Archives for May 2012

Egypt: a fateful choice ahead

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Robin Lustig | 09:51 UK time, Friday, 25 May 2012

It may well be that the most significant political event of the week was neither the euro-summit dinner in Brussels on Wednesday (nothing happened), nor the latest twist in the Leveson-BskyB-Hunt-Cameron saga yesterday (although that's still a story with mileage in it, so it's definitely worth keeping an eye on).

For my money, the first round of the presidential elections in Egypt should get top billing, simply because the potential ramifications are so far-reaching.

As of this morning (Friday), with about one-fifth of the votes counted, it looks as if the candidate of the Muslim Brotherhood's Freedom and Justice Party, Mohammed Mursi, is in the lead, with the Mubarak-era prime minister Ahmed Shafiq in second place. But of course much can change in the coming hours.

Whoever finally emerges as president of Egypt will immediately become one of the most powerful figures -- no, make that the most powerful figure -- in the Arab world. If it is indeed Mr Mursi, he will eclipse the Turkish prime minister Recep Tayyip Erdogan as the world's most influential Islamic political leader.

If it's Mr Shafiq, or the other leading secular candidate, Hamdeen Sabbahi, who seems to have done much better than many observers had expected, Egypt will be seen to have turned its back on the tide of Islamism that has swept across much of the region over the past 18 months.

Why does Egypt matter so much? Well, just look at the numbers: with a population of 81 million, it's considerably bigger than all the other Arab spring countries put together (Libya 6.3m; Tunisia 10.5m; Syria 20.4m; Yemen 24m).

But it goes far beyond that. Egypt has a history stretching back more than five millennia to the times of the pharoahs. Al-Azhar mosque in Cairo has long been regarded as the seat of Sunni Muslim orthodoxy. And every head of the Arab League since its inception in 1945, with one brief exception, has been an Egyptian.

Egypt under President Anwar Sadat was the first Arab nation to sign a peace treaty with Israel. It has played a crucial role over many years in mediating between Israelis and Palestinians, and between the rival Palestinian factions, Fatah and Hamas. It is also, along with Saudi Arabia, the most important US Arab ally.

So Egypt does matter. But even when the results of these elections are confirmed -- and even when the second round run-off between the two leading candidates has taken place next month -- there will be huge doubts about the future direction of the country.

For one thing, the precise powers of the new president remain to be defined. Attempts to draw up a new, post-Mubarak constitution have not yet borne fruit -- and you can be sure that the Muslim Brotherhood, which dominates the newly-elected parliament, will want to make sure that its MPs count for much more than they did in the ineffectual Mubarak-era parliaments.

And then, of course, there's the army. They have grown used to having things their own way, first under Nasser, Sadat and Mubarak, and then, post-revolution, as the country's interim rulers. So there's going to be a huge fight over how much power, whether overt or behind the scenes, the generals hang on to. (Remember Turkey, where for decades the military were the major hidden power, making and breaking governments almost at will.)

So what about the revolutionaries? Those hundreds of thousands of mainly young Egyptians who poured into Tahrir Square in Cairo early last year, forcing out Hosni Mubarak, and -- so they hoped -- ushering in a bright new dawn for their country.

It would be, to say the least, a poignant irony if the two leading candidates to be the first democratically-elected president in Egypt's history turn out to be a man of the Muslim Brotherhood, which played no part in the early days of the revolution, and a man called by his critics a "remnant" of the old order, much derided as a throw-back to the bad old days, and seen as epitomising everything the uprising was meant to be against.

To some, that would be the nightmare scenario, leading to a deeply divisive second round poll, in which the military, the old guard and the secular would line up against the Islamists and the Muslim Brotherhood.

There's a lot hanging on the next few weeks -- because the Egyptian revolution is not yet over.

Berlin's message to Athens: Be very, very afraid

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Robin Lustig | 10:04 UK time, Friday, 18 May 2012

I don't know about you, but I'm beginning to feel as if I'm watching the highest-stakes game of poker ever played.

On one side of the table, sweating nervously, Greek voters. On the other side, gimlet-eyed, poker-faced (sorry), the German chancellor Angela Merkel.

And there, in the middle of the table, where the pile of chips should be, the future of the European economy. Which means, to you and me, our jobs, our savings, our mortgages and our pensions.

Greek voters know they're holding a lousy hand. And they know that Chancellor Merkel knows. What they don't know is whether she's prepared to risk everything on the possibility that they will keep upping the stakes, even with no hope of winning.

After all, if they're bust, they're bust -- so it doesn't matter how much they lose, because they won't be able to pay. So maybe Frau Merkel will fold first. Offer a life-line, perhaps, to keep them in the game.

Also at the table are the onlookers, and they're sweating even more profusely than the Greek voters.

Here's the governor of the Bank of England, Sir Mervyn King: "We have been through a big global financial crisis, the biggest downturn in world output since the 1930s, the biggest banking crisis in this country's history, the biggest fiscal deficit in our peacetime history and our biggest trading partner, the euro area, is tearing itself apart without any obvious solution."

And here's the former Labour chancellor Alistair Darling: "This has the seeds of something disastrous. It is madness."

