The New York Times, 12 February 2010 reports (see here) that Iran’s announcement that it had begun enriching uranium to 20 percent has brought expressions of alarm from Israeli Prime Minister Binyamin Netanyahu, who said earlier in the week that the United Nations must impose “crippling sanctions, and these sanctions must be applied right now.”
It has been the consistent position of this blog that imposing sanctions on Iran would be a seriously dumb idea, for reasons spelt out in Iran: Sanctions are in the air. There are many reasons, but what they all boil down to is that sanctions will not work.
Iran: sanctions still on the agenda provides some further reasons for refraining from sanctions against Iran, offered by Hossein Askari, Professor of International Business and International affairs at the George Washington University, and Trita Parsi, President of the National Iranian American Council and author of Treacherous Alliance — The Secret Dealings of Israel, Iran and the United States.
Also, as explained in Choke point: the Strait of Hormuz, Iran has the option of retaliating by closing the Strait of Hormuz. The United States would have to respond, and the ensuing confrontation would pose a high risk of spiralling out of control.
Aside from the above, there is the morality of imposing “crippling sanctions” against anyone. As the sanctions against Saddam Hussein’s regime demonstrated, general economic sanctions (as distinct from export controls on particular items of military significance) hit hardest the most vulnerable in society – infants, young children, the ill and the elderly. They do so by reducing access to electricity, clean water, safe food, emergency transport, and spare parts for imported equipment upon which life or safety depend.
On the subject of sanctions, I continue to hope, but with diminishing confidence, that wiser counsels will prevail.
The Review section of The Australian Financial Review, Friday 12 February contains an excellent essay, Rethinking riches: time to put poor nations first, by Professor Ross Buckley, a professor of law at the University of New South Wales, and an expert on global trade and finance.
Professor Buckley considers the operation of the global financial system from the technical perspective of resilience, a concept that derives from systems science and measures the capacity of a system to regain its function and identity after an external shock. He argues that the global financial system is highly resilient, in the negative sense of being resistant to necessary change. He states:
The global financial system is functional from the perspective of Organisation for Economic Co-operation and Development countries and the international commercial banks, and quite dysfunctional from the perspective of developing countries. But it is highly resilient.
Even the Global Financial Crisis (GFC) has so far led to little substantive change in the system which produced it. ...
In addressing why this should be so, Professor Buckley says:
So why is a system that for so many of its participants is deeply dysfunctional, so resilient? The answer lies in who the current system serves, and the general paucity of knowledge, outside those it serves, about how it works and its consequences.
Resilience science teaches that strongly resilient systems have healthy feedback loops.
The principal feedback loops in global financial governance are that the system rewards international commercial banks and the elites within nations, at the expense of the common people in those countries.
Professor Buckley illustrates this proposition with the example of Indonesia after the Asian economic crisis of 1997:
... the International Monetary Fund (IMF) and the foreign commercial banks insisted Jakarta assume the obligations of the local banks to foreign lenders and then recover the funds from the local banks, if necessary by selling their assets. As was entirely predictable in the case of Indonesia, recovery proved difficult, and only about 28 per cent of the total liabilities assumed were recovered. Almost three quarters of the cost of repaying foreign loans was borne by the Indonesian people. Yet there was no reason for Indonesia to assume responsibility for these loans. The market mechanism, if left to work, would have seen many of these banks placed into bankruptcy by their Western creditors who would have received a proportion (presumably about 28 per cent) of their claims in the bankruptcy proceedings. Instead the insolvent local banks were put into bankruptcy by Indonesia, the creditors were repaid in full, and the Indonesian people wore most of the cost of the repayment. The funds to repay the creditors came from the long-term loans organised by the IMF and invariably described as bailouts of the debtor nations. Yet the terms of these loans required they be used to repay outstanding indebtedness so the bailouts were of the foreign banks. In Indonesia, the IMF co-ordinated a massive socialisation of private sector debt.
