The Great Debate UK

Ten years on – is it the end of the 9/11 moment?

-Sir Robert Fry is chairman of McKinney Rogers. His career in the British military includes being director of operations in the Ministry of Defence, advising then prime minister Tony Blair on the military strategic direction of the UK’s response to the September 11 attacks. The opinions expressed are his own.-

In his recent book “On China”, Henry Kissinger rather immodestly, but entirely knowingly, echoes the title of Clausewitz’s seminal work, “On War”. If you’re Henry Kissinger, you can do that. If you’re Henry Kissinger you can also offer a view of unrivalled authority on the politico/strategic landscape of the modern era, which is why his suggestion that China in the 21st Century might reprise the role of Germany in the 20th demands some attention. After the pre-occupation with terrorism of the last 10 years, this sounds rather different. Political ends may be timeless, but the means to prosecute them are rapidly changing, and currency, water, cyber and nuclear instruments may be the weapons of the post 9/11 era.

Chinese maritime capability now includes a missile inventory with the capacity to deny sea control in the Asian littoral to U.S. carrier groups, but why would China pick a conventional fight when its ownership of U.S. foreign debt offers profound strategic leverage without a shot ever being fired?

Timothy Geithner, speaking after the fall of Lehman Brothers, first raised the spectre of currency wars with charges that China was manipulating the yuan in a form of exchange rate mercantilism. But this is a complex and ambiguous area and Sino/American relations are underwritten by what looks like a re-run of the Cold War concept of mutually assured destruction, with the greenback playing the role of nuclear weapons: any large scale dumping of Chinese dollar holdings would not only torpedo its role as a reserve currency, but also devalue remaining Chinese reserves, leaving both nations in a mutually dependent financial embrace.

A more immediate cause of conflict is the voracious appetite of emerging economies for resources; above all, water. The Nile Basin, the swathe of the Middle East fed by the Tigress and Euphrates and, perhaps most important of all, the Tibetan headwaters of the North Indian river systems all provide potential flashpoints for inter-state confrontation, with the last of these coinciding with a Sino/Indian territorial dispute – water will be a weapon in its own right; it is also likely to be the recurring pretext for the use of others.

While water wars are in prospect, cyber wars are a reality. With the capacity to bring down critical national systems, cyber weapons succeed nuclear weapons in their capacity for mass effect; but unlike nuclear weapons, which have been used only twice in human history, cyber weapons are used on a daily basis, targeting everything from private bank accounts to national infrastructure. It is this very ubiquity that makes it difficult to distinguish between a criminal act and enemy action, and if the crooks, geeks and cyber terrorists are to be isolated a formal and declaratory deterrent framework may be necessary to distinguish the enthusiastic amateur from the determined state actor.

What to do about the City’s “Lazy Funds”

By Andrew Kakabadse

–Andrew Kakabadse (www.kakabadse.com) is Professor of  International Management Development at Cranfield School of Management. The opinions expressed are his own.–

Over the last 18 months I have interviewed a number of high-level city executives, including chairmen and CEOs, for a research paper to be published in the Journal of Strategic Review early next year. What was surprising was the general consensus that there is £450 billion in ‘Lazy Funds’ waiting to be invested in the City. That is more than twice the upper estimates of national debt. This enormous figure is not being invested because managers cannot see clear opportunities for realising gains.

Many of the respondents also expected another economic crisis of even greater severity than the present in 9-10 years’ time. The prediction is a stark reminder that the root cause of the economic crisis has yet to be resolved. Many respondents made clear that they see this as a political issue, and not one for the financial services industry to remedy. While no other instruments exist for the bankers to do their job, they will continue to use the system that we now know is flawed. The creation of new instruments, which would prevent another economic crisis, is a matter for the government.

The measures that have been introduced by the coalition government to tackle the current economic crisis are not sufficient. The government’s plans privatise gain, rather than socialise capital. Financial institutions continue to have their losses covered by the public, however those same institutions are not sharing the substantial profits that they are now reaping. The levy on banks that was introduced in the comprehensive spending review was an attempt to rectify this. Yet the sums that it will raise represent a miniscule amount when compared with the profits that banks are now making.

What is required is a change in philosophy in how money is invested. At present we live in an economy that privatises gain but socialises debt. However, we should be socialising capital, especially since we now know that a significant untapped amount is available. That was one solution to the economic troubles in 1929 with the foundation of the National Grid. Then, energy was the commodity that needed to be harnessed. Today, that commodity is water. We already know that sufficient clean water will be a challenge in coming years as climate change causes both drought and floods across Europe. A model similar to the National Grid for water would not only safeguard our water supplies, but create jobs and foster entrepreneurship.

