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Monday, 13 August 2012

Buenos Aires: A City Abandoned by its President

In a recent article featuring the 75 most vibrant cities of the future, Foreign Policy decided to include the capital of Argentina, Buenos Aires, to their list. The famous politics and economics magazine describes the Argentine capital like this:

With 13 million residents, Buenos Aires is Latin America's second-most densely populated city (after Santiago, Chile) and accounts for about 30 percent of Argentina's population and 50 percent of its GDP, according to the McKinsey Global Institute. The cosmopolitan capital boasts a high per capita income (about $21,000) and widespread health care, covering 90 percent of the population, and the Port of Buenos Aires, on the Río de la Plata, is a major South American trade hub, moving hundreds of thousands of tons of cargo each month.

Buenos Aires, 9 de Julio Avenue

What Foreign Policy failed to communicate is that for Buenos Aires to be one of the 75 cities of the future, its long conflict with the national government must be put to an end. For in Argentina, the City of Buenos Aires has a unique relationship with the national government- it is its own political unit, but it does not have quite the same status as the Argentine Provinces. Its main bulk of the police force, for instance, is paid from outside the city. The subway system is (or was, as you shall see further on) subsidised by the national government. The city's unique status, therefore, is below that of a province.

If Cristina Fernandez, President of Argentina, took the figures above seriously, you would think investing in the wellbeing of the capital would be in the national - as well as her own political-personal- interest. But, because the current Mayor of Buenos Aires, Mauricio Macri, is a political opponent and potential candidate to take her place in the future, she is abusing the relationship between the nation and the city in order to break him, with the ordinary citizens suffering as a consequence.

The latest row has also been the most severe: the disagreements over the handover of the subway administration to the city have collapsed transport and forced the city to call all available school buses for replacements. Union workers announced a strike and are blocking the service, using the opportunity to demand better salaries. And the City simply cannot afford that. However, with a subway system used to carrying around 2 million people a day, the school bus reserve fleet is like a band aid on a severed limb. And meanwhile, the national government is enjoying watching the city bleed.

It all started with calls by Macri to hand over the administration subway from the nation to the city. Fernandez acceded, but also handed over the bills. The nation ratified the handover, but the City’s government didn’t. Suddenly, it was unclear who would be in charge of the subway. While Macri is ready to talk, Cristina has closed the doors for further negotiation. In other words, her caprice is now costing people time, money, and political patience.

Macri and Fernandez

What Fernandez does not realize is that, even though she challenged the monopoly of Argentine media, most of the media market is still dominated by groups critical of her administration. Cristina’s muscles might be stronger and bigger than Macri’s, but with the proper PR campaign and support from the media, the subway row has the potential to make him more popular with more people. Most importantly, Cristina must realize she is being made almost directly responsible for the breakdown in transit, something that will reflect negatively on her own public image. Surely it cannot end right. By complicating matters further in the capital, where she is already unpopular, it almost seems as if she proactively strives for a polarised country.

The only conclusion that can be reached is that Fernandez has given up on Buenos Aires. She does not care how important the City can be in economic terms. She has enough political power to control it, and, since she knows she cannot be popular there, she at least she tries to break down Macri, who could challenge her in the next Presidential elections. The victims are, once again, the ordinary citizens.

But it is only continuation in terms of Argentine political history: an executive so strong, that it is tempted to polarize its population.

The Foreign Policy article on the 75 cities of the future can be found here:

Note: While FP speaks about 13 million people, this entry deals mainly with the political unit of Buenos Aires City, which has roughly 3.5 million inhabitants, but represents the core of the greater metropolitan area, where millions of people in the outskirts go every day for work and public services.

Update 14/8/2012: The union of workers of the metro service have agreed to accept the current offer of a 23% increase in salaries. The halt to the service lasted for 10 days, during which the President proceeded with a hands-off approach.

What would have happened if the NY subway or the London  underground was interrupted for that period of time?

Update 2: Sources suggest the conflict has been resolved following a call from the Presidential Palace to end the strike. It seems a certain important figure from there had much to do with the strike.

Friday, 10 August 2012

Immediate signs of a change in international configuration and thoughts: China rising

Management, population, and China rising: and the rest of the world?

