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Jihad vs. McWorld – Benjamin R. Barber – The Atlantic

Jihad vs. McWorld – Benjamin R. Barber – The Atlantic.

Just beyond the horizon of current events lie two possible political futures—both bleak, neither democratic. The first is a retribalization of large swaths of humankind by war and bloodshed: a threatened Lebanonization of national states in which culture is pitted against culture, people against people, tribe against tribe—a Jihad in the name of a hundred narrowly conceived faiths against every kind of interdependence, every kind of artificial social cooperation and civic mutuality. The second is being borne in on us by the onrush of economic and ecological forces that demand integration and uniformity and that mesmerize the world with fast music, fast computers, and fast food—with MTV, Macintosh, and McDonald’s, pressing nations into one commercially homogenous global network: one McWorld tied together by technology, ecology, communications, and commerce. The planet is falling precipitantly apart AND coming reluctantly together at the very same moment.

[…]

The tendencies of what I am here calling the forces of Jihad and the forces of McWorld operate with equal strength in opposite directions, the one driven by parochial hatreds, the other by universalizing markets, the one re-creating ancient subnational and ethnic borders from within, the other making national borders porous from without. They have one thing in common: neither offers much hope to citizens looking for practical ways to govern themselves democratically. If the global future is to pit Jihad’s centrifugal whirlwind against McWorld’s centripetal black hole, the outcome is unlikely to be democratic—or so I will argue.

[…]

Four imperatives make up the dynamic of McWorld: a market imperative, a resource imperative, an information-technology imperative, and an ecological imperative. By shrinking the world and diminishing the salience of national borders, these imperatives have in combination achieved a considerable victory over factiousness and particularism, and not least of all over their most virulent traditional form—nationalism. It is the realists who are now Europeans, the utopians who dream nostalgically of a resurgent England or Germany, perhaps even a resurgent Wales or Saxony. Yesterday’s wishful cry for one world has yielded to the reality of McWorld.

THE MARKET IMPERATIVE. Marxist and Leninist theories of imperialism assumed that the quest for ever-expanding markets would in time compel nation-based capitalist economies to push against national boundaries in search of an international economic imperium. Whatever else has happened to the scientistic predictions of Marxism, in this domain they have proved farsighted. All national economies are now vulnerable to the inroads of larger, transnational markets within which trade is free, currencies are convertible, access to banking is open, and contracts are enforceable under law. In Europe, Asia, Africa, the South Pacific, and the Americas such markets are eroding national sovereignty and giving rise to entities—international banks, trade associations, transnational lobbies like OPEC and Greenpeace, world news services like CNN and the BBC, and multinational corporations that increasingly lack a meaningful national identity—that neither reflect nor respect nationhood as an organizing or regulative principle.

The market imperative has also reinforced the quest for international peace and stability, requisites of an efficient international economy. Markets are enemies of parochialism, isolation, fractiousness, war. Market psychology attenuates the psychology of ideological and religious cleavages and assumes a concord among producers and consumers—categories that ill fit narrowly conceived national or religious cultures. Shopping has little tolerance for blue laws, whether dictated by pub-closing British paternalism, Sabbath-observing Jewish Orthodox fundamentalism, or no-Sunday-liquor-sales Massachusetts puritanism. In the context of common markets, international law ceases to be a vision of justice and becomes a workaday framework for getting things done—enforcing contracts, ensuring that governments abide by deals, regulating trade and currency relations, and so forth.

Common markets demand a common language, as well as a common currency, and they produce common behaviors of the kind bred by cosmopolitan city life everywhere. Commercial pilots, computer programmers, international bankers, media specialists, oil riggers, entertainment celebrities, ecology experts, demographers, accountants, professors, athletes—these compose a new breed of men and women for whom religion, culture, and nationality can seem only marginal elements in a working identity. Although sociologists of everyday life will no doubt continue to distinguish a Japanese from an American mode, shopping has a common signature throughout the world. Cynics might even say that some of the recent revolutions in Eastern Europe have had as their true goal not liberty and the right to vote but well-paying jobs and the right to shop (although the vote is proving easier to acquire than consumer goods). The market imperative is, then, plenty powerful; but, notwithstanding some of the claims made for “democratic capitalism,” it is not identical with the democratic imperative.

