Macroeconomics and Bridesmaids

Posted: May 25, 2011 by Zeddington in US Economy

Last night I read this excellent article on the blog New Deal 2.0, which I wanted to share. Have a look.

No, you won’t find many blog posts like this one from me. The US has a long history of meddling in the affairs of other nations for its own national interest, without regard to the interest of the nation in question. So it is natural that, in the US’ latest intervention in Libya, most of those on the left of the spectrum are understandably ready to criticize Obama.

I have some sympathy for the man, as it seems like he just can’t win this time around. On the left, the criticism is that the US cannot and should not intervene wherever they feel fit. Justifications on the ground of humanitarianism are scorned – America does not have a reputation for that. Liberals remember the Afghanistan and Iraq wars, and are justifiably suspicious about this latest action in Libya.

On the other hand, those on the right have and will criticize Obama for “dragging America into another war” when there are domestic considerations, and budgetary concerns. America can’t afford to save these people, let them solve their own problems, they say.

So I find myself in the strange position of having to defend him. On the left they are suspicious of US imperialism: the Arab League was against this, the African Union was against this, and the UN vote wasn’t fair/representative. Well, what about the Libyans? What do they want? Everyone seems to have forgotten about them. Every single Libyan I’ve spoken to (admittedly, not many) has said that they are thankful that Obama ordered military action. If it weren’t for the airstrikes, Bengazi would have fallen, and that would have been that. There would have been a massacre.

There is value in humanitarianism, we must not forget that. The UN is too weak an organization to do it, and so it falls to the US (unfortunately). As uncomfortable as the idea is in my head, I can’t help but feel that Obama acted in the interests of the Libyan people before the US. There will be benefits to the US of a non-Gaddafi Libya, of course, but that is secondary. Regime change wasn’t a stated motive. The US is eager to hand control to NATO and other allies, rather than get stuck in. No ground troops. This is clearly not Afghanistan – a war waged in revenge, without a clear strategy, or Iraq – a very cynical war fought entirely for the greed and power. I believe this really is a reluctant intervention which the US has no intention of being involved in for very long, almost entirely for humanitarian purposes.

Further, comparisons with Bahrain and Yemen are incorrect. In Yemen, there is some negotiation going on, and while there is violence, there seems to be some progress being made internally. In Bahrain, unfortunately the Saudi and UAE armies went it, a grave turn of events, but again the level of violence was nothing like Libya. Crucially, the Bahraini and Yemeni leadership did not threaten to massacre their people, did not compare them to rats, did not urge them to take to the streets to slaughter the opposition. Those countries are not approaching civil war, and no massacres are on the brink of taking place.

Personally I found Obama’s speech to be a good one. It laid out the processes that took place and his intentions quite well. Click here to see it.

Juan Cole writes an excellent ‘Open Letter to the Left‘ on his blog. Do read it. He goes into a lot more depth than I possibly could in this hastily written, badly edited blogpost, and makes the case a lot better than I do. He’s also on Democracy Now debating the Libya issue (Part 1 and Part 2 here).

Finally, this excellent interview on The Daily Show with Dr. Mansour O. Al-Kikhia, another Libyan who supports the intervention. Watch it (and enjoy his energy!). I don’t know if he’s closely related to this Mansour Kikhia, disappeared by Gaddafi years ago, and he makes no mention of it.

Until next time.

The terrible and tragic earthquake and subsequent tsunami that rocked Japan on Friday the 11th of March immediately shut down eleven of Japan’s nuclear reactors. The latest news from Japan on that is that six of the nuclear plants appear to be stabilizing, following efforts from engineers and firefighters to cool the reactors. Despite progress, however, it appears that this nuclear crisis is far from over.

The issue has sparked a new round of nuclear of protests and reinvigorated the debate as to whether we should rely on nuclear power at all, and the focus is on safety. After the disaster, protests have been taking place around the world, including France, Germany, Italy, and elsewhere. Even in the United States, where there are 104 operating nuclear reactors (many of which are almost as old as the Japanese reactors that failed). Vermont’s Senate has recently voted to close their Yankee nuclear plant, an unusual move in itself, but one that recognizes the inherent dangers of old nuclear plants.

Meanwhile, on the other side of the world, Abu Dhabi is building one of the largest nuclear power plants in the world. The UAE, a tiny, oil-rich country, feels that this $20bn project is essential for their long-term development. While the last link clearly details some legitimate reasons for UAE to desire more sources of energy, why must it be nuclear? For a country that has a more-than-reasonable amount of open desert, and a lot of sunshine, why isn’t solar energy being more seriously considered as a source of energy? How do other Arab countries feel about having a brand new nuclear power plant in their backyard?

