by Alex Evans | Mar 26, 2008 | Conflict and security, Middle East and North Africa
…you may have noticed that all is not well. The British troops in Basra (both of them) are needless to say staying out of the way. But as the Yorskhire Ranter reports,
- ISCI = SIIC = new name for SCIRI = Badr Corps = “aristocratic” Hakim family = exiles during Saddam Hussein’s reign = pro-Iran = generally in control of army and security forces = pro-U.S. = ally of Prime Minister Nouri al-Maliki and his Dawa Party.
- Mahdi Army = JAM = “firebrand cleric” Muqtada al-Sadr = Iraqi nationalists = originally part of Maliki’s governing coalition but no longer = anti-U.S. = populist/working class orientation = controls much of the oil sector in Basra.
- “Special groups” = rogue elements of the Mahdi Army = maybe Sadr is just as happy to have Maliki take these guys out for him, but who knows for sure?
- Fadhila = ex-allies of Sadr = won some elections in Basra in 2005 = smallest of the three Shiite factions in the south.
by Charlie Edwards | Mar 26, 2008 | Conflict and security, Cooperation and coherence, Economics and development
A new report by the Agency Co-ordinating Body for Afghan Relief (Acbar) says the international aid effort in Afghanistan is in large part “wasteful and ineffective”, with as much as 40 per cent of funds spent going back to donor countries in corporate profits and consultant salaries. This is worrying but not really news…
As far back as 2002 a classified private contractor’s report (the irony) on the security situation in Afghanistan described how pointless it was to have major consultancies working in Kabul ‘when what the Afghan officials need are desks, chairs and computers.’
The FT article also reports that the administration of Hamid Karzai has failed to tackle high-level corruption in a government that relies on international handouts for 90 per cent of public spending. Let’s not beat around the bush – corruption is endemic in Afghanistan and while there has been very limited success in building a more transparent and accountable government the story is depressing. Senior drug traffickers for example are routinely captured and sent to the police cells only for a call to come in from a senior government official letting the handcuffed prisoner free. As I said in a previous post follow the drugs, all you find are drug users and drug dealers, but if you follow the money, you don’t know what you’ll find’. According to one anti-narcotics official ‘the sharks are swimming free while the minnows are captured’.
And while it is interesting to know that the cost of engaging a foreign contractor can be as much as $500,000 (€324,000, £252,000) a year, and many donors insist that contractors use material and labour from their own countries rather than sourcing locally; and that countries such as Spain and France are contributing too little, while big donors are failing to fulfil their commitments; I do wonder how NGOs are fairing in Afghanistan?
Surely a more more interesting perspective on aid to Afghanistan would be an holistic account of the donor system? How we in the broadest possible sense are doing.
Finally and as mentioned in the Demos report on national security Acbar also published figures showing how the most insecure provinces benefit the most from international funding – the report suggests that if Helmand were a country, it would rank as the fifth biggest recipient of US development aid. In perhaps the best example of an understatement I can think of Matt Waldman, a policy adviser for Oxfam said rewarding the most volatile provinces was “short-sighted”.
by Jules Evans | Mar 26, 2008 | Global system, Middle East and North Africa
Record commodities prices have given countries like China, Singapore, Russia, Kuwait, Abu Dhabi and UAE control over trillions of dollars, which they have stowed away in sovereign wealth funds (SWFs), that are now hovering over the global financial system like mighty hoovers, sucking up whatever assets cross their path.
The SWFs have, in the last 12 months, been on an almighty spending spree. Gulf SWFs, for example, spent an extraordinary $83 billion on 173 deals in 2007. That means SWFs are now, in the opinion of some experts, the main driver of merger & acquisition activity in the world.
Stephen Barrett, international chairman of corporate finance at KPMG, says: “With the right people in place – and experience of some major deals under their belts – the SWFs could rapidly assume the mantle of deal-making kingpins, relegating the private equity houses and corporates to second and third place.”
Perhaps with a view to getting ‘the right people in place’, many Asian and Gulf SWFs have been forging close links with leading Wall Street banks, both by getting their advice on major acquisitions, and by actually buying stakes in those banks.
