Wednesday Night #1401

Don Barwick has been an important contributor and good friend to Wednesday Night.  His recent passing was noted with deepest regret.

India
India’s phenomenal growth in world leadership in recent years has provided that country with incredible wealth, a highly educated population and an increasingly significant place in the world’s politics and economy.  Scheduled tribe members, and Untouchables/Dalits, and some as Adivasis, have places reserved for them at university in an attempt to equalize the national standard of education.  Unfortunately, members of those tribes are mostly farmers producing two crops a year, requiring the services of the children at the expense of an adequate education or even an acceptable level of literacy in a developed country that would provide them with the means of sharing in India’s increasing affluence.  Tata, the fourth largest steel company in the world – and  part of the huge Tata   conglomerate that includes the Taj Mahal Hotel, Jaguar, and the $2,500 Nano car . Tat steel, responsible for the construction of the new plant that will produce the Nano in Jharkhand, India, is working with the community of scheduled tribes, whose population is largely illiterate and therefore cannot benefit from the establishment of the new plant  to make the agricultural lands more productive while enabling the children to become educated to a level hitherto impossible. Tata is also involved in medical and healthcare education for the members of the community, overcoming the problem of communicating with illiterates by conveying the messages through marionette theatre.
The recent Mumbai attack by Pakistani nationals has rased a number of hypotheses including the possibility that it was orchestrated in order to force Pakistan to move troops away from the Afghanistan border.  There is concern in India that the new Obama administration that includes many Clinton-era officials who have previously had close ties with Pakistan and Saudi Arabia. In reaction, India is drawing closer to Russia (which has just sold two nuclear plants to India).  The United States and Pakistan have become mutually dependent, especially with American dependence on Pakistan for the transportation of materials through that country.  The the theory of MAD prevails regarding India and Pakistan, but the inevitably of the proliferation of countries possessing nuclear weapons increases the probability of the doomsday scenario elsewhere in the world.

Canada
Parliament
The most watched Canadian drama, drawing an audience of millions in the theatre, on television and in print, has paused for an intermission during which the script is being hurriedly rewritten although the next act has not yet been finalized.  The puerile acting thus far appears to be beyond of the scope of the script writers and certainly beyond that of the cast.  To date there has been no attempt to restrict minimum age of the members of the audience although there have been some suggestions that televising the proceedings might have contributed to the coarse language. But would it be possible today to eliminate televised proceedings? Highly doubtful. It is up to all leaders to impose rules of civility and decorum on their party members.
Despite the apparent theatrical nature of the Commons, the parliamentary system tempered over several centuries is working.  When sessions recommence, real problems will be faced and solved in a reasonable fashion.
Meantime, the coalition is expected to be short-lived.  None of the parties and certainly no elector would willingly go through another election in the near future. Michael Ignatieff appears to have received widespread support from his Liberal colleagues and the transition in leadership appears seamless.  He will have to widen his appointees to include more representatives from both Québec and  the West.
The new budget
On January 27, the Conservatives will present their new budget. The three opposition parties are each developing their own proposals (but without the same information that the government has at its disposal), which will guide their reaction. If the budget fails to address the issues considered fundamental by the opposition parties, then they will vote against it and the government will be defeated, and only then will we know whether there may be a coalition. Whatever the outcome, there is lingering anger over Minister Flaherty’s Economic Statement, based on numbers that did not make sense. When looking at what is happening south of the border, it is pretty evident that Canada will also have to inject a major stimulus program with consequent deficits. And that will be hard for the opposition to vote against.
Once you have exhausted all other possibilities, you just may get it right
BUT  how will we deal with the excessive liquidity and overspending three years from now? And what if, as at least one Wednesday Night authority believes, that period is longer and  the consumer decides to rebuild his/her balance sheet, cut back on spending? What happens to tax revenues?
The economy
The Canadian Economy has lost the equivalent of one year’s GDP in the course of the current economic crisis.  Tax receipts are collapsing and one acknowledged Wednesday Night maven believes that this state of affairs will continue for more than three years; unemployment is on the rise and seniors have seen their savings evaporate.  Apart from ‘shovel-ready’ infrastructure programs, re-education of the unemployed and retrofitting old housing, the support of global economic realignment is required.  The construction of light rail lines would contribute to the rejuvenation of the economy while providing a contribution to fuel conservation.  Beyond the cost, there is a physical limit to the availability of infrastructure firms and employees as well as the capacity of the education system to absorb an unlimited number of additional students. Also of concern  are companies in certain cycles of product development which will need capital, and funding for innovation – an area where Canada is exceptionally weak [see Guy Stanley’s Conference Board Report].   What is required is the realignment of the tax system to encourage spending rather than saving.

