We need new solutions for governing this disunited kingdom
Calls for the break-up of the UK are nothing new. A hundred years ago, Ireland was seeking self-determination
The Guardian, Sunday 5 January 2014 16.25 GMT
This year marks the centenary of the outbreak of the first world war. But there is another, much less regarded, yet significant centenary occurring this year – 1914 saw the passage of the Government of Ireland Act, the first extensive legislation for devolution in what was then the United Kingdom of Great Britain and Ireland. This 1914 measure provided for Irish home rule and a new parliament at Dublin – changes that many Liberals and Irish nationalists had been demanding for decades. World war led to the implementation of the Government of Ireland Act being delayed: and it was anyway rendered void by the Easter rebellion of 1916. Nonetheless, in 2014, this act is well worth remembering.
It is a reminder, to begin with, that fiercely competing visions of the organisation and identities of the UK have a long history. Accounts of the forthcoming independence referendum in Scotland sometimes give the impression that it's merely a recent and specific piece of purely local difficulty. In reality, there have always been cracks in the fabric, and not just north of the border. Many of the Victorian and Edwardian activists who campaigned for Irish home rule, for instance, also wanted what they called "home rule all round": separate parliaments not simply for Ireland, but also for the Scots and the Welsh – and for the English. "If home rule for England presents serious problems," argued one journalist in 1911, "we had better face them at once. They are not going to be solved either by postponing or ignoring them." The fact that this "home rule all round" campaign was overtaken by world war in 1914 is a reminder, too, of how contingent and uneven has been the evolution of the UK, and how intimately connected with the incidence of war and peace.
The so-called Act of Union between England and Wales in 1536, the Act of Union linking these two countries with Scotland in 1707, and the Act of Union between Great Britain and Ireland in 1800-1, were all implemented either in the midst of major warfare, or at a time of acute fear of war and invasion. By the same token, the years between 1689 and 1815, which saw six major wars between Britain and France, also witnessed the invention of many of the myths and motifs associated with Britishness: the current national anthem and Rule Britannia, for instance, were both composed in that era.
By contrast, periods of peace – especially when protracted – have often been accompanied by agitation for some kind of "break-up of Britain". Thus, sustained struggle for Irish home rule commenced in the 1870s, some 50 years or so after Waterloo had finally brought an end to the cycle of Anglo-French wars. Even the relatively brief period of European peace that occurred between the two world wars saw not only the creation of the Irish Free State (as it was then called), but also the foundation of the Welsh National party, and the emergence in 1934 of the Scottish National party.
The rising fortunes now of Scottish nationalism thus accord in part with patterns that were evident in the past. During and immediately after the second world war, unionism in Scotland – as elsewhere in the UK – was able to draw sustenance and strength from a common military struggle for survival, and from the common relief and satisfaction at victory in 1945. By the 1970s, however, a new postwar generation was emerging, and so – once again, and as in the writings of nationalists such as Tom Nairn – were calls for a break-up of Britain.
In other words, in order to understand the structure of the UK, and its current fractures, there is a need to look not just at comparatively recent developments, alignments and pressures, but also at much longer and deeper histories. The same applies in the realm of ideas. One of the notable features of present-day debates on possible Scottish independence has been the lack of imagination and creativity thus far displayed by most of those seeking to make the unionist case. The assumption appears to be that appeals to economic individualism and fostered fears of the unknown will by themselves be sufficient to make Scots hesitate about opting for independence. This strategy may or may not prove effective, but it shortchanges the public, and not just in Scotland. Scots are being offered arguments in support of independence, and warnings against it. Neither they, nor anyone else in the UK, are being provided with alternative visions of what an amended, re-imagined union might conceivably be like, or what it might be for.
This is very different from the quality of debate out of which the Government of Ireland Act of 1914 emerged. The late 19th century saw all sorts of federal solutions being proposed for the UK's many fault lines, sometimes at a high level. Winston Churchill both supported separate parliaments for Wales, Scotland, and Ireland; and wanted England to be divided into seven regional authorities, each with its own assembly and responsibility for local education, policing and housing.
Another future prime minister, David Lloyd George, also advocated some kind of organisational recognition that England was not a monolith but rather, divided – as he provocatively put it – between "the progressive north", and a Tory-dominated south. Ambitious, clever and pragmatic unionists both, these men were not afraid to put their heads above the parapet and speculate about new modes of governance. Perhaps some of their early 21st-century successors should consider doing the same?
January 5, 2014
Ireland Stirs Homegrown Flavor Into Tech Scene
By MARK SCOTT
DUBLIN — The Grand Canal Docks, an upscale business district here in the center of town, is a kind of home away from home for the big Silicon Valley companies like Google and Facebook. These international behemoths, in large part attracted by the low Irish corporate tax rates, have big presences here. And with their thousands of workers and bustling offices, they have long overshadowed the local start-up scene.
But Ireland last month became the first debt-ridden European country to exit an international rescue package, and now, through a combination of both longstanding and new grants and tax breaks, government officials are pushing to invigorate smaller, homegrown Irish companies. The hope is that a more robust tech sector can cement the country’s economic recovery.
It won’t be easy.
Ireland’s start-up scene is still relatively small compared with other European hubs like London and Stockholm. In the first nine months of 2013, the latest figures available, the country’s fledgling companies received around a combined $65 million of venture capital investment, a 28 percent drop compared with the same period a year earlier. The figure also is less than a tenth of what rivals in Britain secured in the first three quarters of 2013, according to the data provider DJX VentureSource.
And in the race to attract top engineering talent, the lifeblood of a start-up, it is hard to compete with the likes of Google and other global companies, which can offer tantalizing salaries and perks, as well as prestige.
Still, there are signs of hope. The domestic tech industry generates around 70 billion euros, or 40 percent, of Ireland’s annual exports and employs more than 100,000 people, according to government statistics.
This activity can be seen in the Grand Canal Docks, where young multilingual programmers and developers swap office gossip over expensive coffees in fashionable riverside bistros, while construction workers scramble to build high-rise office blocks to house international and local companies that have flocked to the area.
“This place has an interesting combination of young people and inventive scrappiness,” said Stefan Weitz, a senior director of search at Microsoft who has regularly visited the company’s operations in Ireland over the last 15 years.
For many of Ireland’s fledging companies, the key is to look for growth beyond their home market, which has a population smaller than that of Massachusetts. To succeed, many rely on government grants and tax breaks, like a 25 percent tax credit on research and development conducted in the country. The support is available to big and small tech companies alike.
The tactic, which also has been successfully used by Israel to help its domestic tech industry, allows companies to hire more engineers and developers as they can write off some of the cost against their corporate taxes.
To maximize the benefits, many Irish tech companies retain their development centers in the country, but move senior managers overseas, often to the United States, to be closer to their clients and investors.
For example, Movidius, an Irish semiconductor firm that has raised almost $50 million in venture funds, has a 12-person team in Dublin although its chief executive is in California. Datahug, an online business networking start-up, also has a sales office in New York, though it expects to keep its engineers and developers in Ireland.
“It’s cheaper here, but we need to be close to our customers,” said Ray Smith, 33, a co-founder of Datahug, who spends half of his time in the United States. “To succeed, you have to be in America.”
One aspect of Silicon Valley culture can certainly be found here: the struggle to hire and retain top talent.
Local entrepreneurs often complain that it remains difficult to hire well-qualified Irish engineers and developers, despite the country’s youth unemployment rate of almost 30 percent.
“There’s not enough local talent,” said Petter Made, a Swedish co-founder of the payments start-up SumUp, who oversees a 35-person team in Dublin that includes few Irish developers.
Local start-up founders also say that international companies like Facebook and Google attract the highest-achieving Irish computer science graduates through high salaries and corporate perks like well-equipped gyms and fully stocked kitchens.
Few foreign developers who relocate to Dublin to work for large companies choose to stay to start their own businesses here, preferring to return to their home countries.
“People at the big firms often don’t have local ties,” said Sean Blanchfield, 35, an Irish serial entrepreneur. He sold his software start-up to the gaming giant Activision Blizzard in 2007, and now runs a new advertising technology business alongside an outreach program at Trinity College Dublin to persuade Irish students to start their own companies.
To improve connections between start-ups and global companies, some of the tech giants have started to reach out.
“Historically, there wasn’t much contact between the big companies and the local technology scene here,” said Will Prendergast, a partner at the local venture capital firm Frontline Ventures. “Now, that’s starting to change.”
Google, which employs roughly 2,500 people in Dublin, has created workshops for local start-ups on topics like how to improve search results. The goal is to help Irish tech companies to promote their businesses online — as well as coax the start-ups to use Google’s own offerings.
It also now offers mentoring programs that connect Google employees with local fledging companies, and has teamed up with a Dublin university to provide computer science training to around a thousand high school teachers.
“It gives Googlers an outlet for innovation,” said Paddy Flynn, a company executive who now oversees the outreach programs here. “We need to be part of the community.”
The government also is trying to woo international entrepreneurs to start local companies here though its program of grants and tax breaks.
When Brett Meyers, an Australian, arrived 13 years ago, he did not expect to stay for more than a year.
Yet after getting frustrated by high bank charges levied to send money back home, Mr. Meyers, a former programmer at JPMorgan Chase, co-founded CurrencyFair, a low-cost foreign currency start-up, with a grant of €15,000, or $21,000, from the Irish government.
