Apart from a gap of 18 years, when I was travelling, studying, or couldn't afford it (sometimes all three!) I have been a glider pilot since I was 15. Yesterday, Sunday 05 April, I had my first thermal cross country flight in the UK this year and it struck me yet again how gliding is a physical manifestation of the ups and downs of life in general.
Sometimes in gliding - and in life - you make a wrong decision and get away with it, convincing yourself that it was actually your own skill that got you out of the hole, when in fact it was an external force (eg you stumbled into a thermal). Other times, you make the right decision, but neverthesless it all goes pear shaped and you wonder what on earth you have to do for the gods to treat you fairly.
Similarly, when you are up at cloud base and can see for ever, the world is your oyster and the future is full of unlimited possibilities. Experience tells me you need to enjoy this view, since one or two small changes means you can suddenly find yourself grovelling low down over unlandable terrain wondering how it all happened.
What to do under such circumstances? For most of us in gliding, it is possibly dealing with this challenge that is part of the addiction. If you are in the proverbial shit, its best not to keep wriggling. Tell yourself to keep calm and deal with it. Focus on getting out of the shit rather than blaming yourself, or the gods, for dumping you in it. If you fail, at least you are in a better state of mind for dealing with the inevitable landing. If you get out of it, you can reasonably congratulate yourself for not losing the plot. And when you get back up to cloud base, the view is even better!
Sunday, April 5, 2009
Thursday, April 2, 2009
G20 and its impact
So, world leaders have agreed on tighter regulation and a trillion dollar programme of funding to help economic recovery. The US and UK seem to prefer injecting vast funds to encourage lending, investment and spending. Germany and France prefer to restrict spending and strengthen regulation - a more conservative approach which the Anglo-Saxon countries consider will restrict growth and 'competitiveness'.
One question this raises is to what extent the affluent countries need additional growth? Of course, there are large numbers of poor people in rich countries and the rich can never get enough, but do we really need to keep growing our economies?
When is enough enough? Even lower income groups in the UK have a far higher standard of living than a large proportion of people in developing countries. I realise I am fortunate in having a decent home, a car and many luxuries that others are denied through no fault of their own. However, as a result, I have limited needs to keep spending on more things simply because I feel I have enough and am convinced that many others in the UK are in a similar position. Surely, now is a good time to take stock, ask what constitutes an adequate standard of living and how we can focus efforts on realising such benefits for a far larger proportion of the human family.
Another side of the coin is that many people seem to have far more than they know what to do with. As a result, redistribution through progressive taxation seems to deserve a higher priority than growth, especially given the impact we are collectively having on the environment. So, I agree with the German and French approach to tighten the regulatory controls over banks rather than trying to spend our way out of the crisis. The primary focus of expenditure and investment should be on boosting energy efficient technology and a massive home insulation programme. What do you think?
One question this raises is to what extent the affluent countries need additional growth? Of course, there are large numbers of poor people in rich countries and the rich can never get enough, but do we really need to keep growing our economies?
When is enough enough? Even lower income groups in the UK have a far higher standard of living than a large proportion of people in developing countries. I realise I am fortunate in having a decent home, a car and many luxuries that others are denied through no fault of their own. However, as a result, I have limited needs to keep spending on more things simply because I feel I have enough and am convinced that many others in the UK are in a similar position. Surely, now is a good time to take stock, ask what constitutes an adequate standard of living and how we can focus efforts on realising such benefits for a far larger proportion of the human family.
Another side of the coin is that many people seem to have far more than they know what to do with. As a result, redistribution through progressive taxation seems to deserve a higher priority than growth, especially given the impact we are collectively having on the environment. So, I agree with the German and French approach to tighten the regulatory controls over banks rather than trying to spend our way out of the crisis. The primary focus of expenditure and investment should be on boosting energy efficient technology and a massive home insulation programme. What do you think?
Tuesday, February 17, 2009
Israel/Palestine
An impressive, if sobering, assessment by Bruce Anderson in the Independent, 16 February 2009:
Israel is trapped, and the chance of peace is ever more remote.
A crass failure of moral sensitivity has led to equally crass strategic misjudgment.
