Liberalism is dead? says,- Vladimir Putin!

Mr. Putin, a man we all know for his sense of fair play, tolerance, and generosity of spirit has pronounced that liberalism is dead.   Well, what do you know,  are we surprised? Is he right?  It’s this last question that bothers me.

Messrs Putin, Xi, Erdogan, Trump, and several others form a very powerful axis, none of them are remotely liberal.   Between them, they carry more influence than the European block, Canada, Australia, and New Zealand combined.  Between these two groups of authoritarian and liberal regimes stand those who grapple with extreme problems of fundamentalism (e.g.Iran), extreme corrupt socialism (e.g. Venezuela) or radical revisionism.  India and South Africa, who both grapple with monumental change.

All nations it seems, follow strong leaders.  In the UK recently we have had a conspicuous absence of leadership which has led us to the edge of chaos.  The nation is about to appoint a chaotic leader whose key attributes are charisma and a bad haircut.  Despite all the negatives, the UK will appoint a Bullingdon Club boor as its next prime minister simply because he has charisma.   Johnson is a populist in the Trump mold, who will, if allowed, enjoy an authoritarian role focused solely on the Brexit question where charisma outshines the policies for the common good.

Will the UK allow Boris Johnson to lead it out of the EU in an impossible time scale?  Will this ‘no deal’ action result in the breakup of the UK?  Will a general election that follows destroy the center ground of British politics?  Will the liberal majority bring Johnson down, with what consequence?

Was Putin right?  Is liberalism dead?

Relative merits.

Having spent the last three months travelling to the far east I have been astonished by the good will that abounds amongst ordinary citizens.  Without exception everyone seems to be fed up with their political leaders be they Australians, Vietnamese, Amirican or indeed British.

This is an astounding contrast that even in the less developed world there remains a distrust of the political classes be they totalitarian socialist or liberal democrats.  Despite the rule, of who are in effect dictators, such as Erdogan,  Putin or Xi the distrust remains at most levels of society.  Where ever we look we see the seeds of distrust even where there is relatively a low level of corruption.  The world seems to be dividing into populism or totalitarianism.

The European experiment to augment and nurture liberal democracy is teetering on the brink of collapse not only because of Brexit, but because of the national tribal desire to return to the nation state which is alive and kicking in at least ten member states. This is an expression of populism that panders to the right wing and is precisely the opposite of the European dream.

Vietnam, now ruled with a rod of flexible iron by the single party, so called, socialist democracy is a merger of 50 + tribes from North and Southern Vietnam unified by the redoubtable Ho Chi Min.  Ho Chi Min, now seen as the avuncular unifier of the republic, was without doubt an obsessive man of almost unbelievable strength of will.  Not avuncular in his lifetime in any way except his undying idea of a unified Vietnam. Here is a microcosm of the struggle of all nation states; leadership.

Now the General Secretary of the politburo Nguyen Phu Trong rules the country as the secretive and complex government stutters away from Marxism/Leninism towards a Social democracy.  Inevitably those close to the Government do well and those who ever opposed the thinking or purpose of Ho Chi Min are kept in their place.  Usually, a poor place. Confusion and angst are becoming more tangible, Saigon (HCMC) still is more prosperous than Hanoi, and is a hot bed of resentment.  Six million scooters and half a million luxury cars just about sum up the distribution of wealth.  The Politburo has a tough task ahead keeping the lid on economic change and wealth distribution.

In a way the EU and Vietnam have a good deal in common.  Jacques Delors and Ho Chi Min dreamed great dreams but the implementation of those dreams are poles apart. Perhaps Europe is a hundred years ahead of Vietnam, but the same dilemmas exist. Progress, prosperity and peace, how to bring this about without polarising power to the few and avoiding populism and corruption on the way.

What seems unavoidable is that capitalism and liberal democracies are facing enormous challenges, maybe they may merge toward social democracies. The choices are stark but the solutions as yet unresolved.

How to hear the voices of all the lovely people, that is the question.

Mayday! May day, may be.

Teresa May survived her vote of confidence last night, largely because it was a pointless exercise and no one else would want her job anyway.  How those post Cameron candidates must be chuckling.  So did the pantomime prove anything one way or the other?

