Sunday, March 20, 2011

Ambitious Five-Year Plan stops growth obsession

China’s 12th Five-Year Plan has received a lot of positive feedback from commentators in China and in the West. One of its main objectives is to reduce growth rates and to create more income equality. This is definitely needed, as growth remains limited to export-oriented business, inflation eats away most of people’s savings and high personal income tax does the rest.

Now the government vowed to wage a war on inflation, which is officially at 4.9% but probably much higher. One of the core instruments to reduce the income gap is a government investment program set to build 10 million affordable homes this year and 36 million units over the period between 2011 and 2015. This and other measures, the government hopes, will allow citizens to keep more of their salary in their pocket. In my view, it is a good idea because next to bringing social peace, it empowers the citizens and allows for more entrepreneurial ideas in the economy (China being a country in which the entrepreneurial spirit is quite well-developed despite its education system). Higher income also provides citizens with more political power in terms of what you may call “voting with your wallet”. In addition, it may well increase the legitimacy of the government, in which people are said to have little trust.

With regard to the environment, the Chinese objectives are remarkably ambitious. Renewable energies will be raised to 11.4% of China's energy consumption by 2015 and 15% by 2020, energy intensity is to be cut by 16% and carbon intensity by 17%. Officially, EU Climate Commissioner Hedegaard is highly delighted about the good news from China. In reality, the EU has to be very careful that China doesn’t overtake it in environmental policy. While the EU is talking about a smart energy grid, China is already implementing it.

However, problems are still apparent. Five-Year Plans passed by the national parliament (NPC) have generally been quite far-sighted; problems appear when it comes to implementing these policies in the provinces, and they concern environmental measures in particular. Many provinces do everything they can to enhance economic growth at the detriment of the environment. For the coming 2011-15 period, the government has lowered overall growth to 7% but 25 provincial regions out of 31 in the Chinese mainland set double digit growth rates. What the focus on economic growth can mean in practice has been highlighted by the film "The Warrior of Qiugang", that tells the story of a villager's fight against a polluting company next door (watch it here). Fearful of losing an investor, the authorities long refused to act in favor of the population. We can only hope that implementation will become better as the standard of living rises and corruption in public administration declines.

But overall it looks as though China wanted to move away from growth and GDP as indicators of progress and turn towards social, environmental and technological aspects. It apparently elaborates a new set of benchmarks including a kind of happiness index. Much remains to be done, as sources indicate that up to 94% feel unhappy given the unequal distribution of income. But if the objectives of the Five-Year Plan can be implemented on a regional and local level all over China, the country is on the best way to become a fully developed country.

To get a better picture of the Chinese economy, you may want to read this excellent report by HSBC.
Update 20/04/2011: Steward Fleming has a more pessimistic take on the Five-Year Plan, saying that "bureaucrats, operating in China's quasi-market system, are proving unequal to the task of slowing growth, curbing inflation, and managing the exchange rate of the yuan".

Tuesday, March 15, 2011

Japan remains calm - the West panicks

Just read this piece from a Japanese insider - when this catastrophe is over, we seriously have to question Western media coverage.

Monday, March 14, 2011

Silent vigil in front of the European Parliament

To show compassion and solidarity with people in Japan, several Green MEPs have organized a silent vigil in front of the European Parliament this evening. People were standing together holding candles as it is normally done on the anniversary of the Hiroshima bombing.

CC BY-NC-SA/André Feldhof

Sven Giegold, Green MEP from Germany and co-initiator of the vigil, reiterated that the tragic events in Japan should teach everybody to treat dangerous technologies more carefully in future:

Update: More photos are

Thursday, March 10, 2011

Flawed arguments about Strasbourg

"We reserve us all possibilities given by the treaty, also the option to go to the Court of Justice of the European Union." - Laurent Wauquiez, French minister for European affairs
When Michiel van Hulten reported in February that MEPs are fed up with the traveling circus between Brussels and Strasbourg, the political establishment reacted to it like a horse reacts to a fly. "I urge you not to engage in polemics that will damage Europe’s standing. That would only play into the hands of the Euro-sceptics", said France's ambassador to the EU. Joseph Daul and Martin Schulz, respectively leaders of the EPP and the S&D group, dismissed the report as “a waste of time”, adding "that this was not an issue MEPs should deal with".