These Olympic Games are once again revealing a tough competition between the US and China for gold medals. In the last games in Beijing, China came first. The money China spends in training Olympians is a mirror image of the economic and international situation they find themselves in: close or at the same level of the US, in a similar position to that of the USSR during the Cold War, but with a much more promising economic future.

It is widely commented and, simply known, that China is catching up, and fast. What must be added to the equation now is the stagnation and confusion found elsewhere in the world. While the US struggles to recover the dynamism of the economy, Europe is in a much tougher situation. Unemployment and austerity are attacking the idea of the European Union, and the rewards of this strategy are far from sight.

While China has found a way to cope with its demographic imbalance through sound management, the West has began to doubt its own methods while the demographic trend there reveals the unsustainability of its built welfare.

The West must analyze its faults and weaknesses, and learn from what the Chinese are doing right.

UK and Europe

The United Kingdom, despite the boost of the Olympics, has registered no growth, continuing its path of uncertainty since the crisis erupted five years ago. However, Europeans from the periphery continue to move there, as well as Germany and the Netherlands, as work is much more widespread. Walking through the streets of London, and even medium sized cities such as Bristol and Birmingham, hearing Spanish, Greek, Italian and French is almost impossible to avoid. Inequality, which studies keep warning us about on a global scale, is actually also growing in Europe itself, dividing it into two camps- core and periphery.

The biggest challenge will be to repair the political situation, that is, to regain trust and confidence in the European Union and mainstream politics. It is perceived the European Union has affected democracy adversely, forcing democratic leaders out of power in Italy and Greece, and instating EU-backed technocrats. Furthermore, there is the impression that the EU has gone beyond its legal power, especially in regard to the role of the European Central Bank.

For the first time, the trust of the citizens has been breached in a way that can challenge the momentum of the EU (since the Treaty of Paris, what has become the EU has never receded). Even in those countries which benefitted most from the single currency, like Germany, the voices of the people call for an end to bailouts and further economic solidarity with the weaker Eurozone members. In the periphery, many argue that competitiveness is almost impossible to achieve without a devaluation that would cost Eurozone membership.

For now, it is too risky to imagine a future without the EU or the Eurozone. Any country exiting the Eurozone could have catastrophic implications for the economy, although the scale of this damage cannot be forecasted.

An economic recovery will slowly repair the damage, and with the backing of top national leaders, the EU will continue to move forwards. This is the most likely scenario. But the EU can’t allow any other catastrophe disfigure over 50 years of work on European integration.

The US

On the other side of the Atlantic, the US is coming to the end of the first Obama term. The lack of competition in the elections (Romney has been criticised for lacking charisma) almost assures him a second term. Beyond the improvement Obama brought in the fields of charisma, protocol and image, little has been achieved. Many see Obama as a continuation of Bush in terms of war, the economy, and with regard to the Patriot Act and civil liberties. Obama’s first move was to give the bigger banks a bailout following Bernanke’s thesis of “too big to fail”. One his most prominent promises was that he would close Guantanamo. This has not been done.

On the contrary, the US is making pressure to extradite Julian Assange and try him in on US soil for revealing state secrets. It remains to be seen whether Obama has reserved his more genuine policies for the second term. Steve Jobs met with Obama and was infuriated at the President's conformism and the reasons he presented for not being able to get things done. According to one political commentator, if Obama worked for Jobs, he would likely be fired.

Fundamentally, not much has changed in the US since Wall Street became the epicentre of a new global trauma, which has especially affected the West for the last five years. The US has made sure the bailout would keep the same system going on, although it is now crippled and has left much of a chaos. More specifically, Obama has been linked with Goldman Sachs and other big names of the financial sector, and experts calculate that bankers have become untouchable, for upsetting them could shift money into the Republican Party, something that the current administration seems to wish avoid. Dynamics of an unethical economy which does not exist in China, which chooses to be unethical in other areas. While we do not want to learn about Chinese human rights ethics, Chinese management ethics could give the West a welcome boost.

South America

The rest of the world has realised the economic prescriptions from the US and Europe are not quite what they used to be. In Latin America, Brazil is emerging as a new economic giant and important international player. The Lula administration has promoted state intervention in the economy, including the financing of private companies and the expansion of the social welfare system. This model, challenging the neoliberal consensus created in the West, ultimately triumphed in South America, especially after the 2001 default and collapse of the Argentine economy. Since then, South America has been growing at staggering rates, albeit slower and in a less constant fashion than China.