Over the last five years, the online service, which uses peer-to-peer technology to match individuals who want to exchange currencies, has processed around €600 million, or $826 million, of transactions, mostly between Britain, Europe and Australia. Mr. Meyers said the start-up had saved customers a combined €25 million in banking charges.
The firm plans to expand into the United States next year. Ireland’s prime minister, Enda Kenny, stopped by in early December to open its new Dublin headquarters.
“I had a one-year plan to stay in Ireland, but I never left,” Mr. Meyers said. “You have to be impressed by how the Irish have dealt with the crisis. Whatever has happened, they have just got on with their business.”
January 5, 2014
Spain’s Solar Pullback Threatens Pocketbooks
By SUZANNE DALEY
ÁGUILAS, Spain — Six years ago, Justo Cruz Rodríguez, who runs a small business here designing signs, was looking for a way to generate a steady, if modest, pension for himself and his father.
So when the government passed a law offering attractive rates for solar energy — and guaranteed them for the next 25 years — he mortgaged his house, his father’s house and even his workshop to install half a dozen rows of solar panels in his father’s garden, with the idea of selling his excess electricity.
“It seemed so safe,” he said recently. “It was a government guarantee.”
But the Spanish government has changed its mind. It plans to pay less, a lot less. Under legislation that goes into effect this year, it will drop its per-kilowatt-hour payment system altogether and effectively impose retroactive cuts in payments. It also plans to make solar power producers pay a charge on electricity they generate and use themselves, a measure that angry protesters have named the “sun tax.”
Spain has good reason for wanting to take action. It is facing a growing deficit — about $40 billion now — because it has never passed on the true cost of producing energy to its consumers, a problem that has ballooned with the economic crisis. If it does not do something, that deficit will only grow, experts say.
Energy experts across Europe are watching Spain’s actions closely, however, wondering if they amount to folly. Thousands of solar energy investors large and small will doubtless face insolvency, and perhaps just as worrisome, experts say, the new charges for those using their own electricity may set off a rush by owners of solar panels to find ways to sell or use their electricity without reliance on the national grid at all, further reducing its customer base.
Nor is Spain’s abrupt U-turn likely to go over well with future investors, experts say.
“When a government changes the terms of existing contracts, that’s a bad move,” said Toby Couture, a solar energy consultant with E3 Analytics in Berlin, who believes that the government will have trouble when it wants to develop public-private partnerships to fund water treatment plants, highways or pipelines, for instance.
“There are reasons we live by contract rules,” he said. “If you keep changing the rules of the game, then, after a while, your friends don’t want to play. The government has lost credibility.”
Spain was once at the forefront of the solar energy movement. It barreled into the renewable-energy business, winning over thousands of investors big and small with its guarantees. Experts say the country has already come close to the European Union’s goal of 20 percent reliance on renewable energy by 2020.
But experts say the government never expected so much investment and never came up with a way of paying for it. When the economic crisis hit, in 2008, and demand for energy went down, the deficit widened at an even faster rate.
Spanish officials say they have no choice now but to reduce the payments, which were once offered to spur investment in solar energy but are now considered overly generous, especially since the cost of solar panels has dropped precipitously in recent years.
The new government payment system has left thousands of investors, like Mr. Cruz, 51, in a state of shock.
“I am going to lose everything,” Mr. Cruz said, standing near the panels he thought would make his old age easier. “I will be homeless. At my age, homeless.”
The government has proposed cuts to other parts of the energy sector as well, and has taken other steps to reduce the energy deficit, including asking Spaniards to pay more for the electricity they use. But no other measures are as drastic as the reduction of payments to the nearly 60,000 producers of solar power, 50,000 of which are small-time investors like Mr. Cruz, according to the Spanish Solar Power Union.
“If we did nothing, the only two alternatives would either be bankruptcy of the system or an increase of the price to consumers of more than 40 percent,” said José Manuel Soria, the minister for industry, energy and tourism, defending the government plans shortly after they were announced last summer.
The government’s plans have prompted angry accusations across the energy sector here. Solar energy producers feel unfairly singled out and say more savings might be squeezed from other electricity producers. Spain’s other energy producers are offering little sympathy.
They say the terms that the Spanish government was offering in 2007 were so good that no one should have expected them to last. “Essentially, these investors were speculators,” said Eduardo Montes, the president of the Spanish Electricity Industry Association, which represents traditional electricity producers. “It was not reasonable to expect it would stay that way.”
Under the new law, instead of the current per-kilowatt-hour fees, the government will offer a formula intended to produce a 7.5 percent return on investment. The problem, experts say, is that the basis for determining that investment is unclear, and the formula looks likely to penalize those who paid more for their equipment, took out big loans or are paying high interest rates. The Solar Power Union estimates a cut in income of 30 percent to 50 percent for producers.
Already, some investors are turning to the courts. Their lawyers say the original law specifically guaranteed a fee of 58 cents for each kilowatt-hour for the next 25 years and guaranteed 80 percent of that for the years thereafter. It also clearly stated that any future changes could affect only new installations.
“The law was drafted in a very sure way,” said Piet Holtrop, a Barcelona lawyer representing about 1,200 investors, ranging from individuals like Mr. Cruz to small town councils. “The people who invested gave it some thought. They were not just putting their money into anything. It was a sound investment.”
Several large investors have decided to take Spain to the World Bank’s arbitration agency, the International Center for Settlement of Investment Disputes.
Government officials declined to answer questions on the subject. They are being widely criticized for coming up with the new plan without consulting any of the affected parties and for changing their mind about several components in the last few months.
“The government made a bad situation worse by following a process that lacked consultation and transparency and instead created confusion and uncertainty,” said David Robinson, an economist in Madrid who specializes in energy policy and who is a senior research fellow at the Oxford Institute for Energy Studies.
But with a solid majority in Parliament, the government had little trouble getting approval for its main proposals last month, although many details will be clear only when new regulations are published.
Some investors say they will respond to the government’s plan by finding ways to become independent. Diego Nicolas, who owns a car repair business in Murcia and installed solar panels in his garage last year, said that he was considering investing in some wind turbines and a generator and becoming self-sufficient.
“I will be completely independent then, and not subject to their numbers game,” he said.
But that option is not available to Mr. Cruz, whose business has suffered badly in the economic crisis. After the government first reduced his income from the panels in 2010 by capping the amount of electricity it would pay for, he renegotiated the terms of his loans. But he ended up with a higher interest rate and a longer term of repayment. He has already given up any dreams that the panels will contribute to his retirement.
“I can’t go to the bank and say, ‘I am not going to pay you anymore,’ ” he said. “But the government can just do what it likes? That does not seem right to me.”
01/06/2014 12:26 PM
Appointments Cancelled: Merkel Breaks Pelvis in Skiing Accident
German Chancellor Angela Merkel fractured her pelvis in a skiing accident while on Christmas vacation in Switzerland, her spokesman said Monday. She has cancelled appointments and will have to spend much of the next three weeks lying down.
German Chancellor Angela Merkel, 59, has cancelled many of her appointments after injuring her pelvis while cross-country skiing in Switzerland during the Christmas break.
"She fell. While cross-country skiing. We think it was at low speed," government spokesman Steffen Seibert said. He said she had suffered "heavy bruising combined with an incomplete fracture of the left rear pelvic ring."
Merkel spent her Christmas vacation in the Swiss resort of Engadin.
The injury means Merkel will have to lie down as much as possible for the next three weeks, will need crutches to walk and is unable to fly. This week, she has had to cancel a visit to Poland and the inaugural visit of the new Luxembourg Prime Minister, Xavier Bettel, to Berlin.
The injury comes on the heels of the horrific skiing accident suffered by German seven-time Formula 1 world champion Michael Schumacher. He was said on Saturday to be in critical but stable condition after suffering serious head injuries while skiing in the French resort of Meribel on December 29.
German vice-chancellor takes time off to be a dad
Sigmar Gabriel says he plans to take Wednesday afternoon off each week to spend with his two-year-old daughter
Philip Oltermann in Berlin
theguardian.com, Sunday 5 January 2014 17.52 GMT
As the vice-chancellor of Europe's largest economy, the leader of Germany's second largest party and the minister in charge of one of the most pressured government departments, Sigmar Gabriel has a full schedule in 2014 – but not on Wednesday afternoons.
In an interview with the tabloid Bild this weekend, the second most powerful person in German politics revealed he was planning to take off an afternoon a week to spend with his two-year-old daughter. "My wife has a job, and on Wednesdays it's my turn to pick up our daughter from nursery. And I'm looking forward to it."
"Some things are achievable only if you go through files in the car, on the train or at home," said the 54-year-old so-called "super minister" in charge of managing Germany's nuclear phase-out. But he said there had to be space for politicians to spend time with their family, "otherwise we don't know what normal life is like".
Germany still has a reputation as a country where mothers are either Hausfrauen or Rabenmütter: committed stay-at-home mums or uncaring career women who, like ravens, abandon their offspring while they go out to work. But if the latest reshuffle at the top of German politics is anything to go by, Gabriel's announcement could signal a wider shift in attitudes to parenthood.
Late last year, Jörg Asmussen, an executive board member at the European Central Bank, announced he would become an undersecretary of state in the new German labour ministry – a demotion which meant he would lose out on an estimated €150,000 (£124,000) a year. The reason? To spend more time with his family.
