North Korea resembles something between news footage from the Cold War days and “hyper-normalised” life imitating art or comedy like that portrayed by the hilarious 2005 Team America World Police which is well worth a watch if you enjoy biting satire (You Tube, 2017). Read more
Posts from the ‘USA’ Category
This is the message I give to Davos man or woman for the 2017 January meeting of the World Economic Forum in Switzerland, unless you want to go skiing of course. Picking a theme like inequality or climate change is all well and good.
However, with the inauguration of Donald Trump as the 45th President of the USA on the 20th January and Theresa May, UK Prime Minster, taking a harder line with Brexit from the EU once Article 50 of the EU Charter is triggered. The opportunity has arisen for a new type of rebel against the new anti-establishment establishment now that Brexiteers and Trumpites are in their ascendancy.
Global business executives, politicians, commentators and celebrity activists instead of lamenting about the ending of the Obama Presidency now need to embrace not just a new agenda of defending and improving liberal democracy, as the best political engine for raising living standards around the world, but a better way of involving its increasingly disparaged citizens in the process.
More elite group thinking in the cool mountain air is not going to resolve any loss of confidence in Western political systems that caused the political upsets of 2016. It has allowed the rise of nationalism and nativism across Europe and the successful isolationist rhetoric of the Trump presidential campaign.
Will he and his new administration be all bad? He seems to be rather thin skinned and rises to the bait or “tweet” far too quickly for trouble not to be too far away.
However, global stockmarkets have rallied, perhaps too far, in anticipation of looser fiscal policy, reflation and rising bond rates. Investment strategists have suggested the US should publicly finance infrastructure as one area of fiscal policy earmarked to get a boost under Trump.
How the new administration deals with Russia’s President Putin over claimed election interference with Rex Tillerson as the new Secretary of State, a lifelong oilman with business dealings with Russia, will be worth following. So too will the complex negotiations with Iran and Saudi Arabia over Syria, Yemen, trade sanctions and global terrorism. Furthermore, China’s territorial claims in the South China Sea with its neighbours will test and stress his administration to the limit no doubt.
Although it’s likely he’ll rely on his team to do the job for him and I suspect he’ll be as much of a part-timer as possible with Kellyanne Conway and his daughter Ivanka likely to feature a lot in managing the media (and his tweets) in the months ahead.
So what can the new establishment rebels do to make sure they don’t experience the political shocks that upset them so much in 2016 continuing in 2017?
Well to begin with, as it will take more time than a 4 year presidential term or the timeframe for the UK to exit the EU formally. By engaging with people and organisations not based in capitals or large metropolitan areas to better understand, argue and formulate changes to the political system.
Politicians and political elites should promote and introduce deliberative democracy techniques using sortition and lots for forming representative bodies. As in Finland, organise trials for universal basic income models to help alleviate anticipated long term employment or lifestyle changes due to technological advancement.
Well intentioned worries over inequality at Davos won’t produce any worthwhile solutions unless more people perceive they aren’t excluded from society or its opportunities by distant wealthy elites. This is surely the lesson from 2016 and any time now would be a good time to address it. Lest unpalatable results materialising further for those who claim to know best what’s good for society.
It might even be interesting experience transitioning to a new democratic system of governance now that could be worth talking about at some future Davos gathering.
I’m looking forward to seeing the back of 2016.
However it’s not particularly as an investor that I’ll be glad to see the start of 2017 but as a voter. I have voted 5 times since 2014 in elections for EU, UK and Scottish parliaments, 1 Scottish referendum and in June 2016 the Brexit referendum. It has been the latter that has seemed to matter the most and it has caused all the political upset although markets have been benign about the result so far except with currency markets against Sterling. Unfortunately that does matter as prices are rising and inflation will creep back in to the UK RPI figures as 2017 progresses.
Brexit and the Philippines’ President Duterte “Harry” Show the US Has Problems With Key Allies Doing the Unexpected.
Before the UK’s referendum on leaving the EU in June 2016 plenty of world politicians advised the British to remain most prominently was the current US President Barack Obama warning the UK would be, “at the back of the queue,” in any future trade negotiations with the US if it choose to leave.
Republican Presidential Nominee apparent for the 2016 election (unless the Republicans can depose him at their convention) Billionaire property tycoon Donald Trump as part of his electioneering bravado has promised to construct a wall along the Mexican border to stop illegal immigrants from entering the US.
