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British state capacity and Peak Brent Oil

By Fester:

Great Britain has been the recipient of a massive and fortunate fiscal gift for the past two generations.  It is an industrialized, modern, energy intensive nation that is also an oil exporter.  The North Sea offshore fields provided a steady, dependable counter-cyclical stream of oil revenue to the Exchequer while the mature British economy could produce returns that are comparable to returns on investment in the energy sector so the oil curse was at worse, mildly felt.  However, British oil production is in decline.  Since 2004, Britain has been a net oil importer and it has been importing in the face of record dollar and pound denominated prices.  Imports are increasing and the current account deficit is matching that increase. 

As the North Sea declines, there are fewer barrels of oil for the Government to tax, although it is receiving a much larger fee per barrel due to the price increases.  The North Sea is predicted to decline at double digit annual rates.  This will have a dramatic impact on the budget as a major revenue hole will be created that can not be papered over by higher revenues per barrel produced. 

We have looked at a similar situation in Mexico two months ago as the Mexican government receives roughly 40% of its revenue from taxation of oil production.  Mexico, like Great Britain, is seeing its major fields in serious decline.  Are these scenarios similar?

Higher prices are masking the pain at this point but Mexico is entering the Export-Land problem.  Higher local demand is keeping more of its oil off the international market and thus leading to a decline in hard currency earnings.  One estimate is that Mexican oil exports could go from a 2007 average of 1.67 million barrels per day to less than 280,000 barrels per day in 2016.  Even projecting high per barrel prices this is a net decline in overall revenue and a massive decline in revenue per capita. 

So given these trends, how much ability does the Mexican elite have to maneuver?  Not much at first glance unless they can clean up their own acts to free up resources for effective, responsive and localized public good projects that can not be matched by the drug gangs which are seeking to create a hollowed out and ineffective state. 

Great Britain is starting at a massive advantage over Mexico in that it is not the nexus of massive black market smuggling into the largest market in the world.  It also possesses significantly greater, deeper and more resilient social and civic capital networks.  However the crux of the problem remains; both governments have made very signficant promises that were significantly backed by oil revenues.  In the next few years, those oil revenues are under severe threat due to geology and physics and numerous promises may be broken as services are either not provided, or different constiuencies are taxed.  How will either government resolve the diminishment of their state capacity?

Force Fungibility for Afghanistan and Iraq

By Fester:

The US military is pulling out the last of the surge brigades from Iraq and moving to the barely sustainable fifteen brigades in Iraq and three brigade equivilants in Afghanistan.  The five surge brigades were the US strategic deployable reserve and using them for the past year of treading political water means that the US will be operating without a deployable reserve force for the next fifteen to eighteen months.    There is no deployable US slack. 

This means that Iraq directly robs Afghanistan of deployable units, and from a certain perspective, an additional non-US soldier committed to Afganistan allows for the US to shift one man-slot to Iraq.  This was not as true when the US had a deployable reserve.  So when the US commander in Afgahnistan is calling for an extra division, US allies that support the Afghanistan mission but are opposed to the Iraq mission are seeing the US order six new brigades to Iraq and see any additional battalion or brigade they release to Afgahnistan as an enabling component of US policy in Iraq. 

Just Desserts

By Cernig

LOL! I had no idea until just now that Jack McConnell, as duplicitously two-faced a scheming political hack as I ever had the displeasure to know - and former Scottish First Minister - had been tapped to be shuttled off to Maliwi as British High Commissioner there. Nice move from Brown, that - put the weaselly little smirker where he can't do any more harm and it couldn't happen to a more deserving fellow.

Maybe Barrack has a list of small and out-of-the-way nations that need Ambassadors and a concurrent list of troublesome Democratic Party hacks who can fill those posts. One can only hope. Steny for Burundi, Joe L. for Uzbeckistan, anyone?

Scotland To Revert To Hand-Counting Ballots

By Cernig

Just a quick note on something that may be of wider interest emerging from something I doubt interests most Newshoggers readers - Scottish politics. At the end of an article on how the Labour party in Westminister want to hang on to control of Scottish Assembly elections, rather than hand control to an Assembly currently controlled by their rivals, the Scottish National Party, comes an interesting British policy change which might be useful to those worried about US electoral irregularities.

