While Alex blogs live from inside I will be doing my best to follow events outside – via Twitter, Flickr and SMS. But is it safe to go outside?

The ‘experts’ expect anarchy on the streets of London and even the possibility of a terrorist attack.  For example:

Michael Clarke, the head of London’s Royal United Services Institute think-tank, said small terrorist groups may use the cover of planned protests by environmentalists, anti-war protesters and labor unions to mount an attack.

“The protests will cause uncertainty and chaos, and if they turn violent could complicate the lives of those police and security service staff who are looking for terrorists,” said Clarke, who sits on British government’s National Security Forum, an advisory panel of security experts.

So to be clear. Terrorists may use the cover of legitimate protests to stage an attack while the protests themselves are going to cause uncertainty and chaos. As Professor Clarke sits on the National Security Forum I wonder if he and the forum have been briefed by the intelligence agencies – or is this a personal opinion?

If ‘chaos’ is going to happen and there is the potential for a terrorist attack why hasn’t the Security Service (MI5) raised the threat level to CRITICAL – meaning an attack is expected imminently. From what I can gather the Security Service is trying to play down such a threat – concious that legitimate protest is important in this country but keeping a watching brief as events unfold. As has been proven in the past millions of people can walk the streets of London without causing large scale rioting. My concern is that talk of anarchy and rioting by securocrats, ‘experts’,  and the Met Police turns into a self-fulfilling prophecy.

The aim of Government and the Met Police must surely be to reduce the potential for rioting and attempt to diffuse an already volatile  situation – rather than fuelling speculation in the media on what nightmare scenario might happen.  This could have been done through dialogue (better briefing on what is going on (Operation Glencoe)) while reiterating key messages about their role to police a largely peaceful protest, rather than the drip drip of banal information by mid level police officers which sub-editors happily snap up. Hardly the most constructive, mature and sensible way to police an event.

Hundreds of hours have been spent designing the route and security requirements for the demonstrations tomorrow but there will always be the potential  for smashed windows and cuts and bruises – the important thing is to limit those opportunities – to take the sting out of the tail. Designated routes have been identified and signposted and security folk at banks and major buildings in the city will also have been planning for months: Executive boards will have been briefed on what to expect. The last thing politicians, protesters and the public need are police officers, and experts speculating on the potential for massive violence.

Of course there will be idiots who want to be violent – and the security services and the Met Police will have been collaborating with national police forces to ensure those violent protesters are identified and  their conversations and plans monitored. But more work should have been done trying to diffuse the situation.

In the next couple of days the key will be to nip the potential for violence in the bud – allowing the  demonstrations to continue but diffusing the protesters energy so that it doesn’t spill over into other parts of the crowd. The Met Police, experts and the mainstream media could have approached the security of the G20 in a more mature fashion – at least it would have meant we could focus on the meat of the G20 discussions rather than the armour protecting them.

Update:  Editors and sub-editors are at it already. From the New Zealand Herald: Fear terrorists will use G20 protests

With a summit close at hand, one thing we can be sure of is that pointless ‘initiatives’ can’t be far behind. The criteria for such ‘announceables’ are simple: they must grab headlines and create the impression that something is happening, while avoiding any domestic implementation commitments or – horror! – funding obligations.

So while you’re getting ready to play G20 bingo (SDR issue? tick! tax haven rules? tick!), it’s also a good moment to launch the hunt for the pointless initiative of the week.  One strong candidate has already emerged: DFID has proposed

a new ‘Global Poverty Alert’ system that would link international organisations, aid agencies and research groups into a single network that would provide instant updates on the impact of the economic crisis on the poor. This would include ‘real-time’ updates using text messaging and emails. The proposal will be put forward at next month’s G20 meeting in London.

Excellent work! Really visionary stuff. Now, how might it work? Hm. Well, what if we designed something that allowed lots of users to join, and post updates on poverty? We could let them post links to stuff on the web, too. And to keep it punchy and accessible, we could limit posts to 140 characters or less.  I … um … oh.

Er… perhaps if we built a… large wooden badger?

In the latest Vanity Fair, a brilliant article by Michael Lewis (author of Liar’s Poker) on Iceland.

