions about going to war, we must also think clearly about how we fight it. The Nobel Committee recognized this truth in awarding its first prize for peace to Henry Dunant – the founder of the Red Cross, and a driving force behind the Geneva Conventions.

Where force is necessary, we have a moral and strategic interest in binding ourselves to certain rules of conduct. And even as we confront a vicious adversary that abides by no rules, I believe that the United States of America must remain a standard bearer in the conduct of war. That is what makes us different from those whom we fight. That is a source of our strength. That is why I prohibited torture. That is why I ordered the prison at Guantanamo Bay closed. And that is why I have reaffirmed America's commitment to abide by the Geneva Conventions. We lose ourselves when we compromise the very ideals that we fight to defend. And we honor those ideals by upholding them not just when it is easy, but when it is hard.

I have spoken to the questions that must weigh on our minds and our hearts as we choose to wage war. But let me turn now to our effort to avoid such tragic choices, and speak of three ways that we can build a just and lasting peace.

First, in dealing with those nations that break rules and laws, I believe that we must develop alternatives to violence that are tough enough to change behavior – for if we want a lasting peace, then the words of the international community must mean something. Those regimes that break the rules must be held accountable. Sanctions must exact a real price. Intransigence must be met with increased pressure – and such pressure exists only when the world stands together as one.

One urgent example is the effort to prevent the spread of nuclear weapons, and to seek a world without them. In the middle of the last century, nations agreed to be bound by a treaty whose bargain is clear: all will have access to peaceful nuclear power; those without nuclear weapons will forsake them; and those with nuclear weapons will work toward disarmament. I am committed to upholding this treaty. It is a centerpiece of my foreign policy. And I am working with President Medvedev to reduce America and Russia's nuclear stockpiles.

But it is also incumbent upon all of us to insist that nations like Iran and North Korea do not game the system. Those who claim to respect international law cannot avert their eyes when those laws are flouted. Those who care for their own security cannot ignore the danger of an arms race in the Middle East or East Asia. Those who seek peace cannot stand idly by as nations arm themselves for nuclear war.

The same principle applies to those who violate international law by brutalizing their own people. When there is genocide in Darfur; systematic rape in Congo; or repression in Burma – there must be consequences. And the closer we stand together, the less likely we will be faced with the choice between armed intervention and complicity in oppression.

This brings me to a second point – the nature of the peace that we seek. For peace is not merely the absence of visible conflict. Only a just peace based upon the inherent rights and dignity of every individual can truly be lasting.

It was this insight that drove drafters of the Universal Declaration of Human Rights after the Second World War. In the wake of devastation, they recognized that if human rights are not protected, peace is a hollow promise.

And yet all too often, these words are ignored. In some countries, the failure to uphold human rights is excused by the false suggestion that these are Western principles, foreign to local cultures or stages of a nation's development. And within America, there has long been a tension between those who describe themselves as realists or idealists – a tension that suggests a stark choice between the narrow pursuit of interests or an endless campaign to impose our values.

I reject this choice. I believe that peace is unstable where citizens are denied the right to speak freely or worship as they please; choose their own leaders or assemble without fear. Pent up grievances fester, and the suppression of tribal and religious identity can lead to violence. We also know that the opposite is true. Only when Europe became free did it finally find peace. America has never fought a war against a democracy, and our closest friends are governments that protect the rights of their citizens. No matter how callously defined, neither America's interests – nor the world's –are served by the denial of human aspirations.

So even as we respect the unique culture and traditions of different countries, America will always be a voice for those aspirations that are universal. We will bear witness to the quiet dignity of reformers like Aung Sang Suu Kyi; to the bravery of Zimbabweans who cast their ballots in the face of beatings; to the hundreds of thousands who have marched silently through the streets of Iran. It is telling that the leaders of these governments fear the aspirations of their own people more than the power of any other nation. And it is the responsibility of all free people and free nations to make clear to these movements that hope and history are on their side

Let me also say this: the promotion of human rights cannot be about exhortation alone. At times, it must be coupled with painstaking diplomacy. I know that engagement with repressive regimes lacks the satisfying purity of indignation. But I also know that sanctions without outreach – and condemnation without discussion – can carry forward a crippling status quo. No repressive regime can move down a new path unless it has the choice of an open door.

