6
LE MATINAL, PORT LOUIS, LUNDI 27 MAI 2013
LE MATINAL, PORT LOUIS, LUNDI 27 MAI 2013 News, Analysis and comment from the Financial Times
News, Analysis and comment from the Financial Times
BY EDWARD LUCE
Kerry's ambitions for US diplomacy
Nobody ever accused John Kerry of lacking self-belief. Nor are they ever likely to. This week, for the fourth time since taking over from Hillary Clinton in February, Mr Kerry arrived for talks in Israel and Palestine, where he hopes to twitch the corpse of two-state peace talks back to life. His chances are not good. Next month, he will take on even steeper odds as host of a conference in Geneva aimed at stopping the slaughter in Syria. In addition to hopes of a settlement with Iran, he is enthusiastic about a transatlantic trade deal, reviving global warming talks and so on. For many secretaries of state, fixing the Syrian quagmire would be ambition enough, particularly if it hinged on winning help from Russia. Last week’s decision by Moscow to go ahead with missile sales to Bashar alAssad’s regime underlines the difficulty of Mr Kerry’s task. But from someone who in 2004 almost took the White House - and still believes he could have - such bold diplomatic initiatives should come as no surprise. As Joe Biden, the vicepresident, recently joked to a European gathering, the new US secretary of state has an eye on the Nobel Peace Prize. He will have to get used to derision. Haaretz, the Israeli newspaper, last week ran a story likening Mr Kerry’s efforts to a “bull in a China shop”. It also quoted a senior Israeli official calling him
US Secretary of State John Kerry speaks during a press conference in Addis Ababa, Ethiopia, on May 25, 2013. Kerry came to Ethiopia to attend the 50th jubilee's ceremonies of the African Union, with Africa's myriad problems set aside for a day to mark the progress that has been made. “messianic”. Yet Mr Kerry offers a welcome break from the passivity that had descended on US diplomacy in the Middle East and beyond. For one reason or another often because she was blocked by an instinctively cautious White House - Hillary Clinton took a back seat on the Muslim world’s
big challenges, Syria and Afghanistan included. Mr Kerry is diving in headfirst. Amid awareness of his steep odds, there is also encouragement. “Kerry has the makings of being a strategic secretary of state in contrast to Hillary Clinton, whom I would describe as more cause-oriented - global issues,
human rights, gender, and so on,” says Zbigniew Brzezinski, who was national security adviser to President Jimmy Carter. “He is taking on the issues that shape the international system. This will make him a very serious player in my view.” Even people close to Hillary Clinton agree that Mr Kerry is
likely to be much less riskaverse. Mrs Clinton outsourced the “AfPak” portfolio to the late Richard Holbrooke and passed on the ill-fated Arab-Israeli initiative to George Mitchell. Mr Kerry has not yet farmed out anything. This raises the chances that he will fall flat on his face. He seems to have decid-
ed the risks are worth it. “Kerry has come to terms with the fact that he is a silver medallist - this is probably his last big job and he wants to make an impact,” says a former senior US diplomat. “For Hillary, there was always the sense that gold remained a possibility.” Mr Kerry faces two immediate problems. The first is flying solo. Almost all the key players in Mrs Clinton’s state department, including Jeffrey Feltman, who was in charge of the Middle East division, Kurt Campbell, who headed Asia, and Philip Gordon, who managed Europe relations, have left and are yet to be replaced. Others include Robert Hormats, who was in charge of US economic diplomacy, and Robert Einhorn, the point man on proliferation. Replacing such a team will not be easy. At the very least, Mr Kerry must prod a dilatory White House into submitting nominations. It is almost June yet the State Department remains half empty. Having spent barely two weeks in the building since early February, Mr Kerry has yet to master things back in Washington. Likewise he will need to figure out how to navigate an unusually White House-centric administration. He cannot rely indefinitely on the free rein he has been given by President Barack Obama. The White House has been distracted by rolling domestic crises all year. Once things are calmer, the president is likely to put tighter curbs on Mr Kerry’s
How ministers bugged the king ficer. “Spain is on the edge of war and only the adoption of this scheme will save something from the wreck,” Sir Samuel wrote in a note to the Foreign Office in June 1940. The files are also packed full of personal accounts and handwritten notes that bring the history of the period to life. Not least, a letter from Alexander Cadogan, a senior civil servant, to Lord Halifax, foreign secretary, describing Winston Churchill’s visit to Moscow. A banquet with Joseph Stalin is described as “merry as a marriage bell” as the leaders stayed up drinking to 3am. Mr Cadogan complained about being forced to drink something “pretty savage” by the Soviet leader. The documents also show the secret technique agents used to judge the people they followed: assessing their dress sense. After reports that Rudolf Hess, Hitler’s deputy, had £473,000 sequestered overseas, an agent told the Foreign Office that this was highly unlikely. “His garments are not those of a City magnate!” he wrote.
