10 things we missed or got wrong 5 years ago at the height of the credit crunch and food/fuel spike

This summer will mark five years since 2008, the year of both the first flush of the global financial crisis, and of the peak of the combined food and fuel spike.

As David Steven and I have observed in various papers, the last decade was bookended by shocks – 9/11 at one end, and these two at the other. And while the resource spike and the credit crunch lacked the visual vividness of September 11, they were arguably just as significant in the way that they shook assumptions about the stability or direction of globalisation.

But it’s also intesting to look back now at that strange year, and reflect on how many of the initial fears, hopes and assumptions about the twin crises have been proved wrong with the benefit of five years’ hindsight – as well as various shifts that have taken place since 2008 that no-one foresaw at the time. Here are ten things that lots of us (well, I, anyway) got wrong or missed altogether back in 2008 – adapted from a futures presentation I gave to Oxfam last week.

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Is Britain the organised crime capital of Europe?

Last summer Philip Stephens, the FT’s chief political commentator,  wrote the following

The High Court is witnessing an expensive legal battle between Oleg Deripaska and Michael Cherney. The two made fortunes in the wild west privatisation scramble after the fall of the Soviet Union. We have heard lurid tales of organised crime and extortion. Mr Cherney says Mr Deripaska owes him hundreds of millions of dollars. An estimated 60 per cent-plus of the case load of the High Court’s commercial division now comes from Russia and eastern Europe.

His point, and one made by many others in Westminster and Whitehall, is that ‘the capital is a constant reminder of how unequally the bounty of globalisation has been shared’. As London became the financial hub of the world so too did the city attract those from the shadows of globalisation. And boy, did they come… by the Home Office’s reckoning there are 38,000 individuals (across 6,000 groups) involved in organised crime that impacts on the UK.

With that in mind 2013 is the year the Government must act. The Home Secretary gets this. Home Officials talk about a new found determination to tackle organised crime. There are plenty of reasons why. Following the sucess of the Olympics, there is a quiet confidence among officials that while terroism remains a real and present  danger, assurance levels have never been higher. It means the Home Office can address a portfolio of risks – rather than focus solely on a single threat to the UK.

The following is from a piece I wrote for the RUSI website:

EUROPOL, a European Union Agency run by a Briton and heavily reliant on British intelligence, has published its annual Serious and Organised Crime Threat Assessment (SOCTA). The assessment highlights the scale of the threat from organised crime to individuals, communities and businesses across Europe. Of particular concern to EUROPOL are ‘facilitated illegal immigration, trafficking in human beings, synthetic drugs and poly-drug trafficking, Missing Trader Intra-Community (MTIC) fraud, the production and distribution of counterfeited goods, cybercrime and money laundering.’ These crimes, in EUROPOL’s view, require concerted action by EU member states – not least by the British Government.

You can read the rest of the article here

Can Obama bend it like Bono?

BUSH

What do Obama and Bono have in common?

Both have proposed that the world should seek to end extreme poverty over the next twenty years or so.

Obama said so in his annual state of the union address (here) and Bono said the same (here) in an interesting and nuanced TED talk in Los Angeles.

Are they mad or deluded? Actually, no. Under certain conditions it is feasible (and the numbers by various economic growth and inequality scenarios are here).

The idea of an end to extreme poverty is part of a broader discussion on the next generation of UN global poverty goals. There’s plenty on the subject on Global Dashboard from Claire, David and Alex and others.

The current set of goals, the Millennium Development Goals (MDGs), will expire in 2015 (here’s a brief history).

The MDGs aimed to halve income poverty and hunger and to reduce other forms of poverty so the big question for the UN and others is what sort of global goals are after 2015? (assuming you think global goals are good which not all do).

To answer that question we need first to know a bit about progress towards the current – 2015 – goals.

Charles Kenny and I crunched the numbers back in 2011 and concluded, in short, that the goals had contributed in notably more aid for the poorest countries and faster progress on poverty reduction in some areas – notably heath related, MDGs, 4 and 6.

Of course, quite a lot of the progress would have happened even if there hadn’t been any global goals. It seems unlikely, for example, that the MDGs had much to do with China’s and India’s and other emerging economies’ incredible economic take-off.

Still, the first MDG, to cut in half the share of the world’s population living in extreme poverty, has probably been met (see World Bank analysis here), though some have their doubts (see here).

So, what might be feasible in terms of poverty reduction in the next, say 15-20 years?

One idea that has evolved is that the MDGs were about halving global poverty and reducing other aspects of poverty so the post-MDGs should be about ‘finishing the job’ – meaning ‘getting to zero poverty’, to echo a World Economic Forum report on the matter.

Here we conclude too that it is entirely feasible to get close to ending extreme poverty – as measured by the World Bank at $1.25 per person per day – by around 2030 or so – but under certain conditions which I’ll come to in a moment.

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No booze, no drugs, no fun: the UN today

Ban-Obama

This is your last drink for tonight, understand?

This was the week the UN stopped being fun.  To start with, the US is trying to stop diplomats turning up at budget debates drunk:

The U.S. ambassador for management and reform at the United Nations, Joseph Torsella, scolded his U.N. colleagues today for excessive drinking during delicate budget negotiations.

The unusual censure reflected lingering American frustration with its counterparts’ conduct in budget negotiations in December, which one U.N.-based diplomat compared to a circus.

“There has always been a good and responsible tradition of a bit of alcohol improving a negotiation, but we’re not talking about a delegate having a nip at the bar,” said the diplomat who recalled one G-77 diplomat fell sick from too much alcohol.

