Year: 2011

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Switzerland – Failing to Deal with Too-Big-To-Fail?

A lot of numbers to keep track of - stock market news at a UBS branch in Zurich. Courtesy of belpo/flickr.
A lot of numbers to keep track of – stock market news at a UBS branch in Zurich. Courtesy of belpo/flickr.

World-renowned for its delicious chocolate, accurate watches and safe bank accounts, Switzerland considers itself an island of political and economic stability at the heart of Europe. As a measure of success, the Swiss economy survived the 2008-09 financial crisis experiencing fewer devastating consequences than other industrial countries. Switzerland was not completely immune however, as the government had to come to the rescue of the financial industry in the fall of 2008.

Fearful of the potential fallout if banking giant UBS declared bankruptcy, the Swiss government deemed it necessary to bail it out in October 2008. The rescue package included a $6 billion convertible bond issued by the government and the establishment of a fund, supported by the Swiss National Bank, into which UBS transferred toxic assets once worth around $60 billion. In view of an annual GDP of roughly $550 billion the Swiss public entered a huge financial risk by saving UBS.

Since then, the Swiss economy seems to be back on track with slow but positive GDP growth. As immigration and energy issues dominate the media in anticipation of upcoming national elections, many seem to have forgotten about the complex and unresolved risks regarding the financial sector: Banks like Credit Suisse and UBS could still push the economy on the verge of collapse: They remain ‘too-big-to-fail” and profit therefore from an implicit state guarantee.

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Disaster Relief 2.0

Disaster Relief 2.0“The 2010 Haiti earthquake response will be remembered as the moment when the level of access to mobile and online communication enabled a kind of collective intelligence to emerge.”

Last week, The UN Foundation, the Vodafone Foundation and Office for the Coordination of Humanitarian Affairs (OCHA) published a report on the future of information sharing in humanitarian emergencies. The paper examines the role of volunteer and technical communities (dubbed “V&TCs”) in providing information to aid agencies on the ground.

Paradoxically, aid workers in Haiti last year faced two opposite problems. At first, they lacked the most basic sources of information – even the UN offices had been destroyed and many employees had perished. In no time, internet communities mobilized to fill the gap, collecting data online, from satellite images or from SMS.

But then, established humanitarian institutions – and especially UN agencies – had no procedure in place to integrate such masses of external information, and overstretched aid workers soon faced a state of information overload.

Some NGOs focussing on information services in emergencies existed before the Haiti earthquake (e.g. MapAction, Télécoms Sans Frontières, Sahana). According to the report, the earthquake triggered a boom last year. Some of the key V&TCs involved in Haiti it mentions are OpenStreetMap, CrisisMappers, Crisis Commons, the 4636 Alliance and Ushahidi.

“Disaster Relief 2.0” raises several issues regarding the management of information in international emergencies, especially with a view to better exploiting the potential of V&TCs. From the established humanitarian system’s point of view, reliability and professionalism are core values that can be problematic in loosely organized volunteer communities.

On the other hand, those communities have the potential to help solve the current humanitarian system’s “data silos” problem. Coordinated by OCHA, humanitarian relief is organized around clusters (shelter, health,  nutrition, etc…). According to the report, proprietary information systems and individual standards are major impediments to the exchange of data between those clusters and with actors external to the system such as V&CTs.

The arrival of these internet communities on the scene is likely to make the silos crumble. They will bring their open source and semantic web philosophies, hopefully fostering the development of open standards and structured data. Humanitarian aid 2.0 is on its way, hold on!

Until Politics Do Us Part

It's Only Love. photo: Olivier Kaderli/flickr

If Latin American politics can sometimes look like a bad Telenovela, Guatemala has just added two more characters to the cast: Alvaro Colom, the country’s president, and Sandra Torres, the first lady.

Torres announced on 8 March that she planned to run for president as the candidate of a coalition of her husband’s UNE party and the Great National Alliance in September’s general elections. However, as the Guatemalan constitution blocks relatives of sitting president’s from running for office, the couple now decided to quietly file for divorce in an attempt to circumvent the country’s set of fundamental principles.

The Colom-Torres divorce set off an avalanche of criticism from opposition parties, members of the Catholic Church and conservative elements of Guatemalan society, with the leading right-wing Patriot Party (a favorite to win the next elections) calling it an “electoral fraud.” Shortly thereafter, a group of university law students filed the first legal challenge to the divorce, followed by seven further petitions by representatives of different sectors within Guatemalan society.

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Coming Up This Week in ISN Insights…

It's week 14 on our 2011 editorial calendar, Photo: Leo Reynolds/flickr

All this week ISN Insights takes a closer look at relations between Europe and the Islamic world, courtesy of the young scholars who made up our 2010 Junior Associates’ program:

  • We examine the phenomenon of ‘Islamophobia’ on Monday – what it is, and how to break the vicious cycle that perpetuates it.
  • On Tuesday we tackle counter-radicalization policy in a divided Britain.
  • The prospect of enhanced counterterrorism cooperation between EU and Maghreb countries is up for discussion on Wednesday.
  • On Thursday we round out the weekly theme with an examination of Turkey’s new role in the geostrategic landscape of Euro-Muslim relations.
  • Our podcast on Friday delivers the second installment of a discussion about Swiss peace mediation, thanks to Dr Simon Mason of the the Center for Security Studies, ETH Zurich.

And in case you missed any of last week’s coverage, you can catch up here with articles about: AFRICOM’s combat christening in Libya; China’s looming food crisis; Russia’s impending conscription crisis; harnessing the power of social media for the international affairs community; and a podcast on Swiss peace mediation.

The -isms of American Foreign Policy

Looking in Different Directions? photo: Arthur Chapman/flickr

To understand the United States’ role in the world, familiarity with the various frames that decision makers in Washington rely on when formulating foreign policy is helpful. Most statecraft blends these, kind of like a color wheel. The basic contours, however, personified by four giants of American history, are as follows:

The Extroverts

Hamiltonianism maintains that the US should pursue a realist foreign policy, balancing interests, especially material ones, and fundamentally seeks to promote an expansionist agenda. Hamiltonians support a robust national security establishment, a strong dollar policy and a muscular industrial base; in effect the US from WWI to the Great Recession. Domestically, these are the establishment Republicans exemplified by figures such as father George H. W. Bush.

Wilsonianism also subscribes to the furtherance of the Pax Americana. But whereas Hamiltonians favor material interests, Wilsonians emphasize the normative, touchy-feely moral aspects of foreign policymaking. Wilsonians are frequently labeled idealists, like to set up international institutions, are bleeding-heart humanitarian interventionists, prefer to co-opt other states rather than impose their will on them, and ultimately seek to consolidate a global society defined by liberal American values.

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