Not much that we didn’t know before, namely the majority of Parliament are set against the backstop and that Mrs. May has proved inept at rallying support as she persists in trying to do the impossible on her own.  Someone must tell her that she is not a modern day Joan of Arc equivalent.  The idea of parliamentary democracy is about listening to the representatives of the ‘people’ and sharing collective cabinet responsibility.  In this, it is fair to say, Mrs. May has been hopeless.

However, despite these lamentable failings, the one quality of the PM that has shone through  has been her heroic doggedness.  A quality much admired by the Brits. She has managed to press on firmly convinced that she is right and everyone else except possibly Michel Barnier is wrong. She wears her responsibility for the nation as a crown of thorns and parades her pain for all to see. The loan hero walking the lonely road.  Hoorah!

If at the end of this campaign when and if  Brexit is completed, she knows she will be discarded, cast aside.  In the best traditions of national sacrifice she knows she will be thrown on the pyre of a ‘has been and nearly was’, national treasure.

Mrs. May’s outstanding achievement has been that she has increased the leave brigade by a very substantial number, as those of a compassionate nature rush to her defence against the bullies of Brussels.  There may be an artist somewhere putting paint to canvass showing the ‘Maid May’ looking to heaven as she is tortured by the slings and arrows of outrageous Europeans, and the perfidious forces of Rees-Mogg and co.

As dramas go this is pretty melodramatic stuff.  Time for Brussels to give the Brits something to cheer about.  Will they perhaps see that this poor sacrificial lamb of a Prime Minister is a Trojan Horse who”s really working for Rees-Mogg?  Or will she procrastinate yet a while and almost inevitably lead the late Great Britain into a ‘No  Brexit at all, or maybe a ‘no deal’ Brexit’.

Maybe she will, Maybe she won’t, maybe!

Not so surprising, Saudi Arabia?

I’ve been around a bit, and one of the most vivid memories was of my first visit to Jeddah in the 1970’s.  I was stuck by the strangeness of it all and even had a booking foul up which meant I was marooned over the weekend in Jeddah (Friday).  I wondered about and my curiosity was peaked by the crowd outside the rear of the Red Sea Palace Hotel.  I chanced upon the most revolting dehumanising thing I have ever witnessed, namely a public execution.  I did not tarry but scuttled off, shaken to the core.

Since then the Saudi regimes of the various so called royal rulers have continued to routinely chop off heads  of anyone who they disagree with or those who are deemed to have offended the religious beliefs of the Kingdom’s rulers.

Human rights have been and remain the last thing Saudi royal family consider.  They rule by fear and have no truck with the idea of self determination or even self expression.  The  idea of the noble Arab raising from the desert tribes is truly nonsense, and without oil Saudi Arabia would be nothing.  With oil it could be one of the best educated and progressive countries in the world, alas that has not turned out to be the case.

Are we surprised then when the Saudi regime bumps off in the cruellest way a dissenter. Sadly we are not, which begs the question of why does the West espouse the Saudi regime. The reasons are many, including not allowing China/Russia to have control over an important energy source, the biggest pocket book in the world to buy anything from fighters and bombs, as well as hospitals and luxury goods and property in London and Paris.  Also I believe an honest desire to influence these primeval Saudi rulers towards democracy and the respect of human rights.

Clearly this last objective has failed miserably.  The issues of the pocket book remain.  Who cares if the Saudis kill and maim and starve children in Yemen?  Nobody if they can make a buck from selling the Saudis militaria.  Should we care?

Please, I hope we do, and we should lobby our Parliamentarians to stop this trade no matter what the cost.  A Yemeni child or a Saudi journalist or those Saudi citizens  awaiting a barbarous beheading should be given the chance to live. What price on them?

Brexit – stepping into the unknown.

 

Trying to persuade 32 million people (the British electorate) into leaving Europe was easy. It was also easy to project one liners about immigration, extra cash back et al. It was all about what could happen – freedom, border control etc., we know the story well.

There was something about that message that resonated with the Brits. In fact it is clear that we’ve never really been all that comfortable with the idea of anything that surpasses the idea of free trade with our European partners. The Europeans were never that comfortable with the British Government always seeking a playing field that resisted unified currencies and laws.

Breaking up after 45 years is painful, it was always going to be painful, but maybe that concept was never flagged up by either side of the argument. Anyway here we are. As I said in my last blog, it’s an argument of the optimistic innovators against the status quo, the let’s not change brigade.

