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The End of the BRICs

“The only function of economic forecasting is to make astrology look respectable,” said John Kenneth Galbraith, the wisest American economist of his generation. (“A paltry honour,” he would have murmured.) But you still can’t resist wondering when the Chinese economy will be bigger than the US economy – or the Brazilian bigger than the British, or the Turkish bigger than the Italian – as if it were some kind of horse race.

The latest document to tackle these questions is “The World in 2050″, drawn up by HSBC bank, which ranks the world’s hundred biggest economies as they are now, and as (it thinks) they will be in 2050. It contains the usual little surprises, like a prediction that per capita incomes in the Philippines and Indonesia, now roughly the same, will diverge so fast that the average Filipino will have twice the income of the average Indonesian by 2050.

The Venezuelan economy will only triple in size, but Peru’s economy will grow eightfold. Per capita income will double-and-a-bit in Nigeria; in Ethiopia it will grow sixfold. Bangladesh powers past Pakistan, with a per capita income in 2050 that’s half again as big as Pakistan’s. (It’s only two-thirds of Pakistan’s at the moment.) And so on and so forth: local phenomena mostly of interest to local people.

But what’s happening at the top of the list is of interest to everybody. That’s where the great powers all live, with the BRICs nipping at their heels. Or rather, some of the BRICs are nipping at their heels, and some are not. That’s the big news.

We owe the concept of the BRICs to Jim O’Neill, who came up with it almost fifteen years ago when he was head of economics at Goldman Sachs. He was the first to realise that some big, poor countries were growing so fast economically that they would overtake the established great powers in a matter of decades.

The really impressive performers were Brazil, Russia, India and China, so he just called them the BRICs – and pointed out that at current growth rates the Chinese economy would be bigger than that of the United States by the 2040s. We’re quite familiar with that kind of prediction today, but at the time it was shocking (especially to Americans), and the term BRIC has become firmly entrenched in the language. Just in time for HSBC to spoil it.

By now the BRICs are formally the BRICS (with a capital S added for South Africa), . But the South African economy is only in the group out of courtesy, because you couldn’t leave Africa out altogether. It’s much smaller than any of the others and growing very slowly, so you can safely leave it out of the calculations altogether.

China is performing roughly as expected, and by 2050 its economy will be around 10 percent bigger than that of the United States. (Per capita income, of course, is a different matter, and even then China’s will be only a third of America’s.) India will come next, but with an economy only one-third as big as China or the United States
But the other BRICs practically vanish from view. Brazil hasn’t even overtaken Britain by 2050, despite having three times as many people. And Russia’s performance is downright embarrassing: its economy barely doubles in the next 35 years, and it ends up smaller than Spain’s. So six of the top ten countries in the 2050 list are already there today, and the world isn’t going to look so dramatically different at all.

Now, predictions like this are open to all sorts of criticism. China’s growth rate has consistently been two or three percentage points higher than India’s for several decades. Project that to 2050, and China ends up far ahead of India. But China’s growth rate is falling, and India’s may even overtake it this year.

India will almost certainly grow faster in the long run, because it has a young, rapidly growing labour force and China does not. There’s enough time for that to change the pecking order radically by 2050.

The recent performance of the economy obviously affects the long-range forecast more than it should, so Russia drops down the list and Mexico goes soaring up. Five years ago it would have been the other way around, and yet there’s no reason to believe that the fundamental strengths of either economy have changed.

And then there are the “Black Swans”, events like the Sarajevo assassination that tumbled the world into the First World War and invalidated all existing assumptions about the economic future. Not to mention the disasters that you know are coming, like catastrophic climate change – but leave out of your calculations anyway, because you don’t know how to quantify them and don’t know when they will arrive even to the nearest decade.

All that said, some sketchy notion of what the future may bring is better than no idea whatever. And the basic idea behind the BRICs is still sound: the centre of gravity of the world economy is moving south and east.
To shorten to 725 words, omit paragraphs 3, 7 and 12. (“The Venezuelan…people”; “By now….altogether”, and “The recent…changed”)

“Global” Terrorism

“We will not be cowed by these sick terrorists,” said British Prime Minister David Cameron after ISIS produced a grisly video of the mass beheading of Syrian captives by foreign jihadis who allegedly included British fighters. “We will not be intimidated,” said Canadian Prime Minister Stephen Harper after the recent attacks in Montreal and Ottawa. As if the purpose of terrorist attacks in Western countries was to cow and intimidate them.