"If you are constantly commuting, you are not a regular part of family life. You're out of it," Asmussen, 47, told Stern magazine. Getting men to spend more time with their children was not something that could be legislated for, but was instead "about creating culture change" so that a father who stayed at home "wasn't looked on as a wuss by his colleagues".
Since 2007, German parents have been entitled to up to 14 months of parental leave at 65% of pay, to share however they wish. The number of men using of it has been rising, and reached more than a quarter last year – but most only do so for about two months.
While the percentage of women in Angela Merkel's new cabinet is the same as in her last, for the first time four out of the six female ministers have children. The defence minister, Ursula von der Leyen, and the family minister, Manuela Schwesig, have said they aim to balance their new responsibilities with family life.
Von der Leyen told Bunte magazine that "I hope that I will be able to continue to steer many things from home" [http://www.bunte.de/politik/ursula-von-der-leyen-ministerin-im-home-office-65629.html], while Schwesig said that she was planning to get much of her work done from her home in Mecklenburg-Vorpommern.
Reactions in the media have been mixed. An opinion piece in Die Welt was critical of the idea of "part-time" ministers: "Those who aim for an exceptional career, be it in politics, business or professional sport … should know that it can only work with 100% commitment."
But Der Spiegel praised the new cabinet for showing the rest of the country how things can be done: "The days when only childless female politicians like Angela Merkel could make it to the top are over."
Illegal weapons found in Palestinian embassy in Prague, police say
Czech police investigating embassy complex where ambassador Jamal al-Jamal was killed on Wednesday when safe exploded
Associated Press in Prague
theguardian.com, Sunday 5 January 2014 18.32 GMT
A total of 12 illegal weapons have been found at the Palestinian embassy complex in Prague where a possible booby-trapped safe killed the ambassador, according to Czech police.
The deputy Palestinian foreign minister denied the weapons were illegal and police spokeswoman Andrea Zoulova declined to give more details due to the ongoing investigation.
Ambassador Jamal al-Jamal, 56, was killed on Wednesday when a safe in the embassy exploded. The career diplomat had only started his posting in October.
Taysir Jaradat, the Palestinian deputy foreign minister, said on Sunday he had discussed the weapons with his Czech counterpart. "We told them that these guns have been in the embassy for a long time – going back to the former regime of Czechoslovakia – and these guns were either licensed in the embassy or were given as gifts to the ambassador," he told Voice of Palestine radio station. "They are not in use."
It remains unclear what caused the safe to explode, but the ambassador's death is being investigated as a case of negligence. Residents in the Suchdol district, where the new embassy complex is based, have lodged security concerns over the incident.
Economies of Britain and France have more similarities than differences
Despite politicians' rhetoric, the fight to survive in the global economy is a shared experience for the two historic rivals
Sunday 5 January 2014 20.27 GMT The Guardian
As British crowing about last year's return to growth increasingly irks the struggling administration of François Hollande, it is worth remembering that London and Paris have more in common than they care to admit.
While London looks like a vibrant city of skyscraper developments and trendy pop-up nightclubs in contrast to the Napoleonic boulevards of Paris that appear more dishevelled by the month, nevertheless the fight to survive in the global economy is a shared experience for the two historic rivals.
Neither really knows how to tax companies and individuals that have become elusively mobile. Both are struggling to generate decently paid jobs in a world where there is a massive oversupply of labour.
And crucially, once a job is created, taxed or untaxed, governments face the task of persuading a reluctant employer to invest to boost productivity. Without such a rise, workers will struggle to raise their wages faster than the level of inflation and improve their living standards.
On the face of it France has the bigger problem. When prime minister Jean-Marc Ayrault said a few days before Christmas that his government would not copy British economic policies for fear of creating poverty and inequality, he was being a little disingenuous.
"I see a lot more poverty, more inequalities, and if I were to look for a model to reform France I would want to save the French model, reforming it, and certainly not copy what others do – especially not if we're not talking about the best," he told French private TV network TF1.
Ayrault criticised Britain's zero-hour contracts for helping create "mass poverty far worse than in France".
Yet he sidestepped figures that show the similarities outweigh the differences. Britain has a youth unemployment rate of 21%. In France it has reached 25%.
Both countries disguise the level of youth unemployment with an array of training schemes, some more useful than others, and a university system that packs in great numbers of students on courses of sometimes dubious value.
France's economy may have almost recovered to its previous 2007 output record while Britain's economy remains 2.5% smaller, but the direction of travel will see the two economies reach parity in a year.
UK exports, the favoured growth vehicle in Downing Street, have proved lacklustre and risen only marginally despite a 25% drop in the value of sterling since 2007. France has also struggled to export.
In manufacturing survey figures last week a drop in exports dragged the country's industry index further into contraction territory.
A fall in business investment was a key factor in last week's dire news for France, and Bank of England lending figures last week told the same story for the UK.
While mortgage approvals in November were at their highest level since January 2008, net lending to businesses took its biggest fall since comparable figures began in May 2011.
"Overall the picture from the data today remains consistent with a UK recovery that has been fairly household-led," said David Tinsley, UK economist at French bank BNP Paribas. "We would look for that to change in 2014, but a risk remains that corporates will remain reluctant to borrow and invest."
It is a point made recently by Howard Davies, the man conducting the government's airport review and a former chief financial regulator. Writing in the Financial Times, he described France and Britain as being like two bald men fighting over a comb.
Economists tend to believe the UK's dire business investment story is temporary. The Treasury's own forecaster, the Office for Budget Responsibility, has predicted a significant rise in business investment next year – on the basis that it normally follows a rise in consumer spending.
Likewise, Paul Krugman, the Princeton economist and cheerleader for Keynesian policies, has argued that governments can create the right conditions for business investment by pump-priming demand for goods and services.
He argues that once businesses see a solid rise in output backed by consistent government policies, investment will follow, bringing decent jobs for young people.
But the question must be why any global business would opt for France or Britain to manufacture increasingly homogenised goods to be sold across the world, when Turkey will supply land, factories and a cheap skilled workforce tax-free.
The only gain for the Turkish exchequer from business activity in its many enterprise zones is the tax applied to workers' incomes. That is why Ford closed its Southampton factory last summer, after 40 years making Transit vans at the site, in favour of extending its base in Turkey.
Maybe this trend would not matter if the 80% of businesses that are entirely domestic – and so in many ways divorced from the pressures of international competition – invested in new plant and machinery, developed new techniques and processes and trained staff on a large scale.
The problem is they don't. Most research and investment is carried out by big companies.
Even the European commission, which dispensed grants for research and development worth €2.9bn (£2.4bn) to British firms between 2007 and 2011 (and €2.4bn to French companies) directed most of the money to big corporates. Much of the UK's subsidy was soaked up by GlaxoSmithKline and a small number of major pharmaceutical outfits.
The manufacturers' body, the EEF, highlighted in a recent report that foreign-owned companies, which tend to be large, are responsible for 45% of UK manufacturing business investment.
The figures are smaller in France, but to its detriment: car manufacturing in the UK, largely foreign-owned, is a success story – in sharp contrast to France, where indigenous carmakers Renault and especially Peugeot Citroën are sacking staff and closing plants.
Yet carmaking is an isolated example in Britain, where manufacturing is still 9% off its 2007 peak production and a fraction of the size it was in the 1980s.
Britain is further forward in playing the global "race to the bottom" by offering low corporate tax rates, enterprise zones and a labour force where internships are rife and international graduates available on tap.
France, though, is following, and is not far behind. It may be resisting cuts to established workers' terms and conditions, but it is content to make life miserable for younger entrants and immigrants, who are far more likely to be unemployed or on low wages than immigrants to the UK.
Hollande is also shifting his stance to please big business. Not by cutting headline tax rates so much as allowing a raft of reliefs and subsidies for employing new staff, even when they are on short-term, flexible contracts. For the political right wing there is no alternative but to join the race to the bottom.
Skilled workers can bid up their wages while those with few skills operate in a twilight zone. But where are the rising aggregate wages going to come from?
They have declined since the crash and the trend is still heading south. Without investment, France and Britain are going to continue struggling.
How a reality TV parody tells the story of Italy's jobless
Politicians pretend that Italy is on the road to recovery. Meanwhile, Redundancy Island publishes the truth about ordinary people's lives
theguardian.com, Monday 6 January 2014 11.17 GMT
In his New Year's Eve speech, Italy's president, Giorgio Napolitano, acknowledged the unemployment crisis, reading out letters from people who are living through it. Yet apparently other members of the Italian government think differently. The minister of economics Fabrizio Saccomanni tweeted about the employment outlook improving. Even the prime minister, Enrico Letta, said that economic recovery seems to be just around the corner.
This news about a recovery simply isn't true. The latest report from the Italian Institute for Statistics (Istat) confirmed that unemployment has reached emergency levels, and 15.8% of Italians living in poverty. The overall jobless rate is 12.5%, the highest since 1977. But the new record contained in this report is the youth jobless rate, which rose to 41.2%, from 40.5% the previous month. Italy's unemployment is an emergency for all of the EU.
