Political fear 

It's not a bad thing that these days it is basically too hot in these quarters to bother about Central European politics. The resulting lack of daily political activism spawns a distance that can be revealing. When our leading politicians take a step back from their habits, it seems, they become afraid, and rightly so.

What you get then is the conservative Austrian Chancellor proposing the Tobin tax [DE], his socialdemocrat challenger getting tough with asylum seekers [DE], and the Greens falling eerily silent about economic topics [no link].

Hypothesis: In all three cases, this is not Clinton-Blair-style triangulation, but rather it shows a lack of confidence in the own recipes, both party-internally and in confronts of the voter. It is not their fault, I'd say. Rather, we live through a moment when there is a profound lack of promising recipes in economic policy.

Enter, if you are in Germany, the PDS/WASG married couple, which keeps rising [DE] in the polls to currently 12% with its catchphrase that "four neoliberal parties [CDU, FDP, SPD, Greens] are enough for Germany". The WASG believes it has a recipe, courageously defended by Ulrich Maurer against a hostile podium from the established parties in last night's Sabine Christiansen [DE] discussion program on ARD television. Back to state interventionism and Keynes is a formula that is so out of fashion that its pull is almost irresistible.

I'd like to offer some kind of inspirational dialectic synthesis at this point, but my mind is blank. I'm still waiting for that refreshing thunderstorm that was promised for tonight.

[Alternate ending, less elegant: better education and innovation.]


Difficult times ahead 

In an interview [DE] with state-controlled daily Wiener Zeitung, Alexander Van der Bellen, chairman of the oppositional Austrian Green Party and economics professor, was asked about the main weakness of the current government. His reply:
It is becoming clear that there exists no concept in the area of the increasing unemployment and the slowing economic growth. I have the impression that the government ... has not thought out how economic growth can be sped up again in a sustainable manner, because with the 1 to 1.5 percent growth that we have had for years now it will not be possible to get unemployment under control.
There is also this from Veit Sorger, head of the government-friendly industrialists lobby IV, in an interview [DE] with Der Standard:
In the face of the low growth one should think hard whether the concepts from [2002] are still up-to-date. In 2002 we saw globalisation differently. We still had nice growth rates and thought we could deal with this.
If you are ready for a real scare however, have a look at these predictions from the OECD's latest Economic Survey of the Euro Area 2005, discussed by Mahalanobis:

The OECD message is that with unchanged policies, and partly due to the ageing population, trend GDP growth in the eurozone will slow continuously from 2.0 percent at present to 0.9 percent after 2020. The OECD - and Mahalanobis - emphasise the need for more structural reforms because of this. Personally, as a bit of a political pessimist, I worry that the politically digestible reforms might not suffice to boost trend growth to the 2.5 to 3 percent needed to reduce unemployment. Demographics and immigration might change the scenario to an extent. But I fear that the mid-2020s European labour market that my child will have to confront will be truly ugly, and that it will be an uneasy political ride for the next 20 years until we get there.


What has the G8 meeting achieved for Africa? 

Well, among the mixup of old and new pledges it seems rather hard to really know. There is the G8 Gleneagles Communique [pdf] of course, the second part of which is on aid for Africa. The most substantive parts are Annex II and this paragraph on page 26:
27. The commitments of the G8 and other donors will lead to an increase in official development assistance to Africa of $25 billion a year by 2010, more than doubling aid to Africa compared to 2004.
In addition to the one-off debt relief package that was announced several weeks ago, this definitely is not only a step forward rather than backward, but, if implemented, it means that financial aid will reach a qualitatively new level, something that many experts consider a necessity for finally seeing significant progress. This would be absolutely wonderful, inspite of the fact that of course more funds would have been even more wonderful.