US Republican nominee frontrunner Donald Trump appears at the moment to be the billionaire who has both the magic and the pong touch. He appeals to a section of disaffected voters across America, yet causes dismay and bemusement elsewhere. However, with his comments on whether women should be punished for abortion or not he has, bluntly put, handed Democratic front runner Senator Hilary Clinton a big club to beat him with.
Floods, Brexit and Migration with Weak Economic Growth and Tumbling Markets Makes 2016 A Tough Year Already.
There may have been a brief stock market rally late in 2015 and any expressed wishes for its continuance have been dashed as 2016 so far has been a tough one for many people and not just investors. Here in the UK floods have battered the country especially in Yorkshire, Cumbria and Scotland.
During the spring of 2015 major equity market indices such as the S&P500 and the FTSE100 made record highs and most equity investors had a reasonable start to the year. However over the course of the summer, especially since August, these same indices along with share valuations have tumbled sharply. Widely discussed by politicians, economists and pundits is how it will effect or portray the true state of the economy now and in the coming months.
Part 2: Iran’s Nuclear Deal: Road to Peace or Road to War?
The long protracted Iranian deal over nuclear development restrictions coupled with sanction lifting between Iran and the 5 permanent members of the UN Security Council, namely the US, China, France, the UK, Russia plus Germany (G5+1), has been reached. It was announced on the 14th July 2015 to the world by both the Iranian President Hassan Rouhani and US President Barack Obama to jubilation in Tehran and sharp criticism in the US and unsurprisingly Israel.
Basically, the nuclear deal reduces the number of Iranian centrifuges by 66%. It places bans on uranium enrichment at key facilities, and limits further research and development (CNN, 2015). More complicated and where difficulties are sure to arise are with the inspections of nuclear facilities and military bases, Iran needs to agree to them beforehand, and if conditions are violated economic sanctions, which are to be lifted as part of the deal, will be reapplied.
The potentially contentious issue of inspections and access to military bases, reminiscent of the UN weapons inspectors in Iraq before the 2003 US-led invasion, was predicated by a remark from supreme leader Ayatollah Ali Khamenei to senior Iranian politicians, one whom relayed the story to an FT journalist, recalling when Iraq attacked Iran in 1984 they were unprepared and had to scrounge missiles from other countries like Libya and this has not been forgotten by the Iranian leadership.
It is why any future granting any inspections to its military sites, under the nuclear agreement, would be a major achievement for Iran and Group 5+1 for garnering the most co-operation since the 1979 revolution changed Iran’s relationship with the West.
Yet achieving agreements to access each military base, research or nuclear facility will remain a point of contention whether as not Iran can bear to open its military and industrial secrets to scrutiny, and reliving a past humiliation under the gaze of the Great Satan (FT, 1980’s War, 2015). The country wants to both defend itself and develop its capabilities against its perceived enemies to avoid annihilation or invasion as befell its neighbours, Iraq and Afghanistan, remains potent.
Therefore, credit is due to the Group 5+1 group to achieve these concessions under the announced deal with Iran, the negotiations were headed by US Senator John Kerry and Iranian foreign minister Mohammad Javad Zarif with presidential backing. However, Supreme Leader Ayatollah Ali Khamenei gets the final say on entry to the military bases.
What wider issues will make him allow inspectors in and the deal to remain intact including lifting trading sanctions?
This has much to do with the large young population wanting to take part in the wider world as seen in the democracy demonstrations in recent years, especially after the 2011 re-election of President Mahmoud Ahmadinejad.
The Economist magazine’s front cover for 18th-24th July 2015, “Hiyatollah” showing Ayatollah Ali Khamenei giving a peace sign, wearing a CND badge and sunglasses is an irreverent poke at the difficulties ahead yet reflecting the opportunity that is presented, certainly initially, with this historic deal (Economist, 2015).
Predictably Israel is concerned, and understandably, as they face a threat of annihilation from Iran and its satellite groups of Hezbollah and Hamas, and their support of the Assad Regime in Syria along with Russia too (see summer pursuits part.1).Prime Minister Benjamin Netanyahu’s tweet of the deal being,” a historic mistake” underscores the frustration as its announcement.
Saudi Arabia has misgivings too as Iran is a religious and regional political rival with vast oil supplies, the proxy war in Yemen is a manifestation of these tensions. The US Congress in both houses and parties will fight this deal all the way through its approval stages. In the US memories remain fraught of the Iranian hostage crisis in 1979-81 and trust of Iranian motives is low. It will take some real progress on inspections to convince the US that Iranian motives are genuine and have changed to participatory state from pariah.
