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23 May 2018

Politicians, sanctions and corporations



I wonder if every generation - when it gets to a certain age - begins to feel that the world is in a terrible state? I know my father was convinced that the end of Empire and the relative decline in the global position of the United Kingdom presaged the coming of a new Dark Age, with the (relatively) newly democratised rising up against his comfortable status quo. Well, maybe; but actually, I guess I would argue that most of the effects of what he feared in the end have proved positive. So I hope that I am not falling in to the same trap when I say that the world looks pretty unstable right now. 

Take a look around; what we have traditionally regarded as the stable, secure democracies are largely in a mess. The UK is mired in its endless Brexit squabble, with a government of mediocrity and an opposition of even lower calibre, with the added ingredient of actively seeking the destruction of the entire system (John McDonnell: “My aim is to bring about the downfall of capitalism”, before anybody protests that they’re not that bad). Germany is split right down the middle, so it has ended up with the same paralysed coalition it had before its elections. President Macron of France speaks very well, but has set himself a mammoth task in attempting to reform French working practices; good luck with that. Italy has just managed to treat itself to a new government which combines far right and far left - or at least, that’s how it looks - in a coalition of populism. And the EU itself looks seriously split on ideological grounds between the old east and western Europe.

Further afield, it’s difficult to describe Russia as anything other than an authoritarian kleptocracy, Iran and Saudi Arabia - the two middle eastern powers of significance - are driven by two mutually hating forms of Islam, and Xi Jinping has secured a party vote which will enable him to rule for life; I’m struggling to differentiate that from straightforward dictatorship. Who have I left out? Oh, yes, the USA has a President with a very particular way of conducting his office.

All these kind of divisions are exacerbated by the way anybody can vent their spleen and hurl abuse on social media. Now, it ought to be possible to sit back and ignore this stuff, because our business is trading metals, and, whatever happens, the world needs those. So we should be able to let all this discord carry on around us, while we focus on what matters. 

Sadly, though, that doesn’t really work. The turmoil and instability around us has led to policies which impede free trade. I’m not going to give an opinion on whether they are right or not, but the imposition of sanctions does have a detrimental effect on normal business. Iran may be a relatively small issue for metals, but Russia is not. The combination of Russian behaviour and US (and to an extent European) objections to that behaviour is a toxic cocktail, when Russia is a major supplier of important metals to the world. Again, I’m not saying the sanctions are wrong, I’m just pointing to the mess created when politicians - inadequate ones, in my view - can no longer discuss things and problems in a rational way. As well, there is the putative, off-on-off trade war between the US and China; that doesn’t bode well.

I don’t have an answer to this, beyond the fairly bland statement that anyone who wants to be a politician should be prevented from doing so, on the grounds that if they want it, going on current form, they are the least likely to do a good job; too much self importance and self-interest.

However, in all this political and trading confusion, there is perhaps one chink of light, driven rather by corporations than politicians or supra-national bodies. The Congo has been a horror story for a long time, probably in truth since King Leopold II decided it was his own plaything from which to extract every last dollar (worth re-reading The Heart of Darkness, which many readers may know better as Francis Ford Coppola’s Apocalypse Now, for a look at nineteenth century Congo). After Belgium left, US intervention was hardly a stunning success and the UN has signally failed to improve the situation there. Major corporates, though, are beginning to flex their muscles and genuinely pay attention to the origin of the metals they buy. That holds out the hope for the future that the worst of the exploitative mining methods that have been used may finally be outlawed. That, I think, is a testament to the power of the consumer in a free market; now all we have to do is persuade our politicians that free markets and free trade are the best way forward. Otherwise, I fear I may have to join my father exploring Dante’s nine circles of hell……..        

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