As the United States sought to rally support for a proposal to freeze U.N. staff pay in December, it found that key negotiating partners, particularly delegates from the Group of 77 developing countries, were not showing up for meetings. When they did arrive, they had often been drinking.

“As for the conduct of negotiations, we make the modest proposal that the negotiation rooms should in future be an inebriation-free zone,” Torsella said in a meeting of the U.N. membership’s budget committee, known as the Fifth Committee. “While my government is truly grateful for the strategic opportunities presented by some recent practices, lets save the champagne for toasting the successful end of the session, and do some credit to the Fifth Committee’s reputation in the process.”

Meanwhile UN officials have been going after weed

A United Nations-based drug agency urged the United States government on Tuesday to challenge the legalization of marijuana for recreational use in Colorado and Washington, saying the state laws violate international drug treaties.

The International Narcotics Control Board made its appeal in an annual drug report. It called on Washington, D.C., to act to “ensure full compliance with the international drug control treaties on its entire territory.”

Boring!!!

Tony Blair Saves Africa!

When I was young, naive and ignorant both of humanity’s complexity and my own limitations, I believed I would one day save the world. Once I reached adulthood, I thought, the willpower and abilities I possessed would be sufficient to wipe out poverty and put an end to conflict.

Then I grew up. I slowly realised that the world was not for saving, much less by one individual, and least of all by me. As I studied history, I realised too that the only people who still believed they could save the world having reached adulthood were dictators or madmen, and that their efforts always ended in failure.

It turns out, however, that I grew cynical too soon, and that in reality it is possible for one man to save the world, or at least a large part of it. Tony Blair, the former British prime minister, believes that he has singlehandedly rescued Africa from poverty and underdevelopment. In an article on the Guardian website which must be either a push for a Nobel Prize or a pitch for a job at the UN or World Bank, he argues that all of the recent socio-economic improvements that have taken place in Africa resulted from his own focus on increasing international aid (he has nothing to say about the many African countries that have yet to see any improvement).

The beginning of Africa’s salvation, Blair claims, came at the Gleneagles G8 summit which Britain hosted in 2005. His role in the summit was crucial for Africa. As he reports:

Summits with genuine, long-lasting outcomes are rare. But as we started planning for the Gleneagles G8 meeting in 2005, I saw that it could be one of these rare ones – a summit about changing the world…

I decided to put Africa at the top of the agenda for Gleneagles…And it worked. Today, the positive legacy of that summit is still being felt across Africa: aid was doubled and developing world debt dropped.

Now an increase in aid is not, of course, an end in itself. Large quantities of aid given to Africa over the decades have been squandered on entrenching corrupt elites or padding the overseas bank accounts of dictators, with little impact on the quality of life of ordinary Africans. Gleneagles, however, not only increased the quantity of aid; it apparently dramatically increased its effectiveness. Here is Blair again:

I want to answer the aid sceptics – those who think aid doesn’t work or is all swallowed up in corruption. Look at the facts. In Africa since 2005, the rate of children dying before their fifth birthday has fallen by 18%. The proportion of people in Africa living in extreme poverty is down by nearly 10%.

It is undeniable that the latter two sentences are facts, but Blair offers no evidence that they have anything to do with an increase in aid. That they might have had more to do with increased investment in and trade with Africa by China, remittances and ideas sent from the diaspora, high commodity prices, or anything Africans living in Africa might have done is a possibility Blair is either unaware of or, because it does not fit with his messianic self-image, has no interest in highlighting. He even takes the credit for foreign investment. He writes:

Africa is among the fastest-growing regions in the world. The Gleneagles agreement can claim some credit for this; bilateral aid for trade to sub-Saharan Africa has almost doubled between 2005 and 2011. Foreign direct investment in the continent has increased by 87% in the past 10 years.

Again, no evidence is presented linking aid to fast growth – it is merely hoped that the juxtaposition of the two things will convince the unwary reader. Even Blair’s buddy Bob Geldof doesn’t have the chutzpah to attribute China’s growing influence in the continent to Gleneagles, admitting in an otherwise tub-thumping piece today (in which he refers to Africans as ‘the people you kept alive all those 30 years ago’ and to Africa’s success as ‘Blair’s lasting legacy’) that trade was not discussed at the Scottish summit. Blair, though, is in no doubt. ‘The last decade of development progress was defined by aid,’ he announces.

Blair does admit that despite his efforts Africa is not yet a utopia, and that improvements can still be made. Fortunately, he has the answers for these too. ‘After leaving office,’ he writes, ‘I set up the Africa Governance Initiative to continue my work on that forgotten half.’ The forgotten half refers to ‘the ability of governments in developing countries to get things done.’ In Blair’s world aid alone, or at least the aid he generated, has rescued Africa – the region’s governments have had nothing to do with it and like their people, who have thrived only since he decided to help them, can do little without his assistance.

Blair has one final piece of evidence, in case we remain unpersuaded that he is Africa’s saviour. ‘The very fact that people are still talking about Gleneagles eight years on shows that we were right to be ambitious, to change the debate.’ he writes. We will have to take his word for it that Gleneagles remains the talk of the town, and the argument that noise proves success is at least no flimsier than some of his other contentions. It’s certainly strong enough for the image-conscious Blair, who concludes his article by proclaiming that ‘the journey from Gleneagles to long-lasting development in Africa is not over [there was, it seems, no journey before the summit]. But Africa is on the move and if we keep going on the whole Gleneagles agenda…the continent will be transformed. So I’m proud to say that Gleneagles has turned out to be that rare thing – a summit that matters.’ If anywhere else in the world needs rescuing, they know who to call.

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