Category Archives: GIS Statements

Democracy and populists: a misconception

GIS* statement by Prince Michael of Liechtenstein

It is almost impossible to listen to politicians, intellectuals and media personalities lately without hearing the lament that liberal democracies are being threatened by populists, usually of an authoritarian bent.
At face value this assessment seems correct. But on closer examination, doubts grow about whether Western political systems can still be called democratic and liberal.
Representative democracy depends on legislators who represent the public interest (res publica), not that of a party or its ideology. In practice, however, this only works if most parliamentarians are independent people rather than professionals who view politics as a career. Unfortunately, in nearly all Western democracies, the latter predominate.
We commonly refer to parliamentarians as lawmakers. Today this is doubly true, as parliaments have evolved into factories belching forth new legislation, to the detriment of their true role of representing the nation’s long-term interests.
The political system has also evolved, as established parties do whatever it takes to uphold the status quo and maintain their grip on power. In so-called Western democracies, this has meant the established parties have become extremely populist themselves.
A myopic focus on the next election has led to strong uniformity within the political mainstream. Many people have stopped voting because they no longer see any differences. Without a real opposition, there is an absence of vigorous, fact-based debate – a vital ingredient of any democracy.
One way of stifling debate is the concept of “political correctness,” which excludes alternative thinking or raising ideas labeled as “radical.”

democracy-switzerland

Absurd system

Meanwhile, the tsunami of laws and regulations has led to a “nanny” state that little resembles its liberal roots. The powers of government have become increasingly centralized, to the detriment of individual responsibility and autonomy which would be better invested in regions and municipalities. As is well known, democracy functions best in smaller entities, where issues are closer to home and the individual voter can still be heard.
In Europe, countries like Switzerland and Liechtenstein – which uphold strong traditions of local autonomy, direct democracy by referendum, and a militia system requiring members of parliament to earn their own livings – are not threatened by authoritarian movements.
What we now call “liberal democracy” has in fact traveled a long way down the road toward centralized bureaucracy. It is a system that cannot be trusted. No longer liberal, it cannot really be called democratic, either.
The system’s absurdity became painfully obvious during the presidential campaign in the United States. Neither of the two major parties was able to select a convincing candidate after a lengthy series of primaries. Instead, we have been offered the political equivalent of mud-wrestling – an appalling spectacle on both sides.
According to a Reuters/Ipsos poll, 66 percent of American voters are convinced that the U.S. is on the wrong track, while 22 percent think things are headed in the right direction. The situation in Europe is not much different.
What ordinary people have grasped, consciously or subconsciously, is that the current political system is populist and ridden with self-interest. Its resistance to change and decentralization is palpable, as is its hostility to notions of personal responsibility and freedom of thought and expression. No wonder voters are looking for alternatives.

Read the original GIS statement here ->
Democracy and populists


*GIS is a global intelligence service providing independent, analytical, fact-based reports from a team of experts around the world. We also provide bespoke geopolitical consultancy services to businesses to support their international investment decisions. Our clients have access to expert insights in the fields of geopolitics, economics, defence, security and energy. Our experts provide scenarios on significant geopolitical events and trends. They use their knowledge to analyse the big picture and provide valuable recommendations of what is likely to happen next, in a way which informs long-term decision-making. Our experts play active roles in top universities, think-tanks, intelligence services, business and as government advisors. They have a unique blend of backgrounds and experience to deliver the narrative and understanding of global developments. They will help you develop a complete understanding of international affairs because they identify the key players, their motivations and what really matters in a changing world. Our experts examine the challenges and opportunities in economies old and new, identify emerging politicians and analyse and appraise new threats in a fast-changing world. They offer new ideas, fresh perspectives and rigorous study.

Making Lemonade out of Brexit Lemons

GIS Statement by Prince Michael of Liechtenstein

brexit-shock

Doom and gloom! Voters in the United Kingdom have decided to leave the European Union. Markets are tumbling, Prime Minister David Cameron has announced his resignation and politicians around the globe have expressed deep worry.

Leaders of the various EU countries, as well as those in Brussels, have voiced their regret and warned of Brexit’s dangers. Some have also pointed to damaging consequences for the UK, sounding very much as if they are making threats.

Prime Minister Cameron has been criticized for initiating the referendum. However, the vote was necessary to clarify the UK’s position in the bloc. Holding it took courage on his part.

The next move for the UK is to formally notify Brussels of its intention to leave the EU; the exit would become effective after a statutory period of two years. For the time being, the UK is still a member of the bloc. Notification does not have to be issued immediately.

The UK is an important trading partner for the rest of the EU. It is therefore in the interest of both sides to reach free trade and other agreements over the next two years. This should be feasible, assuming both sides go about the negotiations pragmatically.