It’s worth remembering that assurances about safety are always made. No nuclear power plant has ever been built without the owners assuring the public that the plant is 100% safe. And yet we’ve seen accidents before. And having a nuclear meltdown is not like falling off your bike. It’s much, much more serious. From an excellent article on Al Jazeera English:

 

At least 99 nuclear accidents meeting this definition, totaling more than $20.5 billion in damages, occurred worldwide from 1952 to 2009 – or more than one incident and $330 million in damage every year, on average, for the past three decades. And, of course, this average does not include the Fukushima catastrophe.

Indeed, when compared to other energy sources, nuclear power ranks higher than oil, coal, and natural gas systems in terms of fatalities, second only to hydroelectric dams. There have been 57 accidents since the Chernobyl disaster in 1986. While only a few involved fatalities, those that did collectively killed more people than have died in commercial US airline accidents since 1982.

Another index of nuclear-power accidents – this one including costs beyond death and property damage, such as injured or irradiated workers and malfunctions that did not result in shutdowns or leaks – documented 956 incidents from 1942 to 2007. And yet another documented more than 30,000 mishaps at US nuclear-power plants alone, many with the potential to have caused serious meltdowns, between the 1979 accident at Three Mile Island in Pennsylvania and 2009.

 

In this day and age, when technologies for the production of safe and clean energy exist, is there any justification for persisting with dangerous sources of energy, like nuclear? Is it worth the risk?

Anyone who has ever been to Oman knows that the phrase ‘sleepy sultanate’, while annoying, is fairly accurate. Not a lot goes on in Oman: day-to-day life is pretty sedate and mundane. So when a few protests broke out last week, there was plenty to talk about.

Never mind that most of the protests were in support of the immensely popular Sultan Qaboos, this was news. The sleepy sultanate, rising out of its slumber? Hardly. Talking to people in Oman, it appears that the whole situation is a bit of a storm in a teacup. It is unprecedented, yes, but only because nothing like this ever happens in Oman. And yet, if you were to read the Western media, you would start to believe that Oman may possibly be next (and if you were to read the local media, you wouldn’t even know that anything had happened at all).

Now that Oman has become interesting to the press, you get a hold series of hurried, ill-researched and badly misguided articles attempting to analyze the situation. Suddenly Qaboos is interesting, 40 years after coming into power. Now, not all articles written have suffered from these problems. This article in Foreign Policy provides a very basic summary of the country and its leader for those who have no idea about either. And yet it mentions only in passing the very real problems that the nation faces, as an attempt to inject some relevance into the article, linking it to the current unrest.

On the other hand, you have articles such as this one in The Guardian, a publication I normally have a lot of time for. The author clearly has never visited Oman, and has spent about half an hour online before coming to a conclusion about a country he knows very little about. To be fair, his information about media laws are spot on. If Oman is going to continue its transition into a modern, developed nation, these will need to be reformed. And while I do not want to sound as if I am defending such issues, some consideration of this man’s achievements are in order. He’s done a lot in the last 40 years, as recognized by the 2010 UN Human Development Report, which rates Oman as the #1 nation in the world in terms of development progress since 1970 (although, since a lot of the indicators used to judge these things are absent in the case of Oman, I’m interested in what methodology they used to come to that conclusion).

I’d like now to turn to a blog post by Undercover Dragon on his excellent blog. He highlights four differences between protests in Oman and elsewhere in the region, and while I’m not sure I agree with at least one of those points, he does correctly point out that the responses by the Omani government seem to be hasty and not well thought out. He has some ideas, and I’d like to give my thoughts on them:

1) Allow a free media and crack down on mysterious income sources – I agree entirely with what he suggests, including the details mentioned. I think credit needs to be given to magazines such as The Week and Y Magazine, amongst others, which have instigated some form of investigative journalism that was absent in the past. Generally, issues covered are minor, but it’s something which needs to expand and grow in Oman. It is one of the pillars of a free and responsible civil society. I also agree about the taxes and disclose of income for public officials and their immediate families.

2) Change the political system – again, I agree with the changes proposed. People in the country, and others in the Gulf, often have a real fear of democracy (not all people, but those that have something to lose are often the most vocal). And sometimes, those fears can have some basis in reality – such as the fear that Islamists would regress the rights of women. Which is why societies need constitutions, both to protect minorities from the majority of population, and vice versa. Democracy doesn’t mean that majority rules no matter what, it means that the people as a whole are ultimately in control, and can rest assured that those with a weaker voice are protected and represented.

