New Law, Same Old Story?

In March this year, the Cuban government announced a new law on foreign direct investment (FDI). The aim is to boost growth on the island. But what does the new law mean exactly and will it improve the country’s economy? Can the communist government reconcile itself to capitalist free enterprise to improve the lot of the ordinary Cuban? At first glance it would appear that the government is looking for a new ‘best friend’ since the demise of Hugo Chavez, the president of Venezuela. Cuba relied heavily his special relationship with Fidel Castro and Venezuela exported food, raw materials and oil to Cuba on preferential terms. Now Venezuela is suffering its own economic problems Cuba must look elsewhere. Brazil has stepped in to some extent, but the democratic government there has different terms. The law, according to many, does not go far enough, and Cuba would do well to follow the example of other small island economies that have flourished using FDI as a central policy.

Broadly speaking, the law, which will take effect in late June, offers tax breaks for new investors and property guarantees for investors. New investors into joint ventures or partnering with cooperatives will enjoy eight tax free years, paying 15%, half the current rate, after that. Not so encouraging is the fact ventures funded completely by foreign money do not automatically qualify for these breaks and will have to get a special exemption from the government. This leaves room for the imposition of arbitrary or unusual rules on those companies.

The new law is still patchy, according to many observers. It updates an older law (1995), but crucially still insists that companies must hire workers through the state-run employment agencies. This means the cost of labor is inflated as these agencies charge in, and keep, hard currency paid by the FDI investor, yet pay workers in local currency. The conversion rate the government uses to pay the workers in local currency also means that the state keeps two thirds of the money received, so is the only winner in the arrangement. The highest employment tax in the world!

One observer, says that Cuba is missing a trick if it does not look to Cuban emigrants living in countries where they are not subject to the US embargo. These people have more incentive to invest in Cuba, than non-Cubans, and Havana should be looking to court these people.

Most of the current money inflows to Cuba are relatives’ remittances from the US. They are investing in small businesses such as hairdressers or paladares (restaurants), but they are not specifically mentioned in the new law. This it seems is a case of ‘divide and rule’, ignoring those with the highest vested interest in the economy, in favor of large foreign investors.

Crucially, though the new law seems to imply that foreigners are allowed to own property on the island. This would seem to be one way that Cubans living outside the US and Cuba could invest. In fact, there is a property market in Cuba, though not an official one. Cubans have been allowed to own property on the island since 2011, but it seems most of the money is coming from abroad in ‘under the table’ deals that have little legal protection.

There are also still worries about claims on property from exiled Cubans after the land expropriation by the state following the revolution. It seems there are many pending building applications with the government that are still waiting approval.

One major development financed by FDI is the enlargement of the Mariel Port at the northern end of the island. Enshrined in Law 313 last year the area has been designated, Chinese style, as a special development zone, where foreign companies will enjoy 100% ownership and can take profits from any activity there.  The money has come from the Economic and Social Development Bank of Brazil (BNDES), and 32 Brazilian companies will be involved in the port development and subsequent use. Brazil’s Export Development Agency recently took delegates from companies ranging from the retail to the construction sector to see the Mariel development and the country is hoping to use it as a hub to reach other growing economies in Central America.

This it seems was why president Xi Jinping of China did not visit Cuba, one of his ideological allies last year, on a visit to the region. Since 2005 China has provided more loans to Latin America than the World Bank and the Inter-American Development Bank combined. Like Brazil it sees other places in the Caribbean and Pacific (Mexico) as more strategically important. This year, however, the Chinese Foreign Minister, Wang Yi, did visit Cuba, promising to strengthen ties with the country in key areas such as trade, investment and energy.

It is still difficult to find information on FDI into Cuba. Some cases of Joint Ventures (JV) from the 1990s have been documented, though to varying degrees of transparency. They are mainly in association with State-owned enterprises (SOEs). Sherrit, the Canadian metals and mining group, has invested heavily in both nickel mining and oil and gas production in Cuba. Its latest annual report does not state the revenues it gets from Cuba alone, but says its 50% JV with the General Nickel Company of Cuba produced more than 36,000 tonnes of nickel and cobalt and details its continuing expansion plans on the island. It is also making a significant contribution to Cuba’s energy needs, producing oil and gas and generating electricity.

Unilever the FMCG giant, does not consider its revenues from its Cuban JV with Suchel, worth detailing in its 2013 annual report (P. 135), listing it only among numerous countries where Unilever has operations but in the opinion of the directors, whose revenues do not affect the company as a whole. In reality, JVs operating in Cuba discover that socialism, while not exactly a capitalist’s paradise, offers a number of distinct advantages. Once admitted, JVs are often granted monopolies, or dominant market shares, in key market segments. Competition both national and overseas, is restricted by the state and the partner company often acts as a bargaining power with the government.

There are disadvantages too, however: the state exercises total control; no price increases are allowed; JVs have finite contracts which generally mean less investment towards the expiry date of the contract; there is risk as the state intervenes between the company and its suppliers; the JV partner often has conflicting loyalties – to the JV and to the state; the state can alter the rules without warning.

In the absence of meaningful statistics, particularly on FDI, one way of benchmarking Cuba is against other emerging economies. Feinberg cites Costa Rica as a good example that Cuba would do well to follow. Attracting FDI was made a central policy by the Costa Rican government in the early 1990s to the extent that it has now risen to over 5 per cent of GDP. Alongside this GDP per capita has risen to $10,500 and consumption has also gone up. It is now attracting companies in the technology and service sectors too.

Another example is Ireland, with a slightly smaller population of 6.3 million, compared to Cuba’s 11.2 million. Like Costa Rica, Ireland is a small latecomer to industrialisation, but thanks to its liberal tax policy it has succeeded in attracting transnational companies to set up there. Companies such as Intel, Google, and IBM in the technology sector and the likes of Citi, Goldman Sachs and Zurich in the banking sector all have operations there.

What seems to be clear is that the government needs to expand and clarify its new law on FDI, otherwise the status quo will be maintained, and potential investors will be put off. Many sectors would benefit from investment, but while investing in businesses is so difficult, Cuba’s economy will remain stifled.

The Ukraine and Russia Clash: Can We Hope for an Uneasy Peace?

The recent conflict between Ukraine and Russia was the first time that many people had ever heard of the political problems that plague this region. However, Ukraine and Russia have a long history of tense relations that have largely centered on Ukraine’s desire to maintain its sovereignty and Russia’s need to protect and maintain control over Ukraine.

Russia and Ukraine’s Long History

These two countries have over 1,000 years of history, but the conflict that predicted recent events began in 1918. On January 25, 1918, the Ukrainian Central Rada declared itself a sovereign nation and withdrew from Russia. This was short-lived, as Ukraine and Russia were two of the main countries that formed the Union of Soviet Socialist Republics.

In 1991, the Union of Soviet Socialist Republics was dissolved. Looking back at this time, it’s easy to see where today’s problems took root. One of the earliest issues that Russia and Ukraine face was ownership of Crimea. The Crimean peninsula lies just west of Russia and south of Ukraine’s mainland. They agreed to keep Crimea part of Ukraine.

Crimea was not the only disputed area that negatively impacted Ukraine and Russia’s relationship. Sevastopol is a city that to this day is disputed. It is home to the Black Sea Fleet, one of the largest parts of the Russian Navy. The issue was partially resolved in the late 1990s when some of Sevastopol’s naval bases were leased to the Russian Navy. While Russia and much of Sevastopol consider the city part of Russia, Ukrainian residents and most countries around the world consider it a Ukrainian city.

Events Leading up to the 2014 Crisis

While Ukraine and Russia went through a period of relative peace, issues below the surface led to built-up tensions between the two countries. A significant problem is Ukraine’s increasing loyalty to a more Western political style and way of life. Russian leaders see this as a threat, particularly since Ukraine and Russia rely heavily on each other for essential imports. Pro-Western sentiment grew throughout the 2000s; while eastern communities that lie close to Russia are more likely to be in favor of close ties with Russia, western areas of Ukraine are more likely to desire a relationship in which they are less dependent on Russia.

In 2008, Ukraine attempted to join NATO. Although much of Ukraine’s population did not agree with this effort, Russia took it as a snub and a threat to their protection. Russian leaders took immediate action; Prime Minister Putin said that Russia would consider moving to take Crimea and the eastern part of Ukraine if Ukraine joined NATO. Ukraine dropped their NATO efforts in 2010.

Escalating Tension in 2013

In late 2013, relations between Russia and Ukraine came to a head. The government told the Ukrainian people that they would not be moving forward with a plan to build stronger ties with the European Union. Instead, the Ukrainian government said, they would be working more closely with Russia.

The split of pro-Russia and pro-European Union Ukrainians led to a huge protest at this announcement. While Ukrainians that supported the Russian government welcomed this news, over 300,000 Ukrainian protestors took to the streets of Kiev. Putin moved to secure the interdependence of Ukraine and Russia by buying $15 billion in Ukraine government bonds and lowering the price of Russian gas for Ukraine.

The 2014 Crisis and the Fight over Crimea

The protests in late 2013 led the Ukrainian government to pass highly restrictive protest laws. Protests continued in Kiev throughout January and much of February, leading to protesters’ deaths and over 200 arrests. Protests reached their peak on February 20 and February 21; over 80 protesters died and video footage showed government snipers shooting at protesters.

After a meeting involving protest leaders, the Ukrainian president Yanukovich, and political leaders, an agreement was reached. They agreed to reduce Yanukovich’s powers and hold elections. Protesters took control of Kiev, causing Yanukovich to flee the country. Shortly thereafter, he was removed from office.

As Ukraine moved towards a more democratic government, Russia moved to reclaim Crimea. It began in late February as Russian forces began taking government buildings situated in Crimea. The Russian parliament moved to allow Putin to use military force in Ukraine. While most of Crimea’s residents voted to join Russia, Ukrainian leaders vowed to keep the country together. On March 18, however, Putin declared Crimea part of Russia. This, according to the Russian government, was necessary to protect ethnic Russians living in Crimea and eastern Ukraine. As of right now, Crimea is part of Russia.

