I am back from my travels and even enjoying the rain and the overgrown gardens because it is so good to be home and to catch up with myself.
Tunisia and Egypt
I visited Tunisia again with Cities Alliance to look at the issue of slums and local government.Unfortunately, again I did not get to visit the interior of the country where the revolution began and where there is more poverty. Like most dictatorships Tunisia is very centralised and building local government with real authority and funding will be a struggle. But I met the Prime Minister who announced that Tunisia will join the EITI.
I also met ATTEM, an association of people dedicated to transparency in extractive industries. They were an impressive bunch of professionals, proud of the revolution and wanting reform, particularly to deal with corruption in the oil sector. I liked the Prime Minister but was very conscious after long years in prison, he now has the urgent need for reform coming at him from all directions. People are beginning to be disappointed because the hopes of the revolution take time to deliver. I was told the Gulf states are funding salafists who are demonstrating and complaining in an effort to turn the revolution in a conservative direction, in the name of religion. It is notable that the countries of these backward views – Saudi Arabia and the Gulf – are all the great allies of the west.
Full-blooded counter-revolution is at work in Egypt. I still have not heard any explanation of why the properly elected parliament was dissolved. The army is of course well entrenched in the economy and getting big financial benefits from the old order, and therefore doesn’t want change. The Muslim brotherhood made the mistake of trying to use its majority to take all power to itself, unlike Ennahda in Tunisia, and therefore weakened the progressive alliance. Let us hope the new President has learned this lesson. Today he has reinstated the parliament, which is good. But let us remember, all the great revolutions of the past have been challenged by counter revolution, and that is now at work.
Peru and Colombia
We had an EITI Board meeting in Peru and an impressive conference on managing extractive industries in South America and the Caribbean. The continent has been exploited for its rich mineral wealth, ever since the Europeans first arrived and there is a long entrenched pattern of failing to use the wealth for the benefit of all the people leading to the the turbulent and painful history of the continent. Now there is a new phase of mining and oil exploitation with the boom in commodity prices. The question is whether the spread of democracy can lead to fairer distribution of income and wealth. We hope EITI and more transparency can help. I am reading Rent to Riches which is a World Bank publication from a series of authors (but available on Kindle). It outlines the reforms that might help lead to better management of extractives and is helpful background for the EITI reform effort.
Whilst in Bogota, I visited the impressive Museum of Gold which provides a rich account of beautiful creativity with gold before the conquistadors. I also discovered Fernando Botero and loved some of his pictures. His Mona Lisa is here. The violence of the FARC and the paramilitaries, who were both tangled up in drug dealing, is now much diminished – one of the minor consequences is dogs everywhere, sniffing your bags outside hotels and restaurants. But 6million people were displaced and now live in slums. It is hard not to conclude that if the wealth of mining is not better shared, there will be renewed trouble in the future, but it will come through the city rather than the countryside.
During my Cities Alliance visit to Uganda, we met with mayors and people from cities outside Kampala, where slum dwellers are organising, pressing for land from the local authorities, and building their own shower and toilet blocks. Uganda is still a predominantly rural country, urbanising very fast with 60% of the people living in informal settlements. Like South America, Africa is becoming viciously unequal; the elite live very well and pay little tax. Again, it is hard to believe trouble will not come from the towns and cities with, lots of unemployed, educated and informed young people, living close up to great privilege. The effects of the new oil are yet to be seen ( I saw a pot of it, so waxy it has no viscosity, and therefore pipes have to be warmed to move it along).
The Leveson enquiry has gone out of the news. I was pressed by some people to give evidence on the Sun and News of the World attacks on me but I thought they had been well enough aired. The one thing I did want to say and I hope Leveson understands is that the invasion of privacy of some politicians and the endless socialising with others, isn’t accidental, there is a political message – stay in line with News International values or you will be done over. The reason Blair, Cameron and Clegg were and are so useless at facing up to long term challenges is that they see politics as an ability to handle the media which up until now has meant pleasing the Murdoch empire.
Barclays and Libor
Another week another bank scandal. It is bigger than the individuals concerned, it is part of a crises of this stage of capitalism; finance capital makes money out of moving money around rather than investing in anything real, and is imploding on itself. But much of the money concerned is our pension and insurance money so the consequences affect everyone. I am afraid the troubles will continue for some time but I look forward to the change in political mood.
- Survey for Business Council in US: 70 CEOs were asked which global institutions they thought most competent and credible in the face of the current situation. They thought multinational corporations the best at handling the current crises (90% think MNCs have been moderately,very or most effective in handling the challenges created by the economic crises); next best central banks (80% moderately,very or most effective); and next the Chinese communist party leadership (64% approval). This was well ahead of the ranking of the US President (33%) or Congress ( 5%)! (Gillian Tett in the FT, May 19/20)
- In 2010 in the US more than one third of economic growth went to 15,600 super-rich households i.e. top tenth of 1%. 93% went to richest 1%. No one below thetop 10% saw any gains at all. (Robert Reich, FT 1/4)
- In Saudi Arabia the cost of lifting a barrel of oil worth $90 is $2.
- According to the OECD, after the US, the UK ties with Canada for the easiest hire-and-fire rules. ( Brian Groom, FT 28/05/12)
- In 1990 California spent twice as much on its universities as prisons. Now almost twice as much on its prisons. ( Martin Wolfe quoting Edward Luce book on US, FT 21/6)
- The Anglo- Iranian Oil Company grossed profits of $3billion between 1913 and 1951, but only $624 remained in Iran. In 1947 alone UK got £15 million in tax on the company’s profits, while Iranian got half that in royalties. (Pankaj Mishra, LRB 21/6/12)