It is not surprising that both sides are polarising so dramatically. This breakup is widely regarded as the biggest issue to face the UK government since the Second World War. But is it really? After all there was life before the UK joined the EU and the EEU. What about WTO rules and the Most Favoured Nation clauses, Canada E U Trade Agreement and all that?

To put it simply, an MFN clause is a non-discrimination requirement. It means that if you give a favour to one trading partner, you have to give it to all partners who benefit from an MFN clause. The principle is central to the World Trade Organization (WTO) which requires a member to give equal access to its home market to all members of the WTO. An MFN clause applies both to trade in goods and services.

What matters for present purposes, however, is not an MFN clause under the WTO Agreements but an MFN clause under the EU’s trade agreements with non-EU countries. The EU’s FTAs also contain an Most Favoured Nation clause which means that the EU must provide equal treatment to those trading partners who benefit from an MFN clause under their FTAs with the EU. What the EU offers to the UK must, then, be offered to Canada, Korea, Singapore and  other partners with whom the EU has negotiated an MFN clause.

Why does the EU not agree to this is one of the fundamental issues which supports the argument that the EU is a protectionist organisation which looks primarily inwards. Some even claim that the EU is a negative influence to free trade especially to developing economies.

There are, however, important exceptions to a Most Favoured Nations clause under these new Free Trade Agreements. Under Canadian deal an MFN obligation does not apply to cross-border trade in services and investment which covers provision of services through commercial presence, but it can be done with an element of goodwill. By allowing British banks and financial institutions to establish in EU countries and agreeing to recognise professional qualifications as it does now. So called Passporting rights may be covered by this exception because they allow free access to financial services market without imposing further regulatory requirements (i.e. local authorizations), thus constituting recognition of UK home state regulations.

This is tangential to the issue of allowing access to qualified persons of the enterprise working in EU countries and the employment of EU nationals in those enterprises. Again this seems an issue where a sensible compromise should be easily facilitated. However the EU does have and has consistently argued that right to free movement of labour and capital is a redline which cannot be compromised. Furthermore, Annex II of CETA establishes additional reservations (i.e. exceptions) applicable in the EU. One of the listed reservations to an MFN obligation in trade in services provides that the EU reserves the right to adopt an agreement with a third country (i.e. UK in case of an EU-UK deal) which (a) creates an internal market in services and investment; (b) grants rights of establishment; or (c) requires the approximation of legislation in one or more economic sectors (i.e. alignment or incorporation of laws between the parties). While the first two options seem unlikely given the UK government’s current red lines, but need it? It seems that passporting rights will require some form of approximation of legislation.

Of course the harmonisation of rules will necessitate the UK adopting EU rules for their operations abroad and for those regulations to be harmonised with the UK operations. But it would seem common sense anyway. This is surely a question of give and take, which has so far been eliminated by the time wasting posturing of both the UK and The EU.

Other services industries merely have to accede to EU standards where they are already established, i.e. air safety which is subject to world-wide agreed standards anyway. What’s the problem? There isn’t one really

In other words, these exceptions mean that the MFN principle must not be a barrier to a future EU-UK trade deal including financial services.

In the event, it remains to be seen whether the EU’s trading partners would find it practical to challenge larger benefits under a future EU-UK deal. On the one hand, it is probable that they would seek to secure passporting rights under their FTAs with the EU if such were given to the UK.

On the other hand, UK’s passporting rights allow non-EU firms properly established in the UK to get automatic access to sell financial services across the EU. Non-EU firms, including Canadian ones, have been using this route extensively. Whether the EU will agree to continue this scheme post-Brexit is yet to be seen. It is though a key issue.

These issues are complex and there is bound to be adverse consequences in the short term, many possibilities of the negative effects have been postulated by the institutions such as the World Bank who got it wrong at the outset and those who have most to gain from seeing the UK remaining in the EU. Those who threw out the optimistic one liners during the referendum debate have been firmly put back in their box.

It is important to note the things which influence both sides of the argument. The EU is a conglomerate of countries with many different cultural mores, however they are all bonded because of their experience of the World Wars. They were all one way or another, occupied, fought over blitzed or wrecked. The UK however was never invaded, it still sees itself the victorious leader and the defender of democracy.

This conditions the attitudes that prevail at local and government level. The Continent see the virtue of mutual support as Britain sees the future in terms of its individual and positive past.