I have closely followed Italy's recent crisis and job losses from the beginning. On 24 February 2010, a group of redundant workers occupied the abandoned prison on the Asinara island, north of Sardinia and a few miles away from Silvio Berlusconi's estate, famous for its sexy parties. They demonstrated against their factory shutting down – the one in which my father had been working for the past 35 years.
I thought the workers' idea was brilliant: instead of going to Rome and screaming at the parliament, they decided to go to the most isolated place in Italy, harming no one, and putting themselves behind bars. How come only one, local, newspaper was reporting it? I decided to help those workers get coverage with my friend Marco Nurra, a trainee at the Spanish newspaper El Mundo.
A few days earlier, a popular TV show, Celebrity Island, the Italian version of I'm A Celebrity, had started. We opened a Facebook group called Redundancy Island (L'isola dei cassintegrati) with a plan to parody the TV format and get the Asinara workers publicity, as if they were celebrities. We started documenting what was happening on the island and describing the different characters there. A week later, when we started a blog of the same name, we already had 35,000 members on Facebook, which soon after reached 100k. With the help of our followers, the workers got on television and suddenly became famous.
The workers stayed on the island for one year and we reported each day about them. Yet after the Asinara demonstration was over, our story continued. The Redundancy Island blog is now an most important source of journalism about workers in Italy. In November 2012 we became a partner of the weekly L'Espresso, and we won a prize at the International Journalism Festival of Perugia. It was no longer our blog, or that of the Asinara workers – it belonged to our community. Leaders of demonstrations, the working poor, women fired for being pregnant: these interactions have become the crowdsourced database for our journalistic work.
Much more than a blog, Redundancy Island is a parody of the Italian media – and of political communication too. Why did a bunch of workers decide to put themselves behind bars? Because they had no one to talk to. Not the unions, not the newspapers, not the politicians. Why did such a small blog became so popular? Because our stories fill a gap: between the crisis that millions of Italians experience every day and its absence from mainstream political discussion.
Despite everything, the Asinara workers factory closed anyway. We worked very hard to tell their story. Unfortunately, the establishment didn't listen. For the most part, it still isn't.
Europe’s populist insurgents: Turning right
Parties of the nationalist right are changing the terms of European political debate. That does not guarantee them lasting electoral success
Jan 4th 2014 | MONTELIMAR, PARIS AND THE HAGUE
IN A café on a tree-lined boulevard in Montelimar, a southern French town best-known for its sticky nougat, Julien Rochedy is working on his speech. Young, fashionably bearded and sporting both a well-cut suit and a braided black bracelet, he might be finalising a business presentation, or the launch of a fashion brand. In fact, Mr Rochedy is preparing for a public meeting of the National Front, the right-wing party led by Marine Le Pen.
The National Front (FN) has no local office in Montelimar, nor any historical hold here. The town’s narrow streets carry no posters for the evening’s meeting. But in France’s 2012 presidential election, Ms Le Pen grabbed 21% of Montelimar’s first-round vote—more than she did nationwide. So the FN is fielding Mr Rochedy as a candidate in the mayoral elections to be held in March. “I’ve come here a bit like a missionary,” he says cheerfully. That evening a few hundred people turn out, curious to hear Mr Rochedy and his star guest, Marion Maréchal-Le Pen, the 24-year-old niece of the party leader and one of the FN’s two deputies in parliament.
Mr Rochedy, author of a book on the decadence of the West and admirer of Nietzsche, is part of a phalanx of young candidates recruited to become the new face of the FN. Under Ms Le Pen’s thuggish father, Jean-Marie Le Pen, the party lurked reviled on the far right of politics. For his daughter, decontaminating the brand is part of a programme which she sees as preparing the party, in the past always a protest vote, for real power. Her anti-elitist, anti-Brussels, anti-immigrant stance is playing well with a significant fraction of her countrymen—as are similar messages from charismatic right-wing insurgents across the continent.
The voice of the people
In May voters across the 28-member European Union will elect 751 deputies to the European Parliament. Polls suggest that the FN could win a plurality of the votes in France. The United Kingdom Independence Party (UKIP) has similarly high hopes, as does the Freedom Party (PVV) in the Netherlands. Anti-EU populists of the left and right could take between 16% and 25% of the parliament’s seats, up from 12% today. Many of those votes will go to established parties of the Eurosceptic left. But those of the right and far right might take about 9%. And it is they, not the parties of the left, who are scaring the mainstream.
The response of the political establishment to a tide of anti-European populism which draws on anti-immigrant feeling and antipathy towards Islam has mostly been to evoke the 1930s and hope for revulsion to take its course. “We should not forget”, said José Manuel Barroso, head of the European Commission, “that in Europe, not so many decades ago, we had very, very worrying developments of xenophobia and racism and intolerance.”
It is true that some anti-EU parties are toxic. The most sinister is Golden Dawn, which holds 18 seats in the Greek parliament. Despite claiming to have moved beyond its neo-Nazi roots, the movement uses a swastika-like logo, plays the “Horst Wessel Lied” at rallies, and puts its members through military-style training. Its leader, Nikos Michaloliakos, is in jail awaiting trial for association with a criminal gang after the murder of a left-wing anti-fascist rapper.
Squatting on the borders of respectability is Jobbik, now the third biggest party in Hungary’s parliament. Like many parties widely regarded as belonging to the far-right, it rejects the label in favour of “radical nationalist”. The party denies that it is racist or anti-Semitic; yet Marton Gyongyosi, one of its deputies, declared a year ago that it was time to draw up a list of Jews in parliament and government, on the ground that they represent a “certain national security risk”. He later apologised, but the damage was done.
To raise the spectre of a return to 1930s fascism, however, is “not the right question,” argues Catherine Fieschi, director of Counterpoint, a British think-tank. Most of Europe’s populist parties either have no roots in the far right or have made a conscious and open effort to distance themselves from such antecedents. A better question is how far these parties can use popular dissatisfaction to reshape Europe’s political debate, and whether they can use that influence to win real power.
That they are disparate there can be no doubt; they vary hugely according to local tastes, traditions and taboos. Take the FN and the PVV. Late last year their leaders, Ms Le Pen and Geert Wilders, began a political courtship with an eye to creating a new parliamentary group after the European elections. But the PVV is ardent in its support for Israel, while the FN has an anti-Semitic past. The PVV is in favour of gay marriage; the FN marches against it. The PVV sees Islam as a totalitarian danger around the world; the FN frets not over the religion’s basic tenets but only about the “Islamification” of France.
Elsewhere some on the populist right—Belgium’s Vlaams Belang, Italy’s Northern League—want regional autonomy within the EU while others—UKIP and the Finns Party—reject EU membership outright. Those not stained by direct descent from a racist past distinguish themselves from those that are. That is why the FN does not sit in the Eurosceptic group in the European Parliament that UKIP and the Northern League belong to, and why a deal between the PVV and the FN could herald quite an institutional shake-up.
What they all have in common is that they are populist and nationalist, that they have strong views on the EU, immigration and national sovereignty, and that as a result they are doing very well in the polls.
The euro-zone crisis, and its aftermath, goes some way to explaining why—but it is far from a complete answer. The populist right is nowhere to be found in austerity-battered Spain and Portugal. But it thrives in well-off Norway, Finland and Austria. Between 2005 and 2013, according to calculations by Cas Mudde, at the University of Georgia, there are almost as many examples of electoral loss for parties of the far and populist right (in Belgium, Italy and Slovakia, among others) as there are of gain (in Austria, Britain, France, Hungary, the Netherlands).
But if euro-zone economics are not a full explanation, the crisis has been crucial to setting the scene for the potent new pairing of old nationalist rhetoric with contemporary Euroscepticism. Across Europe disillusion with the EU is at an all-time high: in 2007 52% of the public said it has a positive image of the EU; by 2013 the share had collapsed to 30%. The new identity politics is a way of linking the problems of Europe and those of immigration. It also taps into concerns about the way globalisation, defended by the mainstream political consensus, undermines countries’ ability to defend their jobs, traditions and borders.
The parties play on a nostalgia for simpler times that appeals to some older voters; but their pitch also works well with younger voters for whom Europe’s dark past is the stuff of history textbooks, not their or their parents’ experience. Some of them are more comfortable voicing ideas that their elders either reject or pass over in silence; a study of Facebook fans of populist parties by Demos, a British think-tank, found that those aged 16-20 years were twice as likely as the over-50s to cite immigration as the reason for their support. Fully 55% of French 18- to 24-year-olds say that they would not rule out voting for the FN, according to a recent poll by the Union of Jewish Students in France.
Young or old, populist parties speak to an electorate which Dominique Reynié, an academic at Sciences-Po in Paris, sees as “existentially destabilised”: confused and anxious about what they belong to, where their country is heading, and whether their leaders can do anything about it. Most of these parties deny vigorously that in giving these anxieties voice they are merely acting as outlets for protest votes. But protest is nevertheless their theme. “We want our country back,” demands UKIP’s leader, Nigel Farage. “Less Europe, more Holland,” says Mr Wilders.
The problem the populist parties face is that when this sort of protest gains traction its themes can quite easily be grabbed by the mainstream right. When those parties move towards the populists, the populists risk getting swamped even as their messages become mainstream—or, if they attempt to keep a radical edge, being forced back on to the fringes. The tension between influence and power may make the parties’ growth self-limiting.
