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October 27, 2006

A Tale of Two Cities: London and Paris

There is a socio-economic malaise in France. Which choices and models are available for the French to think about?

Dickens caught the public imagination with his Tale of Two Cities: Paris and London. It may be hard for Americans, or almost any other nationalities for that matter, to understand the rivalry between these two differing concepts of urban life. The rivalries are real none the less and they extend well beyond the two capitals. When Paris was jostled out of the Olympic Games by London, the gasp let out by the crowd outside the Hotel de Ville in Paris was loud and deep. I knew that they were hurt but I did not expect an intensely rude telephone call that night from a close French friend. Although he does not live anywhere near Paris and although he does not normally find himself in sympathy with those who live there, he was beside himself with rage. I did my best not to laugh but in the end there was little else to do. We remain friends. The French felt that the Games were theirs almost by right. I had observed a play for them that seemed old-fashioned, distant more fifties than contemporary.

I have had discussions with French friends over the last few years about the state of the French economy, the high level of taxation, the very high and persistent level of unemployment that often leaves young people, facing levels of unemployment much higher than those of older people, in despair or trapped in jobs in which they are overworked and cannot take the risk of leaving. Such conversations have tended to be circular in nature: the British economy is doing well but the French still like their social system if only the problem of unemployment could be solved. Sometimes high taxes are blamed, sometimes the inward flow of labor from other countries in Europe and elsewhere. Globalization is all very well but France needs to defend its national interests.

It has been hard to get a conversation going that asks for the assumptions behind French prosperity in the post-war years to be evaluated, to be compared to the British model after the challenges made to the economy and society by the reforms forced through by Margaret Thatcher. Somehow France will need to tackle its restrictive labor laws and face its growing pensions and social security problems.

This reluctance to evaluate assumptions seems also to have been the case and not just at local level but at the national level, and at the European level too. The wide-spread riots of last year that have some of their origins in the very high rates of unemployment experienced by ethnic minorities, seems, immediately at any rate, not to have encouraged, any greater willingness to reflect but the debate since has been intense. The British continue to press successfully for EU reform in terms of increasing competitiveness in all sectors. The ‘Anglo-Saxon’ (the French forget the Norman heritage in Britain) view of flexible resource allocation and a drive towards not just efficient markets but effective markets and policies is not one that is easy to sell to most French people— even those interested in reform. The French way has been very successful in the past, if only it could continue as it was. Economics, especially free-market economics is regarded as the Anglo-Saxon discipline ‘par excellence’. Thomas Friedman’s criticisms of the short working week and the long holidays seem beside the point to French ears. That there is a discussion in France there is no doubt, but it is, even where pursued with intensity, a French-style discussion.

French suspicion of the world economy (now in terms of job loss and ‘outsourcing’) is not a new phenomenon. French suspicion of an overly-free market economy domestically is not new either. Both suspicions have roots that go back not just to the immediate post-Second World War. They go back at least as far as Napoleon and the Continental Blockade. They may go back even further than Napoleon to the French administrative tradition prior to the French Revolution. In pre-revolutionary France and under Napoleon, there was a strong administrative tradition of regulating economic life. Recall Napoleon’s jibe about ‘the nation of shopkeepers’. The French approach and the British approach were compared in an effort, by economists such as Ganilh, before, and after the fall of Napoleon to find the right approach that managed economic life in a republican framework. Others at the time also argued over the relevance of various theoretical and practical models rooted in the French intellectual tradition. Adam Smith was translated early into French and appreciated and evaluated but his writing on matters of economic policy was never swallowed whole, even by his most loyal follower, J-B Say. The current anti-free-market and anti-globalization mood runs deep. Sophie Pedder, writing in the Economist on the 26 October 2006, talks of the willingness of politicians ‘to blame, and thus to discredit, outside forces’. Pedder quotes Nicolas Baverez: ‘The French political class has constructed a wall of lies against the globalized world’. Simon Jenkins, writing in the Sunday Times last year talked of the way in which the French ‘have voted to barter prosperity— higher personal incomes— for a better communal style of living’. France, he argued, refuses to allow local bread shops, local stores and post offices to go under. France may be centralized but it is interested in the well being of the localities that make up the whole.

