Friday, January 27, 2012

The Honduras mess

The NY Times has an article about the situation in Honduras.

In June 2009 a US supported military coup deposed the democratically elected government of Zelaya - that it considered too leftist. In November 2009 they held an election that no one believes to have been honest and that brought president Lobo to power who still rules.

Since then Honduras has gone from bad to worse with political killings, a sharp increase in drug smuggling, the highest murder rate in the world, enormous corruption and a dysfunctional judicial system.

Yet Obama is still supporting this charade.

Monday, January 23, 2012

Syria - the League gets it, but only a bit

As I have mentioned before the previous demands of the Arab League to Syria made no sense. They basically demanded Assad to surrender. And as that wasn't likely to happen they were a recipe for a civil war.

With first the observation mission and now a plan that looks for a Yemen-like solution - including amnesty for Assad - the chances are better. However, the plan is still somewhat unrealistic:
- amnesty for Assad is fine, but what about all the people who work for the regime. Many assume even that Assad is just a figurehead. In that case he wouldn't be able to accept a solution where only he gets amnesty.
- replacement of Assad by his deputy is a reasonable idea. But I wonder whether there isn't someone else in the present elite who enjoys more trust amongst the opposition. On the other hand: this should be the result of negotiations; not a precondition for it.
- the plan still foresees democratic elections in a few months. That is not feasible. The country has no democratic traditions and no existing parties. Just as in Egypt and Tunisia it would mean that the Brotherhood will win as they have the best organization. But this organization is not built for democracy so the result might very well be a new dictatorship. In addition the conflicts are much too sharp: democracy is only possible when the main parties are prepared to compromise. Elections at the moment would simply mean a revolution by ballot box and result in mass harassment of all those who are even remotely connected with the present government. It would be much better to focus on values: more freedom, less political prisoners and less torture.

So the best idea would be to have a transitional government with a minority representation for the opposition that initially focuses of make the country more free and more civilized. Elections should be held when the government thinks the time is there, but it should be understood that that will take at least two years.

Thursday, January 19, 2012

Erdogan and Assad

It is a common phenomena that when rulers rule too long they get bored with the internal affairs of their country and want to play on the international level. This happens not only with dictators but even more with democratic leaders who after some six year already will find that they are usually the most experienced among their international colleagues.

Often this results in rather embarrassing scenes. To make themselves internationally acceptable they blindly copy what the US is saying at the moment. And one gets the impression that they would do anything for a photo opportunity with the acting US president.

It looks like something like that is happening to Erdogan in Turkey too. While suppressing the press in his own country he enthusiastically embraced the Arab Spring. He pressured Mubarak to resign. He didn't utter one word of protest when the West initiated a civil war in Libya that killed 50,000, destroyed the country and brought it to near anarchy. And finally there was his "masterpiece": Assad in Syria.

And so we saw him going to Syria, having a long talk with Assad, coming back with the message that he had agreements with Assad for reform, feeling disappointed and deceived when Assad didn't deliver and then turning on Assad, calling for his resignation and introducing sanctions.

The list of misunderstandings here is almost too long to consider:
- It is very arrogant to think that as an outsider you can dictate how a country should be ruled. Even a dictator has his constituency that has to be consulted. And he has also to face practical difficulties that might have been ignored during the talks.
- Assad and his allies know the fate of Gadaffi and Mubarak and they will not be very eager to submit to the same treatment.
- Syria is a poor country and it is well known that poverty and democracy seldom go together. A regime change might very well end up as a Salafi dictatorship. Instead of democratization it might be a better strategy to aim for more freedom and less torture.
- Unlike his father Bashar al-Assad is not very political talented. International diplomats were already before the Arab Spring complaining that he seems out of touch with reality. He seems not to grasp basic concepts like that it is not wise to anger the US if it is not strictly necessary. In addition there is doubt how much power he really has and to what extent he is just a figurehead for other people.
- In this context one cannot expect that one day in Damascus will result in democratic change. Instead to achieve results some international diplomat or politician should take it upon him to serve as a kind of long term coach for Assad and other powerful people in his regime. That will be an unthankful job as the international media will likely discard him as defending the regime. Yet it is the only way to achieve peaceful change.

It is clear that Erdogan won't volunteer for this job. He wants to stand in the limelight and be praised and honored. For doing unpopular work with an uncertain outcome we will need someone else.

Monday, January 16, 2012

Dumb and Dumber at the EU

The most important problem in the EU at the moment is the gap of competitiveness between Germany and Holland one side and many Southern countries on the other. Where many Southern states would need trade surpluses to get them out of their budgetary problems they have instead trade deficits. And the main countries they have a deficit with are in the North.

To mend that competitiveness gap the Southern countries are following very restrictive
fiscal policies. Unfortunately the EU is now forcing the North to implement similar restrictive policies. This means that the Southern countries are now running after a moving target that they may never reach before they stumble.

The logical alternative would be to have the North following an expansive fiscal policy. Unfortunately the EU leadership is so ideologically blinded that they refuse even to consider such options.

Sunday, January 15, 2012

How management consulting and equity funds breed inequality

Reading a nice article about Romney and his past as management consultant and leader of an investment fund finally made me understand what causes increasing inequality.

The point is that both management consulting and equity funds introduce top-down change. But many of the ideas they introduce are nothing new for people in the lower ranks. The consultants may have an MBA and use advanced statistical methods, but many opportunities for improvement are well visible for anyone with a bit of common sense. The only thing that management needs to do is to create a culture where such improvements are rewarded and not crushed by those whose personal interest might be hurt. The Japanese kaizen management technique is a good example how bottom up improvement works.

At first sight it may seem that it makes no difference whether a change is initiated from the top or from the bottom. But in fact it does. The first effect is on rewards: those who are credited with the improvements also get the rewards. And if the top is credited with them it will see its remuneration increase at the expense of the lower ranks. The second effect has to do with continuity. As long as mr. genius is leading the company results may be good. But inevitably he will sometimes be succeeded by a weak leader without much initiative. And then all improvement will stop. If, on the other hand, change is coming from below improvements may continue even under a weak leader.