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January 31, 2007

Anti-globalization: The World Social Forum

Whilst the representatives of the rich were junketing in Davos at the World Economic Forum, the representatives of the poor were meeting at the World Social Forum in Kenya. The six-day event in Kenya did not attract much international media attention. What is the World Social Forum? What are its topics of concern and why is it significant?

Globalization is the spirit of the times but the term is a euphemism for if we are to spell it out what we are essentially talking about is the globalization of capitalism. Capitalism has its strengths and weaknesses: it is good at producing wealth; it is good at product innovation and responding to relative scarcities; it is not so good especially in the sort-term at an equitable distribution of new incomes and it has a tendency (recognized by Adam Smith and also by Karl Marx, who nonetheless admired its transformative energy) to produce monopolies. Analysis of the downside of economic development and the division of labor started with Smith and continued with Marx. Social critics in Victorian England such as John Ruskin pointed out the significance of welfare, the right of workers to be healthy and to live in sanitary conditions and to receive an education that helped them develop their humanity rather than simply to be useful to capitalist production. Above all, Ruskin reminded his middle-class readers that we have only one life to live and whilst it is important to look to long-term development, present inequalities and present injustices matter. Economic change can not simply be about more production but must also be about enhancing the quality of human existence.

The World Social Forum is an attempt to provide a framework in which those concerned with the plight of poor people in the context of global economic development can make their voices heard. It is intended to be an open-space wherein those grappling with issues of social and economic justice as well as sustainable development can articulate their concerns. Ideally it should allow poorer people engaged in social action to speak to the wider world. It has been criticized by traditional leftist movements for being vague and ineffective and for being dominated by Non-Governmental Organizations rather than by the direct representatives of the poor. It has been criticized from the right as ignoring the fact that in the long-run market-led growth has positive outcomes with respect to incomes, welfare and liberty. It reminds the world that the poor need attention now and has adopted as its mission that notion that ‘Another World is Possible’.

Any economic change has winners and losers. This is as true of a fall in the dollar exchange value in the United States (exporters benefit and importers are penalized) as it is with respect to the plight of (say) hand-loom weavers in India as a result of China’s strengths in textile production. In theory, if we are looking at economic change through the lens of economic welfare, change is to be promoted in the incomes of those who benefit are greater than the losses to those who miss out, making compensation possible at least in theory. A problem is that with the rate of change in some countries being so rapid, the poor are brushed aside in the rush to domestic economic growth. International measures for compensation are also weak. Think just how long it has taken for debt-relief to be discussed and applied. The World Economic Forum is aware of this and have attempted to look at the plight of those who miss-out as a result of (what I would wish to call, partial) globalization (Sub-Saharan African is largely untouched by the modern phase of globalization; agriculture remains regulated even if Doha round is successful and there is no world-wide market for labor services). The World Social Forum, whatever its organizational problems, is consistently focused on airing the issues that relate directly to poor people and this gives a sense of urgency that may not always be felt elsewhere. The criticism that it is too focused on Brazil and Latin America was partly answered by the fact of the Kenyan meeting. The downside of globalization will usually be experienced as particular problems in particular places and will often require a change in domestic policy. However the problems will share common features with problems elsewhere and hence allow for the possibility of learning from sharing as well as raising the possibility of greater effectiveness in the communication of concerns to global institutions such as the World Bank. It seems unfortunate that the issues that motivated the World Social Forum in Kenya were largely ignored by the international press. In the interest of building global partnerships for development, dialogue would help.

January 30, 2007

World Economic Forum and the Doha Round

It looks as if the World Economic Forum (seen by its critics in the World Social Forum as the club for corporations and other global capitalists) has concluded in Davos on the 28th January. It is reported that progress was made on four significant issues: the Israeli-Palestinian Conflict; Climate change; sub-Saharan Africa and the Doha Round. This note pursues the issues around re-starting the Doha talks and focuses on trade in agricultural products. What happened at Davos? What are the issues and how are these issues linked to the United States Farm Bill?