There does not seem to be as yet any consensus reform agenda. The market is looked upon with suspicion yet planning does not look as if it has anywhere to go. Some may look to Britain but not with any great relish. The political challenge for the French is to create change but change that is in some sense compatible with high levels of social welfare. This will require not the adoption of the ‘Anglo-Saxon’ model but an adjustment to it, one that leads towards greater economic flexibility whilst at the same time, is capable of preserving much of the social welfare system currently under such strain. In the meantime enterprising young French people can find work by moving to the United Kingdom where they are in competition with others from Eastern Europe.

October 23, 2006

Ban Ki-Moon and the post of UN Secretary-General

Ban Ki-Moon takes up office at UN Secretary-General on the 1st January 2007. What is the role of Secretary-General and how will Ban Ki-Moon carry it out?

Generally speaking, the United Nations is not a wholly popular organization in the United States. It is certainly not popular with the Bush Administration over the stand taken by Kofi Annan on the war in Iraq. Annan deplored the notion of unilateral action. The United States view is that the Secretary-General is essentially an administrator, presiding over the management of the complex set of organizations (fourteen directly in the system and a number that are allied to it) that make up the United Nations. Annan adjusted the role to one of highly-level diplomacy (building on changes made by earlier Secretary-Generals) but in the process let the ball drop with respect to managerial issues and corruption in the oil-for-food program was thought to be the result. Annan was open to the creative conflicts within the job and chose to raise issues of reform, and the marginalization of Africa whilst keeping a focus on poverty and peace.

The ‘job specification’ is it would seem, both specific and general. Specifically the Secretary-General is defined as the ‘chief administrative officer’ and therefore the efficiency or better still I would argue, the effectiveness of United Nations activities are the direct responsibility of the Secretary General whoever he or she may be. CAO or CEO functions include reporting, monitoring, evaluating and prioritizing. Additional activities can be delegated to the Secretary-General from the Security Council. According to the Secretary-General’s web site, an exceptionally significant role is that of ‘good offices’ — mediating both in public and in private to prevent the escalation of disputes amongst Member States. However, the context is the fluid world of international relations and in a context of rapid change and enhanced danger, the role and the person occupying it needs to adjust and adapt and, above all, that person needs to get the balance right. It has been ever thus and Ban Ki-Moon is taking office in a period that some see as the most dangerous of times (though others look to the positive range of achievements that have also taken place since the end of the Cold War).

The role is complex. At the moment, the United States has one set of expectations about the office and some of the wider Membership has a differing set. China is not yet clearly determined on any particular role in the organization; it is still working out what its role in the international arena is to be. This is illustrated to some extent by its critical comments against North Korea and by its hesitancy over being too tough (for reasons that are perhaps largely pragmatic). Any Secretary-General needs to win the respect and confidence of all the Member States and, at least to some extent, reach to the wider international public in order to enhance effectiveness and respect.

How does Ban Ki-Moon see his role? He intends, according to his acceptance speech, delivered in English and with some passages in French, to build upon Annan’s legacy with respect to peace and prosperity. He has been given considerable time to prepare for the post. He has made it clear that he will ‘consult widely on how best to proceed with our common agenda of reform and revitalization’. This ought to help him ease his way into office with some sort of an agenda. He is clear that the promise of the United Nations is useless without delivery. An emergent theme may be that of promising less and of delivering more. He sees the UN in the 21st century as an institution that helps ‘to strengthen the inter-state system so that humanity may be better served amidst new challenges’. He will continue Kofi Annan’s aim, according to his speech, ‘to protect the most vulnerable members of humanity’. The reform agenda will be continued though the Members need to be on board. In the process he has committed himself to remain faithful to the principles of ‘harmonious leadership’ that he has incorporated into his diplomatic life. Holding the UN system and its administrators to the ‘highest standards of professionalism’ will be essential to his mission. Ban Ki-Moon was careful not to spell out in detail his priorities and to ensure Member States that he will now engage in a period of listening.

Ban Ki-Moon’s speech seems to put him more in the chief executive camp than in the high-level diplomat camp and this no doubt pleases the United States. Keeping on the right side of the United Sates is significant for the role but how this is achieved needs to be the outcome of a management strategy on the part of the Secretary-General. Within the UN he will need to establish his even-handedness with respect to all Members. The fact that he has also earned China’s support is interesting as it implied that it too is favourable to issues relating to good administration. This ‘chief executive’ approach seems to conform to what is known about his style. The BBC’s Charles Scanlon talks of Ban Ki-Moon’s ‘consensual style’ and his preference for ‘the back-room deal over the grand public gesture’. Saying less and delivering more, through careful and patient consensus building, can be an optimal strategy in tricky situations. Influence rather than power is the way to proceed. It may just be that Ban Ki-Mon has the right collection of skills and appropriate experience of making diplomatic judgments likely to be required for success. In this, only time will tell.

