Sunday, 15 May 2016

The Unhurried Charm Of Ireland Provides A Truly Relaxing Break

In addition to natural beauty and hospitality of the people a visit to Ireland offers a striking contrast to many mass tourism destinations that dominate the Mediterranean and Aegean coasts. For one thing, as you drive away from Shannon Airport you can’t help notice the absence of anything to interrupt your view of the deep, rich green valleys and rugged hills. There is none of the hideous over-building or intrusive bill-boards that have obliterated so much natural beauty in Spain and Turkey.

But we found something even more unique and precious these days – a real break from the pressures and angry confrontations that seem to afflict so much of continental Europe and the Mediterranean tourist destinations.

We spend a lot of time in Greece and Turkey where right now the national blood pressure is in the red zone and the medications don’t seem to be working very well. Both countries are wracked with serious social and political tensions that can catch unwary tourists in a wave of demonstrations, strikes or worse. Turkey also faces serious internal threats from Kurdish guerrillas and external threats from the Syrian conflict spreading across the border. Major cities like Istanbul, Ankara, and Diyarbakir have been hit with several bombings in the last few months that have claimed hundreds of innocent lives, including some tourists caught in the wrong place at the wrong time.

Ireland, like Greece, was caught in the great financial downdraft of 2008/09. But, unlike Greece, it is working its way out of that hole. Unemployment has been dropping steadily and is now just over 8%. The economy is growing, debt is shrinking, and the banks are once more reducing mortgage rates. Perhaps the main difference between the two countries is that where the Irish crisis was primarily financial the Greek crisis was, and remains, a toxic mix of deeply rooted political, administrative, and economic problems that are far more resistant to solutions.

Ireland, to be sure, has its own sad and bloody history, highlighted by its complicated history with Great Britain. But one gets the real sense that bitter events like the Great Famine, the waves of emigration that denuded so much of the countryside, the Easter Uprising, the War of Independence are memorialized more in music and literature than in daily life. Even the deadly sectarian violence in Northern Ireland has diminished greatly in the last few years. People may never forget. Some may never forgive. But, unlike much of south-eastern Europe, the angst of that history does not block forward motion.

In any event, none of that history intruded on our long weekend in County Clare on Ireland’s stunning west coast. Much of the county is dominated by the massive Burren, 250 square kilometres of limestone hills and cliffs that were formed more than 300 million years ago, scraped clean by successive glaciers, and eroded by rain and streams into fantastic shapes. Evidence of 3,000-year-old human settlements can be found throughout the region and several limestone tombs remain in place. Abandoned houses, churches and abbeys are poignant reminders of more recent human movements.
Ancient tomb on the Burren  in County Clare

No trip to County Clare would be complete without a visit to the Aran islands protecting the mouth of Galway Bay from pounding North Atlantic storms. The ticket agent advised us to go to the island of Inishmaan because she said it would be quieter than the busier, more touristic Inishmore. Quiet didn’t fully describe it. Silent would have been more accurate. The other passengers looked at us a little strangely because we were the only people to get off the boat at Inishmaan. Undeterred, we trudged up a narrow lane flanked with high stone walls to the very small village and encountered our first human contact in the tiny general store/post office. No, he wasn’t sure when the island’s only pub would open, but we were welcome to see for ourselves. The pub was indeed closed – with uncertain opening hours –but we were saved by a Dutch woman who ran a small tea room and served excellent homemade soup and sandwiches. It would have been interesting to learn exactly how or why this nice woman wound up on a craggy rock in the middle of the Atlantic Ocean, but we didn’t want to risk our sanctuary from the wind and rain by asking intrusive questions.
We weren't the only ones seeking shelter on Inishmaan

Back on the mainland we ate in good, unpretentious restaurants specializing in fresh local seafood, including the clams, mussels, crabs and lobsters from Galway Bay. There were meat dishes on the menu, but when you’re in one of the centers of great shellfish it seemed a waste not to take advantage of the opportunity.
Part of a long-abandoned Cistercian  abbey

If you are used to short, simple, straightforward answers to routine questions you might get a bit frustrated in Ireland. Once we pulled off the road to ask a passer-by for the shortest route to a certain site. “Well now, that’s an interesting question . . .” he began. We turned off the engine and settled in for a leisurely description of local life, history, ecology, and food that surpassed anything to be found in a guide book. Somewhere in there was a description of which road to take. It took a while. But then, that’s part of the unhurried charm of Ireland

Thursday, 5 May 2016

Turkey Illustrates The Real Risk Of Emerging Markets

The current political turmoil in Turkey illustrates with startling clarity the real risk in the so-called Emerging Markets.  Commonly used economic indicators such as GDP growth, debt, deficits, corporate profits, etc. tell only part – the superficial part -- of the story.

