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A Solid Foundation: Why has the housing market weathered the economic downturn so well?

My article for the Kogod School of Business

A wave of pandemic-induced uncertainty has thrown a pall over America’s economic performance, yet one sector remains a defiant shade of rose against a generally dark background. Why are home sales rebounding so quickly, with some locations reporting a return to the days of bidding wars? Is this a meaningful and lasting trend or simply a function of limited data from which to draw conclusions? “I think everyone in the industry is asking themselves what the new normal will be after such a cataclysmic event,” says Professor Steven Teitelbaum, who teaches Kogod’s Real Estate Development class and works in transit-oriented development and smart growth.

At the beginning of the pandemic in March, home sales fell by 8.5 percent as potential buyers lost their jobs, contended with economic uncertainty, or simply avoided moving due to health concerns. Existing home sales in April fell by almost 18 percent, but prices rose 7.4 percent compared to a year ago.

What could explain why basic supply-and-demand principles don’t seem to apply here? A huge drop in demand should put downward pressure on prices as the market sways in the buyers’ favor. But in this case, while demand dropped, so did supply. Sellers withdrew from the market for the same reasons that buyers did. New home listings fell dramatically after the stay-at-home orders, with estimates ranging from 29 percent to higher than 50 percent.

The drops in supply and demand were generally proportional to each other, but the lower number of transactions made it more difficult to analyze how prices moved in aggregate. “Data is so scarce that one blip sends things teetering toward one end or the other. It is hard to come by meaningful averages,” explains Teitelbaum.

Limited housing supply is likely to be a more prominent issue in certain areas. The pandemic has also affected new build construction. Professor Kim Luchtenberg, professor of finance and real estate, says, “The DC area will remain relatively sheltered from a real estate sector downturn because housing is in such limited supply. This will keep prices high, so buyers will not see much change.”

The number of homes listed for sale in the DC metro area dropped more than 37 percent compared to April 2019, resulting in the lowest inventory in the past 10 years.

A decrease in overall home sales has a number of effects. Home sales generate much spin-off economic activity. Local governments rely on revenue from deed transfer taxes to fund public services. Occupations like real estate agents, home inspectors, and other agents lose streams of income, as do support services like moving companies, furniture and appliance stores, landscapers, and maintenance technicians.

From a social perspective, people often buy homes when relocating for work, having children, getting married, or downsizing for retirement. An economic downtown that makes homeownership inaccessible may delay many of these milestones. For example, the Great Recession caused delayed household formation among young adults.

A much more grave concern is what will happen to the homeowners affected by the general economic downturn. “Foreclosures and mortgage defaults are sure to happen once the protection period ends,” says Luchtenberg. No one is sure how this will affect the real estate industry or the economy as a whole.

With so much turmoil in the stock markets and retail and hospitality real estate markets, plus general economic uncertainty, are investors attracted to the seemingly untouchable residential real estate sector? Luchtenberg and Teitelbaum concur that this trend is afoot, but in an unusual permutation—investment in single-family home rentals. This was the case immediately following the 2008 collapse, and currently, these kinds of rentals are one of the fastest-growing investment vehicles both for large corporations and individual investors. “The second-best option to owning a home is renting a single-family unit. Investors see that,” says Teitelbaum. Luchtenberg is currently writing a research paper on this phenomenon as well.

While understanding the “new normal” seems like an impossible proposition, in the DC area, at least, the old normal of a robust residential real estate market remains.

The Hidden Cost of the Hustle–Faculty and Director of the Kogod Tax Policy Center Caroline Bruckner hones in on the tax consequences of gig work.