It’s a sad, funny and surreal story:

An entire nation without immediate experience or even distant memory of high finance had gazed upon the example of Wall Street and said, “We can do that.” For a brief moment it appeared that they could. In 2003, Iceland’s three biggest banks had assets of only a few billion dollars, about 100 percent of its gross domestic product. Over the next three and a half years they grew to over $140 billion and were so much greater than Iceland’s G.D.P. that it made no sense to calculate the percentage of it they accounted for. It was, as one economist put it to me, “the most rapid expansion of a banking system in the history of mankind.”

At the same time, in part because the banks were also lending Icelanders money to buy stocks and real estate, the value of Icelandic stocks and real estate went through the roof. From 2003 to 2007, while the U.S. stock market was doubling, the Icelandic stock market multiplied by nine times. Reykjavík real-estate prices tripled. By 2006 the average Icelandic family was three times as wealthy as it had been in 2003, and virtually all of this new wealth was one way or another tied to the new investment-banking industry. “Everyone was learning Black-Scholes” (the option-pricing model), says Ragnar Arnason, a professor of fishing economics at the University of Iceland, who watched students flee the economics of fishing for the economics of money. “The schools of engineering and math were offering courses on financial engineering. We had hundreds and hundreds of people studying finance.” This in a country the size of Kentucky, but with fewer citizens than greater Peoria, Illinois. Peoria, Illinois, doesn’t have global financial institutions, or a university devoting itself to training many hundreds of financiers, or its own currency. And yet the world was taking Iceland seriously.

Global financial ambition turned out to have a downside. When their three brand-new global-size banks collapsed, last October, Iceland’s 300,000 citizens found that they bore some kind of responsibility for $100 billion of banking losses—which works out to roughly $330,000 for every Icelandic man, woman, and child. On top of that they had tens of billions of dollars in personal losses from their own bizarre private foreign-currency speculations, and even more from the 85 percent collapse in the Icelandic stock market.

A hedge fund manager in London summed up the situation like this:

A handful of guys in Iceland, who had no experience of finance, were taking out tens of billions of dollars in short-term loans from abroad. They were then re-lending this money to themselves and their friends to buy assets—the banks, soccer teams, etc. Since the entire world’s assets were rising—thanks in part to people like these Icelandic lunatics paying crazy prices for them—they appeared to be making money. Yet another hedge-fund manager explained Icelandic banking to me this way: You have a dog, and I have a cat. We agree that they are each worth a billion dollars. You sell me the dog for a billion, and I sell you the cat for a billion. Now we are no longer pet owners, but Icelandic banks, with a billion dollars in new assets.

“We were always told that the Icelandic businessmen were so clever,” says university finance professor and former banker Vilhjalmur Bjarnason. “They were very quick. And when they bought something they did it very quickly. Why was that? That is usually because the seller is very satisfied with the price.”

It wasn’t just Icelanders caught up in the frenzy of the last few years. Nor was it just bankers in US sub-prime. It was a global frenzy, raging from Moscow to Dubai to Lagos, fuelled by cheap western credit, mainly from US and UK banks.

One of the new casualties to emerge – the shipping industry. I was talking to a banker this weekend, who covers the sector. She told me that 10 European banks (including RBS, Nor, Nordea, HBOS and others) leant around $250bn to European shipping firms in the last few years, at very low rates, and at vastly inflated estimates of the value of the ships.

The value of the ships has now plummeted, many are lying idle, shipping companies are facing bankruptcy and most of the loans are now, on the whole, in default – enough defaulted debt to finish off the banks on their own, never mind with everything else on their plates.

Evening Standard, this afternoon:

France today laughed off a claim that Nicolas Sarkozy had threatened to “walk out” of the G20 summit. They said a report that the French President could “wreck” the event as “unfounded, and like some kind of April Fool’s joke”.

The copy of Le Figaro that I found outside my hotel room this morning:

«Rien ne serait pire qu’un G20 a minima. Je préfère le clash au consensus mou … Si ça n’avance pas à Londres, ce sera la chaise vide ! Je me lèverai et je partirai»

Now I admit my French may only by GCSE standard (and pretty rusty at that) – but I’m fairly confident that this translates more or less as follows:

Nothing would be worse than a minimal G20. I prefer the clash to the soft consensus.  If things don’t move forward in London, it will be the empty chair!  I’ll get up and I’ll leave.

Photo: The Australian

They do things differently in West Africa. It turns out, according to the Kansas City Star, that Moussa “Dadis” Camara won the Guinean presidency after the Christmas coup not because he was the driving force behind the putsch, nor because he was the most senior plotter, nor even because he was the best man for the job. No, he won it in a game of spoof. After a major row over the leadership with Sekouba Konate – who as an army colonel was way senior to the captain Camara and much better known by the public – Camara suggested resolving the dispute by drawing lots.