Nearly 150,000 Scottish Parliament ballots were rejected in the 2007 Holyrood election and subsequently the UK government asked Canadian elections expert Ron Gould to write a report with recommendations to prevent a re-occurence. While rejecting his view that the Scottish Assembly should have control over Scottish elections, not London, they do intend to implement others.

Mr Browne said the UK government is taking forward five recommendations. These were reverting to a manual count; using separate ballot papers for the constituency and regional votes; a longer time between the close of nominations and the date of an election; no changes to Holyrood electoral law within the six months before an election; and consolidation of legislation on the conduct of Scottish Parliament election.

The most important of these are reverting to a manual count of votes and making ballots easy to understand, especially where it relates to different votes. It seems likely that this will be implemented in the UK as a whole too.

Voting machines, consolidated ballots and electronic counting are really for the convenience of beaurocrats, not of voters. Easy to understand, individual, hand-marked and hand-counted ballots serve democracy's interests better. Should we really subordinate the bigger picture to making civil servant's lives easier?

Why man, he doth bestride the narrow world like a Colossus

By Cernig

Oh, what a Shakespearean experience it is to be the Chief Executive. Even the ultra-conservative British tabloid The Daily Mail has to notice.

Air Force One landed in a VIP area of Heathrow, part of a fleet that included another 747 aircraft, two smaller jets and four helicopters.

Two police helicopters were also in the air and scores of officers were on the ground.

The airport authority BAA insisted disruption to the travelling public was 'not that significant', although scheduled services were still suffering the knock- on effects of a 20-minute runway closure some four hours later.

Long before the grand arrival, an 11-strong convoy of vehicles moved into place to greet the incoming President.

Later a motorcade of 13 vehicles  -  including a travelling hospital, armed UK police in 4x4s, and at least one decoy vehicle (pronounced veehickle)  -  emerged from Heston service station.

The M4 there had already been cleared of traffic and was deserted when the convoy trundled off.

Following an example set by Tony Blair, it used the bus-only lane for the journey into London.

The president, incidentally, was not even in the convoy  -  he flew to Windsor by helicopter.

And upon landing in Windsor Castle grounds, he journeyed the last hundred or so yards to the door by limo, especially flown in for the event. Still, at least he didn't take an entire Marine invasion force on their own asault carrier this time, as he did to the G-8 summit in Gleneagles.

Is there any chance that the next incumbent of the White House might be less of a paranoid pantswetter and able to trust his allies in Britain and the rest of Europe to provide his security?

(Hat tip - Kat)

Those Crazy Europeans

By BJ

For some odd reason, the EU seems to think that the people who make chemicals and intend to introduce them into the marketplace should have to prove they are safe first!

The new laws in the European Union require companies to demonstrate that a chemical is safe before it enters commerce -- the opposite of policies in the United States, where regulators must prove that a chemical is harmful before it can be restricted or removed from the market.

Just pause and think about that for a bit. In the US, companies can produce and market whatever chemical cocktail they can come up with, and it is the responsibility of the government to prove whether or not it's harmful before it can be restricted or removed. (And let's not forget the Bush administration's attempt to ensure that companies whose products it's tame regulatory bodies have "approved" can no longer be sued if those products do damage.) Do you feel safer? If you're going to, you'll have the EU to thank.

Adamantly opposed by the U.S. chemical industry and the Bush administration, the E.U. laws will be phased in over the next decade. It is difficult to know exactly how the changes will affect products sold in the United States. But American manufacturers are already searching for safer alternatives to chemicals used to make thousands of consumer goods, from bike helmets to shower curtains.

The European Union's tough stance on chemical regulation is the latest area in which the Europeans are reshaping business practices with demands that American companies either comply or lose access to a market of 27 countries and nearly 500 million people.

From its crackdown on antitrust practices in the computer industry to its rigorous protection of consumer privacy, the European Union has adopted a regulatory philosophy that emphasizes the consumer. Its approach to managing chemical risks, which started with a trickle of individual bans and has swelled into a wave, is part of a European focus on caution when it comes to health and the environment.

I'd call the European approach conservative, under the original meaning of the word, and it is the kind of thinking I appreciate. Dumping all kinds of chemicals into the environment and ourselves is a damn good way to wind up in serious trouble, which, given recent history, we probably already are.