            Much more important for anyone seduced by the theoretical growth potential of these markets are issues like the underlying political stability, existence of ‘crony’ capitalism, competence of government institutions, level of systemic corruption, and -- most important of all – respect for the rule of law.

            A brilliant young Turkish financial analyst, who needs to remain anonymous given the poisonous climate in Turkey, emphasized this contradiction in a recent email about Turkey and cautioned against a headlong rush into emerging markets in general.

“The key issue is to understand that a growing population, rich natural resources, or a large manufacturing (assembly) base do not in themselves make a good long term story. In fact, three common denominators of emerging markets are lack of the ‘rule of law’, an economic system of ‘crony capitalism’, and a poor education system. These, in turn, create a system of constant corruption and regular boom/bust cycles. In emerging markets corruption is the grease that turns the wheels of the economic system – where politicians, bureaucrats and businessmen benefit at the expense of productivity and innovation. This system is usually supported by a political system that plays on social/political divisions along different ethnic, religious or political lines.”

            Turkey, thanks mainly to the work of former economic minister Ali Babacan, doesn’t score too badly on the raw numbers. Unfortunately, the country scores at or near the bottom of any league table on the second set of issues – the ones that can really make or break any investment. President Tayyip Erdoğan has gone out of his way to show that he recognizes no constitution and no law except the law of sheer power.

            The dramatic events yesterday that saw the dismissal of the prime minister only confirm this trend. It is well known that Erdoğan does not tolerate any dissent from his narrow, parochial world view – particularly his ambition to transform the office of president into an untouchable, unaccountable power center. Prime Minister Ahmet Davutoglu was seen as the softer, more reasonable side of Turkey’s unequal power balance. Despite his frequent avowals of undying loyalty, he apparently infuriated the president with his lack of enthusiasm for several issues key to Erdoğan’s megalomania: 1) the change to an unchecked presidential system, 2) his reluctance to throw people in jail before a trial, and 3) his willingness to use professionals like Babacan as economic advisers rather than rely on the sycophants who surround Erdoğan.

            In some ways Davutoğlu was the architect of his own downfall. His deeply flawed foreign policy only succeeded in completely isolating Turkey. Arab countries don’t really trust Turkey, Russia openly loathes and mocks Erdoğan, and the Europeans would really like to keep Turkey in some sort of ante-room to be seen and not heard. The Americans look on in despair at the rapid polarisation in Turkey and the deterioration of the country’s political discourse. But then they grit their teeth and think of Turkey’s geopolitical importance. Perhaps Davutoğlu’s main foreign policy problem as far as Erdoğan is concerned was to be perceived as mildly pro-Western. Erdoğan despises the West. He reacts furiously when Western politicians, journalists, NGOs, etc. scold him for his miserable record on human rights, press freedom, or judicial independence. His only response is loud bravado that ‘Turkey was great once and will be great again’.

            The name of the non-entity who takes over as prime minister is completely irrelevant because his only job will be to enact whatever Erdoğan wants. Cabinet meetings will have the same vibrant discussion, bright ideas, and independent thought as Stalin’s politburo meetings.

The only sliver of good news is that Erdoğan’s Turkey has absolutely no ability to project power beyond its own borders. Erdoğan would love to act like Putin throwing his weight around. But he can’t. He is hemmed in on all sides – if not militarily then politically. The Turkish army is large, but so far has shown no interest at all in moving one meter beyond its borders. From time to time the Air Force chases Kurdish guerrillas into northern Iraq and makes the boulders bounce with a few bombs, but that’s about it.

In the long run Erdoğan will fail because he is making the same major mistake as his arch-enemy the old Kemalist regime that ruled the Republic with an iron hand for more than 70 years. By alienating a large part of the population the Kemalist regime created fertile recruiting ground for Erdoğan. Erdoğan, too, is alienating a large part of the population. He is trying to force all Turks into his narrow mold of what he thinks a Turk should be. The trouble is, Turks don’t do ‘should’. The country is too diverse, too heterogeneous to fit into anyone’s mold. Erdoğan’s mold, like that of the Kemalist regime’s, will one day break. The only question is ‘How long is the long run?’