In light of the Cultural Revolution's horrors, Nixon's meeting with Mao appeared inexcusable – and yet it surely helped set China on a path where millions of its citizens have been lifted from poverty, and connected to open societies. Pope John Paul's engagement with Poland created space not just for the Catholic Church, but for labor leaders like Lech Walesa. Ronald Reagan's efforts on arms control and embrace of perestroika not only improved relations with the Soviet Union, but empowered dissidents throughout Eastern Europe. There is no simple formula here. But we must try as best we can to balance isolation and engagement; pressure and incentives, so that human rights and dignity are advanced over time.

Third, a just peace includes not only civil and political rights – it must encompass economic security and opportunity. For true peace is not just freedom from fear, but freedom from want.

It is undoubtedly true that development rarely takes root without security; it is also true that security does not exist where human beings do not have access to enough food, or clean water, or the medicine they need to survive. It does not exist where children cannot aspire to a decent education or a job that supports a family. The absence of hope can rot a society from within.

And that is why helping farmers feed their own people – or nations educate their children and care for the sick – is not mere charity. It is also why the world must come together to confront climate change.

There is little scientific dispute that if we do nothing, we will face more drought, famine and mass displacement that will fuel more conflict for decades. For this reason, it is not merely scientists and activists who call for swift and forceful action – it is military leaders in my country and others who understand that our common security hangs in the balance.

Agreements among nations. Strong institutions. Support for human rights. Investments in development. All of these are vital ingredients in bringing about the evolution that President Kennedy spoke about. And yet, I do not believe that we will have the will, or the staying power, to complete this work without something more – and that is the continued expansion of our moral imagination; an insistence that there is something irreducible that we all share.

As the world grows smaller, you might think it would be easier for human beings to recognize how similar we are; to understand that we all basically want the same things; that we all hope for the chance to live out our lives with some measure of happiness and fulfillment for ourselves and our families.

And yet, given the dizzying pace of globalization, and the cultural leveling of modernity, it should come as no surprise that people fear the loss of what they cherish about their particular identities – their race, their tribe, and perhaps most powerfully their religion. In some places, this fear has led to conflict. At times, it even feels like we are moving backwards. We see it in Middle East, as the conflict between Arabs and Jews seems to harden. We see it in nations that are torn asunder by tribal lines.

Most dangerously, we see it in the way that religion is used to justify the murder of innocents by those who have distorted and defiled the great religion of Islam, and who attacked my country from Afghanistan. These extremists are not the first to kill in the name of God; the cruelties of the Crusades are amply recorded. But they remind us that no Holy War can ever be a just war. For if you truly believe that you are carrying out divine will, then there is no need for restraint – no need to spare the pregnant mother, or the medic, or even a person of one's own faith. Such a warped view of religion is not just incompatible with the concept of peace, but the purpose of faith – for the one rule that lies at the heart of every major religion is that we do unto others as we would have them do unto us.

Adhering to this law of love has always been the core struggle of human nature. We are fallible. We make mistakes, and fall victim to the temptations of pride, and power, and sometimes evil. Even those of us with the best intentions will at times fail to right the wrongs before us.

But we do not have to think that human nature is perfect for us to still believe that the human condition can be perfected. We do not have to live in an idealized world to still reach for those ideals that will make it a better place. The non-violence practiced by men like Gandhi and King may not have been practical or possible in every circumstance, but the love that they preached – their faith in human progress – must always be the North Star that guides us on our journey.

For if we lose that faith – if we dismiss it as silly or naïve; if we divorce it from the decisions that we make on issues of war and peace – then we lose what is best about humanity. We lose our sense of possibility. We lose our moral compass.

Like generations have before us, we must reject that future. As Dr. King said at this occasion so many years ago, "I refuse to accept despair as the final response to the ambiguities of history. I refuse to accept the idea that the 'isness' of man's present nature makes him morally incapable of reaching up for the eternal 'oughtness' that forever confronts him."

So let us reach for the world that ought to be – that spark of the divine that still stirs within each of our souls. Somewhere today, in the here and now, a soldier sees he's outgunned but stands firm to keep the peace. Somewhere today, in this world, a young protestor awaits the brutality of her government, but has the courage to march on. Somewhere today, a mother facing punishing poverty still takes the time to teach her child, who believes that a cruel world still has a place for his dreams.

Let us live by their example. We can acknowledge that oppression will always be with us, and still strive for justice. We can admit the intractability of depravation, and still strive for dignity. We can understand that there will be war, and still strive for peace. We can do that – for that is the story of human progress; that is the hope of all the world; and at this moment of challenge, that must be our work here on Earth.