2013-05-23T03:53:17-04:00 Andrew Cooper http://www.huffingtonpost.ca/author/index.php?author=andrew-cooper Copyright 2008, HuffingtonPost.com, Inc. HuffingtonPost Blogger Feed for Andrew Cooper Good old fashioned elbow grease. tag:www.huffingtonpost.com,2012:/theblog//3.2197223 2012-11-27T12:48:21-05:00 2013-01-27T05:12:01-05:00

Andrew Cooper http://www.huffingtonpost.com/andrew-cooper/ This piece first appeared in the Toronto Star.

The striking appointment of Mark Carney as the new governor of the Bank of England can be interpreted in a wide number of ways -- from a view that highlights the global governance dimension to British and Canadian-specific aspects of the story.

From a transnational perspective, Carney's appointment is another sign of the rise of free-agent technocracy in an age of crisis. Mario Draghi is another illustration of this phenomenon as witnessed by his move from the position as governor of the Bank of Italy and the chairmanship of the Financial Stability Board, to the presidency of the European Central Bank. However, Carney's move from the Bank of Canada to the Bank of England is more dramatic. Although Draghi was described by the mass-circulation German newspaper Bild as being the "most German of all remaining candidates" for the ECB presidency, Carney has moved across national jurisdictions in a much more explicit fashion.

Some critics of course will point to another shared characteristic of Carney and Draghi, their connection to Goldman Sachs, the formidable and often controversial investment bank. Akin to Draghi, who served as vice-chairman and managing director of Goldman Sachs International and a member of the firm-wide management committee (2002-2005), Carney moved in a 13-year career to a series of senior jobs: co-head of sovereign risk; executive director, emerging debt capital markets; and managing director, investment banking. Yet, if this is a common career path that fits with the notion of the dominance of a hegemonic transnational elite, it is also one that illuminates the triumph of meritocracy as Carney -- who was born in Fort Smith, N.W.T., to a high-school principal father and elementary school teacher mother -- is hardly a product of a privileged background.

STORY CONTINUES BELOW SLIDESHOW


Indeed, it was precisely meritocracy (Harvard and Oxford education before his Goldman Sachs years) -- and outsider (Canadian) status -- that won Carney his appointment as governor of the Bank of England. Over the last month, the Financial Times has put out a series of articles attacking the embedded culture of the bank that made it ill-prepared to deal with the financial crisis when it hit hard in November 2008. Building on a number of independent reports, one former member of the court of directors and Monetary Policy Committee declared that drastic reform was necessary, including the appointment of "new people from the outside."

From a national perspective, the story can be interpreted as another example of a Canadian rushing off to the bright lights of London and the centrality of the United Kingdom -- a move up the hierarchy of nations. Although there are many questions to be asked about this transition (does Carney have to give up his Canadian citizenship, in a similar manner to Stanley Fischer giving up his U.S. citizenship when he took over as governor of the Bank of Israel in 2005?), it is unlikely that Carney took the job because of the prospect of more money -- why leave Goldman Sachs to become senior associate deputy minister, and G7 deputy as Carney did in 2004 -- or even a knighthood (as many governors of the Bank of England have so been honoured). It is more likely instead that Carney choose to leave because the position was more attractive for a free-agent technocrat.

If there is a danger to the Harper government, it concerns symbolic risk: the image of Canada being increasingly wrapped up again with the anglo world -- with shared embassies and now with the movement of a key individual who was able to talk directly to Canadians about financial questions leaving for the Bank of England.

There will be those preferring to believe Carney jumped jobs due to pessimism about the Canadian financial situation (the end of the housing market and resource boom), but a jump to the U.K., which is mired in austerity and a stalled economy, does not seem the easy option. If the job is attractive for a high flyer such as Carney, it is precisely because of the tougher level of difficulty he will have in his new position.]]> tag:www.huffingtonpost.com,2012:/theblog//3.2167046 2012-11-21T12:58:03-05:00 2013-01-21T05:12:01-05:00

Andrew Cooper http://www.huffingtonpost.com/andrew-cooper/ Gangnam Style has been a YouTube global phenomenon. And although in some ways the viral hit informs us of economic differentiation in South Korea (Gangnam being a wealthy area of Seoul), Psy is no rebel.

On the one hand, he has demonstrated a willingness to harness himself to South Korea's diplomatic brand. One of his most publicized events was a meeting in October 2012 with the United Nations (UN) Secretary-General, in which Psy praised Ban Ki Moon's work for Korea. On the other hand, Psy has linked his music to components of corporate Korea -- notably a recent appearance in Toronto, sponsored by Samsung, in relation to a new product launch.

While Psy is the popular face of a confident South Korea, ready and willing to play on the world stage, there are other signs of its success. Even if it faced off against much poorer rivals (Cambodia and Bhutan), South Korea's election in October to the UN Security Council, as a non-permanent member, is a marked achievement. Moreover, as I discovered during a recent trip to South Korea in order to attend a conference on "New Diplomatic Challenges and Responses in the 21st Century," the country has become an artful proponent of finding functional niches with which it can run.

The hosting by South Korea of the G20, in November 2010, proved a turning point. The summit process allowed South Korea to build some degree of ownership over two key issue areas. One of these areas has been on development through the foundation of the Seoul Consensus -- an approach South Korea followed up through the Busan Partnership for Effective Development Co-operation culminating in the High Level Forum in Busan on Aid Effectiveness at the end of 2011.

Another has been on the promotion of Green Growth, an initiative that has facilitated South Korea's advances in creating an important new global think tank (the Global Green Growth Institute headed by Richard Samans, former managing director of the World Economic Forum) and a new international institution (the UN-operated Green Climate Fund). Among the other benefits of these diplomatic endeavors has been the location of South Korea as a key hub in a number of important epistemic or technically related policy communities.

Amid these heady achievements, however, are a number of signs that point for the need to temper the image of South Korea as a country on a positive and constructive roll. Leaving aside the question of North Korea (although this issue among many things has prompted South Korea to host a nuclear security summit in Seoul in March 2012), the legacy of the past intrudes through the sensitivity of dealing with Japan. The tough edge of this legacy is revealed in the surprise -- but highly publicized -- visit in May 2012 by outgoing President Lee Myung-bak to the disputed islands known as Dokdo in Korean and Takeshima in Japanese -- notwithstanding its implications in escalating tensions and derailing momentum in discussing security cooperation.

But the deeper psychological scars are found in the signs of displeasure in South Korea on so may other issues, including significantly widespread irritation that Psy's video has not been a hit in Japan (sentiments accentuated by Japanese music bloggers accusing that South Koreans have been using automated viewing programs or 'bots' to enhance Psy's audience). The Korean Wave Research Institute -- a non-profit body established in 2010 to promote South Korean popular culture globally and which predicted that Gangnam Style would change the paradigm of South Korean tourism -- worked hard to counter these charges of YouTube manipulation, saying that Japanese accusations were "tantamount to doubting a world record in an Olympics Marathon."

Moreover, in mainstream South Korean policy debates, there are also signs of a deeper and highly sensitive challenge to the economic model that has been at the core of tremendous economic growth. In the presidential elections due to be held on Wednesday, December 19, 2012, all three candidates have shared the view that large business groupings or Chaebols have engaged in unfair practices, squeezing out competitors and stymieing advances in corporate governance.

