No borrower solidarity

Greek Prime Minister, George Papandreou, on BBC 1′s The Andrew Marr Show

ANDREW MARR: It has been reported that you’d appealed to the Chinese and indeed possibly also to the Russians for financial support, that you wanted to sell bonds to those countries.
GEORGE PAPANDREOU: Well actually …
ANDREW MARR: Can you clear that up?
GEORGE PAPANDREOU: Yes. Well actually we haven’t, but we are of course open to diversify our portfolio.
ANDREW MARR: So you wouldn’t rule out Chinese or Russian …
GEORGE PAPANDREOU: I wouldn’t rule out different sovereign funds being interested in our bonds. Also we would like to diversify and will do so if that’s possible.

From the Abu Dhabi newspaper The National, quoting a person familiar with the Dubai World debt restructuring talks –

The Abu Dhabi Government intervened in the Dubai World situation last December with an injection of $10bn of bonds that enabled Nakheel to pay a $4.1bn bill for a sukuk Islamic bond. Some $4.9bn of that total sum has been spent, the person said, with the balance still available for the DFSF. “The $10bn will be enough because it has to be enough,” he said.

“It is akin to Greece. If the EU just bailed out Greece, it would be like throwing good money after bad.”

Two things to note.  The Greek PM did not restrict himself to Russia or China in the specification of possibly interested sovereign funds vis-a-vis Greek government debt.  Gulf funds would be an obvious alternative.  But The National’s probably well-connected source makes it sound like Abu Dhabi might be viewing Greece and Dubai as similar situations and thus sees its portfolio weight already as high as it wants for such circumstances.  And that’s despite their differences.  Dubai World is a state-owned but commercial company already in debt restucturing negotiations while Greece clearly has some fiscal restructuring to do, but not debt.  But still.  If they’re hoping to sell bonds in the Gulf, they may have some marketing to do first.

Sunday UK Strategic Defence Review Blogging: Chapter 1

So, here goes with the first in my series of posts on the UK’s strategic defence review as a blog.

Here are what the MoD thinks are the major forces that will determine the political environment:

The National Security Strategy sets out the key threats to the UK’s security and the underlying drivers of those threats. It makes clear that while there is no external direct threat to the territorial integrity of the UK, there are a variety of evolving threats for which we must be prepared, and different environments and domains in which we must be prepared to act, from counter-terrorism and counter-insurgency to maritime security, cyber warfare and capacity-building in fragile states.

We believe five major trends will impact on the international context for defence in the coming decades. The rise of the Asia-Pacific region as a centre of global economic and political power will create a major global shift as dramatic as the end of the Cold War. Continuing globalisation will make the world ever more open and interlinked in communication, trade, culture and transport, and we must ensure that those lines of communication remain open if the UK is to prosper. We will see serious climate change, whose impact is likely to be most severe where it coincides with other stresses such as poverty, demographic growth and resource shortages. We are likely to see growing inequality in many parts of the world, as economic development creates new divisions within and between countries. Proliferation will remain a cause for concern. Several states continue to pursue nuclear programmes in contrevention of their NPT commitments. Terrorists will continue to seek to exploit nonconventional means including chemical, biological, radiological and nuclear materials, with wider access to advanced technologies increasing the risks.

The first point here is something of a theme in the document – we state the problems, but have already decided what the solutions are going to be. This actually comes up in the very first paragraph of the executive summary:

The UK economy relies on trade and the free passage of goods and services. A stable international order is essential to our interests and security.

In the medium-term, success in Afghanistan is critical to UK security.

The next decades will see the development of a number of major trends, including a shift of power to the Asia-Pacific region and climate change.

Of course, anyone who relies on an executive summary deserves to be executed, but it is far from clear to me that the second point (success in Afghanistan) follows from the first or leads to the second, however you define “success”. It’s certainly a major alliance commitment, but its criticality to UK security is debatable, especially in the light of trade, international order, or the rise of Asian powers.

