I received an email today from One.org. As regular readers will know, I’ve often spoken well of this charity, having found them to be pretty right on most of the time. The email says that today is the global day of action against extreme poverty. So far so good. What does One.org want me to do? Write to my MP? Organise a march? Write to my local newspaper? Give some money, perhaps?
Not at all. That’s just not sexy anymore. They’d prefer I tweeted:
I’m standing up to end poverty today with @ONEcampaign. Pls RT and join me. #standup09
or posted a Facebook status:
I’m standing up to end poverty today with @ONE. Please post this as your status and join me.
How does this constitute standing up to end poverty? Saying that I’m against poverty? How original. How productive.
Apparently:
The last 2 years we’ve set a new world record, and if everyone takes part and spreads the world, we may very well go down in the pages of Guinness again this year. So start right now. Stand up.
Now I know that the average person doesn’t have time to get involved with in-depth activism.And I know that raising awareness is important. But I wonder if this kind of request isn’t actually counter-productive. If all NGOs can muster for the global day of action is twittering, I simply despair. I see a race to the bottom, with organisations competing against each other to see who can ask for the least committment and the least meaningful action from their supporters. Am I being too cynical?
The Davos to Seattle Award for Best Crisis-Themed Song goes to The Destroyers for their tune ‘Where has the money gone?’ The Destroyers are ‘a 15-headed conflagration of instrumentalists, vocalists and composers, specialising in turbo-folk mélanges of Gypsy, Balkan, Klesmer and beat poetry.’
The latest G20 summit seems to have gone off as well as could be expected – and perhaps a little better. Markets are up today.
It’s always hard to know how much was decided in advance, but damn near all of it would be a pretty good guess. The final communiqué is now available and it’s clear to see that the expanding role of the G20 itself is the most significant outcome, on the face of it, at least. More on that later. Interesting as well to see Nicholas Sarkozy continues to speak in quite progressive terms about banking reform and the decline of (what he would call) the Anglo-Saxon economic model (‘le laisser-faire, c’est fini’). Together with Angela Merkel, he’s been leadingEurope’s push for firmer regulation and bonus caps. In comparison to these right-wing leaders, Gordon Brown (leading a social democratic party) has been dragging his feet somewhat on the caps, though seems to have relented in the end. However, The Economist believes that the outcome was a ‘fudge’:
Going into the summit they [France and Germany] had pushed hard for firm numerical limits on bonuses as a proportion of revenues or capital. The language of the communiqué, however, was closer to the Americans’ position.
Other key outcomes of the meeting included a declaration of intent to reform IMF voting structures by 2011. Any change will be at the expense of European board members, who will have to give up at least 5% of their voting weight, in part to China. Blake Hounshell is:
interested to see if Geithner’s ideas for reforming the IMF gain any traction. The micro story is a technocratic one, but the macro story could be yet another sign that China is being welcomed into the inner circles of global power. The scuttlebutt is that the Treasury secretary hopes to persuade China to sign on to his priorities on capital requirements and other reforms in exchange for getting a larger share of control of the fund. Anyone know the Chinese word for “bribery”?
The Fund is also getting another funding boost of $500bn. The IMF’s twin – the World Bank – was also discussed and noises (though no committments) have been made about small voting changes there too. More details will be available in the run-up to the Bank’s spring meeting next year.
Broader questions about banking regulations got a good deal of attention, though nothing firm came out of the meeting. However, it is important to note that since the London Summit, G20 leaders haven’t taken the easy route and gone quiet on the subject. This is presumably partly due to the domestic political benefits of looking tough on bankers. Somewhat surprisingly, though, the G20 does seem to be serious about real united reform and progress on tax havens has been substantive. The idea of ‘living wills’ for too-big-to-fail institutions has also been addressed in order to set up special regulatory regimes for systemically crucial firms.
On fiscal stimulus, politicians seem to be taking the necessity of working in concert more seriously. The EU fears that the US will ‘turn off’ its stimulus too early, perhaps fostering a much-feared ‘double-dip’ recession. However, the Group pledged not to pull pack on countercyclical policies just yet. The FTheralded‘a striking area of consensus, given the arguments about stimulus that raged ahead of the previous G20 heads of government meeting in London in April.’
Outside, the protests apparently lacked focus, which is no real surprise. This is the danger of setting yourself up as ‘The Movement’. It’s not meant to be a secret society. On the other hand, Pittsburgh did witness what seems to be the first public use in a democratic country of the sonic blast cannon.