While the West is preoccupied with a crisis, a tragedy is unfolding. The world's financial system will recover. On the Israel/Palestine peace process, there can be no comparable optimism, for it is not clear whether such a process still exists. No process, no peace; a settlement is further away now than at any time since 1967. Israel seems bent on a course which will lead to its eventual destruction.
There is a hideous irony. The way that events are unfolding is a posthumous triumph for Adolf Hitler. With the winding-up of the Soviet Union, the last of the poisons created by the Second World War could be eliminated from the European bloodstream. Not the Middle Eastern one. It is easy to understand why the Israelis reacted as they did. Once you have suffered a Holocaust at the hands of the race which produced Beethoven, Goethe and Mozart, you lose trust in mankind's benevolence: lose faith in everything except your own soldiers and weaponry.
It is equally easy to understand why the Palestinians reacted as they did. Those who are driven into exile and refugeedom do not feel well-disposed towards their oppressors. The Palestinians felt no linguistic inhibitions, and why should they? They bore no guilt for the Holocaust. In the grip of – understandable – rage, some Palestinian rhetoric developed Nazi resonances. That was a mistake. It aroused every Israeli trauma. We have been here before, many Israelis concluded. This time, no one is going to herd us to our death like cattle. This time, we will get our retaliation in first.
Because of the circumstances in which their Jewish state was created, most Israelis believe that they have two existential necessities, and entitlements. They want to enjoy security and they insist that their neighbours recognise their rights to do so. That does not seem unreasonable. But it is. It fails the highest test of political rationality. It is not realistic.
This does not mean that Israelis should have to live in bomb shelters under constant risk of attack. But they have chosen to live in a dangerous neighbourhood, so there must be compromises. Instead of the delusion of absolute security by imposing a humiliating peace on crushed opponents, Israel should understand the need for a modus vivendi.
Israelis are proud of their achievements over the past 60 years, and rightly so. But most of them are guilty of a crass failure of moral sensitivity leading to an equally crass strategic misjudgment. They fail to understand that their security will always be under threat from their neighbours' misery. Above all, their leaders lack the political wisdom and the moral courage to tell Israelis something which most probably know in their hearts: that to make peace, they will have to take risks.
The first act of the current tragedy began in 1967, after the Six-Day War. Plucky little Israel was master of the battlefield. She had overrun a vast acreage of Arab territory. Almost immediately, even by those who had never been enthusiastic about the State of Israel, distinctions began to be drawn between the pre-'67 boundaries and the 1967 conquests. Israel had a tremendous hand of cards, strategic and moral. There was never a better moment for "in victory, magnanimity".
Israel should have announced that unlike almost every previous military victor, she did not seek territorial gains; her sole war aims were peace and justice. To secure them, she was prepared to trade her conquests, with the obvious exception of the Holy Places in old Jerusalem. On such a basis, and with huge international support, a deal would have been possible. But there were problems. At its narrowest point, pre-'67 Israel was only 12 miles wide. A tank thrust from the West Bank could have cut the country in two. Although the generals cannot be blamed for failing to predict the era of asymmetric warfare in which tank thrusts would only occur in war movies, their insistence on a demilitarised West Bank complicated matters. Then a temptation emerged, like the serpent in the Garden of Eden.
Israel was short of land. Much of the West Bank seemed to be inhabited by raggedy goatherds, primevally picturesque, poor and unproductive. Israeli agriculture would soon have the place flowing with milk and honey, while Israeli architects built new homes for a growing population. So the settlements began. The temptation to colonise the occupied territories was abetted by theology. Under the Jehovah declaration, somewhat preceding the Balfour one and also somewhat more extensive, historic Israel was said to include the West Bank. Israel ate the apple.
In order for Israel's pre-'67 Promised Land to be secure, most of the settlements would have to be evacuated, so that a viable Palestinian state could come into existence. It would always have been virtually impossible to generate the political will for this in Israel. Last week's election results eliminated the "virtually".
Even if it wished to do so, which seems unlikely, the new Israeli government could make no progress towards a Palestinian state. Because of its rigidly proportional electoral system, Israel will be condemned to weak governments blackmailed by extremist parties. The imperative to reach a just peace with Palestine will have no leverage on Israeli domestic politics.