What This Means for Russia and Ukraine

Currently, Russia has the upper hand. They have troops stationed near the border they share with Ukraine, where some reports indicate that they are planting fake protestors to incite fighting and protest. Since Russia is now enjoying the benefits of retaking Crimea and the general unrest in Ukraine, many experts believe that the two countries are not headed to war. Rather, some military analysts believe that Russia is trying to destabilize Ukraine from within with armed activist groups. Ukraine is trying to defend its eastern half from the threat of Russian invaders, but recent efforts seem to have lost their steam.

This paints the picture of a stable future for Russia; with Crimea and support from the eastern part of Ukraine, they may be able to take other eastern Ukrainian cities and increase their reach in Eastern Europe. The future is not as bright for Ukraine. Vladimir Putin has claimed that Ukraine is on the brink of civil war. This could benefit Russia as the country’s leaders attempt to use their power to influence Ukraine and keep its leaders from strengthening connections with the European Union and other Western forces. Several countries, including the United States, are backing Ukraine and its neighbor countries.

Time will tell what the long-term effects of the Ukrainian crisis are. Much appears to depend on what Russia’s wishes are. Russian leaders may decide to invade Ukraine, in which case, there may be more bloodshed and rioting. However, as long as Ukraine acts within Russia’s expectations, the countries may enjoy an uneasy peace.

The Power Outage Crisis in Pakistan: Causes, Consequences and Resolutions

Pakistan has recently been experiencing power outages of vast proportions and far reaching consequences. Getting enough electricity has been a serious issue in the country for years but it is now officially exceeding crisis levels. Rural villages are left without power for about 22 hours out of the day and even cities as large as Islamabad are experiencing power outages for 10 hours of the day.

As summer heat waves strike early this year, protests are beginning to break out demanding solutions be found to restore full power output for the nation. In light of this crisis of electricity in Pakistan, what is known about who is behind the catastrophe? Should the government be held responsible or is this a consequence of a private sector that has not been regulated enough? What are the steps being taken to resolve the issue and what steps should be taken to find more effective and faster solutions?

Tracing the Origins of the Electricity Crisis in the Pakistani Economic and Political Setting

Whether or not the power outages can be directly traced to the government; it has become a highly politicized issue. However, the origin of the issue has been years in the making. Decaying and poorly maintained power plants coupled with poorly functioning transmission lines are together exacerbated by out-of-date and ineffective policies.

One of the primary origins of the problem is the all-too-common tendency for the Pakistani public to avoid paying for electricity. The poorer members of the population simply find means of stealing the power for the need while the wealthy simply refuse to pay their bills. This has resulted in an astonishing $5 billion in what is being referred to as “circular debt.” That is, a series of unpaid electricity bills running through every level of Pakistani society from high-ranking politicians to the most impoverished residents of the slums. With so much electricity output going unpaid for, energy providers struggle to cover basic maintenance costs or pay for additional fuel. This means power plants all over the country are slowing output or shutting down entirely.

However, flawed economics from private consumers and businesses do not tell the whole story. Corruption abounds in the government as rich politicians offer highly overpriced contracts to members of the private sector who agree to support them. The extent of this corruption has led to the government spending about $1.7 billion to add no more than 62 megawatts of energy to the nation’s power supply. From this, it becomes clear that neither the government nor the private sector can be accorded the full burden of blame. Rather, it was through corrupt scheming and dealings between these two powerful forces which helped to create an inefficient and poorly funded energy supply which suffered even further from a severe, nationwide failure to pay for the electricity it has been using.

The ineffectual energy ministry worsens the problem further by failing entirely to make realistic and positive changes to the current policy. This ministry, directly responsible for the nation’s energy supply, has not funded the building of a major new power plant for more than a decade and it fails to sufficiently fund the maintenance and repair of the existing power plants.

Although power plants were theoretically allocated 1,525 bcfd (billion cubic feet per day) of fuel for the most recent fiscal year, they have only actually received approximately 47% of that total amount or 718 mmcd due to unusually high pressures on the sources of the supply.

The result is that the electricity crisis has become one of the most expensive issues plaguing the Pakistani nation at this moment. Totaling as much as 4% of the country’s gross domestic product, it is a more costly problem than that of the Taliban insurgency, making it the most pressing issue to resolve at the moment.

Current Attempts at Resolving the Issue

In the interim, Prime Minister Nawaz Sharif will alleviate the crisis by using foreign investments and fuel in order to repair current power plants and get energy supplies back to acceptable levels for the time being. The nation will begin relying heavily upon importation particularly from Iran and Turkmenistan.

The Prime Minister Nawaz Sharif also intends to seek foreign aid for longer term projects such as improving structures and the infrastructure to run a more efficient national power grid. They are also funding exploration initiatives to find reserves of oil and natural gas within the borders of Pakistan.

A third avenue for bringing an end to the power outages comes in the form of the Tarbela IV project which Prime Minister Sharif has recently announced. Under this new initiative, the nation will work on boosting their hydropower. As part of the Tarbela IV project, he has already instructed the Ministry of Water and Power to begin speeding up the process of developing three dams (the Diamer-Basha Dam, the Dasu Dam and the Bunji Dam). If all goes according to plan, the project should add 1,410 megawatts of new, low cost electricity to the Pakistani power grid within three and a half years.

In order to be as effective as projected, however, Tarbela IV will need to rely on foreign aid and investments. While the Austrian government and the World Bank have shown interest in contributing to the completion of the project (the World Bank has already provided $840 million for construction costs); many governments are hesitant to provide any money to Pakistan without seeing any concrete evidence that the nation will be able to turn itself around and rid itself of the corruption and negligence which originally led to the power outage crisis it now suffers from.

There are also talks of coordinating with China to expand the nation’s nuclear power supply by investing in the Karachi Nuclear Power Plant but this would not be finished until at least 2018.

Such long term projects like these dams are necessary for sustained recovery from the current crisis. However, it is difficult to prioritize them for funding when more urgent relief is needed. The most cost-effective short term solution is the import of liquid natural gas from outside of Pakistan. While all other projects will need at least four years to take full effect, liquid natural gas can help to reduce the nation’s growing gap between supply and demand.

However, as increasing urbanization leads to a corresponding increase in demand for electricity, long term solutions are a necessity that the Pakistani government simply cannot afford to overlook. In neglecting the growing problem of meeting its energy needs for so long, the government has allowed the problem to reach a critical mass where unsustainable short term fixes become necessary to solve the crisis at hand but pull away from the finances available to fund long term projects which could alleviate the nation’s energy suppliers and prevent future crises of the same nature from occurring.

A Positive Outlook for the Future of Pakistan

Senator Ishdaq Dar, current finance minister in Pakistan, has stated that the nation is already poised on the path to recovery. Although it has had to take out more loans from the International Monetary Fund (IMF), he claims that, under Prime Minister Sharif’s leadership, the government has been able to resolve the $5 billion circular debt which has been plaguing the nation’s energy suppliers. This means power plants have more money to repair damaged equipment and buy more fuel which will lead to about 1,700 megawatts of added energy to Pakistan’s power grid.

In order to allocate more capital to resolving this power outage crisis, the government has begun a course of strict budget cuts: eliminating redundant ministries and eliminating wasteful spending. They have raised taxes on some and also increased the amount spent on the poorer segments of society.

Finally, they have also implemented a new three part plan to improve the economy through motivating foreign and domestic investors as well as encouraging foreign businesses to build and do business in the nation.

All of these measures should help to alleviate the financial pressure of recovering from the current crisis which has been decades in the making. However, what the finance minister fails to address are which practical policy changes the government intends to make in order to prevent such crises from happening again in the future. Without real and effective change to the policies and corruption which allowed the energy struggle to reach such magnitudes, there is no way to guarantee Pakistan won’t suffer the same consequences again. Generating the capital necessary to stop the power outages is certainly an important and major step. However, unless these new investments are coupled with effective changes to policies, the Pakistani government cannot realistically assure its people or the world that this will not happen again.

Understanding the Nature of the Debt Crisis and Measuring Progress in the Greek Bailout

The Greek economy has been a major source of debate and disagreement, especially amid the European Union member states which each have differing perspectives on the role the EU should play and the relative progress made by the bailout measures currently in place. Truly, this is a complex and distorted issue with many intertwining factors that need to be untangled in order to understand the situation more clearly. Through a deeper analysis of the causes behind the initial debt crisis, the exact nature of the support being provided by the IMF, and the effects these bailout measures have had thus far, it is a hoped that a more thorough understanding of the situation can be achieved moving forward.

Deceit, Corruption, and Excessive Spending: the Making of the Debt Crisis in Greece

In the simplest possible terms, the debt crisis was caused by the government of Greece borrowing significantly more money than it could realistically pay back based on its current GDP. Before the crisis broke in 2010, Greece had been—in appearances, at least—a thriving welfare state boosting a strong network of social programs and a happily employed, well paid populace that was able to retire at an early age (as early as 50 years old).

In reality, however, the government had become increasingly unable to cover the costs of these expensive social programs and had to turn to foreign loans in order to cover the deficit. This is where the water gets muddy. In 2001, Greece joined the EMU (the Economic and Monetary Union). In order to join the EMU, a nation must meet multiple strict requirements including geographical, political, and economic criteria. While Greece had no problem meeting the criteria in the first two categories, the country could not realistically meet the economic requirements of the EMU.

Rather than turn away and look toward other means of covering the nation’s growing costs, Kostas Simitis, prime minister at the time, decided to fudge the numbers and misrepresent the current levels of debt Greece had at the time in order to be accepted into the EMU. The deceit worked and Greece was admitted, meaning the nation was now able to more easily borrow money and borrow it under even better terms than it previously had been able to.

This rapidly growing debt was paralleled by another—perhaps even more serious—problem: the lack of income tax. Even through to today, the Greek government has estimated that it receives less than half of the revenue it should be receiving in taxes. This amounts to well over $20 billion in lost revenues per year for the Greek government.