(c) 2013 The Financial Times Limited
Revealed at last: intelligence secrets from the late 1930s and second world war Whitehall has opened its chamber of secrets to reveal intelligence documents from the late 1930s and the second world war, many of which have languished for decades in the depths of the Cabinet Office. The vast array includes details of how ministers bugged the phone of King Edward VIII in the days before his 1936 abdication, an assassination list for D-day and telegrams authorising millions of pounds of bribes to keep Spain out of the war. Among documents released today are more than 500 files from the department that liaised between the Foreign Office and British secret intelligence, dating from the late 1930s to the early 1950s. They show an anxious secret service plotting its way through the war and into the early years of the cold war. The files range from a 1944 report that Adolf Hitler may have been living undercover in Perpignan, France, to receipts for a £300-amonth PR man, paid for raising the profile of General Charles de Gaulle. Gill Bennett, the former official historian at the Foreign Office who spent five years sorting the files, said they were put in a vault because they were “too difficult, too sensitive and they didn’t know what to do with them”. Lord Wilson, cabinet secretary at the turn of the millennium, took the time to view the dusty files himself but their final sign-off to be transferred to the National Archives came from David Cameron. They show how Edward VIII was secretly bugged during the
Filed under ‘too sensitive’
Winston churchill. days before his abdication, as ministers lost faith in their monarch who was mulling leaving the throne to marry the US divorcee Wallis Simpson. The home secretary ordered the Post Office to record their private conversations five days before he stepped down. Plans for Operation Overlord, the code name for the D-day
THE LEX COLUMN
Gold
Geneva 2 talks offer slim hope of bringing peace to Syria BY ROULA KHALAF For all those clamouring for American leadership on Syria, John Kerry, the US secretary of state, has given an answer. It’s not weapons, no-fly zones or surgical strikes - the kind of leadership the Syrian rebels and their supporters have been lobbying for. It’s a peace conference - Geneva 2 - organised with Russia and expected to be held some time next month. But while a political solution to the Syrian conflict, now more than two years old, is undoubtedly the best option, at the moment, Geneva 2 works more for the US than it does for Syria. It delays the harder choices that
President Barack Obama is keen to avoid having to make but its chances of bringing peace to Syria (if it is held at all) are slim. While European and Arab officials argue that prospects of diplomatic breakthrough are
The US is working to bring on board the Syrian opposition and its regional supporters
higher if the balance of power in the battlefield is tilted more in the rebels’ favour, the peace conference is being prepared when it is the regime of President Bashar al-Assad making the gains on the ground.