Where the political parties differ, though, is in the degree to which they believe that a process of "economic democratization" means a shakeup of Chaebols. The Saenuri party of President Lee Myung-bak is cautious about any major overhaul, although Park Geun-hye (the daughter of Park Chung-hee, the authoritarian leader whose rule from 1961 to 1979 helped shared the economic system) agrees that a restriction on cross-shareholdings would be undertaken. Both candidates Moon Jae-in of the leftish Democratic United Party and independent Ahn Cheol-soo (himself an innovator through his antivirus software firm AhnLab) have been robust in their criticisms and their recipes for an overhaul.

And finally, like any other aspirational global player, there are unlikely sources of attention that bring South Korea to the spotlight for the wrong reasons. An interesting point in this regard is the intrusion of the "Patraeus" scandal into South Korean branding through allegations that Jill Kelley, the Tampa socialite who is one of the central personalities in the scandal, may have tried to use her position as unpaid honorary Consul for South Korea to get fees for consulting/lobbying work. Whatever the truth, this is the episode that is counter-productive to the positive image of South Korea that has been carefully -- and deservedly -- built up.

Ambition, therefore, comes not only with unanticipated successes but some possible risks. As a highly resilient country, South Korea will likely be able to benefit far more from the former than be disadvantaged by the latter. Still as South Korea moves into post-election mode in the New Year, the mix of ambition and sensitivity merits close attention -- as I hope to observe when I make another trip to Seoul in early 2013.

This article first appeared in the CIGI blog Worlds of Global Governance

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Andrew Cooper http://www.huffingtonpost.com/andrew-cooper/ This post first appeared in the CIGI blog Worlds of Global Governance.

Argo's treatment of the escape from Tehran of six U.S. embassy staff in January 1980 offers ample psychological compensation for the image of American vulnerability. In this respect, the movie's dealing with this episode is part of a genre about resilience that goes back to Rambo and other narratives concerning the Vietnam War and its aftermath. The twist however is that ownership of the Tehran drama does not belong to the U.S. alone. As witnessed by the fact that it is widely known as the Canadian Caper, credit must be extended beyond the well-trodden script of American derring-do under stressful circumstances.

The manner by which the movie brings in non-U.S. agency allows an interesting lens through which competing conceptual perspectives concerning Canada's role in the world can be assessed. For, the global identity of a country like Canada is inherently subjective -- that is to say, highly contested in nature.

Certainly Argo aims to dispel any notion that Canada is a principal power, with the operational capacity to act alone in a decisive fashion. In Ben Affleck's movie the rubric Canadian Caper is a convenient ruse that masks U.S. leadership -- most notably via the individual ingenuity and networking skills (via the contacts he has established with Hollywood through other cloak and dagger operations) of CIA operative Tony Mendez. Downplaying the role of Mendez in real life -- though not in the Hollywood version -- is simply designed to maintain secrecy. Although thoroughly deserving of the Intelligence Star he ultimately receives for the successful "exfiltration," Mendez has to wait for almost a decade to keep the medal until the mission is declassified.

Yet, unlike the U.K. and New Zealand (which are inaccurately depicted in Argo as refusing safe haven to the six when they evade capture by Iranian revolutionary guards in the storming of the American embassy), Canadian agency is not written out of the script. Indeed -- helped by the critical reception the movie received when previewed at the 2012 Toronto International Film Festival and with some added input from Ambassador Ken Taylor -- Canada's role is amplified in a number of ways. Most significantly, the postscript of the film has been altered to declare that the escape was possible due to the work of the CIA complemented by efforts of the Canadian embassy.

Hands down, therefore, Argo meshes with a Middle Power representation of Canadian diplomacy even to the point of what can be termed first-followership. Canada is viewed as fully on-side with the U.S. in terms of values. This point is reinforced by Ken Taylor's emphasis in subsequent interviews that his motivation for helping the U.S. was in large part due to Iran's violation of diplomatic status, of particular importance to a country such as Canada. After the escape of the six U.S. officials takes place, Ambassador Taylor conducts a closure of the Canadian embassy with an orderly departure of Canadian diplomats.

Argo casts a wide net in terms of human interest. According to the movie, for example, the facilitation of the exit of the loyal embassy housekeeper, who had close knowledge about the American "guests," is facilitated. If tangential to the main story line of the movie, such attention by Hollywood is interesting in comparison to real life because the situation of locally engaged staff is back as a topic of controversy due to the recent decision of the Harper government (September 2012) to suspend diplomatic relations with Iran.

Indeed, another former Canadian ambassador to Iran, John Mundy, has criticized this decision not only for its strategic implications (for reducing Canada's influence) but also because of the manner in which the decision was taken, abruptly and without consideration for locally engaged staff. In his Globe and Mail Op Ed, Mundy states that: "Blindsided by Ottawa's decision, [locally engaged staff are] now in danger of becoming collateral damage."

Notwithstanding such snapshots, though, Canada's role is largely reduced to the role of one man (Ambassador Taylor) in parallel and supportive fashion to the amplification of a single CIA operative's role who almost single-handedly, according to Argo, creates and delivers the escape of the six using the identities of a Hollywood crew -- as implausible an interpretation in real life as the fictitious chase scene is at the end of the movie.

As in most operational success stories in global affairs the escape from Tehran was a collective team effort involving a mix of entrepreneurial and technical skills. Unlike the inevitable compression in terms of movie characterization, credit for the Canadian Caper needs to be spread around from the Canadian Prime Minister, Joe Clark, and foreign minister, Flora MacDonald [1] to a wider set of pivotal state officials. This latter group included the bureaucrats in charge of assessing and relaying intelligence reports, making sure proper approval was given for the issuing of fake passports, and that the mistakes made by the CIA on the dates for the fake Iranian entry and exit visas were rectified.

In broad strokes Argo opens up the scope of national agency a crack beyond U.S.-centrism. The movie also does an excellent job of capturing some key components of the Canadian helpful fixer personality, albeit in unique circumstance. Nevertheless, as always with Hollywood, detail that complicates or gets in the way of a good drama is shoved aside. Star power, especially if it showcases innovative forms of deception and an individualistic style of delivery, wins out!

[1] Flora MacDonald, in Robert Wright's authoritative book, Our Man in Tehran (Harper Collins, 2011), dismisses completely the need for a Hollywood sub-plot, arguing that the six should and would have got out using the identities of (blander!) Canadian citizens such as those working in oil exploration.

]]> tag:www.huffingtonpost.com,2012:/theblog//3.1955931 2012-10-11T12:50:41-04:00 2012-12-11T05:12:01-05:00

Andrew Cooper http://www.huffingtonpost.com/andrew-cooper/ sharing of some embassy services between Canada and the U.K. has already received a lot of attention. But it seems to me that the attention has focused on traditional considerations that have to do more with domestic political culture than the fast-changing and sensitive geo-political context.