Nevertheless, dubious political moves that put an interrogation mark on the quality of democracy have occurred in Honduras, and more recently, in Paraguay. In Venezuela, Chavez can be re-elected indefinitely, although he argues this is something that occurs in any parliamentary democracy (Venezuela has a presidential system). Economically, the model is also in doubt, and only Brazil has a large enough market and industry to give it a peace of mind for the future.

Argentina is one of the most interesting cases in world politics. After years of China-like growth the economy is finally feeling the effects of leading a protectionist policy towards the world. Inflation remains relatively high, and the government is keeping the population polarised by providing unreliable data and waging political war with some of the most important governors of the country’s provinces and the federal district.

Middle East and Africa

The situation is at its most worrying in the Middle East and Africa.

In the Middle East, Israel and Iran are fighting a Cold War, with Israel sabotaging Iran’s nuclear technologies and Iran sponsoring and promoting animosity with the Israelis. The unresolved issue of the Palestine people and their territory will be a source for eternal conflict between Israel and its neighbours, but the Israelis, supported by the US and much of the Western world, are too stubborn or fearful to make the first step towards a peaceful solution.

The Arab Spring, which brought down dictators and put more power in the hands of the people (in some cases) has had no great effects in the Middle Eastern equation, but the greater influence of Islam in politics could mean more trouble for Israel. It is yet to see how the uprising affects democracy. What is clear is that the power of the West to influence (and perhaps, manipulate) the region is fading.

In Syria, civil war has been the bloodiest, and, together with Afghanistan and Iraq, is in the eyesight of the distant West. Despite rhetoric of the contrary these events have great repercussions for the industrial military machine of the West, and it is no coincidence Obama turned back on his initial conviction to pull US troops out of Iraq. The broken promises made by Obama earlier also have much to say about the nature of democratic regimes and the way politicians communicate with citizens

In China, such promises are not necessary, but will also have no repercussions. The question would be: until when will Chinese citizens accept a kind of management that is geared towards growth without development in more human areas.

Africa is lagging behind extremely, faces bad management and corruption, the legacy of colonialism, and now has the added risk of being exploited from all sides.  China, India and Brazil are hopping on to the industry of mass raw material extraction from Africa, with China being able to challenge the US in terms of investment figures. Whether this is a blessing or a curse for Africa will depend on the skills of future African businessmen and leaders and political bargaining.

Conclusion: Demographics and management

In a world where guns are produced but rarely fired, the economy rules. And demographics play a huge role. China and India, with its massive populations, are in a position of advantage to set the rules of the world of tomorrow. Population size can have a great impact on your internal market and the quality and quantity of production that you can have. China, although a military might, does not have strategic bases or the technological capability of the US. However, given the current state of the US economy, and its 

The key variable is management. While China rises, it must ensure it continues to promote efficient management (and this hopefully influencing for an improvement of the human rights scene), which is lacking, for instance in India, or which is slowly improving in Brazil.

On the other hand, the US is at a plateau and Europe is struggling to reach its former glory. Africa, although of sizeable population, has suffered appalling management and a historical legacy difficult to climb out of. Latin America is somewhere in the middle, with a few countries reaching high levels of human development but unable to produce constant economic growth.

So, at the end, the obvious question is:

If China is doing things right, how can we learn from it and use it to promote growth and development, without copying their worst attributes and fixing our own faults at the same time?

Tuesday, 29 May 2012

Global governance and global democracy against disaster

The world’s leading journal of scientific research Science, as it describes itself, recently published an article stating that Earth has reached an inflection point. Earth must make global governance more effective in order to avoid potential catastrophes.

While the idea that irreversible things such as climate change, loss of biodiversity, and so on are not new, the idea that humans must fundamentally and radically redesign the way our “global governance” works is more of a novelty. Until now, we have been tempted to create solutions with a system of global governance which is dominated by nation-states with the backing of powerful transnational corporations. Although societal forces have been playing an increasingly important role, expanding the welfare of different races, gender and socio-economic backgrounds, they remain on third place.

