The Old Lucretius Plan

The sinner's new initiative

Indonesia is gearing up for the Bali Climate Change Conference in December. This will be the opportunity for the world's nations to plan the post-Kyoto framework for GHG (greenhouse gasses) reduction, perhaps extending the existing cap and trade schemes.

At least, that was our hope until George W Bush thrust his tattered codpiece into the debate this week with his tumescent 'new' initiative (was there an 'old' initiative that we missed?). Tony Blair seemed delighted with Bush's apparent conversion to the cause, probably on the basis of 'joy shall be in heaven over one sinner that repenteth'. Indeed, the fact that Bush acknowledges climate change and accepts that some action must be taken is a some progress from the craven stance of denial and obfuscation that has so far characterized this dire and corrupt administration.

However, the plan to sideline the G8 and UN processes with a US-led initiative is probably not a sound reason for unconfined joy on the part of Blair or anyone else. It rests on the idea of allowing a number of nations to pick a GHG emissions target for the next 10-20 years and then, er, hope it all works out. In fact the whole scheme seems to be fairly loose and relaxed except that the US 'demands' all nations to cut tariff barriers to the transfer of environmental technology from US high-tech firms. Meanwhile the US has once again re-stated its implacable objection to joining in a global system of carbon emissions caps and trading.

The scheme seems to be that the US can continue much as it is now, but can put pressure on developing countries to restrict their emissions and buy US 'clean' technology. There is nothing inherently wrong with hoping that technology will save us, but there is no evidence so far that it will. Furthermore, the thrust of US efforts has been to promote corn-based Ethanol (which uses almost as much energy to grow as it gives back), or float entirely hypothetical ideas about reflective crystals in space and so forth. Both these policy options have traction because the generate massive subsidies for special interest groups (namely farmers and the military-industrial complex).

I believe that the real reasoning behind Bush's new foray into climate change is to find a way to keep China and India in check. Bush referred to energy intensity (EI), which is usually measured by Tonnes of oil equivalent (toe) per million dollars of GDP (in purchasing power parity dollars). This measures the amount of energy that a country uses in relation to its economic output. For instance, according to the World Resources Institute, the UK had an EI rating of 168.5 in 1990, which had fallen to 141.2 in 2003. This was mainly due to the changing nature of the UK economy, which has moved out of industry (which converts adds labour + raw materials + power into tangible products) and into services (which converts labour + knowledge into intangible services). The US has also seen a reduction, from an EI of 272 in 1990 to 221 in 2003.

Where has all this industrial activity gone? Well, many US politicians argue that it has been off-shored to China, so we would expect their EI rating to have risen over the same period, but in fact it has dropped from 504 to 231, so it is roughly the same as the US. India has also dropped (250 to 189), and developing countries as a whole score 224 compared to 300 in 1990. So how will Bush persuade China and India to reduce their energy intensity any further when they are already fairly lean?

Another way to look at this is the C02 intensity, which measures metric tonnes of C02 per million $ of GDP. In 2003 the USA pumped out 556 tonnes per million of GDP, compared to 684 in 1990. China pumps out 658 compared to a massive 1374 in 1990. So in the 13 year period in question China became more efficient at converting energy to GDP (by 50%), while the USA became just 19% more efficient. And all of this happened while China was experiencing the fastest economic growth of any country in history, ever.

Developing countries as a whole produced 491 tonnes of C02 per million of GDP, compared to 510 in developed countries.

This means that the US rhetoric about the profligacy of those irresponsible developing countries going hell-for-leather for growth with no thought for the planet does not stand up to analysis. It is, as usual, the insatiable consumption of developed countries that is driving the boom in places like China, which will need to keep building coal-fired power stations to supply the demand. For the US to suggest that no deal on cuts in emissions is possible until developing countries cut their own emissions is merely a stalking horse to introduce non-tarrif barriers against those countries and thus shield US industry from competition. This painted fop is protectionism dressed up as diplomacy, slumped over the exhausted steed of American exceptionalism and entitlement.

Chow down, sucker

The answer to childhood malnutrition arrived in Maumere a couple of days ago. 

American Army high calorie field rations; Beef Teriyaki, Apple sauce, Refried beans  What more could a child need to get him through the long daily march toting an M-16 through the badlands of Flores?