By Toni Tileva | 
In September 2019, California became the first state in the country to pass a labor law aimed primarily at Uber and Lyft drivers that extends wage and benefit protections to about a million gig workers. California Governor Gavin Newsom wrote an op-ed arguing that when workers are classified as independent contractors rather than as employees, they lose basic benefits such as minimum wage, paid sick days, and health insurance. And their employers do not contribute to safety net programs like workers’ compensation and unemployment insurance, leaving, as Gov. Newsom pointedly stated, “taxpayers holding the bag.”Going a step further to address Social Security shortfalls, on December 19, 2019, Congresswoman Deb Haaland (NM-01), vice chair of the Task Force on Poverty and Opportunity, introduced a groundbreaking bill called the Gig Is Up Act that would require companies that gross at least $100 million and employ at least 10,000 independent contractors to pay the full cost of both the employer contribution and the worker contribution to Social Security and Medicare.“My research shows that gig workers can be in a very precarious economic situation, with most of them working gigs as a supplemental source of income,” Bruckner says. “For many, their low incomes keep them from having other investment vehicles, and they rely solely on Social Security for their retirement. Not getting their just dessert, so to speak, is an unforeseen and not often discussed consequence of contractor and gig economy work.”

The gig economy is notoriously hard to quantify, with estimates stating non-traditional work arrangements account for anywhere between 0.1% of full-time employment to 34%. According to the Freelancing in America survey, there are a reported 57 million American freelancers (counting on-demand and independent contractors) contributing in excess of $1 trillion dollars to the economy each year. Yet, their hustle can perhaps best be characterized as a struggle rather than a success, with little worker rights protection, unpredictable compensation, and intermittent work. The “on demand” nature of the work makes it just that—reliant on the customers’ and employers’ demands rather than the workers’.

In her recent book Hustle and Gig, sociologist Alexandrea Ravenelle argues that “for all its app-enabled modernity, the gig economy resembles the early industrial age…the sharing economy is truly a movement forward to the past.” While much research has been conducted on the size and growth trajectory of the freelancer industry, little scholarship examines the often unintended tax consequences affecting the workers and the economy writ large.

“Self-employed workers already have tax compliance and reporting issues, but the existing reporting rules further precipitate their failure to contribute to Social Security and Medicare through payment of the self-employment tax (SE tax),” explains Bruckner.

The tricky part is that companies that use contract workers aren’t required to send out a 1099-MISC unless they have paid that person $600 or more in a given tax year. On-demand workers who are paid by platforms usually get a 1099-K form, which companies use when a contractor has performed at least 200 transactions over the course of the year and has received at least $20,000 in payments. But, often, gig workers don’t receive any tax forms at all, leaving them on the hook to figure out how much they’ve earned over the past year and accurately report it to the IRS.

“Workers who don’t get tax forms from their employers need to figure out their earnings on their own. It is not as though they are intending to break tax laws, but many of them are simply not aware of what the self-employment tax covers and are short changing their Social Security earnings upon retirement in this way.”

Independent contractors and gig economy workers also do not make tax payments through withholding by their employers during the year and have to figure out estimated quarterly tax payments on their own. Not making those quarterly payments can translate to penalties and increases their audit exposure. “This isn’t just about gig workers underreporting their income tax, although this is a way to quantify the tax gap for the IRS and get their attention on the issue,” says Bruckner. “The consequences of the shortfall are twofold: it affects the funding and solvency of Social Security and translates to lower Social Security benefits for these workers upon retirement.”

In their recent “Failure to Contribute” research project, funded by the Center for Retirement Research at Boston College, Professor Bruckner and economist Thomas L. Hungerford estimate that, in 2014, independent contractors didn’t pay $3.9 billion in Social Security contributions that they should have, and on-demand workers didn’t pay $2 billion.

Bruckner has actively raised this issue with the IRS and given testimony on Capitol Hill. The Failure to Contribute report suggests Congress could take steps to modernize information reporting, update quarterly estimated payment requirements, and require better taxpayer education. Ultimately, these strategies should focus on the independent contractor economy generally and the on-demand/gig workforce in particular. “We need strategies to encourage people to buy into the system,” says Bruckner. “This is why tax policy needs to be accessible.”

With a $50,000 grant from the Wharton School of Business and Pension Research Council, Bruckner plans to continue her research with a study examining how women are using the gig economy to make up for retirement shortfalls. “This next phase of research will be ground-breaking in that it focuses on women specifically, who tend to live longer and have higher healthcare costs,” explains Bruckner. “Because women have been subject to the pay gap or had to take time out of the paid work force,  considering their retirement needs and how gig economy work is a strategy for shoring up retirement savings shortfalls is the logical extension of my existing work looking at the gig economy and its implications for Social Security.”