The word “president” was written on a piece of paper, which was put in a mayonnaise  jar with several pieces of blank paper.  Camara picked the winning ticket, but the dogged Konate demanded a second round. Amazingly, Camara picked the right one again. Such fortune cannot be ignored in Africa, so the colonel backed down and Camara got the top job.

Elections have been promised for December, but a lot can change between now and then. Camara himself is worried about a counter-coup – he sleeps during the daytime in the belief that most coups take place at night, and makes sure he sees Colonel Koubate, who presumably remains a threat, every half hour.

A more likely eventuality, however, is that Camara slips into the role of dictator and cancels the elections. Already there are signs that he is suited to such a role. He appears on TV every night for several hours, expounding his views on life and haranguing those associated with the old regime (great viewing apparently – housewives say they prefer it to watching soaps). His photo adorns the walls of every government building, and he is so popular that his sunglasses have become a fashion accessory. More worryingly for those who see in all this a classic pattern of a slide into autocracy, Camara said only last week that Guinea is not ready for democracy. “Who is going to vote?” he asked journalists. “Who is going to organise elections? You?” He believes only the army can put the country’s house in order, and only then can elections be held. Same old same old, as Guineans probably say.

In the last few weeks, Japan has spent just under $1bn buying carbon emission rights from Ukraine and the Czech Republic, as it scrambles to meet its Kyoto obligations.

Japan agreed at Kyoto to cut its CO2 emissions by 6% from 1990 levels by 2013. Instead, its emissions are rising annually – they rose 2.3% in the year to March 2008.

It has now convened a board of scientists to suggest ways forward to prime minister Taro Aso. It has put forward five proposals, ranging from a 25% cut in 1990 levels by 2020, to a 4% increase.

Last week,  the government also launched its own tentative efforts at an EU style cap and trade domestic market:

The market’s compliance participants include 202 major emitters such as utility and steel companies, a step forward from its smaller predecessor, called J-VETS market.

 

But a government survey of applicants showed only 20 percent of the respondents said they would take part in trading, with 40 percent saying they didn’t know. The remaining 40 percent said they had no immediate plan to trade any.

Two days to go, and it’s probably time to start thinking through what to expect from the London Summit. (If you haven’t already seen it, check out our special page on the Summit – I’ll be there as one of the G20 Voice bloggers, so we’ll have updates throughout the day from the scene of the action).

By and large, expectations seem to be being managed downwards by the commentariat as well as in off the record briefings from officials.  That’s what you’d expect at this stage, as then even modest progress looks like a triumph (in much the same way that Labour Party officials always brief journalists to expect an apocalyptic showdown with the unions in the days running up to the Party Conference every September).  As the Wall Street Journal puts it,

It was supposed to be the inauguration of a Global New Deal, in the hopes of British Prime Minister Gordon Brown, a comprehensive policy response to the world economic crisis, a root-and-branch effort to reorder the way capitalism itself works. But by the time the much-heralded Group of 20 meeting of heads of government ends Thursday, it may be difficult to spot a new world order. It is already clear that the summit will mostly fall short of Mr. Brown’s original lofty goals.

Interestingly, though, one relatively upbeat note comes from Alastair Newton, who’s just published a Nomura briefing note on the summit – and who can claim rather more expertise on summits than most banker, having been head of G8 policy at 10 Downing Street from 1998 to 2000.  Newton’s bottom line: while he doesn’t expect a ‘miracle cure’ turnaround in markets or the real economy, it’s nonetheless

“just possible that we may look back on the 2 April 2009 G20 Summit in due course and see it as ‘the end of the beginning’ of the current crisis.”

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So, Battlestar Galactica is over, at least on American screens.  It was rather good.  The UN came up with a sort-of-fun tribute:

To mark the show’s finale, its fans at the United Nations — people whose nonfictional jobs involve wrestling with similar issues day in and day out — invited the cast and producers to visit the U.N. for a two-hour panel discussion and talk-back.

On Tuesday, some 500 people took seats in the chamber, a stiff, formal space with miles of dull, blonde wood. Whoopi Goldberg, a UNICEF ambassador as well as an Oscar-winning actor, served as the panel’s moderator. U.N. representatives joined actors Edward James Olmos, who played the commander of the show’s title warship, and Mary McDonnell, who starred as President Laura Roslin, his civilian superior.