A prosperous Palestinian state would not guarantee Israel's safety. Some young men would still be enticed by fanaticism and violence. But the problem would be much more manageable. If most Palestinians had a stake in a decent future, there would be many fewer suicide bombers – and the '67 vintage Israeli generals were right on one point. Theirs is a tiny country. The first WMD suicide bomber would do terrible damage.
Over the years, Israel has proved that it can deal with conventional threats. Like the rest of us, it is now working out how to cope with terrorism and asymmetric warfare. Israeli opinion would angrily reject any answers that smacked of appeasement. But a Palestinian state is justice, not appeasement. There are alternatives. Israel could abandon the pretence of a two-state solution and offer the Palestinians Israeli citizenship: the end of the Jewish state. Or she could try ethnic cleansing: drive the Palestinians into Jordan. That would be the end of the Jewish state as a moral entity.
Assuming the alternatives to be unacceptable, there is only justice, or continued muddle, with a sullen, resentful Palestinian population awaiting inflammation. That, alas, is almost a certainty, and who knows how far the flames will spread? Israel is a wonderful place, with landscape, culture, increasingly good wine and as much political argument as you can hold. The country emerged out of tragedy. It would be heart-rending if its heroic journey ended in tragedy. Yet that is the likeliest outcome, and it would be Israel's fault.
Israel is trapped, and the chance of peace is ever more remote.
A crass failure of moral sensitivity has led to equally crass strategic misjudgment.
While the West is preoccupied with a crisis, a tragedy is unfolding. The world's financial system will recover. On the Israel/Palestine peace process, there can be no comparable optimism, for it is not clear whether such a process still exists. No process, no peace; a settlement is further away now than at any time since 1967. Israel seems bent on a course which will lead to its eventual destruction.
There is a hideous irony. The way that events are unfolding is a posthumous triumph for Adolf Hitler. With the winding-up of the Soviet Union, the last of the poisons created by the Second World War could be eliminated from the European bloodstream. Not the Middle Eastern one. It is easy to understand why the Israelis reacted as they did. Once you have suffered a Holocaust at the hands of the race which produced Beethoven, Goethe and Mozart, you lose trust in mankind's benevolence: lose faith in everything except your own soldiers and weaponry.
It is equally easy to understand why the Palestinians reacted as they did. Those who are driven into exile and refugeedom do not feel well-disposed towards their oppressors. The Palestinians felt no linguistic inhibitions, and why should they? They bore no guilt for the Holocaust. In the grip of – understandable – rage, some Palestinian rhetoric developed Nazi resonances. That was a mistake. It aroused every Israeli trauma. We have been here before, many Israelis concluded. This time, no one is going to herd us to our death like cattle. This time, we will get our retaliation in first.
Because of the circumstances in which their Jewish state was created, most Israelis believe that they have two existential necessities, and entitlements. They want to enjoy security and they insist that their neighbours recognise their rights to do so. That does not seem unreasonable. But it is. It fails the highest test of political rationality. It is not realistic.
This does not mean that Israelis should have to live in bomb shelters under constant risk of attack. But they have chosen to live in a dangerous neighbourhood, so there must be compromises. Instead of the delusion of absolute security by imposing a humiliating peace on crushed opponents, Israel should understand the need for a modus vivendi.
Israelis are proud of their achievements over the past 60 years, and rightly so. But most of them are guilty of a crass failure of moral sensitivity leading to an equally crass strategic misjudgment. They fail to understand that their security will always be under threat from their neighbours' misery. Above all, their leaders lack the political wisdom and the moral courage to tell Israelis something which most probably know in their hearts: that to make peace, they will have to take risks.
The first act of the current tragedy began in 1967, after the Six-Day War. Plucky little Israel was master of the battlefield. She had overrun a vast acreage of Arab territory. Almost immediately, even by those who had never been enthusiastic about the State of Israel, distinctions began to be drawn between the pre-'67 boundaries and the 1967 conquests. Israel had a tremendous hand of cards, strategic and moral. There was never a better moment for "in victory, magnanimity".