The really interesting point, as mentioned above, is the ascendance of the Group itself. Pittsburgh, in its own words, ‘designated the G-20 to be the premier forum for our international economic cooperation’. This is a body that theoretically represents 90% of world economy and 2/3 of its population. Summits will take place in Canada and South Korea next year and – in theory at least – annually thereafter. Brookings has a paper out on this (but I’d skip straight to the bottom of page four if I were you). Martin Wolf writes (FT leaflet) that ‘for the first time since the industrial revolution, economic power is no longer concentrated in western hands.’ One would have expected Wolf to be more sceptical of the idea that de jure power will translate to anything meaningful. Paul Collier certainly is:
In a world that needs collective action but is composed of 194 governments, the overarching problem is free-riding. The burden of global leadership inevitably will fall on those few governments that are manifestly too big to free-ride. There will be only five such governments: America, China, India, Japan and the 27-in-one European Union. Over the next decade each of these governments will realise that it can be a deal-breaker: if it tries to free-ride, the other four will refuse to step up to their responsibilities. These five will be the G5, the group that runs the world.
As Wolf acknowledges:
The whole point of the G20 is to allow the world’s most important leaders to have a proper discussion about the world’s most difficult problems. But with 29 people, plus support staff, in the conference room, it will be very difficult to break through the formalities. One diplomat involved in the planning for Pittsburgh points out that if everybody around the table insisted on making a three-minute opening statement, it would take an hour and a half before the discussion could even begin.
Marc Weisbrot has suggested that the move from the G8 to the G20 is not as significant as has been made out, since the G20 lacks any (formal) power of enforcement. For Weisbrot, the G20 issue distracts from the structural iniquities of power at the IMF, World Bank and WTO.
The G20 is not a permanent body, nor does it have a headquarters or secretariat. This might help it in terms of flexibility – in global governance, there’s actually something to be said for ad hoc decision making (what wonks call variable geometry – but it won’t do much for equality between rich and poor countries. There’s also a danger that as ‘the premier forum’, the G20 starts to feel entitled to make decisions affecting non-members without consultation. Before this becomes too gloomy, though, it’s worth saying that 20 voices are better than 8 in democratic terms, so at least this is a move in the right direction, more or less.
From the scene, Paul Mason wrote that ‘bit by bit the world is moving from an order based on treaty and formal sanction to one based on consensus, horse-trading and the diffusion of power’, adding that ‘here inside the Pittsburgh G20 Summit it feels like being there at the birth of a postmodernist medieval empire.’ Has Mason been reading Hedley Bull? Either way, I suspect he’s right.
if the tax is successful in limiting cross-national transactions (“throwing some sand in the wheels of international finance”), then the revenue from the tax will be less significant. Only if large, frequent, cross-national flows persist will the revenue come in, and if that happens then the other goal of the Tobin tax (protection from “hot money” flows) will be betrayed.
This is fair enough as far as it goes, but I’d suggest that the second goal is more important than the first. Indeed, I’d always interpreted the first goal as simply the means to achieve the second goal, rather than an end in its own right.
Additionally, I’d question what’s meant by “large” in this context. Obviously the Tobin Tax would have a minimum threshold so that it didn’t apply to the average holidaymaker at the Bureau de Change. But the limiting of large cross-national flows needn’t necessarily mean the tax would be utterly ineffective, as it would still apply to plenty of smaller (though still large in comparison to holidaymakers’) commercial transactions. It could raise significant money from such exchanges, even if the biggest “hot money” flows were limited. There’s an ideal equilibrium point to be found.
The post at IPE at UNC also argues that:
Rodrik says that a small Tobin tax would raise “hundreds of billions” worldwide. Presumably these will used on all sorts of really great projects that everyone loves (he lists “foreign aid, vaccines, green technologies, you name it”). But the vast majority of these taxes will be recouped by the countries with the biggest financial sectors (who receive the most inflows): the U.S., U.K., Germany, Japan. In essence, then, we would be taxing investors from poorer countries in order to redistribute to citizens of richer countries.
I’m willing to be corrected, but my understanding had always been that the Tobin Tax would be raised nationally, but pooled, administered and (re)distributed at a global level and then spent on projects of “net global benefit”.