Risks and opportunities

The largest danger is overreaction by the EU and the remaining members. This includes any attempt to make an example out of the UK with some sort of retaliatory “punishment.” Motivation for such a move comes from hypocritical self-righteousness, opposition to reform and centralizers’ fear that other members might follow the UK’s lead.

But the vote offers the opportunity to make reforms, such as increasing subsidiarity (where the EU performs only those tasks that cannot be performed at a more local level) and encouraging competition between members to improve efficiency. This would mean going back to a simple system that grants the four basic EU freedoms (the free movement of goods, services, people and capital).

‘The most important reform the EU should make is discontinuing the transfer union'

The most important reform the EU should make is to discontinue the transfer union – by which financial transfers are made from richer to poorer regions. Short-term transfer payments can make sense to develop certain regions, but a permanent transfer system is self-destructive. GIS warned of this more than a year ago, when observing that Europe was accepting Brexit in order to avoid Grexit.

But it is not Brexit that endangers EU cohesion. Instead, it is the transfer union and an exaggeration of so-called “solidarity.” Any over-generous solidarity will be misused.

Hopeful developments

Looking at the gloomy post-Brexit news is depressing, full of predictions of disaster. But this overshadows a lot of good news. Colombia has finally achieved what appears to be a robust peace agreement in a bloody terrorism-infused civil war that lasted decades. The Panama Canal expansion has been completed, which should give an enormous boost to global trade.

So Europe should not paralyze itself in a hysteria of whining, but grasp the opportunities. The referendum and its long-term outcome, despite the immediate result, could yet prove to be a net positive.

Read the original GIS statement here ->
Make Lemonade out of Brexit Lemons


*GIS is a global intelligence service providing independent, analytical, fact-based reports from a team of experts around the world. We also provide bespoke geopolitical consultancy services to businesses to support their international investment decisions. Our clients have access to expert insights in the fields of geopolitics, economics, defence, security and energy. Our experts provide scenarios on significant geopolitical events and trends. They use their knowledge to analyse the big picture and provide valuable recommendations of what is likely to happen next, in a way which informs long-term decision-making. Our experts play active roles in top universities, think-tanks, intelligence services, business and as government advisors. They have a unique blend of backgrounds and experience to deliver the narrative and understanding of global developments. They will help you develop a complete understanding of international affairs because they identify the key players, their motivations and what really matters in a changing world. Our experts examine the challenges and opportunities in economies old and new, identify emerging politicians and analyse and appraise new threats in a fast-changing world. They offer new ideas, fresh perspectives and rigorous study.

Don’t blow Brexit out of proportion

GIS Statement by Prince Michael of Liechtenstein

brexit

   For weeks, the United Kingdom’s referendum on whether it should leave the European Union, a scenario known as “Brexit,” has dominated discussion in the media. The ups and downs of the debate have had a corresponding influence on financial markets.
The excitement generated can produce shudders as strong as a Hollywood thriller might. But the threat of the UK leaving the EU is being used to distract the public from other issues.
Worrywarts furrow their brows. Know-it-all Euroskeptics – from within the EU and without, and on both sides of the Atlantic – as well as good-old nationalists, hypocritically express concern. Their schadenfreude and hope for the demise of the bloc is thinly veiled.
For many reasons, I hope that the British remain in the EU; and I think it is likely they will.
Should a Brexit occur (the referendum would have to be followed by an act of parliament), it is likely to be damaging, but it will not be the downfall of either the EU or the UK. Nor will it cripple the global economy or financial markets.

Brexit could become an opportunity

   It will be very important to see how the various institutions responsible for managing a Brexit react. Revenge would be harmful. If they analyze the situation dispassionately, other EU members are likely to realize the necessity of, and implement, reforms that would take the bloc in the direction of more decentralization and subsidiarity. Under such circumstances, the UK would take on the role of a close neighbor. Brexit could become an opportunity.
On the other hand, a referendum result that legitimizes Britain remaining in the EU will reinforce the UK’s position within the bloc. That would put it in a strong position to support the very decentralization and subsidiarity Europe needs.
Whatever the outcome of the vote, that it is taking place is a positive thing – it will clarify the UK’s role in Europe.

Read the original GIS statement here ->
Don’t blow Brexit out of proportion


*GIS is a global intelligence service providing independent, analytical, fact-based reports from a team of experts around the world. We also provide bespoke geopolitical consultancy services to businesses to support their international investment decisions. Our clients have access to expert insights in the fields of geopolitics, economics, defence, security and energy. Our experts provide scenarios on significant geopolitical events and trends. They use their knowledge to analyse the big picture and provide valuable recommendations of what is likely to happen next, in a way which informs long-term decision-making. Our experts play active roles in top universities, think-tanks, intelligence services, business and as government advisors. They have a unique blend of backgrounds and experience to deliver the narrative and understanding of global developments. They will help you develop a complete understanding of international affairs because they identify the key players, their motivations and what really matters in a changing world. Our experts examine the challenges and opportunities in economies old and new, identify emerging politicians and analyse and appraise new threats in a fast-changing world. They offer new ideas, fresh perspectives and rigorous study.