Israel should have announced that unlike almost every previous military victor, she did not seek territorial gains; her sole war aims were peace and justice. To secure them, she was prepared to trade her conquests, with the obvious exception of the Holy Places in old Jerusalem. On such a basis, and with huge international support, a deal would have been possible. But there were problems. At its narrowest point, pre-'67 Israel was only 12 miles wide. A tank thrust from the West Bank could have cut the country in two. Although the generals cannot be blamed for failing to predict the era of asymmetric warfare in which tank thrusts would only occur in war movies, their insistence on a demilitarised West Bank complicated matters. Then a temptation emerged, like the serpent in the Garden of Eden.
Israel was short of land. Much of the West Bank seemed to be inhabited by raggedy goatherds, primevally picturesque, poor and unproductive. Israeli agriculture would soon have the place flowing with milk and honey, while Israeli architects built new homes for a growing population. So the settlements began. The temptation to colonise the occupied territories was abetted by theology. Under the Jehovah declaration, somewhat preceding the Balfour one and also somewhat more extensive, historic Israel was said to include the West Bank. Israel ate the apple.
In order for Israel's pre-'67 Promised Land to be secure, most of the settlements would have to be evacuated, so that a viable Palestinian state could come into existence. It would always have been virtually impossible to generate the political will for this in Israel. Last week's election results eliminated the "virtually".
Even if it wished to do so, which seems unlikely, the new Israeli government could make no progress towards a Palestinian state. Because of its rigidly proportional electoral system, Israel will be condemned to weak governments blackmailed by extremist parties. The imperative to reach a just peace with Palestine will have no leverage on Israeli domestic politics.
A prosperous Palestinian state would not guarantee Israel's safety. Some young men would still be enticed by fanaticism and violence. But the problem would be much more manageable. If most Palestinians had a stake in a decent future, there would be many fewer suicide bombers – and the '67 vintage Israeli generals were right on one point. Theirs is a tiny country. The first WMD suicide bomber would do terrible damage.
Over the years, Israel has proved that it can deal with conventional threats. Like the rest of us, it is now working out how to cope with terrorism and asymmetric warfare. Israeli opinion would angrily reject any answers that smacked of appeasement. But a Palestinian state is justice, not appeasement. There are alternatives. Israel could abandon the pretence of a two-state solution and offer the Palestinians Israeli citizenship: the end of the Jewish state. Or she could try ethnic cleansing: drive the Palestinians into Jordan. That would be the end of the Jewish state as a moral entity.
Assuming the alternatives to be unacceptable, there is only justice, or continued muddle, with a sullen, resentful Palestinian population awaiting inflammation. That, alas, is almost a certainty, and who knows how far the flames will spread? Israel is a wonderful place, with landscape, culture, increasingly good wine and as much political argument as you can hold. The country emerged out of tragedy. It would be heart-rending if its heroic journey ended in tragedy. Yet that is the likeliest outcome, and it would be Israel's fault.
Monday, December 29, 2008
Fancy playing the blame game?
So Israel is attacking Gaza in retaliation to rocket attacks. The rockets from Gaza were in retaliation to the blockade and collective punishment imposed by Israel. The blockade was in retaliation for the people of Gaza electing Hamas. Hamas was elected in retaliation for …. And so on, and so on, back to the British, the second World War, Moses and Abraham.
Why is the blame game the most enduring of all? Is it because people, and especially governments, find it easier to pass responsibility for disputes than to address and resolve them, even when this means that the disputes escalate and become more entrenched? Extremists need each other and so Likud and Hamas have a lot in common since neither wants a compromise.
Peace is impossible without justice, and a majority of both Israelis and Palestinians accepted in principle the 2003 Geneva Accord. This required Israel to return almost all the land occupied since 1967 to the Palestinians and accept Jerusalem as the shared capital of both Israel and a new Palestinian state. It also required the Palestinians to recognise the state of Israel and abandon the right of return, though with compensation to be negotiated.
As long as the Israeli and Palestinian hardliners are calling the tune, the blame game will continue indefinitely and more people will suffer on both sides (though far more on the Palestinian side).
The key to progress lies in changing the game to support moderates and those who would prefer to claim the credit for resolving the dispute. Since Bush, Brown and Blair have proved themselves utterley inadequate, the ball now passes to Obama. Hopefully, he will play a different game.