Where there’s a will there’s a way. Or so the saying goes, but maybe there are two ‘will- sets’ here. Safety in numbers, a desire to be the leader. Two entirely different points of view. It maybe that the British aspiration to go back to its past is unattainable, but so maybe the dream of a Europe united in multi cultured harmony.

 

 

Imagination vs Fear of the unknown. Brexit is certainly unknown.

There we have it, stay in Europe or strike out on our own.  So far we’ve had umpteen warnings of the catastrophes that will beset the UK if we come out of the EU, so far they haven’t happened.

I wrote two years ago that what has come to pass has indeed happened, quelle surprize! However the lack of leadership from all political parties has added immensely to the conundrum.  “He who tells the future tells lies.” (old Arab proverb) Bare it in mind and accept that we have no idea of what is going to happen.  Absolutely no idea.

There are some out there who feel that launching into the unknown is a crazy thing to do.  They have a point.  There are others who argue that independently the UK will be better off, controlling our trade, taxes, laws and borders.

The worst offenders in irrational arguments are the regional players in Scotland, Wales and Northern Ireland who keep barking on about the financial support they’ve received from the EU ignoring the fact that the UK as a whole is a net contributor.  The aggregate of their argument is that they get a better deal regionally from Brussels than they would from Westminster.  This is a curious argument from those who seek more local power and yet want to bow the knee to an unelected European commission.

The other great argument is about the motives of the Brits to leave the EU.  It is argued, probably authentically, that the great majority of voters voted for Brexit based on their xenophobic attitude toward immigration.  This sad but reflects the oversimplification of a yes/no referendum.  It also reflects poorly on the British sense of values.

We would all do well to go back to the core of the argument, i.e. Do we want to be ruled by an unelected council of ministers whose credo is ever more integration into their idea of a United States of Europe.

Me, no!  That’s it, you may want that, OK if the majority want that, that’s OK with me too.

Just keep in mind that if we leave we have to stride out and do our best to thrive. I hope in so doing we continue to welcome friends of every colour and creed.  I want to see my country thrive as an example of skill and adventure for the good not only of the UK but the world at large.  I just happen to believe that we will do this best as we Brits have done over the centuries.

 

Borrow now, pay back never?

The world is lurching toward another financial meltdown.  Debt is spiralling out of control with all the superpowers going the same way as Japan.  The USA, China and the Eurozone, are piling up debt which is unsustainable.  Add to that the Trump proposition of turning inward  and starting trade wars and the recipe becomes more poisonous.

There seems a disconnect between the macro economic planners and the ordinary citizen, the man in the street who is still blithely encouraged to max out his credit cards and gamble as wildly as he can.  The idea of responsibility and restraint seem to have vanished from our psyche.  Even the memory of the recent bankers crash seems to have faded with astonishing alacrity.

Low interest rates have been seen as the cure to stimulate damaged economies but of course these measures have encouraged more borrowing and less saving thus exacerbating the debt spiral.

Debt equals hardship, if not now, then certainly when the debt is called in.  This is true for  national as well as personal debt.  When are we going to wake up?  Already we see slow or no growth and productivity stuck in a rut.  Going backwards and digging filthy coal is surely not the answer.

Hence the mass return to populism, the easy buck promise is in the ascendancy.  Trump, Farage, Barron et al, shout for the easy way out, namely, screw your neighbour.

Meanwhile the poor get relatively poorer and the rich richer as the manipulative money engineers continue to hedge and make money out of distressed high streets and edgy currency markets.  For example Bitcoins may be an abstract to most of us but it is yet again a method to help those who have the financial muscle to make hideous amounts of money.  At whose expense?  Somebody like you and me.

Left, Right or Centre, it’s a new day.

Many countries including the UK, maybe especially the UK, are running out of money.  From Local Authorities to all the great departments of state.  Whether it is the National Health Service, Education, Justice, even the Ministry of Defence.

The UK exemplifies the mature western democracy where capitalism is approaching the zenith of its life.  The rich are getting richer, the middle classes managing (just) and everyone below struggling in a low growth economy.

The key, the economists tell us is a lack of real growth and stagnant productivity, we have got to a stage where we find it hard to get even more bang for our bucks. So what to do?