Politically, the main critique of the arrangement has been whether it demonstrates a return to an Anglosphere that insults or at least neglects Quebec and is at odds with the post-colonial/multicultural ethos of Canada. Administratively, the core defense alternatively has been one of efficiency: the logic being that the agreement allows a spreading of cost. Yet, in geo-political hierarchical terms, the main risk of Canada cutting rather than building diplomatic infrastructure is that it plays to an image of decline that is contrary to the desire of the Harper government for signalling that Canada -- and Canadian interests and/or values -- is back up on the world stage.

An article in the Globe and Mail by Patrick Martin did touch on this theme in comparative context, by contrasting the rapid increase in Turkish embassies around the world (25 new ones in Africa alone over the last decade) with the paring back of Canadian diplomatic services. Still the topic deserves even greater illumination, especially in a week that sees Prime Minister Harper embark on a significant trip to Africa.

On one side, we have the "emerging" powers -- whether members of BRICS or other big countries such as Turkey -- projecting their diplomatic profile in a highly ambitious fashion around the world. It is relatively easy to get visas at Chinese and Indian consulates -- even with long lines -- because they are located in so many major centres. When Canadians travel abroad it is increasingly likely they will see more Chinese, Indian or Brazilian embassies than their own -- or indeed even those of the U.K.

Air Canada has direct flights to the small tourist-friendly Caribbean country of Antigua. However, the only embassy (or embassy cars) you will see on the island are Chinese. Most notably, emerging powers such as Brazil have raised their profile in Africa. Not only did former President Lula da Silva travel to the continent 12 times over eight years (in comparison, Prime Minister Harper's trip to Africa this week is only his second), Brazil has increased its number of embassies from 17 in 2002, to 37 in 2012, more than not only Canada but the U.K.

An agreement with the U.K. then risks displaying not strength but a double image of weakness. Canadian domestic taxpayers may at first glance appreciate this sort of cost cutting. But fiscal rationality does not end with embassy sharing. It extends to basic services. Just to give one illustration, the Visa and Immigration Section at the embassy in Berlin has been closed and transferred to Vienna, Austria. So, although travellers can get a visa to go to China or India in downtown Toronto, travellers in a major world city -- and with what in the wake of the Eurozone crisis is considered the go-to European geo-political hub -- have to take another trip. Equally though, it is significant that the U.K. High Commission in Ottawa no longer takes care of passport issues -- the embassy in Washington D.C. looks after that form of activity.

The agreement about sharing services between Canada and Britain sends very different signals than the older agreements between Canada and Australia. In 1986 when those arrangements were constructed, both countries shared a global identity as middle powers with relatively equal status. Just as significantly, it must also be emphasized, the emerging powers of the 21st century were not yet as dramatically on the rise. Sharing embassy services and embassies in countries such as Cambodia and Venezuela not only displayed rationality, but no negative geo-political signals were sent out.

Canada has long been a country with a high degree of sensitively -- and astuteness -- about status in the world. Accordingly it is surprising that such sensitivity does not seem to have factored into the decision about embassies (even if the agreement is a limited one). Although most Canadians understandably don't pay too much attention to the theme of geo-political comparative performance, you can be sure that foreign policy makers and opinion leaders do. Observing the move on embassies from a BRICS or emerging power perspective, these new arrangements will not be interpreted as a technical move based on administrative rationality but as one that demonstrates that not only Canada, but the U.K., is slipping down the global hierarchy.

This post first appeared in the CIGI blog Worlds of Global Governance.]]> tag:www.huffingtonpost.com,2012:/theblog//3.1903249 2012-09-21T12:44:37-04:00 2012-11-21T05:12:01-05:00

Andrew Cooper http://www.huffingtonpost.com/andrew-cooper/ Burson-Marsteller on "Twiplomacy."

How diplomats respond to new technology to reach diverse publics is a key challenge for 21st century statecraft. Yet, the Burson-Marsteller study conflates Twiplomacy with the fact that 30 world leaders do their own tweets.

Leaders remain at the hub of the diplomatic world, not only because of the rise of informal summits (G20, BRICS and so on) but also because of the stretch of issue-area. Leaders are now expected to be the core of diplomacy on security issues and even on areas such as the environment and sports (winning the Olympics, the FIFA World Cup and other events for their countries).

Yet, a focus on individual leaders and their pattern of tweets in the manner by which Burson-Marsteller does it, distorts both the trajectory and the challenges of e-diplomacy generally and twiplomacy more specifically.

In part, this is because so much of the activity of the leading twitter users is on domestic politics. While President Obama is the most followed world leader on Twitter @BarackObama and the @WhiteHouse, the focus of his tweets is almost entirely on domestic politics with an eye to mobilizing his campaign for re-election. Obama's tweet on gay marriage remains at the top of the list of his most popular.

But it also confirms that beyond the U.S. there is little connection between increased tweets and increased impact in world politics. European Union Council President Herman van Rompuy (@euHvR) is the best connected world leader with 11 mutual followers, but this opens the puzzle whether this activity is aimed at confidence building or distraction from the Euro-crisis. On this evidence, his tweets (usually coming from his office and not him personally) are not connected with successful policy outcomes.

South America reinforces the image that more tweets are not always an indicator of power. Venezuela's Hugo Chavez (@chavezcandanga) is the second most followed world leader on Twitter after President Obama. Yet, the leader of the real diplomatic power in the region -- Brazil's President Dilma Roussef (@dilmabr) does not follow any other leader's tweets and has not made any personal tweets since being elected president in 2010.

In saying there are limits to Twiplomacy, Burson-Marsteller is stating the obvious. Much of the push to embrace e-diplomacy is beyond the leaders' level, the prime example being Hillary Clinton who has aimed to incorporate this activity into her vision of 21st century statecraft. Under Clinton's point person, Alec Ross, the U.S. department of state has built up a team of externally-focused bloggers (active in languages such as Arabic, Urdu and Somali) and internally-focused Facebook-like social networking site, Corridor, and an internal Wiki called Diplopedia.

Still, the impression I am left with is how difficult it is for statecraft to keep up to other forms of cyber-activity. For all of the buzz about twiplomacy the bite in the Internet activity is coming from cyber-security (directly or indirectly from the intelligence communities) and cyber-advocacy (from a host of civil society organizations). Diplomacy is in a constant process of trying to catch up with technology innovation. And when it tries to move out in front, under crisis conditions, the result can often be awkward and counter-productive. A prime illustration came to the fore last week when the U.S. embassy in Cairo got into a testy exchange with the official Twitter account of the Egyptian Muslim Brotherhood.

If diplomacy is to be kept relevant in practice -- and taken seriously in think tanks and academia -- Twipolamcy needs to add value not only on an ad hoc and usually reactive case by case basis. Although Burson-Marsteller's study is problematic because it equates Twipoloacy with one sort of activity (at the apex of power), the true impact of e-diplomacy can only be grasped when it is placed in the context of necessary strategic adaptation to changes in the overall geo-political system.

This blog first appeared in Andrew Cooper's CIGI blog Worlds of Governance.]]> tag:www.huffingtonpost.com,2012:/theblog//3.1875048 2012-09-12T08:00:27-04:00 2012-11-12T05:12:01-05:00

Andrew Cooper http://www.huffingtonpost.com/andrew-cooper/ cameo performance -- addressing an empty chair as though it was occupied by President Obama -- sent shudders down the collective spines of the assembled Republicans at the Tampa national convention, it was another illustration of the gap between expectation and performance.