Let’s get something out of the way quickly. The average UN official does not wrestle with a job comparable to piloting a star cruiser carrying the last humans across space pursued by Cylon people-robots.  On trips to the UN HQ canteen, I rarely spot anyone wrestling with anything (except a rubbery panini) but let’s go along with the spirit of the thing: UN officials do work for the good of humanity, and are duly in need of a bit of fun.

But that doesn’t mean you should let them do the entertaining.  The UN-Battlestar convention seems to have gone a bit awry:

Dave Howe, the Sci Fi Channel’s president, declared that, like the U.N., “great science fiction forces us to look at who we are and ask the tough questions: Where are we going? . . . And what can we expect to find when we get there?” The U.N. officials were a little fuzzier on the analogy. One admitted to never having seen the show, and Radhika Coomaraswamy, the special representative of the Secretary-General for Children and Armed Conflict, said she had hastily watched a few episodes in preparation. (“It was really nice to see not just special effects,” she said.)

Genius. Just genius. If the UN arranged a day of celebration for The Joy of Sex, they’d probably manage to find a eunuch to give the key-note address.

Tid-bits for nostalgists from an excellent new piece by Seymour Hersh (still the greatest journalist ever) in the New Yorker on Israeli-Syrian relations:

As the Bush era wound down, U.S. allies were making their own openings to Syria. In mid-November, David Miliband, the British Foreign Secretary, distressed the White House by flying to Damascus for a meeting with Assad. They agreed that Britain and Syria would establish a high-level exchange of intelligence. Vice-President Dick Cheney viewed the move by Britain—“perfidious Albion,” as he put it—as “a stab in the back,” according to a former senior intelligence official.

An excellent choice of phrase in dealing with Israeli security, of course. In insulting those nearer to home, the Veep stuck to baseball analogies during the last MidEast war of his time in office:

The Obama transition team also helped persuade Israel to end the bombing of Gaza and to withdraw its ground troops before the Inauguration. According to the former senior intelligence official, who has access to sensitive information, “Cheney began getting messages from the Israelis about pressure from Obama” when he was President-elect. Cheney, who worked closely with the Israeli leadership in the lead-up to the Gaza war, portrayed Obama to the Israelis as a “pro-Palestinian,” who would not support their efforts (and, in private, disparaged Obama, referring to him at one point as someone who would “never make it in the major leagues”).

You can say what you like about Cheney, but I miss that impish humor.

Now that President Obama has laid down his AfPak strategy, it is time for European governments to follow suit. As I show in this new ECFR brief, they have not yet done enough to become full partners in NATO’s Afghan mission. In an excellent brief issued at the same time as mine, Shada Islam and Eva Gross, two European foreign policy wonks, make a similar case.

European governments have in particular failed to provide staff to civilian bodies like EUPOL, the office of the EU special representative to Afghanistan, or the NATO civilian representative’s office. And while many European governments have pushed for the UN to take on a stronger role in policy development and coordination, few have given the UN mission in Afghanistan and Kai Eide, The UN’s special representative, the necessary support, staff or resources, either in New York or Kabul.

European governments all talk about the “comprehensive approach” -– the need to mix civilian and military instruments — but in the north and central parts of the country, where I just visited (see my travel blog here), there is little evidence of such a policy. Despite the decision last year to bulk up the EUPOL mission to 400 people, actual staffing levels remain at less than half this figure, with many European countries having no personnel in the mission at all.

European governments must do better. In bullet form, they should help:

1. Safeguard the elections
2. Relaunch reconciliation
3. Improve security by training the army and police
4. Change the counter-narcotics policy
5. Target development
6. Support regional diplomacy

I develop each point in the brief with concrete ideas for European leaders to pick up. 

The EU has underinvested in the Afghan mission for years. With the coming US surge, the Afghan elections looming, and failure in the region a real danger, it needs to change course. Not only is it in Afghanistan’s interest; it is also in Europe’s.