3) Improve educational meaningless – I think one big problem is with the culture of education in the Sultanate: nobody learns for the love of learning. It’s all about the certificates, about the paper. It means nothing if there is no passion to learn and no desire to improve oneself through education. I understand that that is something relatively rare even in the best of societies, but in Oman it is almost non-existent. I also believe that the arts are not emphasized enough in the region as a whole, nor is philosophy and other related disciplines. These improve the depth of a society, and are required. It’s not all about churning out doctors, lawyers and businessmen.

4) Level the employment playing field – I’m not sure that the proposals Dragon suggests are viable in practice – one would need to look at the theory behind it and crunch some numbers – but in practice the proposals seem sound. The objective ought to be to discourage the hiring of imported labor without forcing companies to hire Omanis that do not want to work. Companies need to be provided incentives to not just hire Omanis but to train them. At the same time, Omanis looking for a free ride should not be allowed to benefit from laws that make firing them almost impossible.

5) Bring in compulsory pseudo-military service – I’ve seen how people who’ve done some military service can be very different from those who haven’t. The effect is drastic. Naturally it’s not for everyone, but not including the exceptions it would help instil a work ethic into a labor force that seems to have precious little. Linking unemployment benefits to this is also a good idea.

6) Reduce population growth – easier said than done, but every country that has begun serious development or even moved into the classification of ‘developed country’ has seen a drop in population growth. Some countries choose specific policies that force people to limit the number of children they have, such as China. For other countries, its an organic process: better education, in particular for mothers are daughters; lower child death rates; and a healthier population all tend to encourage families to choose quantity over quality, and invest more in the children they have. Cultural and religious issues may need to be overcome (such as resistance to birth control – and the relatively recent appearance of condoms in supermarkets shows that the government is trying).

7) Reduce tribalism – in a word, yes. Historically, countries with a more diverse population tend to have greater friction and potential for conflict. It’s not rocket science really, and is a great source of corruption, nepotism, and racism in society. Reward people for marrying across tribes, and have social programs that work on removing the social stigma of doing so. Discourage marriage between cousins.

None of the suggestions Dragon makes are headline friendly. They’re not exactly things you would announce in an attempt to quell rising anger. People tend to want immediate solutions, but they are usually the ones that backfire.

A Word on Libyan Diplomat ‘Defectors’

Posted: February 24, 2011 by Zeddington in Egypt, Libya, Middle East
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A quick word on the Libyan diplomats who have defected. Some are saying they never served Gaddafi or the regime, they always served the Libyan people.

The best way they could have possibly served the people in their times would have been to resign.

It’s helpful that they’re defecting, as it undermines his mad regime, and draws power away from him. However, we should not applaud them. Bravery? What bravery? They’ve sensed the winds changing, and they’re trying to get onto the right side of history. They’re trying to avoid prosecution for their role in the continuation of that mad dog’s regime. Their roles should be examined, and they should be dealt with accordingly. I’m not talking about the soldiers, pilots, and others who refuse to shoot at the Libyan people – they should be applauded. They are every day people with a sense of morality, willing to accept the consequences if they must. They should be applauded and protected. But the ambassadors, high-level diplomats who’ve been protected and given a comfortable life thanks to the brutality of the Gaddafi regime should not be able to escape so easily.

What is US Uncut?

Posted: February 22, 2011 by Zeddington in US Economy
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On the 26th of February – this Saturday – something remarkable will take place. It will happen in the city I live in, but it will probably happen in the city you live in as well. On February 26th hundreds, maybe thousands, of Americans will take to the streets in 30 cities from Maine to Hawaii to protest the stringent cuts to public services across the US.

The latest budget from Washington has slashed spending on over 200 federal programs, a total of $1.1 trillion dollars over the next 10 years. Most of these programs are there to help the millions of lower and middle class Americans who work hard every day in order to make a decent living. We are told these cuts are necessary – austerity is the word of the day, we all need to make sacrifices in this, the worst financial crisis since The Great Depression.

But just who exactly is making all the sacrifices? The average working class American is, but are the people at Wall Street? Is Lloyd Blankfein, who’s just had his salary tripled, to two million dollars? Are all those massive corporations tightening their belts as well? Apparently not. According to CNN, nearly two-thirds of US corporations don’t pay income taxes. Tax havens alone are responsible for one trillion dollars of taxes not paid over the course of a decade, which would almost be enough to cover the entire magnitute of the budget’s proposed cuts.