Why is the blame game the most enduring of all? Is it because people, and especially governments, find it easier to pass responsibility for disputes than to address and resolve them, even when this means that the disputes escalate and become more entrenched? Extremists need each other and so Likud and Hamas have a lot in common since neither wants a compromise.
Peace is impossible without justice, and a majority of both Israelis and Palestinians accepted in principle the 2003 Geneva Accord. This required Israel to return almost all the land occupied since 1967 to the Palestinians and accept Jerusalem as the shared capital of both Israel and a new Palestinian state. It also required the Palestinians to recognise the state of Israel and abandon the right of return, though with compensation to be negotiated.
As long as the Israeli and Palestinian hardliners are calling the tune, the blame game will continue indefinitely and more people will suffer on both sides (though far more on the Palestinian side).
The key to progress lies in changing the game to support moderates and those who would prefer to claim the credit for resolving the dispute. Since Bush, Brown and Blair have proved themselves utterley inadequate, the ball now passes to Obama. Hopefully, he will play a different game.
Sunday, December 28, 2008
The elephant and the mouse
There was once an elephant and a mouse living next door to each other. Now although the elephant was the largest and strongest of creatures, it did not know much about the world and was actually scared of things that were different, even mice. Naturally, the mouse had to spend most of its time and energy avoiding being trampled by the elephant. As a result, it became quick-witted and adaptable, but had no energy left to grow strong and healthy.
One night, the elephant had a dream that it need not be scared of other things and woke up determined that change was possible. The mouse, whose name was Cuba, was very happy at the idea that they might actually be able to live peacefully together as neighbours.
Cubans are nothing if not realistic. Whilst they have hopes that Obama may relax the embargo which has crippled the Cuban economy for several decades, they realise that the older Cuban-Americans, who are vehemently opposed to any change, still exert influence in US politics, even though younger ones are so integrated into US society that they have no interest in returning to Cuba or opposing change.
The US imposed embargo has had a serious impact on the Cuban economy by reducing opportunities for international trade and forcing the country to live by its wits with minimal natural resources. Despite these constraints, Cuba has much of which to be proud. The civil defence system is arguably the best in the world in that although two of the worst hurricanes in recent memory, (Gustavo and Ike), destroyed over half a million houses and large areas of tobacco and other agricultural products, only about two people died as a direct result and these were reportedly due to people leaving shelters. Whilst the mayor of New Orleans was boasting on CNN that the city had successfully evacuated a few thousand people to areas of safety, no mention was made of the fact that Cuba successfully protected over 300,000 people. The country has a vibrant culture and its health and educational systems have enabled the country to equal the US in terms of Human Development Indicators (a more useful guide to social wellbeing than GDP, since they measure infant mortality, levels of literacy and life expectancy, etc).
However, it should also be acknowledged that domestic economic management in Cuba has been a failure. Vast tracts of fertile land remain uncultivated, since farmers understandably see no point in working hard if they are forced to sell most of their produce to the state for a pittance. Similarly, joint ventures with foreign investors often fail if the Cuban government suspects that they are making what are considered excessive profits, or if an investor falls out of favour.
During a recent visit to Cuba, nobody spoke about Fidel in other than positive terms. It was acknowledged that whilst he was authoritarian, he was also inspirational and idealistic. No such affection appeared to exist towards his brother Raül, who assumed the presidency in February this year and who, as head of the military, seems intent on maintaining tight political control. Whilst Cubans may now legally stay in hotels, the costs prevent this for all but a small minority. Similarly, it is now legal to own a cellphone, but getting a line is far too expensive for the average worker.
Cubans, especially the young, are desperate for change and feel that whilst they are proud of their country and the achievements of the revolution, this very achievement makes it unnecessary for them to fight the same battle as their parents and grandparents fifty years ago.
This pressure for progress poses a genuine problem for the government. If it relaxes political control too far, or too quickly, the country may fall into the sort of chaos faced by Russia after the collapse of the Soviet Union. At the same time, Cuba is constrained from adopting the Chinese approach of liberalising the economy whilst maintaining strong state controls politically because they have a minute domestic market and no internal capital base.