We have believed that in this current setup heads of states and businesses could become guided by a moral compass and do what is right. Corporate social responsibility and democratic accountability would force them to do so. However, the expectations were too high, and the results fail to satisfy the populations.

Different NGOs and projects have sprung up to protest against the power of business and elite politicians. Social movements such as the Occupy Movement spread in the Western World, while in South America the disaster of neoliberalism created an unprecedented change from below bringing in a new class of politicians who challenge the established Western idea of politics.

The issue of carbon emissions reductions is the most telling. It is the most global problem, the one that requires the most collective efforts, and the one that could prove most lethal very soon. Numerous studies since the mid-20th century have pointed out that human activity is mainly responsible for the perceived changes in climate patterns- we are ruining the environment, our planet, for future generations (our kids).

In 1997, the Kyoto Protocol to fight global warming was adopted. It was to start in 2005. But the United States and Canada, two of the highest emitters of CO2, have failed to ratify the protocol. Developing countries were exempted from the treaty- including China, India, Brazil, and in fact- countries with 80% of the world. Canada, because it feared the economic sanctions of failing to keep its targets (by 2009 its emissions were almost 20% higher than those of 1990) withdrew from the Kyoto Protocol in 2011.

Global figures have not been more encouraging: from 1999 to 2008, global CO2 emissions have increased almost 25% per person, while the world’s population increased from 6 to 7 billion people. This means that CO2 emissions increased by about 50% during that decade alone. Future estimates are even scarier.

At a side event of the Earth System Governance conference in Lund, Sweden, experts debated the issue of a global parliament. It seems that we require new forms of voicing our concerns. National leaders are more concerned with enhancing their own power by creating power. But that solves nothing. What we really need is to find the strength to combat global problems such as climate change. Not only is climate change a truly global issue in that it affects all of us, but it is also a natural phenomenon which requires both intellectual and physical effort.

Theoretically, we could end war by forcing ourselves not to wage it anymore. In the case of climate change, we need more than that. We need to be proactive to prevent it, waging a real war against carbon emissions, the oil industry and many others. We need to make incredible effort to replace dirty energy with clean energy as we cannot simply shut down entire economies based on fossil fuels. Change that radical is simply unfeasible: it would bring about anarchy, chaos, and, very likely, violence and death.

In "Navigating theAnthropocene: Improving Earth System Governance", Biermann, from the VU University in Amsterdam, and many other scholars, contend that, out of climatic reasons alone, we need to dramatically reform the international- no, excuse me- Earth system governance, reshaping it in a more equal and sustainable way. In essence, giving power to global governance to manage global challenges more effectively, the most serious of which is the possibility of widespread natural disaster which could affect the livelihood of millions, if not billions.

Biermann has attempted to connect climate change and global politics in a radical way. While he is not the first to make the link between climate change and the need for more democracy and equality as a fundamental prerequisite to achieve effective global governance that can tackle these serious issues. At the core of his call are seven building blocks:  (1) reform of environmental agencies, (2) strengthening sustainable development in the agenda of international institutions, (3) increased international transparency and deregulation of the technologies sector, (4) stronger emphasis on environmental issues in global trade and finance regimes, (5) a stronger reliance on qualified majority voting (to speed up international lawmaking), (6) increased accountability for international institutions through access to information and decision making (enabling citizens to raise their concerns), and, finally, (7) giving equity and fairness a greater role in the most important global institutions.

In doing so, he joins the call by numerous organisations, notably the Campaign for a United Nations Parliamentary Assembly (UNPA), environmental NGOs such as Greenpeace and others and social movements such as the Occupy Movement for more democracy, more problem-solving, and less greed and profit-seeking.

Certainly desirable, the question remains how to turn this vision into a feasible reality, in which the established governors of the global arena allow the necessary reforms. For now, economic science is trumping biology, preventing us from seeking the solution to a possible disaster, which does not lie that far away anymore. The ample scientific evidence is not being equally met by a political impulse. The more we wait, the more radical this change will have to come about, and, if nothing is done, change will come in the most radical of ways.

Friday, 23 March 2012

What is going on with Germany?


Germany used to be the driving force of the EU. If the French needed legitimacy from someone strong backing it, voilà! Germany was there, and its economic strength helped convince other Member States too.

