I spent Christmas in France with a cousin which was a nice adventure, then we had a New Year family gathering. Already there are buds in the garden and crocuses popping up so spring is approaching.
What does 2012 have in store?
We all say Happy New Year to each other but what kind of year will it be? In the UK and Eurozone there will be economic downturn, but it is one of the richest regions of the world so it will not be unbearable. Perhaps it will lead to a rejection of greedy consumerism and a search for something better. The Arab Spring will continue to roll forward, despite the setbacks. This is one of the most important advances in the world for a long time and is deeply rooted in the wishes of the people. In China people are protesting when they are misused and are demanding better wages. This parallels the behaviour of people in Europe and North America at similar points in history, and like the Arab Spring shows that you can’t crush the human spirit. Africa has continued with better economic growth, a massive growth in education – 5 million graduates a year in SSA – and growing urbanisation. I look forward to progressive change with turbulence. The US long-term decline will continue but happily the Republicans seem determined to select an extremist candidate, which makes Obama’s reelection more likely. The question is, will he continue to disappoint or find some second-term courage? The big thing that is missing is any concern with climate change and sustainability, so there will be big trouble to come.
Israeli house demolitions
In summer 2010 I went to the West Bank and stayed with Salim and Arabiya in their house with a group of international volunteers, and we rebuilt a demolished neighbouring house. Last night the Israelis demolished Salim and Arabia’s house for the fifth time. They also demolished the house we rebuilt, and nearby bedouin houses. All of these were built on the owners land. The cruelty of these house-demolitions is unbearable, as people lose their home and almost all their personal possessions. The Israelis are trying to wipe out the Palestinian community and take the occupied territories as their own, in complete breach of international law. They are making a two-state solution impossible as they take more and more land. And still the EU does nothing. So much for the claim that it is based on a commitment to human rights and international law.
UK austerity
It struck me last week what a lie it is to pretend everyone is having to cut back because the country overspent. This is what happened in the Second World War when everyone had the same rations. But now anyone who hasn’t lost their job and has a mortgage is better off because interest rates are so low. All those who pontificate in the media are on £50,000+ and thus in the top 10% of the population and not suffering at all. If we did all share the adjustment equally it would be quite easy to make.
Extractive Industries Transparency Initiative (EITI)
I have spent a lot of time since last March learning about the EITI, which I now chair. I have also visited quite a few mining and oil and gas countries and read quite a lot on the subject. There is no doubt that if these resources could be well used, they could lift up the living standards of large numbers of the poorest people in the world. But it is also true that in many countries such riches feed corruption and bad governance. The inspiration of the EITI is to use transparency to improve accountability. The EITI has now been operational for five years and is working in 35 countries. It has certainly helped to create a growing focus on these questions but there is no evidence that it has improved accountability or the distribution of the resources. We have set up a Strategy Working Group to consider how we can do better. This was the subject-matter of my lecture at Kellogg College Oxford on 19th January. As I say there, we need the help of all who share EITI’s aims to strengthen its impact.
Nigeria
There is no doubt that the subsidy to the price of petrol is used by corrupt forces in Nigeria to rip off the proceeds of oil. But how odd it is to announce complete abolition and massive price rise with no compensation for the people. Some argue that governance systems are so rotten in Nigeria that the only way to give the people a share is to distribute the $400 per head that oil produces directly to the people. Then the government would have to tax the people to provide for public services, and have to be accountable. But ask how would that be organised uncorruptly. The way the people mobilised to halt the price-rise might be a sign of things to come. But the idea of distributing oil funds direct deserves further consideration. How about starting with child benefit? Then the poor would at last get some benefit from the oil. And if informal Somali systems can move money from New York to villages in Somalia, Nigeria ought to be able to do it.
Syria
Left-wing commentators are beginning to say that external forces are intervening in Syria and should not be indulged. I have no doubt that they are but this is undoubtedly an uprising of the people and should be supported. I myself believe that the current president meant to be a reformer when he went back from London. But the regime is a cruel security state and is not reformable. We should all support the Arab League call for a government of national unity and free elections, otherwise the danger is more blood and death and civil war. Like other revolutions the outcome will then depend on whether the bulk of the army go over to the people.
Interesting facts
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Nearly 75% of the world’s poor live in middle-income countries. South Asia is home to half of the 827 million poorest. Africa is home to 473 million (Oxford University study released 7/12/11).
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The average pay per employee in the Financial Services sector rose to £41,772, nearly double the UK national average of £23,381 (City of London Corporation quoted in FT 16/12/11).
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The average income of the UK’s top 10% of working age population is almost £55,000, nearly 12 times the bottom 10% who earn an average of £4,700. Only Israel and the US are more unequal. Rising inequality in the UK is caused by the growth in incomes at the top, the highest 1% of earners took 7.1% of income in 1970 and 14.3% in 2005 (OECD quoted in FT5/12/11).
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In 2005 the share of the top 1% in pre-tax income varied from 5.6% Netherlands; 6.3% Denmark and Sweden; 12.7% Canada; 14.3% UK; 17.4%.
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The US Embassy in Baghdad is the biggest in the world. It employs 16,000 people and occupies 104 acres on the banks of the Tigris. Of the 16,000, 5,500 are private security contractors (FT 24/12/11).
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Israel killed 180 Palestinians in 2011 including 21 children. 3,300 Palestinians were detained. 26,837 settlement units were approved for construction including 1,664 housing units in and around occupied Jerusalem. Almost 4,000 acres of land owned by Palestinians was confiscated. 495 houses were demolished and 18,764 olive and fruit trees were uprooted (PLO report “A People under Occupation”).
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Half a billion people have moved out of poverty in the 5 years up to 2010. Never before have so many people being lifted out of poverty in such a short time (FT editorial 31/12/11).
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Six Walmart heirs are wealthier than the entire bottom 30% of the US population (headline in recent Los Angeles Times).
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Top executive salaries at Barclays have gone from 13 times the pay of the average British worker in 1980 to 169 times now.
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The minimum wage in Shenzhen, one of the special economic zones in China, has increased this year to the equivalent of $238 per month. On an hourly basis Shenzhen’s minimum wage is now 4 times less than the federal minimum wage in the US. In 2004 when Chinese minimum wage was introduced, the basic rate was 12 times cheaper than the US (FT 5/1/12).
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Between 2007 and 2012 the Chinese economy will expand by close to 60%. Emerging Asia as a whole will grow by almost 50%. Over the same period the economies of high-income countries will grow by a mere 3% . But at purchasing power parity, China’s income per head was barely above one 5th of US levels in 2010. India’s was less than one 10th (Martin Wolf, FT 11/1/12).
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Guantánamo Bay has held 800 people in detention. There are now 177 detainees held at a cost of $800,000 per detainee (USA Today 12/1/12).
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Nigerian revenues from crude oil exports peaked at a little less than $25 billion in 1980. They slumped to less than $7 billion a year from 1986 to 90. In 2007 they exceeded $52 billion (Duncan Clark, Africa: Crude Continent).
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India’s richest 100 own assets equivalent to a quarter of GDP (Arundhati Roy, FT 14/1/12).
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Over the past 30 years the top 1% of Americans have seen their income grow by 300%. Median income has grown by 40% and that includes the effects of many households becoming dual income. Male real median earnings have stayed flat (FT 14/1/12).