So while the Tobin Tax is certainly not ‘the answer’, it might well be an answer. At the least, it has the potential to become a progressive and effective tool in global economic governance. The strange thing is that however much it might irk the city and financial institutions, the Tobin Tax is an idea that never quite seems to go away. Its simplicity and elegance, together with the fact that it’s not a tax that (directly) impacts much on the ordinary citizen make it perennially popular. One gets the feeling that however much structural power is wielded by those who stand to lose by it, every idea that manages to be both good and popular at the same time will have its time come eventually.
This is an automated message. By the time you read it I will have handed in my dissertation and as such, will have finished my master’s. Like Vince Lombardi said:
any man’s finest hour, the greatest fulfillment of all that he holds dear, is that moment when he has worked his heart out in a good cause and lies exhausted on the field of battle – victorious.
Overdramatic, perhaps. But it has been a long slog and I am pleased to say that my dissertation not only reflects my genuine views (my essays rarely do this), but it also has practical proposals, which at least makes me feel that I’ve contributed something tangible and meaningful, even if only about five people are ever going to read it.
Books issued from university library: 400*
No. cups coffee/tea: 1460 (approx)
Blog posts: 151
Blog views: 9,697
Essays: 8
All-nighters: 2
No. of dissertations: 1
The future is unclear – I’ll keep you posted.
* Not quite sure how this happened. That’s more than one per day…
I’ve been working solidly on the dissertation for the past month or so, and as regular readers will have noticed, posts have been few. I had planned on properly writing up all the interesting things that have been going on but instead, I’m going to go down the easier/lazier link-dump path of giving a quick overview – it’s just too much info to get through any other way.
The head of the FSA seems to have come out in favour of a Tobin Tax – cuelotsofdebate. Interesting stuff – From Davos to Seattle has broadly favoured Tobin’s idea, but it’s good to see some proper discussion about it (both pro- and anti-) in contemporary circumstances.
Timothy Adams and Arrigo Sadun reckon a ‘global economic council should oversee all’. Again, this blog is more or less in favour of a stronger global economimc architecture. The devil’s in the detail and it would be good to have a little more of that.
Arvind Subramanian thinks that ‘India should push for a radical reorientation of the World Bank, so that it undertakes less traditional lending to governments and focuses more on financing global public goods, especially relating to R&D in climate change, tropical agriculture, and diseases.’
Owen Barder takes the time to remind us just how big Africa is. (Africa is really big.) Check it out:
What else? Oh, yeah: Doha’s going nowhere. Or is it? Hmm. Pesky regional and bilateral agreements are part of the problem (true). ICTSD reports on ‘parallel and alternative paths’, which make me nervous, instictually. I tend to feel that the more complex the system, the more scope for abuse. One rule, one law. Too simplistic? Maybe. India wants services. (India wants a lot of things.) Also, perhaps it’s time to deliver on duty-free, quota-free market access for the world’s poorest countries. But, then, when wasn’t it time to do that? There’s a reason it hasn’t happened so far. It’s ok, like Gramsci, I’m a pessimist of the intellect, but an optimist of the will.
In other WTO news, the Boeing-Airbus dispute has been ruled upon. Rumour is they found for the US, which figures. But the ruling’s over a thousand pages, so I think I’ll leave it to others to get stuck into the detail.
This has been a lazy post and for that I apologise. Better writing forthcoming, hopefully.
Norman Borlaug, best known as the man behind the ‘Green Revolution‘ has died. According to The Guardian:
Borlaug won the Nobel in 1970 for his contributions to the science of high-yield crop varieties and bringing other agricultural innovations to the developing world. Many experts credit the green revolution with averting global famine.
Thanks to the revolution, world food production more than doubled between 1960 and 1990. In Pakistan and India, two of the nations that benefited most from the new crop varieties, grain yields more than quadrupled over the period…
Equal parts scientist and humanitarian, Borlaug realised that improved crop varieties were just part of the answer to world hunger, and pressed governments for farmer-friendly economic policies and improved infrastructure to make markets accessible.
His obituary is here and you can also read his Nobel Lecture here.
Why are well-meaning Westerners so concerned that the opening of a Colonel Sanders in Beijing means the end of Chinese culture? A fatal Americanization. But we have had Chinese resteraunts in America for over a century, and it hasn’t made us Chinese. On the contrary, we obliged the Chinese to invent chop suey. What could be more American than that? French fries?
The US has won its two year old case against China at the WTO’s dispute settlement panel. The dispute centred on the Chinese state monopoly on the import of foreign books and films, with the US arguing that this constituted a barrier to trade.