In its response to the communique, the Make Poverty History Campaign broadly acknowledges that apart from aid increases that were already known previously, there will be significant new money (US$20 billion):
The G8's promise of US$48 billion boost to aid in five years is mostly made up of money already pledged. MPH calculates that only around US$20 billion is new money. Some of this money is also likely to be raised through borrowing from future aid budgets, rather than new contributions.
The breakdown of pledged contributions by country is in Annex II on page 30 of the communique. It's good that the European G8-members are among those who promise the biggest additional funds, in line with the pledge of the whole EU "to reach 0.7 per cent ODA/GNI by 2015 with a new interim collective target of 0.56 per cent ODA/GNI by 2010." [Austria, which is a laggard in aid funding levels, will have to hurry up to get in line.]

It is understandable that aid organisations would prefer to see the higher aid levels reached sooner, but if incremental increases are more digestible for realpolitik, that can maybe be tolerated.

The big questionmark in all this is of course that all these pledges are non-binding. A pledge made by one of the national leaders in 2005 does not mean that whatever government is installed in the respective countries in 2010 or 2014, facing budgetary situations that are unforeseeable from today, will feel a strong commitment to fulfill that old funding commitment from ten years ago. The civil society will need to uphold constant pressure on the governments until then. This is easier said than done!

I take back my harsh criticism of Tony Blair's achievements in this matter from several weeks ago. The decisions to which he has contributed are positive. I pledge that I will continue to try to give him and all other politicians responsible for these matters a hard time :-).


A bit of a political blogger's credo 

I believe that for democratic politics it is important to engage many voices. I also believe that it is important for people to strive very hard to determine what is the good in politics, and in more profane matters, to understand what is the best policy for a particular issue. As a matter of subjective empirical observation, too often do we follow our prejudice with too little self-scepticism and openness of mind when applying ourselves to new political topics.

A political blog is an excellent means to practice such a personal search for the ethical good and for factual truth in politics on a regular basis.

A political blog is an absolute waste of lifetime if it only spells out a fixed worldview time and again. Nobody will ever change the mind of another blogger. That's the kind of people we are.

A political blog is a pointless effort that deserves little sympathy when it merely copies (with hugely inferior resources) what the mainstream media already do more or less well. If you do things similar to massmedia coverage, either 1) find niches that they neglect - stop when the niche is invaded by them (btw a safe recipe to minimise blog readership); or 2) create relevance by adding a truly unusual personal voice to the mountain of public opinion.

Regarding the search for truth and the good in politics, one of the reasons why blogs are such an excellent tool for this is their implied requirement for intersubjectivity, which means that the blogger is inspired by his online status to write in a way that unknown others can understand and relate to. Ideally, this would lead to a whole new dimension of quality as lively debates emerge, where almost every erroneous argument will be corrected by another participant. Unfortunately, the vast majority of political blogs do not receive sufficiently close scrutiny to achieve this. It is getting better, slowly, as more people start to engage in political blogging, but most of us - this blog included - are nowhere close to such intense dialogue yet. Most of the times when I've written rubbish here, nobody bothered to tell me so before I found out myself later. I'm still very fond of the exceptions to this though. The attempt to establish such dialogue is by the way the only, really the only, justification for going to pains to increase one's readership statistics.

Meanwhile, it may be a good idea to try out one's blogging ideas in real life by means of actual political activism. I'm finding that as the group-psychology aspects in such activism absorb more energy than one would expect, having the blog at hand for those individualistic moments and loner-efforts makes for good consolation.


Flag, no nationalism intended 

British flag
I had the pleasure of living in the UK for one year as a student.
[flag copied from Andrew Sullivan]


Prediction of the final result of the election in Albania 

17:00- Ugliness rears its head as four PS-candidates have contested [AL] the results in their constituencies and the road to an official final result is therefore getting longer and longer.

