Monthly Archives: September 2009

Pinn illustration

Barack Obama normally likes to talk about hope. Last week at the United Nations he had the audacity to fear. The US president conjured up a vision of a dystopian world: “Extremists sowing terror…Protracted conflicts that grind on and on. Genocide and mass atrocities. More and more nations with nuclear weapons. Melting ice caps and ravaged populations.” That is our collective future, according to Mr Obama, unless the world’s leaders co-operate to find “global solutions to global problems”. Read more

Angela Merkel’s victory in the German elections last night is both a triumph and a paradox. In 2005 she campaigned as an economic liberal but ended up in a coalition with the Social Democrats, which forced her towards the centre. This time around she campaigned as a centrist and a champion of the traditional German social market economy, and has ended up in a coalition with the economic liberals of the Free Democrats.

So the next question is will this new coalition finally free Merkel to be Merkel, and to push through the free-market policies that she put at the centre of her programme in 2005? Or has the chancellor really changed?

I think there are two big tests to look out for. First, tax cuts; both the CDU and the Free Democrats promised tax cuts – will they, can they, deliver? Second, what are they going to do about the Opel bail-out. Securing the future of a big car manufacturer was an important achievement for Merkel in the last days before the vote; but leading figures in the Free Democrats expressed misgivings about such a costly, anti-market measure. Whose views will prevail? Read more

Watching television in America is always educational – a useful reminder of what a bizarre country this is. Earlier this week, I tuned into a CNN discussion in which an orthodox rabbi – Rabbi Shmuley – was demanding that Iran be thrown out of the UN, and the world body be turned into a league of democracies. Then last night, I turned on and there was Rabbi Shmuley again – only this time, he was flogging a book based on thirty hours of interviews he had recorded with Michael Jackson.

There are so many questions raised by this – should I take Shmuley’s views on UN reform, more or less seriously, because he was a confidant of the king of pop?; why did Jackson, a former Jehovah’s witness, choose to confide in a Lubavitch rabbi?; is Shmuley rushing the bookout for the benefit of mankind, or does he have baser motives? Read more

The closing press conferences at the G-20 yesterday gave a nice chance to compare and contrast the style of the French and American presidents. Obama was asked only one question about the G-20 itself; all the rest were about Iran, Afghanistan and health-care. He was his usual, polished, languid self – his answers are lucid and long, probably too long.

Sarkozy, by contrast, was a bundle of nervous energy and excitement. While Obama has two basic facial expressions – serious and beaming smile, Sarko’s face is in perpetual motion; grinning, grimacing, gurning. When one question struck him as eccentric, he just laughed, shrugged and rotated his finger by his ear – to show that he thought the questioner was batty. I can’t imagine Obama doing that.

Sarko’s press conference was in a much smaller room than the ballroom assigned to the US president, so it was possible to sit just a few feet from him. Unlike the American press corps, the French media seemed genuinely interested by the G20 and Sarkozy was postively enraptured. He proclaimed a “veritable revolution” in the regulation of banks, adding – “It’s really historic what’s happened. There’s no longer an Anglo-Saxon world and a European world. We’ve transcended that theoretical opposition.” Although he was too tactful to put it that bluntly, Sarko clearly thinks that it is the French model that has won out – he made the point several times that the new G20 rules on bonuses are based on laws already adopted in France. Another longstanding French goal, the crackdown on tax havens (which are very annoying if you are running a high-tax economy like France) is also now being advanced by the G20. “Tax havens, banking secrecy, that’s all finished”, trumpeted Sarko.  Read more

The subject matter at the G20 is undeniably important. But now that the immediate fear that the world economy is going to implode has died down, discussions about financial regulation and global economic imbalances are once again rather dry and technocratic. This morning, however, some real drama intruded on the economic discussions – with the revelations about Iran’s second and secret nuclear plant. Obama, Brown and Sarkozy appeared before the cameras looking stern and threatening tough action, unless Iran changes course.

In an odd way, the new revelations were both feared and hoped for. On the one hand, they confirm the fears of the West that there is much more to the Iranian nuclear programme than had been declared. On the other hand – since that was always thought to be the case, anyway - it is useful to have confirmation, to brandish in the face of the reluctant Chinese and Russians, who must agree to any further sanctions.

