Pauline Neville-Jones analyses the foreign policy implications of a prolonged global recession

Shadow Security Minister Dame Pauline Neville-Jones is, according to the monthly ConservativeHome survey of grassroots members, the most popular female member of the shadow cabinet.  Elevated to the Lords at the same time as Sayeeda Warsi she has been working away at developing a coherent Conservative security policy – taking a tough line on domestic extremism and developing a global perspective on threats and opportunities.  Although, by many accounts, she has struggled to adapt to the political cut-and-thrust she is set to be a very authoritative minister.

Earlier this week she delivered a speech to the World Islamic Economic Forum in Jakarta.  Key extracts are published below.

We could see a reversal of progress on international poverty: “According to the World Bank, from 1981 to 2001, the number of people living on less than $1 a day went down from 1.5 billion to 1 billion.  Improvements in global literacy went hand-in-hand with this.  This favourable trend could now go into reverse. Just one indicator of what is at stake.”

Private capital flows to emerging economies are set to collapse: “In 2007, net private capital flows to emerging economies were $898 billion… The Institute of International Finance estimates that net private capital flows to emerging and developing countries will be just $165 billion in 2009 – a decline of 82 per cent from 2007.”

The early stages of the world recession have already caused low level political instability: ” The United States intelligence community has looked at some of these issues. Its current Threat Assessment observes that ‘roughly a quarter of the countries in the world have already experienced low-level instability such as government changes because of the current slowdown.  Europe and the former Soviet Union have experienced the bulk of the anti-state demonstrations’.  In other words, have already been and will continue to be a rise in social unrest directly attributable to the economic downturn.  No doubt not all of it will be peaceful.”

One third of the world’s nations may struggle to cope with the economic challenge: “The  US Threat Assessment goes on to say that ‘although two-thirds of countries in the world have sufficient financial or other means to limit the impact for the moment, much of Latin America, former Soviet Union states and sub-Saharan Africa lack sufficient cash reserves, access to international aid or credit, or other coping mechanism.”

Under-pressure governments may become repressive and protectionist: “If the crisis goes on for more than a couple of years or so some governments are likely to be toppled.  The political insecurity of governments can itself be a potent driver of both repression and economic nationalism which they may see as shortcuts to greater security.“

Extremists and terrorists may exploit the economic downturn: “We know that a number of factors contribute to the vulnerability of individuals to extremist messages of any kind, including poor education, unemployment, poor local services, isolation and lack of effective political rights or a combination of all of these.  The economic crisis is likely to exacerbate such factors, sharpen the effects of underlying conflicts and potentially increase the appeal of the terrorist message.“

The importance of increasing food supply in the years ahead: “The World Bank predicts that, by 2030, demand for food will increase by fifty per cent- largely the effect of population increase. But how will suppliers meet it, when things like climate change and poor weather conditions can reduce crop output? Will improved husbandry be enough? …Over thirty countries have reduced exports, introduced export restrictions or stockpiled food.  Food protectionism is a bad start.  And countries like Saudi Arabia and China have responded to the prospect of increased costs and the possibility of shortages by seeking long-term food purchase agreements, buying land leases or, indeed, buying tracts of agricultural land outright in places like Africa.  That makes other countries’ problems greater as the tracts of land are not being secured for trading purposes, but for the direct shipment of products to their own populations.  Food prices are likely to be driven up by autarky.” In response PNJ suggests reform of the Common Agricultural Policy, a greater proportion of aid spending to be devoted to food security and, possibly, “a more internationally organized system of storage for certain basic food stuffs.”

In the speech PNJ also warns against cartelisation of the energy market and against protectionism.  She says that the G20 may now be a more appropriately diverse group of nations to manage the scale of international economic challenges we face:

“My protected market is your closed factory and angry workforce… Maintaining the open system – requires possibly unpopular decisions about keeping markets open and thus putting some local jobs at risk and is a much bigger immediate challenge to political leaderships.   But it is the route more likely to bring long run sustainable security.  But while governments can be protectionist on their own, they have to cooperate to keep markets open. As a proponent of liberal capitalism, I want to see it heal itself and continue to be the motor of international economic development and welfare.  To achieve this, we need to use global mechanisms.  The G7 is no longer inclusive enough and it is right that the G20, despite being somewhat unwieldy as a steering mechanism, is at last – some might say rather late – taking primacy.”

It’s a wide-ranging informative speech and you can read the whole thing here.

Comments

[snegchui]

Well, as told in Ebrington Barracks, some 32 years ago, more jobs, less shooting. Now don't say nuffink, they hate the Brits here, never mind foreigners.
The saying "The Devil makes work for idle hands" is the centre of this speech and also true co-ordination on a non-partisan international scale.

[Tony Makara]

Nations must develop their internal market as a first step in breaking out of recession.

The fact that an internal market trades in the same national currency and operates under the same legislation regarding wages and working conditions, means that producers are operating on an even playing field. Unlike under the free-trade system where countries can exploit currency differentials and employ sweatshop labour. So under an internal market system business has a real chance of success if the home market is its main catchment area.