Oh, and the head of the International Institute of Finance, Charles Dallara: if Greece leaves the euro, the damage would be "somewhere between catastrophic and armageddon".

OK. You get the picture. European leaders are very, very worried, as they head to the US for this weekend's meeting of the G8. So what will they do? My hunch: not a lot -- and here's why.

Politicians don't start sounding panicky unless there's a good reason -- and my guess is that the reason this weekend is that they want to panic Greek voters.

They want them to fear that if they vote for an anti-austerity party in their rerun election next month, all hell will break loose.

They want to persuade Greek voters that they can't have what they want, and what the anti-austerity Syriza bloc is promising them: an end to the pain, but continued membership of the eurozone.

The message to Athens from Berlin and Brussels is (cue ominous drum-beat): Be afraid; be very, very afraid.

Are you sure you want to stay in this game of high-stakes poker? What happens if Frau Merkel has stronger nerves than you do, if she forces you out of the game and then takes the shirt off your back and throws your family onto the streets? Is it a risk you're prepared to take?

Now, the implied threat may or may not be well-founded. I'm in no position to judge, and -- more to the point -- nor are Greek voters. All they need to know is that the threat is there, and the risk is real.

For Chancellor Merkel, the threat is a different one. Do you really want to risk Greece crashing out of the euro? More pressure on banks in Spain and Portugal, perhaps Italy as well? Even the collapse of the entire euro project?

After all, Frau Merkel (the Greek poker-player might say), the euro has served Germany well, has it not? Isn't it the euro that has bought you your economic strength, your export-led growth? Do you really want to risk throwing all that away, just so that you can punish us Greeks for our past profligacy?

See what I mean about high-stakes poker? I suggest you put a note in your diary: 17 June, election day (again) in Greece. A day when Greek voters may well be deciding a great deal more than who's going to form their next government.

Unless, of course, the whole euro-caboodle has come crashing down before then.

What the voter told the banker - a transcript

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Robin Lustig | 09:23 UK time, Friday, 11 May 2012

I've managed to get my hands on the transcript of a conversation between a European voter and a major international lender. I should warn you that I can't vouch for its accuracy -- indeed, it may for all I know be a piece of total fiction -- but I thought I'd share it with you anyway ...

"Voter: I'm going to spell it out for you nice and simple, Mr Lender: we've had enough, we won't take any more, you can take your austerity and stuff it. And we'll get rid of any government that makes the mistake of signing up to your nonsense conditions. We've booted out 10 governments so far, I think, and we're not done yet.

"Lender: That's fine by us, Mr Voter. But there's something you need to understand as well. Debts have to be paid, and if you fail to pay up, there will be consequences. If you don't believe me, ask your mortgage lender what'll happen if you default on your mortgage.

"Voter: Wrong, Mr Lender. They're not my debts. I'm not the one who invented ridiculously complex financial products so that billions of dollars could swill about the banking system without anyone understanding what was going on. And while we're at it, I'm not the one who's getting paid astronomical salaries and bonuses while our economy disappears down the plughole. It's your problem, buster, not mine.

"Lender: I don't think you quite get it, Mr Voter. You happily ran up your credit card debts, didn't you, and merrily borrowed vast amounts to buy a home that you couldn't possibly afford? I don't remember you complaining when you borrowed to buy your outsize plasma TV screen, or to extend your home, or buy your gas-guzzling 4x4. Where do you think all that cash came from? Did you really not stop to think for a single second that one day it would all have to be paid back?

"Voter: Now just hang on a minute. If banks lent out far more than they should have done, that's their problem, not mine. I refuse to accept that welfare benefits are cut, pensions slashed, and government spending hacked back, just because you guys screwed up. I'll say it again: your problem, not mine.

"Lender: OK, fine. Here's what's going to happen. You want a government that tears up your hated "austerity" plans. You want it to go on spending; in other words, you want it to go on borrowing. But if you think I'm going to go on lending, you can think again. Sure, I could lend -- there's still plenty of Chinese cash swilling about -- but I'd charge so much in interest, it'd make your eyes water. Is that what you want: more debt, at higher interest rates?

"Voter: No, that's not what's going to happen. Because you know as well as I do, Mr I've-got-all-the-answers Lender, that you don't want the whole system to collapse any more than I do. Riots on the streets? Thousands of homeless? Parties of the extreme right and extreme left gaining millions of votes? I'm not sure that's going to do your bonuses much good. Remind me: what happened to all the financiers in Moscow in 1917, or Berlin in the 1930s?

"Lender: Oh for goodness sake. You're being ridiculous. Let's try to agree that this is a problem we both need to sort out. Yes, I know you're angry. And we lenders aren't being unreasonable. Of course we don't want to see societies fracture -- but the financial system is built on trust. Debts have to be paid, whoever's responsible for them. If they're not, you go bankrupt, and that't not nice, I can assure you.

"Voter: Oh yeah? Well, from where I'm sitting, going bankrupt doesn't look much worse than what we've got at the moment. And it has the one big advantage that it hurts you guys as well as the rest of us. What I really can't stomach is the way you sit there in your mansions and your air-conditioned limousines, lecturing me on why I have to suffer while you argue over your bonuses.