October 19, 2006

Round and Round the Doha Round.

EU Trade Commissioner, Peter Mandelson, was in Washington in late September trying to revive the Doha Round. Pascal Lamy, the head of the World Trade Organization, remains pessimistic about the resumption of the Doha Round. What is going on?

In Washington, at the end of September, Peter Mandelson, who packed a huge range of meetings into his three-day visit, demonstrated his commitment to reviving the talks. Mandelson reported that ‘We face a tough challenge to bring the Doha Round to a successful timely conclusion. I believe that the Administration is committed to this, and so am I’. Mandelson held meetings with the Secretary of State, Condoleeza Rice, as well as with the Agricultural Secretary, Mike Johanns and a range of others with interests in trade and agriculture. He also met with a number of influential members of Congress as well as with representatives of the private sector. The EU’s position is that it will cut domestic subsidies and remove export subsides and that this will create space for American and other producers in the international market but some of this will require changes in American policy.

The EU has already reformed its Common Agricultural Policy and has moved towards a system that brings benefits to the consumer (and the tax payer). Most subsidies will be de-coupled from production. Instead of a subsidy to production (that leads to over-production) there are new ‘single farm payments’ that are to be made with respect to policy objectives relating to environmental, animal welfare and food safety considerations. These reforms have a wider context, that of the development and modernization of EU trade policy. Here the consideration is making sure that the EU is competitive in international trade. Mandelson has helped develop a new approach that recognizes the need for Europe to be competitive in international terms. The force of this policy is that of reducing protectionism and opening up overseas markets. As in the United States current approach to trade policy, the EU is now also concerned with the protection of intellectual property rights (important with respect to China) and with a new round of bilateral trade agreements. As in the United States, there is a drive towards bilateral agreements. This suggests an alternative strategy on the part of both, just in case Doha really is finished. Multilateralism, which has the advantage of being simpler once agreements have been reached, is under question.

So the EU has adopted a system of de-coupling farm support from farm output. Mandelson seems to want the United States to adopt a similar policy for its support program. This is a question that links directly to the Farm Bill currently under discussion in the Legislature. There are voices that are pro-reform along the lines already adopted by the EU. These are not the only voices. The context is the commitment by the EU and the United States within Doha to open up the international markets through a process of domestic subsidy reform. The EU holds that it has achieved a significant reform that lives up to the commitment made and that enables it to remove export subisidies. It is looking to the United States to adopt a similar set of reforms. Even if the United States does so this may only reconcile the US and the EU but the reforms must also satisfy Brazil, India, Australia and Japan if there is any hope for the Doha negotiations to re-start.

Mandelson may have made a hopeful statement at the end of his visit but Pascal Lamy’s view on the 17 October is more pessimistic. As the head of the World Trade Organization (WTO) he disapproves of bilateral deals, including those made by the EU, and made this clear to his audience, the European Parliament Trade Committee. In his eyes such deals evade the significant issues: the reform in world trade in agricultural commodities and the issue of dumping. These are the reforms that are of significance for developing countries. They are the reforms that the Doha Round set out to tackle and that are central to Doha’s developmental agenda. He also feels that whilst leaders may be paying lip service to the idea of restarting the talks, ‘these political signals do not represent a change in negotiating positions’ though he was careful to add ‘But these may be forerunners of a new state of mind’. Lamy too sees the strategic importance of the shape of the Farm Bill with respect to the negotiating position of the United States. He also points to the negotiating mandate given by Congress to the Administration with respect to trade agreements (and soon to run out) and suggests that its renewal or otherwise is strategically important. It seems that with respect to what’s going on, we will have to wait and see.

October 13, 2006

Exacerbating security problems in Iraq

What is the significance of General Sir Richard Dannett’s comments on Iraq? What will be the political fall-out?

It is not often that a Chief of the General Staff in the UK speaks out in public but when it happens it carries considerable political significance. The present incumbent in the post, the plain speaking, General Sir Richard Dannatt has done so twice now. He first drew attention, when he took office, to his view that the British Army is over-stretched. The second time, only this week, he stated that the Army’s presence in the Basra district of Iraq ‘exacerbates violence from those who want to destabilize Iraqi democracy’. This is not all that the General had to say in his original Daily Mail interview. He talked of the ‘original intention’ of being in Iraq as being that of setting up a ‘liberal democracy that was an exemplar for the region was pro-West and might have a beneficial effect on the balance within the Middle East’. He suggested that, given the experience to date, ‘we should aim for a lower ambition’.