This is a line of thought that the coalition government does not appear to have considered. According to the Institute for Fiscal Studies, the recent cuts proposed in the comprehensive spending review will affect the poorest in society the most.  This is when the UK is already 20th out of a list of 21 developed countries, which UNICEF monitors for child poverty. The current political situation represents a return to laissez faire politics, where the individual had no recourse to the state for their basic needs. Vulnerability has also been privatised. However if we are to repair the economy in the long term – not just for the next decade, then we need to have a close look at our attitudes to investing money. Relying on the banks may not be the best solution and social initiatives might be part of the answer, just as the National Grid was in 1929. New financial instruments is another.

Why Pakistan deserves generosity

Muhammad Atiq Ur Rehman Tariq is a Ph.D. student at Delft University of Technology and Dr Nick van de Giesen is Professor of Water Resources Management at Delft University of Technology. The opinions expressed are their own.

According to official reports of the Federal Flood Commission of Pakistan, at least 1,556 people have died and more than 568,000 homes have been badly damaged or totally destroyed as a result of the recent floods in Pakistan. Almost 6.5 million people have been affected by this flooding and 3650 sq km of Pakistan’s most fertile crop land have been destroyed.

The flooding hit 11,000 villages and cities. The situation is deteriorating in flooded areas, where waterborne diseases may increase the human death toll if measures are not taken in time.

The devastating flooding occurred at a moment at which Pakistan was still confronting the consequences of a severe drought. As such, the flood came as a complete surprise, especially in the province of Khyber Pakhtoonkhwa where flash flooding occurred.

The country had suffered severe droughts from 1999 to 2001 and had not faced any major flooding since 1995. Historically, most occurrences of severe flooding had been caused by the Indus River, which were largely checked after the construction of the Terbela dam in 1974.

The present floods are atypical and their severity (the worst in at least 80 years) was not anticipated by the inhabitants of the floodplains.

“Dutch dialogue” aids New Orleans restoration

-Han Meyer is Professor of Urban Design at Delft University of Technology.  He has been a principal organiser of the ‘Dutch Dialogues’ with New Orleans since 2005 and is Editor of ‘New Orleans-Netherlands:  Common Challenges in Urbanised Deltas’. The opinions expressed are his own.-

In August 2005, Hurricanes Katrina and Rita devastated large swathes of the U.S. Gulf Coast and overwhelmed New Orleans causing what then-U.S. Secretary of Homeland Security Michael Chertoff described as “probably the worst catastrophe, or set of catastrophes” in U.S. history.

Katrina’s punishing storm surge, strong winds and massive rainfall weakened flood protection infrastructure which then failed, flooding coastal areas of Louisiana and Mississippi, including 80 percent of New Orleans:

• Tragically, at least 1,836 people lost their lives, while a massive 1.3 million residents were evacuated, some never to return.
• The scale of the carnage is underlined by the fact that U.S. federal disaster declarations covered some 90,000 square miles, an area almost as large as the United Kingdom.
• The U.S. Geological survey has estimated that some 217 square miles of land was transformed to water by Katrina and Rita.
• The economic impact of the crisis has been estimated at some 150 billion pounds, with around 81 billion dollars in property damage alone.

The disaster was not only the costliest in U.S. history, but also served as a major warning for all urbanised deltas across the world of the need to maintain sufficient and efficient flood defences and water management systems.  As such, one of the biggest questions raised in New Orleans itself since 2005 has been how, and indeed whether, the city should be reconstructed and redeveloped given the threat it will continue to face from future hurricanes and catastrophic flooding.

This debate has not only prompted major interest from U.S. planners, engineers and designers, but also public authorities and politicians too, including Louisiana Senator Mary Landrieu, about international best practice, especially the pioneering ‘Dutch tradition’ of combining water management with urban development.

from Pakistan: Now or Never?:

India and Pakistan: a personal view of the water wars

 It was so long in the making,  so utterly predictable, that the news that Pakistan and India are now arguing over water carries with it the dull ache of inevitability.

When I was living in Delhi, which I left in 2004, a few analysts were already warning that the next war between Pakistan and India would be over water, rather than over Kashmir.  The mountain glaciers which fed the rivers which are the lifeline of both countries were melting, they said, and sooner or later India and Pakistan would blame each other for climate change. I did not take it that seriously at the time. Not even after seeing first hand how far the Siachen glacier - the world's longest glacier - had receded.  

Nor indeed did it properly register after talking to an Indian sherpa who had led the first Indian military expedition to Siachen in 1978 in what India considers part of its own Ladakh region  At the time, Ladakh was much colder, he said, and the snow on the glacier came right down into the valley. It had receded in recent years because of global warming, exposing the black tracts of scree I had scrambled up during my trip there. “It was like a beautiful road coming right down from K2,”he said, , “black moraine on either side.” There was nothing, and nobody there.