THE RESOURCE IMPERATIVE. Democrats once dreamed of societies whose political autonomy rested firmly on economic independence. The Athenians idealized what they called autarky, and tried for a while to create a way of life simple and austere enough to make the polis genuinely self-sufficient. To be free meant to be independent of any other community or polis. Not even the Athenians were able to achieve autarky, however: human nature, it turns out, is dependency. By the time of Pericles, Athenian politics was inextricably bound up with a flowering empire held together by naval power and commerce—an empire that, even as it appeared to enhance Athenian might, ate away at Athenian independence and autarky. Master and slave, it turned out, were bound together by mutual insufficiency.

The dream of autarky briefly engrossed nineteenth-century America as well, for the underpopulated, endlessly bountiful land, the cornucopia of natural resources, and the natural barriers of a continent walled in by two great seas led many to believe that America could be a world unto itself. Given this past, it has been harder for Americans than for most to accept the inevitability of interdependence. But the rapid depletion of resources even in a country like ours, where they once seemed inexhaustible, and the maldistribution of arable soil and mineral resources on the planet, leave even the wealthiest societies ever more resource-dependent and many other nations in permanently desperate straits.

Every nation, it turns out, needs something another nation has; some nations have almost nothing they need.

THE INFORMATION-TECHNOLOGY IMPERATIVE. Enlightenment science and the technologies derived from it are inherently universalizing. They entail a quest for descriptive principles of general application, a search for universal solutions to particular problems, and an unswerving embrace of objectivity and impartiality.

Scientific progress embodies and depends on open communication, a common discourse rooted in rationality, collaboration, and an easy and regular flow and exchange of information. Such ideals can be hypocritical covers for power-mongering by elites, and they may be shown to be wanting in many other ways, but they are entailed by the very idea of science and they make science and globalization practical allies.

Business, banking, and commerce all depend on information flow and are facilitated by new communication technologies. The hardware of these technologies tends to be systemic and integrated—computer, television, cable, satellite, laser, fiber-optic, and microchip technologies combining to create a vast interactive communications and information network that can potentially give every person on earth access to every other person, and make every datum, every byte, available to every set of eyes. If the automobile was, as George Ball once said (when he gave his blessing to a Fiat factory in the Soviet Union during the Cold War), “an ideology on four wheels,” then electronic telecommunication and information systems are an ideology at 186,000 miles per second—which makes for a very small planet in a very big hurry. Individual cultures speak particular languages; commerce and science increasingly speak English; the whole world speaks logarithms and binary mathematics.

Moreover, the pursuit of science and technology asks for, even compels, open societies. Satellite footprints do not respect national borders; telephone wires penetrate the most closed societies. With photocopying and then fax machines having infiltrated Soviet universities and samizdat literary circles in the eighties, and computer modems having multiplied like rabbits in communism’s bureaucratic warrens thereafter, glasnost could not be far behind. In their social requisites, secrecy and science are enemies.

The new technology’s software is perhaps even more globalizing than its hardware. The information arm of international commerce’s sprawling body reaches out and touches distinct nations and parochial cultures, and gives them a common face chiseled in Hollywood, on Madison Avenue, and in Silicon Valley. Throughout the 1980s one of the most-watched television programs in South Africa was The Cosby Show. The demise of apartheid was already in production. Exhibitors at the 1991 Cannes film festival expressed growing anxiety over the “homogenization” and “Americanization” of the global film industry when, for the third year running, American films dominated the awards ceremonies. America has dominated the world’s popular culture for much longer, and much more decisively.

[…]

This kind of software supremacy may in the long term be far more important than hardware superiority, because culture has become more potent than armaments. What is the power of the Pentagon compared with Disneyland? Can the Sixth Fleet keep up with CNN? McDonald’s in Moscow and Coke in China will do more to create a global culture than military colonization ever could. It is less the goods than the brand names that do the work, for they convey life-style images that alter perception and challenge behavior. They make up the seductive software of McWorld’s common (at times much too common) soul.

Yet in all this high-tech commercial world there is nothing that looks particularly democratic. It lends itself to surveillance as well as liberty, to new forms of manipulation and covert control as well as new kinds of participation, to skewed, unjust market outcomes as well as greater productivity. The consumer society and the open society are not quite synonymous. Capitalism and democracy have a relationship, but it is something less than a marriage. An efficient free market after all requires that consumers be free to vote their dollars on competing goods, not that citizens be free to vote their values and beliefs on competing political candidates and programs. The free market flourished in junta-run Chile, in military-governed Taiwan and Korea, and, earlier, in a variety of autocratic European empires as well as their colonial possessions.