You hear this sort of rhetoric from Western leaders all the time, but Harper went further, and demonstrated exactly how they get it wrong. “(This) will lead us to…redouble our efforts to work with our allies around the world and fight against the terrorist organisations who brutalise those in other countries with the hope of bringing their savagery to our shores. They will have no safe haven.” Sound familiar?

Sure enough, there are now half a dozen Canadian planes bombing ISIS jihadis in Iraq (although it’s unlikely that either of the Canadian attackers, both converts to radical Islam, had any contact with foreign terrorist organisations). But Harper has got the logic completely backwards.

The purpose of major terrorist activities directed at the West, from the 9/11 attacks to ISIS videos, is not to “cow” or “intimidate” Western countries. It is to get those countries to bomb Muslim countries or, better yet, invade them. The terrorists want to come to power in Muslim countries, not in Canada or Britain or the US. And the best way to establish your revolutionary credentials and recruit local supporters is to get the West to attack you.

That’s what Osama bin Laden wanted in 2001. (He hoped for an American invasion of Afghanistan, but he got an unexpected bonus in the US invasion of Iraq.) The ISIS videos of Western hostages being beheaded are intended to get Western countries involved in the fight against them, because that’s how you build local support. So far, the strategy is working just fine.

The “Global Terrorism Index”, published annually by the Institute for Economics and Peace, reported last week that fatalities due to terrorism have risen fivefold in the 13 years since the 9/11 attacks, despite the US-led “war on terror” that has spent $4.4 trillion on the wars in Iraq and Afghanistan and anti-terrorist operations elsewhere. But it’s not really “despite” those wars. It’s largely because of them.

The invasions, the drone strikes in Pakistan, Yemen and Africa, the whole lumbering apparatus of the “global war on terrorism” have not killed the terrorist beast. They have fed it, and the beast has grown very large. 3,361 people were killed by terrorism in 2000; 17,958 were killed by it last year.

At least 80 percent of these people were Muslims, and the vast majority of those who killed them were also Muslims: the terrorists of Islamic State (ISIS) in Iraq and Syria, Boko Haram in Nigeria, the Taliban in Afghanistan and Pakistan, and al-Qaeda and its offspring in other parts of the world (like al-Shebab in north-east Africa).

That is not to say that terrorism is a particularly Muslim technique. Its historical roots lie in European struggles against oppressive regimes in the late 19th and early 20th centuries, and it gained huge currency in liberation struggles against the European colonial empires after the Second World War. Even the Stern Gang in Israel and the Irish Republican Army can be seen as part of this wave.

Later waves of fashion in terrorism included the European, Latin American and Japanese “urban terrorist” movements of the 1970s and 80s – Baader-Meinhof Gang in Germany, Red Brigades in Italy, Montoneros in Argentina, Japanese Red Army and so on – none of which has any political success at all. Specifically “Islamic” terrorism really begins only in the 1990s, with the rise of radical, anachronistic forms of Sunni Islam.

Only about 5 percent of the victims of this latest wave of terrorism lived in developed countries, but it was their deaths, and their governments’ ignorant responses to them, that provided the fuel for the spectacular growth of jihadi extremism. So what can be done about it?

The Global Terrorism Index has some useful observations to offer about that, too. It points out that a great many terrorist organisations have actually gone out of business in the past 45 years. Only 10 percent of them actually won, took power, and disbanded their terrorist wings. And only 7 percent were eliminated by the direct application of military force.

EIGHTY percent of them were ended by a combination of better policing and the creation of a political process that addressed the grievances of those who supported the terrorism. You don’t fix the problem by fighting poverty or raising educational levels; that kind of thing has almost nothing to do with the rise of terrorism. You have to deal with the particular grievances that obsess specific ethnic, religious or political groups.

And above all, keep foreigners out of the process. Their interventions ALWAYS make matters worse. Which is why the terrorists love them so much.
To shorten to 725 words, omit paragraphs 9 and 10. (“That is…Islam”)

The Return of the Dictators

6 April 2014

The Return of the Dictators

“I prefer death to surrender,” said Pakistan’s former military dictator, Pervez Musharraf,  on 1 April to the special court that is trying him on five counts of high treason, but it’s a reasonable guess that he’d prefer exile to either of those options. The real puzzle is why he ever left his comfortable exile in England in the first place.