From this it becomes clear that the debt crisis was an inevitable result of the dangerous combination of excessive government spending, rapidly increasing debt, and an inability to collect the full amount of taxes it was owed. In 2010, these three main issues had finally reached their boiling point when it was publically revealed that Greece’s debt accounted for a much larger percentage of the nation’s GDP than it had previously admitted (12.7% of GDP rather than the 6%-8% Greece had initially stated).

This realization led to widespread panic as the rest of the EU worried that Greece defaulting on its debt would lead to the complete downfall of the Euro and economic catastrophe throughout the region since the European Central Bank owned a lion’s share of Greek debt.

Third Time’s the Charm? Understanding the First, Second, and (potential) Third Bailout Packages

Clearly, urgent solutions needed to be found in order to prevent the looming disaster. The first bailout plan set in place back in 2010 was fraught with risk and disagreements. It would later be said by a participant in the bailout discussions that “the Greek bailout was not a program for Greece, but for the euro zone itself” because the plan left an overwhelming amount of the debt burden on Greek citizens rather than on the nation’s European creditors. Whether it was the need for urgency or the refusal at the time to share any of the burden, the first bailout package would soon reveal itself to be ineffective and in 2011 a second plan would need to be put in place.

With youth unemployment reaching 60% , a second bailout was desperately needed which redistributed the burden so that Greece’s creditors took on some of the responsibility as well. In order to create more growth potential and elasticity in the Greek market, the IMF has implemented a variety of restructuring efforts. To address youth unemployment specifically, the IMF has instituted various job creation and hiring program which are being financed by the EU. Although such employment programs are behind schedule, it is expected that over the course of 2014, these programs will be brought up to speed and meet their expected targets.

In a recent joint statement by the European Commission, European Central Bank, and the International Monetary Fund, Greece’s economic progress and downfalls were highlighted. The statement also contained a brief overview of the many programs being implemented including a minimum income pilot program due to be phased in at the national level by the end of 2015.

As early as 2012, IMF officials had begun to speculate on the necessity of a third bailout for Greece. In February of this year, a more clear cut plan for a third bailout was laid out. However, the plan will not be considered by policy makers until May or June. If it is agreed upon, Greece will be given another loan of between 13 to 15 billion Euros and an extension on the maturity dates of the 240 billion Euros worth of loans given to Greece in the previous two rescue packages. The IMF and EU alike have stressed the fact that such a package will only be given to Greece should the nation meet certain criteria for economic progress and agree to certain conditions.

The Effects of the Rescue Packages and the Economic Forecast for Greece

While the strict austerity measures that came with the first bailout were initially thought to be necessary, it was soon revealed to be a miscalculation on the part of the IMF which admitted to making mistakes in the structuring of the 2010 bailout. As debt peaked at 175% of GDP in the summer of 2013, the shortcomings of the bailout became all too clear and discussions of a third plan (discussed in greater detail above) are set to take place later this year.

Whether or not the IMF’s bailout strategy for Greece has been at all successful is still largely up for debate. The initial 2010 bailout got off to a sputtering start and witnessed significant failures and drawbacks. The second bailout has been a mixed bag with some signs of optimism but still slower than desired progress.

As far as the Greek economy as a whole is concerned, the levels of debt it is currently burdened by are still unsustainable (meaning they will not be able to be paid back on time at the interest rates they currently hold). Budget cuts have been painful but still not enough to cover the deficit and efforts to collect the full amount of taxes the government is owed are still largely unsuccessful. Perhaps the greatest success of the IMF bailouts is the consolidation of Greece’s debt making it much easier and simpler to pay back than it had previously been.

The people of Greece have expressed high levels of discontent regarding the bailout packages and, more specifically, the stringent austerity measures which came with them. The most recent form of this discontent came in the form of a violent protest against the new law which would keep shops open on Sundays in an effort to stimulate the private market.

Political tensions have risen as blame is shifted around and more and more EU member states resent the need to support Greece through this continued crisis. However, it would appear there is still some glimmer of hope on the horizon as the Greek economy does show some positive signs of being able to meet its target growth rates.

Although total unemployment still sits an uncomfortably high level of 28%, it has finally hit a plateau and is no longer rising. Consumer demand within Greece is slowly and cautiously beginning to increase and the nation as a whole seems poised to meet its target GDP growth rates for 2014. While it is far too early to make any concrete predictions about Greece’s ability to lower its debt to 110% of GDP by 2020; these early signs of economic recovery should not be wholly ignored or written off as insignificant.

A recent study by the OECD (Organization for Economic Cooperation and Development) has identified more than 500 bureaucratic regulations which may be hindering the Greek market, particularly in the areas of food processing, retail, tourism, and building materials. A push to lift these restrictive measures may help spur faster growth in the nation’s overall GDP. The estimated impact of doing so is as much as 5.2 billion euro in extra market activity.

While foreign investments are still slow to come for Greece, a recent return to the capital market (for the first time since the crisis broke out in 2010) saw a much larger than expected interest in Greek bonds. With the sale of 3 billion Euros in bonds sold and 20 billion Euros in waitlisted orders, demand was approximately eight times higher than initially expected. Such high demand speaks to a renewed confidence in the nation’s economy and an optimistic outlook for the future.

A third (and much smaller) bailout package that is designed with the mistakes of the past in mind and better regulations for moving into the future may be the final nudge the Greek economy needs to move out of decline and into a new era of growth and prosperity—or, at the very least, sustainability.

Nelson Mandela: The Champion of Freedom for South Africa and an Example to the World

Nelson “Rolihlahla” Mandela was born in Mvezo, South Africa on July 18th, 1918.  He was baptized in the Methodist Church and was the first member of his family to attend school.  While growing up, Nelson heard stories about his ancestor’s bravery during wars of resistance; he dreamed of contributing to the strugglefor freedom faced by his people.

Revolutionary Activity

At the start of his law studies at the University of Witwatersrand, Nelson was the only native African student.  He became friends with many European liberals, Jews, communists and Indian students.  In 1943, Nelson met Anton Lembede who was an African Nationalist vehemently against the idea of a racially united front against communism and imperialism.  In spite of Nelson being friends with many non-blacks and communists, he supported Lembede’s viewsinthe belief that black Africans should be completely independent in their struggle for political freedom.

Mandela joined the African National Congress, becoming a national executive in March of 1950.  At the time, the Defend Free Speech Convention was held in Johannesburg and it brought together African, Indian and communist activists who called for anti-apartheid general strikes. Nelson was against the idea because it was not backed by the African National Congress. However, a majority of black workers participated and, as a result, it increased police suppression and resulted in the introduction of the Suppression of Communism Act of 1950.

After the anti-apartheidstrike, Mandela’s mistrust of communism broke down and he began to find influence in the works of Marx, Engles, Lenin, and Stalin.  On July 30th, 1952, Mandela was arrested under the Suppression of Communism Act, with a trial taking place in Johannesburg.  He was found guilty of “statutory communism” and was sentenced to nine months of hard labor, but it was suspended. In December, Nelson was prohibited from attending meetings or speaking to more than one person at a time; the ban was to last for six months.

In 1955, the African National Congress sent out 50,000 volunteers into the townships and countryside of South Africa.  The aim was to collect the “freedom demands,” of the people; the system was designed to give all South Africans equal rights.  On June 25th, 1955, the charter was adopted and drafted into a final document by ANC leaders Alan Lipman and Lionel “Rusty” Bernstein. The document is notable because of its demands for a commitment to a non-racially divided South Africa.

On March 21st, 1960, South African police killed sixty-nine unarmed individuals who were protesting against the pass laws, which required that a citizen carry a passbook at all times. The actions of the police led to the country’s first state of emergency and a banning of the African National Congressas well asthe Pan Africanist Congress.  Nelson Mandela and thousands of others were detained during the state of emergency.

After being acquitted at his treason trial, Nelson Mandela went into hiding and began to plan a national strike for March 29th-31st, 1960.  However, due to massive police presence and mobilization efforts, Nelson called the strike off.

In January of 1961, Nelson Mandela adopted a pseudonym and secretly fled the country.  He travelled around Africa and to London in hopes of gathering support for an armed struggle against the South African government.  He received military training in Ethiopia and Morocco and returned to South Africa in July, 1962. Mandela was arrested at a police roadblock and charged with leaving the country illegally and inciting riots; for this he received a sentence of five years in prison.

On October 9th, 1963, Nelson Mandela and ten others were put on trial for sabotage in what became known as the Rivonia Trial.  While faced with the death penalty, Mandela gave his famous “Speech from the Dock.” Nelson and seven others were found guilty and sentenced to life imprisonment on June 11th, 1964.  Several times throughout his stay in prison, Mandela was offered conditional release.  However, he refused a conditional release each time because he would not renounce violence against the government, break ties with the Communist Party or stop insisting on majority rule.

Apartheid and the South African Government

Under Apartheid, residents of South Africa were segregated into categories of white, black, colored, Indian and Asian.  From 1948 through 1994, apartheid was the law of South Africa and blacks were deprived of their citizenship.  Under the laws of apartheid, Nelson Mandela spent almost 27-years in prison, but he never once gave up his fight for equality and freedom.

Racial segregation in South Africa started during Colonial times.  Apartheid is an African word meaning “apartness” the concept was enacted into law through the general election in 1948.  National Party leaders argued South Africa was not composed of a single nation, but was rather made up of the four main racial groups that inhabited the country.  The four races were split into thirteen groups or racial federations and each race was to live in certain assigned areas.

The government started a resettlement policy and forced people to move to their designated “group areas.”  Under Apartheid, interracial sex and marriage were against the law and other laws segregated buses, schools, taxis, hospitals, trains, restaurants, health care facilities and schools.  Nelson Mandela personally felt the injustice that Apartheid brought to the blacks of South Africa, but at no time did he seek revenge and it helped South Africa find peace.

