April 29, 2009
Fat pig. Eat like a pig. Sweating like a pig. Let’s face it, pigs had a PR problem even before the swine flu outbreak began in Mexico. The flu itself is quite scary, but sounds even more ominous because it is called swine flu. Bird flu brought up images of people sprouting wings, flying away. Swine flu on the other hand sounds devilish, for obvious biblical reasons (“A large herd of pigs was feeding on the nearby hillside. The demons begged Jesus, ‘Send us among the pigs; allow us to go into them.’ He gave them permission, and the evil spirits came out and went into the pigs.” Mark 5: 11-13).
The FT is reporting this morning that a number of different communities of scientists and politicians are upset about the name, for a number of reasons. People who work in the pork industry are upset that the flu is giving pork a bad name – several countries have already banned the import of US and Mexican pork, even though there is no scientific basis for doing so as the virus, like bird flu, does not spread through eating cooked meat. Indeed, the virus was only 50% porcine: the other half is avian and human, which seems to make swine flu a misnomer. Additionally, the Israeli Minister of Health was quoted as saying that the name was offensive to Jews and Muslims, who are forbidden by their religions to eat pigs.
Thus some are proposing renaming the flu “Mexican flu” or “North American flu.” But that seems to me to be putting lipstick on the pig, rather than addressing the real risk of a flu pandemic spreading quickly thanks to globalisation.
April 20, 2009
In the autumn, I made a little forecast about the potential duration of the financial crisis, the severity of which I have always been a bit skeptical about. Essentially, I predicted that the crisis would be over by early April, on the basis that several close friends were expecting babies around that time, and that parents wouldn’t want to bring babies into a world of financial meltdown.
While the forecast was of course tongue in cheek, I’m happy to report that there are signs that it appears to have been correct. Bernanke and Obama were out last week talking about “green shoots” and “cautious optimism,” saying that although the recession would continue to cause some pain, there were signs that things were already getting better. Today, Bank of America announced that their profits have tripled, which was a good sign that the banking sector has started to recover, especially when coupled with news that JPMorgan, Goldman Sachs and Wells Fargo are also expecting to make big profits this quarter. All of those who drank from the tap of public funds plan to pay them back early. It’s true that these might prove to be temporary upticks in the economy, but they seem pretty robust signs that the critical element of the economy affected by the crisis – the banking sector – will begin to resume lending and therefore prevent the economy from going into further recession.
While all of this is good news, I’m even happier to report that four baby boys have been born to my friends, on March 11th, April 4th, April 10th and April 15th. Two more are expected on April 30th (one girl amongst all these boys!) and in early May. Let’s hope that their arrival continues to augur well for the economy, not just for their parents and families.
April 2, 2009
While we sit and wait to see whether world leaders can come to some sort of agreement about coordinated fiscal stimulus, enhanced financial regulation, IMF reform and trade protectionism, I thought that I would do a bit of speculating about whether what’s going on inside London’s ExCel Centre today is likely to lead to a break through. Of course, having never had the pleasure of being involved in such a high level meeting, I’ve had to rely on some other experts to give a sense of what’s going on and whether the summit will be a success. Here, rather than focusing on the things that are in the news about spats between the French / Germans and the British / Americans / Chinese, I’m looking at some larger aspects of the summit to predict whether it will be successful.
The G20, and it’s predecessor the G7 /8, are unique because they are informal gatherings of finance ministers, foreign ministers and heads of state which allow leaders to seek agreement on major international issues. But it is not always organised the same way, and the way that it is organised helps to determine it’s likely outcome. This has been one of the key themes in a class I taught this year at LSE, Economic Diplomacy.
One of the things that Sir Nicholas Bayne (former British diplomat, LSE academic and one of the foremost experts on the G8) has stressed is that successful summits come about when finance and foreign ministries are extensively involved in the preparation of the negotiations prior to the leaders meeting. He describes this as the ministers making the policy, with the leader giving authority to approve it / improve on it. When this happens, the more technical aspects of the communique are likely to be agreed on in advance, leaving only the most sensitive political decisions for last minute negotiation amongst leaders. That is when the informality of the G20 / G8 grouping is most effective: when sitting President Sarkozy next to President Hu Jintao at dinner (which Gordon Brown did last night) is actually likely to lead to some breakthrough.
However, as Sir Nicholas has noted in lectures at the LSE, there was only weak coordination between finance ministers and leaders in the case of both of the G20 summits (in November and at present). The meeting of finance ministers held on 13-14 March appears to be lightly tied in to today’s summit. This is perhaps understandable given how new the G20 is as a format for leaders: while it’s been around since 1999 for finance ministers, it’s ability to coordinate at leaders level is actually much less established and they are still ironing kinks out of the process. But that might mean that the gaps left are too large to bridge by the end of the day, and no amount of face to face contact between Obama and Sarkozy will be able to help facilitate cooperation.
Additionally, by being so inclusive (the UK has invited leaders of NEPAD, the African Union, ASEAN, the World Bank, IMF and other regional development banks to the talks in addition to the 20+ heads of state), the British will have lost the sort of “clubby” atmosphere of the summit which is supposed to facilitate agreement. The expansion to the G20 already compromises the extent to which the leaders feel some sort of connection and common understanding of global problems, and the inclusiveness of the invitations, while laudable from a global governance and equity standpoint, may actually compromise the effectiveness of the summit. In fact, social theorists of economic diplomacy argue that such small groupings are effective because they allow actors to be persuaded, rather than forced to go along through more coercive socialisation methods.
But even when things go well at the summits themselves, the G8 and G20 are not super-effective at getting heads of government to change domestic policy. This has been noted recently regarding the surge of protectionism after the November summit: while leaders pledged to not increase trade protectionism, 17 out of 20 G20 members implemented some sort of protectionist measures between November and April. Research actually indicates that less than 50% of what is promised at summits is actually carried through on. That seems to imply that the longer the list of to-do’s the communique presents, the less the chance that it will be implemented in full. The November communique contained more than 40 items on the to-do list, which were not fully prioritised.
So what do all of these insights mean? That the summit is doomed to failure? I don’t think so. As I said several times over the past couple of days in the news, I think that in the end, a spirit of cooperation will prevail given that the stakes for showing international unity on the financial crisis are so high. But that doesn’t mean that the summit will produce stunning outcomes – the very fact that there is likely to be agreement means that there will be a sort of least common denominator feeling to the eventual communique. A disappointment, perhaps, but not a complete failure.
April 1, 2009
This morning I attended a briefing at Chatham House entitled “The London Summit: Multiple Perspectives on the G20″ where the Chatham House plugged the recent report in which I was a contributor and several notable members of the UK and Egyptian governments commented on the progress expected on the summit.
In the question and answer period, Chatham House’s director, Robin Niblett threw Lord Malloch-Brown, who has played a major role in organising the summit, a self-described “curve ball” by asking whether the UK would consider giving up its seat in the IMF at tomorrow summit, acknowledging that I was sitting in the audience. Lord Malloch-Brown said that he certainly supported ideas of IMF reform, but wouldn’t be so unwise as to “play his queen or aces” prior to the conference. He also noted that he has spent a large part of his career backtracking on comments he once made that the UK should give up its seat on the UN Security Council.
Interpret as you will, but it sounded to me that the idea of the UK making a surprise announcement about their representation in the IMF is not as far-fetched as I thought even yesterday. Here’s to hoping that the UK makes a surprise announcement which demonstrates a real commitment to reforming global governance, and using the G20 to focus on what it has a track record of doing: forging agreement on global governance.