Intriguingly, the presidents of both Russia and China have visited Cuba in the last month and as both these new political and economic giants are immune to US economic pressure, this may open options for domestic change. Certainly, one observer indicated that the party is planning a major review of economic policy in 2009 in order to provide incentives for farmers and workers in other sectors to increase production and to reduce dependency on tourism as a source of hard currency.
Official concern that this may increase social and economic inequality has to be offset by the fact that there is already a massive disparity in incomes between a senior professional earning at most US$40 a month, a primary school teacher receiving US$8 a month and those working in tourism who can earn up to US$250 a month. Such disparities also force many trained professionals to abandon their vocations to take any work where they can earn foreign currency. This is not only a waste of their education, but a source of great personal frustration. One taxi driver told me he was a qualified engineer who could earn far more in a week as a driver than he could as an engineer. He consoled himself that he “was still an engineer in his heart”.
Anyone planning a book on economics in Cuba would do well to use the title “It all depends”, since this is the answer given if you ask the price of anything. It alls depends on whether you work in, or know somebody working in the sector, you have something to swap, or are paying in local, or foreign currency. The failure of the formal economy has forced large sections of the population into an illegal black or informal economy which in turn enables the authorities to selectively punish those it deems a threat.
A pessimistic assessment of the future would be for the military, which already enjoys considerable influence and economic benefits, to increase its hold over both political and economic spheres to the detriment of both economic and social progress. An optimistic assessment for the country’s talented and creative population would involve a relaxation of the US embargo once Obama is in power, followed by a steady increase in external investment managed by an increasingly pragmatic and self-confident government. This would facilitate a range of joint ventures with foreign investors and donors in ways which can build the economy and maintain high standards of public services and welfare, whist accepting a degree of difference in the allocation of benefits (as exists already).
The global economic crisis has destroyed faith in unregulated markets even in the bastions of neo-liberalism. In doing so, it has opened the door to approaches which seek to achieve a balance between social justice and environmentally sustainable economic development. Obama’s election provides hope that the US may place a higher priority on meeting social policy objectives which can reduce inequality. Similarly, there are signs in Cuba that Raül Castro will relax central government controls and promote economic growth and investment, possibly with Russian or Chinese help.
As Cuba prepares to celebrate the fiftieth anniversary of the revolution in the beginning of 2009, a gesture from the US to progressively relax the embargo could help build confidence that change is possible for both countries.
One night, the elephant had a dream that it need not be scared of other things and woke up determined that change was possible. The mouse, whose name was Cuba, was very happy at the idea that they might actually be able to live peacefully together as neighbours.
Cubans are nothing if not realistic. Whilst they have hopes that Obama may relax the embargo which has crippled the Cuban economy for several decades, they realise that the older Cuban-Americans, who are vehemently opposed to any change, still exert influence in US politics, even though younger ones are so integrated into US society that they have no interest in returning to Cuba or opposing change.
The US imposed embargo has had a serious impact on the Cuban economy by reducing opportunities for international trade and forcing the country to live by its wits with minimal natural resources. Despite these constraints, Cuba has much of which to be proud. The civil defence system is arguably the best in the world in that although two of the worst hurricanes in recent memory, (Gustavo and Ike), destroyed over half a million houses and large areas of tobacco and other agricultural products, only about two people died as a direct result and these were reportedly due to people leaving shelters. Whilst the mayor of New Orleans was boasting on CNN that the city had successfully evacuated a few thousand people to areas of safety, no mention was made of the fact that Cuba successfully protected over 300,000 people. The country has a vibrant culture and its health and educational systems have enabled the country to equal the US in terms of Human Development Indicators (a more useful guide to social wellbeing than GDP, since they measure infant mortality, levels of literacy and life expectancy, etc).
However, it should also be acknowledged that domestic economic management in Cuba has been a failure. Vast tracts of fertile land remain uncultivated, since farmers understandably see no point in working hard if they are forced to sell most of their produce to the state for a pittance. Similarly, joint ventures with foreign investors often fail if the Cuban government suspects that they are making what are considered excessive profits, or if an investor falls out of favour.