The European Parliament in Strasbourg
by night, CC BY-NC-SA, by m4tik
Now that MEPs voted to scrap a trip to Strasbourg per year, the French government and other stakeholders are howling with rage. French members of the EPP group "denounce the attacks on Strasbourg" and ask the French government to take the case to the ECJ; Wauquiez is seriously considering to follow suit (possibly in vain).

You hear that there is a lot of emotion and not so much rational thinking behind these arguments. Bernd Posselt, German member of the EPP, has even compiled a list of "preconceptions" that the pro-Brussels camp is supposed to have, and he completely boycotts the Brussels seat.

But many of the pro-Strasbourg arguments are flawed. I went through some of Posselt's arguments to start with.

Posselt: The "democratic deficit of Europe will get worse if Europe becomes more centralized", as centralization would "go against the general movement of history" and "concentrations of powers increase the risk of abuse of powers".

==> Many observers say that the Parliament needs to be close to the institutions it controls, and that it could not fulfill its function if it were to work from the distance. Besides, when it was decided in the 1950s where to base the EEC, Robert Schuman supported decentralization of European institutions and "was joined in his ideas by Belgium, Luxembourg and the Netherlands, small countries that were afraid that their cities could not integrate a large number of foreigners." There was never a political motivation for the decentralization of the institutions. Instead, "the ministers were unable to decide on a site, choosing three provisional capitals and therewith bringing about de facto decentralization."

Posselt: "In Brussels the Parliament is more in the category of “and others” after NATO, the Council and the European Commission, while in Strasbourg, it is the center of attention."

==> Quite the contrary, the existence of "Brussels" and of face-to-face relations led to a European public sphere that allows for the shaping of opinion through discussions between different stakeholders (albeit in a bubble). Opinions could not be negotiated as well if they had to travel back and forth between Brussels and Strasbourg.
In addition, the disappearance of the European Parliament from Strasbourg would for the first time give adequate visibility to the Council of Europe and the European Court on Human Rights.

Posselt: "To abandon Strasbourg would be a shock to the European identity which was much defined after the war by the contested border region of Alsace."

==> Plain wrong. The identity in Alsace after WWII, partly German and partly French, was bounced around between Alsatian affection for France and the repulsion that France showed for Alsace. "The Alsatian became the “lowest creature in France that one [could] mock . . . without facing a consequence". Had Alsatians "been proud of their 'double culture' before the war, now there was a 'desire to forget the language and the culture, to undergo assimilation and to be like the other French in order to not longer have anything in common with the German enemy.'"

In conclusion, many arguments in favor of a Parliament in Strasbourg are based on historical or ideological reasons. And many of them are flawed. The Council of Europe and the European Court of Human Rights would deserve more limelight than they have, while the Parliament should check decision-makers in Brussels as it is supposed to do. Instead, as several commentators suggest, new European institutions could fill the vacant space in the Strasbourg buildings.

Update (17/04/2011): A new paper published by 90 MEPs suggests a similar direction as I have taken here. It wants to make Strasbourg the European City of Justice by moving the ECJ over there. 

Thursday, March 3, 2011

Gaddafi's fall and the African Union

Should Muammar Gaddafi's government fall - and things are looking like it will - this will mean an end to mass murder, an end to political oppression in Libya - but also and end to much of the African Union.

The African Union, created in 2001 by Gaddafi himself, unites 53 African states. It is modeled on the European Union, has an African Union Commission in Addis Abeba, Ethopia, and a Pan-African Parliament in Midrand, South Africa. Gaddafi's objectives in launching the African Union are questionable - after failed Libyan expansion attempts to Chad and financial and military involvement in many other countries, his aims were certainly not only generous. In 2009, he served a year as African Union chairman himself; after missing reelection, he "criticized the AU for "tiring" him with long meetings and making declarations and reports without asking him." But Gaddafi provided 15% of the African Union membership fees, according to Geoffrey York from the Globe and Mail. Below, a chart of what else he financed.

Picture Source:

Besides giving funding, the Libyan revolution leader was a fervent supporter of the Pan-African movement in ideological terms (he had his reasons, having failed to win favor of the Arab League countries, to the point that he hissed in 1998 that the "Arab world is finished"). Laura Seay, a political scientist at Morehouse College in Atlanta who specializes in African politics, esteems that “without Gadhafi, the pan-African movement is dead.” She does not see anybody with the personal conviction and the financial resources to fill the gap. The African Union is already facing financial difficulties; without Gaddafi's money and support, it may be difficult to sustain much of its activity.

Maybe the EU could give a hand to the African Union?