The delivery also included:

- Microwaveable macaroni cheese
- Dented tins of sweetcorn
- Packets of Bran Flakes breakfast cereal
- Cheese flavoured crisps

These items were packed in boxes by well-meaning volunteers in the USA, I know this as there was a sticker on the box stating that fact.   The food is free, although the cost to ship the two containers from Surabaya in Java to Maumere is 30 Million Rupiah (USD 3,000), so I would argue that it isn’t really free at all.  Furthermore, it usually costs only 1.5m Rupiah (USD 150) to ship a container to Surabaya, so someone is making a tidy mark-up.

Without wishing to demean the hard work of volunteers (well, that would be a tad hypocritical), a brief critique of these foodstuffs is in order.  Firstly, microwaveable products are not really appropriate when the only microwaves on this island are emitted by the mobile phone masts, and in any case instant macaroni cheese does not seem very nutritious.  The tins of sweetcorn will be received with incredulity by families who have spent the past few months growing corn in their back yard, and the idea of putting food in a tin is an alien concept here, and deemed to be rather revolting (I have recently read a report from Aceh where tsunami victims have pleaded with NGOs to give them fishing rods rather than tinned tuna, which the women say ‘no one in the family wants to eat because fish should come from the sea, not from a tin’).  There is no concept of breakfast cereal, and milk (which is all imported) is beyond the budget of most people.  As for cheese-flavoured crisps, well at least they don’t need to be zapped in a microwave, but are they really what a malnourished child needs?

The military rations mentioned above are described on the pack as ‘good performance meals’, and no doubt they are better than the other items.  The instructions on the pack, destined to be perused by every hungry jarhead, read: ‘You are more active during field training, deployment and combat than in garrison…one Ready-to-Eat (MRE) contains 1200 to 1300 calories. Average daily calorie requirements in the field are 2800 to 3600 calories…’  How can a high energy meal designed for a strapping 90 kg marine be appropriate for a 9 kg malnourished three-year-old child?

There is a real fear from the Nutrition Department of the local Health Department that this food, if eaten, will cause severe diarrhoea, as not only is the nutritional value questionable, but also children are not accustomed to this type of rich western-style food.

Why couldn’t we have the 30 million Rupiah as cash to spend on locally grown fruit and vegetables? Local intervention would not only have provided appropriate and nutritious food, but also help stimulate the local rural economy.  Instead completely unsuitable food, low in nutritional value, will create unusual eating habits and fail to tackle any of the root causes of malnutrition. 

It is disheartening to see the hard (yet possibly misguided) work of volunteers in the USA, who presumably believe they are helping malnourished kids, end up as an development intervention that manages to be both expensive and useless.  We have seen plenty of misbegotten schemes in our time out here, but this one really takes the trans-fat laden biscuit.

Corruption (part 2)

You may have gathered that corruption is becoming a special subject of ours out here, as it is always a hot topic here in Indonesia (see blogs passim).

While fighting corruption here, by trying to persuade Indonesians that the road to sustainable development passes over the bridges of civil society, we often find ourselves being seen as unimpeachable British crusaders for honesty in all transactions. This is a fairly uncomfortable position, and we try to emphasise that the reason why Britain is relatively less corrupt than Indonesia is not through the essential honesty of its citizens, but because of the numerous systems that are in place to make corruption difficult.

I tell our local colleagues that in the absence of certain elements of civil society (a free and inquisitive media, strong government institutions, trustworthy judges, auditors and tax collectors) British people are probably fairly corruptible. For instance, how many respectable middle-class people have paid the builder in cash to avoid VAT?

However, I held on to the idea that the British have enough belief in some form of social contract to prevent them ever becoming overtly corrupt, regardless of how frictionless it may appear to be. To be exposed as a corrupt businessman, or policeman, or council officer is still to suffer social stigma, whereas in Indonesia such people are treated with a certain misplaced respect.

It is therefore interesting to read about how the British Government caved into pressure from a cabal of arms dealers to soften anti-corruption regulations applying to exports covered by the Export Credits Guarantee Department. (The ECGD is a means whereby you, the taxpayer, subsidise the export costs of certain items to other parts of the world. In particular, the British Government deems it necessary to provide credit guarantees for arms exports to Saudi Arabia, that beacon of democracy and human rights in the Middle East).