During a recent visit to Cuba, nobody spoke about Fidel in other than positive terms. It was acknowledged that whilst he was authoritarian, he was also inspirational and idealistic. No such affection appeared to exist towards his brother Raül, who assumed the presidency in February this year and who, as head of the military, seems intent on maintaining tight political control. Whilst Cubans may now legally stay in hotels, the costs prevent this for all but a small minority. Similarly, it is now legal to own a cellphone, but getting a line is far too expensive for the average worker.
Cubans, especially the young, are desperate for change and feel that whilst they are proud of their country and the achievements of the revolution, this very achievement makes it unnecessary for them to fight the same battle as their parents and grandparents fifty years ago.
This pressure for progress poses a genuine problem for the government. If it relaxes political control too far, or too quickly, the country may fall into the sort of chaos faced by Russia after the collapse of the Soviet Union. At the same time, Cuba is constrained from adopting the Chinese approach of liberalising the economy whilst maintaining strong state controls politically because they have a minute domestic market and no internal capital base.
Intriguingly, the presidents of both Russia and China have visited Cuba in the last month and as both these new political and economic giants are immune to US economic pressure, this may open options for domestic change. Certainly, one observer indicated that the party is planning a major review of economic policy in 2009 in order to provide incentives for farmers and workers in other sectors to increase production and to reduce dependency on tourism as a source of hard currency.
Official concern that this may increase social and economic inequality has to be offset by the fact that there is already a massive disparity in incomes between a senior professional earning at most US$40 a month, a primary school teacher receiving US$8 a month and those working in tourism who can earn up to US$250 a month. Such disparities also force many trained professionals to abandon their vocations to take any work where they can earn foreign currency. This is not only a waste of their education, but a source of great personal frustration. One taxi driver told me he was a qualified engineer who could earn far more in a week as a driver than he could as an engineer. He consoled himself that he “was still an engineer in his heart”.
Anyone planning a book on economics in Cuba would do well to use the title “It all depends”, since this is the answer given if you ask the price of anything. It alls depends on whether you work in, or know somebody working in the sector, you have something to swap, or are paying in local, or foreign currency. The failure of the formal economy has forced large sections of the population into an illegal black or informal economy which in turn enables the authorities to selectively punish those it deems a threat.
A pessimistic assessment of the future would be for the military, which already enjoys considerable influence and economic benefits, to increase its hold over both political and economic spheres to the detriment of both economic and social progress. An optimistic assessment for the country’s talented and creative population would involve a relaxation of the US embargo once Obama is in power, followed by a steady increase in external investment managed by an increasingly pragmatic and self-confident government. This would facilitate a range of joint ventures with foreign investors and donors in ways which can build the economy and maintain high standards of public services and welfare, whist accepting a degree of difference in the allocation of benefits (as exists already).
The global economic crisis has destroyed faith in unregulated markets even in the bastions of neo-liberalism. In doing so, it has opened the door to approaches which seek to achieve a balance between social justice and environmentally sustainable economic development. Obama’s election provides hope that the US may place a higher priority on meeting social policy objectives which can reduce inequality. Similarly, there are signs in Cuba that Raül Castro will relax central government controls and promote economic growth and investment, possibly with Russian or Chinese help.
As Cuba prepares to celebrate the fiftieth anniversary of the revolution in the beginning of 2009, a gesture from the US to progressively relax the embargo could help build confidence that change is possible for both countries.
A blessing in disguise?
So, the Centre for Economics and Business Research (CEBR) predicts that UK economy could shrink by as much as 2.9% next year as bank lending continues to stagnate. Yet the very same Windows Live headlines for today, 27 December, also noted in its top story that “internet retail group IMRG estimates e-shoppers will splurge £103.6 million, up from the £84 million spent last year”.
Is this possibly the large throw of the dice from desperate gamblers keen to rake in what they can with what they have got left, or while they still have jobs? Can we really spend our way out of recession as Gordon Brown proposes? Interestingly, it seems that the top selling items are high quality televisions and laptop computers being bought by people upgrading existing equipment, rather than buying something for the first time.
The problem for Brown and his ilk is that, once we have upgraded our TVs and computers, what will we spend money on then, even if we still have a job? Yet another new bathroom or kitchen? Yet more clothes? The latest playstation? The fact is that most people in the UK and other affluent societies already have most of the necessities of life, much of it with designer labels attached, so do we really need more of the same? Is increased consumption really the answer to having a decent quality of life?