But now Germany seems to have lost its sense of leadership. It has become selfish. Or it always was? Two events have recently almost transformed the EU from a union into a disunion, and Germany has been sought for guidance, unsuccessfully: the euro-crisis and the Arab Spring.

The sovereign debt crisis

The global financial crisis led to acceleration in fiscal spending and an unsustainable increase in debt levels. Apart from Greece, all other countries directly affected by the sovereign debt crisis- Portugal, Ireland, Italy and Spain- were not acting in an irresponsible manner. But what did unite all those countries was trade deficit.

Now, the trade deficit of these countries, which we may call PIIGS (no pun intended) was an outcome of integration under the Single Market; Germany, on the other hand, was registering enormous trade surpluses. In other words, the German economy was much more competitive than that of the PIIGS (and other Eurozone and EU members for that matter). For that reason, Germany was able to reap extensive benefits at the expense of the economies of the PIIGS.

However, Merkel has failed to recognize this, instead preaching what nobody, especially European citizens, want to hear: fiscal austerity. The German people would never tolerate to redistribute their money across states that have not been on point with their finances.

The worst part of this is Merkel’s proposed solution: a mechanism to ensure compliance of fiscal austerity prescriptions, which may threaten democracy. EU pressure for these countries to abandon their national economic policy and adopt the European (aka German) prescription has resulted in the replacement of Papandreou and Berlusconi in exchange for EU backed technocrats. The people, naturally, did not have any choice in the matter.

This effectively transformed the debt crisis into a political crisis. A political crisis exacerbated by the lack of solidarity and leadership demonstrated by Germany. The impression in the normal world is that the crisis has been prolonged by the actions of Merkel (although it is claimed by the IMF and EU that the Greeks have been slow at implementing reform) and other reluctant (and rich) EU countries.

The Arab Spring: intervention in Libya

The same can be said for Germany’s role in the non-intervention of the EU in Libya. Germany decisively abstained to vote in UN Resolution 1973. It completely demobilized the EU framework for an intervention in Libya. As opposed to Iraq in 2003, there was ample international consensus that intervention would result beneficial to the Libyan people.

The German government claimed Libya must resolve its own internal situation without foreign military interference. Guido Westerwelle, Germany’s Foreign Minister, condemned Gaddafi´s regime and declared it illegitimate. Germany would participate in his removal by upping its economic sanctions.

But how did Westerwelle think the situation would resolve itself in the absence of foreign intervention? Without NATO intervention Libya might have as well ended where Syria is, in a civil conflict that has cost thousands of lives.

At least Westerwelle knew how to catch votes. The decision to abstain from UN Resolution 1973 might have been to save his own skin.

The Liberals (FDP) and the Greens, although too small to create a government of their own, have a substantial influence on the regime outcome after elections. The Greens tend to form coalition with the Social Democrats (SPD), the Liberals with the Christian Democrats (CDU). At the moment there is a CDU-FDP coalition.

The Liberals suffered from sinking popularity rates. In the 2009 Bundestag elections, the Liberals won more votes than the Greens or the Leftist party. However, as of 2011, the Liberal Party was less popular than both.  Even the “Pirate party”, founded in 2006 and irrelevant until last year, stands at 7%, 4 percentage points above the traditional FDP party. So with the UN resolution the Liberals were looking to use the opportunity to boost government image: 61% of Germans disagreed with German intervention in Libya. Domestic elections are due in March 27th, and the coalition government had already lost the influential state of Baden-Wurttemberg to the Greens (the first time they assume complete government over a state).

FDP at lowest. source: SPIEGEL online

Recent articles in the German media have been devoted to finding out how Germans perceive the EU. One highlights the position of the German people after the experience of the crisis.  Within Germany, 51% of the people think negatively about the monetary union (Die Zeit, 2012).

And according to “Bild am Sonntag”, 46% of Germans believe they would be better off outside of the EU.

At the same time, Guido Westerwelle has come out claiming the EU needs a Constitution and elected President.

Naturally, these incoherences pose several questions. Where is Germany going? Why are they such bad regional leaders suddenly?

On the one hand it seems Germany may have matured. It is steadily putting its own interests ahead of Europe.

On the other hand, by prolonging the Greek economic draught and and not supporting the end to Libyan suffering, it is abstaining from its habitual leadership status.