THE ECOLOGICAL IMPERATIVE. The impact of globalization on ecology is a cliche even to world leaders who ignore it. We know well enough that the German forests can be destroyed by Swiss and Italians driving gas-guzzlers fueled by leaded gas. We also know that the planet can be asphyxiated by greenhouse gases because Brazilian farmers want to be part of the twentieth century and are burning down tropical rain forests to clear a little land to plough, and because Indonesians make a living out of converting their lush jungle into toothpicks for fastidious Japanese diners, upsetting the delicate oxygen balance and in effect puncturing our global lungs. Yet this ecological consciousness has meant not only greater awareness but also greater inequality, as modernized nations try to slam the door behind them, saying to developing nations, “The world cannot afford your modernization; ours has wrung it dry!”

Each of the four imperatives just cited is transnational, transideological, and transcultural. Each applies impartially to Catholics, Jews, Muslims, Hindus, and Buddhists; to democrats and totalitarians; to capitalists and socialists. The Enlightenment dream of a universal rational society has to a remarkable degree been realized—but in a form that is commercialized, homogenized, depoliticized, bureaucratized, and, of course, radically incomplete, for the movement toward McWorld is in competition with forces of global breakdown, national dissolution, and centrifugal corruption. These forces, working in the opposite direction, are the essence of what I call Jihad.

Jihad, or the Lebanonization of the World

OPEC, the World Bank, the United Nations, the International Red Cross, the multinational corporation…there are scores of institutions that reflect globalization. But they often appear as ineffective reactors to the world’s real actors: national states and, to an ever greater degree, subnational factions in permanent rebellion against uniformity and integration—even the kind represented by universal law and justice. The headlines feature these players regularly: they are cultures, not countries; parts, not wholes; sects, not religions; rebellious factions and dissenting minorities at war not just with globalism but with the traditional nation-state. Kurds, Basques, Puerto Ricans, Ossetians, East Timoreans, Quebecois, the Catholics of Northern Ireland, Abkhasians, Kurile Islander Japanese, the Zulus of Inkatha, Catalonians, Tamils, and, of course, Palestinians—people without countries, inhabiting nations not their own, seeking smaller worlds within borders that will seal them off from modernity.

A powerful irony is at work here. Nationalism was once a force of integration and unification, a movement aimed at bringing together disparate clans, tribes, and cultural fragments under new, assimilationist flags. But as Ortega y Gasset noted more than sixty years ago, having won its victories, nationalism changed its strategy. In the 1920s, and again today, it is more often a reactionary and divisive force, pulverizing the very nations it once helped cement together.

[…]

The aim of many of these small-scale wars is to redraw boundaries, to implode states and resecure parochial identities: to escape McWorld’s dully insistent imperatives. The mood is that of Jihad: war not as an instrument of policy but as an emblem of identity, an expression of community, an end in itself. Even where there is no shooting war, there is fractiousness, secession, and the quest for ever smaller communities.

[…]

Among the tribes, religion is also a battlefield. (“Jihad” is a rich word whose generic meaning is “struggle”—usually the struggle of the soul to avert evil. Strictly applied to religious war, it is used only in reference to battles where the faith is under assault, or battles against a government that denies the practice of Islam. My use here is rhetorical, but does follow both journalistic practice and history.) Remember the Thirty Years War? Whatever forms of Enlightenment universalism might once have come to grace such historically related forms of monotheism as Judaism, Christianity, and Islam, in many of their modern incarnations they are parochial rather than cosmopolitan, angry rather than loving, proselytizing rather than ecumenical, zealous rather than rationalist, sectarian rather than deistic, ethnocentric rather than universalizing. As a result, like the new forms of hypernationalism, the new expressions of religious fundamentalism are fractious and pulverizing, never integrating. This is religion as the Crusaders knew it: a battle to the death for souls that if not saved will be forever lost.

The atmospherics of Jihad have resulted in a breakdown of civility in the name of identity, of comity in the name of community. International relations have sometimes taken on the aspect of gang war—cultural turf battles featuring tribal factions that were supposed to be sublimated as integral parts of large national, economic, postcolonial, and constitutional entities.