This is one case where the political power of open trade is clear. The free exchange of cultural products like this one of the best things about globalisation and, as the Chinese government surely knows, the seductive power of American culture and its aspirational themes and ideas can be a democratising force. In short, American books and films will seem pretty subversive to an authoritarian government. Unfortunately, however, according to the FT:
foreign industry executives, who did not wish to be named, said they saw little chance of Beijing overturning the decision from the WTO in Geneva.
“They will definitely appeal but they understand that it’s just for gaining practice in dealing with trade disputes, not because they expect victory,” said one executive.
It’s here that the rise of China is a concern for the international trade regime. A rising hegemon upsets the balance of powers that currently keeps the systemticking over.Whilst many will welcome the decline of US hegemony at the WTO, the rise of a self-interested and rapidly growing China isn’t a particularly appealing prospect either. We can definitely expect a lot more trade conflict between the US and China in future. Luckily, the pacific effect of free trade is widely acknowledged.
Though, on that note, I’d like to suggest that it’s not free trade that stops wars, but rather the existence of a set of rules and norms to manage trade. It’s the institutionalisation of trade politics more than the nature of those politics that reduces conflict. It’s not an unimportant distinction.
For the record, posting is slim because I’m still writing my dissertation on the concept of trade justice. At some point, I’ll get round to posting a summary of it here. I just have to work out what I think first. Do not adjust your sets.
The Conservative Party here in the UK have been unveiling their proposed policies on international development, should they (as widely expected) win the next general election, expected in May. Having admirably promised to ‘ring fence‘ international development spending, their green paper states that:
Any future government will have to take tough decisions to balance the books – and that means cutting back the rate of growth of government spending. The Conservative Party has made the bold pledge, even in the context of this fiscal squeeze, to increase the level of British aid. We have done so, above all, because it is morally right to do so. Cutbacks must not cost lives.
However, they also propose to:
establish a new MyAid fund, worth £40 million in its first year. Every taxpayer will be able to log on to the MyAid website and view details of ten ongoing DFID-funded aid programmes, and vote for which one they think should receive the extra money. The options will include programmes run directly by DFID, as well as those run by respected NGOs. The Fund will then be distributed between the ten programmes in proportion to how many votes they receive. For example, if 25 per cent of people vote for the DFID programme in Malawi, that programme would receive 25 per cent of the Fund – £10 million. Everyone who votes will be kept up to date with regular email updates about the progress of ‘their’ project.
(H/T Brian Barder.) Now I like to think of myself as a democrat. I also like to think that by and large, on broad moral issues, the people as whole know best. But international development is a much, much more complicated field than many people think. With the greatest of respect to the British citizen, if the average person in the street was able to competently evaluate development projects, then why is it that the development industry continues to be plagued by horror stories of projects gone wrong, even as the expertise of aid workers is ever increasing? The truth is that workable aid projects are really really hard to do well. A vox pop/Big Brother approach is not the way to go about it.
The Overseas Development Institute concluded that ‘there are as many questions here as answers’. This is to be expected of a green paper. Yet:
the devil lies in the detail and there is much in the chapter on value for money, and indeed in the whole report, that raises further questions. On how aid is spent, for example, it is not clear what the criteria will be for allocating aid by country if, as the Green Paper states, the 108 countries in which DFID works at present is too many (even though 90% of current spending is concentrated in 23 countries).
Duncan Green adds that the Tories ‘love NGOs. Get ready for weird lobby meetings in which NGOs are arguing for channelling funding for essential services via the state, rather than via NGOs’. Yet the Conservatives’ free market preferences haven’t gone down well with charities, particularly when it comes to their proposals on aid vouchers. The vouchers:
would be redeemable for development services of any kind with a supplier of their choice. Such an innovation would help demonstrate what poor people really want – and who they perceive to be most effective in meeting their needs. Clearly, this will only work where there is a genuine choice between different service providers, and is not a substitute for comprehensive efforts to strengthen the capacity of national governments to guarantee access to essential services for their people. We will also examine carefully the case for using a more limited type of voucher in certain emergency situations, where providing people with aid vouchers rather than food would enable them to access products through local markets, rather than shipping in imports and putting local providers out of business.
In response, an Oxfam spokesman emphasised the impotence of vouchers where basic services do not exist, arguing that ‘what is needed is aid money invested in helping poor countries build and maintain free public health and education systems.’ Kevin Watkins was more outspoken, arguing that a voucher system would be ‘using vulnerable people to advance an ideologically loaded, market-based vision for education, which would exclude millions of kids from school. It completely overlooks the achievements of publicly financed, publicly provided education in countries such as Ethiopia and Tanzania. Watkins is right to call out the Conservatives on what they claim is a ‘non-ideological approach’ to aid delivery. There is no such thing.