The stakes are raised of course when celebrities run for office. Eastwood was well suited to being the mayor of the affluent Carmel-by-the-Sea community in California. But many other celebrities both in the U.S. (notably Jesse Ventura, the former WWF wrestler and one-term governor of Minnesota) and outside (among many others, Amitabh Bachchanthe huge Bollywood star who had a short and troublesome political career in the early 1980s) never threw off the image that they were in over their heads in the political world.

The gap between expectation and performance is accentuated still further when a celebrity is promoted as a national leader after gaining celebrity status elsewhere. Indeed a number of high-profile illustrations demonstrate how difficult it is for even a major celebrity to "go home again" and win high political office by capitalizing on global fame

To be sure, in some cases there were structural impediments. Wyclef Jean used the fame he achieved as a member of the Fugees as a platform for a 2010 bid for the presidency of Haiti. Yet, amid controversy over the activities of his Yéle Haiti Foundation, Wyclef was barred as a candidate for not meeting the residency requirements. A similar set of obstacles stood in the way of Youssou N'Dour entering the race for Senegal's presidency in 2012, as he was disqualified over the validity in the signatures used for his nomination.

In other cases, though, it was the image of inexperience in terms of organizational prowess and opportunism that got in the way. Although a huge football/soccer star -- in 1995 winning FIFA World Player of the Year -- George Weah lost the 2005 Liberian presidency in a run-off with the far more networked and policy savvy Ellen Johnson-Sirleaf.

The take-away lesson from this survey is that celebrities need to do a lengthy form of apprenticeship as they make the transition from celebrity to politician.

This apprenticeship was the key to the enormous -- but at least initially unanticipated -- success of the most famous celebrity turned politician, Ronald Regan. From his first foray into politics in 1964, through two terms as governor of California, it was 16 years before he won the American presidency.

What is compelling to watch now is whether or not another celebrity turned politician, Imran Khan, can use a similar apprenticeship to win the presidency of Pakistan. Often dismissed in the past as a political lightweight, the former cricket star (leading Pakistan to victory at the 1992 Cricket World Cup) and socialite, Khan has gradually re-branded himself with aneclectic mix of Islamic values, reform-oriented liberal economics, a focus on anti-corruption measures, and an anti-militant vision with respect to the Taliban.

From being unable to win a single seat in the 1997 general election, Khan and his Tehreek-e-Insaf (PTI) party have become a real force. A recent Pew Research Centre under its Global Attitudes project signaled a rise in Khan's popularity to a 70 per cent approval ratings, a move up the list by 18 percentage points over the past two years.

Although he may still be out-manoeuvred and/or prove disappointing Imran Khan's revived fortunes do show that being taken seriously as a politician means playing the long game -- minimizing the image of an out-of-touch celebrity in Pakistan and putting your years in with respect to an on the ground political apprenticeship.

This blog first appeared in Andrew Cooper's CIGI blog Worlds of Governance.]]> tag:www.huffingtonpost.com,2012:/theblog//3.1858883 2012-09-08T08:50:46-04:00 2012-11-08T05:12:02-05:00

Andrew Cooper http://www.huffingtonpost.com/andrew-cooper/
Australian governments over the past few decades have been quite successful in balancing foreign policy interests that consolidate security links with the United States while catering to Chinese demands, especially in minerals. This has been true of the Australian conservative coalition that brings together the Liberal and National parties. But it also true of the Australian Labor Party (ALP) currently holding on with its fingernails to office. I cannot find too many examples of a country that has done a more successful job of segmenting security and commercial policy approaches.

On the one hand, Australia under Prime Minister Julia Gillard has ramped up its reputation for being a loyal ally to the United States by agreeing to the deployment of up to 2,500 marines in the Northern Territory -- a deployment commonly interpreted at being directed at China. On the other hand, notwithstanding some well-publicized irritants, the Australian-Chinese relationship in minerals such as iron ore has expanded considerably. Overcoming the spillover from the fallout of episodes such as Chinese authorities arresting and imprisoning four Rio Tinto executives (including Australian citizen Stern Hu on charges of stealing commercial secrets and bribery), Chinese investors from mostly state-backed steelmakers moved to increase their stake as the so-called resource super-cycle played out. In one of the best-known deals, state-owned Hunan Valin Iron & Steel Group paid $1.3-billion (Australian) in 2009 for a 16.3 per cent stake in Fortescue Metals Group.

At odds with this balanced approach, however, are signs in Australia that there is defection among the political elite from this successful model. Australia's opposition leader Tony Abbott used a speech in Beijing at the end of July to declare he prefers a more value driven approach rather than the pragmatic formula used by Labor and indeed by Abbott's predecessor, John Howard -- a politician that rode this approach for a long and unanticipated 10 years plus as prime minister from 1996 to 2007. Abbott followed up by announcing, through a Coalition discussion paper, that any government he leads would be wary of foreign takeover attempts in established enterprises. This would include agricultural operations such as the major cotton growing 'Station' that amid considerable raucous debate is to be bought out by a Chinese-led consortium.

This shift by Tony Abbott could simply be posturing from an aspirant prime minister unaccompanied to operating on the global stage. It could also be an attempt to differentiate on a partisan basis from 'the world is tilting toward China' vision espoused, in a number of speeches around the world, by former Australian prime minister and ALP leader Kevin Rudd. Still any such declaratory statements seem out of synch not only with the economic well-being of many of his major business and regional supporters, but also with the screeching halt of the resource super-cycle.

Whatever the direct salience for Australian politics and policy (although polls continue to put the Coalition ahead of the ALP), comparative analysis with Canada and the trajectory of Prime Minister Stephen Harper's China strategy is highly interesting. Akin to Tony Abbott's current approach, Stephen Harper came into office in 2006 with an approach that emphasized values over commercially based interests. In a plausible scenario for Abbott's future -- if and when he puts this platform into operation while in office -- Prime Minister Harper realized an adjustment was needed to unfreeze relations with Beijing. Big picture realpolitik won!

Still, as in the case for Australian governments, the tough test for Prime Minister Harper and indeed for Canada is when a yes or no call has to be made about pivotal Chinese resource investment deals -- think of the $15.1-billion (Canadian) bid made in July by the state-owned CNOOC Ltd. for Canadian energy company Nexen Inc. With the expansion of Chinese firms operating in Canada, and the signing of a long-delayed Canada-China Foreign Investment Promotion and Protection Agreement, Canada -- in the last couple of years -- has achieved an impressive performance in catching up to Australia's longstanding approach to China.

Overwhelming support (acknowledging the "daunting, unfamiliar challenges" Canadian Business magazine argues akin to representatives of the oil patch that it should be pursued) among Prime Minister Harper's business and regional based supporters (including Alberta's provincial government) for Nexen type-deals, means "yes" can be predicted -- with more deals likely to come. If so, it will again underscore the variation between two highly similar countries. As Australian conservatives, at least in opposition, tilt toward adopting restrictive policies, Canada's Conservative government looks to be open for Chinese business.