Tuesday, 15 March 2016

Spiral Of Violence In Turkey Spins Faster And Faster

Several years ago I was sitting in the back of a very small school room on a very small chair in the Kurdish area of Turkey watching an earnest young teacher trying to teach the Turkish language to about 40 Kurdish 10-year-olds. Suddenly the door burst open and another student rushed in with eyes as big as dinner plates. “Obzer,” he yelled, “Run for it. They’re here.” Obzer didn’t need to be told twice. He knew he was just the latest target in a generations-old feud.

In one bound he was out the window and quickly disappeared toward the Euphrates River in a ball of dust. A few minutes later the door crashed open again as two very rough men carrying small, lethal shotguns came into the room demanding to know where Obzer -- the new world record holder in the 400-meter dash -- had gone. No one said a word. One kid in the front row merely nodded his head toward the open window to indicate that their quarry had escaped.

            I was told later that this was more or less par for the course in that part of the country. Blood feuds were common. No one bothered calling the police or gendarmes to settle ancient grievances. In another, less lethal example, the farmer I was staying with grew rice near the river, and each night he had to hide his tools in a different location in an effort to keep them from thieves.

            Therein lies one of the big problems with the Kurds – the lack of unity, the lack of trust among themselves. Kurds are scattered over at least four countries. And from what I could see each of the several factions, tribes, families has a different agenda. Just when you think that a Kurdish-based political party is making serious, peaceful, headway in Turkey, another group becomes jealous of the newcomer’s power and resorts to violence to assert its own power. The only beneficiary of this mess is Turkey’s aspiring dictator, President Tayyip Erdogan. This intra-Kurdish conflict makes it easy for him to demonize all Kurds and erode the base of the Kurdish political party. This in turn makes it easier for him to get enough members of parliament to change the constitution.

            I have no idea who was behind the latest deadly suicide bomb attack in Ankara. The government is saying, predictably, that the Kurds are behind it. Perhaps. But it sounds a little like Captain Louis Renault in Casablanca, telling police to ‘round up the usual suspects.It is entirely possible that a little-known faction of the militant Kurdish guerrilla group, PKK, that is even more militant than the parent group has resorted to these attacks. If so, it is another nail in the coffin of Kurdish political development – at least in Turkey.

Is this the new normal in Turkey?

            It is not obvious who re-started the military conflict between the PKK and the Turkish state last summer. We know it followed the unexpectedly strong showing of the Kurdish political party in the June elections. Both the PKK and the government each had reasons to re-start the violence at that time. The PKK could well have wanted to demonstrate that it, not the Kurdish political party HDP, controlled negotiations with the Turkish state. The government, for its part, needed to demonize the Kurds to reduce their vote in the next election. That strategy worked like a charm in the November election.

            What is obvious now is that Erdoğan has no idea how to stop the violence. His preferred military solution isn’t working any better than similar efforts for the last 30 years. Security officials have so far proven incompetent in stopping the violence spreading from the southeast to big cities. Arial attacks on alleged PKK camps in the mountains of northern Iraq do nothing except make the rocks bounce. The bomb in Ankara on Sunday was the third deadly attack in the Turkish capital since last fall. In January another terrorist attack claimed about 10 lives in the middle of Istanbul’s main tourist area. In most countries, such failure on this scale would at the very least raise questions about the quality of the security services. Not in Erdoğan’s Turkey.

            It is also sadly clear that Erdoğan does not have the will, temperament, or imagination to seek any other solution at this time. He can use the violence and instability as an argument for his long-cherished unchecked presidency. He can blame the current parliamentary system for the current chaos in Turkey, and say that only a strong presidency can stop the violence. The fact that Erdoğan, already acting as a strong president, has been unable or unwilling to change course is conveniently forgotten by most AKP voters.

The tragedy of the situation is that at one time he almost succeeded in a negotiated settlement with the PKK. But he must have felt betrayed when that settlement lead to strong Kurdish political gains that put his cherished presidential ambitions at risk. He could, if he wanted, recognize that the military solution won’t work and re-start the political process. He could also, if he wanted, seek the support of the other political parties for such a move. But, given the dangerously polarized state of the nation it is unlikely any of this will happen. And it is the innocent citizens of Turkey who will continue to pay the price for this folly. At what point does he start to question the high cost of his obsessive push for the strong presidency?