With the help of Lebanon’s Hizbollah, Mr Assad is now on a counter-offensive, fighting to reassert control over the city of Qusair, north of the Lebanese border. If the regime prevails, it would cut an important supply route for the rebels and allow the government to connect areas under its control, from Damascus through to the Mediterranean. The basis for Geneva 2 is an ambiguous, if not unworkable, accord known as Geneva 1. Back in June 2012, western powers and Russia (the Syrian government’s supporter), failing to agree on whether Mr Assad should stay or go, signed up to a document that called for the creation of a transitional body with full executive authority but also
the “mutual consent” of the regime and opposition. Western diplomats argue that once such an authority is formed, Mr Assad’s role becomes irrelevant. But Mr Assad will not sign up to a deal that brings about his own demise. The extent to which Russia will be willing to press him to give up power remains uncertain. Whether he will listen in any case is doubtful. The US is working to bring on board the Syrian opposition and its regional supporters, Qatar Turkey and Saudi Arabia. Washington’s statements underline its scepticism as to the chances of Geneva 2 succeeding and its recognition that bolstering the rebel forces might be a prerequi-
site for a political solution. A few weeks ago, Mr Kerry worried opposition leaders when he did not emphatically state that Mr Assad must step down. On Wednesday, after a meeting of the Friends of Syria a group of western and Arab governmental supporters of the opposition - a joint declaration specified that the transitional executive body “should assume all the powers of the presidency in addition to control over the armed forces and the security and intelligence apparatuses”. It also said: “Assad, his regime, and his close associates with blood on their hands cannot play any role in the future of Syria.” The statement said that until
the Geneva meeting produced a transitional government, the countries present would increase support for the opposition. According to a US official, this was added because “we
With the help of Lebanon’s Hizbollah, Mr Assad is now on a counter-offensive
don’t know if the Geneva process is going to be successful or not”. The official also said that given the reluctance of the Assad government tonegotiate, the goal remained “to change that balance on the ground . . . to fa-
CONTENT PROVIDED TO LE MATINAL BY FINANCIAL TIMES
BY HANNAH KUCHLER
freelancing. Friends of Mr Kerry also worry that he has no executive experience. After 30 years on Capitol Hill, he is used to talking rather than doing. Each senator likes to play sun to their own solar system and Mr Kerry chaired the Senate foreign policy committee. Now he must adjust to being a planet. “With Kerry there is always a danger he will get too far ahead of Obama,” says a senior European diplomat. Most of all, the former senator’s allies hope that he does not get wrecked by the Middle East, as probability dictates. David Rothkopf, chief executive of Foreign Policy and a former senior official under President Bill Clinton, likens the situation facing new US secretaries of state to being in a garden with an apple tree. They believe if they pluck the fruit of Middle East peace they will gain immortality. Although they will be banished if they fail, few can resist trying. In contrast, Mrs Clinton’s focus was the pivot to Asia. “It would be an irony if we swapped Middle East wars for equally fruitless Middle East diplomacy at the expense of the bigger strategic challenges,” says Mr Rothkopf. At the end of the day, he adds, Mr Kerry’s greatest weakness is also his biggest strength - an immense self-confidence. Since February, there has been a new sense of purpose to US diplomacy. No one should be surprised that Mr Kerry is reaching for that apple.
cilitate arriving at a negotiated political solution”. Thus, Gulf states will continue to arm the rebels and, according to one opposition figure, the UK has also promised weapons if the opposition takes part in Geneva 2. The fear of a weak and fragmented political opposition is that going to Geneva without any guarantees would erode the little credibility it has with rebels fighting the Assad regime. Diplomacy on Syria is often disconnected from the reality on the ground. Yet, for diplomacy to work, there must be the impression that it has a chance of being implemented, ending the regime’s brutality and silencing the guns. (c) 2013 The Financial Times Limited
7
Some think gold’s rally is over. Maybe it is. Others are holding on for all kinds of reasons. One of those reasons is demand from India and China. But this dynamic is less straightforward than it sounds. Since China deregulated gold buying in 2002, the country has come from virtually nowhere to become the world’s second largest and, on occasion, largest gold buyer. India has been in the fray for longer. The two countries made up 55 per cent of gold bar and coin purchases in the first quarter, up from 46 per cent a year ago, according to the World Gold Council. Both add important features to gold demand. As BullionVault notes, they are more interested in physical gold buying over the type of investment demand driven by exchange-traded funds in the US and Europe. And contrary to the belief that the Chinese only buy in a bull market, both countries look increasingly like opportunistic buyers. As prices started to fall coming into 2013, gold bullion sales to China surged by more than half in the first quarter from a year earlier and those to India jumped a fifth. The two countries also display seasonal swings in demand (lunar new year in China and Diwali in India, for example). And demand in both has further to go. The lack of investment choices and a risky financial system make demand for gold in China particularly attractive. All that sounds like gold is a one-way bet. But no. Although ETFs contribute barely 10 per cent of net gold demand, their performance has the biggest swing on prices. Hence, the net sale of 200 tonnes of gold by ETFs in the first quarter dragged down prices. The reality is that buying physical gold takes longer to feed through to prices. Nor is India a one-way bet. Because gold buying is boosting the trade deficit, the central bank has slapped restrictions on gold imports by the banks. The demand picture for gold is far from clear. (c) 2013 The Financial Times Limited
