by David Steven | Jan 28, 2009 | Economics and development
Courtesy Flickr user massdistraction
The IMF today predicted a grim economic outlook for 2009, with some green shoots in 2010.
The news is especially grim for the UK and Eurozone countries, with a 2.8% and 2% fall in output in 2009 and barely any growth in 2010. The US is predicted to do quite a lot better – a 1.6% fall this year, but 1.6% of growth next. That should cue a pleasant new wave of American triumphalism.
China floats through the crisis more or less unscathed. Growth slips to 6.7% in 2009, but bounces back to 8% in 2010. India does a little worse, Brazil suffers pretty badly, while the Mexican economy really tanks.
But I really don’t know why I even bothered to read the stats. Nine months ago at the Progressive Governance Summit, Dominique Strauss-Kahn told everyone that Europe and the US would experience a slowdown, but not a loss of growth (with the European economy expected to outperform the American one).
Even since it last ran its models in November (just three months ago!), the IMF has knocked 1.7 percentage points off world growth, and a staggering 6 points from its prediction for what were once known as the Asian tigers.
The IMF itself is forced to admit that “the uncertainty surrounding the outlook is unusually large.” Doesn’t that translate as “our models weren’t built for these crazy conditions, but we’ll run them anyway and PR them heavily to the 1000 or so media outlets that’ll reprint our speculation as fact”?
Or am I missing something here?
by Alex Evans | Jan 28, 2009 | Conflict and security, Cooperation and coherence
A few days ago, I did a post on the UK government’s current horizon scanning exercise – part of the process leading up to its second National Security Strategy – in which I suggested that “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 [will undermine] their ability to respond to all the global trends that we were discussing”.
As regular readers will know, that observation comes straight out of the writings of ‘fourth generation warfare’ theorists like William Lind, Martin van Creveld and John Robb. But what may come as more of a surprise is the interesting revelation that Kaiser Wilhelm II made a similar point yesterday in his birthday conversation with Lind*:
“My generation of kings and emperors were fixated on the age-old contest between dynasties. Would the houses of Hapsburg and Hohenzollern defeat those of Romanoff and Savoy or the other way around? We could not see the paradigm shift welling up all around us, the onward rush of democracy and equality and socialism and all the rest of that garbage. What we needed was an alliance of all monarchies against democracy. Instead we wiped each other out, putting the levellers in charge everywhere, to the world’s ruin.”
“Does that hold any lessons for our time?”, I asked.
“From Olympus, the picture could not be more clear,” His Majesty replied. “As we were mesmerized by dynastic quarrels, so your politicians cannot see beyond the state. They think only of states in conflict. Will America be threatened by China? Should India go to war with Pakistan? Is Iran a danger to Israel? They cannot see that states are now all in the same, sinking boat, just as all the dynasties were in 1914.”
“What should states then do?”, I enquired.
“Form an alliance of all states against non-state forces, what you call the Fourth Generation,” the Kaiser answered. “The hour is late, and the state system itself has grown fragile. That is the lesson of America’s quixotic war in Iraq. You destroyed the state there, and now no one can recreate it. That is what will happen almost everywhere when states fight other states. But none of your leaders can see it, because they, too, are time-blinded. It is the human condition.”
* Since you ask: in addition to being one of the top experts around on counter-insurgency and fourth generation warfare, William Lind is also an ardent Prussian monarchist. Consequently, he marks the birthday of Kaiser Wilhelm II (“my reporting senior and lawful sovereign”) with a column each year in which he records a conversation with that leader’s ghost. Previous editions are highly recommended – e.g. here and here.
by David Steven | Jan 26, 2009 | Climate and resource scarcity, North America
Nick Stern isn’t going to like this, but there’s a new Stern on the climate block: Todd Stern , who is set to be announced as the US’s new climate envoy.
(Todd) Stern has set out a fairly clear road map for US engagement in the climate process (nb. these are his personal pre-appointment views, not those of Obama or Clinton). He thinks the US should:
- Start with domestic policy – get the National Academcy of Sciences to recommend (and review on regular basis) a stablization target; legislate cap and trade, not a carbon tax; supplement with regulation on energy efficiency and tex incentives for R&D.
- Use domestic policy as a lever in the international arena – negotiating first with a core group of countries (the ‘E8’ – Brazil, China, EU, India, Japan, Russia, South Africa and the US); then building a post-Kyoto framework on the back of their agreement, with binding long-term targets for all developed and ‘as many advanced developing countries as possible,’ and a built-in mechanism to ratchet those targets up over time (and as scientific findings dictate).