What Are the Odds? A computational neuroscientist and Kogod adjunct scores a career as a data scientist with the NBA.

So much of our everyday life involves making predictions—from picking the best route for our morning commute to bringing an umbrella to choosing a partner. “We predict all the time, so the process is natural,” says Grant Fiddyment, adjunct professor of predictive analytics at Kogod and data scientist for the NBA’s Philadelphia 76ers. “In a lot of ways, it’s the same way we interact with technology and the world. For instance, how can I phrase my web search so that the site will match what I’m looking for? How can I pronounce a word so that a virtual assistant will understand what I’m saying? Without knowing the technical details, we implicitly learn how these technologies work.”

What is predictive analytics, and how does it offer us a glimpse into the future?

At its most fundamental level, the discipline calculates the likelihood of future events by simply (although many would cry foul at this characterization) counting the possible outcomes. Its foundations were laid in a 1654 letter exchange between French mathematicians Pierre de Fermat and Blaise Pascal discussing how the winnings of a coin-flipping gambling game should be split. And while we all know that the house always wins in Vegas, few would know to credit Jacob Bernoulli’s Law of Large Numbers from 1713 as the reason why.

Despite predictive analytics’ old roots, it is responsible for many facets of modern-day life we give little thought to—things like credit card fraud detection, virtual chess partners, and, of most interest to Fiddyment, creating professional sports super teams.

Grant Fiddyment's headshot.

As a data scientist on the research and development team for the 76ers, Fiddyment helps frame and analyze the predictive questions that arise in sports—for example, how will signing a new player impact a team’s title odds, or how well will a tall lineup play against a smaller, quicker one?

Predictive analytics has long been used in sports, going back to the analog days of yore. Baseball has historically led the movement. One of the most famous success stories is told in the movie Moneyball, which follows 2002 Oakland Athletics general manager Billy Beane as he uses predictive analytics to hire under-valued players and send his team on a crowd-wowing 20-game winning streak. But the methods developed in Oakland have application across all sports.

“Most teams were asking, ‘How often does a batter get a hit when they go to bat?’ Instead, the A’s asked, ‘How many bases does a player get when they go to bat?’ Looking at total bases turns out to be more predictive of how many runs a team will score,” explains Fiddyment. “Similarly, in the NBA, teams used to ask how often a player will make a shot. But this overlooks the fact that all shots are not equal. So now teams are asking, ‘How many points will a player get when they take a shot?’”

In the past decade the number of three-point shots in the NBA has increased. Is the rise just due to random luck or is it part of a well-crafted strategy? Fiddyment and other fellow data scientists employed full-time by sports teams work to answer new questions like these. He credits the invention of video tracking as the proverbial game changer. “Chip or camera-based systems will follow players as they actively play a sport, and the data we get is much more nuanced than a single-number summary,” says Fiddyment. “For example, we can answer how many pick-and-rolls the team ran last game or how open were the shots they generated. We can analyze the individual and team as a whole.”

At the moment, this kind of data collection is limited to professional teams, making it difficult to spot up-and-coming superstars. “College and international teams typically don’t have the same camera systems, so projecting which players will become successful remains a very challenging problem,” Fiddyment says.

Despite rapid advancements in technology, however, not all data is created equal—or, perhaps, equally useful. The limitations of data translate to limitations in predictive accuracy (as meteorologists can confirm). “We need to be aware of computers’ strengths and weaknesses,” Fiddyment advises. “Computers can process vast amounts of data much more quickly than humans ever could. But they are restricted to the data they have and operate very literally, so we should never expect them to behave exactly like a human, even if they can match our performance at a given task.”

From the glitz of Vegas to the life-saving powers of storm forecasts to the way opinion polls affect voters, predictive analytics is ever-present in our lives. Advances in machine learning and big data models are improving our ability to look into the future, but they are also raising some thorny issues, one of the most notable being the boundaries of data privacy. For now, however, Fiddyment has scored a slam dunk for the NBA.