From the records of the India Office of the British Library, I unearthed an account written by the American explorer Fanny Bullock-Workman of her own travels in Siachen in 1911-12 -- so little consulted nowadays that the pages of her book began to come away in my hands.  She suggested that Siachen had been receding back in her days too,  so I was able to put the ebb and flow of the glacier down to natural changes in the climate.

Then a few years ago,  I made the drive from Srinagar in Kashmir to Leh in Ladakh and -- dangerous as it is to extrapolate from one's own experiences - saw the impact of global warming first hand.

It is a two-day drive from Srinagar to Leh, with a stopover in Kargil where India and Pakistan fought an intense border war in 1999. It is a spectacular drive, but also one of the most precipitous and most terrifying. By the time you are nearing Leh, you are looking forward to a comfortable hotel bed and a bowl of thick Tibetan soup.

Not long before we reached Leh, we discovered that the road bridge had been swept away by heavy floods rushing down from the mountain glaciers. I met a local Ladakhi journalist I knew who was, like me, stranded on the wrong side of the broken bridge. He took one look at me, and though I had not seen him for three years or so, he shook my hand and said two words: "global warming".  Then, like all the other Ladakhis there, he disappeared over a precarious crossing which the locals had fashioned across the river -- which involved walking across the upturned root of  a tree and then somehow making it from branch to branch across a raging glacial torrent to the other side.

Bringing a new perspective to World Water Day

- Dr. Ir. Jules B. van Lier is a professor at Delft University. The opinions expressed are his own. -

The international observance of World Water Day, this year on March 22, is an initiative that grew out of the 1992 United Nations Conference on Environment and Development in Rio de Janeiro.  This year’s theme — ‘Clean Water for a Healthy World’ — reflects the fact that population and industrial growth are adding new sources of pollution and increased demand for clean water across the world.

Human and environmental health, drinking and agricultural water supplies for the present and future are at stake, yet water pollution rarely warrants mention as a pressing issue.

It is absolutely right that water quality considerations should be highlighted just as much as water quantity issues going forwards.

However, what is sometimes obscured in this important debate is that, even with a step change in global water treatment efforts, vast amounts of potentially valuable wastewater will continue to be produced for the foreseeable future.

Indeed, in some developing countries some 80 percent of all waste is being discharged completely untreated, because of lack of regulations, resources and control. Globally, it is estimated that 1,500 cubic kilometres of wastewater is produced on an annual basis, whereas the world renewable fresh water reserves amounts to only 40,000 cubic kilometers per year.

Realising that 1 m3 of non-treated wastewater may spoil over 1000 m3 of fresh water for human consumption or other activities, the urgency of the matter is obvious..

from The Great Debate:

First the stock market, now water

-- Jonas Minton is Water Policy Advisor for the Planning and Conservation League, an environmental advocacy organization.  Previously he was deputy director of the California Department of Water Resources. The views expressed are his own. --

In many ways, water policy in the Western United States mirrors the economic policies which created our financial catastrophe. Here in the West we’ve seen a massive development boom fueled by unrealistic expectations of ever-increasing supply.

Water contracts have been issued for many times the amount of water that nature can reliably provide. Wildly optimistic appraisals of water availability are being used to justify long-term, otherwise infeasible projects. Long held cautionary principles are being overlooked or eliminated in the rush to fulfill promises and support dreams that are unsustainable. And the public is being actively encouraged to invest billions more in bonds to subsidize the very system that is driving us to the crisis point.

The result has been escalating conflict, unwieldy demands, environmental collapse and economic disaster. Fortunately, as with the economy, adjustments in expectations, greater efficiency, and implementation of new, smarter ways of doing business can reverse some of the damage we have done, allow the West to come to grips with water limits, and provide reliable water to meet our needs.

The West supported lush post World War II growth in California, Nevada and Arizona by depleting local rivers and creeks and overdrafting groundwater. As these resources dried up, cities reached out with ever deeper wells and with hundreds of miles of aqueducts to grab “surplus” water from areas with less political clout.

But just like Wall Street’s derivatives, underlying water assets were counted many times over.  In startling testimony late last year the California State Water Resources Control Board revealed that they had issued water rights permits for over 8 times the amount of natural water available in an average year. On the Colorado River, seven states cling to unreasonable expectations that they will receive the full allocation promised to them in decades old agreements. (For background information, click here for PDF.)

Over allocation is not limited to surface water. Over pumping of groundwater water is also common in the regions overlying the huge Ogallala aquifer, a major source of water supply for South Dakota, Nebraska, Wyoming, Colorado, Kansas, Oklahoma, New Mexico, and Texas.