Populist parties that make it into national parliaments can further their agendas by deft horse-trading. From 2001 to 2011 the Danish People’s Party under Pia Kjaersgaard swapped parliamentary support for a succession of centre-right minority coalitions for tighter legislation on immigration. They can also hope to move beyond single issues and get into government. To the consternation of liberal Scandinavians, Norway’s nationalist-right Progress Party, which secured 16% of the vote at recent parliamentary elections, has been welcomed into a minority coalition government. Its leader, Siv Jensen—a sort of Norwegian Marine Le Pen, who talks about the “rampant Islamification” of Norway—has become the finance minister.
But even where mainstream parties rule out alliances, as France’s centre-right UMP does with the FN, the populist right can prompt established politicians to sound a tougher note, thereby legitimising some of the thoughts and vocabulary that once belonged only to the extremes.
The best example of how the new nationalism can pull the political debate in its direction by getting others to ape it is offered by UKIP. It has ten seats in the European Parliament (one of them Mr Farage’s) but none in Westminster; it secured just 3% of votes in the 2010 general election. Yet, as Heather Grabbe of the Open Society think-tank in Brussels points out, good poll numbers and impressive showings in by-elections have been enough to give its views potency, strengthening the hands of hardline Eurosceptics in the Conservative Party. As a result David Cameron, the Conservative prime minister, has promised a referendum on British membership of the EU. He also sounds an increasingly hardline note on immigration from the EU, and on the need to clamp down on “welfare tourism”. The opposition Labour Party, relaxed in the past about open borders, now promises to be tougher, too.
This success is largely Mr Farage’s. His canny deployment of saloon-bar blokeishness as common sense is the most potent tool of a party which lacks any strength-in-depth and is prone to chaotic squabbling behind the scenes. His importance is typical of the populist parties’ heavy reliance on one-man brands.
Mr Wilders in the Netherlands is the best example. With his distinctive thick silver mane, he is not just the face of the PVV: he is (rather oddly) its only registered member. In the ten years since he founded the party he has consistently courted controversy, calling Islam “a totalitarian religion” and the Koran “a fascist book”. In 2011 he was acquitted on a charge of incitement to racial hatred; he is himself undoubtedly hated by some, to the extent that he has a permanent security detail and unusually strict procedures for visitors. In the corridor outside his parliamentary office, two bodyguards sit on a black-leather sofa next to a potted plant; a poster of Margaret Thatcher hangs on the wall.
Mr Wilders exudes a focused self-confidence, sensing what he calls an “historical moment”: “I really believe that our generation of politicians can for the first time make a difference and get back what belongs to us, which is national sovereignty.” Today, the PVV has 15 seats in the 150-seat lower house of parliament, with a suite of offices there, and ten in the 75-seat Senate. Mr Wilders successfully used his party’s votes to back, and then let fall, a minority centre-right coalition government, and to secure a clampdown on immigration and asylum-seeking. Now he hopes to go further. “I think we have really the best chances of becoming the main party in the Netherlands,” he breezily declares.
Mr Wilders keeps a tight grip on party ideology—his blog and Twitter account are the party’s most direct way of communicating policy. And he is in complete control of its strategy. Thus the decision to invite Ms Le Pen to visit The Hague was his alone—and not, it seems, an easy one. A Zionist, Mr Wilders says that in the past he had considered it too big a risk to reach out to the FN, “and maybe it still is”. But having heard Ms Le Pen disown her father’s views—Jean-Marie Le Pen once referred to the Holocaust as a “detail” of history—he is taking her at her word.
Though this highly personalised form of politics has worked well so far, it hardly looks sustainable in the long term. The PVV has suffered several defections; two prominent ex-policemen who were among the PPV’s most visible and charismatic members of parliament said that they had had enough of Mr Wilders’s autocratic style. If popular parties are to survive their founders they need more conventional structures.
Ms Le Pen—who, like Mr Wilders, oozes confidence—is setting about doing just that. Like Mr Farage, she has little by way of an elected power base; the FN has only two deputies in the French parliament, and controls not a single town in France. Yet she has both the governing French Socialists and the opposition centre-right on the run. She is building on strength in the once-Communist industrial north, but also making a new push in southern towns like Montelimar—in October the FN won a stunning by-election victory in Brignoles, not that far away. Ms Le Pen’s ambition, she says with a wide grin, is to be “at the Elysée in ten years’ time”.
To “de-demonise” the party, she has rid it of its jackbooted types and denounced Nazism as an “abomination”. She rails not against Muslims but “Islamification”, drawing on deep-seated secular French principles to justify her condemnation of religious expression in public places. As a 45-year-old divorced mother of teenagers, Ms Le Pen gives the party a more modern feel by her presence alone. And when she speaks, she is heard by the public at large, not just followers at rallies. Whereas her father was treated by the media as a pariah, she is a frequent guest on news shows. “The image, or the caricature, of a movement of violent macho men has completely disappeared,” she insists.
The quest for respectability has been uneven. Ms Le Pen rejects outright the suggestion that there is anything racist about the party today. Yet the FN recently had to suspend one of its municipal candidates for posting a photomontage of Christiane Taubira, the black justice minister, next to that of a monkey on Facebook. Ms Le Pen herself once compared Muslims praying in the French street to the Nazi Occupation.
Her strategy also involves trying to deepen party expertise in a bid to earn policy credibility—not a voters’ worry today, but possibly one tomorrow. She has recruited three graduates of the elite Ecole Nationale d’Administration to her team; the fact that she wants such énarques, and that there are énarques happy to work with her, signals seriousness. And she has lined up scores of young candidates, such as Mr Rochedy in Montelimar, to stand at municipal polls. The idea is to secure them local experience to prepare for bigger ambitions in the future.
Ms Le Pen seeks to resolve the tension between campaigning as an outsider and aspiring to govern by insisting that she is “not against the system”, only the cosy mainstream consensus: “The left and the right that says the same” and is in favour of globalisation and the euro. Another way to deal with the tension is not to move too fast. Sylvain Crépon, at Nanterre University, argues that the FN would be quite happy with limited electoral success this year: enough progress to look good, not so much as to end up mired in the messy compromises the exercise of power would bring.
Ms Fieschi at Counterpoint argues that the tension between the moderation needed for power and the outsider status that attracts a dispirited public makes such parties “fundamentally unstable” in a way that limits their growth. As Matthew Goodwin at Nottingham University points out, Austria’s Freedom Party imploded after it joined government in 2000 because it could not manage the conflict between protest and power. On this analysis, Europe’s populists may be near the height of their influence. Were the economy to recover and unemployment to drop, their message might fall on less receptive ground. Within the European Parliament, rivalry between them may thwart their high hopes for influence. Ms Le Pen sniffs that UKIP “is a bit too immature” to see beyond the caricature of her party.
For the time being, however, a battered Europe is fertile terrain. There is little sign yet of a sustained drop in joblessness, nor decisive economic recovery. Back in the Montelimar café, the patron turns out to be an FN supporter too. “We’re not a racist party,” he insists. His grudge, rather, is against Europe, the euro and the complacent leaders who “got us into this mess” in the first place.
Turkish PM says he would not oppose coup plot officers' retrial
Recep Tayyip Erdoğan, hit by corruption inquiry, in talks with judiciary as military claims evidence against officers was fabricated
Reuters in Istanbul
theguardian.com, Monday 6 January 2014 08.25 GMT
The Turkish prime minister, Recep Tayyip Erdoğan, said he would not oppose the retrial of hundreds of military officers convicted on coup plot charges, a case that underlines civilian dominance over a once all-powerful army.
Turkey's appeals court in October upheld the convictions of retired officers for leading a plot to overthrow Erdoğan's government a decade ago.
The military last week filed a criminal complaint over the court cases, saying evidence against serving and retired officers had been fabricated.
"There is not a problem for us about retrials as long as the legal basis is established. In terms of regulations, we are ready to do what we can," Erdoğan told reporters late on Sunday before leaving on an official visit to Asia.
He said he had a "positive" meeting on Saturday with the head of the Turkish bar association at which the cases were discussed and the justice minister was working on the issue.
The military complaint comes as Erdoğan's government is weakened by a wide-ranging corruption investigation that has led to the resignation of three members of his cabinet and highlighted concern about the independence of the judiciary.
Erdoğan's backers accuse Fethullah Gülen, a US-based Turkish cleric with strong influence in the police and judiciary and a former ally of the prime minister, of connivance in the corruption investigations. Gülen denies the allegation.
Erdoğan's Islamist-rooted AK party is widely held to have relied on Gülen's influence in breaking the power of the army – which carried out three coups between 1960 and 1980 and forced an Islamist-led government from power in 1997 – including by pursuing suspected coup plotters through the courts.
Iraq’s Fallujah falls to Al-Qaeda militants as 65 killed
By Agence France-Presse
Sunday, January 5, 2014 11:23 EST
Iraq has lost Fallujah to Al-Qaeda-linked fighters, a senior security official said, putting militants back in control of the city in Anbar province where American forces repeatedly battled insurgents.
And fighting in Anbar killed 65 people — eight soldiers, two government-allied tribesmen and 55 militants from the Al-Qaeda-linked Islamic State of Iraq and the Levant (ISIL), security officials said.
It is the worst violence to hit Anbar province in years, and the first time militants have exercised such open control in major cities since the height of the bloody insurgency that followed the 2003 US-led invasion.