Similarly, there’s a sort of reiteration of standard War on Terror tropes – we’re asked to be very worried about terrorists getting hold of weapons of mass destruction.

Going through that little list of horrors under trends, there’s an interesting point that is missing. The rise of new world powers is not a matter of debate, but what about the corollary? Arguably, the UK and France remain medium powers; but the big change is surely that the status of the US as sole superpower is on the way out. It’s not yet clear how much of this change is accounted for by Chinese or Indian success and how much by American decline, in so far as “decline” is a useful concept, nor how fast and how far it will go. But that it exists is indeniable.

Surely “Coping with US relative decline” ought to be high on the UK’s political to-do list?

After all:

International partnerships will remain essential to our security, both membership of multilateral organisations – like NATO, the EU and the UN – and bilateral relationships, especially with the US….Within this multilateral framework, the UK has a range of close bilateral security and defence relationships. None is more important than that with the United States. The relationship is based on common values and interests which will endure in the 21st century, to our mutual benefit. The UK benefits greatly from bilateral co-operation in the nuclear, intelligence, science, technology and equipment fields. Our relationship also increases our impact on issues such as terrorism, proliferation and transnational crime that affect our security but over which in today’s globalised world our national influence is limited.

As anyone who reads this blog will probably know, I reckon several of those points should carry the Wikipedian tag “citation needed”. A major theme of Chapter 1 is the importance of multilateralism and international institutions, not just the formal ones like the EU, UN, and NATO, but also informal international institutions like maritime trade and telecoms interconnection. This is not new in British politics – up to a point it’s an implementation of the so-called international society approach associated with thinkers like Hedley Bull and Martin Wight.

But a key problem here is what happens if the bilateral special relationship and the multilateral institutions conflict. Since the second world war, it’s been a central assumption of policy that there is no conflict – the US is supportive of the institutions, it benefits from them, and therefore there is no problem. Relax this constraint, however, and the compass starts to spin crazily. What if the US wants to tear up the UN Charter, split NATO, commit a gaggle of war crimes? And we have to relax the constraint – not only do we have the example of Iraq, but we admit that the role of the US is itself changing and its relative power declining.

The answer is surely that a major aim of policy is to maximise our ability to say “no”. Otherwise, either the institutions themselves break down or get used to drag at least some of the members along. Looking at Iraq, it’s worth remembering that it’s not enough to be small and pro-European; the Netherlands, Spain, and Italy all ended up contributing significant numbers of troops, but hardly enough to give them any meaningful influence over the Americans. (Hey, a full armoured division and most of the RAF wasn’t.) Alternative scenarios include the creation of new multilateral institutions (that we might not like), a revived UN based on a balance-of-power settlement, or a pre-1914 scenario with five or so similarly sized world powers competing.

To be fair, the drafters of Chapter 1 do seem to be aware that – as Bruce Sterling might say – whatever happens, things are going to get weird, or to put that in civil service prose:

It will be harder to predict which threats will emerge as the most significant, leading to a future international context characterised by uncertainty.

They also draw conclusions from that:

On the basis of experience in the United Kingdom and internationally, if we continue to search for a technological edge, including improved protection for our personnel, we can expect the cost of successive generations of equipment to continue to rise at above the rate of inflation

Am I right to read this as a call for general-purpose capability and the avoidance of expensive and hyper-specialised gear? A sort of Toyota strategy, perhaps not the best analogy to use right now. In fact, of course, the industries that have been best at doing what Toyota did recently are the ones that supply the UK armed forces. Chapter 1 also touches on that:

We will need to establish a better balance between operational output and supporting activity and between the quality and quantity of our major platforms.

To put it another way: enough with the cost overruns, and projects that spend £192m on PowerPoint presentations. This, of course, is much easier said than done and heavily reliant on the kind of people the MoD recruits to run its procurement operation.

