What happens after an earthquake

by | Jan 31, 2010 | Climate and resource scarcity, Latin America and the Caribbean

Duncan Green has been perusing ALNAP‘s report on lessons from past experiences of the aftermath of earthquakes, and has summarised some of the key findings.  This one was especially interesting:

Land disputes will rise: Land-ownership emerges as a critical issue in all earthquake disasters. First, there are property disputes even before the disaster. Will opportunists seize land in the chaos? Will squatters be able to return and rebuild their shacks (even if that is a good idea)? The loss of documentation, the destruction of landmarks, the deaths of property owners, and the need to formalise previously informal arrangements all add a new layer of complexity to existing land-ownership issues.

But there are positive opportunities too. Some disaster interventions have been effective in changing the pattern of formal house ownership, with new houses registered in the names of both husband and wife. A follow up on the 2001 El Salvador earthquake response, in which the World Bank implemented a joint-ownership policy for new houses, found some communities where 50% of respondents reported that a woman was one of the legal home-owners and that, overall, 37% of the homes were wholly owned by women.

There’s a load of other interesting material on Haiti in other recent posts on Duncan’s blog – e.g. this piece on why humanitarian work is so hard in cities.

Our Brookings report in The Economist

by | Jan 28, 2010 | Climate and resource scarcity, Global system

Our new Brookings report Confronting the Long Crisis of Globalization (blog post here; full pdf here) is covered in an article in tomorrow’s Economist (on the web here).  Excerpt:

Now, a report for the Brookings Institution, a think-tank in Washington, DC, and the Centre on International Co-operation at New York University looks at international politics in an age of want.

The sort of problems governments increasingly face, they say, will be much less predictable than those associated with old great-power rivalries. Pressure from demography, climate change and shifts in economic power builds up quietly for a long time—and then triggers abrupt shifts.

They claim that the current global system is ill-designed for such a world. It is not just that the foreign policies of big countries are in flux. Rather, the way states deal with new threats is, in the jargon, “stove-piped”. As a UN panel said in 2004, “finance ministers tend to work only with the international financial institutions, development ministers only with development programmes.”

The authors say that what is needed is not merely institutional tinkering but a different frame of mind. Governments, they say, should think more in terms of reducing risk and increasing resilience to shocks than about boosting sovereign power. This is because they think power may not be the best way for states to defend themselves against a new kind of threat: the sort that comes not from other states but networks of states and non-state actors, or from the unintended consequences of global flows of finance, technology and so on.

What would all that mean in practice? They cite the Intergovernmental Panel on Climate Change (IPCC) and the Global Alliance for Vaccines and Immunisation as the sort of institutions they want more of: bodies that use technical expertise—leaving aside the IPCC’s mistake over the melting of Himalayan glaciers—to induce countries to recognise their mutual interests. Such agencies can promote foresight, and help governments think harder about the consequences of failure (unlike traditional diplomacy, which likes muddling along). They propose an Intergovernmental Panel on Biological Safety along the lines of the IPCC to improve biosecurity; they also suggest boosting the G20 by giving it a secretariat and getting national security chiefs together.

Many of these ideas may go nowhere; national sovereignty is hugely resilient. But to those who call the whole exercise pointless, they cite Milton Friedman, who, when monetarism was being mocked in the 1970s, replied “our basic function [is] to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes the politically inevitable.”

Q: what’s worse than being rescued than the IMF? A: China refusing to rescue you

by | Jan 28, 2010 | Economics and development, Europe and Central Asia, Global system

Poor old Europe: it just goes from bad to worse. Already sore from being brutally sidelined during the Copenhagen summit last year, it now faces this addition of insult to injury:

Greece is wooing China to buy up to €25bn of government bonds, a move that underlines Beijing’s increasing financial power, as Athens struggles to fund soaring public debt. Goldman Sachs, the US investment bank, had been promoting a Greek bond sale to Beijing and the State Administration of Foreign Exchange (Safe), which manages China’s $2,400bn foreign exchange reserves, said people familiar with the issue.

That’s what the FT reported yesterday, and the news immediately set pulses racing in Brussels and Frankfurt.  As Unicredit’s chief economist put it to the FT a day later,

For the eurozone, “a member country implicitly rescued by China would be an even worse signal than an IMF programme”.

But even worse, China then signalled they probably didn’t want Greece’s ropey debt anyway. Yu Yongding – who’s not only a senior member of the Chinese Academy of Social Sciences but was also a member of the Canadian-run L20 project back in the day (and hence a sort of Chinese government-licensed public intellectual on global affairs) – commented yesterday that,

It is unreasonable for an economist to support a diversification away from an unsafe asset class to a much more unsafe asset class. Let European governments and the European Central Bank rescue Greece.

Cue predictable carnage as the markets digested this news: stocks immediately fell 4%, according to the WSJ, and bond investors demanded a record spread of 3.70% between Greek 10 year bonds and the benchmark 10 year German bonds. But the events of the past couple of days are also an interesting little microcosm of larger issues, some of which are these. (more…)