You can read the full story here: http://www.thecornerhouse.org.uk/item.shtml?x=107362

Jean Eaglesham wrote in the Financial Times on 14 January 2005:

"Lobbying ministers for the right to turn a blind eye to corrupt activities that boost overseas profits is not an activity any business would wish to advertise. So it is not surprising industry moved swiftly to try to distance itself from yesterday's court battle over the dilution of curbs on overseas bribery.

The government has agreed to a full public consultation on the anti-bribery rules to avert a court challenge to its one-sided consultation with business.

The CBI employers' body protested that the legal challenge was simply a "dispute about the process of government" between Patricia Hewitt, the trade and industry secretary, and anti-corruption campaigners.

Business had been "inadvertently caught up" in the wrangle, the CBI said. But this protestation that industry was an innocent bystander to the government's actions sits uneasily with documents connected to the case. These show how BAE Systems, Airbus and Rolls-Royce spearheaded an intensive - and highly successful - industry lobbying campaign, persuading Ms Hewitt to override her civil servants."

(You should note that I am quoting the Financial Times here, not The Guardian!)

When those pillars of civil society such as the Government and the CBI collude to water down anti-corruption initiatives, it is tempting to conclude that Globalisation is the means whereby we preach modern Western-style honest dealing to developing countries, while participating in old-fashioned envelope-passing under the table. Such practices perpetuate bad regimes, prop up oligarchies and contribute towards deepening poverty.

Korupsi

According to Transparency International, Indonesia is the third most corrupt country in the world with Nigeria the second and Bangladesh in the number one spot. (I have heard it said that the only reason Nigeria is number two instead of number one is that they bribed Bangladesh). Corruption is a way of life here, and some of the instances of it are very shocking, and one can become quite angry at the injustice of it.

In the UK it has become a commonplace that the developing world is corrupt, and in fact many people abjure from making charitable donations as they believe their money will pass into the hands of corrupt officials. I was therefore interested to read about the Alvis case in the Guardian regarding the corrupt sale of tanks to Indonesia in 1995.

Britain's controversial sale of tanks to Indonesia was a thoroughly corrupt transaction, according to the Alvis documents released by the court. If the deal were to take place today, it would be a criminal offence under recent legislation. The high court heard that £16.5m was paid into offshore accounts - a rake-off of around 10% of the deal's value. This was paid to Madam Tutut, her real name is Mrs Siti Rakhmana, the eldest daughter of the then president Suharto. Thanks to Tutut, the money came through to buy 50 brand-new light tanks, costing £1.6m each.

It occurs to me that a corrupt transaction requires two parties, and they are both equally corrupted by it. A great deal of the really shocking corruption in the third world involved deals between western companies and foreign governments, and yet we see developing countries as corrupt and transnational corporations such as BAe (the current owner of Alvis) as fine upstanding motors of economic growth.

The corruption here was inspired by the Indonesian Army, which had been bolstered for years by unquestioning support in the West, despite its appalling human rights record. I am not in favour of invading every country that has a nasty regime (as in Iraq), but I do feel rather strongly that we should not sell them arms, and we certainly shouldn't fill their coffers with kick-backs. At the time of the sale of the tanks, John Major's government assured protesters that the tanks would not be used against indigenous people fighting for their rights (for instance in Timor Leste), and as it turns out, they was right. Ironically, there appears to have been no real military demand for such extravagant weapons. Suharto, the court documents reveal, was interested in the tanks merely because he thought the army's existing armoured cars looked unimpressive.

What is worse? That a myopic, digenerate, immoral Tory government sold weapons that may have been used to oppress the populous, or that they sold expensive toys to a corrupt regime that was already in hock to the west for billions of dollars, money that one day will need to be wrung from the poor?

From where I am sitting, it seems that corruption can come in many forms, and has many interested parties. All I know is that ordinary Indonesians are paying for it, every day, when their children die of malnutrition or malaria, and when they cannot take their crops to the market because the roads have still not been repaired. Just one of those tanks, $1.6m, could transform the lives of people on this island.

There is a chink of light in all this. Gallup carried out a recent poll for Transparency International as part of its 'Voice of the People Survey' carried out between June and September 2004. While corruption remains a problem in many parts of the world, it seems that SBY, the new President of Indonesia is already having an effect on the topic.

In the poll, Indonesia was the most optimistic country of the world, with two out of three respondents forecasting a reduction in corruption in the coming years.