Government by Acronym

Haiti is a country with at least 9 million people and GDP of $7 billion (pre-quake).  Think about that size of that latter number in relation to the usual magnitudes that we discuss on this blog.  But anyway, given its long-standing economic plight, Haiti also has extensive relations with international financial and development organizations and as part of that relationship, it has a poverty reduction strategy.  In February 2009, the government published a progress report on implementation of that strategy.  Here’s a paragraph on implementation (para. 37) –

Strategic-level entities: the Strategic Orientation Investment Council (COSI), the Donor Advisory Committee (DAC), and the Priority Arbitration Committee (CAP) are not yet officially up and running. At the operational level, the Interministerial Committee for Implementation Coordination and Monitoring (CICSMO) is up and running and is chaired by the Minister of Planning and External Cooperation. The Executive Secretariat of CICSMO, the key entity for the entire implementation mechanism, the Interministerial Subcommittee for Sectoral Coordination and Monitoring (SCTICSMO), and the Departmental Subcommittees for Implementation Coordination and Monitoring in the regions (SCDCSMOs) have been established. SCTICSMO is holding its ninth monthly coordination and monitoring meeting.

Does this sound like the kind of administrative weight that a country like Haiti could handle? And with the government now essentially destroyed by the earthquake, does it sound like the kind of thing they should rush to re-establish?  And yet as the demands come in for a “coordinated” approach to aid delivery, how does one avoid exactly this kind of structure emerging again?  There is going to be a clear tradeoff between getting aid delivered quickly and establishing any meaningful role for the government of Haiti in the crisis mitigation and recovery process.  Can you build a nation without a government?

 

 

A Fistful of Umlauts

In which the Frankfurter Allgemeine, the German newspaper whose website has meanwhile gotten much better, interviews Edward. He says things such as

“Um das zu erreichen müssen Preise und Löhne für Jahre um 6,5 Prozent fallen.”

and

“Denn die Unverantwortlichkeit der spanischen Regierung gefährdet andere Europäer. Gefragt ist Führungsverhalten in Europa, vor allem von Frankreich und Deutschland.”

The bits with fewer umlauts are also very good.

Europe in the World Cup Draw: Zzzzzz

All the major European sides are in groups where they are likely to advance. England has an interesting match against the US, but does anyone really think the English are going to fall to Algeria or Slovenia? The Netherlands, to Denmark or Japan? Italy, to Slovakia or New Zealand?

The closest thing to interesting is down in Group D, where Germany faces three teams that, while not as good as Germany, are all good enough to perhaps pull off an upset. But Germany is still very likely to advance.

Since “which major European side advances” is not interesting, and the obvious stuff about the draw has already been discussed a million times elsewhere (Italy lucks out! France is not punished! Portugal, too bad!) let’s briefly consider the structure of the groups. Continue reading

Europe in the 2010 World Cup

Looks a lot like Europe in the 2006 World Cup, actually.

Qualifiers this time: Denmark, England, France, Germany, Greece, Italy, Netherlands, Portugal, Serbia, Slovakia, Slovenia, Spain and Switzerland. That’s almost the same list as last time. Oh, we won’t have Poland, or Croatia, and the Danes, Slovaks and Slovenes got in, but eight of the thirteen are the same, and the Big Five all got in as per normal. Is it cynical of me to think that switching the Slovenes and Greeks for Sweden and the Czechs won’t make much difference?

Anyway. Consider this an open thread for World Cup football. With 192 days to go, what have been the big surprises so far? (Have there been any, really?) And what are the wild hopes? Who’ve you got?

Immediately. Without Delay.

From the assembled press, someone shouts a question, “Effective immediately?”
“I have been informed that such an announcement was prepared today, you should already have a copy. According to my understanding, that is immediately. Without delay.”

Twenty years ago this evening, Günter Schabowski gave an unrehearsed answer at a press conference, and thousands of East Berliners — and soon, many more thousands of East Germans — did not delay. The Berlin Wall was open.

