It is reported this morning by the BBC that the meeting of the International Monetary Fund (IMF), held over the weekend in Washington, has considered a plan for an orderly fault of Greek debt involving a 50% write down of the debt coordinated with extra funds to bolster European Banks. This looks on the face of it like another attempt to kick the can down the road delaying real action; but this time it could be different.
It is clear that Greece cannot pay its debts so is in effect bankrupt. World bankers do not want to admit this in public but it will have been at the top of the agenda behind the closed doors of meetings amongst the inner circle of IMF officials.
The 50% write-down plan buys time in that it looks possible that Greece could pay its way out of the reduced debt burden, but this does not address the core problem. From the viewpoint of outsiders, the demands for reform in Greece may look reasonable but inside Greece these are politically impossible. Greece needs the freedom to sort out its own affairs in its own way. Greece fiddled the figures to get into the Euro and it cannot now dig itself out of the financial hole except by leaving the Euro – in addition to defaulting on its sovereign debt.
I would hope that the IMF, ECB and central bankers now have a secret plan for Greece to exit the Euro in an orderly fashion – if this is still possible at this late stage in the crisis. De La Rue, the trusted bank note printer will have been given a contract (under great secrecy) to print Greek Drachma and these are now held securely in a warehouse in London waiting to be airlifted at two hour’s notice. The plan will include freezing Greek bank deposits immediately before the public announcement to prevent a run on the banks. There will then be a firestorm through the financial system as the reality takes hold but not as bad as people fear. There might be relief that the inevitable has come to pass and, if the plan has worked out how to prevent Italy following the exit route, it is possible that stability will return.
The secret plan to eject Greece from the Euro needs a good cover story. The discussion of a 50% write down on Greek debt might be a suitable distraction to give the ECB and central bankers the time they need to prepare.
Are the IMF and ECB kicking the can down the road, in desperation or with quite confidence that they have a secret plan for real action? Over the coming months the truth will emerge.
Monday, 26 September 2011
Sunday, 18 September 2011
A Curse hanging over French Guiana
The curse of fossil fuel is hanging over French Guiana. Tullow Oil, the London-based exploration company, has struck oil with its first well sunk in a new exploration block offshore. Commentators speculate that this could be the biggest new oil discovery of the year.
This small French ex-penal colony has a population of 200,000 and relies on income from an incongruous mix of its forestry industry and launching communication satellites for the European Space Agency. Agriculture is mainly along the coastal area including rice and manioc and further inland a small amount of marijuana mainly for local consumption. This beacon of stability in South America is about to be undermined in anticipation of the windfall profits from becoming an oil-exporting nation.
I lived in another outpost of Central America, Belize, for 6 months in the 1980s near a town called Punta Gorda. On first sight these were poor people but after a few months you began to realise that these were happy people with a wealth of natural resources, fruit from the jungle and fish from the sea. A Western eye could be fooled into believing that they need development but it is too hasty to jump to this conclusion.
A number of outsiders had moved into this part of Southern Belize to ‘get away from it all’. What they were actually about they were reluctant to say but it was a reasonable assumption that their business was growing marijuana for export to markets further north. In a sleepy town with ample remote jungle and good coastal access to export the drug, this was an ideal location. At the same time there was the first murder in living memory in this little town. The influx of money was starting to corrupt and undermine a way of life.
Oil production and growing marijuana are not the same; one is legal the other is not. Where they are the same is that they both bring monetary wealth, and with wealth comes the prospect of greed and corruption.
The people of French Guiana may find that oil is not the salvation it appears to be as the black gold starts to flow ashore and the discussions over money gather pace. Norway has shown how oil wealth can be used to improve the life of its people and secure long-term security. The Middle East has shown how oil wealth can corrupt and undermine society. French Guiana needs, as a matter of priority, good governance and long-term sustainable plans to ensure that the curse of oil does not strike down this South American colony.
This small French ex-penal colony has a population of 200,000 and relies on income from an incongruous mix of its forestry industry and launching communication satellites for the European Space Agency. Agriculture is mainly along the coastal area including rice and manioc and further inland a small amount of marijuana mainly for local consumption. This beacon of stability in South America is about to be undermined in anticipation of the windfall profits from becoming an oil-exporting nation.
I lived in another outpost of Central America, Belize, for 6 months in the 1980s near a town called Punta Gorda. On first sight these were poor people but after a few months you began to realise that these were happy people with a wealth of natural resources, fruit from the jungle and fish from the sea. A Western eye could be fooled into believing that they need development but it is too hasty to jump to this conclusion.
A number of outsiders had moved into this part of Southern Belize to ‘get away from it all’. What they were actually about they were reluctant to say but it was a reasonable assumption that their business was growing marijuana for export to markets further north. In a sleepy town with ample remote jungle and good coastal access to export the drug, this was an ideal location. At the same time there was the first murder in living memory in this little town. The influx of money was starting to corrupt and undermine a way of life.
Oil production and growing marijuana are not the same; one is legal the other is not. Where they are the same is that they both bring monetary wealth, and with wealth comes the prospect of greed and corruption.
The people of French Guiana may find that oil is not the salvation it appears to be as the black gold starts to flow ashore and the discussions over money gather pace. Norway has shown how oil wealth can be used to improve the life of its people and secure long-term security. The Middle East has shown how oil wealth can corrupt and undermine society. French Guiana needs, as a matter of priority, good governance and long-term sustainable plans to ensure that the curse of oil does not strike down this South American colony.
Sunday, 11 September 2011
Sustainable Development in the UK
The UK government is in trouble for using the term ‘sustainable development’ in the Draft National Planning Policy Framework in order to justify the following statement:
‘... a presumption in favour of sustainable development, which should be seen as a golden thread running through both plan making and decision taking. Local planning authorities should plan positively for new development, and approve all individual proposals wherever possible.’