[…]

Neither McWorld nor Jihad is remotely democratic in impulse. Neither needs democracy; neither promotes democracy.

McWorld does manage to look pretty seductive in a world obsessed with Jihad. It delivers peace, prosperity, and relative unity—if at the cost of independence, community, and identity (which is generally based on difference). The primary political values required by the global market are order and tranquillity, and freedom—as in the phrases “free trade,” “free press,” and “free love.” Human rights are needed to a degree, but not citizenship or participation—and no more social justice and equality than are necessary to promote efficient economic production and consumption. Multinational corporations sometimes seem to prefer doing business with local oligarchs, inasmuch as they can take confidence from dealing with the boss on all crucial matters. Despots who slaughter their own populations are no problem, so long as they leave markets in place and refrain from making war on their neighbors (Saddam Hussein’s fatal mistake). In trading partners, predictability is of more value than justice.

[…]

Jihad delivers a different set of virtues: a vibrant local identity, a sense of community, solidarity among kinsmen, neighbors, and countrymen, narrowly conceived. But it also guarantees parochialism and is grounded in exclusion. Solidarity is secured through war against outsiders. And solidarity often means obedience to a hierarchy in governance, fanaticism in beliefs, and the obliteration of individual selves in the name of the group. Deference to leaders and intolerance toward outsiders (and toward “enemies within”) are hallmarks of tribalism—hardly the attitudes required for the cultivation of new democratic women and men capable of governing themselves. Where new democratic experiments have been conducted in retribalizing societies, in both Europe and the Third World, the result has often been anarchy, repression, persecution, and the coming of new, noncommunist forms of very old kinds of despotism.

[…]

To the extent that either McWorld or Jihad has a NATURAL politics, it has turned out to be more of an antipolitics. For McWorld, it is the antipolitics of globalism: bureaucratic, technocratic, and meritocratic, focused (as Marx predicted it would be) on the administration of things—with people, however, among the chief things to be administered. In its politico-economic imperatives McWorld has been guided by laissez-faire market principles that privilege efficiency, productivity, and beneficence at the expense of civic liberty and self-government.

For Jihad, the antipolitics of tribalization has been explicitly antidemocratic: one-party dictatorship, government by military junta, theocratic fundamentalism—often associated with a version of theFuhrerprinzip that empowers an individual to rule on behalf of a people.

[…]

How can democracy be secured and spread in a world whose primary tendencies are at best indifferent to it (McWorld) and at worst deeply antithetical to it (Jihad)? My guess is that globalization will eventually vanquish retribalization. The ethos of material “civilization” has not yet encountered an obstacle it has been unable to thrust aside.

[…]

…democracy is how we remonstrate with reality, the rebuke our aspirations offer to history. And if retribalization is inhospitable to democracy, there is nonetheless a form of democratic government that can accommodate parochialism and communitarianism, one that can even save them from their defects and make them more tolerant and participatory: decentralized participatory democracy. And if McWorld is indifferent to democracy, there is nonetheless a form of democratic government that suits global markets passably well—representative government in its federal or, better still, confederal variation.

[…]

It certainly seems possible that the most attractive democratic ideal in the face of the brutal realities of Jihad and the dull realities of McWorld will be a confederal union of semi-autonomous communities smaller than nation-states, tied together into regional economic associations and markets larger than nation-states—participatory and self-determining in local matters at the bottom, representative and accountable at the top. The nation-state would play a diminished role, and sovereignty would lose some of its political potency. The Green movement adage “Think globally, act locally” would actually come to describe the conduct of politics.

This vision reflects only an ideal, however—one that is not terribly likely to be realized. Freedom, Jean-Jacques Rousseau once wrote, is a food easy to eat but hard to digest. Still, democracy has always played itself out against the odds. And democracy remains both a form of coherence as binding as McWorld and a secular faith potentially as inspiriting as Jihad.

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Why New York Real Estate Is the New Swiss Bank Account — New York Magazine

Why New York Real Estate Is the New Swiss Bank Account — New York Magazine.

“The global elite,” says developer Michael Stern, “is basically looking for a safe-deposit box.”