This is how nations must rebuild their economies in a post recessionary era.

There can be no doubt that if mainstream Social Democratic and Conservative parties continue to push the free-trade line at a time of recession/depression, then voters will turn to the extremes, be they left or right, and the political climate will change dramatically.

For this reason mainstream parties need to understand that they must work to develop internal markets, to bottle nationalist sentiment before it develops an unpredictable dynamic of its own.

[Steevo]

"But how will suppliers meet it, when things like climate change and poor weather conditions can reduce crop output?"

Current production of potash (mineral fertilizer) is the richest and highest quality in history. Bumper crops are produced. If she's concerned about global warming then she will be misguided in her ability to establish sound policy for global food production.

[The Dog]

I can always spot a Tony Makara post after a couple of sentences :)

[Phyllis Crash]

GM crops are a big part of the answer to the food crisis but we oppose them :(

[Tony Makara]

The Dog, its called consistency and conviction. I know the things I say to be correct.

On the matter of feeding the world and Africa in particular, the West has to be very watchful that it is not usurped by China with its 'No strings' policy of trade-with-aid.

China is already in the process of milking the African continent dry and aims to turn the region into one mass sweatshop workhouse.

We have to ask, why does the West allow China to gain such a strong foothold in Africa? Especially given that Africa is the last great untapped region for natural resources.

[Patsy Sergeant]

Actually 'The Dog' it was after the first six words this time.

[chris southern]

Tony has a point in regards to China.
other countries are giving the African nations money and very little is going to the people, thus the infrastructure/economy is still suffering, whilst China is buying up land within various countries so that it controls large quantities of the worlds natural resources.

this is because of two reasons, the non freemarket that is operated (you get around trade blocks by controlling more resources so that people have to deal with you instead of you dealing with them, thus the trade tarrifs are then negated)
secondly, China is a developing world economy that realizes it relies on other countries for the sale of it's products too much, if it controls the natural resources of the world, it gains the economic strength that the british empire once had (and too much global power in any single nations hands is actualy harmfull to large parts of the world)

in regards to the local economies needing to be strengthened first, yep he's right.
if your international economy is strong yet your internal (local economy) is still screwed you cannot give the long term support to the international economy.
just look at the UK, it relies on the fininacial sector too much, as such it's crumbling national economy (local)is falling apart at a greater speed.
small-medium size business are being allowed to die due to the international part of the UK's economy being supported by the state.
the state and the international part of the UK's economy can not support the population, that's the job of the national (local) economy.

think of the local economy in terms of the part of your weekly income that covers bills and food.
the international economy is the part that allows you to go out for a meal and take a holiday, on it's own it isn't enough.

in regards to foreign policy for the UK, we need to stop supporting dictators (even home grown ones) and support the people of those countries.
training of essential skills for needed parts of their growing economies (agriculter for starters) as well as the backing of companies to supply the skills and equipment allowing them to stand on their own feet.
don't just throw money ate the problem, that only helps the corrupt in power, not the people and their future.

[snegchui]

"the West has to be very watchful that it is not usurped by China with its 'No strings' policy of trade-with-aid.

China is already in the process of milking the African continent dry and aims to turn the region into one mass sweatshop workhouse"

The last time I was in a discussion with some Ugandan businessmen, they were making very hostile anti-Chinese comments, and see China as actually having quite a few strings aka "Monies to the Leaders Private Purse".

The problem with this, just as you have an Al-Qaeda movement that is more about toppling the Saudi and Pakistani regimes on the grounds they are corrupters of Islam and thieve from the mouths of the poor than actually picking fights with the USA (it only picks fights because they see the US as keeping The House of Saud and Mr 10% Zadari in power), in time this could lead to an African populist "Get-the-bosses" movement that seeks to hang Chinese from the nearest lamp-post.

The way forward will be interesting. Maybe the Chinese will withdraw and settle across Russia instead.

[chris southern]

the three main trading blocks that are forming (and where talked about many years ago) are the americas (north and south)
euroupe
asia, austrlia and the middle east
it was never known wether russia would go in with the third block or the eurpoean block.
the way the EU have tried to bully russia i could see them joining the third block.

it's all falling into place, setting up some nice economic wars for the future, especialy political fighting over who can entice the African nations over to them.

the world is going mad i tell you, all because the people have allowed politicians to give themselves too much power.

[snegchui]

Youse pairs are nuts

[Tony Makara]

We have to stop the rise of China. My great fear is that the strategic and military co-operation that already exists between China and Russia may develop into something more concrete. Particularly worrying given the hegemonistic posturing of both countries in recent times.

China has been earmarking countless island territories such as the Nansha Islands as being subject to its sovereignty and Russian ambitions in the West are growing all the time.

We in the West are better placed to bring Russia under our sphere of influence, thus nullifying the danger of a Sino/Russian powerbloc.

The day will come when China's energy needs are going to come into conflict with those of the West. We have to start preparing for that eventuality today.