In more than 30 years, the Environmental Protection Agency has required additional studies for about 200 chemicals, a fraction of the 80,000 chemicals that are part of the U.S. market. The government has had little or no information about the health hazards or risks of most of those chemicals.

The EPA has banned only five chemicals since 1976. The hurdles are so high for the agency that it has been unable to ban asbestos, which is widely acknowledged as a likely carcinogen and is barred in more than 30 countries. Instead, the EPA relies on industry to voluntarily cease production of suspect chemicals.

"If you ask people whether they think the drain cleaner they use in their homes has been tested for safety, they think, 'Of course, the government would have never allowed a product on the market without knowing it's safe,' " said Richard Denison, senior scientist at the Environmental Defense Fund. "When you tell them that's not the case, they can't believe it."

One of the harshest criticisms of globalization is that companies look to relocate to places where regulatory requirements are lax and easily worked around. One of the benefits of a multipolar globe with an interconnected populace is that they can force their governments to act when they'd prefer to turn a blind eye. Thanks to the EU deciding not to go with the lowest common denominator, it appears that this is one of those cases where we get to reap the benefits.

Sen. Frank Lautenberg (D-N.J.) introduced a measure last month that would overhaul U.S. chemical regulation along the lines of the new European approach. It would require the Centers for Disease Control and Prevention to use biomonitoring studies to identify industrial chemicals present in umbilical cord blood and decide whether those chemicals should be restricted or banned. A study by the nonprofit Environmental Working Group found an average of 200 industrial chemicals in the cord blood of newborns.

Said Denison: "We still have quite a ways to go in convincing the U.S. Congress this is a problem that needs fixing." But new policies in Europe and in Canada push the United States closer to change, he said. "They show it's feasible, it's being done elsewhere, and we're behind."

Conservative Political Courage

By Cernig

A senior British Conservative party MP - shadow home secretary David Davis - has resigned his seat in parliament in protest over the UK government's push to extend detentions without trial for terrorism suspects to 42 days.

Mr Davis, 59, told reporters outside the House of Commons he believed his move was a "noble endeavour" to stop the erosion of British civil liberties.

He is one of the best-known opposition MPs and his resignation came as a complete surprise in Westminster.

He told reporters: "I will argue in this by-election against the slow strangulation of fundamental British freedoms by this government."

...Mr Davis has led the opposition to Labour's plans to extend the maximum limit terror suspects can be held beyond the current 28 day maximum.

Well done, Mr Davis. You follow in the proud tradition of senior Labour cabinet members who resigned rather than see their party lead the UK into a war of choice.

Does anyone remember when American conservatives last had this kind of courage to stand up for civil liberties and the rule of law, regardless of who the law was applied to? In fact, does anyone recall when an American politician of any stripe last showed this kind of commitment to the principles upon which their nation was founded?

But American conservatives should be particularly singled out in their spinelessness. Instead of standing up for the Founder's principles, they argue that constitutional rights should not apply to non-citizens. The notion that the rule of law doesn't apply equally to all, irrespective of citizenship, is a peculiar and unique fomulation of the American extreme Right. No other nation in the free world gives it any credence whatsoever - indeed the rest of the free world sees such a view as a slap in the face of the principles of just law. It's really just that hoary old American exceptionalist Divine Mandate chestnut dressed up in constitutional drag and should be called out as such.

Or, they argue spinelessly that the constitution "isn't a suicide pact" - because surely other nations have such problems getting terror convictions even though they allow habeas rights and the entire populace of such nations is being decimated by daily terror attacks...

The wife of a would-be London train bomber was sentenced Thursday to 15 years in jail for failing to tell police about her husband's plan to attack an Underground station three years ago, the court and police said.

...Her brother received a 10-year sentence and her sister received a 15-year sentence for their roles.

Osman was convicted and imprisoned for life last year for his part in the attempted bombings.

And yes, those UK convictions are a prima facie case that David Davis is correct about extending terror detention periods in the UK too.

Sarkozy Moves To Strengthen European Military Union

By Cernig

French President Nicolas Sarkozy has proposed a raft of measures to boost European military union - provoking a kneejerk antipathy from the British, who after all have been trying to prevent that very thing for centuries.