Tuesday, 8 March 2016

Is This A Tory Party Bun Fight Or A Serious Debate?

What should be a serious debate about Britain’s place in the European Union has descended fairly quickly into nothing more than a food fight in a rather exclusive secondary school. On one side you have Prime Minister David Cameron and the Chancellor of the Exchequer George Osborne lobbing day-old bread rolls across the dining room at other Tory party grandees who respond in kind with volleys of butter pats. Stewards at some of London's finer gentlemen's clubs aren't quite sure which members are no longer on speaking terms.

            Make no mistake. This is a Conservative Party issue. Most of the non-political population of Britain seemed perfectly happy muddling along in the bosom of the European Union with the ease of visa-free holidays overriding nebulous issues of ‘sovereignty’. There were a few dissenting voices, but they were largely relegated to some colorful fringe elements. Most of the rest of us are left with mouths agape at the finest example of British fratricide since the civil war in the 17th century. The Labour Party can only marvel at this sudden turn of good fortune that has taken attention off its own internal problems. 

            Those Tory party members champing at the bit to leave make a great claim about regaining British sovereignty and ending the rule of faceless, unaccountable EU bureaucrats in Brussels. The problem is they haven’t really defined exactly what they mean by sovereignty and how much that perceived sovereignty has been curtailed by Brussels. They forget the considerable success that British diplomats have achieved in winning substantial concessions for Britain. One of the main British victories allowed London to remain the leading financial center in Europe.

In their more fevered moments some members of the Leave campaign sound as if they would like to re-fight the Battle of Hastings. And this time the good, solid Saxons would send the poncey Frenchmen scuttling back across the English Channel to Normandy. One forgets that it was the Plantagenet heirs of those poncey Frenchmen that won eternal glory for the English at Crecy, Poitiers, and Agincourt.

            The debate has divided the British cabinet with several members taking prominent roles in the Leave campaign. The ever-calculating mayor of London, Boris Johnson, has thrown his lot in with the Leave campaign by trying desperately to sound like his hero Winston Churchill during the Battle of Britain. Unfortunately for him his thundering denunciations of the EU make him sound much more like Basil Fawlty than Winston Churchill.

            The main fault of the Leave campaign is that it only speaks in vague generalities about what Britain would look like outside the EU. Oh, there are brave words about how the economy would flourish, trade would soar, British-made justice would rule the land, and the British lion’s roar would once more be feared. But there are precious few specifics about how all this would be accomplished. No answers to questions about British access to European markets. No answers to questions about Britain’s relationship with the United States. No answers to questions about the likelihood of another referendum for Scottish independence. No answers to questions about the willingness of companies to re-locate or even remain in an EU-less Britain. No answers to questions about how seriously an EU-less Britain would be taken by the rest of the world. We are supposed to take it on faith that all would be good in this best of all possible worlds. Right.

            One of the biggest victims of Britain’s withdrawal from the EU could well be one of the most important parts of the country’s economy – the financial sector. London is without doubt the financial capital of Europe, if not the entire world. This status could be crippled by Britain’s departure from the EU by eliminating the ability of London-based financial firms to ply their trade in the EU. It’s not just the financial firms at risk. Think of the lawyers, the accountants, insurance companies and others that underpin much of the financial world. How long would they stay in a City of London stripped of its ability to operate within the EU? That crunching sound you might hear could well be the price of London office space landing on the suddenly empty streets.

            The best argument the Leave campaign might use has nothing to do with the imagined loss of British sovereignty to a bunch of Eurocrats. The best argument may well be that the European Union itself is crumbling under the weight of its own internal contradictions. Is it a loose federation of sovereign states? Or is it the beginning of the United States of Europe? Rather than deal conclusively with these hard questions the EU leaders preferred to bask in the glow of good feeling – almost as if they were a bunch of campers holding hands around a campfire singing Kumbaya. Meanwhile the real issues like common monetary policy or common foreign policy were left in limbo.

            If the British referendum on EU membership does nothing else, it should sharply focus the minds of everyone in the EU about the future of the entire project.

Thursday, 25 February 2016

Donald Trump As President? Not Very Likely.