So what happens next? The first stage is the meeting of the Perm 5+1 (the US, UK, France, Russia, China and Germany) with Iran next week. This is going to be a bit awkward for Iran – and they might agree to new international inspections. But I would be very surprised if they made any serious concessions. A regime that is content to shoot demonstrators down in the streets, can brush off a little diplomatic embarrassment. Read more

Gideon Rachman, chief foreign affairs commentator of the Financial Times, reports from the G20 summit in Pittsburgh on the reaction to news of the existence of a secret nuclear plant in Iran.  Read more

I am sitting in a cavernous press centre in Pittsburgh at the G-20, watching television pictures on a big screen of anarchist demonstrators being tear-gassed in a suburb about four miles from here. Now I understand one of the reasons for putting the summit in Pittsburgh. You can throw an exclusion zone around the centre of the city, in a way that just isn’t possible in New York.

Obama has also chosen Pittsburgh for reasons of tact. It would just have been too much of a snub to the other 170-plus members of the UN General Assembly, if a select group of 20 nations had snuck off to hold a separate, exclusive meeting in another part of Manhattan. It would have been like one of those New York night clubs, where the hoi polloi are held back behind a rope, while the favoured few are waved through the VIP entrance.

Pittsburgh is also regarded as a showcase for post-industrial recovery. The city was decimated by the shrinkage of the steel industry. Half the population has moved away, as the jobs disappeared. Pittsburgh’s population, which was 676,000 in 1950, is now a little over 300,000. The city’s champion football team, the Steelers, are well supported all around the country because there are so many Pittsburghers in exile. However, these days, the local economy is regarded as a success story. New industries have sprung up in medical services, robotics and computing. The unemployment rate is “only” 7.7%, which is lower than the rest of the US. They should hand-out t-shirts at the summit, with the slogan – “You can survive globalisation” Read more

Approaching the UN today, I came across pro and anti-Gaddafi demonstrators. The “pros” were American members of the Nation of Islam, in their trademark suits and bow ties, who seemed to regard Gaddafi as “the leader of Africa”. The opposition was provided by real Libyans, protesting about human-rights abuses.

As it happens the UN General Assembly is currently being chaired by a Libyan diplomat, Ali Treki. He had insisted that all heads of state speak for no longer than 15 minutes. But he did not apply this to Gaddafi, who he introduced in neutral style as “king of kings and leader of the revolution.” The Libyan leader rambled on for some 96 minutes, reading off scraps of paper, and throwing the UN schedule into chaos.

Now clearly Gaddafi is going to get bad reviews in the morning papers here in the US. But I have to say that some of what he had to say made perfect sense. It is entirely true that the structure of the UN Security Council is anomalous and outdated (although it was perhaps a bit harsh to call it “the terror council”). Gaddafi’s analysis of why it is so hard to reform the council was also bang on the money – each time you suggest one country, you trigger a demand from the next one in the queue. (So if you suggest Germany, Italy jumps up and down.) And his proposed solution – a Security Council of regional organisations such as the EU, Asean, the African Union – sounded like an elegant way out. Gaddafi was even quite witty. I liked his comparison of the UN General Assembly to Speakers Corner in London; you can speak as much as you like, it is just that you will be ignored. Read more

New York is even more chaotic and noisy than normal, when the UN comes to town. Trying to deal with the security arrangements for 88 heads-of-state in a few square miles of midtown Manhattan turns the city into a mad-house of road blocks and blaring police sirens.

The locals are reasonably tolerant. But, inevitably, Fox News is trying to use the occasion to whip up a bit of anti-UN sentiment. I watched a broadcast in which a TV anchor listed all the “crazies” and anti-American leaders who are in town, and invited his audience to share in his disgust that they are being funded by “your tax dollars”. The implication was that it was clearly in American interests to save some cash by slinging the UN out of New York and barring the likes of Hugo Chavez, Gaddafi and Ahmadi-Nejad from ever entering the country.

ADJ is still the number one villain. Fox helpfully pointed out that he is staying at the Intercontinental. Gaddafi has not found anywhere to pitch his tent, so is staying at the Libyan mission. And Obama is at the Waldorf Astoria. I was at the Waldorf last night and by American standards, the security is reasonably relaxed. You can wander around the lobby unmolested. Its only the upper floors that are barred. Read more


Angela Merkel, the German chancellor, might have been excused had she decided to skip the Group of 20 meeting in Pittsburgh later this week. The German general election takes place on Sunday – just 48 hours after the summit. Ms Merkel’s decision to go to Pittsburgh is both cool and calculated. It sends a signal to the German electorate that she is relaxed, above the fray, an international leader more concerned with representing her country to the world than with mud-wrestling domestic opponents in the last days of a campaign. Read more

Germany and the Afghan elections Read more

US ditches missile shield Read more

I was delighted to discover at the recent World Economic Forum meeting in Dalian that the US Treasury representative in Beijing is called David Dollar. The Chinese suspicion that the World Bank is simply an instrument of American foreign policy might have been stoked by the fact that Mr Dollar’s previous job was country director for China at the Bank. Now he is back in Beijing, representing the US.  And in Dalian, if he was ever in any doubt about his primary loyalty these days, he needed only to glance down at his name tag, and there it was – Dollar.