The World Economic Forum is an international foundation concerned with global economic and social policy. Its critics see it as a club for capitalist discussion and for economic net-working on a massive scale. Its supporters see it as a chance for considered discussion on significant global issues, leading to the prospect of beneficial policy changes. At the end of this year’s meeting it seems that something significant was achieved. The official re-opening of the Doha ‘Development’ Round now seems to be a possibility as a result of the meeting of Trade Ministers tacked on to the end of the Forum. Tony Blair indicated during the Forum itself that there was a significance chance that talks would officially reopen. He reminded participants that Doha was a bout helping developing countries trade their way out of poverty. Chancellor Markel (Germany) indicated that she would put the Doha Round firmly on the agenda of the Group of Eight Summit to be held in June 2007.

Pascal Lamy (Director-General of the WTO) had indicated prior to the meeting that he hoped that all players were experiencing a new sense of commitment. The issues of creating free-trade in agricultural commodities are complex as the objective of market access comes up against the expectations of agricultural industries used to tariffs and subsidies. It is in the United States and within the European Union that the biggest adjustments will be needed. The issue of freer trade in agricultural commodities world wide is linked to domestic subsidy reform in the United States and in the EU. The Farm Bill, soon to be considered by Congress is pivotal as is the Administration’s ability to negotiate trade agreements without having them picked apart by Congress (the President loses his authority to negotiate trade agreements on the 30th June). Subsidies will be traded-off against market access. Domestic politics in the United States suggests that the EU has not made enough concession to make this trade-off interesting to farming states.

Davos has talked up the issue of development with the appropriate posturing by world leaders (including Bono and Bill Gates) but the significant players are the EU and the United States. There is still some disagreement within the countries that make up the European Union. France, for example, is currently opposed to further tariff and subsidy concessions though the issue there has something to do with the Presidential election to be concluded by the 6th May. France is not alone as the Republic of Ireland is also skeptical. However both the EU through Peter Mandelson, the EU Trade Commissioner (whom some think has pushed for change beyond his brief) and the United States have signaled a willingness to make improved offers though there is some official denial on the part of the United States as to what is on offer. The key group for any further developments also includes Australia, Brazil, India and Japan. Various outcomes are possible if the trade talks restart though there will still be a mix of agricultural tariffs and subsidies and a list of what commodities are in the agreement and what are left out.
Complete free trade in agricultural commodities is not on the agenda.

Whilst there will be benefits to world trade in agricultural commodities, it appears that sub-Saharan Africa is unlikely to be a major beneficiary of the Doha ‘Development’ Round. The is party due to the structures of sub-Saharan African economies, the lack of bargaining clout experienced by small economies and the comparative lack of negotiating capacity in analytical terms. The WTO is constructed on a democratic basis. If Doha is to be officially re-launched, and it looks that this is increasingly likely, then the outcomes must be able to command broad backing, including backing from sub-Saharan Africa.

We know need to watch out for a move by Pascal Lamy and for the details of the US Farm Bill.


January 25, 2007

China continues its rapid economic growth

It is estimated that the Chinese economy grew at an astonishing 10.7% during 2006. China, with India, shares the role of being ‘driver economies’ in the Asian continent. What fuels China’s growth? What are the consequences for China and the rest of the world?

What is happening in Asia and particularly in China is a process of economic change that is unprecedented in world history. Across Asia as a whole, people are being removed from dire poverty at a rate that has never been witnessed in any contemporary or historical society. The Chinese economy has grown consistently over the last four years at around 10% per annum. Growth figures are estimates rather than scientifically precise but all the evidence points to growth at the levels recorded and with China growing, other countries in the region are being pulled along with it.

Chinese economic growth is driven by private foreign investment, mainly from firms originating in the United States, as well as by state economic reform and domestic capital investments in social overhead capital projects. The country seems to have an almost unlimited capacity to absorb foreign investment, though the Chinese authorities are worried about ‘overheating’ and the social consequences of sustained rapid growth. Where firms from the United States are involved the added bonus is that inward investment yields almost immediate returns in rises in exports and export earnings.