Surely the answer is not to encourage more profligate and unnecessary consumerism, but to spend money on improving our infrastructure and public services, in ways which make less demands on the environment and non-renewable resources and make us a better society? Even more importantly, can we use our human and material resources to make the world a fairer and more sustainable to live in? When the wealth of the richest 200 people in the world equals the total wealth of the poorest 40% of the world’s population, something needs to change.
The current recession is a well overdue wake-up call to reassess what we need and want out of life. When the material necessities for a decent standard of living have been met in the West, largely thanks, it has to be said, due to the efficiency of markets, it is now time to move on and ask less material questions, such as what do we need to be happy. This is an issue which markets are not equipped to address. We need a new vision and leaders to help realise it.
Those of us born during or just after the last world war know what it is like to manage with little. We are therefore possibly better equipped to cope with recession than those born later, when things were easier. We also remember times when people had a sense of community and consideration for others before Thatcher and Reagan set in train a selfish, greedy approach to life which even denied that such a thing as society existed! The irony is, of course, that having destroyed something that they said did not exist, the Tory Party under David Cameron now claims that we live in a broken society that, yes, the Tory Party can rebuild!
The real tragedy is that New Labour was so desperate to reassure Middle England that they would not raise taxes that they did Thatcher’s work for her by continuing her economic policies, only with even greater emphasis on state control. The temporary hope that Gordon Brown would change direction after Blair headed off to make his millions to whoever would pay him proved illusory, leaving us with a government which is morally, philosophically and intellectually bankrupt and an official opposition which is elitist and opportunistic.
So what can we expect from the Liberal Democrats? Clegg may lack charisma, but is making a sound case for a fairer society and for policies to address climate change. Since we live in what are challenging times for optimists, maybe the best we can hope for is for a hung parliament in which the LibDems have sufficient influence to make Vince Cable Chancellor of the Exchequer under a government led by anyone other than Gordon Brown. After all, it was him who did more than anyone to get us into this mess.
We desperately need politicians who have a sense of what is needed in the post neo-liberal world into which we are moving. The current recession will hopefully provide the conditions for such a new vision of society and economics to emerge and the right leaders to help realise it.
The reason why so much is expected of Obama is that he appears to understand these concerns and have the qualities needed to address them. The recession will hurt countless people in the short term, but if this is what it takes to bring humanity to its senses, it will turn out to be a blessing in disguise.
Friday, December 19, 2008
All friends together - with their backs against the wall!
With the giveaway name of Bernard Madoff relieving investors of US$50 billion (not a typing error) of their money, the US regulators responsible for overseeing such the financial sector (the Securities and Exchange Commission) have been coming in for some well justified criticism. The SEC Chairman Christopher Cox has even grovelled in public, though only to pass the buck down the ladder to paid employees so that the commissioners, who are politically appointed and therefore ultimately responsible, can try to wash their hands of blame.
Of course, we do things differently in the UK. Don't we? Well, actually, no. It's not only quagmires like Iraq that New Labour has followed the US into. We have also followed their approach of 'light-touch' regulation of the financial sector. A key reason why UK banks got so heavily into trouble following the US sub-prime housing scandal was because the UK regulatory authority, the Financial Services Authority, was funded by - guess who? - the very banks it was mandated to regulate! Its like authorising prisoners to run the prison to ensure nobody escapes. With such a cosy relationship, no wonder things went wrong.
Another fine mess you've landed us in Gordon!
Of course, we do things differently in the UK. Don't we? Well, actually, no. It's not only quagmires like Iraq that New Labour has followed the US into. We have also followed their approach of 'light-touch' regulation of the financial sector. A key reason why UK banks got so heavily into trouble following the US sub-prime housing scandal was because the UK regulatory authority, the Financial Services Authority, was funded by - guess who? - the very banks it was mandated to regulate! Its like authorising prisoners to run the prison to ensure nobody escapes. With such a cosy relationship, no wonder things went wrong.
Another fine mess you've landed us in Gordon!
Subscribe to:
Posts (Atom)