Professor Buckley goes on to discuss changes to the global financial system which he says would make it fairer, reduce the extent to which it favours the powerful, and disempower the feedback loops that make the current system so resistant to change.
Professor Buckley’s essay is taken from Resilience and Transformation: Preparing Australia for Uncertain Futures, Steven Cork ed., CSIRO Publishing, 2010.
A conference on Shaping Australia’s Resilience, hosted by Australia 21 (www.australia21.org.au)will be held in Canberra on 18-19 February. Conference program is available here, registration form available here.
US scoffs at Iran’s nuclear claims shrieks the headline in The Weekend Australian, 13-14 February 2010 (see article here).
When it comes to commentary on the Iranian nuclear program, it is amazing how the spin changes to suit the context.
Since about 1993, when Israel started to run out of the sorts of threats that would enable it to engage Washington’s attention in a convincing manner, we have been hearing about how Iran is an ‘existential threat’ to Israel. There are two elements to this preposterous claim:
- An Iranian nuclear weapons capability is just around the corner, perhaps only months away
- Iran is run by mad mullahs, irrational and unpredictable people who could do anything, and who therefore could not be entrusted with nuclear weapons.
In light of this ‘existential threat’ we have had a constant drumbeat of Israel (and the hawks in the George W. Bush Administration) thinking aloud about a pre-emptive attack on Iran.
Now that Iranian President Mahmoud Ahmadinejad has declared to a Tehran crowd that Iran was now a "nuclear state", and claimed the country had produced its first stock of 20 per cent enriched uranium, we get a different reaction – derision. As The Australian tells it:
The White House has accused Iran's government of "playing politics" with false claims that it has enriched uranium close to the level needed to build nuclear weapons.
Washington dismissed claims by Iranian President Mahmoud Ahmadinejad that the country had produced its first stock of 20 per cent enriched uranium and was able to achieve more than 80 per cent purity.
...
White House spokesman Robert Gibbs rejected claims of an advance in Iran's nuclear program. "They're based on politics, not physics," he said yesterday.
So now we are assured by the White House that there is no advance in Iran’s nuclear program, and are invited to believe that they have not produced 20 per cent enriched uranium and/or that they are not capable of enriching to 80 per cent (still short of the grade required for effective weaponisation).
Well, that is a relief. One could hardly contemplate a pre-emptive attack on a country whose nuclear program is scoffworthy.
Under the heading Stocks and dollar dive amid new economic fears, an article on the front page of The Weekend Australian, 6-7 February 2010 begins:
Global financial markets reeled yesterday, with $30 billion carved off Australian stocks alone, amid escalating fears the world has not seen the last of the economic crisis.
My only question about that is to ask who on earth thought that the world had seen the last of the economic crisis? There is worse to come, much worse.
As I wrote last March in Debt and sovereignty: another issue for the White Paper, what we are seeing is not a blip in the story of Western dominance of a process of endless economic growth, with a return to “normal” in a year or two’s time – it is a fundamental change. There is no “normal”, there will be no going back to the status quo ante. That lesson seems to be lost both on governments who ought to know better and on the bailed out bankers rubbing their paws in anticipation of their next fat bonus.
Later in the article:
The Australian dollar, which last year was chasing parity with the US dollar, slumped to US86.63c last night as investors flocked to the greenback.
One has to wonder about that too. This time last year the smartest people in the financial world were bailing out of the Australian dollar in the flight to “quality” or “safety” in the form of the greenback. By 1 February 2009 the AUD had been sold down to 63.6 US cents. Just over seven months later, on 10 September 2009, it cracked 90 cents, and on 17 November it was worth 93.5 US cents. Someone buying Australian dollars on 1 February and selling them on 17 November would have made 47% profit – not a bad little return for a bit under ten months. One didn’t have to be very precise about picking the right day – the average price for February 2009 was 65 US cents, and the average for November 2009 was 92 cents.