Corporations in the United States look more readily to China than they do to India which is surprising given that India is the world’s biggest democracy, works also in English, uses common law as the basis for its legal system and may prove in the longer term to be more stable that China. Given political concerns about the potential emergence of China as a super-power, there might be valid reasons for paying more attention to India. With so much foreign investment from the United States and with China’s huge surplus from US trade, it is possible to think of a Sino-US economy. Key issues at the recent Chinese-US economic summit were the external value of the Chinese currency (The US wants a re-valuation of the yuan), common access to markets and information issues. The United States is keeping up pressure on China to stick to its World Trade Organization requirements. China is now of greater importance for trade with the United States than Mexico.

There are internal strains. Chinese economic growth has other severe disadvantages. The level of industrial pollution is causing local and international concern though old vehicles (buses and taxis) add to the pollution in urban areas. If the social costs of pollution are factored in, there are serious concerns in some areas. Beijing is being cleaned up for the Olympics with money being spent on cleaning up power stations and investing in new industrial heating systems and on moving polluting industries. The problems in the industrialized parts of China, overall, are massive, impact more on poor people than on rich people, and will take many years to eradicate. Cleaner, more sustainable development with greater equity is a significance issue or likely to be come so.

Western China is relatively untouched by economic change (except perhaps through migration). The pattern of growth differs from region to region. Inequalities are increasing with the rich and poor both benefiting but the rich getting richer faster than the changes to the poorer members of society. Rural-urban divisions are also significant. Over the last two or three years there have been numerous and significant incidences of rural protest and increased criticisms of the ways in which ‘globalization’ issues are playing out in some parts of Chinese society. The economy is geographically unbalanced and unbalanced by sector. Criticism of the censorship that tries to cover-up corruption and unrest has even come from former senior party members. Given the rapid growth in the use of the internet by Chinese citizens it is difficult to see how information can continue to be suppressed. Domestic issues include the reform of the Communist Party, of the administration and of the financial sector. Contradictions between economic reform (not fully completed) and Party rule (more democratic developments) will have to be faced some day. As a result of many generations of unpredictable changes, m any Chinese fear chaos. Over-rapid economic growth and rising expectations can also shake societies apart.

January 16, 2007

The Dis-United Kingdom?

The new Scottish Parliament is planning to celebrate the three centuries of Union with England but the Union is a topical political issue. The Scottish National Party is paradoxically (at first sight at least) campaigning for an English Parliament. Gordon Brown, himself a Scot, is currently Chancellor and perhaps the next British Prime Minister. He is worried enough to give (a rather dull) political speech on ‘Britishness’. Tony Blair has come out strongly against further tampering with the Union. What is going on? Do any of the many possible changes have any international significance?

Great Britain was created as a country in 1707 as the result of a Treaty of Union between Scotland and England. So the idea of Great Britain is three hundred years old this year. The Scots are and always were tied to England in one way or another as the result of the simple fact of geography. The one nation always did raise problems or consequences for the other. To keep England at bay, the Scots developed a relationship with France on the basis, one may suppose, that ‘my enemy’s enemy is my friend’ though the Reformation in Scotland really put an end to that. Life for the two countries become more complex when the King of Scots (James VI of Scotland) became King of England (James I or as the Scots would have it James the VI and I).

Why did the Scots agree to suspend their Parliament? There were many reasons. Scots were banned from legally trading with the English colonies in North America (there was an illegal trade out of Glasgow). Their own attempt at colonization in Darien was an economic disaster, which the English had a hand in causing, with severe domestic consequences. If the Scottish economy was to recover, increased trade was essential and increased trade could only really come from trade with the English colonies, on an equally footing, in North America. However, the Scots were anxious to preserve Scottish institutions such as the system of local government, the Church of Scotland (Presbyterian in nature) and the Roman-Dutch legal system. Technically the Parliament merely adjourned sine die. The motivation for Union was to better preserve the Scottish nation. The English agreed because of the fears that they had about an alternative king being established in Scotland, a fear that was real and in public evidence in rebellions of 1715 and 1745. The Act of Union was agreed by the Scottish Parliament on the January 16th 1707. On the whole it worked. Scotland traded and industrialized and its thinkers such as David Hume and Adam Smith helped shape the modern world. The Scots became ‘North British’ in the 18th century and then, by way of cultural reaction, Romantic tartan-sporting Scots again in the 19th century. Political arrangements for the governance of Scotland have always been somewhat contrived since the Union.