Environmental concerns
Not to be ignored is the Earth’s carbon budget, which is out of balance and suffers from a structural deficit (See James Hansen’s recent work) As Thomas Friedman has suggested, this is a time of temporarily low gas prices and an opportunity to put together a budget that focuses on the environment.
There is a shift in alignment on global environmental issues, as Asian countries  increasingly look more at the impact of the environment on their access to resources and they are reacting in a non-market fashion, e.g. China buying up vast tracts in Africa and moving farm managers to Africa in order to secure their access. This is another model and the weaker the western actions seem, the more traction these policies gain.

Canada : The Arctic – a favorite WN topic
In looking for infrastructure solutions, the development of the Canadian Arctic, whether or not it should rate as a priority, is certain to be on the agenda. Already Russia is acting in the Arctic in line with  the model cited above, making access more difficult for other oil & gas companies.   The northern boundary of the new North will be decided in accordance with the 1982 United Nations Convention on the Law of the Sea (UNCLOS)  [the U.S. is a signatory, but has never ratified the treaty]  by an international commission in 2013.  Canada needs to do some serious homework on its case which is based on calculation of territorial waters using the straight baseline method. This allows a country with offshore islands and/or very jagged coastlines to calculate its territorial seas from straight lines drawn from a point on the coast to the islands, or from island to island.  One then “connects the dots” literally, and the water behind the lines is designated internal waters, while waters away from the line and toward open waters are considered territorial seas.
[Editor’s note: Tom Axworthy raised similar concerns in December 2007]   As long as the U.S. (not a signatory) considers the Northwest Passage an international waterway, the issue will remain unresolved, although some experts suggest that if Canada were to formulate a sufficiently progressive policy in terms of security, the U.S. would be pleased not to have one more area to patrol. Meantime, however, in one of his last acts as  president, George Bush released a 10-page Arctic policy spelling out American priorities. [Which, at least publicly, the Canadian government is not taking very seriously], albeit Bush said his country’s presence in the North should grow.

Canada : Investment in infrastructure
Infrastructure should not be restricted to physical structures alone but should include such electronic innovations as the implementation of medical records.[Editor’s note: President-elect Obama has made this a priority – U.S. President-Elect Urges Electronic Medical Records in 5 Years]. In addition to the tremendous task of implementing this initiative and bringing records up to date, the issues of confidentiality and access must be addressed, but once implemented, the savings would be great in both physically handling of records and availability of data.

Canada: Politics
In a strange way the stupidities of the past weeks have been resolved in a satisfactory fashion, including the change in leadership of the Liberal Party. It is unlikely that the Conservative government will permit itself to be defeated and none of the parties and certainly not the Canadian public has the taste or financial health for another election.  As for the Conservative party, it will certainly do its best to avoid an election until the economy improves, at which time it will be able to claim responsibility for that amelioration.  If, however an election were to be foisted upon them and on the country, Mr. Harper would most certainly run his campaign on his proposed budget which would likely include a popular, although perhaps ill-advised, reduction in income tax.

R2P
Whatever happened to ‘responsibility to protect’?