In theory Musharraf, who seized power in Pakistan in 1999 and finally gave it up under great pressure in 2007, could face the death penalty if he is found guilty, but in practice he is protected by the Important Persons Act, an unwritten law that operates in almost every country. High political office is a club, and the members look after one another.

Nevertheless, Musharraf is being greatly inconvenienced by the trial, and last week the Taliban nearly got him with a roadside bomb near Islamabad. Doubtless he missed Pakistan, but what bizarre calculation could have led him to go home and put himself in the hands of his many enemies?

Musharraf said he was coming home to run in the 2013 election, which was delusional in the extreme. There was little reason to believe that many Pakistanis would want to vote for him after living under his arbitrary rule for eight years. There was no reason at all to think that he would not be disqualified from running in the election and put on trial for grave crimes.

Yet Musharraf is not alone. Other ex-dictators, far nastier than him, have succumbed to the same delusion and gone home convinced that they would be welcomed back. Another recent case is Jean-Claude “Baby Doc” Duvalier, who took over as Haiti’s dictator at 19 when his father “Papa Doc” died in 1971 and ruled it until he was overthrown by a popular revolt in 1986.

Haiti was the poorest country in the Western Hemisphere when he took power, and still the poorest when he lost it, but he took an alleged $120 million with him into exile in France. His dreaded Tonton Macoute militia murdered thousands and drove hundreds of thousands into exile, and many of them were massacred in the revolution that ended his rule, but he lived on in Paris in great luxury.

Eventually Duvalier’s spendthrift ways and an expensive divorce got him into financial difficulties, but just going back to Haiti was not going to fix that. Yet he went home in 2011, after a quarter-century in exile. He said he was “just coming to help,” whatever that meant, but he arrived just as the recently elected president was facing charges of election-rigging, which led some to speculate that Duvalier still had political ambitions.

He was arrested and charged with embezzlement, human rights abuses, and crimes against humanity. Three years later the courts are still pursuing him on those charges, but in the meantime he is frequently seen lunching in the bistros of Petionville, and has even been welcomed at the same events as the current president, Michel Martelly. It’s safe to say that he will not die in jail.

And then there was Jean-Bedel Bokassa, president of the Central African Republic, later known as Emperor Bokassa I of the Central African Empire. He was a brutal soldier who had served in the French colonial army, and seized power from his country’s first president (a cousin) in 1966. For the next thirteen years he ruled the country with great violence and practically bankrupted it.

The mass murder of schoolchildren and rumours of cannibalism finally moved the French to intervene militarily and overthrow Bokassa in 1979 while he was travelling abroad. He was sentenced to death in absentia in 1980 for the murder of many political rivals – but he returned from exile in Paris in 1986, seemingly confident that he would be welcomed with open arms.

He was put on trial and sentenced to death again – in person, this time. But the following year his sentence was commuted to life in prison, and in 1993 he was set free. In 2010, President François Bozizé issued a decree rehabilitating Bokassa and calling him “a son of the nation recognised by all as a great builder.”

Two things are odd about this phenomenon of ex-dictators confidently returning to the scene of the crime. One, obviously, is their belief that they are still loved (as if they ever really were). But that is less strange than it seems, for during their time in power very few people dared to tell them anything else.

What’s much more curious is the fact that the countries they misruled eventually find it necessary to forgive them. They do this not so much out of sympathy for the man who committed the crimes, but rather out of a need for the nation’s history not to be merely a meaningless catalogue of blunders and misdeeds.

Musharraf may have come back a bit too early to benefit from instant forgiveness, for some of the people he hurt have not yet retired. But he will not face really serious jail time or the death penalty, because Pakistan’s army would not permit it. And he will be forgiven by Pakistan’s historians and myth-makers in the end, because somehow or other the history has to make sense.
To shorten to 725 words, omit paragraphs 9, 10 and 11. (“And then…builder”)

Israel: Nuclear Hypocrisy

12 February 2014

Israel: Nuclear Hypocrisy

When Mordechai Vanunu, a humble Israeli technician who worked for years at Israel’s secret nuclear site at Dimona, spilled the beans about Israel’s nuclear weapons in 1986, very bad things happened to him. He was lured from safety in England for an Italian holiday by a woman who was an Israeli secret agent, drugged and kidnapped from Italy by other Israeli agents, and imprisoned for eighteen years (eleven of them in solitary confinement).