The present Parliament came into being as the result of recent regional policy. It is of recent origin but is the long-term outcome of a Scottish National Convention that reworked the case for a better way of governing Scotland. The problem is (though this has to some extent always been the case) that Scottish MPs are now over-represented in the British Parliament where they can vote on purely English domestic affairs whereas English MPs are denied this as Scottish domestic affairs are the responsibility of the Parliament in Edinburgh with its own elected MSPs. The Edinburgh parliament has pursued domestic polices different in detail and sometimes in intent and in content from those of England. In addition, Scots are highly prominent in the British Cabinet. The Labour Party has a significant power base in Scotland. This influences the outcome of British elections and the distribution of political office. To make matters even more complex, the Scottish National Party (SNP) may become, at the next Scottish election, the largest party in the Scottish Parliament. This would lead to calls for the restoration of Scottish Independence and the break up (if this happens) of the United Kingdom. The leader of the SNP, Alex Salmond, is cunningly calling for an English Parliament and this is drawing responses from English MPs and others more widely. The prospect of the Labour Party leadership battling against further constitutional change is one that is viewed with dismay by Tony Blair. If the power base changes in Scotland it will have political consequences for the rest of the UK and for Gordon Brown as potential Prime Minister (hence his stress on 'Britishness').

There are international consequences also that are likely to be in Tony Blair’s mind. The UK has a role in international affairs (foreign policy is the responsibility of the British Parliament). Any significant change in the state of the Union could have detrimental effects on the world stage. If Scotland were to achieve independence, it would become eligible for a seat at the United Nations and a direct role in the EU. This is bound to have consequences with respect to "England’s" position on the Security Council (it would be removed). If it were not to achieve independence but the campaign for an English Parliament were to be successful, then governing the whole of the United Kingdom would become even more complex. What is a unitary government of sorts would essentially become a federal government of sorts. It is hard to see how the arrangements would be stable. This would again impact on the UK’s international role and the world-stage ambitions of the current and of the next Prime Minister.

Of course all of this could just go away with the present discussion merely clearing the air. Scottish Nationalism comes and goes and is often created by British national politics. Margaret Thatcher was very unpopular in Scotland (she was determined to Anglicize Scottish institutions) and the SNP benefited but the effect did not much out-last Thatcher’s leadership. Tony Blair is unpopular in Scotland and the SNP is widely expected to benefit. Salmond, cleverly, has made English governance an English issue, so this could run with others doing his fighting for him. One way or another we will know more in May (the date for the elections to the Scottish Parliament). My own thinking is that nothing too dramatic is likely to happen and the United Kingdom will muffle through in the usual British constitutional compromise.

January 11, 2007

The old-new policy on Iraq.

In an earlier web-log I suggested that the Iraq Study Group essentially asked the President to swallow whole a set of ideas at variance with what was in place. Bush has not done so though he has taken an increasingly assertive role in the specification of strategy in Iraq and has admitted the ‘need to change’ including acceptance that a ‘democratic Iraq’ will not be ‘perfect’. What did he say? What are the key ideas and what are the chances of success?

Bush places the key to peace and democratization in Iraq on security, ‘the most urgent priority for success, especially in Baghdad’. It is in and around Baghdad that 80% of the security problems are experienced. The earlier mistake, he argued, was not to commit enough resources (American and Iraqi troops) to clear ‘insurgents’ from the urban areas. What is needed is an Iraqi Security Plan and this has been formulated by the Iraqi Government and it is only the democratically elected government that can effectively end the sectarian violence once neighborhoods have been cleared and secured. The key is to clear and hold areas and this requires more troops and a better structure of command; hence the appointment of an Iraqi military commander and two deputy commanders for Baghdad and the deployment of Iraqi troops and police (eighteen brigades in all) across the city. The additional American troops will be ‘embedded’ in the Iraqi units. All neighborhoods will be entered, none will be off-limits. (The implications are, for example, direct confrontation with Moqtada Sadr and hence an increase in violence and sectarian strife in the year ahead.) Outside influences will be tackled not by diplomatic action (key to the Iraq Study Group proposals) but by force if necessary and to this end Bush has ‘ordered the deployment of an additional carrier strike group to the region’.