The Bruntland Commission (1987) defined the term ‘sustainable development’ in the context of underdeveloped countries. Back in 1987 the concern was how to provide development without the associated path of destruction that the developed countries followed. There was an underlying assumption that there would be development so the need was ways to make it sustainable. This argument does not apply to highly developed countries like the UK.
The draft policy includes three threads:
planning for prosperity (an economic role)
planning for people (a social role)
planning for places (an environmental role)
This is the order of precedence used in the report and the bold highlighting has not been added by me; it has been used by the author to emphasise the guidance to local authorities and planning officials that:
‘... significant weight should be placed on the need to support economic growth through the planning system.’
This is a very clear example of the business as usual approach which I analysed in my book Victim of Success: Civilisation at Risk. In Chapter 13 (a coincidence of number choice) I wrote about ‘The Three-way Balancing Act’ between people profit and planet. I wrote:
‘I do not argue that we soften our focus on economics. Economic tools are quantifiable and measurable and the outcome of increased wealth is a tangible improvement. The problem is that a narrow focus on economics does not lead to sustainable outcomes. We need to bring the same level of rigour to the way we deal with social outcomes and protection of the environment.’
The UK government is leading the UK down the path that I described in the early chapters of Victim of Success on which we knowingly and stupidly continue down the path to destruction. There is no need; there is a better way; UK planning rules do need changing but the foundation assumptions of this draft (daft) policy is wrong.
‘... a presumption in favour of sustainable development, which should be seen as a golden thread running through both plan making and decision taking. Local planning authorities should plan positively for new development, and approve all individual proposals wherever possible.’
The Bruntland Commission (1987) defined the term ‘sustainable development’ in the context of underdeveloped countries. Back in 1987 the concern was how to provide development without the associated path of destruction that the developed countries followed. There was an underlying assumption that there would be development so the need was ways to make it sustainable. This argument does not apply to highly developed countries like the UK.
The draft policy includes three threads:
planning for prosperity (an economic role)
planning for people (a social role)
planning for places (an environmental role)
This is the order of precedence used in the report and the bold highlighting has not been added by me; it has been used by the author to emphasise the guidance to local authorities and planning officials that:
‘... significant weight should be placed on the need to support economic growth through the planning system.’
This is a very clear example of the business as usual approach which I analysed in my book Victim of Success: Civilisation at Risk. In Chapter 13 (a coincidence of number choice) I wrote about ‘The Three-way Balancing Act’ between people profit and planet. I wrote:
‘I do not argue that we soften our focus on economics. Economic tools are quantifiable and measurable and the outcome of increased wealth is a tangible improvement. The problem is that a narrow focus on economics does not lead to sustainable outcomes. We need to bring the same level of rigour to the way we deal with social outcomes and protection of the environment.’
The UK government is leading the UK down the path that I described in the early chapters of Victim of Success on which we knowingly and stupidly continue down the path to destruction. There is no need; there is a better way; UK planning rules do need changing but the foundation assumptions of this draft (daft) policy is wrong.
Sunday, 4 September 2011
Is Sustainable Development an Oxymoron?
It was not intended that ‘Sustainable Development’ would be an oxymoron when it was defined by
the Bruntland Commission in 1987 as ‘development that meets the needs of the present without compromising the ability of future generations to meet their own needs’. In the context of examining how to encourage the development of poorer countries, it was argued that this should be according to the paradigm of sustainability. Making the assumption that underdeveloped countries will need to develop was a reasonable assumption at the time. Over recent years, the term ‘sustainable development’ has been used (and misused) as a term to justify further development in the belief that sustainable development must be good.
The deeper understanding of sustainability that is slowly emerging recognises that the assumption that there must be continual development (meaning expanding the industrial and built environment) is the wrong foundation on which to build policy. The term ‘sustainable’ is now, in many cases, a contradiction when used in conjunction with ‘development’.
Sustainability is about the effective management of resources now and for future generations. That means retaining a functioning eco-system; which means preserving bio diversity; which means keeping a sufficient proportion of land for nature. Development that slowly encroaches on the bank of natural land has to be constrained before lasting damage is done. ‘Sustainable development’ now fits the definition of an oxymoron: a phrase in which two words of contradictory meaning are used together for special effect; examples from the dictionary are 'wise fool' and 'legal murder'. To these we can add ‘sustainable development’.
the Bruntland Commission in 1987 as ‘development that meets the needs of the present without compromising the ability of future generations to meet their own needs’. In the context of examining how to encourage the development of poorer countries, it was argued that this should be according to the paradigm of sustainability. Making the assumption that underdeveloped countries will need to develop was a reasonable assumption at the time. Over recent years, the term ‘sustainable development’ has been used (and misused) as a term to justify further development in the belief that sustainable development must be good.
The deeper understanding of sustainability that is slowly emerging recognises that the assumption that there must be continual development (meaning expanding the industrial and built environment) is the wrong foundation on which to build policy. The term ‘sustainable’ is now, in many cases, a contradiction when used in conjunction with ‘development’.
Sustainability is about the effective management of resources now and for future generations. That means retaining a functioning eco-system; which means preserving bio diversity; which means keeping a sufficient proportion of land for nature. Development that slowly encroaches on the bank of natural land has to be constrained before lasting damage is done. ‘Sustainable development’ now fits the definition of an oxymoron: a phrase in which two words of contradictory meaning are used together for special effect; examples from the dictionary are 'wise fool' and 'legal murder'. To these we can add ‘sustainable development’.
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