Maybe, just maybe, crashing out of the EU will create such short-term distress that there will be a surge in enterprise to make up for the change of circumstances.  I don’t mean simply selling to non-EU countries, I mean a resurgence of creativity particularly, as seems likely, if the UK is cast adrift from Galileo and other scientific projects of pan European nature.

The future might see the UK, at last, recognizing that it is no longer a world leader either economically or militarily.  Consequently, the powers, at last, abandon wild armament programs such as Trident.  That does not mean shutting up the shop, all these fantastic skills and knowledge can be applied to so many applications from nuclear power to electric cars or hydrogen combustion engines.

Perhaps too, we could see the UK pick up and run with its education system which is currently squeezed so that many educational standards are losing ground and education itself, in all its form, is being devalued.

Most of all The UK could take a leaf out of The Donald’s book, put Britain first, not by protectionism but by creative power. By concentrating on making the UK a better and richer place where the riches are built on a vibrant education system, a competitive industrial base of a highly skilled workforce, and transport and infrastructure at least equal to our European competitors.

In Justice, we need a court that stands for freedom of anyone who makes their home in the UK and respects the rights of all men.  We need to care for all our folk, old and young alike.

To accomplish these things we need a centrist philosophy that balances the meritocracy and the social responsibilities.   Taxation needs to reflect the realities of the British aspiration, a good or bad Brexit, is still a new start for British values to stand and to be built upon.

 

 

 

Protecting Mr Trump.

Protecting the United States’ low productivity and outdated industries fly in the face of common sense.   In my earlier blogs, I talked about the economic street, with the rich at the top and the poor at the bottom (of the street).  It is inevitable that the rich nations will as a matter of their economic evolution transfer the dirtier and low skilled jobs down the street.

There are a few exceptions to this rule. The principals are as follows: if we can enhance vital but dirty industries by the application of advancing technology and in so doing either make those industries or commodities cleaner or more competitive. Achieving these goals has the obvious advantage of improving competitiveness and improving both product and environmental standards as well as preserving jobs.

However, simply putting up a tariff wall, will only preserve the unpreservable, since both economic and quality demands are not sustainable.  I.e. poorer quality and lower competition will degrade both market prospects and financial viability.

Trump, for all his off the wall creativity, is it seems to me, is economically illiterate.  The only thing he is likely to achieve is slowing demand for American finished goods, serious retaliation from the USA’s hitherto trading partners, a lack of capital for R & D, a poorer environment, and of course the hastening of a world recession. It’s perhaps worth adding that he’ll secure the rust belt vote which will sustain his Presidency to another term. He’s just protecting Mr. Trump, he’s not protecting America.

Capitalism or Socialism or something else? Looking outside the box!

I can’t help thinking that we are going to have another almighty crash.  Things are changing so fast, our systems of communication, markets and public services cannot possibly keep up. The information age is upon us and is outstripping our ability to manage the consequences

At the same time, the financial well being of a whole generation is being squeezed whilst a few of the very wealthy get wealthier by the day. This seems a recipe for disaster. The stock markets are booming, debt is at an all-time high despite the dismal pay packets for the servants of the economy.

Politicians are beginning to wake up to these massive threats, but sadly tend to look back not forward for solutions.  In U.K. the socialists are talking about renationalization whilst the right wing wobbles over the Brexit debate and is in danger of taking its eye off the ball of the impending crash.

In the U.S.A. the POTUS, unpredictable as he is, seems to be turning to protectionism.  However, as I predicted last year, Trump’s unstructured and unpredictable behavior may shed light on new ideas. So far we’ve seen some astonishing moves on the Korean Peninsular scene, who knows if Trump may wittingly or otherwise make moves to improve world trade and to discipline the information giants.

This is particularly important in the management of the information revolution which is changing the world on a daily basis.  These companies mainly of American origin too big to control and too big to fail,  are creating change at an unbelievable rate. From shopping to robotics, information technology is destined to radically change the employment profile of the civilized world and no one it seems can tame these agents of change, or even look honestly into the inevitable chaos that these changes will bring.

Everyone seems concerned about aspects such as personal privacy, just what you would expect.  True, the manipulation of millions of pieces of information is truly dangerous and threatens the old order, even the idea of ‘Truth’.  But this huge threat is only one aspect of the challenges we face.

Whilst the box is ever bigger, looking outside it is more imperative than ever.