From Veteran to Venture: Kogod alum-turned-professor helps veteran entrepreneurs launch their businesses

My story for Kogod School of Business

Each year, roughly 200,000 US service members transition from the military to the private sector. Although veterans are twice as likely as non-veterans to be self-employed, their rate of business ownership has dropped precipitously from the entrepreneurial high of their predecessors in the last century.

Half of World War II veterans went on to own or operate a business—a similar rate to the 40% of Korean War vets who did the same almost a decade later. Of the more than 3.6 million people who have served in the military since September 11, 2001, only 4.5% have started a business. What has led to such an enormous gap in veteran entrepreneurship?

In short, more challenges—and fewer resources to overcome them.

Although 25% of veterans say they want to start their own businesses, they face more obstacles securing the capital needed to get their ideas off the ground than in the past. Unlike the GI Bill of 1944, the updated 2008 version does not include access to low-interest loans to start a business. The financing needs of veteran and non-veteran businesses are similar, research shows, but even though would-be veteran business owners submitted more loan applications and reached out to a wider variety of lenders, they typically obtained less financing and got lower approval rates.

Because of frequent travel and work abroad, some veterans are also struggling with building a credit history and amassing collateral. And while previous military drafts drew from all segments of society, this century’s all-volunteer armed forces are more likely to come from military families, making them increasingly isolated from the non-military community and the networks that facilitate business success.

Seda Goff—a Kogod adjunct professor and MBA alumna—is helping veteran entrepreneurs overcome these challenges in her role as the director of veteran entrepreneurship at the PenFed Foundation. Through the foundation’s Veteran Entrepreneur Investment Program (VEIP), veterans can get the seed capital and mentorship they need to build and grow their ventures.

“Veterans have given a lot to serve and protect us, and the skill sets that they gained in the process lend themselves perfectly to entrepreneurship,” Goff says. “This new generation of entrepreneurs feel that same desire to serve and to make a difference and be bigger than themselves.”

After graduating from Kogod, Goff worked for the US Department of Veterans Affairs before moving to PenFed, where she was able to build the nonprofit investment program from the ground up. Her passion for helping veterans stems from growing up in close contact with service members.

“My father was in the Turkish Navy. He worked for the navy for almost 30 years after we came to the US,” Goff recalls. “I loved being around service members and their families. Everybody is very mission- and service-oriented.”

Since launching in March 2018, the Veteran Entrepreneur Investment Program has invested in and offered resources to veteran entrepreneurs. And because veterans are 30% more likely to hire other veterans, the program’s benefits extend to the entire veteran community.

VEIP is funded by outside donors, with PenFed Credit Union matching up to $1 million in contributions. Returns on all investments go back into the program to support future veteran-owned ventures. “The success of veteran entrepreneurs allows the program to exist,” Goff explains. “The dividends go right back into investing in more entrepreneurs. The multiplier effect translates to growth for businesses that are ready to launch, established businesses that want to grow, and those that are still in the exploratory stages.”

In the future, the PenFed Foundation aims to develop new resources for veteran entrepreneurs in all stages of the business cycle, with a focus on women veteran entrepreneurs—who have grown from owning 2.5% of veteran-owned businesses in 2008 to 4.4% in 2012.

Goff, who works with the American University Entrepreneurship Incubator, hopes to one day launch an incubator for veteran entrepreneurs at Kogod, too.

“I feel like the majority of entrepreneurs are just problem solvers. And if you point them in a direction, they’re going to solve problems,” Goff says. “In my work, I have seen how a military career is not something that you need to transition away from to be successful. Serving already has given vets the tools for success.”

Islamic Finance—A Centuries-Old Approach Providing Modern Solutions

Published here

Could a system of finance dating back to the seventh century offer modern solutions to problems like college debt and crumbling infrastructure? Dr. Ghiyath Nakshbendi, chair and founder of the graduate certificate in Islamic finance at the Kogod School of Business, believes so.

“In America, millennials are growing tired of the system of interest, especially when it comes to student loans. They are looking for something that is different,” Dr. Nakshbendi explains. “We also have big problems with infrastructure. More than 54,000 bridges need repairing, for example. Islamic finance could be a way to fund these projects.”