The proposals, circulated to European governments in a five-page document detailing Paris's security policy priorities, include common EU funding of military operations, a European fleet of military transport aircraft, European military satellites, a European defence college, and the development of exchange programmes for officers among EU states.

Since 2004, the British have resisted the headquarters idea, seeing it as a French ploy to undermine the Nato alliance and boost common European defence by establishing a European rival to Nato's Shape planning headquarters at Mons in Belgium. The prime minister's spokesman said yesterday the British government is committed to Nato remaining the cornerstone of European defence, but also supports permanent structured cooperation on defence within the EU so long as it does not duplicate the work of Nato, or remove the UK veto.

The two governments are already negotiating quietly over President Nicolas Sarkozy's defence proposals, sources said, adding that Washington is privately pressing the Brown government to reach a deal with the French.

In a speech to Greece's parliament, Sarkozy said the EU must be able to defend itself, but he said: "It is not a case, nor will it ever be a case of competing with Nato. We need both. A Nato and European defence that oppose each other makes no sense."

Details of the French proposals, obtained by the Guardian, confirm that Sarkozy is determined to use his six-month EU presidency, starting in three weeks, to drive forward his military agenda for Europe. The French have sought to keep their proposals private for the moment so as not to derail ratification of the EU treaty. Ireland is holding its referendum on the Lisbon treaty next week and British peers are due to vote on whether to demand a similar referendum next Wednesday.

The British government insisted the document was a set of preliminary proposals for discussion with the British and Germans, and did not represent French government policy.

Most sensitively, Paris is insisting on the new Brussels headquarters coming under the authority of Europe's foreign policy supremo, a post whose powers are considerably boosted under the EU's reform treaty and which is currently held by Javier Solana of Spain. Ultimately, the Brussels headquarters would plan and control EU missions abroad.

The French are making it very clear that these proposals are French national policy, however, and the Bush administration seem willing to go along with them as a quid-pro-quo for hastening French reintegration into NATO, which needs French co-operation desperately in Afghanistan.

"France wants to create an efficient and strong European security and defence policy. The main goal for the French [EU] presidency is to strengthen EU military capabilities," said Admiral Anne-François de Saint Salvy, a senior French defence ministry official. "The EU has to really increase operational capabilities and Nato has to decrease its command structures." Increased French cooperation in Afghanistan has been taken as a sign of a new willingness to compromise by the French.

Eurosceptics and some Atlanticists see such statements as further evidence of traditional French anti-American policy. "I don't see anything in this that will benefit the United Kingdom," said Geoffrey Van Orden, a Conservative MEP and former brigadier. "This will end in tears."

But the French maintain the policy is aimed at reinvigorating the transatlantic alliance and basing Nato and European security policy on "complementarity" rather than rivalry and duplication.

British officials said there was nothing unexpected in Paris's proposals and played down their significance. Experts disagreed. "It's very ambitious," said Tomas Valasek, security analyst at the Centre for European Reform thinktank. "The French want everything."

I can see pros and cons in this French move for both the US and Europe...and mostly cons for Britain. The US gets a short-term boost for NATO which however sets the groundwork in the longer term for a Euro rival both to NATO and eventually (presumably) to the existing major military powers. The French get to steer this European military from the guiding seat, making them the unquestioned mover and shaker of European defense and security policy - but risk excluding the UK (and the UK's money) from a future Europe. This, more than a common currency or a common constitution, may well be where Blighty makes a stand and says 'enough". There will be enormous public antipathy from the British public to any notion that the UK could place it's military under French control, "of all people", for multiple reasons of history and stereotyping. But should this thing come to pass, then snowball into a European military union in truth, and Britain walk away, it will be sidelined in Europe as a whole and sidelined militarily by being sandwiched between the far larger military powers of a European union and the U.S. Accusations that Britain is simply America's largest aircraft carrier would be impossible to deflect, then, which would also negatively impact Britain's alliance with America.

Tabloid Spies

By Cernig

It's true, Britain does better sex scandals than America - this one has it all; prostitutes, bondage, Nazis, fast cars and now...spies.

A bizarre sex scandal involving a top motor sports official and the prostitute wife of a British spy has raised urgent questions about the screening procedures employed by the MI5 security service.