It is seems to be widely accepted that Dannatt is articulating what many sections of the British Army feel, though Dannatt himself was quick to point out that he was talking neither of quitting nor of running. The issue is that of a timed and timely withdrawal, and, given what he had to say about 'lower ambition', of revising the objectives. The sensitive political issues that Dannatt, according to the lead article in the Times Online has been talking on are two: ‘Iraq and Afghanistan — which have in many ways defined the reputation and record of this government.’ Dannatt’s initial statements, later clarified, have not essentially been modified. He feels that he is representing in his statements concerning the ‘exacerbation of violence’ in the Basra area what the commanders and soldiers on the ground feel. He feels that he has an obligation to do this (he sees the Army as his ‘constituency’) and this makes him able to hold his ground against the politicians and the normal expectations of correct British civil service protocol.

There is nothing essentially new in this, from the point of view of those who comment regularly on Iraq. That is not the point. Rather, the fact that a senior figure has spoken out clearly in the difficult problem of helping or hindering the development of Iraqi responsibility in terms that are substantially different, according to the BBC, from the kind of language still used by Tony Blair must be significant. The two may claim that there thinking is close but as the BBC’s Nick Assinder points out ‘Imagine the prime minister had suggested- no matter how obliquely- that British troops were exacerbating security problems in Iraq or elsewhere’. Both Dannatt and Blair, in subsequent statements, have picked on aspects of what Dannatt originally said in order to present an united front. It is considered significant however, that Dannatt has not actually withdrawn anything that he originally said. Any suggestion that he somehow slipped up in talking as he did to the press, must surely be mistaken. Steadiness under fire can be assumed of a man who gained the Military Cross very early in his career. He is too an astute a leader not to have worked out exactly what he was doing.

What is the fallout, if any, from the fact that Sir Richard spoke his mind? Iraq is a significant political problem which will not go away or which will remain long un-discussed, nor indeed should it. For Blair, it keeps coming back. Those who have been consistently against the war will not let go of the General’s views. The 'how' and the 'when' of exiting will be discussed with more urgency. Iraq is the issue that politically stalks Blair. It is an issue that requires new thinking, not just in London but more especially in Washington. New thinking seems hard to come by. In the end, new thinking may require new thinkers.

October 10, 2006

North Korea: What next?

What are the issues surrounding the nuclear test in North Korea? What is North Korea trying to achieve?

President Bush branded North Korea along with Iran and Iraq as members of an ‘axis of evil’. The regime in Iraq has been toppled though this has brought neither stability nor relief from threats against security in other parts of the Middle East or elsewhere. If the aim of the ‘axis of evil’ policy was to encourage ‘rogue’ states (states that do not accept the normal pattern of inter-state relations) to accept due international process, the policy appears to have failed. North Korea, by all accounts, has acted with confidence knowing that neither the United States nor even China can do much at least in the short run, to alter the course of events in Pyongyang. China is constrained by fear of potential instability in the area should the regime crumble under any withdrawal of Chinese economic support. The United States is engaged in financial sanctions and will push harder. Any lack of effective international action against North Korea will be avidly studied by Iran and the political consequences noted. Both China and the United States have tended to use multilateral negotiations. The United States worked with the six-nation contact group and the Chinese supported this. We must expect that the Chinese are currently talking with Japan and other interested Asian countries. China, irritated by North Korea, but needing to balance stability against potential chaos, is the country to watch.

But what is North Korea trying to achieve? It could not win a nuclear confrontation with the United States nor can such a confrontation be considered likely except as an act of self-destruction, at some stage in the future. This would not seem to be the issue unless 'regime change' is on the agenda. The regime in North Korea simply wants to survive. Colin Powell hinted at this in his talk recently in Minneapolis. Survival and direct negotiations with the United States are also the subjects of an article by Selig S. Harrison in the Washington Post of the 10 October 2006. The debacle in Iraq illustrates very clearly both the strengths and limitations of American power and seems to have strengthened the will in both Tehran and Pyongyang.