Kogod’s graduate certificate in Islamic finance is the first of its kind in the US. Although Islamic finance has been practiced for over a millennium in Muslim countries, it is relatively new to the US, with the Office of the Comptroller of Currency approving its use for home lending in 1997. It  has taken strong root in Europe, with nations like the United Kingdom, Germany, and Luxembourg at the forefront. In 2018, the UK’s largest Islamic bank, Al Rayan Bank, said about one-third of its customers were non-Muslim, up from one-eighth in 2010. So what is driving Western interest in this ancient approach?

“Islamic finance is not for Muslims only,” Dr. Nakshbendi states. “It is for humanity.”

Islamic finance is an alternative to conventional finance. Sharia law—Islamic law based on the religious principles of the Quran and the Hadith—forbids the charging of interest. Because money is only a way of defining value, making money from money is not permissible, rendering financial products like options, futures, and derivatives moot. In Islamic finance, lending can only occur in the context of a sale or exchange of some sort, meaning investments must result in something tangible.

If interest is forbidden, how do Islamic institutions interact with conventional financial markets? Profit-and-loss sharing contracts are one way, where an Islamic bank pools investors’ money and assumes a share of the profits and losses. Another way is renting or leasing products and services. Or a bank can form a partnership with the company it is sponsoring, reaping some of the benefits once the company produces its product. There are also sukuk—Islamic bonds.

Malaysia, a leader in Islamic banking, has been at the forefront of using Islamic finance to fund environmental sustainability projects. In 2018, Malaysia’s Securities Commission debuted the world’s first green sukuk, an Islamic bond used to fund environmentally sustainable infrastructure projects. Two Malaysian investment companies have already issued green sukuk to fund the construction of large-scale solar power plants in multiple districts.

Islamic finance is even finding its way into cryptocurrency. Rain, a Bahrain-based cryptocurrency exchange, announced in February that it had passed a Sharia compliance certification and bills itself as “the most regulated and secure digital currency exchange in the Middle East.”

“Malaysia and Bahrain are setting global best practice standards of Islamic finance. Business juggernauts like Kuwait and Saudi Arabia have been relying on this system, and they are at the forefront of all sorts of innovations,” says Dr. Nakshbendi.

The Islamic finance program attracts a wide variety of students who are eager to learn an alternative way of doing business, from creating community-minded, sustainable development to avoiding predatory lending and promoting inclusive growth.

Recent graduate Bianca Tardio sees Islamic finance as an avenue for positive societal change. “A lot of conventional finance funding provides more of a debt problem, which people obviously have trouble getting out of,” Tardio says. “Islamic finance would be an alternative to benefit not just companies or corporations but actually the people.”

Many students see Islamic finance gaining traction in the world economy and want to make sure they’re prepared to be a part of this growing global branch of finance. For them, the certificate opens up a world of career prospects.

“If one of the regular banking institutions wants to open an Islamic finance branch, someone with this certificate will be the first they will ask to get involved,” Dr. Nakshbendi says. “Even though the figure is from 2016, a study found that there are more than 50,000 jobs in Islamic finance worldwide.”

In 2017, total worldwide Islamic finance assets were estimated at $2 trillion. By 2021, they are expected to grow to $3.5 trillion. In the US, banks like Standard Chartered and JP Morgan—alongside several smaller banking institutions—are already offering Islamic personal and business banking services.

Students graduating from the certificate program are positioned to be at the forefront of Islamic finance’s growth in the US and around the world. From infrastructure development to climate-friendly investments to cryptocurrency, Islamic finance’s inherent innovation invites further exploring.

Though it has ancient roots, Islamic finance is far from irrelevant or antiquated; it offers solutions to some of the world’s most entrenched modern problems. Rather than focusing on wealth generation, Islamic finance offers an avenue to community-focused development and socially responsible investing.

Professor Akbar Ahmed Presents Findings from “Journey into Europe” Project

My article
Also published in Stoner’s Journal

Ambassador Akbar Ahmed, the Ibn Khaldun Chair of Islamic Studies at American University’s School of International Service, recently reported on findings from his fieldwork in Europe over the past two years and gave a preview of his upcoming book and documentary.