T H E  I N V I T A T I O N

As we step over the sill of 2009 and into the dawn of a new century of Wednesday Nights, what do we look forward to and what do we hope we will never hear more of??  While there are surely   lessons to be learned from last year’s turbulence; will the world heed and apply them ? We are  delighted that Marc Garneau will be with us “to answer all our questions” about the recent turmoil in Ottawa, prospects for the Liberals under Mr. Ignatieff, and more important, what can be done to encourage innovation in Canada. Cleo Paskal and John Jonas will be with us with recent information about India, the world’s second largest emerging economy. The dismal science will, of course, have its share of representation.
We suggest some of the past year’s topics below from which we may – or may not -choose subjects for deliberation this week. You are welcome to add to the list.

H Hunger;  Hamas; Hillary; Harper; Hurricanes Ike and Hanna; Huffington Post; healthcare; handouts (read bailouts)
A ABCPs; Afghanistan; Asia (China & India for starters); Auto-makers; AIG;  Arab world; Athens – New School of – and riots;
P President-elect Obama; Paul Newman (RIP), a gentleman who made his stardom work for others; Palin; Paulson; Policy; Petroleum
P Pirates (Somali); prorogue; Poznan; Palestine; Putin; and, puppies -presidential and others; the Press and the Pundits, without whom we would have no opinions; Ponzi (the only way we could work in Madoff);  Panarin, Igor (the Russian who predicts that the U.S. will break up in 2010); parliament; Pauls Volcker and Krugman; population
Y Youth who will inherit the mess; Yucca Mountain

N Nuclear; newspapers; Nicolas (Sarkozy); Nouriel Roubini; Nobel; NAFTA
E Economy (writ large) and economists; European Union; Energy; Environment; Emerging markets; Elections; Ecometrica
W  Water; Wall Street (encompassing a multitude of sins); Warming (as in Global); Westmount (as in local)

Y Year-end predictions
E  euro, the Economist; ecology
A Agriculture & Food; Alternative energy sources; Africa (Kenya, Zimbabwe and the DRC);  authors (especially Wednesday Nighters Cleo and Peter Brown); Arctic; Aviation & airlines; Alaska whence to view Russia;
R R2P ; real estate; Robert Rubin; re-branding (‘Bush shoes’); reasonable accommodation

Food for thought:
… No less a geopolitical chess player than Henry Kissinger believes 2009 “will mark the beginning of a new world order.”
He draws attention to the contradiction between the way global economic forces today work without regard to borders and the old-fashioned way international governance remains locked into the prerogatives of single states.A new framework for international decision-making is long overdue. Currently, the prospects for international cooperation are dimmed when bodies such as the UN Security Council, to which Canada is now seeking membership, can be routinely hamstrung by China and Russia acting as wary spoilers.
When you look around, you see that most of the big international projects are in abeyance. Competing national agendas have stalled international trade negotiations (the so-called Doha round), talks surrounding climate change and energy cooperation, and nuclear proliferation. Jeremy Kinsman “What should we expect?”
The best place to begin looking at what might be unexpected is to identify what most Washington types think is in store for us. As of right now, 2009 looks like this: deeper, messier recession worldwide, the beginning of the U.S. pullout from Iraq, worries about Pakistan and Iranian nukes, hopes that Obama can restore U.S. standing. Oh, and recently a recognition that Israel-Palestine will continue to be an open wound. But here’s five black swans that could arrive and wreak unanticipated havoc … David Rothkopf writing for Foreign Policy The failed state next door, and other black swans
Recently there has been plenty of attention given to the issue of humanitarian crisis, intervention and the Responsibility to Protect (R2P) at the global level. The R2P, which was originally articulated in 2001 by a commission created and supported by the government of Canada [One of the authors of the original R2P document was Michael Ignatieff], is designed to articulate and enforce what terms like sovereignty, human security and global responsibility actually mean and just how short the international community has fallen in its efforts to protect vulnerable populations worldwide.Global Responsibility and the Shortfall of International Policy By ROBERT W. MURRAY and DAVID KILGOUR
From the Afghanistan “surge” that’s already begun, to the global warming solution that could be making the problem worse, here are 10 big stories that never became big news—but should have. From Foreign Policy The Top Ten Stories You missed in 2008