Although the principal agendum item is that of a surge of troops concentrating on security, there are to be political and economic objectives (backed by new resources). To ‘clear and hold’ is added then the idea of continuing to build political structures and economic life. The Iraqi Government is to be held to its security, political and economic objectives. Economic reconstruction will be re-emphasized. The number of ‘Provincial Reconstruction Teams’ will be doubled. These teams will work with local communities to pursue ‘reconciliation’ and development. Condoleezza Rice will appoint a ‘reconstruction coordinator’ to achieve positive results for increased economic assistance. If the process is to work, then effectiveness is essential. The trouble is that increased violence in the short run as areas are progressively cleared (not an easy process) delays economic and political strategy implementation.

Clearing, holding and building (still the key ideas in the revamped approach) do not add up to an essentially new strategy. Linking issues in Iraq with the ‘war on terror’ also continues to be a significant theme. The proposed increase in developmental activity incorporates elements of the Iraq Study Group Report but not in the forceful way developed within the report itself. It is the case that security of limb, life and property normally comes before economic development but it is hard to see how only limited political and economic activity in the midst of further and enhanced violence is going to secure the objectives set. The old, English adage that the ‘devil makes work for idle hands’ would suggest a more central place for both political and economic initiatives. The suggested $1bn is a significant sum, but much of the exiting level of developmental assistance seems to leak a way in corruption and inefficiency. Conviction rather than analysis and change, seems to be the basis for the strategy. The idea that there were too few troops in Iraq was one that was advocated in 2003 by General E. K. Shinseki. It would seem to be the case that most commanders are not arguing currently for increased troops.

Much is placed upon the shoulders of an Iraqi government, still lacking administrative capacity, and legitimacy and, as demonstrated by the manner of Saddam Hussein’s execution, even-handedness. How effective the Americans can be within the context of what the Iraqi government can in fact do remains to be seen. How effective the Iraqi’s can be in securing their future within the framework of a hugely increased US presence also remains to be seen. The Iraqi Prime Minister continues to be in the position of ‘responsibility without power’. He wanted an Iraqi government with ‘an Iraqi face on it’ (Washington Post, 10th January). Bush’s rhetoric suggests that Maliki, described by Rice as ‘on borrowed time’ is being prepared as a potential scapegoat. There would seem to be paradoxical elements in the proposed policy and scope for enormous frustration for both the Americans and the Iraqi Government, a frustration that will be exploited by those opposed to US interests locally. Some kind of risk analysis, overtly stated and evaluated would be politically helpful.

With respect to regional diplomatic initiatives, (central to the Iraq Study Group Report) threats rather than negotiations are the proposed way forward. US troops have already been reported as acting against the Iranian presence by storming the Iranian ‘consulate’ (the status of the building seems to be in doubt) in Irbil and removing papers and computer equipment.

This policy is not popular. It has already alienated many members of Congress. It is not consistent with new thinking on Iraq as presented by the Iraq Study Group though it incorporates some elements of its proposals. It does not overtly present and evaluate the risks. It places military power before local political negotiations and compromise. It places approximately 600 troops in every key administrative district in Baghdad. It increases the likelihood of violence and of American and Iraqi deaths. It desperately needs a profound political and economic strategy to work with it. This is to be supplied, it would seem, by an Iraqi Government that wanted the very opposite and which even according to its allies is ‘operating on borrowed time’. A problem with violence is that, as we have already seen, it unleashes an irrational political dynamic of its own that it is difficult to predict and prevent. It is the weakest element in the policy (the capacity and fortitude of the Iraqi Government) that is key to its long-term success. If that government breaks under the strain, what then?

