Wednesday Night #1493

“You can’t go back.”  Visiting the place of one’s childhood, (and/or youth in the case of old age) or one’s place of work, after sufficient time has elapsed since employment to have produced a complete change of personnel, evokes memories of the “good old days,” when service was a priority, when the individual was more important than the provider of that service.  There are times when one questions whether the Conservative Party of Canada is the clone of the regional Reform Party cloaked in the uniform of the Progressive Conservatives.  On reflection, however, the current governments, federal, provincial and municipal have been democratically elected and perhaps it is we, the aging and aged, who remain romantically attached to images of the past while, realistically, our workplace and our governments have changed for better or for worse, as have our memories, but not always in sync.

Canada, the UAE
Wednesday Nighters have mixed feelings about Canada’s refusal to expand landing rights for United Arab Emirates airline flights. Competition is fierce between state-funded airlines like Etihad and Emirates and commercial airlines, such as Air Canada. In truth, it is not only in Canada, but commercial airlines around the world are said to look unfavourably at the Emirates airlines.  Canada is but a piece of the puzzle. On the other hand, is it the role of the Canadian government to divert Canadian passengers from airlines that give better service to Air Canada?  Canadians preach free trade yet, in this case, resist it in practice. There are few truly national airlines left in the world and the days when people took pride in flying with their national carrier are gone.  Air Canada enjoys a good reputation internationally (perhaps principally for its safety record), but the services provided by carriers such as those of the U.A.E., Cathay Pacific and Singapore, are superior, and competition is generally a factor in improved service.
We are reminded  that although Canadians complain about Air Canada’s domestic service (often with good reason), when compared with U.S. domestic airlines, it is far superior.
We are reminded that given the number of good jobs generated by Air Canada in Montreal and Westmount, there is more than a bit of self-interest involved in whether or not Air Canada, which essentially has no competition as Canada’s only international airline, should be able to rely on government protection.
Canadian airlines cannot compete in terms of service, just as true discount airlines on the Ryanair model would force competition for price while enabling luxury service at a luxury price if the demand were there.
It is difficult to see Canada’s decision as in our national interest. The issue is much broader than one of airline competition; it is about the Canadian mission in Afghanistan and NATO. Abu Dhabi has been a major player in the development of the Afghan mujahideen in the fight against the Soviets. The eviction of the Canadian armed forces from Camp Mirage, the major staging area for supplies to Kandahar, undoubtedly  in retaliation, has caused important problems for Canada’s Afghanistan mission.  A former major player, now a non-ally in Afghanistan, is certainly not cause for celebration. Meanwhile, although it is reported that Canada is negotiating with Pakistan for a staging area, in the opinion of one security expert Cyprus is the only viable alternative.

Canada and the Security Council
There are allegations that Canada’s decision vis-à-vis the U.A.E. contributed to its loss of the race for the UN Security Council seat.  However, the outcome of the vote may possibly have more to do with the solidification of and integration in the European Union than possible anti-Canadian sentiment.  One explanation is that Canada is seen to be too close to the U.S., an opinion shared by some Canadians as well. Furthermore, there is some question as to the power and influence of the non-permanent members of the SC [Editor’s note: see General Lewis MacKenzie Thank you, Portugal!]. It may be that Canada can exercise more influence from outside the Council. However, for Canada’s diplomats, there is an impact caused by the perception in international diplomatic circles that Canada has lost some prestige – if not credibility. Of all the attributed causes,  the charge that it was Michael Ignatieff’s comments that influenced the UN vote, produced the most scathing comments among Wednesday Nighters. [Media reports indicate that informal polling of UN delegates reveal that the vast majority had never heard of Mr. Ignatieff, let alone his comments.]  As discussed last Wednesday, the world changes, alliances shift – and with them, the seat of power – and inevitably, the pecking order amongst the nations of the world evolves, as does national philosophy.
The management of a country requires multi-talented input and unique electoral skills to be chosen as Leader of government and of the opposition.  The linguistic, cultural and occupational heritage of Canada is so diverse as to render the election of a Prime Minister especially difficult.  The success of our present Prime Minister speaks well of his electoral skills.  But it is widely reported that the evident top-down management  skills applied to his cabinet have been unfortunately extended to the senior civil servants where international personal relationships and collective specialized knowledge have been built up over the years.  A successful effort to bring stable government to a traditionally tribal Afghanistan, the evaluation of the long form census, its needs and public acceptance, the power of a knowledgeable foreign service all require expertise that is rare among successful politicians, or their political staff, who are endowed with a totally different range of expertise than that of senior civil servants. Many deplore the advent of advanced communications technology which enables the political powers to curtail the activities of the professionals in the field; in the past, ambassadors were relied on to use their talents and knowledge in situ.