Journey into Europe is Ahmed’s fourth project in a series of award-winning books published with Brookings Press. The series explores relations between the West and the Islamic world after 9/11. Ahmed is one of the world’s leading authorities on contemporary Islam.

His first book in the series, Journey into Islam: The Crisis of Globalization, examined what Muslims thought of the United States and the West through fieldwork across the Muslim world. The second book, Journey into America: The Challenge of Islam, showed how Americans perceived Islam and Muslims. The third book, The Thistle and the Drone: How America’s War on Terror Became a Global War on Tribal Islam, explored the tribal societies on the periphery of nations.

The next volume, Journey into Europe: Islam, Immigration, and Empire, will examine the historical relationship between Europe and the Muslim world, the contemporary challenges posed by increased immigration from the Muslim world, and the new pressures of security, globalization, and multiculturalism.

Dean James Goldgeier moderated a panel on February 11 that included Associate Professor Randolph Persaud, director of the Comparative and Regional Studies program, Distinguished Historian in Residence Michael Brenner, director of the Center for Israel Studies at AU, and Professor Tamara Sonn, the Hamad Bin Khalifa Al-Thani Professor in the History of Islam at Georgetown University.

Journey into Europe explores the intersecting issues of the increased immigration of Muslims to Europe and the growing number of right-wing parties in Europe. The study also clarifies common misconceptions about European Muslims, for instance, the idea that they subscribe to one cultural community.

Ahmed described an “ominous, threatening landscape in Europe.” His perception of Europe’s role as the “mother continent,” its large Muslim population, and continued tensions between Islam and the West make this project timely and important in contributing to “healing a fractured world,” he explained. As an anthropologist, he noted that his project is both practically-grounded and academically-minded.

Ahmed noted that the Muslim community in Europe is not united. “It is divided along ethnic, sectarian, political, and national lines,” he said. “The monolith of ‘Muslim communities’ does not exist as such as there is far too much diversity.” He noted that there are indigenous Muslims who are native to Europe and non-indigenous Muslims, including immigrants in France, the United Kingdom, and Germany.

Persaud noted that European Muslims are increasingly living in a “third space” that neither fits the traditional notion of the Middle Eastern Muslim or the notion of “Orientalism” seen in colonial times. Thus, many Muslim immigrants find themselves in a state of limbo, said Ahmed, even those who have lived in Europe for a long time, such as the Pakistanis in the United Kingdom.

The project’s scope–and engagement with a wide spectrum of Muslim experiences in Europe–makes it a very timely and cogent endeavor.

Childhood Deployed: Remaking Child Soldiers in Sierra Leone

My article on Susan Shepler’s book Childhood Deployed:

Shepler’s recent book, Childhood Deployed: Remaking Child Soldiers in Sierra Leone, examines the difficult reintegration of former child soldiers in Sierra Leone. Sierra Leone’s devastating civil war lasted from 1991-2002, leavingmore than 50,000 dead and over two million displaced as refugees. UNICEF estimates 10,000 children were involved in the hostilities.

Shepler was a Peace Corps volunteer in Sierra Leone in the 1980s, where she worked as a teacher. She returned ten years later, while the war was ongoing and again after the war was over, to study the process of former child soldiers’ reintegration into their communities. She conducted ethnographic research in Interim Care Centres for demobilized child soldiers. She followed the children in their everyday lives, in the centres, in school, in the community, and at play. Shepler jokingly referred to participant observation as “deep hanging out” and this description seemed especially apropos in her interaction with the children, which allowed her to gain a view accessible to her as a member of their community rather than an outsider.

The Paris Principles define a child soldier as any child associated with an armed force or group, regardless of whether she/he was involved in actual combat. All the factions in Sierra Leone’s war recruited children (boys and girls) from all parts of the country. The children carried guns, commanded battle, and worked as porters, spies, cooks, or “wives.” Some of the children were abducted and some joined willingly. Shepler’s book brings up the fact that the Western view of a child is actually quite different from the Sierra Leonean—this is relevant in the sense that child labor and child agency are much more heavily emphasized there than they would be in the West.