Secretary of State John Kerry said Sunday the United States would stick by Iraq in its battle with the militants, but stressed it was “their fight.”
“We will stand with the government of Iraq who push back against (militant) efforts … but it is their fight — that is something we determined some time ago,” he told reporters in Jerusalem.
“We are very, very concerned” about ISIL, Kerry said.
“These are the most dangerous players in the region. Their barbarism is on display for all to see, their brutality is something have seen before.
“The United States will continue to be in close contact … We will help them in their fight, but this is a fight in the end they will have to win and I’m confident they can.”
Fighting erupted in the Ramadi area Monday, when security forces cleared an anti-government protest camp set up after demonstrations erupted in late 2012 against what Sunni Arabs say is the marginalisation and targeting of their community.
The violence then spread to Fallujah, and a subsequent withdrawal of security forces from areas of both cities cleared the way for militants to seize areas of both cities and hold them for days.
“Fallujah is under the control of ISIL,” said a senior security official in Anbar.
An AFP journalist inside Fallujah also said ISIL seemed to be in control, with no security forces or Sahwa anti-Al-Qaeda militiamen visible on the streets.
Iraqi ground forces commander Staff General Ali Ghaidan Majeed said security forces killed 55 ISIL fighters in Anbar.
Eight soldiers and at least two government-allied tribesmen were also killed in the Ramadi and Fallujah areas, security officials said.
Majeed said there were three groups fighting: security forces and allied tribes; ISIL; and forces of the anti-government “Military Council of the Tribes”.
Iraqi Prime Minister Nuri al-Maliki vowed Saturday that “we will not back down until we end all terrorist groups and save our people in Anbar”.
And the United States slammed ISIL’s “barbarism against civilians of Ramadi and Fallujah and against Iraqi security forces”.
On Friday alone, more than 100 people were killed in Ramadi and Fallujah, in Iraq’s deadliest single day in years.
Hundreds of gunmen, some bearing the black flags often flown by jihadists, had gathered at outdoor weekly Muslim prayers in central Fallujah, where one militant announced that “Fallujah is an Islamic state,” a witness said.
The city was the target of two major assaults after the 2003 US-led invasion, in which American forces saw some of their heaviest fighting since the Vietnam War.
American troops fought for years, aided by Sunni tribesmen in the Sahwa militia forces from late 2006, to wrest control of Anbar from militants.
The US forces suffered almost one-third of their total Iraq fatalities in Anbar, according to independent website icasualties.org.
But two years after US forces withdrew from the country, the power of militants in the province is again rising.
ISIL is the latest incarnation of an Al-Qaeda affiliate that lost ground from 2006, as Sunni tribesmen and former insurgents joined US troops against jihadists in a process that began in Anbar and came to be known as the “Awakening”.
But the group has made a striking comeback following the US withdrawal and the outbreak of Syria’s civil war in 2011.
Charles Lister, a visiting fellow at the Brookings Doha Center, said its “strength and territorial control and influence has been expanding in Anbar for some time,” although mainly in rural desert areas.
The Ramadi protest camp operation pushed Sunni tribes into conflict with the government, and ISIL “has ridden this wave of popular Sunni anger,” Lister said.
Prime Minister Maliki had long sought the closure of the protest camp, dubbing it a “headquarters for the leadership of Al-Qaeda”.
But its removal has caused a sharp decline in the security situation.
And while the closure has removed a physical sign of Sunni Arab grievances, the perceived injustices that underpinned the protest have not been addressed.
Violence in Iraq last year reached a level not seen since 2008, when it was just emerging from a brutal period of sectarian killings.
Sunni anger helped fuel the surge in unrest, boosting recruitment for militant groups and decreasing cooperation with security forces, while the civil war in Syria also played a role, experts say.
Drug trade could splinter Afghanistan into fragmented criminal state – UN
UN expert warns west of danger of not stepping up efforts to tackle opium production in Afghanistan after record $1bn harvest
Emma Graham-Harrison in Kabul
The Guardian, Monday 6 January 2014
Afghanistan's booming narcotics trade risks splintering the country into a "fragmented, criminal state" if the government and its western allies do not step up efforts to tackle opium production and the illicit economy it supports, a senior UN official warned.
Opium farming in Afghanistan, the world's main producer of the drug, hit a record high last year, with farmers harvesting a crop worth nearly $1bn (£610m) to them, and far more to the traffickers who take about four-fifths of the profit.
There are no miracle cures. A transformation of the corrupt economy could take up to two decades, and opium production is likely to climb beyond 2013's worrying levels before it falls again, said Jean-Luc Lemahieu, outgoing head of the UN office on drugs and crime in Afghanistan.
But he still sees cause for hope in the transformation of the narcotics police into a disciplined and relatively well respected force, an increase in treatment for Afghan addicts, and the government's recent crackdown on powerful officials linked to the drugs trade including the arrest of a top police officer.
"If no appropriate action is taken, then Afghanistan runs the risk of becoming a fragmented criminal state, ruled by an illicit economy," Lemahieu told the Guardian after five years grappling with Afghanistan's narcotics problem, as well as interlinked issues from government corruption to other criminal enterprises like illegal logging. "It is not too late, but we need to act decisively."
Feverish concerns about the future are helping keep prices high despite a glut. Negotiations over a deal to keep US forces here after 2014 have been stalled by tensions between Kabul and Washington, and no one knows who will be running the country after a presidential poll set for April, which the incumbent President Hamid Karzai is barred from contesting.
"At this moment there is more opium being produced in Afghanistan than is required for the outside market," Lemahieu said. "It is domestic speculation coping with uncertain times and compensating for declining international money flows within the country."
The cash is vital for all the officials and their supporters counting on the drugs for unorthodox campaign finance during presidential elections this year and parliamentary ones in 2015. When those are over, and there is more certainty about what Afghanistan might look like after foreign troops have left and Karzai has been replaced, prices may finally start to come down to levels justified by demand, he said.
But the trade will not end even with prices at half current levels, until the international community reverses years of neglect and marginalisation and treats counter-narcotics as a problem that runs across all development efforts.
"The security agenda and short-term ideas of success didn't go well with the ideas of counter-narcotics work," Lemaheiu said, pointing out that in some areas the military event blocked counter-narcotics efforts, worried that they could alienate local power brokers or drive farmers into the arms of insurgents. "For the international military, counter-narcotics went against their aim of winning hearts and minds," he added.
The drugs trade ties together the Taliban and many of the corrupt officials inside Afghanistan, whose bank accounts were swollen by the tide of western dollars poured into efforts to pacify and rebuild the country.
As foreign cash dries up on the back of the troop withdrawal, businessmen and the officials they paid off are looking for other sources of cash. The government recently arrested the police chief of western Nimroz province on suspicion of ties to the drug trade; a long and porous border with Iran makes the sparsely populated desert province one of the main smuggling routes out of the country.
The Taliban are also more reliant on poppies for financing than ever before, as conflict in the Middle East sucks away some of the donations from rich sympathisers that once poured into their coffers.
"Not all in the Taliban are happy about the drug business, but undeniably too many of them are involved. Not all connected to the government applaud the corruption and the drug business, but no doubt too many have their hands in the pot," Lemahieu said. "And the ones who are involved on both sides know each others' phone numbers, they find each other."
Despite opium's duel role fuelling the insurgency and a large portion of much-resented government corruption, poppy eradication still does not feature on a list of national priorities drawn up by Kabul. Major donors show little more interest; counter-narcotics is barely mentioned in a pact detailing aid priorities for the government and its backers over the next decade that was drawn up in Tokyo two years ago.
"We have to understand that doing nothing on the illicit economy will defeat the security and development agendas," Lemahieu said. "If the governance system would work properly, then external threats might be easier to cope with."
Change must involve slow work with communities that grow opium, offering them improvements in quality of life to compensate for the drop-off in income that is an inevitable result of ending drug production, said Lemahieu, who helped coordinate a successful reduction in opium cultivation in Burma before moving to Afghanistan.
No other crop can match the financial returns from poppies, but in a possible sign that development and curbing the trade are linked, far more children are in school in areas where there is no poppy than in farming communities that cultivate the drug.
"If you can work on other factors you can prepare a community to have less income but still a similar or better quality of life: access to agricultural services and markets, food security, other income within the extended family, clinics, schools, irrigation," Lemaheiu said.
However any change will be slow, not least because of the impact of ending opium cultivation on rural jobs. The crop employs five times as many people as wheat farming, in a country with hundreds of thousands of young people flooding out of school to look for jobs each year.
"We need to be persistent. Political courage is required and supporting those who want to make a change … understanding that real solutions are feasible," Lemahieu said.
"Yet if one moves too fast, in the belief that fast-track immediate solutions are within reach, one may end up doing more harm than good. One cannot pull the rug from under an employment market that already has to absorb up to half a million new entrants each year."
• This article was amended on 6 January to include updated quotes after an editing error
January 5, 2014
Low Turnout in Bangladesh Elections Amid Boycott and Violence
By ELLEN BARRY
DHAKA, Bangladesh — Amid a deepening conflict between Bangladesh’s two main political parties, the scene here in the capital as polls opened for the general elections on Sunday was ominous, with black-clad special forces units and soldiers in combat gear patrolling nearly empty boulevards.