"Lender: Look, I understand why you're angry. All I'm saying is that you need to understand the consequences of saying No to austerity. We all got things wrong in the past; and now we all have to try to put them right. Believe me, the short-term pain of higher unemployment and lower government spending will pay dividends eventually. You just need to be patient ...

"Voter: You just don't get it, do you? We've run out of patience, and we don''t believe a word you say. You've proved that you don't have a clue what you're doing; all you care about is your wretched bonuses. You think you have more power than us voters? You think you can force us to bail you out while our jobs disappear? Watch this space ..."

And there the transcript ends. As I say, it may not be entirely accurate; it may even be an utter invention. But I can't help feeling it has the ring of truth to it.

The tale of Chen Guangcheng

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Robin Lustig | 10:23 UK time, Friday, 4 May 2012

Sometimes, the courage of a single individual can shake the mightiest of nations.

Think of Nelson Mandela, Lech Walesa, Vaclav Havel, Aung San Suu Kyi -- and now, just maybe, Chen Guangcheng.

A week ago, you had probably never heard of him. He's a blind, self-taught lawyer from a remote village in eastern China, a courageous campaigner on behalf of women forced to undergo involuntary abortions or sterilisation.

Today, he's in a hospital in Beijing, but he may soon be on his way to the United States, his fate having thrown into crisis the always delicate relationship between the world's two most powerful nations.

His story is worth telling in some detail, I think, because it shines a spotlight on some of China's internal stresses and contradictions as it struggles to chart a political path that won't risk tearing the nation apart.

Chen first made a name for himself as a campaigner on behalf of disabled people. He was, for a time, officially approved of -- but then, when he started agitating on behalf of women who fell foul of the official one-child-per-family policy, he ran into trouble.

He was sentenced to four years in jail on what his supporters say were spurious charges -- then, after his release in September 2010, his house was surrounded by "security officials", in reality either plain-clothes police or thugs hired by local Communist party officials, and he and his family were subjected to an informal, but effective, form of house arrest.

The account of how he made his escape, according to a detailed reconstruction published in the New York Times, is straight out of a Hollywood thriller.

According to the Times: "Mr. Chen feigned sickness for weeks, tricking his minders into thinking he was bedridden. Then, on a moonless night on April 22, he began his mad dash from Dongshigu village, heaving himself over the first of several walls while the guards slept. It was during the first few minutes of his scramble that Mr. Chen severely injured his foot. In all, he told friends he fell 200 times as he made his made his way to a predetermined pickup point."

He was driven 300 miles to Beijing. The plan was that he would lie low until he could decide what his next step should be. But his foot injury meant he needed urgent medical attention -- and that, according to the New York Times, is when friends contacted the US embassy to ask for help.

Here's how the Times described what happened next: "A rendezvous point was agreed upon in an area some miles west of the embassy where an official car would meet the vehicle carrying Mr. Chen. The plan was for the lawyer to be helped into the embassy car.

"But as the two vehicles were about to converge, the Americans noticed Chinese security cars tailing them, one behind the embassy car, the other behind the car with Mr. Chen and his friend ... It was clear the handoff would have to happen in a rush. As Mr. Chen's car moved into an alley, the embassy vehicle drew alongside, and the lawyer was pulled into the American vehicle. The Americans evaded the two Chinese cars and headed for the embassy ..."

Chen spent six days at the embassy before being transferred -- with his full agreement, according to US officials -- to a Beijing hospital. He had apparently received assurances from Beijing officials that he and his family would not have to return to their home in Shandong province and would be protected from the thuggery of local officials there.

But as soon as he had an opportunity to discuss things with his wife, and she was able to tell him of her own experience at the hands of those officials, he changed his mind. While Hillary Clinton was in town for a series of high-level talks, lower ranking officials desperately scurried to come up with a formula that would not be seen in either the US or China as a humiliating climb-down.

As of this morning, Friday, it looks as if they may have managed it. According to the Chinese foreign ministry: "Chen Guangcheng is currently being treated in hospital. If he wants to study abroad, he can apply through normal channels to the relevant departments in accordance with the law, just like any other Chinese citizen."

So what have we learned? That the US and China both see the need to work together, even if neither really trusts the other? Perhaps. That pragmatism, even in what often looks like a monolithic Communist party, is a powerful policy motivator? Maybe.

But also, I'd suggest, that a single individual -- even if blind, self-taught, and from a humble background -- can sometimes make a real impact. The big question now for Chen Guangcheng is whether that impact will be diluted if he goes into exile.

And the question for China's leaders in Beijing is how long they are prepared to tolerate the illegal and corrupt behaviour of local officials. That's also the issue that lies behind the crisis of Bo Xilai in Chongqing, the former party high-flyer whose wife is alleged to have been involved in the death of the British businessman Neil Heywood.

Things are changing in China -- but it's a messy, protracted and uncertain process, as is illustrated, in their very different ways, by the fates of Bo Xilai and Chen Guangcheng.

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