January 4, 2007

Saddam’s execution.

John Prescott, Britain’s deputy prime minister, and acting Prime Minister during the period of Blair’s holiday, has broken British government silence on the scenes that have been shown concerning the execution of Saddam Hussein. After some personal reflections on the death penalty, this web log will deal with: What did Prescott say? How have others reacted to the events surrounding the execution?

Unlike the writer George Orwell, I have never witnessed an execution and I never wish to. I did once witness the death sentence being announced. I was in Botswana many years ago, working on a research project and reading documents in the National Library in Gaborone. A High Court was being held in the Town Hall next door where the Chief Justice (a Nigerian at that time) was presiding over a murder trial assisted by two Botswana assessors. I knew the court stenographer and she rushed up to me and through an open window urged me to attend the Court as the judgement was due and it was going to be death. To my shame, I did. The Chief Justice found the prisoner guilt, donned the Black Cap and sentenced the prisoner to death. A wave of visceral excitement, almost animalistic in its frenzy, rushed in a huge wave, through the Court. As the prisoner was led away, the public poured out of the make-shift Courtroom shouting ‘it’s death, it’s death’ in a macabre spectacle of excitement, even delight and awe. I decided there and then, as I was not neutral with respect to the violence of the emotions being expressed that the death penalty was of questionable validity.

Executions, however sanctioned, unleash unstable and unpredictable emotions. The outbursts and taunting that took place as Saddam Hussein was executed are both shocking and sadly indicative of what Iraq has become. Due process of law suggests, whatever view that you take of the death penalty, something clinical and orderly, rule-bound and neutral organized by a state intent on rule-making and rule-keeping rather than naked revenge. It may be too much to expect, given the irrational violence in Iraq that any other outcome could have been possible. This can be easily interpreted as an act of vengeance and of provocation rather than the administration of justice. It seems that victims of Hussein were selected as the executioners, ‘each with a personal grudge’ according the Rosemary Behan writing in the Times (3 January).

Prescott talked about the ‘deplorable’ circumstances of Saddam Hussein’s execution whilst admitting that he was unsure as to whether the British government has made any official protest. Prescott felt that the Iraqi authorities had acted inappropriately though it was not clear whether he was attacking the circulation of the unofficial film or the events that they recorded. His remarks were off-the-cuff. Tony Blair has been silent on the issue and the statement by the Foreign Secretary (Margaret Beckett), that Saddam had been ‘held to account’ was issued before the unofficial film was shown. In retrospect this seems a poor response. The British Foreign office, according to the Guardian newspaper of 3 January, privately holds that ‘the insults will be seen as another sign that the Iraqi state is now run by Shia Muslims who have little interest in national reconciliation …’. Other countries in the EC (Italy has repeated the demand for a world-wide ban on the death penalty and French presidential candidates have expressed their disgust at the death penalty and at the way in which events unfolded) have made similar comments. Iraq has responded by arresting a guard thought to be responsible for making the unofficial film though this does not meet the point about the taunting. The general feeling in Europe is that the execution, its insensitive timing and the manner in which it was undertaken hinders rather than helps the process of democratization.

Opinion in the Arab world is divided. Some see the rushed execution as the direct responsibility of the Americans. Others critical of Saddam Hussein and who agree with the execution, deplore the manner in which it was carried out. His death rushed through whilst he was reciting a testimony of faith causes concern to many. Some are prepared to see a large hypocritical element in Arab reaction, one letter to the Guardian (3 January) puts the issue thus: ‘… clinging to the false hope of Saddam in idiotic. Rather than lining up to condemn his execution, we Muslims need to condemn the deaths of Iraqis today. Hundreds more have perished since Saddams’s death, but there are no ringing editorials in Arab capitals condemning al-Qaida …’. The brutal facts of Saddam Hussein’s execution may yet open eyes to the realities of the war of all against all in Iraqi and to the moral requirements of clear thinking and just action.