by Charlie Edwards | Mar 31, 2009 | London Summit, UK
While Alex blogs live from inside I will be doing my best to follow events outside – via Twitter, Flickr and SMS. But is it safe to go outside?
The ‘experts’ expect anarchy on the streets of London and even the possibility of a terrorist attack. For example:
Michael Clarke, the head of London’s Royal United Services Institute think-tank, said small terrorist groups may use the cover of planned protests by environmentalists, anti-war protesters and labor unions to mount an attack.
“The protests will cause uncertainty and chaos, and if they turn violent could complicate the lives of those police and security service staff who are looking for terrorists,” said Clarke, who sits on British government’s National Security Forum, an advisory panel of security experts.
So to be clear. Terrorists may use the cover of legitimate protests to stage an attack while the protests themselves are going to cause uncertainty and chaos. As Professor Clarke sits on the National Security Forum I wonder if he and the forum have been briefed by the intelligence agencies – or is this a personal opinion?
If ‘chaos’ is going to happen and there is the potential for a terrorist attack why hasn’t the Security Service (MI5) raised the threat level to CRITICAL – meaning an attack is expected imminently. From what I can gather the Security Service is trying to play down such a threat – concious that legitimate protest is important in this country but keeping a watching brief as events unfold. As has been proven in the past millions of people can walk the streets of London without causing large scale rioting. My concern is that talk of anarchy and rioting by securocrats, ‘experts’, and the Met Police turns into a self-fulfilling prophecy.
The aim of Government and the Met Police must surely be to reduce the potential for rioting and attempt to diffuse an already volatile situation – rather than fuelling speculation in the media on what nightmare scenario might happen. This could have been done through dialogue (better briefing on what is going on (Operation Glencoe)) while reiterating key messages about their role to police a largely peaceful protest, rather than the drip drip of banal information by mid level police officers which sub-editors happily snap up. Hardly the most constructive, mature and sensible way to police an event.
Hundreds of hours have been spent designing the route and security requirements for the demonstrations tomorrow but there will always be the potential for smashed windows and cuts and bruises – the important thing is to limit those opportunities – to take the sting out of the tail. Designated routes have been identified and signposted and security folk at banks and major buildings in the city will also have been planning for months: Executive boards will have been briefed on what to expect. The last thing politicians, protesters and the public need are police officers, and experts speculating on the potential for massive violence.
Of course there will be idiots who want to be violent – and the security services and the Met Police will have been collaborating with national police forces to ensure those violent protesters are identified and their conversations and plans monitored. But more work should have been done trying to diffuse the situation.
In the next couple of days the key will be to nip the potential for violence in the bud – allowing the demonstrations to continue but diffusing the protesters energy so that it doesn’t spill over into other parts of the crowd. The Met Police, experts and the mainstream media could have approached the security of the G20 in a more mature fashion – at least it would have meant we could focus on the meat of the G20 discussions rather than the armour protecting them.
Update: Editors and sub-editors are at it already. From the New Zealand Herald: Fear terrorists will use G20 protests
by Alex Evans | Mar 31, 2009 | London Summit
With a summit close at hand, one thing we can be sure of is that pointless ‘initiatives’ can’t be far behind. The criteria for such ‘announceables’ are simple: they must grab headlines and create the impression that something is happening, while avoiding any domestic implementation commitments or – horror! – funding obligations.
So while you’re getting ready to play G20 bingo (SDR issue? tick! tax haven rules? tick!), it’s also a good moment to launch the hunt for the pointless initiative of the week. One strong candidate has already emerged: DFID has proposed
a new ‘Global Poverty Alert’ system that would link international organisations, aid agencies and research groups into a single network that would provide instant updates on the impact of the economic crisis on the poor. This would include ‘real-time’ updates using text messaging and emails. The proposal will be put forward at next month’s G20 meeting in London.
Excellent work! Really visionary stuff. Now, how might it work? Hm. Well, what if we designed something that allowed lots of users to join, and post updates on poverty? We could let them post links to stuff on the web, too. And to keep it punchy and accessible, we could limit posts to 140 characters or less. I … um … oh.
Er… perhaps if we built a… large wooden badger?
by Jules Evans | Mar 31, 2009 | Economics and development
In the latest Vanity Fair, a brilliant article by Michael Lewis (author of Liar’s Poker) on Iceland.
It’s a sad, funny and surreal story:
An entire nation without immediate experience or even distant memory of high finance had gazed upon the example of Wall Street and said, “We can do that.” For a brief moment it appeared that they could. In 2003, Iceland’s three biggest banks had assets of only a few billion dollars, about 100 percent of its gross domestic product. Over the next three and a half years they grew to over $140 billion and were so much greater than Iceland’s G.D.P. that it made no sense to calculate the percentage of it they accounted for. It was, as one economist put it to me, “the most rapid expansion of a banking system in the history of mankind.”