This blog first appeared in Andrew Cooper's CIGI blog Worlds of Governance.]]> tag:www.huffingtonpost.com,2012:/theblog//3.1703574 2012-07-29T00:00:17-04:00 2012-09-27T05:12:05-04:00

Andrew Cooper http://www.huffingtonpost.com/andrew-cooper/
To be sure, important actors still seek order to be privileged. At the global level, the G20 and the BRICS reveal the preference by both members of the old establishment and the new emergent states to join in key efforts of collective action. And many countries -- acting on classic realist assumptions -- have shown a desire to put what they see as stability before change in their bilateral/regional dealings: the U.S. hung onto its alliance with President Mubarak; Russia continues to support the Assad regime; and the BRICS as a whole (and China in particular) have tended to favor the status quo -- whether in resource development agreements in Africa or in dealing with the uprising against Colonel Gaddafi.

We see this traditional preference for order over messiness in even major "soft power" activities where the tendency has been to equate well-managed major symbolic events (the 2008 Beijing Olympics comes readily to mind) as being the model that can and should be emulated.

Across the board, nonetheless, it is messiness that is on the rise. Richard Haass highlighted this trajectory with his expression messy multilateralism, a framework that has been much in evidence not only at the G20 summits but in other forums ranging from the Summit of the Americas, ASEAN and the African Union.

But messy multilateralism is only one aspect of what is happening on the ground in the global arena. We are also seeing messiness as the template for activity in a wide range of sites and operations ranging from the process of messy regime change (as witnessed most dramatically in the Arab world), to messy Olympics (with numerous glitches of security and management flaws as we look to the London games as the antithesis of the Beijing model).

Conceptually we have to get over our privileging of the management of order over messiness. In many ways messiness may actually be preferable -- especially when judged in retrospect -- to order. Authoritarian regimes in the Arab world were not part of a benign system. And even the Beijing Olympics can be seen as having flaws -- from the white elephant Beijing National "Bird's Nest" stadium to the change of status of Ai Weiwei from acclaimed consultant to a targeted critic of the Chinese government.

From a wider perspective, messiness offers considerable richness in the study and application of global governance. It allows other alternative and competitive designs about what we understand as global governance to be brought in. And it opens the door for alternative albeit irregular and jagged settings, rules and actors.

This blog first appeared in Andrew Cooper's CIGI blog Worlds of Governance.]]> tag:www.huffingtonpost.com,2012:/theblog//3.1682752 2012-07-18T14:59:29-04:00 2012-09-17T05:12:07-04:00

Andrew Cooper http://www.huffingtonpost.com/andrew-cooper/
Both of these points were reinforced to me as I went to Spain last week to attend the big International Political Science Association conference. You don't have to be an expert on Spain, or Madrid and the surrounding Castilla y Leonarea more specifically to appreciate the extent of pride that underscores the national and regional mentality. In part this pride is a function of the imperial past so evident in the grand boulevards and museums. But it is also a pride that goes hand in hand with the transformation that has taken place since the Spanish Civil War of the 1930s and the ensuing years of the Franco regime. Having been to Madrid during his regime (and even catching sight of the Generalissimo coming out of a bullfight at the Plaza de Toros), it is easy to recognize and appreciate how far Spain has come in terms of not only economic modernization but also in terms of social equality and tolerance.

If no longer -- thank goodness -- the geo-political cockpit of Europe (caught between rival ideologies in the civil war era), Spain cannot be dismissed as a periphery or marginal country out of step with the European project. Spain has all the features of a highly efficient and accountable country, from its ability to produce majority governments from both the respectable left and right, its elaborate system of federalism, and its increased multicultural identity.

The lumping of Spain in with other countries as PIIGS or Club Med is not only ethically problematic (a point that extends beyond Spain to all of the countries placed in these categories) but misses the mark about the particular problems of Spain. Spain appears to be in trouble less because it is simply another Greece (with its massive patronage-driven bureaucracy), or Ireland (with its housing bubble and short-cut economic strategy), or Italy (with its attraction to big and buffoonish individuals such as Silvio Berlusconi), but because it has elements of the deficiencies found in bigger and traditionally more successful countries. Akin to Germany and France, Spain has very rigid employment structures -- with huge disadvantages for the up and coming generation. Even allowing for the informal economy, Spain's youth unemployment (with some 1.7 million under 30 unemployed, just under 50 per cent) is scandalous especially as this cohort is well educated and outward looking. Akin to the U.S., Spain's housing market suffers from a combination of enhanced demand (including aspirational immigrants) and problematic financial institutions (especially in the regional savings banks).

From this perspective, Spain's problems do not come from an unwillingness to change older problematic habits but from excessive ambition. Having had decades of being largely poor, disconnected from the rest of Europe, and with a rigid authoritarian political system, Spain has raced ahead to be like other big, pivotal countries with ambitious citizens and companies (not only global financial institutions such as the Bank of Santander but also companies such as GrupoFerrovial which has built a series of toll roads around the world, including Highway 407 in Ontario, as well as operating airports such as Heathrow).

It is misleading to ignore the overstretch that has resulted from this ambition -- indeed in many ways, exacerbated by the size of the country. Spain's economic condition is the most serious in the Euro-zone. Not only is the bailout request (some US $125 billion) massive, so is the household debt as a percentage of annual disposal income.

Yet, to showcase this dire condition should not be an excuse for loose generalizations. Even quick glimpses of Spain showcase that not only are the causes of the difficulties different, but that its ability to be resilient in the face of these stresses will be different as well. Having witnessed the results of political polarization, extremism, and the cult of personality in the 1930s and beyond, Spain looks like a country that will be able to adapt in a more low-key, pragmatic and concerted fashion, even if it means stymieing a good deal of its pride in doing so.

This blog first appeared in Andrew Cooper's CIGI blog Worlds of Governance.]]> tag:www.huffingtonpost.com,2012:/theblog//3.1650896 2012-07-05T09:23:23-04:00 2012-09-04T05:12:15-04:00

Andrew Cooper http://www.huffingtonpost.com/andrew-cooper/
Instead, as highlighted by the G20 at Los Cabos, Europe has now been placed on the defensive. Amid all the many differences of opinion that non-Europeans have on other issues, the common dynamic from beyond Brussels is a frustration and impatience. The sentiment from the US, Canada, the BRICS, and middle states in the G20, such as Korea, Mexico and Australia, is that the EU needs to act decisively and to do it quickly.

This shift in psychological and policy positioning has been unsettling. At Los Cabos we saw EU Commission President Jose Manuel Barroso suffer the equivalent of a diplomatic meltdown when asked why non-Europeans should bailout Europe through a reinforcement of the IMF second line of defence.

Yet, to the credit of the Brussels EU world it has adapted, to some extent, substantively if not stylistically. The EU moved to include its economic and financial reform agenda in the G20's action plan. And if grudgingly, the EU did consult other countries around the G20 "high table" on its plan for moving forward with greater integration.

Moreover, as witnessed by the decision of the EU Commission and European Central Bank to move forward with initiatives on Banking Union (including suggestions for European wide deposit insurance), Europe demonstrates that, notwithstanding a siege mentality, it can also come up with innovative ideas.