If corruption also reduces outside Indonesia, say in British arms manufacturers, then maybe there is reason to be more cheerful.

The Poisoned Well

The link between soda fridges and Windows Media Player

Keynes once wrote that "Capitalism is the astounding belief that the most wickedest of men will do the most wickedest of things for the greatest good of everyone"

Barely a week goes by without evidence to support this thesis appearing in the business pages, but last week's Coca-Cola Dasani debacle surely sets a new standard in corporate cynicism. I was given a bottle of Dasani in the street about six weeks ago, by an earnest PR cannon-fodder bloke in a polyester Dasani-themed jacket. "look!" he said, "pure water from Coca-Cola!" "Oh, is it mineral water then?" I ask, "oh no, it's purified water" comes the reply. "So it's basically tap water then" I offer, "No, its been through a reverse osmosis process" I am told, as the bottle is thrust in my hand, while I ponder the mind-blowing economics of buying an enormous Britta water filter, running tap water through it and then selling it at a 300,000 percent mark-up.

That said, it's a free market and of course we are not obliged to buy this attractively (if rather pointlessly) packaged tap water, so I resolved to continue to drink anti-war Evian rather than imperialist-aggressor Dasani.

This is not as easy as it appears. The next time I visited my local Spar shop, the fridge contained no Evian, Vittel or Highland Spring. The shelf reserved for mineral water was a sea of Dasani blue, at 95p a pop. Why is this? Because Coca-Cola corp owns the fridge and dictates what goes in it. How galling it must have been for Coke over all those years to see shelves of Coke, Fanta and Mountain Dew in these fridges, and see customers reach for a bottle of French mineral water. Now they had their chance to ensure that all liquid refreshment delivers a profit to the mighty Coca-Cola corp.

This is all irrelevant now of course, because it was discovered that in their special filtration process, Coca-Cola managed to take perfectly good Surrey tap water and turn it into potentially carcinogenic 'pure' water. They did this, apparently, to improve the 'taste profile'. They have withdrawn it from the market and have no plans to return, but it must be heartening to know that this is the second-largest brand of water in the USA.

So, what has this got to do with Microsoft?

Well, Microsoft has a history of almost no innovation leading, miraculously, to market dominance and extraordinary riches. It does this by bundling their inferior apps (Windows Media Player springs to mind) with their appalling operating system, so they can use market dominance to catapult WMP to the number one position, making it the default standard, and creating a new monopoly.

Where did they learn this from?

Well, remember when that nice man from Coca-Cola turned up and gave you that fridge...

Fairtrade Fortnight

Today is the launch of Fairtrade Fortnight, and thanks to my chum Jill I was able to gate crash the launch breakfast at Mezzo in Soho, hosted by George Aligaih no less. We learned that Fairly traded products sold in the UK topped £92 million in 2003 (a rise of 37% over the previous year), and now account for over £100m. CafeDirect is one of the stars of this particularly righteous firmanent, and is now Britain's sixth-largest coffee company.

It is great to see the fairtrade fortnight gain some publicity (and I enjoyed my free coffee from the co-op publicity stand at Paddington), but if it is so popular why do I spend so much of my time explaining to friends and relatives what it is?

For those of you still in the dark, here is a quick guide:

Fairtrade ensures:
- A price that covers producer's costs.
- A premium for producers to invest in their communities - clean water, healthcare, education and the environment.
- Long-term and more direct trading relations.

So, to understand fairtrade you have to first understand that most global trade is inherently unfair, which is a huge subject and will be covered in one of my other posts.

What can I do?

Buy products with the fairtrade logo, and convince your employer to do the same.

Is it expensive?

Co-op' own brand fairtrade coffee costs just 1p more than non-fairtrade brands (such as Nescafe and Maxwell House).

Do the producers really benefit?

Taking coffee as an example, Co-operatives that sell to the Fairtrade market receive 106 cents a pound for robusta coffee and 126 cents for aribica. This compares with 32 cents and 65 cents respectively on the world market (December 2003).

Is this just about coffee?

No, there are now many products which can be fairtrade, and the list is growing. Among them are:
Coffee (ground and instant)
Tea (including Earl Grey if you look hard enough)
Honey
Bananas
Chocolate
Fruit Juice
Muesli
Sugar
Wine
Footballs
Roses

Posted: Mon - March 1, 2004 at 10:56 AM