I’m sure there are lots of examples of people whose jobs and names coincide in this satisfying number. Ronald Reagan’s spokesman was called Larry Speakes. It was said that Reagan found it a useful reminder. What does Larry do again? Oh yes, now I remember. Read more

Last week a Tibetan mastiff was flown into Xian airport in central China, where it received a welcome fit for an emperor. The dog was swept into town by a convoy of 30 Mercedes-Benz cars. Tibetan mastiffs are a rare and noble breed – and the pampered pooch had cost his new owners Rmb4m ($586,000, €402,000, £351,000). Reporting the story, the China Daily newspaper commented nervously that such an extravagant display of wealth might “heighten tension between rich and poor”.

This shaggy dog story is just a particularly weird example of the new wealth of modern China. When I last visited the Pudong district of Shanghai, in the mid-1990s, it was a ramshackle area of factories and warehouses. Last week, I found it transformed into a forest of neon-lit, modernist skyscrapers. China has shrugged off the global recession and should grow by 8 per cent in 2009. Read more

Anybody following the US healthcare debate – and the statements of Sarah Palin on almost anything – might be forgiven for thinking that the Republican Party is now completely off its trolley. But there are still American conservatives providing a rational and sceptical view of the Obama administration. The Shadow Government web-site is a platform for Republican foreign-policy experts, who often have interesting things to say.

Republican scepticism is not only being focussed on the Obama administration. Will Inboden, a former official in the Bush National Security council, is now based in London. He recently took a look at Britain’s own shadow government – the Tories – who are probably just nine months away from government. Read more

I just bumped into a Malaysian friend, here at the “Summer Davos” in Dalian, up on China’s north-east coast. “What are you doing here?” I asked – “Paying tribute”, he replied.

There is quite a lot of that, here in Dalian.  Last night, Wen Jiabao, China’s prime minister, told us that the economy would grow at the politically-required 8% this year. With the US still reeling, the international business people and foreign politicians here are increasingly looking to China for trade and investment opportunities.

I got a strong sense of that at the session that I chaired on the “The global downturn and the developing world”. Before we got talking the organisers took a poll of the audience, asking them to say what part of the world they expected to do most to pull the world out of recession? There were 67 votes for “Greater China”, about 30 for non-Chinese Asia, five for the US, two for Europe. I felt like finding the two people who had voted for my home continent, and buying them both a drink. Read more

I am sitting in Shanghai airport – and was about to file a glowing piece about the transformation of the city since my last visit in the mid-1990s. But it has just been announced that my flight to Dalian has been delayed, so my mood has darkened. And I have just read a report from a Chinese think tank, claiming that the country has lost 40m jobs since the onset of the Great Recession. Read more

Comment illustration

“Follow the money” is the advice routinely offered to detectives in low-budget thrillers. For anyone attempting to understand the ebbs and flows of international politics, I offer a variant of that old line: “Follow the oil”. Read more

Over the next month or so, Obama is going to have to make a big decision about whether to commit more troops to Afghanistan. My guess is that, with a heavy heart, he will follow the advice of the military and “double down” – sending even more troops into Afghanistan.

But not only is the situation in Afghanistan itself looking increasingly unpromising. The domestic politics of the war have also shifted against Obama. His natural supporters among centre-left opinion formers are beginning to back away from the war. I thought it was significant that over the weekend, the New York Times’s two main foreign affairs columnists – Tom Friedman and Nicholas Kristoff – both wrote highly sceptical columns about the war. Kristoff argues for fewer troops and a pull-back to the cities. Friedman is highly sceptical of the possibility of nation-building in Afghanistan and hints strongly that the US should pull back – although he won’t quite say it. Read more

Gordon Brown has given a speech this afternoon defending Britain’s military mission in Afghanistan. Although the speech was scheduled before Eric Joyce, a junior defence minister, resigned over the war, there is no doubt that Brown is responding to a growing mood of disquiet about mounting violence and casualties and an unconvincing election.

The trouble is that that Brown doesn’t have much new to say. He makes the link to terrorism and claims that – “A safer Afghanistan means a safer Britain.” He talks about training up the Afghan army and he stresses that the war must be “won on the ground and not in the air”. (This, on a day, when it seems as if Nato may have killed a great many Afghan civilians in a bombing raid.) Read more