[…]

The influx of global wealth is most visible on the ultrahigh end, as Stern and other builders are erecting spiraling condo towers and sales records are regularly shattered by foreign billionaires, like the Russian fertilizer oligarch Dmitry Rybolovlev, purchaser of the most expensive condo in Manhattan’s history ($88 million), and Egyptian construction magnate Nassef Sawiris, who recently set the record for a co-op ($70 million). But much of the foreign money is coming in at lower price points, closer to the median for a Manhattan condo ($1.3 million and rising). In fact, if you’ve recently been outdone by an outrageous all-cash bid for an apartment, there’s a decent chance that, behind a generic corporate name, there’s a foreign buyer and an offshore bank account.

[…]

The Census Bureau estimates that 30 percent of all apartments in the quadrant from 49th to 70th Streets between Fifth and Park are vacant at least ten months a year.

To cater to the tastes of their transient residents, developers are designing their projects with features like hotel-style services. And the new economy has spawned new service businesses, like XL Real Property Management, which takes care of all the niggling details—repairs, insurance, condo fees—for absentee buyers.

[…]

Even those with less reflexively hostile reactions to foreign buying competition might still wonder: Who are these people? An entire industry of brokers, lawyers, and tight-lipped advisers exists largely to keep anyone from discovering the answer. This is because, while New York real estate has significant drawbacks as an asset—it’s illiquid and costly to manage—it has a major selling point in its relative opacity. With a little creative corporate structuring, the ownership of a New York property can be made as untraceable as a numbered bank account. And that makes the city an island haven for those who want to stash cash in an increasingly monitored global financial system. “With everything that is going on in Switzerland in terms of transparency, people are being forced to pay taxes on their capital that they used to hold there,” says Rodrigo Nino, the president of the Prodigy Network. “Real estate is a great alternative.”

[…]

“Real estate is a wonderful way to cleanse money. Once you buy real estate, the derivation of that cash is forgotten.”

[…]

Every year, the British real-estate brokerage Knight Frank publishes a document called “The Wealth Report.” The latest edition produces the curiously precise estimate that there are 167,669 individuals in the world who are “ultrahigh net worth,” with assets exceeding $30 million. “Of course, the big question is: are the rich getting richer?” the report asks. It answers gleefully in the affirmative, forecasting that over the next decade, the ranks of the ultrarich will increase by 30 percent, with much of the growth coming in Asia and Africa.

This new global wealth is being lavished on the usual status items—planes, yachts, contemporary art—but Knight Frank is pleased to report that the rich favor real estate most of all. Real estate can serve as a convenient pied-à-terre, an investment hedge against a wobbly home currency, or an insurance policy—a literal refuge if things go bad. Other financial centers boast a similar mix of glamour and apparent security—Knight Frank’s list of the top-ten “global cities” includes London, Paris, Geneva, and Dubai—but New York is forecast to add more ultrahigh-net-worth individuals than any city outside Asia over the next decade.

[…]

As expensive as New York’s luxury real estate might seem, it’s a bargain compared to other global capitals; a million dollars will buy twice as much space here as it does in Monaco or Hong Kong. New York is perceived to be more stable than Miami, Shanghai, and Beijing. It is much cheaper than London, where tabloid-fanned outrage over property prices has created an uncomfortable political climate and various new or proposed taxes are aimed at foreign investors and offshore entities. In New York, by contrast, buyers of new construction often qualify for a tax abatement.

[…]

The first rule of selling property to the ultrarich is that you can’t try to sell them property—you offer them status, or a lifestyle, or a unique place in the sky. A marketing video for 432 Park Avenue, scored to “Dream a Little Dream,” features a private jet, Modigliani statuary, and Harry Macklowe himself costumed as King Kong. One recent morning, at the development’s sales office in the GM Building, Wallgren led me down a hallway lined with vintage New York photographs, through a ten-by-ten-foot frame meant to illustrate the building’s enormous window size, to a scale model of Manhattan.

“If you bend down like this,” Wallgren said, stooping to street level, “you can really appreciate the height of it.”

[…]

“Rich people come to the U.S., and these people are busy,” he said. “What is, for these people, very important? I am asking you! To save the time.” Perepada doesn’t drag his clients to a bunch of open houses. He takes them to Jean Georges, gets them hockey or Broadway tickets, rents helicopters or horse carriages, sets them up with plastic surgeons. He says that by building a rapport, he is able to sell 80 percent of his properties with a simple phone call.

