The Great Debate UK

from FaithWorld:

Will the Arab Spring bring U.S.-style “culture wars” to the Middle East?

(From left: Olivier Roy, Cardinal Angelo Scola and Martino Diez of the Oasis Foundation at the conference on San Servolo island, Venice, June 20, 2011/Giorgia Dalle Ore/Oasis)

Where is the Arab Spring leading the Middle East? What will be the longer-term outcome of the popular protests that have shaken the region since the beginning of this year? Of course, it’s still too early to say with any certainty, even in countries such as Tunisia and Egypt that succeeded in toppling their authoritarian regimes. Some trends have emerged, however, and they’re on the agenda at a conference in Venice I’m attending entitled “Medio Oriente verso dove?” (Where is the Middle East heading?). The host is the Oasis Foundation, a group chaired by Cardinal Angelo Scola, the Roman Catholic patriarch of this historic city, and guests include Christian and Muslim religious leaders and academics from the Middle East and Europe.

In one of the most interesting -- and hotly debated -- presentations, the French Islam specialist Olivier Roy described the Arab Spring as “a break with the culture and ideologies that dominated the Arab world from the 1950s until recently.” It marks a clear change in the demographic, political and religious paradigms operating there, he said. The old dichotomy of the authoritarian regime or the Islamist state has broken down, he argued, and Islam is taking on a new role in the political process. In the end, the region -- or at least the states where the Arab Spring brings real change -- could see democratic politics marked not by major efforts to establish an Islamic state but by Muslim “culture war” controversies not unlike the way hot-button issues such as abortion and gay marriage emerge in U.S. political debates.

(Newly wed Egyptian anti-government protesters in Tahrir Square in Cairo February 10, 2011/Dylan Martinez)

The first trend Roy cited to back up this thesis is the sharp drop in fertility levels in the Arab world since the late 1980s and the 1990s. Several Arab countries, especially those in North Africa, now have birthrates of around two children per woman, close but still above the European average. Tunisia’s birthrate is actually lower than France's.  “The generation that is now on the job market is the last generation of big families,” said Roy, who is now director of the Mediterranean Programme at the European University Institute in Florence. “It’s a generation that has many fewer children and marries much later.”

from FaithWorld:

Handouts dash Saudi king’s reformer reputation

(Saudi King Abdullah addresses the nation from his office at the Royal Palace in Riyadh March 18, 2011/Saudi Press Agency)

Saudi King Abdullah's lavish social handouts and a boost to security and religious police, but no political change, leaves his prized reputation as a reformist in tatters, analysts say.

The king, believed to be 87, has carefully crafted an image as a cautious reformer in a country ruled by a single generation of his brothers as absolute monarchs for nearly six decades. But faced with unrest rocking much of the Arab world, he is playing the old game of buying support from key sectors of society to keep family rule as it is.

In a rare TV address to the nation last Friday, the king announced the new spending but gave no concessions on rights in a country where public space is dominated by the royal family, political parties are banned and there is no elected parliament.

There was no word either on a much anticipated reshuffle of a cabinet whose main posts are held by senior princes, some of whom have been in their jobs for more than four decades in the key U.S. ally and world's top oil exporter. "I was expecting perhaps a cabinet reshuffle but unfortunately he focussed on paying money and he has increased the role of the religious establishment," said Tawfiq al-Saif, a leading intellectual among minority Saudi Shi'ite Muslims.

"He is returning to the policy of the late King Fahd in the 1980s when money and religion was the only tool of the government," he said.

from Commentaries:

Banks must see the debate has changed

Regulators are rarely accused of being too candid. But Adair Turner's observation that the financial sector is too large has seen the chairman of Britain's Financial Services Authority swamped by a wave of protest.

Executives, lobby groups and even Boris Johnson, London's Mayor, have responded with dire warnings about the risks of undermining the financial sector. This knee-jerk response shows the industry still fails to understand the consequences of the crisis it helped to cause. It is high time bankers engaged in a proper debate about their future.

The criticism of Turner takes two familiar forms. First, financial services businesses and their employees pay lots of tax. Second, tougher regulation could drive this valuable activity elsewhere. Both arguments have some limited merit. However, this narrow defence fails to address the broader question of the banking industry's function, and its relationship with the state.

It is true that big banks have in the past paid a lot of tax, as have most of their employees. However, these historical receipts must be weighed against the trillions of dollars of public money that governments have been forced to commit to prop up their banking systems.