Harrison’s argument is that the secretive regime in North Korea wants to coexist with the United States. The North Koreans are not engaging primarily in a ‘military challenge’ rather they wish to urge direct bilateral talks concerned with the ‘normalization of relations with the United States’. The regime does not wish to suffer the fate of Iraq. Harrison contrasts Washington’s view with the Pyongyang view that the denuclearization agreement had two basic elements: ‘abandoning nuclear weapons’ and steps to ‘normalize relations’ between the United States and North Korea. Washington focuses on the first point, whereas the regime in North Korea is profoundly concerned with the second. Normalization of relations would include the loosening of United States financial sanctions against the regime.

Harrison is clear that diplomacy is needed and in this case direct diplomacy as the perceived threat (generated no doubt by notions such as the 'axis of evil') in North Korea is from the United States. ‘Regime change’ is out of the question. The effort must be to both coordinate a diplomatic effort that includes China and at the same time encourage direct discussion between North Korea and the United States. Such disucssions should aim to remove the nuclear option whilst encouraging stability. Harrison’s argument deserves further attention. The bargaining elements for a dimplomatic settlement are available i.e. concessiosn with respect to nuclear policy and concessions with respect to sanctions, particularly financial sanctions and the added possibility of Chinese support. There is of course a bind in all of this: by creating the idea of an ‘axis of evil’ a set of expectations has been generated by those labeling and those being labeled that seems to have made matters worse. Getting caught by one’s own rhetoric suggests that with significant diplomatic issues, saying less may well be best.

October 3, 2006

Colin L. Powell on leadership and other things.

Colin L. Powell talked to an audience of 5000 people at the University of Minnesota on Tuesday 3 October. What was the ‘flavor’ of what he said?

Colin Powell’s ostensible subject was ‘leadership’ though it was clear that the audience anticipated his comments, gently worked, on the present administration, the war in Iraq, Iran and North Korea. North Korea’s announcement that it will test a nuclear device makes Powell’s views all the more interesting. Iran too has announced that it will continue to work on the enrichment process and this has led to a pessimistic report by Javier Solana to the Security Council. What follows here is my interpretation of what Powell said, rather than a verbatim report.

Powell’s views on leadership were based around four or five clear understandings: the creation of a sense of purpose or mission; the understanding that is it ‘followers’ who get things done; inspirational attitude leading to self-motivation; the need for supportive training and the issue of trust. Trust is the bond between leaders and led and voters and leaders, he seemed to say, need to reconsider how trust can be re-established.

He rejected that, in the present context, that this was the most dangerous of times. He argued that there are many positive things about today’s world including the end of the Cold War; the modernization of China; the avoidable nature of any possible disputes over Taiwan; the new strategic partnership with India; the addition of seven new members of NATO. There were problems in Afghanistan, Iraq and in the Israel/Palestinian relationship. He reminded the audience that 5million refugees returned to Afghanistan as a result of the changes there. In Iraq the problems were that there had been a lack of an adequate policy shift after the initial overthrow of the regime. Subsequent sectarian violence, he seemed to say, can only be properly handled by the Iraqi authorities who need to show, and need to be allowed to show, proper leadership. US troops cannot stay there for ever. Iraq plus Palestine together make up 90% of the perception problem with US policy in the Arab world. This is, it seems to me, an important insight that needs further debate.

With respect to the Geneva Convention and associated matters, Powell made it clear that any suggested failure to observe International Conventions causes the United States to lack moral authority in the eyes of foreign governments and populations. The situation was retrievable and trust could be restored. The conditions needed to be tested in the Supreme Court.

Libya has been moved away from nuclear weapons. It took time and a period of isolation. Iran sees itself surrounded by or close to states that have nuclear weapons. Diplomacy, in his view, had time to work as it did in Libya, and it will be a number of years before the situation is critical. The agenda was a diplomatic one with European involvement. North Korea has nuclear capacity. The regime is anxious to survive. It seems to be developing weapons as a way of helping to secure itself, a kind of bargaining chip with the United States. There is nothing that it can do with the weapons.

Powell felt that it was important to remember that over the last few years a number of positive outcomes for diplomacy had emerged: the expansion of NATO and a new basis for European security; the settling of the North-South War in Sudan (though there were still problems with a settlement in Darfur); greater United States aid to Africa; the establishment of a number of free-trade agreements. There were positive developments as well as negative developments and scope for continued diplomacy. His theme overall, it seems to me, was that of building trust and forging alliances, in line with much of the diplomatic actions he sustained when he was in office.