Chrysler engineers from Detroit are making monthly pilgrimages to the southern Polish town of Tychy to learn how to run a successful car plant. The Fiat plant in Tychy is thriving in the economic downturn and hired as many as 1,700 new workers last year. “We are lucky there is a crisis,” said the director of the Tychy plant, Zdzislaw Arlet, unable to resist a gibe at the bigger cars and trucks. “Everybody wants to build small cars now.”
Meanwhile, Richard Dowden argues that the world recession will have long lasting consequences for Africa and its international relations:
The global financial crisis seems likely to push Africa closer to China and other Asian countries, and away from its historical western partners. Already, African rulers are using their new-found friendship with China to resist western pressure on economic policies, as well as human rights and democracy.
And over in Brazil, President Lula is bucking the consensus of ‘cautious regulation’, as set by Larry Summers and pursued by the Obama administration since January. He is indulging in a touch of countercyclical stimulus. To the concern of Newsweek’s Mac Margolis, Lula has been:
spraying public money around with gusto…pumping up the public payroll, rolling over debt, ordering government banks to ease consumer-lending rates, and even proposing a law to increase the minimum wage every year until 2023.
Some things, however, do not change. In the world of multimillion dollar football, Real Madrid are spending big. Again. With the signings of Kaka and Ronaldo, reportedly funded by Caja Madrid and Banco Santander, to the tune of $250million, the question surely is, does it make economic sense?
Maybe I should start a collection. (Incidentally, Peter Vale’s publishing a book about cartoons and South Africa’s international relations.) Anyway, this cartoon is from bilaterals.org. Sorry about the small size.
Matthias Varul has a nuanced assessment of fairtrade over at e-IR – it’s worth a read and I reckon he’s got it pretty much spot on. To top and tail it:
The idea of fairtrade is, at first glance, a paradoxical one. Observing that the capitalist world market works to the disfavour of producers in the Third World, left wing and Christian campaigners from the 1970s onwards tried to use this unfair market to establish equitable North-South trade relations. The paradox is encapsulated in the slogan: “In the market against the market”…
Fairtrade goods on the supermarket shelves may be sometimes misused to buy a clear conscience – but at the same time they are the bad conscience of the postcolonial world of consumption. The Adam Smith Institute complains about a “moral monopoly” that the fairtrade movement has established – and in a way it’s fair to say that it has. There now is compelling plausibility for fairtrade. Such plausibility might not be strong enough a reason to determine individual purchasing decisions – but it may prepare the ground for institutional safeguards and legislation that might one day make fairtrade a thing of the past by making sure all trade is fair.
I’ll probably be blogging more about this as my dissertation progresses. Dr Varul is also running a day seminar on the topic in October – more info here.
On 6 July, DFID published its new White Paper , promising to:
Maintain our commitment to people in poverty
Work to make sure every pound of UK aid is spent well
Work for sustained, fair and green growth
Help make people safe and secure
Increase our investment in international organisations and continue to lead reforms with real impact
Commit to helping vulnerable countries adapt to climate change and develop in a low carbon way
Reinforce our partnerships with charities, faith groups, trade unions, businesses and others
Meet our aid target of 0.7% of UK income by 2013
So far, so pedestrian. It looks like the white paper is essentially advocating a pretty straightforward continuation of current policy. More superficially, as predicted, British aid efforts have been rebranded as ‘UKaid’, in a similar manner to the American USAID programme.
However, the ODI are concerned, as am I, that DFID is neglecting trade. As Oxfam have famously argued, ‘if Africa, East Asia, South Asia, and Latin America were each to increase their share of world exports by one per cent, the resulting gains in income would lift 128 million people out of poverty.’ Pascal Lamy, writing in the Wall Street Journal, predictably agrees that ‘developing countries need trade’. Expect yet another update on Doha progress in relation to the Obama administration shortly.
Courtesy of Wordle. I notice there is a naughty word in there – I didn’t write it, it was a quote from the potty-mouthed Jeff Jarvis. Anyway, I think it’s an interesting way of looking back over the last few months of From Davos to Seattle.
I’m a student in the UK, working towards a master's degree in International Political Economy. This blog is intended to complement my studies by addressing perennial issues and current affairs. Please see the about page for more information, or the contact page to get in touch. My personal website is here.
