by Alex Evans | Jan 17, 2009 | Conflict and security, Middle East and North Africa
Chances are you’ll already have seen media coverage of Generation Kill – HBO’s outstanding new mini-series based on Evan Wright’s book on his time as an embedded correspondent with a US Marine Corps reconnaissance battalion as they invaded Iraq. The series comes from David Simon and Ed Burns, the creators of The Wire (here’s an audio interview with Ed Burns, Wire fans). Lest you haven’t already sampled the extensive selection of clips on YouTube, here’s a small sample to whet your appetite:
[youtube:http://uk.youtube.com/watch?v=aSLAIKjT7y8&feature=channel]
Book and series alike both give close-up perspectives on the failures of counter-insurgency doctrine that typified the early Iraq campaign. Even then, it’s clear that the more thoughtful marines portrayed in Wright’s account become steadily more aware of the hearts and minds dimensions of their campaign – especially in the case of Lt. Nathaniel Fick, who led the platoon in which Wright was embedded. Fick has since left the USMC for the Center for a New American Security, where he’s now co-authoring research with long-time 4th Generation Warfare expert John Nagl. (more…)
by David Steven | Jan 17, 2009 | Economics and development, Global Dashboard, Global system
So it looks like we’re getting close to an announcement of a ‘bad bank’ here in the UK, with signs that this move has been co-ordinated with the new US adminstration.
According to the Telegraph:
The bad bank plan has climbed the political agenda in the past couple of weeks as the Government has become aware of the extent of the lenders’ bad debts.
Sources said that a bad bank would have to take on about £200?billion of toxic assets. That would take the Government’s total commitment to solving the banking crisis to almost £1?trillion in taxpayers’ money that has either been spent or pledged.
Valuation remains controversial, with banks scrabbling to extract as much as they possibly can from the taxpayer. One option (following the Swedes again) is to use an independent board to have a go at guessing what all the crap is worth.
Willem Buiter has a simpler suggestion – privatise the whole sector, with the government then making whatever valuation it likes as it transfers toxic assets into a new vehicle. Buiter, who thinks that even HSBC is now toast, points out that the current half-way house (partial state ownership) may be the worst of all worlds:
Ironically, by partially nationalising some of the banks, by making this injection of public capital expensive financially and as regards other conditionality, and by holding the threat of possible future (partial) nationalisation over the remaining banks, the authorities created an incentive structure that is biased strongly against bank lending, and against bank risk taking generally. The best escape from this unfortunate halfway house is to go to temporary full public ownership of all the banks. It would be cheap. It should not cost more than £50bn for the state to buy the rest of the UK high street banks. It could wait a while and get them even cheaper – possibly for nothing. But time is more precious than money in this case.
by Mark Weston | Jan 15, 2009 | Africa, Economics and development
Last May I wrote about a World Bank scheme to pay Tanzanians to test negative for sexually transmitted infections (a proxy for HIV/AIDS), and about the positive effects on health of Mexico’s Oportunidades conditional cash transfer programme (South Africa’s pension scheme has also had beneficial health impacts, as have programmes to pay US drug users not to inject).
A new study by Rebecca Thornton lends further support to the idea that financial incentives should play a part in HIV prevention. In a randomised trial of over 2,000 Malawians, she gave some participants money in return for testing for HIV and finding out their results. Those receiving the cash were on average twice as likely to turn up to be tested as those left empty-handed. Even pretty small sums, amounting to a tenth of a day’s wage, had a significant effect on the likelihood of getting tested.
Unfortunately, Ms Thornton also found that being tested didn’t have much impact on sexual behaviour (though several other studies have found that knowing you’re HIV-positive makes you less likely to indulge in unsafe sex). Still, cash incentives could be used to persuade the reluctant to adopt other preventative measures, like male circumcision, condom use or, as the World Bank hopes, to find their own ways of staying negative.
H/T Chris Blattman.
by Alex Evans | Jan 13, 2009 | Cooperation and coherence, Economics and development, Global Dashboard, UK
As everyone waits to see what Obama plans to do about reforming foreign assistance in the US, back here in Britain change is in the air too: the Conservatives are coming clean about what they really think about DFID, the Department for International Development.
For a while now, there have been whispers that the Tories don’t really buy into the idea of an independent DFID – and that perhaps (gasp!) they might be considering merging it back into the Foreign Office, where it resided until 1997. Well, following last week’s Independent interview with Conservative aid spokesman Andrew Mitchell, we can put that notion to rest: “We are very committed to DFID continuing as an independent department of state”, says he.