The Sunday Times and Sunday Telegraph reported that an MI5 officer had been forced to resign after it emerged that his wife was one of five prostitutes who took part in an orgy with Max Mosley, president of Formula One's governing body, the FIA.

...Mosley has been fighting to keep his job after another paper, the News of the World, reported in March he had taken part in what it called a Nazi-style sado-masochistic orgy...The affair raises many questions, not least how MI5 could have failed to know that the wife of one of its own operatives was working as a prostitute.

I'm going to follow the cliched explanation, and blame the massively expensive and conservative private schools the British elite send their kids to.

Germany Declines To Copy Rice's NSC "Failure"

By Cernig

How long do you think America's reputation will take to recover from the Bush administration's ineptness?

Germany's foreign minister has rejected plans by Chancellor Angela Merkel's party to set up a U.S.-style National Security Council to oversee foreign policy, saying the body proved a failure in the run-up to the Iraq war.

Frank-Walter Steinmeier said in a speech in Berlin on Monday that the U.S. NSC, which was run by Condoleezza Rice when the United States launched its invasion of Iraq, had "suppressed all counterarguments" to the war in 2003.

"This cannot be the model for us," said Steinmeier, a member of the centre-left Social Democrats, who under former chancellor Gerhard Schroeder staunchly opposed the Iraq war.

Decades, that's how long. For as long as the U.S. is in Iraq, and a while after that, America's reputation will be that of the superpower that started a war by fixing the intelligence around the policy, just because it could.

MeK Wins UK Terror List Ruling

By Cernig

The Mujahedeen e-Kalq's political wing has won a landmark ruling in Britain as it tries to shake off its terrorist group designation.

An Iranian opposition group won a seven-year legal battle on Wednesday when three top judges upheld a ruling that the government was wrong to ban it as a terrorist organisation.

The judges at the Court of Appeal threw out a government challenge to a ruling last November that its refusal to remove the People's Mujahideen Organisation of Iran (PMOI) from its list of proscribed terrorist organisations was perverse.

The Lord Chief Justice, Lord Nicholas Phillips, said the appeal bid by Home Secretary Jacqui Smith had "no reasonable prospect of success", and added: "The appropriate course is to dismiss her application."

Maryam Rajavi, head of the PMOI's political wing, the National Council of Resistance of Iran, told Reuters: "The ruling proves the terror label against the PMOI was unjust."

But not so fast - the Appeals Court decided that the terror label was only unjust now, not in the past:

The Home Office expressed disappointment with the ruling but a spokesman conceded that the legal case had reached "the end of the line".

"We will not hesitate to re-proscribe the PMOI if circumstances change and evidence emerges that they are concerned in terrorism," the spokesman said.

...A European diplomat said removing the PMOI from the EU's sanctions list would require either a ruling from the European Court of Justice or an initiative by Britain within the EU Council of 27 member states.

He said he was "very sceptical" whether the PMOI was fully committed to renouncing terrorism, although Rajavi said it had fully disarmed in 2003.

In the court case, the government took a similar line, but the judges said there was no reliable evidence to suggest the PMOI intended to resort to terrorism in the future.

Of course, there's little reason for the MeK to resort to terror tactics now that it has allied with those in the U.S. crying "faster please" for Iranian regime change and thus successfully made the U.S. military and media its proxies. Reuters reports that "Alireza Jafarzadeh, former U.S. spokesman for the National Council of Resistance of Iran, told Reuters in Washington he was heartened by the London court ruling and hoped it would serve as a precedent for the United States." Jafarzadeh is also FOX News' Iran analyst and has a column on their website in which he constantly regurgitates the PMOI line as their de facto spokesman still. The MeK had a lot of influential backing from prominent neoconservative voices in the UK, something that's bount to be repeated when the US ban on the group comes up for review in October. I'd be very surprised if the U.S., with it's even more influential neocons and with the way the military has been using MeK people as translators and interrogators in Iraq, kept it's own ban in place.

UK Local Elections - A New, Kinder Tory?

By Cernig

As the Newshoggers' resident ex-pat Brit, I should say something about the Conservative Party's massive landslide in local elections in England and Wales yesterday.The very rightwing Daily Telegraph is filled with glee, noting that:

Labour has lost more than 300 council seats – the worst result since the 1960s – and the Conservatives are expecting to win between 230 and 240 extra councillors. This morning, Labour announced it had lost Reading, its last council in the south outside London, while the Conservatives won North Tyneside as the party continued to make inroads in the north and Wales.

