by Alex Evans | Jul 23, 2008 | Global system
Lots of discussion in the US about whether FDIC – the Federal Deposit Insurance Corporation, which makes sure depositors get their cash back if banks go bust – can handle the banking bust that appears to be in the post. Nouriel Roubini points out that the collapse of IndyMac earlier this month used up fully 15 per cent of FDIC’s reserves.
As a result of that, FDIC will need to raise additional capital by hiking the premiums that banks have to pay, so financial services sector analysts are fretting about the additional costs this will imply for banks. What bothers me, though, is the fact that FDIC has five years in which to replenish its reserves. As an unnamed source put it to the FT:
The FDIC says it feels confident with $53bn … That’s incredible. The last crisis, in the ’90s, there were 550 institutions that failed. So far, there have been five. It can be a long season.
by Richard Gowan | Jul 22, 2008 | Africa, Conflict and security, Cooperation and coherence
Hardly had I posted my take on the current peacekeeping crisis yesterday than Thorsten Benner and his colleagues at GPPi published this op-ed in the IHT:
UN peacekeeping is the victim of its own success: Never before in their 60-year history have blue helmets been in such high demand. About 110,000 personnel are deployed in 20 peace operations around the world, more than a six-fold increase from 10 years ago.
However, UN member states have neglected making crucial investments in the support infrastructure for an expanding network of large peace operations with increasingly complex tasks, from protecting civilians to rebuilding defunct institutions in post-conflict states. As a result, the UN apparatus is severely overstretched, exhibiting increasingly serious pathologies ranging from sluggish deployments to shocking sexual abuse scandals.
Worse yet, the Security Council has returned to the ill-fated practice of sending peacekeepers into ever-more hostile environments where there simply is no peace to keep.
Recent reports from Darfur, the largest and most expensive UN mission to date, are reminiscent of the news from Bosnia in the weeks before the fall of Srebrenica: UN peacekeepers, facing a logistical and political nightmare, are unable to defend themselves, let alone protect the civilian population. Were further large-scale atrocities to occur under the UN’s watch in Darfur, the repercussions would threaten to undermine the entire business of peace operations.
Thorsten and I often find ourselves on the same page – we’re both advocates of greater European engagement in Iraq, for example. I hope that, when it comes to peacekeeping, we’re both wrong. If we’re right, it’s going to be grim out there.
by Alex Evans | Jul 22, 2008 | Climate and resource scarcity, Economics and development
I’m currently immersed in writing the main pamphlet for my project on food prices with Chatham House (hence not much posting for the last few days) – but I have to take ten minutes out to sing the praises of the gorgeous piece of writing I’ve been immersed in for the past couple of hours.
The paper in question is Escaping Poverty Traps: the Chronic Poverty report 2008-09, from the Chronic Poverty Research Centre. The title, admittedly, makes it sound like any other international development report of the sort that fill cardboard boxfiles in great reams of unread worthiness in people’s offices around the world. But don’t be fooled. This is an edgy, push-the-envelope, fundamentally political piece of work.
What makes it so, above all, is its understanding of what poverty actually is. The report brushes aside the dry platitudes about the number of people living on less than a dollar a day, and brings the reader face to face with the nature of social exclusion. In particular, it explores five kinds of poverty trap:
– Insecurity, including conflict and violence, but also economic crises and natural hazards;
– Limited citizenship, where the report bluntly calls for us all to “move beyond the good governance agenda, and purely technocratic interventions around ‘getting institutions right’ or ‘strengthening civil society'”, and focusing instead on “individuals’ engagement in the political sphere”;
– Spatial disadvantage, through four overlapping dimensions, including remoteness, natural resource endowments, political disadvantage and weak integration;
– Social discrimination, including social relationships of power, patronage and competition that entrap people in exploitative relationships; and
– Poor work opportunities, caused by low or non-existent growth, or by growth happening only in enclaves.
As this kind of analysis makes clear, this is anything but a technical agenda. It also underscores commonalities across different kinds of countries: so while the report’s clear about the particular challenges of working in ‘chronically deprived countries’, it also stresses that these traps can and do afflict poor people in much higher income countries too.
So what should donors do about all this? One of the approaches that the report’s keenest on is social protection systems (which I’ve written about here before, and which will be the focus of one of the main parts of my food pamphlet). These can take many forms – food vouchers, pensions, payment for public works, conditional cash transfers, skills training and so on – but in all cases the key is that the assistance is targeted at society’s most vulnerable people, with a view to helping them manage, prevent and ultimately overcome their vulnerability.
As that objective implies, social protection’s an agenda that’s very much about promoting grassroots resilience (something we could do with more of here in Britain as well). But the authors of the Chronic Poverty report think it can help to produce something else as well: durable social compacts between states and their citizens, that in turn point directly towards effective, legitimate, responsive and accountable states.
This kind of approach to development is exciting. It’s practical, tangible, full of ideas you can see working in practice; but it’s also about real world politics, where there are vested interests, obstacles to change, coalitions that need to be built and sustained. As the consensus on international development that was put together in 2005 starts to come due for renewal, this is the direction in which the development agenda needs to head.
by Charlie Edwards | Jul 22, 2008 | Conflict and security, Cooperation and coherence, Europe and Central Asia, Influence and networks, UK
Readers of GD will be familiar with Brownian motion – the random movement of particles suspended in a liquid or gas or the mathematical model used to describe such random movements. An updated version of the 1825 theory is the description of a relatively new phenomenon in British Government. Brownian Motion is the time it takes an initiative or policy recommendation to move from a Ministers in-tray to reading stage before final agreement and sign off. The updated theory is named after the 51st Prime Minister Gordon Brown and his propensity... ok, you get the picture. Brownian motion is highly contagious and can move far and wide – even as far as Australia.
This morning I gave a presentation at the Lowy Institute on European approaches to national security focusing in particular on the Netherlands, the UK and the French White Paper. The original idea was then to move onto the long awaited Australian national security strategy however the strategy seems to have got stuck in somebody’s in-tray and, as such, won’t be published until next month. That said the conversation was excellent, and the range of issues between the UK and Australia disconcertingly similar, though perhaps that’s not especially surprising.