Stern is fairly tough on China. The country needs to accept targets (calculated on what basis is a question he does not address), but he makes lots of positive noises. Joint action on a climate can form the basis of a new strategic partnership between the 800-pound gorillas, but only if it is elevated from “traditional place in the second tier of mutual concerns.”
Throughout, of course, he has an eye on the US Senate and ratification. Bottom up targets and sectoral agreements should be deployed if they can suck more countries into a climate deal, as this will shut up antsy Senators. Access to carbon markets should be used as another tool that creates an incentive for developing country participation.
But there needs to be a stick too, Stern believes – and that stick is trade. Unilateral tarrifs on carbon-intensive goods would be ‘profoundly alienating’ and ‘a prescription for mutual recrimination, not progress’, especially after the US has spent so many years in the climate wilderness. But:
Considered in a mutilateral context…the idea…is more interesting. Today, the carbon content of goods is not captured in their price…If the premise of a climate regime were that countries must capture those social costs by putting a price on carbon, whether by means of a cap-and-trade program, a carbon tax, or equivalent policies to cut emissions, tarrifs could then be imposed on the exported products of any country that lacked such policies.
The Europeans will welcome Stern’s appointment with open arms – the Brits in particular. John Ashton, the UK’s climate envoy, gets name checked by his new US counterpart – and it wouldn’t surprise me to see the two working hand in hand…
by Jules Evans | Jan 23, 2009 | Economics and development, Global Dashboard, Global system, London Summit
David Cameron yesterday warned that the UK could be forced to go cap in hand to the IMF, as it did in 1976 under chancellor Denis Healey. (This, by the way, at the launch of a new programme at Demos about ‘progressive conservatism’. Et tu, Demos?)
The question is, would the IMF have the cash. Click on more to read a story I recently wrote for my mag, www.emeafinance.com, which looks at the risk of the IMF running out of money in the next 18 months, and asks what the chances are of it receiving more funds from cash-rich G20 governments (answer: slim).
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by Richard Gowan | Jan 21, 2009 | Africa, Conflict and security
Last year, I wrote a couple of posts (here and here) warning of a rift between African countries and the West over how to administer peace and justice on the continent. That was coming out into the open over Darfur and Zimbabwe, forcing Western liberals to balance a commitment to “African ownership” with their desire to stay involved in African affairs. Now, a trenchant critique of “African solutions to African problems” rhetoric comes from Tsoeu Petlane, a South African scholar:
As we enter a New Year, we have to acknowledge that the “African solutions for African problems” approach has had some glaringly painful failures. The continuing crises in Somalia, in Zimbabwe, in Darfur and in the Democratic Republic of Congo and the surrounding Great Lakes region all demonstrate the weaknesses of the way “African solutions” have been implemented in 2008. These weaknesses must be addressed in 2009. The year ahead should be one of rethinking how Africa deals with problems in a manner that is effective and restores the continent’s image and initiative.
Petlane anatomizes the problem thus:
There are three key reasons for failure: an almost unquestioning adherence to protecting state sovereignty, dependency on forces outside the continent and lack of leadership. Together, these stifle innovation, limit the effectiveness of proposed solutions and alienate potential allies.
First, the continent’s endorsement of the leaders of collapsed or collapsing states such as Zimbabwe, Somalia and the DRC, far from promoting sovereignty, negates it.
Sovereignty resides in the people, who only delegate it to leaders. In a situation in which the expression of this sovereignty is denied the people, such as in Zimbabwe; where those entrusted with it are unable to exercise it practically, such as in the DRC; or where the institutions supporting it are in question, such as in Somalia, protecting a government makes no sense – it allows a regime to maintain a veneer of statehood only on the basis of recognition by others. Thinking beyond this paradigm is urgently needed.
Second, while African leaders appear united in calling for indigenous solutions, few have demonstrated a conceptual or practical commitment to the notion. Their initiatives and solutions have depended on Africa’s “partnership” with the nebulous “international community”. A major component of this “community” comprises the very same former colonists who, we claim, have (i) “created” Africa’s problems by colonising them, (ii) “interfered” in Africa’s internal affairs, (iii) shaped the international system to serve their own interests (in trade, economy and international relations), (iv) dictated values of good governance and economic performance that are “foreign” to Africans, and (v) “abandoned/marginalised” Africa by withdrawing aid and political support after the Cold War.
This kind of dependency – developing solutions on the basis of actions of others, and blaming them when things don’t work – points to our lack of good leadership.
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