The chief goal of the African National Congress would be taking over the government.  The main threat to peace and stability came from right-wing terrorists.  The best way to stop extremists would be to ensure the white population that they would belong in the “New South Africa” and be treated equally. Mandela knew it was very important to sendout the right message.  Appearing insinceremeant risking the stability of South Africa and losing any dreams of unity.

Mandela was unlike other leaders in that he did not seek peace by highlighting differences and seeking retribution.  Nelson’s experience in prison taught him that giving in to vengeful feelings would only bring temporary happiness, and it would wind up costing more in the long run. He was able to convince people to his way of thinking by treating each person as an individual; showing trust and respect.

Nelson Mandela appealed to the better nature within the people of South Africa. He did everything he could with clear purpose and for the greater good of the country he sought to unify.  In the past, Mandela once calculated violence would be the only way to gain liberation for the blacks of South Africa.  However, with time and with great reflection he came to realize there could be no democracy without reconciling the nation and no justice without forging peace for all.

Prison Release and Presidency

In December of 1988, Mandela was moved to the Victor Verster Prison in Paarl.  Nelson Mandela was imprisoned as a terrorist, convicted of treason and sabotage.  The only real crime he may have committed was being guilty of wanting to rid South Africa from the constrictions and atrocities of Apartheid; thus gaining equality for all its citizens.

On February 11th, 1990, Nelson Mandela was released from prison and within a matter of hours, was once again vowing to end apartheid.  South Africa set an election for April 27th, 1994 and the African National Congress began campaigning.  The ANC was victorious and its first act was to formally elect Nelson Mandela as South Africa’s first black chief executive.

Nelson Mandela published his autobiography entitled “Long Walk to Freedom,” in December 1994.Because he was president while the country transitioned from apartheid to a multicultural democracy, Mandela saw South Africa achieve the dream he had always held for the country.

Changes in South Africa after Apartheid

Mandela oversaw the formation of the Truth and Reconciliation Commission to investigate Apartheid crimes committed by the government and the African National Congress.  At the time Mandela became president of South Africa, the country had a huge disparity in wealth and services between the black and white communities.  With a population of 40 million people, about 23 million individuals did not have electricity or adequate sanitation services, 12 million did not have access to clean water, 2million children were not in school and one-third of the country could not read.

Under Mandela’s presidency, welfare spending increased.  The South African government gave grants to the community and free healthcare was introduced for children and pregnant women.  By the end of 1999, 3 million South Africans had telephone lines, 1.5 million children were enrolled into schools, 500 new health clinics were built, 2 million individuals had power and water access and around 750,000 new homes were constructed.

Nelson Mandela stepped down as the president of South Africa in December of 1997.  On March 29th, 1999, Mandela gave his farewell speech, after which time he retired formally from politics.  After his retirement in June of 1999, Mandela sought out a private and quite family life, dividing his time between Johannesburg and Qunu.  Finding a life of seclusion to be difficult, Mandela went back to a busy public life and met with world leaders and celebrities.

Mandela continued to work diligently with the Nelson Mandela Foundation, which focused on rural development, construction of schools and fighting HIV/AIDS.

How Nelson Mandela’s Approach to Peace Can Influence the Political Climate of Today

Right now the world needs inspiration and the global political climate is extremely unstable.  Governments are spying on citizens, passing laws which restrict privacy, violating human rights and doing nothing to improve the current state of affairs.  The sentiment for government mistrust is at an all-time high, especially in countries like the United States, Turkey, Syria, Egypt, Afghanistan, Iraq and Libya.  It is abundantly evident some things must change!

Strong leadership and inspiration is needed on a global scale, in order to help societies worldwide recover from the economic crisis, civil unrest and other situations currently being faced.  World leaders today can look to the example set by Nelson Mandela to address social, economic and environmental problems to find proactive and positive solutions to the issues the world faces.

Mandela approached the things he did from a peaceful and deliberate aspect; everything he did was based on furthering his goal of reaching a peaceful resolution for banishing Apartheid in South Africa.  He firmly believed in sustainable leadership, which met the needs of the present times and at no time would endanger or compromise the chances a future generation would have to meet their own needs.

Nelson Mandela believed in treating mankind as equals, regardless of skin color or social class.  He believed overcoming poverty was paramount to social justice.  To heal the current state of world affairs, looking to his leadership and legacy is just a start. Mandela once stated education is the most powerful weapon a person can use to change the world.  As a whole, the world leaders of today must step back and educate themselves, because only then can a peaceful resolution to all the problems be achieved.

Nelson Mandela was a role model for showing mortal enemies how to get past their hatred of one another and find a compassionate and peaceful way to rebuild a nation.  Through his use of truth, justice and becoming the embodiment of forgiveness, he changed not only the lives of his fellow South African’s, but his example can be used to change the world.

The Noble Peace Prize

In 1993, Nelson Mandela and South African President Frederik Willem de Klerk jointly won the Nobel Peace Prize. [i]The two men shared the award for their work to eliminate Apartheid and their humanitarian efforts.  Mandela has been viewed as Africa’s greatest symbol of freedom and is known as one of the most famous political prisoners in the world.

Death and Legacy                                                                                           

Nelson Mandela died on December 5th, 2013 at the age of 95, after suffering from a prolonged respiratory infection.  South Africa embraced a period of national mourning for ten days and numerous memorial services were held all across the country.  An official memorial for Mandela was held at the FNB Stadium in Johannesburg on December 10th, 2013.  A state funeral followed on December 15th, 2013 inQunu, where his body was interred.

Nelson Mandela was a champion for equality and freedom for the citizens of South Africa; he never lost hope for the goal of ending apartheid.  Mandela was an example of a leader South Africa needed and he became exalted throughout the world.  He gave the country of South Africa a reason to dream and fought to achieve a future everyone could believe in.  Mandela left behind a legacy of peace in South Africa, while he continues to inspire others all over the world to lead and live by his example.

Examining Immigration’s Impact on European Social Change

It is not uncommon to hear a European lament the decline of, or at the very least a noticeable shift in, his or her culture due to supposed saturation of immigrants. In the last two pieces, the statistical challenges facing Europe’s immigration situation and the political response have been explored. In this piece, let’s see if we can answer the question:

Are these perceived changes real or simply alarmism due to ‘closet racism’ as some might claim?

According to recent official government national census statistics, 61% of the population of London was born outside of the UK.  That includes 25% of the population who are not British nationals.

It’s worth noting that figure does not include what is generally accepted to be the very high number of illegal immigrants in the British capital – by some estimates up to another 500,000 people.

To put it another way, in the heart of the UK’s major city the chances are that about 1 in 4 or 3 of the people you stop to speak to at random will be ‘foreigners’.  If you change the terms to look at the chances of finding someone at random who was born into a British culture, they are now a distinct minority (c39%).

The survey also established that 20% of England’s population described themselves as not being “White British”.  Basically, the question’s wording meant that a negative answer couldn’t be interpreted in terms of the “White”, the “British” or both.

Some people objected vehemently to the linking of color (ethnic origin) to the question because it appeared to be a deliberate official attempt to dodge a very painful question for modern European societies – i.e. “do you consider yourself culturally to be British” (or German, Spanish, French etc.)?

That question, had it have been asked, might have explored another and potentially  explosively concerning dimension as to whether many new citizens of a given country actually really believe themselves now to be part of the society they are enfranchised within.

That’s important because the true magnitude of cultural change is reflected by how many people within a country consider themselves to be ‘of its culture’ rather than one of its citizens. Citizenship is an emotionally meaningless legal formality for many – it says nothing about the extent to which individuals really consider themselves to be part of the society they live within.

This is or should be critical as a factor in any analysis.

Some countries have relatively quickly naturalized significant numbers of their immigrant populations and the result is an apparent decline in ‘foreign’ population numbers. However, that may be illusory and does nothing to measure the cultural affiliation of very large numbers of a given ‘nationality’.

If that was measured, as mentioned above, the true cultural population changes reflected may be even more alarming to some than even the current figures.

Whether this huge demographic change is a ‘real’ problem or not is a matter for debate – or it should be.  Suggesting that the existing population of the British Isles shouldn’t even be interested or that they are racist if they are is a very dangerous stance to adopt.

In Germany, the ‘best guess’ figures for the total number of foreigners living in the country is around 10% – but this excludes those large numbers of primarily Turks who have relatively recently taken German citizenship. It also, as in the UK, doesn’t include the large numbers of illegal immigrants in the country.

In France, the figures are even harder to obtain due to legal bans on asking questions relating to ethnic or national origins in some situations but some official estimates place the number of foreigners at around 9-11% (link in French).

Once again, this excludes illegal immigrants where the French interior ministry estimates, crudely, the numbers in France to be between 200-400,000. However, some claim this figure to be impossible to believe when compared to other government estimates that claim the numbers of illegal immigrants entering each year to be between 80-100,000 (link in French).

In Spain, in 2011 approximately 5.7million people living there were foreign.  That is around 12% of the total population. The biggest percentages are Romanians (895,000) and Moroccans (almost 800,000). Once again, there are an unknown but large number of illegal (typically north and sub-Saharan African) immigrants also.

It’s possible to ask a very significant question about these and other related figures, where they exist and are trustworthy – so what?

Do people care?

The impact of mass migration on the culture of a local area can be very significant.

To take perhaps one of the least controversial and largely zero-racial connotation examples available, it is now possible to drive for literally hundreds of kilometers along parts of the Spanish Mediterranean Coast and find it difficult to identify a local Spanish culture.

Much of the indigenous culture has been virtually obliterated by 30 or 40 years of mass tourism development and large scale migration from some of the countries of Northern Europe.

Today the prevailing culture is largely ‘international’ with a very slight Spanish flavor.

If you are seeking genuine local culture, your natural inclination may be to drive a little inland.

Once you do though, you may be in for a surprise.  Many of the more workaday towns just a few kilometers inland now have very large non-Spanish and non-EU populations who have moved into the area, legally and illegally, in order to obtain a living off of the tourist traffic around the coast.

So, in some areas, the local Spanish culture has ceased to exist not only in the prime locations now covered by hotels and villas but also sometimes in unlikely spots further inland.