Donald Trump makes wonderful headlines as he trashes the Republican party primaries in the United States. He says he’s angry at everyone and doesn’t care who gets offended by his tirades. To hell with policies, it’s show time! Despite the reality TV theatrics, however, his path to a general election victory in November is as difficult as climbing Mount Everest in flip-flops.

Very, very long odds of him becoming president
History and the numbers are against him. First the history. Americans have never, ever elected an extremist of the left or right as president. Ignoramuses, fools, crooks yes. Some of them have managed to find their way to 1600 Pennsylvania Avenue. But candidates representing only fringe elements, no. Strom Thurmond in 1948, Henry Wallace in 1948, Barry Goldwater in 1964, George Wallace in 1968, Ralph Nader in several campaigns, and Ross Perot in 1992. Goldwater helped dig his own grave in 1964 by famously declaring “Extremism in defense of liberty is no vice.” The Democrats had a field day with that statement, forcing Goldwater onto his back foot for the entire campaign by making extremism sound like a very dangerous word. The famous Daisy ad complete with an atomic explosion highlighted the campaign against extremism. In that election the American voters showed what they thought of extremism by electing Goldwater’s opponent, Lyndon Johnson, in a land slide.

People are angry now. But believe me they were even angrier in 1968 when the twin assassinations (Robert Kennedy and Martin Luther King), Vietnam, the Weathermen, Black Panthers, Russian invasion of Czechoslovakia, riots in Paris that ultimately forced Charles de Gaulle from power were threatening to tear societies apart. In that American election year George Wallace, former governor of Alabama, ran a fiery campaign appealing to much of the same demographics as Donald Trump – angry white men who felt left behind by the march of minorities and the so-called ‘Big Government’. Wallace wound up getting 13% of the popular vote and 45 electoral votes. Richard Nixon, who had been around for ever as a right wing California congressman, vice president, failed presidential candidate, wound up getting elected.
George Wallace was angry in 1968
 The numbers are also stacked against a Trump presidency. A candidate has to win 270 of 535 electoral votes to become president. In theory the electoral college serves to protect the interests of smaller states. It is possible, but difficult, to lose the popular vote, as George W. Bush did in 2000, and still win. Each state is awarded two electoral votes representing the equal number of senators each state has. The rest of a state’s electoral votes are apportioned according to the number of congressmen it has in the House of Representatives. The District of Columbia (Washington, D.C.) was given three electoral votes. All but two states have a first-past-the-post system whereby a candidate who wins the popular vote in a given state wins all that state’s electoral votes. Nebraska and Maine use proportional representation.
2012 electoral map shows the difficult road for a Trump candidacy

Despite the efforts to keep small states in the game, the system clearly favors large states. California, for example has 55 electoral votes, one for each of its 53 members of the House of Representatives and two for its two senators. My home state of Vermont, on the other hand, gets only three electoral votes because we have but one congressman and two senators. This puts Vermont on a par with the likes of Alaska, Montana, South Dakota, North Dakota, Wyoming, and Delaware. You can see why candidates don’t spend a lot of time campaigning in those states.

The problem for Trump and other screamers from either side is that the big states tend to vote for main line candidates. Right now these states with the exception of Texas, tend to vote Democratic. Even states that were solidly Republican like Virginia and North Carolina are turning from solid red to purple.  That means any Democratic candidate starts with the huge advantage of California plus most, if not, all of the heavily populated Northeast, and key Midwest states like Michigan and Illinois. It is also extremely difficult to see any of the current Republican candidates winning Oregon or Washington state. By my count this gives any Democratic candidate almost 200 electoral votes of the required 270 before the counting has even begun. Obviously, some Republicans have broken this strong hold, but only by appealing to the broad center of the electorate. And there is not a Republican in sight who appeals to this key group – represented by what I call the extremely sensible and smart ‘Ohio soccer mom.’ She may well vote Republican from time to time, but there is no way in hell she will cast a vote for either Donald Trump or Ted Cruz.

So sit back, enjoy the theater as Trump flails around the country destroying the traditional Republican party. But he might want to hold off on his plans to re-decorate the White House. In this environment, it is easy to understand why former New York mayor Michael Bloomberg is considering a run. While the odds are strongly against him, he is the only one of Hillary Clinton's potential opponents who has even a slim chance of blocking her trip to White House.