Think about that for a second. Programs dedicated to publich health, job creation, energy subsidies for low-income households, and other essential and socially beneficial programs could be saved, if only the millionaires paid their dues to society.

And that is the reason why US Uncut exists. To compel those who refuse to uphold their obligation to the nation who’s public services they make use of, who’s infrastructure and labor force they employ to make their millions. US Uncut is based on a similar organization in the United Kingdom, UK Uncut, who have had remarkable success in organizing peaceful public protests, sit-ins, and demonstrations. Johann Hari has written an excellent article in The Nation on the origins of UK Uncut, their methods and the success they have had recently. The success of the model is built on the ease of organizing an action. If US Uncut doesn’t have anything organized for your town or city, organize it yourself! Contact the group, and they’ll tell you how.

This Saturday will be the first action by US Uncut, and will be an indication as to whether such tactics can work in the US. But with the amount of support the organization is getting, the signs are good. And as awareness grows with more media coverage, more and more ordinary Americans will realize that they can fight back, they can take action against those who would take advantage of the benefits granted of being in American company, without paying any dues. Every American must pay their taxes in order to enjoy all the benefits of living in this great country; corporations should too.

Click here to access US Uncut’s website, or go to www.usuncut.org

Raj M. Desai of The Brookings Institute has written a number of papers, analyses and articles about the ‘authoritarian bargain’, and how it is starting to unravel in the Middle East. The spark was Mohamed Bouazizi, a 26 year old Tunisian who set himself on fire in frustration, after police confiscated the fruits and vegetables he had been selling without a permit. For Bouazizi, a university graduate with no steady job and no other means of supporting his family, this was the final straw. By setting himself on fire, he also set alight the passion of millions and millions of Arabs who have been living under brutal and dominating authoritarian regimes for decades. High unemployment, inequality and corruption reigned supreme under the watch of the dictators, which brutal police forces dealt swiftly with those who dared to raise their voices against this. With Bouazizi’s self-immolation, something snapped, and an act borne of frutration and despair triggered the biggest social upheaval the region has seen in decades. Tunisia’s Ben Ali fell in 23 days; Egypt’s Mubarak fell in ‘only’ 18. And now we see demonstrations in Libya, Morocco, Yemen, Jordan, Algeria, Saudi Arabia, and Bahrain. Who will fall next*?

Desai descibes the ‘Arab authoritarian bargain’ as a situation where Arab leaders maintain their power through providing public services, such as education, healthcare, government jobs, and other such benefits to their citizens. In return, those citizens hand over political involvement, democratic mechanisms, and the right to criticize those leaders, or act against them in any way. To see a dictatorship simply as a system of extreme repression is too simplistic – even Libya, one of the harshest dictatorships under Gaddafi (who doesn’t really hide the fact that he won’t stand for criticism), provides free and compulsory primary education, as well as scholarships for some high school graduates to continue their education abroad.

However, while it is clear that Tunisia, Egypt and Libya were already on the brink, countries in the Gulf are less so. Populations in the Gulf still enjoy a high rate of government expenditure, and a growing standard of living. In countries such as Kuwait, Qatar, UAE and Oman, small populations and high oil revenues allow for a high income per capita, and masses of imported labourers mean that most locals don’t need to work very hard to build up their countries – that job is outsourced. For the average Joe – or Khalifa – there is a government job waiting. What is there to protest about?

At least, that used to be the case. High unemployment is still an issue in the Gulf, despite government efforts, and a burgeoning youth population that cannot enter university for lack of places, or find jobs, will get increasingly frustrated. Add to that a growing political awareness amongst the young middle class, a growing awareness of the importance of human rights and treating everyone, even foreign workers, with respect, and persistent inequality (figures are hard to come by for a reason), and you have a growing concern that instability may be on the way. And this, by David Cameron, will be of no reassurance to the Arab rulers either.

Don’t expect the revolutions in North Africa to spread to the Gulf anytime soon, however. While problems exist, they are essentially still in their infancy. Unrest takes time to foment discontent; and by and large, Gulf nationals are content. Sure, there is unemployment for some, there are issues of women’s rights, human rights, minority’s rights, corruption, inequality, and a lack of political rights. But unless these problems remain unresolved over the longer term, Arab rulers will not be sweating over their own positions too much**. Concessions will need to be made, but by and large we should not expect a Gulf revolution any time soon.

 

*hint: the smart money’s on Libya right now.

 

** Bahrain is a special case, and is due more to sectarian discontent. The ruling family are sunni, whereas some 66% of the Bahraini population are shia. The shia believe they are discriminated against when it comes to employment, housing, etc.