[…]

“Did you see The Wolf of Wall Street?” Perepada asked as we drove. “I love this movie. You see how he works? Amazing. ‘If you trust me, you have to buy. If you don’t trust me, you need to work with someone else.’ This is my regulation: Trust me, take it.”

[…]

Jajan believes the most important service he offers is reassurance. “The client wants an adviser here; he wants to feel comfortable knowing he has someone he can trust here in the United States.” Jajan’s firm offers a range of management functions. “We recently purchased a vacuum cleaner,” he told me. “It was for one of our high-net-worth clients that bought $15 million worth of property this year. We’re not about to say, ‘We don’t do that, we’re lawyers.’ ”

[…]

An anonymous high-net-worth client of Credit Suisse, who spoke to U.S. Senate investigators after taking advantage of an amnesty for tax cheats, described the process by which he would manage his funds when visiting Zurich. A remote-controlled elevator would take him to a bare meeting room where he and his private banker would discuss his money; all printed account statements would be destroyed after the visit.

The theatrical secrecy is designed to build personal trust between such bankers and their clients, which is especially vital when the goal of the transactions is to conceal assets from the prying eyes of rivals, vengeful spouses, or tax collectors. Moving the money itself is a relatively simple matter: A wire or a suitcase can convey cash from China to Singapore, or from Russia to an EU member state like Latvia, and once the funds have made it to a “white list” country, they can usually move onward without triggering alarms. Concealing the true ownership of a property or a bank account is trickier. That’s where the private bankers, wealth advisers, and lawyers earn their exorbitant fees.

Behind a New York City deed, there may be a Delaware LLC, which may be managed by a shell company in the British Virgin Islands, which may be owned by a trust in the Isle of Man, which may have a bank account in Liechtenstein managed by the private banker in Geneva. The true owner behind the structure might be known only to the banker. “It will be in some file, but not necessarily a computer file,” says Markus Meinzer, a senior analyst at the nonprofit Tax Justice Network. “It could be a black book.” If an investor wants to sell the property, he doesn’t have to transfer the deed—an act that would create a public paper trail. He can just shift ownership of the holding company.

Recently, scrutiny from the United States has punctured some of the traditional secrecy of Swiss banks. But that has just pushed clients to boutique advisory firms, often run by the same personnel. “Banks like working with those firms,” Meinzer says, “because they are then legally in the clear, without the risk of going to prison.” As international blacklisting has pushed some offshore locales toward greater legal compliance, new havens have arisen. New Zealand trusts offer similar secrecy to those of the Caymans, without the stigma.

It’s a sophisticated, well-oiled system that rarely requires crude subterfuge. Though U.S. authorities track all transfers over $10,000, a wire into a real-estate lawyer’s escrow account should look perfectly routine. “A lot of times, I don’t even know where my clients are from,” says the lawyer Bruce Cohen. “But I know that certain countries are very careful about the money that leaves their country.”

[…]

The best—though still fuzzy—global estimates say as much as $1.5 trillion in criminal proceeds is laundered each year. The United Nations figures that as little as one-fifth of one percent of that is ever recovered.

 

An Apology of Enclaves – NYTimes.com

An Apology of Enclaves – NYTimes.com.

Obscure examples, and the concomitant thrill of discovery, are part of the attraction of scouting for border anomalies, a few of which Simon suggested: “Haven’t seen much in the literary record on the Malaysian railway in Singapore … used to be Malaysian territory once you got on the train.” He likewise suggested “the little back door leading into Guantánamo Bay solely for the Cuban pensions officer.”`

My own favorite obscure border anomalies include the Drummully Polyp, a pene-enclave [2] on the intra-Irish border, and the omelet-shaped enclave complex of Madha and Nahwa — Madha being a small Omani enclave inside the United Arab Emirates, and Nahwa in turn a tiny emirates enclave inside Madha [3]. And there are plenty of river/border asynchronicities [4] around the world to get excited about.

[…]

Baarle and Cooch Behar have often been mentioned in the same breath, but have hardly ever been compared. Beyond the obvious formal similarities and practical differences, both complexes share a few surprising traits, and are marked by at least one glaring divergence.