It is also the case that unilateral action taken by any one country would risk driving business offshore, much as heavy-handed regulation by the U.S. helped create the Eurobond market in the 1960s and 1970s. Moreover, not all the financial sector is equally to blame. Most of the insurance industry operates without direct government support.

But arguments about tax and competitiveness miss the point. There is no realistic prospect of Britain acting alone to rein in its banking sector. Like other regulators, Turner is acutely aware that action must be co-ordinated internationally by governments.

The bankers have also failed to address Turner's central question, which is why the financial services industry has grown so large. Benjamin Friedman of Harvard University points out that, from the 1950s to the 1980s, the finance sector -- excluding insurance and real estate -- accounted 10 percent of U.S. corporate profits. In the first half of this decade it was 34 percent.

from Commentaries:

Turner is right to take on swollen banks

So the watchdog can bark after all. Adair Turner, chairman of Britain's Financial Services Authority, says the financial sector has "swollen beyond its socially useful size". That is a striking statement for any financial regulator, particularly one that counts promoting London's financial centre as one of its goals. Identifying the problem, however, is the easy bit. Reversing decades of financial expansion will require global agreement on tough new rules, and the determination to make sure they are consistently enforced.

Turner's comments, in a debate hosted by Prospect magazine, underscore the extent to which the crisis has upended the received wisdom among policymakers. For years they assumed markets were self-correcting, that financial innovation brought lasting economic benefits, and that regulators should think twice before getting in the way.

But after two years of global economic turmoil and with several trillion dollars of public money committed to preventing further panic, the costs of this approach have become all too clear.

What is less certain is what should come in its place. A market economy needs functioning banks and financial markets to intermediate capital flows and allocate credit. This useful activity will involve some useless speculation: it is hard to imagine a regulator -- or anyone else -- reliably drawing a line between the two.

The authorities can, however, make sure that banks take greater account of the possible costs of their risk-taking. Turner thinks forcing banks, particularly those involved in trading activities, to hold greater reserves of capital will choke off some "socially useless" activity. Such changes are already under way. They will have the added benefit of reducing banks' profits and -- by implication -- the outsized bonuses they distribute to employees.

Governments can also do more to protect taxpayers from future financial failures. Banks could be required to prepare for their own failure by drawing up what Mervyn King, governor of the Bank of England, memorably described as a "living will". Alternatively, systemically important institutions could be charged an explicit fee for the state guarantee they enjoy.

Turner also floats the idea of introducing a Tobin tax -- a levy on financial transactions -- named after the economist who in the 1970s proposed taxing cross-border currency transactions. However, this would not distinguish between "useful" and "useless" transactions. It is also hard to imagine a global tax that could not be avoided somehow.

Why Britain must deliver enduring constitutional reform

- Lord Lester of Herne Hill QC is a leading constitutional and human rights lawyer. The views expressed are his own -

Almost alone on the democratic world, we British have no written constitution protecting our basic civil and political rights. We have no constitutional charter defining the scope of the powers of the legislative, executive and judicial branches of government or the relationship of these branches with the European Union (EU). Parliament struggles to assert its power while the government uses its ancient monarchical authority — that is the prerogative power vested in the Queen — to exercise its executive powers.

There is now widespread discontent with our system of government, and a massive loss of confidence in politics and politicians.

The early days of the “New Labour” government were times of promising reform. Major changes such as devolution for Scotland, Northern Ireland and Wales, removal of most hereditary peers from the House of Lords, abolishing the role of Lord Chancellor and creation of a Supreme Court were accompanied by measures directly empowering individuals, in particular the Human Rights Act and Freedom of Information Act.

Since then, despite much talk of further reform, the government has only tinkered round the edges. As the House of Commons Justice Committee’s recent report noted “’unfinished business’ has been the enduring motif of many of the strands of constitutional renewal” during the lifetime of this government.

Why has the government failed to complete its ambitious constitutional reform programme? The Blair government was half-hearted and bogged down in controversies over the Iraq war and concerns about security and terrorism. When Gordon Brown took over in 2007, he seemed keen to invigorate the constitutional reform process with the launch of the Governance of Britain agenda.

But, the failure to drive forward this agenda with any speed or sense of purpose or imagination meant that ministers became lukewarm or hostile to any further meaningful reform. They lost any appetite for radical change until the scandals about MPs expenses and dodgy peers became part of a media frenzy. These scandals have resulted in a further public loss of confidence in our political system while reviving the debate about constitutional reform.