When Avraham Burg, the former speaker of the Israeli parliament, said last month that that Israel has both nuclear and chemical weapons (you know, like the nuclear weapons that Iran must not have and the chemical weapons that Syria must give up), nothing bad happened to him at all. He is protected by the Important Persons Act, the unwritten law that gets powerful and well-connected people off the hook in every country.

They didn’t even go after Burg when he said that Israel’s long-standing policy of “non-disclosure (never confirm or deny that it has nukes) was “outdated and childish.” But even ten years after Vanunu finished serving his long jail sentence, he is not allowed to leave Israel, go near any foreign embassy, airport or border crossing, or speak to any journalist or foreigner.

Vanunu defies the Israeli authorities and speaks to whomever he pleases, of course. But he really can’t get out of the country, though he desperately wants to leave, and his decision to live like a free man gives his watchers the pretext to yank his chain by arresting him whenever they feel like it.

The Israeli government’s excuse for all this is that he may still know secrets he might reveal, but that is nonsense. Vanunu hasn’t seen Dimona or talked to anybody in the Israeli nuclear weapons business for 30 years. What drives his tormentors is sheer vindictiveness, and he may well go on being punished for his defiance until he dies – while Avraham Burg lives out his life undisturbed and offers occasional pearls of wisdom to the public.

So here are the “secrets” that Vanunu and Burg revealed, in rather more detail than Burg chose to give and in a more up-to-date form than Vanunu could give from personal knowledge.

Israel has a minimum of eighty and a maximum of four hundred nuclear weapons, those limits being based on calculations of the amount of fissile material that it has enriched to weapons grade. The best guess is that the total is around two hundred warheads, most of them two-stage thermonuclear devices (hydrogen bombs).

At least some dozens are “tactical” weapons designed to be fired by 175 mm and 203 mm artillery pieces at ranges of 40-70 km. The remainder are meant to be delivered by missiles or aircraft, and Israel maintains a full “triad” of delivery systems: land-based missiles, sea-launched missiles, and aircraft.

The missiles are mostly Jericho II medium-range ballistic missiles, which can reach all of Europe and most of western Asia. Since 2008 Jericho III intercontinental ballistic missiles (ICBMs) have also been entering service, with a range that would allow Israel to strike any inhabited point on the planet except some Pacific islands. Both can carry a one-megaton warhead.

Why such remarkably long ranges, when Israel’s avowed enemies are all relatively close to hand? One speculation is that this is meant to encourage caution in other nuclear states (Pakistan? North Korea?) that might at some future time be tempted to supply nuclear weapons to Israel’s near enemies.

The maritime leg of the triad is highly accurate cruise missiles that are launched from underwater by Israel’s German-built Dolphin-class submarines. These missiles constitute Israel’s “secure second-strike” capability, since it is extremely unlikely that even the most successful enemy surprise attack could locate and destroy the submarines. And finally, there are American-made F-15 and F-16 strike aircraft that can also carry nuclear bombs.

Israel probably tested its bomb in the southern Indian Ocean in 1979 in cooperation with apartheid South Africa, which was also developing nuclear weapons (subsequently dismantled) at that time. The test was carried out under cover of a storm to escape satellite surveillance, but a rift in the cloud cover revealed the characteristic double flash of a nuclear explosion to an American satellite, Vela 6911.

This was a violation of the 1963 Limited Test Ban Treaty, which forbids open-air nuclear tests, but the United States did not pursue the matter, presumably in order not to embarrass Israel.

The United States did not help Israel to develop nuclear weapons in the first place (France did that), and even now Washington does not really approve of Israel’s nukes, although it tolerates them in the interest of the broader alliance. But why, after all these years, does Israel still refuse to acknowledge that it has them?

The only plausible answer is: to avoid embarrassing the United States in ways that would make it restrict its arms exports to Israel. But realistically, how likely is that to happen? The US Congress will ensure that Israel goes on getting all the money and arms it wants no matter what it says about its nukes, and it is high time to end this ridiculous dance around the truth.
To shorten to 725 words, omit paragraphs 4, 12 and 13. (“Vanunu…it”; and “Israel…Israel”)