Meanwhile, I've head a look at the proportional vote based on the incomplete count figures given by the Central Electoral Commission. Both big parties use the proportional vote to nurture a range of small allied parties that would not have a chance to win first-past-the-post seats. This explains why the two big parties get only around 10% each in the proportional vote, whereas the two "strongest" parties there are the PR, a PD-ally, with over 20%, and the PSD, a PS-ally, with close to 11%. For the total tally of direct and proportional seats below, I have put the LSI in the left-wing camp and the monarchists of the LZHK in the right-wing camp for simplicity.

From this I predict 74 seats for Berisha's right-wing camp against 65 seats for Nano's left-wing camp, with one independent deputy completing the 140 seat assembly.

In details:

Left: PS 47(+-2) - PSD 5 - LSI 5 - AD 2 - PAA 2 - PBDNJ 2 - PDSSH 2

Right: PD 59(+-2) - PR 10 - PDR 3 - PDK 1 - LZHK 1

To conclude, it's a Berisha victory, but Genc Pollo of the PDR was right to say in an interview before the election that if Berisha will try to do crazy things, there are forces in his coalition who can discipline him - namely the PR and the PDR, who will carry a big responsibility.

Albanian election analysis: PD victory with the help of LSI 

12:00- I have scraped some data off the website of the Central Electoral Commission. There are inofficial data for 89 direct seats:

PD 52 seats
PS 34 seats
LSI 1, PBDNJ 1, Indep. 1

4 seats for PD and PS each are very close. Most of the 11 seats for which there were no data are in the South, so if the PS wins them by 2:1 margin, this would yield approx. PD 55 - PS 42.

I also counted the number of seats which the PS would likely have won if the LSI had not defected - there seemed to be no less than 9 such seats, meaning the result could have been PD 46 - PS+LSI 52 if Nano and Meta were still friends. They have dug their own grave, so to say.

However, the PD is still well short of the absolute majority of 71. For that, it will need more than 16 seats from the proportional count that determines the remaining 40 seats, where it looks that the center-right Republican Party (PR) is doing very well [AL] (at 20% of the vote, with PS and PD trailing at 10% each). So it looks like the PR will be the kingmaker and as far as I know its coalition preferences are not entirely clear - probably PD though.

A much more final result can now be expected from the Central Electoral Commission relatively soon, but the important point about the LSI role will then still stand.

Albanian election: PS loses Tirana 

10:00- Finally some hard facts from the Central Electoral Commission: The governing PS has indeed won only 2 out of the 12 direct seats in Tirana, which lies just at the border between the traditionally PD-dominated North and the PS-dominated South. The PS had a majority in Tirana last time around. This seems to indicate that mass media reports of a PD victory may be right.


Albanian Election: 100 = 55 + 56 + 1 

Or so the contenders want to make us believe.

On June 4, 23:00 [AL], Gramoz Ruci of the PS reconfirmed his earlier declaration that the PS has won 55 of the 100 direct seats.

At 21:25 [AL], Zhozefina Topalli of the PD asserted that the PD would form the next government with 56 of the direct seats, with another 8 within reach.

Ilir Meta's single direct seat for the LSI was reported earlier in the day.

The Central Electoral Commission is still counting and keeps its mouth shut, apart from announcing measures to speed up the vote count [AL], which now seems to have become completely politicised.

Earlier, American caretaker Elliot Engel made a statement of dubious merit [AL], when, in awareness of the cliffhanger this is proving to be, he pronounced that the ultimate certification of the vote as free and fair was more important than whether the losing side would accept or contest the results. He couldn't have invited the two contenders in clearer terms to battle out this election result by all questionable means possible.

Oh, and both of the perennial mortal enemies Fatos Nano and Sali Berisha have won [AL]their respective direct seats, what luck for the country. Time for me to get some sleep.

Albania: PS claims decisive lead 

15:45- PS-General Secretary Gramoz Ruci has come forward with the claim [AL] that at c. 30% of the votes counted, the PS is ahead in 55 of the 100 direct seats, the PD in 44, and the LSI in 1. If true, this means that the PS will surpass the threshold required for an absolute majority in parliament even when the results from the proportional count are considered. Ruci conceded that the PS is doing worse than it had expected. He said that the walkout of members of electoral commissions was perpetrated by PD-members, not PS-members as reported earlier.