Buying time with other people’s money

GIS* statement by Prince Michael of Liechtenstein

   The leaders of the G7, an informal bloc of industrialized democracies consisting of the United States, Canada, France, Germany, Italy, Japan and the United Kingdom, met last week in Ise-Shima, Japan. In their joint declaration, the seven heads of government, among other things, confirmed their commitment to Iraq’s unity and territorial integrity, pledging $3.6 billion to this task.

   For those who have been paying attention, it is already clear that the decision to create Iraq – taken by Britain and France after the Ottoman Empire collapsed – was a disaster. An artificial nation state was imposed on diverse ethnic and religious groups.

GIS-statement-dollars

   It is equally obvious that democracy cannot function in a multiethnic state – no matter how much the U.S. tried after the fall of Saddam Hussein – if the strongest ethnic group dominates the central government.

   The solution should have been either a far-reaching federalization or the dissolution of the country into new nation states. The G7’s decision shows that it is still committed to a failed structure and determined to prolong Iraq’s agony with money.

   Also meeting last week were the European Union finance ministers in Brussels. This time the recipient was Greece, which got 10.3 billion euros in bailout money.

Continue reading -> GIS Statement


*GIS is a global intelligence service providing independent, analytical, fact-based reports from a team of experts around the world. We also provide bespoke geopolitical consultancy services to businesses to support their international investment decisions. Our clients have access to expert insights in the fields of geopolitics, economics, defence, security and energy. Our experts provide scenarios on significant geopolitical events and trends. They use their knowledge to analyse the big picture and provide valuable recommendations of what is likely to happen next, in a way which informs long-term decision-making. Our experts play active roles in top universities, think-tanks, intelligence services, business and as government advisors. They have a unique blend of backgrounds and experience to deliver the narrative and understanding of global developments. They will help you develop a complete understanding of international affairs because they identify the key players, their motivations and what really matters in a changing world. Our experts examine the challenges and opportunities in economies old and new, identify emerging politicians and analyse and appraise new threats in a fast-changing world. They offer new ideas, fresh perspectives and rigorous study.

Economic riders of the apocalypse

GIS* statement by Prince Michael of Liechtenstein

The G20 finance ministers and central bank governors have already met twice this year to discuss the world economic situation, writes Prince Michael of Liechtenstein.

After the February meeting in Shanghai, they released a cautiously optimistic communique congratulating themselves for “important achievements” in bolstering growth and stability. This was revised to an even more optimistic assessment of global recovery at the April 14-15 meeting in Washington.

Washington, D.C., April 15, 2016: G20 finance ministers and central bankers gave themselves a pat on the back, but also warned of “downside risks and vulnerabilities” (source: dpa)
Washington, D.C., April 15, 2016: G20 finance ministers and central bankers gave themselves a pat on the back, but also warned of “downside risks and vulnerabilities” (source: dpa)

The picture looks different if one takes a longer view, especially from the standpoint of business and trade. The G20’s achievements have been mostly in the verbal sphere, with the sole tangible result of imposing more regulations, guidelines and controls. This is the only area where the various countries seem to agree.

More government intervention and the expansion of an already oversized and inefficient regulatory framework, both national and global, can only harm innovation and trade. It fosters protectionism, regardless of the G20’s declarations to the contrary. By stalling the real engines of sustainable long-term growth – free enterprise and free trade – such measures steal prosperity from all parts of society, especially the poor.

Regulatory risk has become a huge obstacle to financing infrastructure projects, which are vital to any improvement in living standards. Irresponsible government interference in markets, usually for populist reasons, has become common in the energy industries and public utilities of many countries, to give just one example.

Perhaps aware of these difficulties, the finance ministers and central bank governors betrayed a certain uneasiness in Shanghai. In the official statement, they published a list of apocalyptic riders that could spoil the results of their good work, and for which they could take no responsibility …  Continue reading -> GIS Statement


*GIS is a global intelligence service providing independent, analytical, fact-based reports from a team of experts around the world. We also provide bespoke geopolitical consultancy services to businesses to support their international investment decisions. Our clients have access to expert insights in the fields of geopolitics, economics, defence, security and energy. Our experts provide scenarios on significant geopolitical events and trends. They use their knowledge to analyse the big picture and provide valuable recommendations of what is likely to happen next, in a way which informs long-term decision-making. Our experts play active roles in top universities, think-tanks, intelligence services, business and as government advisors. They have a unique blend of backgrounds and experience to deliver the narrative and understanding of global developments. They will help you develop a complete understanding of international affairs because they identify the key players, their motivations and what really matters in a changing world. Our experts examine the challenges and opportunities in economies old and new, identify emerging politicians and analyse and appraise new threats in a fast-changing world. They offer new ideas, fresh perspectives and rigorous study.