Cooch Behar is often called the world’s most complex enclave complex, with Baarle a close second. But both have totally different outcomes on the ground. Baarle is a best-case scenario: a money-spinning tourist attraction; Cooch Behar a worst-case scenario: a continuing source of poverty and misery for the locals.

Before we attempt to find a moral in that story, let’s find a definition for the main ingredient on either map: those geopolitical islands stranded inside another territory. The most common term is “enclave”; a related, seemingly opposite one is “exclave.” Both are often used interchangeably, and indeed, enclaves often are also exclaves. In spite of that overlap in practice, in theory they are each other’s semantic opposites. Prepare to have your mind slightly boggled.

An enclave is a piece of sovereign territory (that may or may not be part of country X), wholly enclosed by country Y. For example, the Vatican is an enclave within Italy, even though it is not the dependence of a third country. Yet Monaco is not an enclave within France, because it also borders the sea.

An exclave is a piece of sovereign territory that is separated from its “mainland” (country X), possibly but not necessarily by country Y. So Lesotho, entirely surrounded by South Africa, is not an exclave, because it is sovereign and does not “belong” to a third country. But Llivia, a Spanish village north of the Pyrennees, is an exclave of Spain (as well as being an enclave within France). Ceuta and Melilla, tiny Spanish territories on the Moroccan coast, are exclaves of Spain, even though they sit on the Mediterranean Sea.

So even if both definitions sound similar, their point of view is opposite: enclaves imply total encirclement by country Y, exclaves imply non-contiguity with country X.

[…]

Baarle, on the Dutch side of the border with Belgium, is a Siamese twin of a town, one part Belgian and one part Dutch. Each part has its own mayor, town administration and police force, each is beholden to a different set of national laws. The Belgian part, called Baarle-Hertog, is a collection of 26 separate parcels, four of which are on the Belgian-Dutch border (therefore technically not ’claves) and 22 within Baarle-Nassau, the Dutch part of town [5]. The largest of those Belgian ’claves contains six Dutch ones, with a seventh one ensconced in the second largest Belgian ’clave. These Dutch ’claves within Belgian ’claves are called “counterenclaves” [6]. An eighth Dutch territorial splinter is located within Zondereigen, the largest of Baarle-Hertog’s 26 parcels and one of the four on the Belgian-Dutch border. As this is not a Belgian ’clave, the Dutch splinter it contains is not a counterenclave, merely an enclave (within Belgium), but also an exclave (of the Netherlands).

Whereas Baarle mainly consists of Belgian enclaves within the Netherlands, the Cooch Behar complex is more evenhanded — except in its name. “Cooch Behar” describes only one half of the equation: the former Indian principality that now is a district in the Indian State of West Bengal. That district possesses 106 enclaves in Bangladesh, but conversely, Bangladesh has 92 enclaves in that part of India. To muddy the waters, Bangladesh has 21 counterenclaves (i.e. located within Indian exclaves inside Bangladesh). India has three of those, and a single counter-counterenclave (i.e. Indian territory, located within one of Bangladesh’s counterenclaves).

The Baarle complex is dwarfed by Cooch Behar, which is the world’s largest archipelago of ’claves. Baarle-Hertog’s assorted bits of land total just under three square miles, and have a mere 2,500 inhabitants [7]. Both Baarles form a compact whole. Cooch Behar, on the other hand, is an approximately 200-mile-long confused concatenation of ’claves, the combined area of which is 37 square miles with a combined population of around 70,000.

Remarkably, both complexes’ territorial splinters have similar origins, in what were essentially self-sufficient agricultural units. As was standard in pre-modern times, even neighboring and interdependent farms and estates often owed allegiance to different overlords. In the case of both Baarle and Cooch Behar, these allegiances hardened over centuries, as local lords were succeeded by national governments. The Baarle split in its earliest form dates from the 15th century, when the Duke of Brabant competed with the counts of Breda for local loyalty. Cooch Behar finds its origin in the motley border drawn up in the 18th century, between the local principality and the advancing Mogul Empire.

[…]

That some survive, and resplendently so in the cases of Baarle and Cooch Behar, is a testament to a combination of factors: international unwillingness, administrative inertia, local pride, and the ’claves’ general inobtrusiveness to the affairs of state.