Much has been said of the need for those who run the country to have vision.  However, it is becoming apparent that vision alone is insufficient.  Castro is said to recognize that his economic model does not work. Undaunted, he has devised a clever scheme that Robert Landori has identified in his blog piece: How can you get your worst enemy to refinance your country’s failing economy?   The civil service has been reduced and small private business enterprises permitted. As the state cannot support them, they will inevitably turn to relatives in the United States, who will thus contribute to the renaissance of the Cuban economy. Brilliant!

Less brilliant according to some Wednesday Nighters has been the performance of the Liberal Party in terms of developing and spreading a vision and a program to create genuine interest and debate among the population, rather than an image of being against the Conservatives.
“Going to the website” doesn’t satisfy these individuals who would like to see more discussion of foreign affairs, infrastructure, unemployment, especially youth unemployment, the shift of economic importance to the west, the plight of the Maritimes, economic and social policies that take into account scarcer and more costly energy.   Despite the apparent success of Mr. Ignatieff’s Liberal Express summer tour, there appear to have been little more than feel good meetings with groups of hospitable communities across the country. Although loyal Liberals point to numerous policy pronouncements from the leader, there is a failure to communicate these widely.

There are others who are skeptical of politicians with visions. Pierre Trudeau united the nation with the vision of  The Just Society even if that vision, quickly became an agenda; pragmatism invariably trumping vision in the real world. Today, says one Wednesday Nighter,  is not the Age of Visions, except among unfortunate countries with Glorious Leaders. The pace of change, likely attributable to technology (along with the incredible amount of information and mis-information), is such that our ability to cope has not accelerated in equal measure. Thus, we are reduced to taking the world as it evolves, along with a certain deconstruction of national cultures.

China‘s star has been rising, but doubters point to the small size of the economy relative to the size of the population.  The model has been changing constantly and China’s place in the world has begun to become less rosy in the minds of some Wednesday Nighters. The role of China in currency manipulation should not be underestimated and is causing many problems for countries like South Africa.

The rising stock market is an indication of the current slow recovery phase from a nasty recession.  The low interest rates favor a rising stock market in which a dramatic drop is unlikely. Cash is good; in the view of some, gold is over-priced.

In Hungary, the aluminum slime has been accumulating in open pits since 1943 and has continued to accumulate even after the country’s recent privatization of the industry.  The latest inspection of these reservoirs less than a month ago, indicated, according to the inspectors’ reports, that they were safe.  The release of the toxic waste into the Danube had the potential for incredible disaster; the C.E.O. was arrested, charged and released because of lack of evidence of wrong-doing, but the company’s assets have been seized and has returned to ownership by the government of Hungary. The complex political web surrounding all these events is highly charged.