Albania election: Ominous silence 

14:45: The flow of new information concerning the election results has slowed down considerably over the last hours. As the Albanian press agency ATA reports, the vote counting process has been interrupted in seven of the 100 districts, according to the Central Electoral Commission.

According to BalkanWeb [AL], the reason is that in these zones the electoral commission members of the governing PS have walked out - the oppositional PD claims this is because they understood that the PS was losing. If the walkout was ordered from the PS party leadership, this could mean trouble.

Ilirian Celibashi, the head of the Central Electoral Commission has reminded [AL] the parties that it is more important that electoral standards are upheld than who turns out to be the winner.

Election in Albania: First trends - results later 

As expected, there are no firm results yet from the elections in Albania. Counting started around midnight.

The oppositional PD of Sali Berisha claims to possess information that it won 10 of the 11 seats in Tirana that are assigned by the first-past-the-post system - this would signal that the PD is doing better than in the last two elections, when Tirana was split almost equally between the PD and PS, but these results alone hardly warrant the PD's displayed euphoria over a country-wide victory. (newspapers Shekulli, Koha Jone)

The ruling PS implausibly claimed in the night to be winning between 60 and 71 of the 100 first-past-the-post seats nationwide. And at 10am, a socialist candidate from Tirana claims that socialists are now seen ahead in 3 more seats in the capital (according to BalkanWeb).

The assembly consists of a total of 140 seats, the remaining 40 being assigned by proportional representation. Smaller parties like the newly-founded LSI will therefore likely receive only a handful of seats. Meanwhile LSI-leader Ilir Meta is reported to have won his seat (BalkanWeb)

It is possible that a clear result will emerge only by Tuesday or even Wednesday.


Final Election Preview Albania 

IMF on adverse effects of development aid on growth 

Mahalanobis points to this FT article about new research by the IMF on the effects of development aid. I reprint a longer section of the article because I learned a lot there.
Days before the Live-8 concerts around the world, and next week's Group of Eight countries summit in Scotland, the IMF has released two extensive research papers that suggest aid flows to poor countries have not led to higher growth rates, the main driver of poverty reduction. ...

“The basic message is that it is good that people are talking about increasing aid flows but that we have to find ways to make them more effective. “It is not the case that all that matters is good governance,” said Raghuram Rajan, the fund’s chief economist and co-author of the reports. “We know far less about what makes aid work than the public or governments would like. By acting like we know all the answers raises false expectations.” ...

Mr Rajan, and Arvind Subramanian, head of macroeconomic studies, argued that the contribution of aid flows to a country's rising exchange rate - undermining export competitiveness- was one reason why they failed to have a positive impact on growth. This may occur even when the aid provided to the government is well used.

Aid might also have contributed to poor productivity by depressing exports, the IMF research shows. Productivity growth is the most important determinant of living standards.

Economists call the impact of large windfall gains on an economy’s exchange rate and export competitiveness the “Dutch disease”, referring to the process whereby the discovery of Dutch natural gas reserves in the 1960s led to an appreciation of the country’s currency and a decline in its export sectors.

“The bad news is that even if delivered with the best intentions and used carefully by recipient governments, there are side effects like adverse effects on competitiveness, which can offset aid’s beneficial effect on growth,” the fund said. “The good news is that by paying careful attention to macroeconomic management and issues like absorptive capacity, perhaps aid may have a better chance of success. “

The IMF makes a distinction between aid that is given to promote growth and humanitarian aid, for example, after natural disasters, saying that the two should not be confused. “Humanitarian aid to save lives is right regardless of the macro effects. But when the aid is focusing on growth, you need to take into account the macro effects,” Mr Rajan said.

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