landings, include a secret hit list of key German and French figures to be assassinated beforehand, including the commanders responsible for defending France, and members of the Vichy government. Foreign Office officials initially agreed to the assassinations, to be carried out by the French Resistance, but the plan was dropped less
than a month before the landings as senior members of the secret service worried that it would lead to reprisals against Allied prisoners. A plot was hatched to keep Francisco Franco’s Spain from entering the war on the side of the Germans and to fund a resistance movement ready to attack if Germany invaded. Sir
Samuel Hoare, British ambassador to Madrid and a former foreign secretary, conspired to fund a “coup d’état” through opponents of the regime. The British government paid £10m - just under £500m in today’s money - in bribes to a handful of Spanish generals including £2m to Nicolas Franco, the dictator’s brother and a naval of-
Run up to D-Day Senior secret service officials quashed a plan to assassinate German and French generals in the run-up to the D-day landings, saying they were concerned by whether it was legal and feared reprisals against Allied prisoners of war. But Victor Cavendish-Bentinck, chairman of the joint intelligence committee, insisted he was not rejecting it out of “squeamishness”. “There are several people in this world whom I could kill with my own hands with a feeling of pleasure,” he said.
In the days leading up to his abdication in 1936, Edward VIII’s phone was bugged on the instruction of the home secretary, revealing a loss of ministerial faith in the troubled king. A note marked “most secret” was sent on behalf of John Simon, 1st Viscount Simon, to the head of the Post Office, saying “you will arrange for the interception of telephone communications between . . . Buckingham Palace . . . and the continent of Europe” as Edward and Wallis Simpson, called each other. Winston Churchill and Joseph Stalin The British prime minister and the leader of the Soviet Union drank heavily at a Kremlin banquet featuring suckling pig and “innumerable bottles”, according to an account of the trip by a senior Foreign Office official. But while Alexander Cadogan, the civil servant, was forced to drink “something pretty savage”, Churchill managed to confine himself to red wine by complaining of a headache. “Winston was impressed [with Stalin],” Mr Cadogan wrote to the foreign secretary. Franco’s Spain Britain sent millions of pounds through Swiss bank accounts to Spain to prevent it from supporting Germany and to build a resistance movement to defend itself from German attack. The money was paid as bribes to generals, including the brother of Spain’s leader, Francisco Franco, above, and funded a “proSpanish and anti-foreign” movement. The plan was almost scuppered in 1941 when money held in a US bank account was frozen, forcing Churchill to intervene to ensure the bribes were paid.
The abdication
(c) 2013 The Financial Times Limited
Climate sceptics have already won
BY MARTIN WOLF
Humanity has decided to yawn and let the real and present dangers of climate change mount. That was the argument I made in last week’s column. Nothing in the responses to it undermined that conclusion. If anything, they reinforced it. Judged by the world’s inaction, climate sceptics have won. That makes their sense of grievance more remarkable. For the rest of us, the question that remains is whether anything can still be done and, if so, what? In considering this issue, a rational person should surely recognise the extent of the consensus of climate scientists on the hypothesis of man-made warming. An analysis of abstracts of 11,944 peer-reviewed scientific papers, published between 1991 and 2011 and written by 29,083 authors, concludes that 98.4 per cent of authors who took a position endorsed man-made (anthropogenic) global warming, 1.2 per cent rejected it and 0.4 per cent were uncertain. Similar ratios emerged from alternative analyses of the data. A possible response is to insist that all these scientists are wrong. That is, of course, conceivable. Scientists have been wrong in the past. Yet to single out this branch of science for rejection, merely because its conclusions are so uncomfortable, is irrational, albeit comprehensible. This leads to a second line of attack, which is to insist that these scientists are corrupted by the money and fame. To this my response is: really? Is it plausible that a whole generation of scientists has invented and defended an obvious hoax for (modest) material gains, knowing that they will be found out? It is more plausible that scientists who reject the typical view do so for just such reasons, since powerful interests oppose the climate consensus, and the academics on their side of the debate are far fewer.