Though final results had not been released by early Monday, official counts from Dhaka suggested that the turnout here averaged about 22 percent — a steep decline from the last general elections, when more than 87 percent voted.
At least 19 people were reported to have been killed in political violence, and 440 polling places were closed early because of security concerns. Bangladeshi television stations broadcast images of rural polling places charred by arson attacks, and of bodies wrapped in red blankets.
Sunday was the culmination of months of confrontation between the governing Awami League and the main opposition force, the Bangladesh National Party. The B.N.P. refused to participate in the elections after the government rejected its demand to put in place a nonpartisan caretaker government to oversee the voting, which had been customary in recent years and was seen as a protection against government manipulation.
As the largely uncontested elections drew closer, the opposition began a campaign to suppress turnout, hoping it would pressure the government to scrap the results and prepare for new elections under conditions that the B.N.P. would accept. Opposition leaders exulted as the polls closed on Sunday.
“I think this so-called election has been clearly and firmly rejected by the people,” Shamsher Mobin Chowdhury, the B.N.P.’s vice chairman, said in a telephone interview.
But it is far from clear that the Awami League is ready to compromise with its rival.
Bangladesh’s leader, Prime Minister Sheikh Hasina, has signaled her willingness to call early elections ahead of schedule, acknowledging that the new government would have a weak mandate. But in interviews, Awami League leaders laid out a formidable list of preconditions for the B.N.P., including renouncing violence; ending its alliance with Jamaat-e-Islami, the country’s largest Islamic political party; and dropping its demand for a caretaker government.
“You have to understand, a party like the Awami League cannot surrender to another political party on the basis of their demands,” said Tofail Ahmed, one of the Awami League’s leaders. “We will try our best to have negotiations with the opposition, so that in the future there is a participatory, credible election where all parties will participate. Both sides will have to sacrifice. I cannot give you a date. I cannot give you a time.”
The lack of competition produced a bizarre election, especially given Bangladesh’s tradition of boisterous democracy. Pro-government candidates ran unopposed in more than half of Parliament’s 300 seats; in those districts, local elections were not held, leaving 48 million registered voters without any opportunity to vote.
The teams of American and European observers who have been a regular presence in Bangladesh declined to monitor the process this year, saying the elections were flawed, leaving only delegations from India and Bhutan.
Starting in the morning, there was a sense of foreboding. Television stations led with the news of the fatal beating of an assistant poll supervisor in the northern district of Thakurgaon. Later in the day, the police in that district opened fire on opposition activists who were trying to prevent voters from reaching polling places, killing two of them. A fourth man was killed in a clash between activists, said Faisal Mahmud, the district’s assistant police superintendent.
The news made people jumpy. Ataur Rahman, a street vendor from Thakurgaon, said he had spent the morning calling his relatives and begging them not to vote, for their own safety.
Mohammad Ibrahim, a lawyer and B.N.P. activist, said he had spent a month going door to door in his apartment building trying to persuade residents to boycott the polls. The news coverage of the attacks on polling stations had greatly helped his efforts, he said.
“We are not threatening anyone, but definitely they are scared, because they are watching television all the time,” Mr. Ibrahim said. He added that the violence was “more or less on the shoulders of B.N.P.” because it had called on supporters to oppose the elections. “In one sense, this is wrong,” he said. “But in the other sense, this is right, because no one is listening to our voice. This is the only way to resist the elections.”
Months of violent protests have taken a toll on the economy and have injected fear into daily life. Most voters interviewed expressed frustration with both parties — formidable forces led by tough-minded women who detest each other, Mrs. Hasina and Khaleda Zia, who has served twice as prime minister.
“This is not a situation where you can blame one side,” said Mahfuza Jasmine, 40, a journalist, who added that worried relatives had dissuaded her from working on Sunday. “Our whole politics have come to this situation, because our politicians are driven by their own egos.”
For weeks, political analysts and foreign observers have held out hope that once the elections were over, the two parties would see no option other than to compromise. But the tolerance of each side for the other has been diminishing for years, and it is unclear whether it is possible to break the deadlock, even under intense pressure, said Zafar Sobhan, the editor of The Dhaka Tribune.
“In the past, there was some kind of compact between the Awami League and the B.N.P. — they didn’t like each other, but they could coexist,” Mr. Sobhan said, adding that this appeared to have changed.
“I don’t really see that there is much scope for them to find common ground,” he said. “There doesn’t seem to be any ground common enough.”
Julfikar Ali Manik contributed reporting from Dhaka.
January 5, 2014
Fog-Wreathed Paradise, Built by a Billionaire Under a Cloud
By EDWARD WONG
JIUZHAIGOU, China — Inside the hotel’s front entrance, a white mechanical yak nods and says “Moo.” Beyond it is the centerpiece of the compound: a vast glass atrium with a replica of a Tibetan and ethnic Qiang village filled with three-story stone and wood buildings, each housing a restaurant or bar. Corn husks sit atop the roofs.
For visitors, this is the first sight of paradise, or more precisely Jiuzhai Paradise. One of the biggest hotels in China when measured by number of rooms — 1,010 of them spread across seven buildings — it is part of a mountain resort nestled in a fog-wreathed forest in a Tibetan area of western China. What draws tourists is its proximity to the Jiuzhaigou Nature Reserve, the most famous park in the country, a wonderland laced with emerald lakes that is China’s equivalent of Yellowstone or Yosemite.
That this kind of hotel could be built on such pristine land is a testament to the political connections of its founder, Deng Hong, a billionaire and one of the most famous businessmen in Sichuan Province.
People with knowledge of business and politics in Sichuan said Mr. Deng was close to Li Chuncheng, the deputy party chief of Sichuan who is now being investigated by the Communist Party’s anti-corruption commission. Mr. Li was detained in December 2012, and the inquiry has been widened to other powerful figures in Sichuan.
On Nov. 8, Xinhua, the state news agency, posted on its website an article from Beijing News that said Mr. Deng had been formally arrested. Police officers in the city of Xianning, where Beijing News said Mr. Deng was being detained, declined to comment, as did representatives of Mr. Deng’s company.
Mr. Deng, 50, the son of an air force officer, made his fortune in the hotel and exhibition center business. He was listed by the 2013 Hurun Rich List as the 290th richest person in China, with a net worth of about $1 billion.
He has an ambitious list of projects, including the New Century Global Center, a mall and hotel complex in Chengdu that is the world’s largest building, but Jiuzhai Paradise is the one most dear to him. A painter and calligrapher, Mr. Deng designed the hotel and often stayed there with his family.
“I think the whole hotel represents his vision,” said Tyson Wang, the general manager, who works for InterContinental Hotels Group, a British company. It has been contracted to manage 13 properties developed by Mr. Deng’s company, including resorts in the Maldives and Micronesia and a 2,000-room hotel in Lhasa, Tibet.
Mr. Deng envisioned Jiuzhai Paradise as what the Chinese call a “lost city in the mountains,” Mr. Wang said. “From a distance, you see nothing. All of a sudden, there’s a giant five-star.”
But Mr. Deng has not been to the resort in about a year, Mr. Wang said, and the Beijing News article said his last public appearance was in Chengdu in February last year. The corruption investigation in Sichuan appears to run parallel with an even more delicate one that is scrutinizing former executives at state oil companies and the family of Zhou Yongkang, a former Sichuan party chief who retired in 2012 after years overseeing China’s state security apparatus and legal system while on the elite Politburo Standing Committee.
It is unclear exactly how Mr. Deng fits into that puzzle, though party investigators often use bribery confessions by businesspeople to build a case against officials. The company founded by Mr. Deng, Exhibition and Tourism Group, or ETG, based in Chengdu, declined to comment. Asked about Mr. Deng’s detention, Mr. Wang said, “We can’t talk about that.”
Mr. Wang is a polished, English-speaking hotel manager who understands the vagaries of the justice system — he was a police bodyguard in Harbin before being assigned in 1994 to a joint hotel venture between the police department there and Holiday Inn. Later, Holiday Inn hired him away.
Jiuzhai Paradise opened in 2003 under the management of ETG. In 2007, the company signed InterContinental as the manager, the first of their 13 ventures together.
Paradise is what the hotel aims to sell. It can arrange horseback rides with Tibetan nomads, rafting in Goddess Lake and tickets to a dance show that features 150 ethnic Tibetan and Qiang performers. Attendants in the lobby are mostly Han, the dominant ethnic group in China, dressed in traditional Tibetan robes.
Standard rooms at the hotel go for about $305 a night, excluding taxes. In 2012, the hotel had revenue of nearly $50 million, Mr. Wang said.
The design of the rooms is a cross between a Tibetan home and a British pub. The rooms sell out during national holidays.
“I’ve turned my phone off so officials can’t call asking for a room,” Mr. Wang said during a holiday weekend last fall. “We’re totally full.”
Hotel guests visit the nearby Jiuzhaigou or Huanglong nature reserves and sit in the replica Tibetan and Qiang village around boiling hot pots of food. At the door of the Sichuan restaurant, lamb turns on a spit. Next to the Tibetan restaurant in the rear courtyard rises an 11-story stone edifice resembling a traditional Qiang village tower.
Some guests indulge in Tianyu Spa, which is 11,960 square yards and includes both a swimming pool and an indoor hot spring.