...The size of the Conservative majority is comparable to Labour’s local election win under Tony Blair in 1995. sparking speculation that Mr Cameron could be swept into power with a sizeable majority if repeated in a general election.

It's a massive defeat for Labour, certainly - by a Conservative party that Andrew Sullivan rightly describes as under  "new green, moderate" leadership. In other words, a clone of Tony Blair in the run-up to his own first victory, when he was still unsullied by all his bad decisions in office. This isn't your Republican Party - the UK conservatives are now arguably to the left of American Dems on most issues, including the Iraqi occupation. But I don't think it necessarily presages a Conservative landslide in the next general. For one thing, local elections are historically protest votes in the UK. Labour used to win handily in the locals only to be trounced by Thatcher in the generals. For a second, I don't believe that Cameron will be facing Gay Gordon (as many old party stalwarts in his own constituency privately refer to him) in the general now. The Labour Party will be looking for it's own Blair clone (or maybe an Obama clone) to contest the main event and if Brown won't go willingly he'll be pushed.

In all fairness to Brown, the disaster isn't all his fault. He was locked in to the government's immensely unpopular support for the Iraq War by his predecessor, leaving Cameron to claim the populist role of anti-war protestor. The UK's economic troubles are primarily a result of knock-on from the American financial crisis and economic meltdown - and if even Brown's great ability with the numbers couldn't save the UK economy then there's certainly no-one else more capable. And, of course, he has the charisma of a mouldy rock - while David Cameron is the very model of a modern, dynamic, media-friendly face.

Cameron, of course, doesn't agree with me:

Speaking outside his home this morning, Mr Cameron said it was a “very big moment” for his party. He heralded Conservative wins in Wales, such as advances in the Vale of Glamorgan, Monmouth and Cardiff, saying “the Conservative Party is back in Wales”.

“I think these results are not just a vote against Gordon Brown and his government, I think they are a vote of positive confidence in the Conservative Party,” he said. “I think people see a party that has changed for the better, that is united, that’s got a strong team of leaders and increasingly they are looking to us, trusting us, to speak out on the issues they really care about - in terms of improving schools and improving our hospitals and dealing with crime on our streets.

“I think this is a very big moment for the Conservative Party, I don’t want any one to think we would deserve to win an election just on the back of a failing government. I want us to really prove to people that we can make the changes that they want to see in terms of schools and hospitals and crime and the other issues that really matter to all of us - and that’s what I’m going to devote myself and my party to doing over the next few months.”

That attempt at creating a narrative would be more convincing if the Coservatives were making a comeback across the board. However, they're still flat and in third place with 16% in the polls in Scotland. There, the leader is Alec Salmond of the SNP who is another media-friendly sort with a sunny demeanour and popularity rates eclipsing every other British politician including Cameron. His party's devolved rule is also immensly popular in Scotland, on the back of a rather more left-wing agenda than Blair's Labour-Lite ever attempted. The SNP are actually extending their lead in Scottish polls over all their rivals, with polls showing they would increase their lead by another 12 to 16% in the next general election at the expense of both Labour and LibDems. Salmond, at the scene of a by-election victory for the SNP, had this to say about the wider race:

"As Gordon Brown faces humiliation south of the Border, this result demonstrates a tale of two governments.

"The SNP has massively increased its vote as a range of SNP policies like freezing council tax and cutting prescription charges have been delivered.

"In contrast, this was a catastrophic night for Labour and Gordon Brown as we see the council results come in down south. Whilst the Labour government is disintegrating, the SNP government is going from strength to strength as we mark one year on from the election."

So, for the next general election, I see the Labour party taking advantage of the Tory tack to the Left to also move leftwards, towards something akin to the SNP's social and economic platform - thus competing more effectively with them in Scotland and against their national rivals in the North of England, the Midlands and Wales. That, combined with anew leader, will make Labour more competitive again and show the electorate that they're willing to make a clean break with the Blair years. The Torys might still win the general, but not by a landslide, and the sum result will be to take the UK to the left politically.