So, a ringing endorsement of DFID, then? Er, not quite. Here’s the full context:
The shadow International Development Secretary, Andrew Mitchell, said DFID had begun to encroach on the work of other departments and to come “perilously close” to setting its own foreign policy, a role he said should be reserved for the Foreign Office. He said the Foreign Office will be given much greater influence over the use of overseas aid should the Tories win the next election …
“There are times when DFID comes perilously close to pursuing its own foreign policy and that is not right,” Mr Mitchell said. “Foreign policy is decided by the government and the Cabinet, led by the Foreign Office, and DFID should not be an alternative to this. We are very committed to DFID continuing as an independent department of state. But we would make it more of a specialised development department and a little less like an aid agency,” he said.
That left me wondering just which specific instances Mitchell was thinking of in arguing that DFID was coming close to having its own foreign policy. Iraq? Afghanistan? Climate change? (Thinking that Paul Wolfowitz might not be such a great idea for President of the World Bank?) Sadly, we don’t know. Earlier today I called his office to ask him to elaborate, but he declined to say more.
This is a shame, on two counts. First, because it’s a cop out. For the Opposition front bench spokesman on international development to argue that the Department he shadows has come ‘close to pursuing its own foreign policy’ is a serious claim – and one which he ought to be prepared to substantiate. To fail to do so leaves him open to accusations of offering soundbites rather than reasoned argument.
More fundamentally, though, it’s a shame that Andrew Mitchell wouldn’t elaborate because this debate needs to be had. (more…)
by David Steven | Jan 11, 2009 | Climate and resource scarcity, East Asia and Pacific, Global Dashboard, Global system, London Summit, North America
[youtube]http://www.youtube.com/watch?v=iRzr1QU6K1o[/youtube]
In last month’s New Atlantic, James Fallows had a fascinating interview with Gao Xiqing, Chief Investment Officer at China’s sovereign investment fund, and the man responsible for a significant chunk of China’s huge holdings of American dollars.
Gao – who Fallows dubs one of the US’s new banking overlords – thinks Americans need to learn some humility and fast.
“The simple truth today is that your economy is built on the global economy,” he says, “and it’s built on the support, the gratuitous support, of a lot of countries. So why don’t you come over and … I won’t say kowtow [with a laugh], but at least, be nice to the countries that lend you money.”
The US should disentangle itself from expensive overseas conflicts, Gao believes, raise its diplomatic game, and – above all – tell its citizens to get saving as part of a “long-term, sustainable financial policy.”
It’s all well and good, but maybe Fallows should have pushed Gao a little harder on whether China’s own financial policy is sustainable. After all, despite recent appreciation, the yuan remains substantially under-valued against both the dollar and the euro – the main reason why the Chinese has ended up holding so much Western debt.
Gao’s comments on the dollar are somewhat contradictory (and reflect all the ambiguity of China’s own dollar position). On the one hand, it defends its status as a reserve currency. The US is still the most viable and predictable market, he says. But on the other, Chinese investment in the dollar is widely unpopular at home. According to Gao, China’s citizens ‘hate’ its support of rich Americans (“people eating shark fins”) at the expense of “poor [Chinese] people eating porridge.”
More significant than public pressure, perhaps, is Gao’s belief that the dollar is highly likely to lose value over the short to medium term (with a corresponding appreciation for the yuan). This will wipe billions of Chinese reserves (reserves that have only been built up through consumption foregone) – while challenging China’s export-led growth model:
We are not quite at the bottom yet. Because we don’t really know what’s going to happen next. Everyone is saying, “Oh, look, the dollar is getting stronger!” [As it was at the time of the interview.] I say, that’s really temporary. It’s simply because a lot of people need to cash in, they need U.S. dollars in order to pay back their creditors.
But after a short while, the dollar may be going down again. I’d like to bet on that! The overall financial situation in the U.S. is changing, and that’s what we don’t know about. It’s going to be changed fundamentally in many ways.
Unravelling these imbalances seems certain to be ugly. Reading George Cooper’s book, The Origin of Financial Crises, on a plane the other day, I was struck by strong parallels between today’s economic woes, and a crisis we have heard little about recently – the ‘Nixon Shock’ that led to the end of the Bretton Woods system. (more…)