So why were all the experts selling Australian dollars in February and buying them in November?
The Minister for Defence Personnel, Materiel and Science, The Hon. Greg Combet, today announced reforms to Australia’s naval ship repair sector. Under the reforms,
... the Defence Materiel Organisation will reform the Navy's Major Fleet Unit Repair and Maintenance program as outlined in the Smart Sustainment initiative.
If the DMO’s conduct towards the government’s shipbuilder/sustainer ASC Pty Ltd is anything to go by, the thought of DMO teaching anyone else how to go about their business does not have me throwing my hat in the air.
In Narciso Yepes and the Concierto de Aranjuez I described the close relationship in the late 1940 and 1950s between the up and coming classical guitarist Narciso Yepes and the inspired Spanish conductor Ataúlfo Argenta.
On 16 December 1947 Yepes had made his Madrid debut, performing the Concierto de Aranjuez with the National Orchestra of Spain under the baton of Argenta. The performance was an outstanding success, due apparently in no small measure to the conductor, who it seems had taken it upon himself to promote this as yet little known concerto, and who seems to have guided the young guitarist in aspects of its interpretation. Guitarist and conductor took the Concierto on international tour in Europe, and the success of these performances ensured the fame of both Yepes and the beautiful Concierto de Aranjuez. Argenta and Yepes recorded it for Decca in the late 1950s.
At the time of writing the earlier post I lamented the fact that (as far as I was aware at the time) this particular recording had not been re-released either on CD or on iTunes. It turns out that the recording was in fact re-released on CD in 2008, and is now available on iTunes. The easiest way to find it is to enter Ataulfo Argenta into the iTunes search box, and look for the coupling of the Yepes Concierto de Aranjuez with the equally wonderful recording by Gonzalo Soriano of Falla’s Nights in the Gardens of Spain, again under the baton of Argenta.
These are historic performances and well worth listening to. Although both Yepes and Soriano (a specialist in Spanish music) made subsequent recordings of these works, Argenta leaves the other conductors for dead, and in both cases I think this is the soloist’s best performance. Also, this is the one recording by Yepes of the Concierto de Aranjuez which predates his development of the ten-string guitar, which with its four resonating strings has the merit of giving the guitar extra sonority, but I think the thinner sound of the standard six-string guitar better suits this particular work.
Yesterday my wife and I returned to Australia from a two-week skiing holiday in Utah (Park City), flying each way with V Australia’s daily service out of Sydney. The flying experience (passenger comfort, cabin cleanliness, meals, adherence to schedule) was of good standard. Unfortunately I cannot say the same about my experience of baggage handling, as the following account will indicate:
- We were booked to fly from Melbourne to Sydney on VA 873, operated by Virgin Blue, ETD Melbourne 1745 hrs Wednesday 13 January, ETA Sydney 1910, to connect with VA 001, ETD Sydney 2105 hrs Weds 13 January.
- We landed in Sydney at about 1900, thus leaving two full hours for baggage transfer.
- Nevertheless, when we landed in Los Angeles my suit case failed to appear on the baggage carousel. My wife’s suit case and our two ski boot bags did appear, thus demonstrating that there had been time in Sydney to make the baggage transfer.
- The V Australia representative on the ground at LAX directed me to Delta Baggage Services, where I was told that about half a dozen bags had been left behind in Sydney and would be despatched on the following day’s flight. I should file a missing baggage report on arrival at Salt Lake City Airport.
- When I filed the missing baggage report with Delta Baggage Services at Salt Lake City Airport at about 2130 local time on 13 January the agent did a baggage trace and confirmed that my bag had been left behind in Sydney: I saw this for myself on the agent’s screen. She said that it would follow on the next flight and be delivered to my hotel.