Shepler’s work examines how the “standard narrative” of the child soldier: “I was abducted; it was not my wish, and now all I want is to continue my education,” is something that was not universally told by the children. Children had different ways of talking about the experience, depending on who they talked to. In other words, it is not as though that narrative was not authentic, but rather that “child soldier” as an identity is created in social practice across a range of settings. In a sense, the process of using that term and applying that term is intensely political and we must examine what is lost and gained by deploying ideas of modern childhood.

“Reintegration works best when it works with local culture,” she said. Child fosterage, for example, would have been a preferable alternative to institutionalization in interim care centres. Apprenticeship, which is an integral part of the child-rearing experience in Sierra Leone, would have been better than the “skills training” provided in the centres.

Shepler advocated for the need to develop better models that capture the complexity behind the term “youth.” She also suggested that policy makers be cognizant of the political consequences of their distinction making. She advocated for the design of programs for benefit all war-affected youth and not just those children who were deemed to fall under the “child soldier” category.

Associate Professor Susan Shepler’s research is a powerful testament to why ethnography matters and why anthropologists have a lot to share with international development organizations.

 

 

SIS Experts Debate Response to Terrorism

My piece for the School of International Service

Facing the rise of the Islamic State group in the Middle East, Boko Haram in Nigeria, recent terrorist attacks in Paris, and extremist groups elsewhere, the United States and its allies are grappling with how to combat extremism and prevent and respond to terrorism. A panel discussion at the School of International Service on February 3 — U.S. and European Responses to Terrorism: Do We Have It Right? — addressed these challenges.

Moderated by Distinguished Journalist in Residence David Gregory, the former host of Meet the Press, the panel included Distinguished Practitioner in Residence Lt. Gen. David Barno (Ret.), who was senior commander of U.S. and coalition forces in Afghanistan from 2003–05, and Distinguished Scholar in Residence Nora Bensahel, a national security expert.

“This is a conflict that defies easy explanations,” said Barno, noting that the presence of terrorist groups such as ISIS and Boko Haram is threatening to destabilize the entire Middle East and North African region.

Bensahel noted that it is not a traditional military challenge alone. “These types of threats are a response to U.S. conventional supremacy, and since they do not take place on a force-on-force battlefield, even state adversaries are turning to irregular tactics like terrorism to achieve their goals.”

She noted that the Al Qaeda model of the past was a centrally-organized unit, which offered more options to counter it. Al Qaeda has since morphed into many different groups with different agendas, which makes a central strategy to combat it very difficult.

Both panelists concurred that the United States has a geographic advantage that allows it to mostly avoid terrorist attacks at home, and that the United States takes a “if we fight them there, we do not have to fight them here” approach to radical combatants.

Europe, on the other hand, is vulnerable to domestic terrorist attacks, given its proximity to North Africa and the Middle East and its continuing challenges to assimilate its Muslim communities. Europe “sees terrorism as a criminal activity — as such, it is a law enforcement problem,” said Bensahel. This non-military based response differentiates the fight against terrorism waged by Europe from that waged by the United States.

Gregory asked about the legacy of the wars in Iraq and Afghanistan and the consequences for global terrorism. Barno noted that these wars were plagued by a number of issues. He pointed to a “lack of any continuity and zigzagging far too much” and suggested that the U.S. approach has lacked a proactive element. “We have to figure out how to get at the ideology of militant Islam. We have to limit their ability to recruit by removing their ideological legitimacy, attack their finances, and also address the humanitarian crisis they leave in their wake,” he said.

Bensahel and Barno both said that a containment strategy is more realistic than a “seek out and destroy” worldview. “Instead of talking about ‘defeat and destroy,’ a more realistic goal might be ‘degrade and contain geographically,’” said Barno. To that end, intelligence and law enforcement cooperation is crucial and there is also a greater need to understand dynamics on the ground — particularly difficult in Syria, which is wracked by a civil war.

At SIS, Barno and Bensahel are collaborating on a book on military adaptation and the future of U.S. warfare. Follow them and David Gregory on Twitter: @DWBarno76; @norabensahel; @davidgregory.

Watch a video of the event here: http://www.american.edu/sis/events/SIS-Forum-Terrorism-and-US-Strategy-in-the-Middle-East.cfm