Welcome to the Lisbon Era

Czech President Vaclav Klaus, after much hemming and hawing, signed the Treaty of Lisbon this afternoon. It is expected to enter into force on 1 December 2009. This success is undoubtedly the highlight of the Swedish Presidency, which made concluding ratification a top priority.

Prominent changes include more qualified majority voting in the Council of Ministers, increased involvement of the European Parliament in the legislative process through extended codecision with the Council of Ministers, eliminating the pillar system and the creation of a President of the European Council with a term of two and half years and a High Representative for Foreign Affairs to present a united position on EU policies. The Treaty of Lisbon will also make the Union’s human rights charter, the Charter of Fundamental Rights, legally binding.

Now that that’s done, is everyone ready for the next round of enlargement?

Everyone must move to Finland right now

So some British think tank called the “Legatum Institute” has published an index of the best countries in which to live. Apparently they’ve been doing this every year for a while now, but it just now caught my eye.

Let me start by saying that I find this index pretty dubious. (N.B., there are a lot of bad international indexes out there. Don’t get me started on the American Heritage Index of Economic Freedom.) The Legatum Institute’s staff appears to be a mixture of warmed-over Thatcherites and recently-unemployed American conservatives. So it’s not surprising that the top 20 countries are dominated by western Europe and the Anglosphere, while the bottom ranks are all former colonies full of brown folk.

To make matters worse, they’re being shifty about their methodology. If you download the report (.pdf), you’ll find that it says it’s using 79 different variables, assigned to nine sub-indexes. But it does not say clearly what these variables are, nor where the information is coming from, nor whether they are weighted to create the sub-indexes. The sub-indexes are not weighted, which is another bad sign — they’re just taking the scores that they’ve generated and averaging them together.

Meanwhile, Iraq and Afghanistan are conspicuously missing. Okay, that could be from a lack of good data. On the other hand, they found enough data to go forward in Sudan, Yemen, and the Central African Republic. And having Mugabe’s Zimbabwe absolutely last makes me say “hm” — I can think of half a dozen places that should be in contention, from North Korea to the Congo — as does the very low rank given to Hugo Chavez’ Venezuela. (I’m no fan of Hugo’s. But Venezuela is the worst country in Latin America? Even after throwing out Guyana and a few other small countries that weren’t ranked, that’s a very large “hm” indeed.)

Having said that, this index is at least interesting. Continue reading

Rory the Tory?

File under “Who knew?” The Guardian reports that Rory Stewart has been selected as a candidate for the UK’s parliament from a safe (10,000 majority) Conservative seat. In one of those moves that makes me think that parliamentary systems are odd sometimes, one of his first actions will be to move so that he actually lives in the district he will represent. “I will be straight on to the estate agent in the morning,” the Guardian quotes him as saying. “I’m very much looking forward to living in the constituency and getting to know everybody.”

(Stewart’s been a soldier, a diplomat, a wanderer, a provincial governor in Iraq, a professor at Harvard and is currently a director of a significant charity helping part of Afghanistan, yet the Guardian web edition’s headline writer chooses to identify him as “Former royal tutor Rory Stewart.” What does that say about Britain? Or the Guardian? Or perhaps the Guardian’s perceptions of its audience?)

I would not have pegged the author of The Places In Between as a Tory, though on closer consideration I think he’s too much of a loose cannon an independent thinker to be much of a back-bencher at all. Anyone who drops everything to walk across Asia and spends the winter of 2001 walking across central Afghanistan is not likely to be fazed by a party whip. I haven’t yet read The Prince of the Marshes: And Other Occupational Hazards of a Year in Iraq, which probably gives a better sense of how he’ll do in constituent service. Maybe he’ll turn out splendidly. Still, he’s had a decade of changing jobs every year or two, is he likely to settle down to work in Westminster? (On the other hand, I asked the same question about Bobby Jindal, with whom I have a passing acquaintance, and he’s still on the job.)