The complication is that the world of Berlin is also under siege. In part, this is a function of the Brussels world's counter-offensive that includes options such as jointly-guaranteed Eurozone bonds or a debt redemption fund that Chancellor Angela Merkel -- and indeed most of the German political establishment -- find unacceptable. But it is a function of the German constitution and German public opinion that make it very difficult or even impossible for a government to take the immediate measures that would calm markets.

This is not to suggest that the Berlin world has run out of its own ideas to move the EU generally and the Eurozone more specifically forward. The German attraction to Banking Union has not been made on the basis of more joint liability (whether through Eurobonds or forms of mutualization of liability), but because such an initiative has the potential to advance new forms of central controls with deeper rules of enforcement when rules are broken.

The two different types of siege may be taking the worlds of Brussels and Berlin -- eventually -- to the same destination. However, the journey is a perilous one. Brussels will continually be under short-term pressure, to help what Berlin sentiment refers to as the Club Med countries. Berlin, alternatively, may be so fixated on the long-term that the EU or the Eurozone as we know it will be hollowed out.

Carving out a middle constructive path demonstrates the vital importance of creative statecraft under intense (and often public) forms of stress. Having proved itself so effective in the early days of the G20 as a model of diplomatic robustness when looking outwards, the EU must do the same when engaged in the complex "devils in the details" inward looking projection. One thing is clear though: only by some form of sustained reconciliation between the two worlds of Brussels and Berlin is there any chance that this test will be passed.

First appeared in Andrew Cooper's CIGI blog Worlds of Governance.]]> tag:www.huffingtonpost.com,2012:/theblog//3.1573496 2012-06-06T12:23:43-04:00 2012-08-06T05:12:10-04:00

Andrew Cooper http://www.huffingtonpost.com/andrew-cooper/ Camp David G8. In the past, a major meeting of the U.S. and its major allies at a time of turbulence -- especially one hosted by a U.S. president in an election year with the add-one of a NATO summit -- would have generated intense interest. Yet the G8 generated an image of only extreme modesty.

Any sense that the G8 constitutes the apex of global decision-making is long gone. Although economic governance issues moved to the forefront of discussions, all this did was to confirm the lack of operational relevance for the forum. And if the absence of Russia's Vladimir Putin made the summit look more like a caucus, this translated into an image of "agree to disagree," not a site of creative like-mindedness.

Although Germany took centre stage as the G8's determined resister on the growth agenda, there was no appetite by the U.S. or Canada for any new ambitious bailout plan for the Eurozone beyond EU self-help. Furthermore, the move to connect the Camp David G8 with the Chicago NATO summit did little to contradict the impression of extreme modesty in the security arena. Notwithstanding a long list of demands for action (from Afghanistan to possible forceful responses to the violence in Syria), the supply of deliverables was notably limited.

Nor, it needs to be mentioned, is the G8 the hub of global networking anymore. Through the span of the more memorable G8s -- especially Gleneagles in 2005 and Heiligendamm in 2007 -- there was a combination of things that made them special: big promises on development/health, the presence of emergent big countries (albeit in an outreach capacity), big demonstrations and the presence of some big celebrities such as Bono and Youssou N'Dour. None of these were featured at Camp David. To be sure, President Obama did bring out a "New Alliance to increase Food and Nutrition Security" but even this initiative was more notable for the shift away from state-based activity to private partnership with 45 major corporations.

Although the lack of demonstrations (and appearances by celebrities) of course can be viewed as a blessing, such absences do play into a symbolic narrative of decline. This view is exaggerated further by the shift of not only the BRICS but smaller countries to other forms of engagement with the old establishment countries. Whereas the G8 aimed to find a comfort zone in its core membership, the G20 sees values in wider consultation -- with the invitation of five "special guests" (Spain, Chile, Colombia, Benin and Cambodia) to the Los Cabos summit on June 18 and 19.

Mexico, like South Korea when it hosted the G20 in November 2010, has a huge incentive to go beyond an extremely modest outcome for Los Cabos. There is also some greater momentum for a commitment to a growth agenda inside the G20. They range from President Obama's desire to twin an economic surge with his own re-election, to the support of this approach by Mario Monti, Italy's technocratic prime minister, to the recent pronouncement that Australia would support China in advocating growth at the G20.

Good planning by the host country and momentum for growth, however, could meet dual storms at the time of Los Cabos. One of these storms is the political shock from the Greek general elections -- particularly if it is one that features another strong result from Syria (recent polls suggest that anti-bailout coalition of the radical left is up to 30 per cent support). This happens on June 17, a day before the summit begins in Los Cabos. Will Greece act as a distraction -- as it did on the first day of the Cannes G20 summit in November 2011 -- or a catalyst for more concerted and robust forms of collective action?

And if there is not a Greek shock will there be a Spanish storm? As a very interesting Financial Times article (Richard Milne, "Fears grow over Spain as warning lights flash red", May 30) highlights, Greece, Ireland, and Portugal lasted just 12, 24 and 34 days after the premium they paid to borrow over Germany reached 500 basis points before seeking international help. Spain reached this 500 b.p. mark on May 28 so there is another formidable storm that could hit as early as Los Cabos.

Under such conditions, extreme modesty in terms of outcomes -- or an image of muddling along -- will undermine confidence in the G20. Shocks as we found out in 2008 and 2009 can concentrate activities and allow "hanging together" to take place at the new apex of global governance. Los Cabos could determine how resilient or strained this ethos is if new and hard to predict, but potentially extremely formidable, tests hit. Unlike the G8 it matters what the G20 does or doesn't do to meet these tests.]]> tag:www.huffingtonpost.com,2012:/theblog//3.1568923 2012-06-06T07:29:21-04:00 2012-08-06T05:12:10-04:00

Andrew Cooper http://www.huffingtonpost.com/andrew-cooper/ told the U.K. Independent, the problem was both one of substance: "The economy has huge problems. We still have all these banks that are too big to fail. Unemployment at 10 percent? It's terrible" -- and stylistic compromise --not standing "for things" and making "whatever deals" are necessary "to try to get elected again."

While few other stars were as outspoken as Damon, an air of ambivalence has become pervasive in celebrity culture. Angelina Jolie in January 2012 told reporters while promoting In the Land of Blood and Honey that, "I think there are many, many things I think have gone in a wonderful direction, and there are a few things I am disappointed in." Other Hollywood stalwarts such as Norman Lear indicated a reluctance to contribute to Obama's re-election campaign due to frustration over the watering down of the liberal agenda.

But a few months are a very long time in politics. With the combination of a big substantive move (the announcement by Obama on May 9 of his support for same-sex marriage) and a stylistic bounce (from the mega $15 million fundraiser at George Clooney's Los Angeles house on May 10) Obama is very much back within his core consistency among the world of entertainment.

If Obama does win a second term, the entertainment world will be able to say with some justification that it rescued the Obama presidency. In terms of normative reputation it did so by nudging him away from the image of calculation and cautious evolution that he developed during the first term. Certainly the enthusiastic reception from celebrities on same-sex marriage --including Jay-Z, who crafted the issue as one "no different than discriminating against blacks" -- has helped enormously reinvigorate Democrats at the grassroots level.