- The following day I rang V Australia’s toll-free baggage services number in the United States with the aim of ensuring that V Australia was up with the play and that my bag would indeed be despatched on the next available flight. I found myself speaking to someone in an India-based call centre. The woman I spoke to told me that the whereabouts of my bag was not known but that everything possible was being done to trace it.
- I protested that on the evening before I had been told that it had been left behind in Sydney and the agent had shown me the results of the baggage trace on her screen. The agent simply reiterated that the whereabouts of my bag was not known but that everything possible was being done to trace it.
- I then rang Delta Baggage Services and the agent I spoke to confirmed that my bag had been left behind in Sydney and as it had not been scanned aboard an aircraft it could be assumed to be still on the ground in Sydney. This meant that it had not been despatched on the flight following mine.
- The following day (Friday 15 local time) I rang both V Australia and Delta Baggage Services again. With V Australia the story was the same – whereabouts of bag not known, everything was being done to trace it. When I started to protest that this was not what I was being told by Delta Baggage Services, the line dropped out; I assume that the agent, whose English was barely adequate, hung up on me. I rang back and spoke to someone else, but the story was the same: whereabouts of bag unknown, airline is trying to trace it.
- Delta Baggage Services, on the other hand, was able to tell me that the bag was being carried aboard the V Australia flight which would be landing at LAX at about 1530 that day (i.e. the one which left Sydney two days after me), and give me an estimate of how long it would take to forward it to Salt Lake City.
- The bag finally caught up with me in Park City, Utah, about 72 hours after I filed the delayed baggage report.
After a long career involving extensive international travel I know that bags do miss connections or get delayed for one reason or another. I also know that this is supposed to be a rare occurrence, particularly in these days when security considerations dictate that baggage should travel on the same aircraft as the customer, and that the usual reason for missed connections is delayed incoming flights leaving too little time for the baggage transfer to be executed.
What I find unacceptable about the above experience is as follows:
- It is unacceptable for baggage to be left behind when there is more than two hours to make the transfer, and within the same airline group.
- It is unacceptable that, having been left behind, the bag was not despatched on the flight the following day, taking a full 48 hours to be sent on its way.
- It is unacceptable that V Australia’s baggage services agents are not able to provide the passenger with information which Delta agents can readily ascertain from the international baggage tracing system. Even when my bag was en route to Los Angeles on board a V Australia aircraft, V Australia was telling me that the whereabouts of my bag was unknown. This is hopeless. My advice to V Australia would be to lose the India-based call centre, fast. The use of outsourced call centres for purposes like this smacks of a culture of “managing” customer problems, rather than attempting to resolve them.
It gets worse:
- My wife and I departed Salt Lake City on Saturday on a Delta flight to Los Angeles, connecting with VA 002 to Sydney, on timelines which provided for a two hour window for the baggage transfer. The flight landed on schedule.
- When we arrived in Sydney we again had the dreary experience of standing at the baggage carousel watching a diminishing number of fellow passengers retrieve their baggage, at the end of which we wandered off to find someone with whom to file a missing baggage report. Neither of our ski boot bags had come off the plane. A trace of the bag tag numbers quickly ascertained that the two boot bags were still on the ground in Los Angeles.
- By the time we had finished lodging a missing baggage report in Sydney we had missed our 0745 connection to Melbourne and found ourselves standing at the back of a long queue at the transfer desk. It turned out that the baggage had come off the flight so slowly (it took more than an hour, although we were the only flight on the ground at the time) that many of our fellow passengers had also missed connecting flights and were being rebooked, the net effect of which for us was that the following two flights were full and we had to wait until 1015 for an onward flight.
In the course of thirty years engaged in intensive international travel for internationally oriented Commonwealth Departments like Trade, Foreign Affairs and Trade and Defence, I can recall only two experiences of a delayed bag. V Australia managed to more than double this in the course of a single return trip across the Pacific. If anyone were to ask me for my assessment of V Australia, I would have to reply, “How important to you is it to arrive with your luggage?”.