Where’s the hope and motivation then to make these changes in behaviour?
The Theocracy and its Republican Guard Corps (IRGC) have more to lose than regional wars as the burgeoning young population want to experience not only more democracy but also its lifestyle, media and fashions. Many Iranians, although not all, has a different revolutionary zeal from 1979 which created the Sh’ite regime, one of pleasure and for shared experience and travelling to the West. An article in the FT magazine on the 30/31st May 2015 highlights my thoughts of a country looking to move away from theocracy, if theocrats and IRGC allow it (FT Magazine, 2015).
Its economy needs investment for its infrastructure especially its oil and energy sectors and to provide the opportunities it requires after years of crippling sanctions. Iran certainly has the cultural and historical heritage to have a burgeoning tourist industry. Iranian oil and its effects on production levels and global prices will affect the global oil and gas industries and have wider economic impacts on inflation and global demand in the months ahead after this historic deal.
Unhelpfully, the regime will spend some of the proceeds of sanction lifting on supporting its armed satellite forces which will then be lost to the ravages of war in places like Syria until a peace of sorts, inevitably involving Iran’s co-operation, for the containment of ISIS occurs and elsewhere where its influence is present (see summer pursuits part.1). This is a bullet worth biting to achieve a bigger benefit.
The shortcomings of the regime remain yet not to give this an opportunity to flourish would just lead to further regional tensions and wars which would hamstring and hold back (or even utterly destroy) a large chunk of the Iranian population keen to break out of its pariah status. Further wider regional benefits would follow if the deal can remain intact and normal diplomacy and trade was achieved.
I think President Rouhani and Ayatollah Ali Khamenei know this and keeping their theocracy intact as much as possible in the long run is better than losing it through changes in demographics and the ravages of time. For the EU and the US it’s an export market in a world of low or lowering growth prospects (e.g. China).
For President Obama this will be his foreign policy legacy if it holds, for Saudi Arabia and the wider Middle East –let’s see and hope for the best for a better behaved Iran.
Note: The August blog-will look at UK construction, housing, and infrastructure prospects with a comment on architecture.
Further reading and references:
Cable News Network; (2015); “Landmark Deal Reached on Iran Nuclear Program”, by J. Mullen & N. Robertson, Turner Broadcasting System, Inc. Website accessed 19th July 2015: edition.cnn.com/2015/07/14/politics/iran-nuclear-deal/
Economist Newspaper; (2015); “Hiyatollah!,” Front Cover, The Economist Newspaper Limited, London UK. Website accessed 22nd July 2015: www.economist.com/printedition/covers/2015-07-16/ap-e-eu-la-me-na-uk
Economist Newspaper; (2015);“ Hiyatollah! The nuclear deal with Iran is better than the alternatives—war or no deal at all”, Leader, The Economist Newspaper Limited, London UK. Website accessed 22nd July 2015: www.economist.com/news/leaders/21657803-nuclear-deal-iran-better-alternativeswar-or-no-deal-all-hiyatollah
Financial Times; (2015); “Hurdle in Iran Nuclear Talks Harks Back to 1980s war with Iraq”, by Najmeh Bozorgmehr, Financial Times Ltd, London UK. Website accessed 25th June 2015: www.ft.com/cms/s/0/aa598862-1984-11e5-a130-2e7db721f996.html
Financial Times; (2015); “An Iran Deal That is both Historic and Imperfect,” by Editorial, Financial Times Ltd, London UK. Website accessed 25th June 2015: www.ft.com/cms/s/0/9f221ad6-2a32-11e5-8613-e7aedbb7bdb7.html#axzz3gNVF6NZo
FT Magazine; (2015);“Iran’s Generation Normal’, by Roula Khalaf, Financial Times Ltd, London UK. Website accessed 22nd July 2015: www.ft.com/cms/s/2/b110ec2e-04b0-11e5-95ad-00144feabdc0.html
Will the Cradle of Civilisation Ever Recover its Illustrious Past: US Starts Bombing Iraq to Rid the Region of the Islamic State.
Once again the US Air Force has commenced a bombing campaign in Iraq. This time in support of the Kurdish Peshmerga forces fighting in north western Iraq against the Islamic State in Iraq and the Levant (now simply called IS). The RAF sent Tornado fighter bombers to conduct surveillance missions with a combat role now beginning.