Turning from values to money, the entertainment world has rescued the resource base for Obama to run his campaign. In an environment where the Republicans have some huge advantages -- most notably through the use of new super-PACs which can take unlimited amounts of money from individuals and collective entities as long as there no active coordination with candidates -- celebrity culture allows Obama to play on a relatively even playing field.

What makes this rescue even more salient is the element of déjà vu about it. From 2007 to 2008, Oprah Winfrey was credited with helping rescue Obama's campaign against front-runner Hillary Clinton: She appeared on CNN's Larry King Live in May 2007 that she was endorsing Obama, she hosted a mega fundraiser in September 2007 at her Santa Barbara home, and she announced in November 2007 that she would campaign for him in Iowa, New Hampshire and South Carolina. One study calculated that Oprah's endorsement was worth over a million votes in the Democratic primaries, and her California fundraiser raised $7 million.

The difference was that at that time Obama didn't need to convince the celebrity world that he would do the "right thing" if elected. On substantive issues Obama rode the first wave of enthusiasm about the audacity of hope. Indeed, as he reminded the Hollywood crowd at the May 10 fund-raiser, he first met George Clooney at a Darfur-related event, a hallmark value-oriented international agenda item.

In either case, what the world of entertainment has done is produce a game changer in terms of momentum. The first rescue shifted the image of Obama from a long shot to win the Democratic nomination. The second rescue effort -- overcoming the image of some celebrities in the winter of discontent with respect that Obama would (and should) be a one-term president -- positions him well for another four years in office.]]> tag:www.huffingtonpost.com,2012:/theblog//3.1523887 2012-06-05T08:00:00-04:00 2012-08-05T05:12:28-04:00

Andrew Cooper http://www.huffingtonpost.com/andrew-cooper/
Most athletes see themselves as the first victims, as their opportunity for reward suffers. Athletes were the big losers during the high profile, back-to-back boycotts of the 1980 Moscow Games by the U.S. and 50 other countries, and of the 1984 Los Angeles Games by the U.S.S.R. and 13 of its allies.

Yet it is exactly this combination of high visibility and low costs that makes sporting boycotts so attractive. Isolating apartheid South Africa from major events such as the world cups of cricket (1975-1992) and rugby -- from 1987 to the famous 1995 event, hosted by a newly democratic South Africa at which Nelson Mandela famously wore the Springbok jersey -- gained massive attention, and did not rely on complicated sanction measures, or buy-ins from consumers in other areas.

If athletes have been almost unanimous in their opposition to boycotts, human rights activists' opinions have been much more mixed. Many of the best-known dissidents in the Soviet Union, notably Andrei Sakharov, did support the boycott of the 1980 Moscow Olympics. But in other cases, human rights activists have used the hosting of major international sporting events as a catalyst for change, the classic case being South Korea prior to the 1988 Olympics. Although the bid for the games was organized by an authoritarian regime, the hosting function is credited with precipitating democratic transition -- a positive shift that overwhelmed the impact of a boycott of the games by North Korea.

These intense debates have been rekindled in the context of whether or not the Euro 2012 football championship should be utilized to ramp up the pressure on Ukraine over its treatment of the imprisoned opposition leader, Yulia Tymoshenko.

In some ways, the controversy has followed the usual script. Athletes came out in opposition, most notably German captain Philipp Lahm who joined manager Joachim Loew in arguing that a boycott of the European championship was "clearly not sensible" although they acknowledged that the political situation in Ukraine was of concern.

State officials have followed a more ambiguous script -- what can be termed a boycott "lite" bandwagon. German Chancellor Angela Merkel is reported to be campaigning for a boycott of the European Football Championship in Ukraine. However, if Kiev does not release Tymoshenko, the boycott will not come in the form of cancellation of participation of the German or other national teams, but rather through the curtailment of appearances by European leaders at the matches. Moreover, the European Commission declared that all 27 EU commissioners would refrain from traveling to the matches in Ukraine if Tymoshenko remains in custody.

This approach sends a message of disapproval without any real risks, outside of a backlash by supporters of President Viktor Yanukovych. No pressure is being made on teams or their supporters to go to Ukraine to play or watch Euro 2012 matches. Moreover, Ukraine is co-hosting the championship (which starts June 8) with Poland, so even the activation of a boycott lite is only partial in nature.

Notwithstanding these limitations, however, isolation on highly visible events such as Euro 2012 sends a signal to governments -- and people -- that has a normative sting. In an era where holding a major sporting event has become the most visible sign of global status -- as demonstrated in various Olympics and FIFA world cups -- a boycott by leaders and other officials hits hard at the core of the legitimacy of the state. Instead of a triumph on July 1, when Ukraine hosts the final of the Euro 2012, with a special presidential "lodge" prepared for high ranking visitors, major absences will speak volumes.

The big question that remains, as in other similar situations, is what consequences there will be in the bigger picture. Will a regime such as Yanukovych's -- embarrassed by the Euro 2012 cup, and with a record of vindictiveness, not only witnessed by the seven year sentence meted out to Tymoshenko for "abuse of office," but the jailing of five other former ministers -- simply turn even more inward with an explicit disengagement from the EU?

Or, following models from Korea 1988, will Euro 2012 be an event that helps act as a catalyst for a reawakening of a democratic culture? What is illuminating here is that the opposition in Ukraine has not pushed beyond what the EU has been willing to do in terms of a boycott on Euro 2012: going along with the script that the football championship should go ahead, but that political contacts should be avoided.

In either scenario, the only certainty is that the worlds of sports and global governance will continue to be inextricably if not awkwardly entangled in specific and often unanticipated situations.

First appeared in Andrew Cooper's CIGI blog Worlds of Governance.]]> tag:www.huffingtonpost.com,2012:/theblog//3.1495675 2012-05-07T11:50:40-04:00 2012-07-07T05:12:01-04:00

Andrew Cooper http://www.huffingtonpost.com/andrew-cooper/
Under the Basel III accord, all banks would in very basic terms have to maintain a ratio of common equity to risk-weighted assets (such as loans) of at least seven per cent on an ongoing basis, up from the Basel II standard of maintaining so-called Tier One capital at four per cent. The set of regulations would also require the world's biggest and systemically important banks -- the ones that pose the greatest risk to global financial governance -- to maintain extra capital; that is to say, a surcharge, of between one and 2.5 per cent of their risk-weighted assets.

From a political economy perspective however, the important question is how these debates play out at the policy, and political level. Do what for most detached observers seem like good ideas actually stand up to pressures from lobbying exerted by interests that want to dilute, or further delay the introduction of these regulations (formally expected to be phased in from January 2013)?

Notwithstanding the anticipated backlash by interests in the U.S., and elsewhere against these capital levels, the power of good ideas does seem to be holding up. Here the robust championing of such ideas by Mark Carney, the governor of the Bank of Canada (and chair of the Basel-based Financial Stability Board, which works in tandem to the Basel Committee) deserves special kudos. It takes a very special regulator to take on -- and win convincingly -- the policy battle not only internally, with strong elements of the Canadian banking industry, but externally with JP Morgan Chase CEO Jamie Dimon who led the US backlash to the capital surcharge.