There are areas of French towns where Arabic is the prevailing language and Islamic social culture is widespread.  In Germany, significant areas of some cities are predominantly Turkish in culture and in the UK the same can be said for large parts of (or entire) towns where Bangladeshi or Pakistani cultures are pre-eminent.

This is something that you either think is inevitable and perhaps even desirable or a phenomenon that worries you. What nobody denies any longer, including those of the Left, is that the above is anything other than reality.

The obvious question arising from this is – who cares? Does it matter?

Whatever your own personal viewpoint is, it is becoming very clear that increasing numbers of Europeans do care very much about the culture that is changing around them through processes over which they have had no say whatsoever.

Politicians seem to have been extremely slow to pick up the rising levels of concern around this subject.  If and when they have, they have continually tried to discuss the issue in terms that are of little or no interest to the host populations concerned.

Seeing the concerns as evidence of inherent racism is perhaps the best example of how many political leaders have simply not ‘got it’ in terms of people’s worries.

Typically, few people in Europe are bothered about whether their neighbors are of non-European genetic origin or not. Virtually nobody cares.

What they do worry about are very different cultures becoming the prevailing norm in ‘their’ home territories. They also care when they see the local economy, education and social services, which are all struggling already, being placed under even more pressure by the arrival of large numbers of immigrants from other countries and cultures.

Many Europeans see this as an issue relating to threats to their culture, values, security and economic/social well-being. Whether they perceive those threats to be arising from an influx of large numbers of Britons, Poles, Africans, Romanians, Muslims or Native Americans, is a matter or irrelevance to the vast majority.

The growing concern in many European countries is predominantly a cultural and economic one that has little or no direct relationship to the minority population’s ethnic origin.  It is not a ‘racial’ issue and politicians have lost the patience of sections of their electorate by continually trying to describe it as such.

It is clearly against all logic, for example, to suggest Germans would be any happier with large numbers of British people arriving and changing the society around them than they are when they believe it to be happening through Turkish immigrants.

As a result of a combination of decades of the suppression of open and frank discussion of these changes and the exclusion of the host populations from any significant degree of participative dialogue about them, there is a growing feeling in some countries that it is only the far Right that is going to be able to look seriously at the issue and to come up with answers relating to immigration control, population movements and cultural integration.

What this means politically

The rise of the political far Right in Europe is a very real phenomenon and at the time of writing, they are expected to do well in many of the European, local and national elections due to take place over the next few years.

That rise in popularity is, of course, not exclusively attributable to the typically hard line they take on matters such as immigration, integration and economic-cultural protection for host populations.

Even so, it would be extremely naïve to assume that the issues directly related to immigration are not a significant factor in making the Right seem more attractive to many traditional Centrist voters across Europe.

The traditional response from politicians of the Left and Center to this phenomenon is to accuse the Right of trying to peddle hate and fear. Yet again, this is showing a significant lack of understanding of the electorate and paradoxically simply aids the Right.

In fact, some Centrist politicians across Europe are now waking up to the political and social consequences of ignoring the immigration issue in many countries and societies.

Even the German chancellor Angela Merkel, noted for her moderate views and consensus politics, has famously declared the idea of a multi-cultural Germany to be now effectively dead.

So, it may be reasonably anticipated that the European Union will need to be seen, by its electorate, to be taking positive steps to deal with trying to improve the control of immigration from outside of the EU as well as very possibly also the mass-population movements occurring within it for economic reasons.

There are, however, significant problems with this:

  • Whatever politicians like Merkel may say, the reality on the ground is that many European countries, including Germany, are now effectively and perhaps irredeemably de-facto multi-cultural states. It may be extremely traumatic to try and reverse that. In other words, her (and others) conversion to the cause of seeing multiculturalism as being at best unproven and at worst dangerous, may well have come far too late.
  • Under European law, the individual member states may have virtually no freedom to take positive steps to try and control mass intra-community population movements.
  • There appears to be no obvious humanitarian solution for significantly and quickly reducing the numbers of illegal immigrants entering the European Union through its southern and southeastern borders.

What this means socially

Nobody seriously questions that there are very significant inter-cultural tensions in many European countries and that they are, for the most part, building.

There is also no real degree of cross-EU cultural affiliation or identity.

In addition, particularly illegal immigrants but also to some extent immigrants from the poorer countries of the European Union, tend to move into ghettos and operate on the margins of the local society in a process that is well understood and has been documented extensively over long periods and in different continents.

The risks here for the development of criminal cultures, a permanent underclass and potentially political extremism are clear.

For example, at the end of 2012 approximately 33% (22,893) of all prisoners held in Spanish prisons were foreign. Of those, around 20% were EU citizens but of that 20%, 46% were Romanian – roughly 5 times more than the nearest other EU state.

This probably indicates the large typically poorer Romanian population in Spain that may have moved into underclass status.

Of the other 80% of non-EU foreign prisoners held in Spain, 26% were from Morocco alone. This is another country which is a source of large-scale legal and illegal immigration into Spain and which provides yet another underclass in many Spanish towns.

Given the state of the Spanish economy over many recent years, it shouldn’t be surprising if economic migrant, particularly illegal migrant, communities have become marginalized and have in some cases turned to crime to survive.

Whilst it might be hoped that, given a sufficiently lengthy period of time, these communities will eventually merge and integrate, that is by no means certain and the hope represents a social gamble of epic proportions.

Looking around the world, there are significant cultural minorities in many countries, who have lived alongside a host community sometimes for centuries but who have failed to integrate.

Whether this is their fault or that of the host community doesn’t matter. What is clear is that tensions between these communities can suddenly explode and sometimes for very trivial reasons.

There have arguably already been outbreaks of inter-community violence in several European countries which, in spite of the authorities’ attempts to describe them otherwise, clearly have at their core not just poverty and social exclusion but also to some extent inter-community biases.

This is an area that may prove to be a festering sore in many parts of the European Union and one that is unlikely to go away simply because mainstream politicians don’t like facing the magnitude of the potential problem.


People of all ethnic, national and cultural backgrounds are inherently reasonable and intelligent.

It should not be beyond the bounds of reason for everyone to recognize that mass migrations have and are continuing to take place across the continent of Europe.  It should equally be possible for people to accept that as well as bringing benefits and opportunities, these migrations also bring with them major challenges and major dangers.

Whilst the metrics are unclear and the matter spoken about in hushed tones, parties of the extremes are free to operate as they wish. This applies equally to both the host and migrant populations.

The European Union will need to undertake an open study and wide-ranging public debate about these issues and to identify a strategy going forward for managing them.

Saying nothing and hoping that things will somehow ‘sort themselves out’ in due course might prove to be very risky in the medium to longer term. Nobody is suggesting that large-scale civil unrest is imminent but it’s not inconceivable if a ‘do nothing’ approach continues to be adopted.

Some people suggest that any such strategy must eventually involve unpalatable options such as higher walls around the borders, mass repatriations and restrictions on the rights of movement for EU citizens.

This is nonsense and sometimes used as yet another scare tactic used to suppress debate.  There may be many options to better manage migrations and integration – they do not have to be draconian or against basic human rights.

However, until major studies are funded and matters openly discussed, things may continue to deteriorate.

The War of Political Philosophy and Morality Surrounding the European Immigration Issue

Until comparatively recently, anyone in politics or the media who attempted to engage in a debate on immigration was immediately castigated and written off as a racist.

Of course, a minority of the individuals or parties concerned was not only genuinely racist but seemingly unashamedly so – yet they still attracted significant public support.  That was a phenomenon that should have drawn major mainstream political attention to the subject but which initially didn’t.

The left and center-left

It is probably fair to say that since the end of the Second World War, the political philosophy of the Left has been strong in many European countries – notably in the media.

Rooted very much in the ideas of class and economic social struggle, it is perhaps understandable that these political philosophies have a certain vested interest in defining themselves as champions of an economically disenfranchised social underclass.

The Left has also historically seen itself as the custodian of humanitarianism and the basic rights of man.  As such, any attempt to categorize a group of people as being somehow “not us” would be a highly controversial to them both in terms of ideology, political expediency and self-interest – except, of course, for those in society who are affluent and who can therefore can be legitimately differentiated for analysis.

One such example is France’s banning of the full-faced ‘Islamic veil’ for women in education and the full body-covering Burqa in public. Roundly condemned by the Left as being racist or anti-Islam, in practice, the laws actually reflect a fundamental and non-negotiable foundation stone of French education – that of secularism.

The law relating to full body coverings in public also includes people wearing balaclavas or face masks in public places. It is a broad-based security measure not specifically targeted at Muslim women and one that commands mass public support.

On the subject of immigration, the Left has traditionally deployed its full range of powerfully emotive influences.  These can be seen in the above-mentioned tendency to describe any attempt to analyze the issue objectively as “fascism”.

Equally, they have relatively regularly employed the use of highly sensitive terms to describe attempts to understand population movement in ways such as “seeking a final solution to the immigrant problem” or “trying to build Festung Europa” (Fortress Europe).

Some such sources argue for unrestricted immigration and accuse anyone who worries about whether this is logical as a solution to the world’s problems, as being “Fuhrers of Europe’s Fascism”. The same dismissive logic is applied to the concerns of the European electorate along the lines of “Establishment politicians compete with each other to mimic the fascists’ xenophobia as they make the case for a ‘Fortress Europe’ to shore up their votes.

The attempts of many on the Left to link efforts to understand the scale and scope of the issue to Nazi phraseology and ideology may have at times, as in the above case, been clumsy and distasteful but they were historically largely effective in stifling debate on the subject.

The Right and Center-Right

Historically, the Right has had a very hard time of it in this battle.

For much of the latter half of the twentieth century, the Nazi’s racist policies were a huge legacy millstone around the necks of any politician attempting to express doubts about the long-term effects of immigration on Europe.

To make matters worse, their intellectual and moral position was consistently undermined by a failure to clearly differentiate between the challenges of immigration as perceived by the public and some of their own occasionally highly erratic and idiosyncratic views on the subject.