Unfortunately, however rational it may be to seek to lower the risk of catastrophic outcomes, this is not what is happening now or seems likely to happen in the foreseeable future. Data on the burning of fossil fuels since the mid-18th century show a consistent rise in annual emissions of carbon dioxide. These data do, it is true, show a slowdown in the rate of rise of annual emissions in the 1980s and 1990s. But this slowdown was reversed in the 2000s, as China’s coal-burning increased
unit of output. But it still emits less per head than the high-income countries because its people remain relatively poor. Its leaders feel, rightly, that there is no moral reason to accept a ceiling on the emissions allowed for each Chinese individual far lower than the level Americans insist upon for themselves. As the emerging countries develop, emissions per person will tend to rise towards levels in high-income countries, raising the global average.
(see chart). Today, 30 per cent of CO2 in the atmosphere is directly due to humanity. What is behind this recent surge in emissions is quite clear: catch-up growth. China was responsible for 24 per cent of the global total emissions in 2009, against 17 per cent for the US and 8 per cent for the eurozone. But each Chinese person emits only a third as much as an American and less than four-fifths of a resident of the eurozone. China is a relatively wasteful emerging economy, in terms of its emissions per
This is why global emissions per person rose by 16 per cent between 2000 and 2009, which was a period of fast growth in emerging economies. So forget the rhetoric: not only the stocks of CO2 in the atmosphere, but even the flows, are getting worse. Sceptics convinced that the best thing to do is nothing should stop moaning: they have won. What about the rest of us? The chances that humanity will achieve the reduction in emissions needed to keep CO2 concentrations below 450 parts per million and so great-
ly reduce the risks of a rise in global temperature of more than 2°C are close to zero. The 25-40 per cent cut in emissions of high-income countries by 2020, needed to put the world on that path, will not happen. But in no sense does this mean inaction should continue. Unless the most apocalyptic scenario happens, humanity may be able to curb emissions and buy itself time. So in this grim situation, what is to be done? Here are eight possibilities. First, implement carbon
Unless the most apocalyptic scenario happens, humanity may be able to curb emissions and buy itself time.
taxes. Taxing bad things is always a good place to start. In the present context, emissions are such a bad. Taxes are the simplest way to shift incentives. Since the revenue would accrue to each government, the proceeds could be deliberately used to lower other taxes - on employment, for
example. The complex global distributional questions could be ignored. It would be best if it were possible for governments to commit themselves to a long-term tax escalator, so giving investors a degree of predictability to the cost of carbon. Second, go nuclear. This is why France is such a remarkably low-carbon economy. It is a model others should embrace, not run from. Third, impose really tough emissions standards on cars, domestic appliances and oth-
Sixth, let governments invest in research and earlystage innovation, through a mixture of funding university research and supporting public-private partnerships. Seventh, invest in adaptation to the effects of climate change. This will surely also have to be a focus of development assistance in the future. Such adaptation may well include large-scale movements of people. Finally, think through geoengineering, large-scale manipulation of the planet to re-
er machinery. Innovation will flower in response to the mixture of price and regulatory standards, as has so frequently happened before. We will not know what businesses can do if we do not dare to ask. Fourth, create a secure global trade regime in the lower-carbon fuels. This is one way to persuade China to shift away from coal. Fifth, develop ways of financing the transfer of the best available technologies for creating and, still more important, saving energy across the entire planet.
verse climate change, dire though that idea is. None of this can be enough to eliminate the risks of seriously untoward climate shifts. But it does look to be the best we can do now, given the economic pressures. It will, for now, continue to fail. The reasons for this failure are deep-seated. Only the threat of more imminent disaster is likely to change this and, by then, it may well be too late. This is a depressing truth. It may also prove a damning failure. (c) 2013 The Financial Times Limited