The Greek government has proceeded with its austerity plan as well as a number of structural reforms, including the raising of pensionable age to sixty-five years, the opening  up of professions and several others, but much more must be done. However, provided the pace of reform is maintained through Spring of 2011, Greece appears to be becoming more stable. Greece is a study in anti-competitive practices that deserves a book. How can the country be a member of the European Union, sign on to European competition laws and regulations, yet maintain an arcane, byzantine system of under-the-table controls. Example: in the trucking industry, there has not been a new license issued for a truck since 1986. Beware of Greeks Bearing Bonds is a colorful account of how the system works, based on cronyism, political favoritism and corruption. The corruption incidentally is widespread and the entire population appears to cheerfully participate. Tempus fugit and the wonderful Alice in Wonderland era of Greece appears to have ended and future Greek citizens, expatriates and visitors will undoubtedly look back at these inevitable changes with regret.

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The Prologue

All 33 trapped Chilean miners have been rescued

It’s a race for the top news item, but we prefer to award pride of place to the incredible and inspiring story of the rescue of the Chilean miners Chile celebrates as first miners make greatest escape.
It must be followed by the sad news of Canada’s failure to win the coveted seat on the Security Council. We are both sad and curious to see whether there will be ‘lessons learned’ from this exercise.

Canada quits race for UN Security Council seat
UNITED NATIONS – Canada has withdrawn its candidacy for a seat on the UN Security Council after failing to gain the required number of votes in two rounds. Germany was elected outright in the Western powers group, while Canada’s withdrawal means Portugal advanced to fill the second “Western” seat for the 2011-2012 two-year term.
Canada’s withdrawal means that the government of Prime Minister Stephen Harper is the first Canadian government to have failed to maintain Canada’s record of winning a place on the UN Security Council once a decade since the UN was launched in 1945. Canada abandons UN bid in embarrassing turn for Harper … Mr. Harper’s office wasted little time assigning blame for the disappointment, placing it at the feet of Liberal Leader Michael Ignatieff. ‘Sad day for Canada’ sparks call for foreign-policy overhaul
Amidst the sound and fury, the wisest words came from Colin Robertson, an expert on Canada/U.S. relations, who said he is “disappointed and surprised” by the result. But he cautioned Ottawa “should not disengage” or “revel in it or don ashes. “We can lick our wounds then get back in the ring,” he said. “Acrimony, blame and second guessing – of which there will doubtless be plenty – won’t change things. We need to redefine our interests and then pursue them.”

Meanwhile, the Christian Science Monitor suggests that India, South Africa could complicate US agenda in UN Security Council [because] In the past, India and South Africa have been loath to punish Iran.
The arrival of the South Asian and African regional powers as two of the five new non-permanent members elected to the Security Council Tuesday could bring new clout to the council – in developing nations, in particular.
But adding India and South Africa to a council where Brazil already holds one of the 10 total non-permanent seats could also pose new challenges to the council’s old guard, including the United States. Iran, for example, could find a new base of support in the troika of developing powers, all of which have resisted mounting US-led pressures on Iran over its nuclear program.

It doesn’t appear to be a great week for Canada’s international relations – the dispute over Camp Mirage in Dubai apparently originates with then-Minister of Transport John Baird’s recommendation to refuse more landing slots to UAE airlines. While the government’s reaction to the linkage of landing rights for Emirates with the base in Dubai is understandable, surely the grown-ups could have sat down and worked this out amicably without leaving Minister MacKay up in the air, as it were?

Tony Deutsch will be with us and asks if we are planning to put the Economics Nobels on the Wednesday agenda. The answer is yes.  Labour market researchers share Nobel for economics As the world struggles to sustain a fragile economic recovery, the Nobel Prize for economics was awarded on Monday to three researchers whose work explains how market frictions can hinder the smooth functioning of an economy and its ability to adjust to shocks. Their work, which shows how markets can sometimes lead to inefficient outcomes, has influenced economists’ understanding of unemployment. See also The Economist And the Nobel goes to…
The Atlantic also has a good piece The Idea That Won The Nobel Prize in Economics “Harvard economist Edward Glaeser has a nice explainer about the ideas that won the 2010 Nobel Prize in Economics. The award went to three economists — including one, Peter Diamond, whose nomination to serve on the Federal Reserve board is being “held” by Republican Sen. Richard Shelby [Tony also pointed this out] — for their work on “search frictions” in the labor market. In short: Why do employers and employees sometimes have such a hard time hooking up?”