Dani Rodrik has found the following quote from HG Wells, writing in 1933.  From the text, you might wonder whether Wells’ writing on time machines was altogether fictitious – actually, he’s writing about the other London Summit: the one held 75 years ago.  Deja vu?  Mmm hmm…

[For] some months at least before and after his election as American President and the holding of the London Conference there was again a whispering hope in the world that a real “Man” had arisen, who would see simply and clearly, who would speak plainly to all mankind and liberate the world from the dire obsessions and ineptitudes under which it suffered and to which it seemed magically enslaved. …

Everywhere as the Conference drew near men were enquiring about this possible new leader for them. “Is this at last the Messiah we seek, or shall we look for another?” Every bookshop in Europe proffered his newly published book of utterances, Looking Forward, to gauge what manner of mind they had to deal with. It proved rather disconcerting reading for their anxious minds. Plainly the man was firm, honest and amiable, as the frontispiece portrait with its clear frank eyes and large resolute face showed, but the text of the book was a politician’s text, saturated indeed with good will, seasoned with much vague modernity, but vague and wanting in intellectual grip. “He’s good,” they said, “but is this good enough?”

Read the whole post. H/t Duncan Green.

From FT2020, via Andrew at From Davos to Seattle.

The Lede gives us the lowdown on how they do political rhetoric in Prague:

To anyone who heard echoes of AC/DC when the Czech prime minister assailed President Barack Obama’s stimulus plan, calling it “a road to hell” on Wednesday: You were right.

It turns out that the heavy metal band AC/DC played a show in Prague last week which was attended by Mirek Topolanek, the country’s prime minister. Mr. Topolanek, who is now just a caretaker prime minister, after losing a vote of confidence this week — one unrelated to his flights of rhetorical fancy — told a Czech newspaper that he was influenced by one of the group’s most famous songs, “Highway to Hell,” when he veered off script this week during his speech before the European Parliament and criticized Washington’s stimulus spending.

“AC/DC played here last week,” Mr. Topolanek told the daily Lidové Noviny. “And their cult song ‘Highway to Hell’ might have led me in that very improvised speech to use the phrase ‘road to hell’.” According to the Czech newspaper, Mr. Topolanek’s prepared remarks included the less resonant phrase “the way to destruction.”

Fair enough, but what about those of us who heard echoes of Chris Rea? He, after all, sang specifically about a “road to hell” – not just a highway. It makes a difference. AC/DC’s hell-oriented highway sounds quite fun:

Living easy, living free
Season ticket on a one-way ride
Asking nothing, leave me be
Taking everything in my stride
Don’t need reason, don’t need rhyme
Aint nothing I would rather do
Going down, party time
My friends are gonna be there too
I’m on the highway to hell

By referencing this, Topolanek was presumably implying that the U.S. stimulus package is (i) poorly thought-out (“don’t need reason, don’t need rhyme”) and (ii) protectionist (“asking nothing, leave me be”). Now compare this with Rea’s bleaker vision:

Stood still on a highway
I saw a woman
By the side of the road
With a face that I knew like my own
Reflected in my window
Well she walked up to my quarterlight
And she bent down real slow
A fearful pressure paralysed me in my shadow
She said ‘son what are you doing here
My fear for you has turned me in my grave’
I said ‘mama I come to the valley of the rich
Myself to sell’
She said ‘son this is the road to hell’

On your journey cross the wilderness
From the desert to the well
You have strayed upon the motorway to hell

So, had Topolanek been thinking of Rea rather AC/DC, his critique would have taken a Leftist/populist turn, implying that the U.S. stimulus represents a sell-out to the rich (i.e. Wall Street).  The stuff about the desert might also be interpreted as a complex reference to Iraq’s impact on the American economy – while the “motorway to hell” might be a nod to plans to invest stimulus dollars in America’s infarstructure.

Next time Mr Topolanek decides to free-style in the European Parliament, he had better think through the potential for textual deconstruction first.

CONTEST 2 has been launched in both wonk version (172 pages) and, for those who want a brief overview of the strategy, a slim 13 pages (You Tube Video is here ).  The most interesting chapter is the first one – where there has been a real attempt to provide a strategic context and make clear the planning assumptions on which HMG are basing their approach. These include:

- the Al Qa‘ida ‘core’ organisation is likely to fragment and may not survive in its current form;

- The stability, security and prosperity of the FATA of Pakistan will remain critical in determining the future of Al Qa‘ida; (note Obama’s ‘we’re at war in Pakistan )

- Al Qa‘ida affiliates will develop more autonomy;

- It will continue to be difficult and at times impossible to conduct conventional law enforcement counter-terrorist operations in and with fragile and failing states (watch out DFID)

But look at what isn’t stressed  in CONETST 2.  Can you spot the difference?

CONTEST 1 (2006)

CONTEST 2 (2009)

Answer after the jump

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