Still, the capacity (and willingness) of interests to push back on regulation comes out through surprising means. A striking illustration was revealed recently from the Leveson inquiry into the British press, a more likely source for information about celebrity lives rather than global financial governance.

Notwithstanding this assumption though, the inquiry has highlighted the intensity of pressure at the apex of political power. As recorded by The Guardian newspaper (April 23) among the texts showcased at the inquiry were those before the May 2010 UK election by a member of a prominent British business family trying to lobby David Cameron, the Conservative leader (and now prime minister), for an easing of financial regulation, and specifically a longer time to implement the Basel capital and liquidity rules.

As in the case of the US or Canada, such pressure cannot be equated with policy effect. David Cameron did not reply that he was receptive to the need for retreat from regulation. Vince Cable, the Liberal Democrat Business Secretary, has since rejected such arguments as "special pleading" by the banking sector and its allies. And it appears that George Osborne, the UK Chancellor (Finance Minister) is fully convinced that this form of regulation is a price worth paying for a secure banking sector, even it means that "extra insurance" was required to ensure that British taxpayers were never required to again bail out financial institutions. Indeed, as recent meetings with his European Union counterparts confirm, Osborne is pointing towards Britain imposing higher capital ratios on its banks than elsewhere in Europe -- a move that could likely disadvantage continental institutions (in terms of stability and costs for any future bailouts).

That being said, the analysis of the technical intricacies with respect to regulation needs to be supplemented by examinations of how good ideas navigate the shoals of interest-based lobbying through the policy, and political process. The devil may indeed be in the details, but as such it depends on how, why, and by whom the details are decided by.

This article first appeared in Andrew Cooper's CIGI Blog Worlds of Global Governance.]]> tag:www.huffingtonpost.com,2012:/theblog//3.1462515 2012-05-02T10:00:04-04:00 2012-07-02T05:12:13-04:00

Andrew Cooper http://www.huffingtonpost.com/andrew-cooper/
In 1999, admittance into the G20, a forum of finance ministers, and central bankers, was done in a completely informal manner.

Although attention was paid to the systemic importance of the chosen countries, implicit attention was given to the sort of considerations one would expect of a country club: the reputation, and image of entrants at both the country, and individual level

Malaysia's claim for membership was certainly stymied by the imprisonment of its finance minister, Anwar Ibrahim. By this standard, even as it sunk into crisis, Argentina retained club credibility, a point reinforced by the re-appointment of the Harvard-educated Domingo Cavallo as Argentina's minister of the economy in March 2001.

Moreover, unlike other clubs, no rules were established for the temporary exit of members if and when they face some form of concerted criticism for their behaviour. The difference between the G20, and other international clubs such as the Commonwealth in this regard are striking. Unlike the G20, the Commonwealth has provisions for suspension, albeit for extremely serious offences such as the systemic abuse of human rights or military coups.

These divergences are reinforced by the existence of built-in mechanisms that accommodate change. Commonwealth countries can decide whether or not they want to stay as members as they modify their constitutions. By way of contrast the membership of the G20 was maintained in an "off the shelf" manner when the G20 was elevated in 2008 to the leaders' level. Although the L20 initiative, inspired by Canada's once-Finance Minister Paul Martin, looked at a wide variety of options in terms of members for such a forum, when the time came amid the global financial crisis, President George W.
Bush, as the host of the first summit in Washington, D.C. in November 2008, went with the status quo of the established Finance G20.

From the perspective of both members and non-members, the retention of Argentina must have seemed a puzzling choice; especially if the G20 was to perform both as a crisis, and steering committee setting the rules of global behaviour. Argentina had not only experienced a massive default, formalized in January 2002, but it was also a country that refused to submit required annual reviews of economic policies and data under IMF regulations.

Moreover, as witnessed once more in the context of the G20, Argentina was a country that possessed an idiosyncratic diplomatic style. Ready to run with ideas that had some rationale (pushing the G20 to put jobs on the agenda) it was also a country whose leader -- President Cristina Fernández de Kirchner -- has upset the host on symbolic etiquette (being late for the group photo), and substantive rules of the game. A March 2009 Wikileaks cable from the U.S. ambassador to Argentina pointed to the fact that President Fernández de Kirchner "had spoken twice as long as other leaders," and that her message had been very distinct from the other leaders, with a rhetorical and Argentine-centric bent.

In everyday life the combination of small and big offences would likely mean that Argentina would wear out its welcome. The same Wikileak cable indicated that even some officials from the Argentine government were concerned that "an Argentina perceived as politically conflictive could be thrown out of the G-20, or actions referred to address the global crisis could be transferred to another forum that specifically excludes Argentina." Certainly, prompted by the recent controversies over the Repsol YPF nationalization and accentuated forms of protectionism, many editorial writers hope so as they heap abuse on the role (or non-role) of Argentina in the G20. The Financial Times showcased "mutterings that Argentina might be kicked out of the G20." More robustly The Wall Street Journal took the line that Argentina should be suspended: "When its president wants to behave like a real head of state and not a thug, the country can be invited back into the club of serious nations."

Although several bloggers have joined in this intellectual flash mobbing, it is conceivable that an informal forum (even one with such high status as the G20) would eject Argentina on the record so far. To do so might actually put other countries on the defensive. If the US was to expend diplomatic capital on such an initiative, it would in all likelihood reinforce the notion that it was still acting on the basis of perceptions of a left-right divide in the Western Hemisphere. If the UK was to do so, speculation would increase that such a move was punishment for Argentina stirring up the Falklands-Malvinas conflict. And if Spain -- a permanent guest as opposed to a complete member of the G20 -- was to try to build a coalition in order to kick out Argentina, this approach would be viewed as self-serving both on commercial and diplomatic grounds.

Rather than pushing Argentina out, what is apparent in the build up to the mid-June Los Cabos G20 is a strategy that facilitates the marginalization of Argentina. One of the many other intriguing features about the G20, lacking in other international organizations, is the ability of the host to add a few (up to five) other countries to the summit. If originally tilted towards representatives of regional bodies such as ASEAN and the African Union, space is also given to some like-minded friends.

Instead of crying about Argentina, Mexico has gone around the issue by inviting countries to Los Cabos that, from its perspective, provide the acceptable face of the Americas. One of these is Chile, a country that could have been allowed in on merit to the original G20. Indeed, it is highly significant not only that Chile's economy minister Pablo Longueira was specially invited to the recent G20 Finance and Trade ministers meeting in Mexico, but that he was prepared to go public on Chile's ambition: "For many ministers at the meeting, it's hard to understand why Chile, such a successful country is not a member of G-20". The second is Colombia, a country that is in the process of moving beyond its image as a narco-fragile state, to a member of the so-called up and coming CIVETS countries.

From this perspective, the G20 confirms the impression that it is better understood as a network and a traditional closed club. Rather than dealing with a contentious issue in a direct zero-sum manner, the G20 host dealt with such problems by adding to the mix of actors taking part in the summit. Such an approach will not put an end to the controversy over Argentina, but it allows the G20 to live with the outlier situation without any major distraction from the G20's main game as the hub of global economic governance.]]>