With Tony back in his usual chair, we also propose looking again at the topics raised last week, along with some related items:
According to Reuters, the UN to establish rules for sovereign debt
Governments and financial institutions are calling upon the United Nations to address issues of sovereign debt by creating rules that would help prevent irresponsible lending, and empower courts to resolve debt-related disputes. The initiative, which is expected to be taken up early next year by the UN Conference on Trade and Development, is intended to reduce the frequency, and intensity, of debt crises.
At the IMF annual meeting, emerging nations sought greater representation in that body Developing countries fear raw deal on IMF reform. Emerging Markets reported that “Privately, developing countries’ representatives said that even the proposed deal on board seats would not solve the basic issue – that representation based on GDP (market exchange rates) condemns poor and middle-income countries to under-representation.” The article also mentions that the developing nations called for an end to the duopoly at the top of the IMF (European)  and World Bank (American). Dominique Strauss-Kahn appears to agree.
The FT reports that there’s a  Call for new global currencies deal — The world’s leading countries should agree a new currency pact to help rebalance the global economy.  Later, the Christian Science Monitor reported that the IMF  “gathering ended with nations going their own way on exchange rates. One reason: the difficult relationship between the US and China” IMF leaves question unresolved: Can world avert harmful ‘currency war’? Meanwhile, Brookings devotes its report to the climate change agenda at the World Bank’s parallel meeting.

Food security continues to be a concern. Emerging Markets writes that the FAO’s Committee on Commodity Problems last month put “unexpected price hikes and volatility” on the CFS agenda, pinpointing them as key threats to food security. Some academic experts argue that underlying issues of excessive food dependency and land-grabbing also need to be addressed. Food security fears spark calls for futures markets regulation

Good news is scarce, but we applaud the decision of the Norwegian Nobel committee to award the Peace Prize to Liu Xiaobo, and we join the rest of the world in admiration of the Chilean efforts to free the trapped miners, and the extraordinary demonstration of strength and determination of the 33 men trapped for more than two months. And good for President Piñera for setting the bar ever higher with his declaration that he hopes Chile will “move mountains”, becoming the first South American country to defeat poverty.

Congratulations to An Ngo and her team for pulling off the highly successful policy exchange last Thursday. She writes: After nearly 3 months of hard work and preparation my brainchild was finally let loose into the world.
160 registrants, fifteen speakers, professional moderator, and extensive local media coverage, assembled by a crackerjack team of miracle workers in a time frame that any sane person would consider impossible.
Thank you for your support and encouragement, and for helping to promote this event throughout the Montreal community. Wednesday Night was instrumental in the shaping of the Science & Policy Exchange and I am truly grateful. We are very happy to have been able to encourage and assist this worthwhile initiative in whatever way.

Our favorite writer of international thrillers, Robert Landori has returned from his book launches (we see that the new terminology is ‘author event’) in Coral Gables and Grand Cayman; he is speaking this Thursday, October 14, at 12:30 PM on “Understanding the Cuban Revolution” in the exotic setting of the Atwater Library.

We try to leave you with a smile and surely this news item (from Tony) will fill the bill:
Drunk Man Rescued After Chasing Goose Into River
Wausau [police] rescued and arrested a drunken man who plunged into the Wisconsin River while chasing a one-legged goose. The 40-year-old Wausau man told officers he wanted to catch the bird and roast it. He said he took off his shirt and shoes Thursday afternoon and jumped into the frigid water. We are happy to confirm that the intrepid goose, obviously swifter than its human pursuer, is still on the loose.

And a note from Ron Meisels:
Successfully delivered speeches in Berlin and London.
The crowd loved it, hope forecast will be fulfilled.