Frequently confusing basic concepts such as cultural differences with those arising from ethnicity or race and then further tangling things by conflating those with issues relating to social provisions, the Right’s position was consistently in disarray and discreditable.

What was also lacking was any attempt to link concerns over immigration to any form of moral basis and framework. Too often their discussion just seemed nasty, resentful and hastily ill-considered.

Almost inevitably as a result, for some decades only relatively eccentric individuals of the Right or sometimes those who were clearly either cranks, overt racists or fanatics, made any sort of public comment on immigration whatsoever.

Whilst many politicians of the mainstream Center and Right may have had such worries, to raise them in public almost invariably meant operating outside of a philosophical framework and an immediate pillorying by the very large sections of the European media who have Centrist or Left sympathies.

However, over more recent times, things have changed.

Even previously hard line parties of the far Right, such as the Front National in France under Marine Le Pen or the Party for Freedom in the Netherlands under Geert Wilders, are showing a growth in support. At least in part, this is attributable to a softening of earlier race-centric debate orientation and a broadening out of the analysis into cultural values.

Numbers of other politicians of the Center and Right have started to grasp the nettle of the immigration issue and to discuss it in something approximating to a thought-through and cohesive fashion. For the first time, they are making at least some headway in contesting the moral high ground with the Left on the subject.

An example is the current questioning of the often-quoted Leftist position that allowing mass economic immigration from outside the EU would be humanitarian and beneficial for the migrants concerned.

The Right is now pointing out that this is by no means clear if the people are coming to countries where there is insufficient work for them, limited social benefits and as a result, they end up as a lowly-paid underclass.

Some sections of the Right now argue that economic development programs outside of the EU’s borders, aimed at providing employment and wealth, might be far more beneficial to everyone than just ‘opening the gates’.

Irrespective of what Center or Left-leaning political and media circles may wish to be otherwise, European public concerns over immigration are growing even if they are not necessarily as prominent in people’s worry lists as things such as the economy.

It is extremely dangerous for democracy when significant numbers of people believe that their views and concerns are not being expressed in the governing levels of society, in other words, they have no outlet. The new Right has been capitalizing on that frustration and in a relatively structured fashion, as opposed to their previously traditional scare-shots and ranting on the subject.

That is why things are changing and why immigration is now a hot issue – and in an open public debate context.

Why immigration is a growing political issue in the EU

As politicians and the media became increasingly obsessed with their own debates surrounding the political principles and statistics of immigration, they initially seemingly failed to notice the growing groundswell of concern amongst the European electorate on the subject.

It is important to try and understand what some of these concerns relate to because the reality is typically significantly different to that perceived by many politicians or sections of the media.

The fact of the matter is that whatever the real numbers might be, across widespread areas of some European countries the background culture is significantly changing as a result of immigration.

One of the weaknesses of trying to discuss the problem in terms of national statistics is that it typically fails to take into account the fact that economic migrants, both legal and illegal, tend to head to the top three or four wealth-producing areas of their target countries.

Therefore while the total numbers of immigrants nationally may be relatively small, in some areas it is extremely significant in terms of its impact on the local culture and its values. This is a well-known phenomenon in many countries of the globe.

This in itself might be slightly problematic in terms of the perceptions of the host population but it becomes even more so when some of the cultural values of certain immigrant groups are perceived, rightly or wrongly, to be fundamentally in conflict with those of the society they are moving into it.

This leads to all those painful and ultimately very dangerous debates (though actually unavoidable) about “whose laws and cultural values prevail here”?

Whilst many well-intentioned people may believe that these differences can be resolved through compromise and negotiation, doubtlessly correctly in many cases, in other instances the differences may be so large as to be potentially irreconcilable. 

Just a few examples of such problem tendencies for the future include:

These are all extremely worrying for the future of inter-community relations..

Then there are rather more practical concerns relating to how large-scale immigration affects both positively and negatively the wealth of the surrounding society.

At one time rather simplistically viewed as being entirely beneficial, today there is a harder-nosed questioning as to just how many immigrants a society can accept before it starts to suffer economic and social damage as a result.

In countries such as Britain and Germany, even what might be termed mainstream politicians of the left and government spokespeople are officially acknowledging that large-scale immigration can mean fewer jobs for local people and potentially far more pressure on local social, health and housing services – even if only in the short to medium term.

While it’s possible to have a debate as to whether the changes arising from large-scale immigration are a good or bad thing, what is clear is that both national and European government has never sought and therefore never received a democratic mandate from its populations to implement these very significant shifts in the cultural makeup of their societies.

Whether the governing circles of the European Union think these things should be an issue or not is largely irrelevant.  Significant numbers of European voters in many countries believe that they are because they perceive them to be so.

This is influencing the evolution of the political spectrum across much of the European Union, with a notable increase towards a Right-leaning agenda on many subjects – including immigration and intra-EU migrations.

But how accurate are these sentiments? Is the political response—both by politicians and the electorate—warranted? Or is it all truly xenophobia rearing its head in Europe once again? Check out next week’s piece for an exploration into these questions.

Immigration in Europe: A Tale of Misinformation and Statistical Uncertainty

Few subjects are more emotive in the European Union than that of immigration.

For many decades it was arguably a non-subject, the discussion of which was unofficially ‘punishable’ by political and social ostracism.

Yet over recent years the reality of events on the ground are forcing many individual countries and the EU as a whole to look again at the issue and to start discussing it in a more overt fashion. 

Immigration and 21st century Europe


Groups of people have always moved around in Europe.

Many towns in Europe have had their ‘Jewish Quarters”, “Chinatowns”, “Polish Streets”, “French Boroughs” and so on.

For the most part, these co-habitations have been largely amicable and peaceful – often resulting in mutual benefits for both the immigrant and host populations.

However, in the scheme of a country’s overall population and culture, such immigrant communities have usually been perceived to be small and not threatening.

Once they become ‘larger scale’ though, stresses can result.

In a taboo subject area, until recently subject to virtual censorship of debate, one thing that most parties would agree on is that the late 20th and early 21st centuries in Europe have seen large-scale population movements on a scale that is arguably unprecedented – at least since relatively ancient times.

These migrations break down broadly into two categories:

  • Movements between individual European member states.
  • Migrations into Europe from outside the European Union.

Intra-EU migrations

In the case of the former, various European agreements over the years have led to the inalienable right for citizens from one member state to move to and work in, another member state without restrictions or generally, entry formalities.

In practice, there are certain exceptions whereby new entrant states can have the migration rights of their citizens deferred for an initial period and in some countries the citizens of other EU states do not necessarily have an automatic right to the same levels of social benefits as the citizens of the host country itself.

Nevertheless, broadly speaking, European Union citizens can now go where they want and do what they wish across the vast EU domain.  It’s an understandable source of pride for some of the EU’s architects.

The figures involved here should not be underestimated – this is not merely a case of a few hundred or some thousands of people deciding to try their luck in another country.

To cite one of the more notable recent examples, earlier in this century a number of new member eastern European countries gained the right for their workers to go to the United Kingdom for work.  UK government estimates at the time projected that the numbers that would be likely to move to the UK would be somewhere in the low tens of thousands.

Subsequently over a million people actually applied for worker registration entry and it is accepted that most of those eventually moved into the UK over a short period of time.

Whilst some sources suggest that these figures are meaningless because they fail to take into account those that subsequently returned home, it seems a jump too far to extend that undoubtedly correct comment to a conclusion that mass population movements within the European Union are not a potentially huge challenge for the most popular destination countries concerned.

Even if approximately 50% of the predominantly Polish migrants stayed only a short period of time and subsequently went home, this means that the UK’s population went up by approximately 600,000 within a very short space of time – that primarily attributable to just one single source country.

These numbers aren’t just restricted to the UK.

Leaked German government reports suggest that almost half a million Romanians and Bulgarians had migrated to Germany in the three years up to mid-2013.

Unfortunately, official European statistics on inter-community migrations are exceptionally difficult to interpret.  They appear to indicate that approximately 1.3 million EU citizens moved from one member country to another in 2011 but many would argue that figure is self-evidently far too low.

It can be very difficult to obtain even remotely precise figures, as official statements tend to talk about three things in parallel:

  • Intra-EU migrations
  • Migration into the EU from outside
  • Net migration – this is the figure given when you subtract the numbers that have emigrated from those that have arrived and the difference is the net amount by which a country’s population has increased or decreased.

The vast confusion and double-speak that arises when many politicians and civil servants are quoting “facts” on immigration can be alarming to many open-minded people, as there is sometimes a strong sense that nobody knows the reality and that figures are being manipulated and ‘sanitized’.

That feeling in turn leads to the area being a fertile recruiting ground for European parties of the far-Right.

Of course, the fact is that in the modern EU there is no definite way of counting intra-EU migration. Due to the integrated nature of the EU labor markets and Schengen, there is no longer any need for the nationals of one country to go through extensive registration formalities as part of needing to get permission to work, so the true numbers are unknown.

To give an example of that specific phenomenon, the French embassy in London officially states that it believes around 300,000 French people currently live and work in the UK.

However, it admits that very significant numbers of French citizens may not bother telling the authorities they’ve arrived as they have no legal need to do so.  Some authorities suggest that the above figure may be far too low – by perhaps 50%.

Of course, the same is true for British people living and working in France.  The numbers are simply unknown and in the modern European Union, unknowable.

What is clear is that very large numbers of people are on the move within the EU and given the very diverse nature of the economies within the different states, the majority of them will be heading towards those three or four countries where they believe their economic position is likely to be improved.

Legal migration into the European Union from outside

The same statistics source as quoted above indicates that in 2011 approximately 1.7 million people moved to EU countries from outside.

It’s important to note that this figure represents only legal migration.

Illegal immigration figures (entry into the EU)

By definition these figures cannot be known.

Some sources suggest that in the third quarter 2013 the numbers illegally entering the EU amounted to 42,600 persons. Assuming an even distribution, that would give a total for the year of approximately 168,000.