At the same time, in part because the banks were also lending Icelanders money to buy stocks and real estate, the value of Icelandic stocks and real estate went through the roof. From 2003 to 2007, while the U.S. stock market was doubling, the Icelandic stock market multiplied by nine times. Reykjavík real-estate prices tripled. By 2006 the average Icelandic family was three times as wealthy as it had been in 2003, and virtually all of this new wealth was one way or another tied to the new investment-banking industry. “Everyone was learning Black-Scholes” (the option-pricing model), says Ragnar Arnason, a professor of fishing economics at the University of Iceland, who watched students flee the economics of fishing for the economics of money. “The schools of engineering and math were offering courses on financial engineering. We had hundreds and hundreds of people studying finance.” This in a country the size of Kentucky, but with fewer citizens than greater Peoria, Illinois. Peoria, Illinois, doesn’t have global financial institutions, or a university devoting itself to training many hundreds of financiers, or its own currency. And yet the world was taking Iceland seriously.
Global financial ambition turned out to have a downside. When their three brand-new global-size banks collapsed, last October, Iceland’s 300,000 citizens found that they bore some kind of responsibility for $100 billion of banking losses—which works out to roughly $330,000 for every Icelandic man, woman, and child. On top of that they had tens of billions of dollars in personal losses from their own bizarre private foreign-currency speculations, and even more from the 85 percent collapse in the Icelandic stock market.
A hedge fund manager in London summed up the situation like this:
A handful of guys in Iceland, who had no experience of finance, were taking out tens of billions of dollars in short-term loans from abroad. They were then re-lending this money to themselves and their friends to buy assets—the banks, soccer teams, etc. Since the entire world’s assets were rising—thanks in part to people like these Icelandic lunatics paying crazy prices for them—they appeared to be making money. Yet another hedge-fund manager explained Icelandic banking to me this way: You have a dog, and I have a cat. We agree that they are each worth a billion dollars. You sell me the dog for a billion, and I sell you the cat for a billion. Now we are no longer pet owners, but Icelandic banks, with a billion dollars in new assets.
“We were always told that the Icelandic businessmen were so clever,” says university finance professor and former banker Vilhjalmur Bjarnason. “They were very quick. And when they bought something they did it very quickly. Why was that? That is usually because the seller is very satisfied with the price.”
It wasn’t just Icelanders caught up in the frenzy of the last few years. Nor was it just bankers in US sub-prime. It was a global frenzy, raging from Moscow to Dubai to Lagos, fuelled by cheap western credit, mainly from US and UK banks.
One of the new casualties to emerge – the shipping industry. I was talking to a banker this weekend, who covers the sector. She told me that 10 European banks (including RBS, Nor, Nordea, HBOS and others) leant around $250bn to European shipping firms in the last few years, at very low rates, and at vastly inflated estimates of the value of the ships.
The value of the ships has now plummeted, many are lying idle, shipping companies are facing bankruptcy and most of the loans are now, on the whole, in default – enough defaulted debt to finish off the banks on their own, never mind with everything else on their plates.
by Alex Evans | Mar 31, 2009 | Global system, London Summit
Evening Standard, this afternoon:
France today laughed off a claim that Nicolas Sarkozy had threatened to “walk out” of the G20 summit. They said a report that the French President could “wreck” the event as “unfounded, and like some kind of April Fool’s joke”.
The copy of Le Figaro that I found outside my hotel room this morning:
«Rien ne serait pire qu’un G20 a minima. Je préfère le clash au consensus mou … Si ça n’avance pas à Londres, ce sera la chaise vide ! Je me lèverai et je partirai»
Now I admit my French may only by GCSE standard (and pretty rusty at that) – but I’m fairly confident that this translates more or less as follows:
Nothing would be worse than a minimal G20. I prefer the clash to the soft consensus. If things don’t move forward in London, it will be the empty chair! I’ll get up and I’ll leave.
by Mark Weston | Mar 31, 2009 | Africa, Conflict and security
Photo: The Australian
They do things differently in West Africa. It turns out, according to the Kansas City Star, that Moussa “Dadis” Camara won the Guinean presidency after the Christmas coup not because he was the driving force behind the putsch, nor because he was the most senior plotter, nor even because he was the best man for the job. No, he won it in a game of spoof. After a major row over the leadership with Sekouba Konate – who as an army colonel was way senior to the captain Camara and much better known by the public – Camara suggested resolving the dispute by drawing lots.
The word “president” was written on a piece of paper, which was put in a mayonnaise jar with several pieces of blank paper. Camara picked the winning ticket, but the dogged Konate demanded a second round. Amazingly, Camara picked the right one again. Such fortune cannot be ignored in Africa, so the colonel backed down and Camara got the top job.
Elections have been promised for December, but a lot can change between now and then. Camara himself is worried about a counter-coup – he sleeps during the daytime in the belief that most coups take place at night, and makes sure he sees Colonel Koubate, who presumably remains a threat, every half hour.
A more likely eventuality, however, is that Camara slips into the role of dictator and cancels the elections. Already there are signs that he is suited to such a role. He appears on TV every night for several hours, expounding his views on life and haranguing those associated with the old regime (great viewing apparently – housewives say they prefer it to watching soaps). His photo adorns the walls of every government building, and he is so popular that his sunglasses have become a fashion accessory. More worryingly for those who see in all this a classic pattern of a slide into autocracy, Camara said only last week that Guinea is not ready for democracy. “Who is going to vote?” he asked journalists. “Who is going to organise elections? You?” He believes only the army can put the country’s house in order, and only then can elections be held. Same old same old, as Guineans probably say.
