by David Steven | Feb 4, 2009 | Economics and development, London Summit
The EU may be planning to sue over the US’s Buy American nonsense, but in the FT, Lex is confident that globalization cannot easily be put into reverse:
Economic nationalism, it is argued, will tip the world into a Great Depression, just as America’s Smoot-Hawley Act did 79 years ago. This is a horrifying but, frankly, also a distant prospect. The disaggregation of global supply chains, the source of the huge efficiencies that companies pass on to consumers, will not be easily undone.
Maybe so… But Willem Buiter is much less sanguine:
We can go down in history as the generation that created the Great Depression of the Noughties. Just keep on beating the protectionist drums. Keep on the footdragging that prevents effective qualitative and quantitative monetary policy easing in the Eurozone and the UK. And go ahead with unsustainable fiscal stimuli in the US, the UK and elsewhere that will spook markets, push up long-term interest rates and raise the spectre of sovereign default by countries not belonging to the group of usual suspects. Yes we can! I hope we won’t.
by David Steven | Feb 2, 2009 | Economics and development, Global system, London Summit
The G20 London Summit in April will be Barack Obama’s first trip to Europe. The Canadians get him first (apparently this is traditional), while the Japanese (who see the G20 as an evil plot to dilute their influence) are hoping for a sneaky bilateral before the big G20 powwow.
But London will be the big one. Gordon Brown – tired of saving the world on his lonesome – will slip into the role of Robin. Obama will play Batman and kick the world back into shape. The role of Joker is yet to be cast.
But will the summit be a success? The British PM has a lot riding on it, and not just because he believes he can use the event to transform his electoral prospects. We’re in the midst of “the first financial crisis of the global age,” he says, and the best solution is try to bind all the key global issues (economy, trade, climate change, energy, development etc) into a new vision for a “global society”.
“This is not like the thirties,” Brown told a Davos audience (slightly plaintively, perhaps). “The world can come together.” But will it? And more to the point, will Obama reserve sufficient bandwidth to global coordination? Or will he be sucked into further America First policies, as the mess at home hoovers up a growing proportion of his time, energy and political capital?
The past does not dictate the present of course, but the historical precedents are not so good. The nearest equivalent to the London Summit in the thirties was World Monetary and Economic Conference, which was held in the summer of 1933.
This meeting, which bought 66 countries together in last ditch attempt to trigger global economic recovery, was derailed by a new US President – Franklin D Roosevelt – who had recently been elected in a landslide. Roosevelt rejected a compromise deal that had been hammered out by his own delegation.
The result was humiliation for a weakened British Prime Minister, and a furious reaction from the other European nations, led predictably enough by the French. The Germans, meanwhile, were left out on a limb. Hitler – just settling in as Chancellor – was forced to disown his Economic Minister mid-summit. It was an early setback for him on the international stage.
(more…)
by Richard Gowan | Feb 2, 2009 | Africa, Conflict and security, Cooperation and coherence, Middle East and North Africa
News from Lebanon:
BEIRUT: Poland has said it may withdraw its troops from the United Nations Interim Force in Lebanon (UNIFIL), prompting fears of a “crunch” in international peacekeeping resources as governments slash spending in the face of the global financial crisis. Polish Prime Minister Donald Tusk said Saturday that his government would “certainly take a decision” this year on the continued presence of almost 500 troops that the country contributes to UNIFIL.
Last month Poland announced it would cut its contribution to a peacekeeping force in Chad in a bid to save money. “We will consider whether it makes sense to continue certain foreign missions,” Tusk said.
His comments come as his government announced it is cutting spending by almost $5 billion as the global economic crisis deepens, and there are fears that other countries could follow suit and seek to save money by withdrawing troops from expensive overseas peacekeeping missions.
Last week France announced cuts in such missions around the world, including the withdrawal of two naval vessels from UNIFIL’s maritime contingent, which patrols Lebanese waters to prevent arms smuggling into the country by sea.
The problem stems from the way the countries are reimbursed for the peacekeepers they provide. The UN offers a fixed amount for each solider that a country contributes to a peacekeeping mission, regardless of how much it costs the country to pay the soldier.
The system means that poorer countries are able to contribute troops without cost to their domestic budget. But in richer countries, where soldiers earn more than the UN’s reimbursement, national governments are footing the bill for contributing troops to the missions.
On this reckoning, the financial crisis means that the West will increasingly demand that poor countries take on peacekeeping – more UN and AU missions, then, and less from NATO. Poor governments may well respond with enthusiasm, as UN subsidies will help keep their generals happy. Peace operations will remain low-tech and dogged by fights between “those who pay” and “those who play”… Not a happy picture.
by Alex Evans | Jan 25, 2009 | Economics and development
A year or so ago, I did a post wondering what had happened to the anti-globalisation movement. Well, something looking very like it now certainly seems to be reappearing in Iceland at least. Here’s Roger Boyes in the Times on Wednesday last week:
Icelanders all but stormed their Parliament last night. It was the first session of the chamber after what might appear to be an unusually long Christmas break. Ordinary islanders were determined to vent their fury at the way that the political class had allowed the country to slip towards bankruptcy. The building was splattered with paint and yoghurt, the crowd yelled and banged pans, fired rockets at the windows and lit a bonfire in front of the main door. Riot police moved in.
Eirikur Bergmann thinks this amounts to “at the very least, a revolution in political activism”. And both writers are having a grand old time identifying the baddie. (more…)
by Alex Evans | Jan 25, 2009 | Cooperation and coherence, Global system, UK
Over the past few weeks the UK government has been organising an extensive series of horizon scanning events to feed into the current revision of the National Security Strategy. In all, some 24 workshops have been held on the full range of foreign policy issues; various other events have also been held, including the Wilton Park conference I mentioned a couple of weeks back.
Having been to a few of these events, I must admit to being less than convinced that the sessions are really breaking out of the comfortable groupthink that can so easily characterise futures work. Like Charlie, I’m starting to feeling a sense of deja vu each time I attend an awayday or brainstorming session that concludes that emerging economies are, well, emerging; that resources are becoming more scarce; that everything’s interconnected; and so on.
I can see the utility of futures work that focuses on a pretty specific area – prospects for the pharmaceutical sector, say, or the future of UN peacekeeping – but I suspect that very big picture horizon scanning is only really helpful at this stage if it yields up insights or possibilities that are being ignored or overlooked.
For me, the really stand-out risk that barely got a mention in the events I attended was the possibility that serious erosion of states’ capacity and legitimacy undermines their ability to respond to all the global trends that we were discussing (viz. climate change, organised crime, economic meltdown, terrorism, energy scarcity – you know, the usual list).
Normally, when we think about state fragility we assume that we’re talking about the Lebanons, Somalias and Guinea-Bissaus of the world. But as people who work in the counter-insurgency sphere have been pointing out for some time, the problem of erosion of state capacity is a whole lot more widespread than that. (more…)