That may not sound many against a background population of 500+ million but there are issues here including:

  • The figures above are typically based upon those illegal migrants who are rescued or ‘caught’. The numbers successfully entering undetected may be far higher and as a result, would move that figure up very considerably.
  • The figures are inconsistent.  In just the first 3 months of 2014 the Italian Navy picked up a total of over 9,000 people off of the coast of the tiny island of Lampedusa alone.  This is 10 times higher than the same period in 2013 and is just one tiny spot of the EU’s long sea and land border. It gives, in this one miniscule location, an estimated annual figure of around 36,000.  It is difficult to reconcile that with the quoted figure of around 168,000 for the entire continent.
  • Official Italian government sources estimate that perhaps 300,000-600,000 illegal immigrants will attempt to cross the Mediterranean from North Africa in summer 2014. Once again, it is difficult to relate this figure to official EU-wide estimates – clearly they cannot both be correct.
  • Much illegal immigration involves applications, if caught, for political or religious asylum.  The European Union quite rightly demands that applications for sanctuary from persecution are considered seriously and humanely. Yet in one of the above Italian Navy incidents, only 50 people out of 1100 on the boat were female. This ratio is not unusual. This leads to the inescapable conclusion that either the males concerned are leaving their mothers, sisters and wives behind to deal with the persecution unaided or perhaps, as is far more likely, that their motivation is clearly economic migration. This means that however much political stability might be improved in North or Sub-Saharan Africa, the flows will continue unabated and may be almost limitless unless large-scale economic growth is achieved in the source countries concerned.
  • Relatively few, as a percentage, of illegal immigrants ‘caught’ are eventually expelled.
  • Studies in 2009 indicated that in the UK alone, there were at the time somewhere between 600,000-1.1 million illegal immigrants. Yet again, a figure that is difficult to understand in the context of other lower EU-wide figures.

The war of statistics

The actual numbers involved in immigration to and migration across the EU have for many decades been the subject of political warfare. Both sides have made extensive use of statistics to both project their point of view and attempt to demolish contrary positions.

Historically, parties of what might be termed ‘the Left’ and Center have adopted the position that immigration is not a serious issue.  Largely dismissing any concerns to the contrary as racist or fascist, they have nevertheless occasionally found themselves on the defensive and have been forced to resort to statistics to try to support their position.

Similarly, parties Right have had their own barrage of facts and figures to support their assertions, which are generally along lines of immigration being out of control and a threat to certain of the cultural values as well as the economic livelihood of the European Union.

As has been contended above, with the sole exception of legal immigration into the EU from outside, which is at least theoretically tracked and recorded, there are absolutely no firm figures governing much of the population movement into the European Union and internally within it.

For this reason, many of the statistical measures offered by the various parties are held in considerable disrepute by many ordinary European voters.

Perhaps the best example of this is the move in some areas, notably the United Kingdom, to use the measure of ‘net migration’ as a yardstick for how successful the governments are being in controlling population movements.

As mentioned above, this is an ostensibly sensible step designed to show that although large numbers of people are entering a country, large numbers are also leaving.  The argument goes that this simple subtraction gives you a net inward migration figure.

Yet some right-wing parties in the UK claim this is either missing the point or a deliberate distraction. That’s because concerned UK voters don’t care much about numbers in absolute terms, they do care though about changing cultural profiles.

Unless you have a method of relating those leaving a country to those who have arrived in the recent past, you are also reflecting in the net migration measure the large numbers of what might crudely be called the indigenous British population who are emigrating to be replaced by new immigrant arrivals.

The argument goes that if 400,000 people arrive from a combination of other EU countries, Africa and the Indian sub-continent but 200,000 predominantly British people leave, arguing that the net immigration to the UK is only 200,000 is something that makes no sense to those sections of the electorate worried about the effects of immigration on the background culture of their country.

Net migration figures also do nothing to reflect the number of illegal immigrants or the very large numbers of intra-EU migrants who enter perfectly legally but who are effectively unrecorded.

It is impossible to even remotely accurately measure the population flows around the continent and into it. In fact, the constitution of some member states actually forbids them taking accurate census information which reflects the cultural or ethnic origin of people living within their boundaries.

So the statistical wars between left and right or national versus central EU government are effectively a complete irrelevance, as the facts simply cannot be ascertained.

Politicians, psychologists and philosophers like to debate the relative weightings of fact versus perception. However, in the case of immigration, the absence of hard fact means that perception is frequently all that exists.

It is the perception war that therefore counts and that’s the domain where troubles may be brewing.

Nevertheless, statistics don’t mean much when political will gains momentum. Check out the next installment where I examine the political response to Europe’s immigration situation in more detail.

Robot Overlords? Unlikely Indeed

Let’s set aside our concerns of Skynet and the Matrix. Let’s not trouble ourselves with the notion of artificial sentience and the ethical considerations of robots attaining enlightenment. Let’s forget for the time being worries of self-replicating nanobot viruses, or the socioeconomic implications of the mass automation of industry. It’s not that these couldn’t be realistic possibilities—perhaps some more than others—and we’ll get to all that later, it’s that they completely miss the point of a meaningful dialogue about the impending so-called robot age. Among some circles, this era, of which we currently stand at the cusp of, engenders a fair amount of anxiety.

And yet, in other circles, there is so much enthusiasm. It’s easy to be excited and optimistic about technological advancement. It has become a defining feature of our social, economic, political and personal lives. And to some, it’s literally become a religion. Some techno-philosophers are now suggesting that a great computer programmer in the sky created the universe. A cursory glance at the influential works of futurists such as Ray Kurzweil’s The Singularity is Near suggest—rather convincingly I might add—that the current rate of advancement will ultimately lead to a fusion of biology and technology, creating a new super-organism that will “spread its intelligence” throughout the entire universe. A bit messianic I’d say.

Robotics and AI are indeed exciting and important fields. What has already been accomplished is staggering and what is to inevitably come is no doubt even more so. But I intend to argue that the futurists and technologists are missing some fairly obvious aspects of what it means to be human. And humanity’s obsolescence is far from guaranteed.

How your life works

You are a person, an individual. You have a distinct identity, something that allows you and others around you to distinguish yourself. You have a personality and a history. At even a relatively young age, your life is a rich tapestry of experiences. You have accomplishments under your belt of which you are very proud. You have shameful failures. There are things you want and you work toward getting them. All of this shapes you and the decisions you make.

Sometimes your desires are vague, foggy, abstract notions on the horizon of your consciousness. Yet they still drive you.

You think in words, pictures and emotions. You act upon and react to the world around you. You don’t always know what will happen or the consequences of your actions, and though data in the computational sense rarely, if ever, enters your mind, you silently and skillfully calculate probabilities on a dime (and hundreds of times a day if not more) that would put the world’s supercomputers to shame. You make choices to act, or communicate, or inquire when presented with a problem. These choices are often not calculated or conscious, but rather a reaction to previous experiences, or based on a sort of hope, or perhaps something you learned by observing others.

When you are faced with a challenge and you choose to rise to it, you become creative. You create a solution or reaction out of thin air. Your solution could very well be 100% unique or a tried and true method you learned, though you tailored it to your unique situation.

When you grow old, the life behind you will have been a completely unique fingerprint on humanity because you were creative. You created your own life.

How our life works

We are social creatures. It’s been the secret of our success. Humanity naturally separates itself into groups. These groups rally around shared values. They can be large like nation states or as small as a husband and wife. Most are in between—businesses, political action groups, academic societies, professional associations, etc.

These values in turn affect the actions of these groups, creating a feedback loop of sorts. Nations are theocratic or secular, authoritarian or democratic—or any number of options. Married people chase money and security, or they work enough to finance their many travels—or any number of options. Associations push to affect public policy, or to raise awareness of a disease—or any number of options. It is these groups that enable large projects or ambitious endeavors. This combined creativity has built pyramids, bridges, governments, space exploration programs, corporations and more.

These groups affect individual identities, choices, thoughts and actions. We define ourselves based on group associations. Groups push society, and thus humanity, in one way or another.

It all follows from two important distinctions between computers and man: One, the ability to be creative. And two, the ability to value things.

An impressive case study

It has always been the Japanese, and Japanese industry, and the Japanese auto industry in particular, who have been on the forefront of robotics, automation and artificial intelligence.

The apparent success of the Japanese replacing armies of workers with robots has sparked the imaginations, anxieties and excitement of those who fear—or hail—a roboticized world. But one of Japan’s biggest carmakers, Toyota, is turning back the clock on automation.

Why? According to Toyota project leader Mitsuru Kawai, who has been in Toyota’s management and human resources departments for 50 years, you can’t beat a well-trained, focused human being. He says:

“We cannot simply depend on machines that only repeat the same task over and over again. To be master of the machine, you have to have the knowledge and the skills to teach the machine.”

Some Japanese Toyota factories are now replacing their automated machine workers with humans for two reasons: to enhance quality and to allow for a decision-making entity that truly understands how and why the car is made to be the one that makes the car. And guess what? The results are in, and they are: reduced waste, shorter production lines and lower costs.

But that’s impossible! How could humans, in all of their fallibility, imprecision and physical limitations possible outperform a robot? Quite simply, humans approach every problem (on the auto assembly line or otherwise) creatively. If they are committed—as often workers are—they care very much about what they’re doing, aka value it.

The human spark

Robotics, automation and some degree of AI are, and will continue to be, incredibly helpful. But when held up to their human counterparts, these things are severely limited in some key areas.

The human capacity for creativity and true understanding cannot be quantified, emulated, reproduced or replaced.

Yes, our neural pathways send messages more slowly than integrated circuits. Our hands are not as precise as the fine-tuned, custom-made “arms” and “fingers” of automated robots. We cannot install software and suddenly possess incredible amounts of new information. We learn slowly, by practice and repetition and reflection.

But we create our own purposes; they are not given to us. We unconsciously understand the subtleties of our societies, our languages, our fields of expertise, ourselves and the problems and situations we find ourselves immersed in.