Thus in the last 12 months, the Kuwait Investment Authority has invested $3 billion in Citigroup and $2 billion in Merrill Lynch; the Abu Dhabi Investment Authority has invested over $7 billion into Citigroup; the Mubadala Development Company from the UAE invested $1.3 billion into the Carlyle Group and another $1.2 billion into the hedge fund Och-Ziff Capital Management Group; the DIFC from UAE invested over $4 billion building up stakes in OMX and the LSE; while the Qatar Investment Authority has also spent billions of dollars building up stakes in Credit Suisse and, it is rumoured, Royal Bank of Scotland – and says it intends to spend a total of $15 billion on western financial stocks.
In other words, Gulf SWFs have taken a massive bet on the continued health of the western financial system. Whether these are good bets remains to be seen – so far, for example, Citigroup’s stock price is down 21% since Abu Dhabi invested $7.5 billion in November. The China Investment Corporation’s $5 billion investment in Morgan Stanley is down by a similar amount.
But the challenge for the SWFs is where to put all their money. They have, literally, an embarrassment of riches. And this could prove to be a historical low for western bank share prices, and a great buying opportunity for SWFs.
On the other hand, some analysts are wondering if SWFs could, themselves, replace Wall Street banks as the biggest deal-makers, the biggest global lenders, and the biggest hirers of financial talent. Banks like Merrill Lynch, Credit Suisse and Citigroup are already scrambling to set up big offices in the main Gulf and Asian countries, so as to offer their financial advice to the SWFs and other big emerging market investors.
So, rather than paying banks millions of dollars in advisory fees, why don’t the SWFs just hire the cream of Wall Street’s deal-makers and get them to work for them? Wouldn’t that be cheaper? But if they did poach bankers from Wall Street, wouldn’t that undermine their investment in the banks and funds where these deal-makers used to work?
Such are the confusing dilemmas presently facing SWFs. As one banker I spoke to said yesterday: ‘They don’t have a plan as such. They are making it up as they go along.’ SWFs have abruptly and unexpectedly found themselves at the driving wheel of the global financial system. Freaked out by this, they have handed the wheel to…Wall Street bankers, who are exactly the people who crashed the car last time!
by Alex Evans | Mar 25, 2008 | Conflict and security
° The number of armed conflicts around the world has declined by more than 40% since the early 1990s.
° Between 1991 (the high point for the post–World War II period) and 2004, 28 armed struggles for self-determination started or restarted, while 43 were contained or ended. There were just 25 armed secessionist conflicts under way in 2004, the lowest number since 1976.
° The dollar value of major international arms transfers fell by 33% between 1990 and 2003. Global military expenditure and troop numbers declined sharply in the 1990s as well.
° The average number of battle-deaths per conflict per year—the best measure of the deadliness of warfare—has been falling dramatically but unevenly since the 1950s. In 1950, for example, the average armed conflict killed 38,000 people; in 2002 the figure was 600, a 98% decline.
° The period since the end of World War II is the longest interval of uninterrupted peace between the major powers in hundreds of years.
° The number of refugees dropped by some 45% between 1992 and 2003, as more and more wars came to an end.
These and other happy tidings from the Human Security Report, which you should have read if you haven’t already.
by Alex Evans | Mar 25, 2008 | Influence and networks, South Asia
Avaaz’s current petition, calling on China to begin “meaningful dialogue” with the Dalai Lama, looks set to pass has now passed the one million signature mark some time later today, which will make making it comfortably the largest petition ever organised on the internet. Sign it here.
[Update: and they’ve also just won political video of the year on the 2007 YouTube video awards. Quite a week.]
Still, you have to wonder (again) at the breathtaking incompetence of the Chinese at public diplomacy. For heavens’ sake: the Dalai Lama has been calling for people not to boycott the Olympics; he’s arguing for autonomy rather than independence for Tibet; he called on rioters to halt, and maintain a nonviolent stance. As the Economist noted on Friday, opening talks would boost China’s image around the world. Instead, China “seems intent on using the Olympics to flaunt its control of Tibet, as the flame is paraded in Lhasa”.
‘Course, that same torch is coming through London a week on Sunday. Expect fireworks…