One Tibetan man in the area said the hotel had helped the local economy, even if the Tibetan employees mostly held menial jobs. (Mr. Wang said 10 percent of the 1,350 employees were from the area.) The Tibetan man did complain, though, that the hotel was a “Hanification” of the area’s Tibetan culture.
One morning, a tourist from Jiangsu Province, Ma Minjun, 63, took photographs of the village as he and his wife walked through the central atrium. “I think this hotel is very beautiful; you don’t find others like this,” he said.
Mr. Deng began his entrepreneurial ventures selling clothes in Chengdu while practicing his art, Mr. Wang said. After living in the United States for a spell, he returned to China with enough capital to put together land development deals, a common route to vast fortunes in this country.
But that route also raises questions about corrupt relationships with local governments, because developers often rely on officials to grant them the land. Asked how Mr. Deng got this piece of forested land near the Jiuzhaigou nature reserve, Mr. Wang said: “I really don’t know. But I really think it was a good idea.”
Despite Mr. Deng’s disappearance, none of the joint ventures between Mr. Deng’s company and InterContinental appear to have halted. It was “business as usual,” Mr. Wang said.
The Lhasa project is the most contentious. On Nov. 5, advocates of Tibetan independence demonstrated at several InterContinental hotels around the world to protest it.
The Tibet advocates say that the project will strengthen the Communist Party’s grip on Tibet. Eleanor Byrne-Rosengren, the director of London-based Free Tibet, has said that InterContinental aims “to open a playground for the rich in the heart of a repressed nation.”
Mia Li and Ye Fanfei contributed research.
Japan hits back at China over Voldemort comparisons
Both sides have now likened each other to Harry Potter villain in diplomatic row played out in articles in British press
Justin McCurry in Seoul
theguardian.com, Monday 6 January 2014 09.40 GMT
A week after a Chinese envoy compared Japan to Lord Voldemort, Japan's ambassador to Britain has also invoked Harry Potter's arch-enemy to accuse Beijing of raising tensions amid disputes over territory and wartime history.
In an opinion piece in the Daily Telegraph, Keiichi Hayashi said China was attempting to use "coercion" to change the status quo in the Asia-Pacific region, and defended Japan's postwar commitment to peace, democracy and human rights.
"Our maritime forces never harass neighbours on the high seas and we have upheld in action the values inscribed in the UN charter," Hayashi wrote in reference to Beijing's vigorous territorial claims, adding that those values were "deeply ingrained" in Japan.
"East Asia is now at a crossroads," Hayashi said. "There are two paths open to China. One is to seek dialogue, and abide by the rule of law. The other is to play the role of Voldemort in the region by letting loose the evil of an arms race and escalation of tensions, although Japan will not escalate the situation from its side.
"The answer seems obvious. Although China has so far refused to enable dialogue between our leaders, I sincerely hope that it will come forward, rather than keep invoking the ghost of militarism of seven decades ago, which no longer exists."
Hayashi's broadside, made in response to a scathing op-ed in the same newspaper by his Chinese counterpart in London, Liu Xiaoming, was published as Japan's prime minister, Shinzo Abe, called for dialogue with the leaders of China and South Korea.
Abe angered Japan's neighbours last month with a visit to a controversial shrine that honours the country's war dead, including several former leaders convicted of war crimes.
To many Chinese and South Koreans, the Yasukuni shrine in Tokyo is a potent symbol of Japanese militarism; pilgrimages by politicians are seen as evidence that Japan has yet to atone for its wartime conduct on the Asian mainland.
While there is little prospect of summit talks, Abe said he wanted to explain the reasons behind his visit to the shrine to Chinese leader Xi Jinping and South Korean president Park Geun-hye.
"Seeking dialogue with China and South Korea is extremely important for the peace and security of this region," Abe told reporters on Monday. "I would like to explain my true intentions regarding my visit to Yasukuni. There aren't any direct approaches being made to set up such meetings at present, but the door for dialogue is always open. I would like to hold Japan-China and Japan-South Korea summit meetings.
"I am sure that I will be able to obtain the understanding of nearby nations about my administration's pursuit of peace if I explain it thoroughly."
Abe insisted that he did not visit Yasukuni to honour war criminals or to promote militarism, but to remember the 2.5 million Japanese war dead and to reaffirm his determination that Japan should never again go to war.
His explanation did nothing to calm tempers in Beijing, whose envoy to London accused Abe of "raising the spectre of militarism" and putting the world on a "perilous path".
Liu wrote: "If militarism is like the haunting Voldemort of Japan, the Yasukuni shrine in Tokyo is a kind of horcrux, representing the darkest parts of that nation's soul."
In response to Beijing's criticism of Abe's plans to increase defence spending over the next five years, Hayashi wrote: "It is ironic that a country that has increased its own military spending by more than 10% a year for the past 20 years should call a neighbour militarist."
He drew attention to growing unease over China's territorial ambitions in the region, including its claims over the Senkaku islands – known in China as the Diaoyu – which are administered by Japan.
"[China's] attempt to change the status quo by force or coercion has raised concerns not only in Japan, but also among its neighbours throughout the East China Sea and the South China Sea," he said.
Worsening ties between China and Japan, the world's second and third-biggest economies, are causing concern in the US.
At the weekend, the US secretary of defence, Chuck Hagel, urged Abe to reach out to China in the wake of his Yasukuni visit, which Washington had described as "disappointing".
"Secretary Hagel underscored the importance of Japan taking steps to improve relations with its neighbours," the defence department said in a statement.
Australia’s new government: False start
Not long after voting in Tony Abbott’s team, Australians are having second thoughts
Jan 4th 2014 | SYDNEY |
AS POLITICAL honeymoons go Tony Abbott’s has proved elusive, even invisible. Mr Abbott (pictured above) became Australia’s prime minister almost four months ago, when he led the conservative Liberal-National coalition to a comfortable victory over an unpopular Labor government. By the end of the year, however, the unpopularity had shifted to the new government. No prime minister in memory has fallen so quickly from voters’ grace.
Surveys conducted in November and December by Australia’s two main pollsters, Nielsen and Newspoll, both showed Labor ahead of the coalition by 52 points to 48. The coalition won 53.5% of the vote at the election last September against Labor’s 46.5%, after distribution of second preference votes. John Stirton, of Nielsen, says that in 40 years of polling, his firm has never seen a swing of such magnitude against a new administration. Governments have usually basked in polling honeymoons of up to two years. This time, the post-election swing is against it.
Besides bad polls, problems now loom over the government’s handling of the economy. On December 17th a Treasury update on the fiscal year from July 2013 painted a chilling picture. The budget deficit had more than doubled from its original projection last May to A$47 billion ($42 billion). Growth had slowed, and unemployment was forecast to rise slightly, to 6%. Falling revenue and the legacy of stimulus spending under Labor played some part in what the Treasury called the “deterioration”. The Treasury also cited the new government’s promised grant of almost A$9 billion to the central bank to help it manage future crises, and some of its policies such as the projected repeal of a carbon tax. Mr Abbott has retreated from his promise a year ago of a surplus in each of his government’s first three years.
Even before this sober reality, the government was looking clumsy. Mr Abbott’s apparent insouciance over revelations in November that Australia had spied on Indonesia’s leaders made that furore worse. The government in Jakarta then withdrew co-operation over dealing with people-smugglers who were sending asylum-seekers in boats to Australia. This imperils another of Mr Abbott’s election promises, to “stop the boats”.
Damage from arrogant performances by two of Mr Abbott’s senior ministers has also been self-inflicted. Once, the immigration department revealed numbers and nationalities of asylum-seekers arriving by boat. Scott Morrison, the new government’s immigration minister, banned such disclosures. Instead, flanked by an army commander to highlight the government’s military-led operation against boat people, Mr Morrison holds weekly briefings, where he reveals only what he chooses. In a statement on December 27th to mark the “first 100 days of Operation Sovereign Borders”, Mr Morrison declared: “The boats have not yet stopped, but they are stopping.” The press lampooned him.
In November Christopher Pyne, the education minister, reneged on the coalition’s promise to implement the former Labor government’s education-finance reforms. They stemmed from a report two years ago by David Gonski, a leading business figure, who called on Canberra and the states to spend an extra A$5 billion a year, especially to raise public-school standards, where Australia has slipped lower in world league tables. The Abbott government underestimated the public backlash to its ditching of this popular measure; it was forced to reinstate it. Mr Abbott even tried to explain his original promise as one “that some people thought that we made”.
Collectively, the government’s performance has fed voters’ long-standing doubts about Mr Abbott. The doubts have surfaced in the conservative Liberal Party, which Mr Abbott leads. John Fahey, a finance minister in the former coalition government, under John Howard, says Mr Abbott was not “known for his judgment” then, and has not taken his “best team into government” now.
As opposition leader, Mr Abbott played tough against a divided Labor government, but offered few sturdy policies. Mr Stirton reckons Australians changed government in September mainly to be rid of Labor. Mr Abbott, he says, is “the least popular opposition leader ever to be elected to the prime ministership”.
Mr Abbott has plenty of time to hone his judgments; the next election is due in 2016. In a report to Australians on his government’s first 100 days, he said it was “purposefully, carefully and methodically” building its “policy foundations”. So far, at least, voters seem uncertain about both the policies and their foundations.