A robot will never be able to be an entrepreneur, or an artist of any substance. It won’t be able to report on the horrors of war or describe the way light dances in the forest in springtime (as cheesy as that sounds). A robot will not be able to find solutions to social and political problems because it will never understand—beyond it’s grasping of data sets—why or how those problems exist. A robot will never be able to solve a problem that no one has ever solved before, and every problem you’ve ever had falls into that category.

The Skynet/Matrix problem

For computers to affect any change on human society, a computer must understand, hold and aspire to values.

What could those values possibly be? Speed? Precision? Access to massive data sets?

Much of human endeavor has sprung from the desire for wealth and power, both values in their own right. But what would a computer want with these things? What would a computer do with creature comforts or access to sex? What would a computer gain from being creative, or exploring spirituality, or making money, or helping others? How can a computer “gain” anything at all?

In these terms, fears of a robot invasion seem ridiculous.

However, there are real social concerns to massive automation of industry and what we know as ordinary work. For wealth to be generated, people need to be productive and sell the fruits of their productivity. If automation takes, as some economists are predicting, will result in massive layoffs in the future, dramatic social problems could arise.

In times and regions of high unemployment, like night follows day, crime increases, drug use and prostitution increases, malnutrition and violence increases and literacy and education as a priority decreases.

There are solutions, no doubt, but it is unlikely that these involve a golden age of leisure time where humans, supported by their machine counterparts, are able to pursue uniquely human pursuits. Will everyone become a painter? Or pianist? It’s doubtful.

However, Toyota’s example is encouraging. This major, globe-spanning corporation has discovered the abstract, ethereal nature of the human spirit to be profitable. We can only hope others follow suit.

Taiwan – Diplomatic Isolation in Disputed Waters

Taiwan, its government and its relationship with China are complicated. Taiwan calls itself ROC or Republic of China, whereas the mainland is the PRC – the People’s Republic of China. Taiwan asserts control over its own and other islands lying off the eastern coast of the mainland. The autonomous Republic was set up in 1949 when the losing side in the Chinese Civil War, led by Chiang Kai-shek and his anti-Communists, fled to Taiwan. The Taiwanese government liberalised the economy in the 1980s and the democratization process continued through the 1990s. Today the Taiwanese are fiercely protective of their democracy that they see as hard-won back in the 1980s.

Now, not wishing to get bogged down in the legal wrangles over the wording of the two governments’ Constitutions I will limit myself to a brief description.

The two administrations have differing views. The one-China policy states that countries seeking diplomatic relations with the PRC must break all relations with Taiwan, and vice versa. This is not the same as the one China principle, under which both governments recognise that there is only one sovereign state encompassing the mainland and the outlying islands, including Taiwan, but disagree about which of them is the legitimate government of that state.

And because of this state of political affairs, Taiwan’s relations with other nations are anomalous. For example, since 1979 when the US established formal diplomatic relations with Beijing, it has not recognised Taiwan as an independent state, but as part of China, yet the two countries have strong unofficial ties. Similarly the UK has strong cultural, trade and investment ties with Taiwan, being its biggest trade partner in Europe, and some 300 UK businesses operate on the island. And the European Union recognises Beijing and the ‘one China‘ policy, but also has unofficial ties with Taiwan.

Yet against the backdrop of these opposing diplomatic views China is Taiwan’s biggest export market and trade partner, so how does this work in practice? Since both China and Taiwan joined the WTO in the early 2000s trade agreements have proliferated. The latest, signed in June last year, purports to open up the mainland to Taiwanese businesses, yet it has sparked protests by thousands of students and others opposed to the ratification of the deal. Protesters are unwilling to meet with President Ma although he has offered talks, as they say he has informed the media first, and has offered no structured program for such talks.

The main complaints of the protesters are over the preferential trade agreement, the China-Taiwan Economic Cooperation Framework Agreement, signed in 2010, of which the latest round was signed in 2013, relating to banking, e-commerce and other service industries. They are worried that the agreement will be rushed through parliament without being properly examined, so there are transparency issues. Another source of contention is that the agreement will increase Taiwan’s dependency on China and is in fact a cover for unification with the mainland.

The opposition Democratic Progressive Party (DPP) has sided with the students and Joseph Wu, former DPP deputy secretary general of the Presidential office, who outlined some concerns to Bloomberg: the printing industry is restricted to foreign owners in China, where they need a permit from the government to operate. Historically such a permit has never been granted. Chinese companies, however, need no permit to open up shop in Taiwan. Financial institutions are also seen to be at risk, as a 10% investment stake in Taiwanese financial institutions by Chinese companies has been agreed, but opposition forces worry this could distort or destroy Taiwan’s financial order. The government counters that it will be easier for Taiwanese banks to establish branch offices on the mainland after one year instead of the current two as representative offices.

Yet according to Standard Chartered’s Renminbi Globalisation Index (RGI), the island is already a substantial hub for Renminbi deposits, which today account for 31% of all foreign currency deposits, a jump from 6% in February 2013. This indicates the significant local interest in the mainland currency and the extent of trade ties with China. The Central Bank governor has said the deal is needed to allow Taiwanese funds to invest directly in Chinese onshore markets. Currently London asset managers are the only ones in the West allowed to invest directly in Chinese stocks.

Taiwan is one of the four ‘Asian Tiger’ economies that flourished in the Nineties and ranks highly on the Global Competitiveness Index (GCI), at number 12, just two below the United Kingdom. Like other developed economies it has an ageing population with the post-war baby boomer generation reaching 65 in the next decade or so, and a declining birth rate.

It lies off the coast of mainland China, which recently (2010) took over from the US as its biggest trading partner. However, Taiwanese youth obviously value their freedoms, and their nation has more in common with Western economies than with China. This is why there has not been any opposition to the trade agreements the Taiwanese government has signed with other nations, including New Zealand, Japan, Singapore and Indonesia. They do not see their economy benefitting from selling more computers and televisions to China. With Taiwan’s dominance in those sectors of the economy threatened by South Korean competitors also gaining access to the Chinese market, Taiwan is looking to compete in the innovation arena and seek direct access to more lucrative markets.

The Taiwanese students may well have been inspired by events in Ukraine, not wishing their own larger neighbor to bully its way across the strait. Hong Kong is also watched closely by the Taiwanese. Since it transferred back to China from Britain in 1997 there has been disagreement about how the Basic Law of Hong Kong is applied, adopted before the handover of the former colony. And Hong Kong residents feel that the media has practised more self-censorship, so as not to upset the authorities in Beijing.

On the other side of the strait, China seems to have recognised its own changing status to a consumer society from that of predominantly manufacturing and exports. Its burgeoning middle class has greater purchasing power than previous generations and it wants to attract the educated Taiwanese workforce to help facilitate that transition.  The mainland has lowered tariffs on 760 types of imported Taiwanese goods by 60%. It looks very much as though China is seeking to narrow its burgeoning trade surplus. It also is pursuing a policy of internationalizing the Yuan, to prevent volatility and sudden outflows in the currency market.

Another issue, though not, as far as we know, on the students’ agenda, is the heightened rhetorical battle between China and Japan in the territorial dispute over the East and South China Seas, site of substantial underdeveloped oil and gas reserves. The dispute is complex, dating back to the Second World War. Suffice to say, both sides claim sovereignty over the area’s numerous uninhabited islands, as does Taiwan over one or two. The two sides have recently held bilateral talks but Taiwan did not participate, even though it has joint ventures with Chinese exploration companies in the region. Foreign commercial operators in the region include the Canadians Husky Oil, Primeline and the ubiquitous Royal Dutch Shell.

China’s sudden announcement of its new Air Defence Identification Zone (ADIZ) over the disputed waters last year prompted the US to send two B-52 bombers into the region. The air space is already administered by Japan and South Korea, with dozens of commercial flights crossing every day.

Perhaps this is why the US has a healthy, on-going program of defence and security sales to Taiwan, as well as programs to train military personnel, with the stated aim of helping to prevent nuclear proliferation and threats to national and international security. This antagonizes China, and it has responded by closing down all military exchanges with the US and imposed sanctions on the companies involved. The US view is that it increases stability between the island nation and the mainland. President Obama will be treading a fine line when he visits the area later this month, seeking to reassert US influence in the region, without antagonising either the new Chinese Premier, Xi Jinping, who has rapidly established his singular, personal authority and shown expansionist tendencies since he took office little more than a year ago, or Japan’s Shinzo Abe’s unapologetic nationalism.

Other countries that are supporters of the ‘one China’ principle abstain from selling arms to Taiwan in order not to incur the wrath of Beijing. Recent reports state that the US accounted for 94 per cent of arms sales to Taiwan, whilst the EU, mainly France and Germany only 6%. Japan, again not an endorser of the ROC, has also been pursuing closer economic ties with Taiwan; they signed a fisheries agreement last year to cooperate in the disputed waters near the islands. Closer ties with Japan would bolster the Taiwanese government’s democracy links and lessen its economic dependence on China. Japan would certainly benefit by being able to cite China as the aggressor in the maritime dispute.

The problem seems to be that the Chinese government cannot push too hard, neither can the Taiwanese administration, for fear of upsetting the vehemently independent Taiwanese electorate.  Indeed, Taiwan ranks higher than China on Transparency International’s Corruption Perception Index, at number 36, against the latter’s 80th place out of 177.

Cross-straits relations are friendly at the official level, as meetings between quasi-governmental organisations show, but this seems to be paying lip-service to further integration and China’s claim to sovereignty over the island.

However, the attempts to thaw political relations with China will no doubt be helped inadvertently by international events. Until November 2013 Taiwan enjoyed formal diplomatic relations with 23 nations, largely in Africa, Latin America and the Caribbean. That number dropped to 22 when the Gambian president unexpectedly announced he would sever diplomatic ties with Taiwan in favour of Beijing. This is unsurprising in light of the increased investment China is making in many African countries, and others are likely to follow suit if greater economic benefits are on offer from the Chinese. What this will mean for the government of Taiwan remains to be seen.