[…]

In Baarle, the peculiarities of the border are now part of the local folklore. For example, as taxes are paid in the country where the front door is situated, houses on the border would move their main entrance in accordance to the country where taxes were, for the moment, more advantageous. House numbers are marked in the respective national colors, and a line marking the border heightens the tourist appeal of Baarle’s town center. And shops and restaurants on the border will have different closing times, serving rules and/or sales periods on either side of the line, with interesting consequences for their customers.

[…]

In contrast, in Cooch Behar, the grim imposition of borders on daily life is still a regular occurrence. Inhabitants of the enclaves are caught in a classic Catch-22: They are unable to obtain a visa, as this would require them to go to the “mainland,” which is impossible without a visa. For these people, leaving their ’claves constitutes an illegal border crossing. Adding to a general sense of despair is a criminal element, which has learned to exploit the legal limbo of the ’claves to find a safe haven.

[…]

There’d be plenty of interesting things to see. Like Upan Chowki Bhaini (Bangladesh), at 570 square feet, the size of a large living room, the world’s smallest international enclave. Or Dahala Khagrabari (India), the world’s only international counter-counterenclave [9]. Or the quadripoint, reputedly near the Patgram police station, where four international borders (two for each country) meet (Baarle has a similar quadripoint).

Sun and Shadows: How an Island Paradise Became a Haven for Dirty Money | International Consortium of Investigative Journalists

Sun and Shadows: How an Island Paradise Became a Haven for Dirty Money | International Consortium of Investigative Journalists.

Like most small tax havens, Seychelles has an outsized impact that belies its modest market share. As Al Jazeera’s undercover muckrakers discovered, offshore patrons and the accountants, bankers and other operatives who help them usually don’t settle for a single offshore company or bank account. They create elaborate webs that use multiple jurisdictions, multiple front men and multiple layers of ownership. Smaller havens such as Seychelles are crucial links in these chains of secrecy and in the wider offshore system.

They support a system that, critics charge, caters to drug traffickers, fraudsters, money launderers and high-net-worth tax dodgers, fueling onshore corruption and poverty. By one estimate, as much as $32 trillion in private financial wealth is hidden is offshore havens — roughly equivalent to the annual output of the U.S., Chinese and Japanese economies combined.

[…]

Seychelles is happy to help offshore clients embrace the flexibility of the international tax system: “Paying less tax as long as it is within the parameter of the law is legal. It is not even your patriotic duty to pay a cent more.” 

[…]

in a nation where the president’s party controls 31 of 32 seats in the legislature, Michel’s silence on questions about his offshore assets will close the door on any discussion of the issue.

“A president and his cronies stashing their money in an offshore account, in order to keep it away from their own tax authorities — in any other part of the world, these people would be on their knees, begging for forgiveness,” says Ferrari. “Here, guess what? It’s just business as usual.”

[…]

The offshore action in Seychelles centers on the main square, in a series of unlovely multi-story office complexes. Accountants and corporate operatives work in mostly interchangeable, white-walled offices, on desks cluttered with manila folders. They take their lunches at one of the Victoria members-only clubs, and spend the afternoons receiving a steady stream of foreign clients, or chatting on the phone with the European and American lawyers who help steer new business their way.

[…]

In 1995, the Republic of Seychelles enacted the Economic Development Act, a law that offered broad immunity from prosecution and extradition to any foreign national who invested at least $10 million in the local economy.

U.S. officials described it as the equivalent of a “Welcome, Criminals” banner. Britain’s Serious Fraud Office called it “the perfect present for drug barons, fraudsters and money launderers.” Under international pressure, the government backed down, at least on paper. The law was taken off the books.

[…]

For critics of tax havens, the argument that banks are integral to the offshore world isn’t a defense; it’s evidence of how deep offshore abuses are rooted in the global financial system. Many of the world’s biggest banks — including HSBC and JPMorgan Chase & Co. — have been sanctioned for failing to follow anti-money laundering rules. Barclays itself paid $298 million tosettle U.S. criminal charges that it shifted hundreds of millions of dollars on behalf of banks and individuals in Cuba, Iran, Libya and other rogue nations.

[…]

Around the world, offshore financial centers are often touted as economic engines that help small, resource-starved places improve themselves. But it is often a few well-connected locals — along with expatriate lawyers and accountants from the U.S., the U.K., Australia and other rich nations — who enjoy most of the profits.