Bill Emmott - International Author & Adviser

Article

Libyan tremors will be felt as far away as China
The Times - February 28th 2011

The Arab awakening is an unfolding story that is barely two months old and which will most likely continue unfolding for years to come. But it is beginning to have consequences, and not just for the dictators and their families and cronies who are being overthrown.

            One potentially important consequence can be seen in Saturday´s vote by the United Nations Security Council to impose sanctions on the Gaddafi regime in Libya, to freeze its assets and to refer Colonel Gaddafi to the International Criminal Court. Welcome and appropriate though these gestures are, they are little more than gestures, given that the murderous Gaddafis holed up in Tripoli are not in much of a position to be affected by them. The true significance of the resolution lies in the unity of the Security Council and, in particular, in China´s albeit-reluctant support for the measure.

            In effect, China has just voted to refer Colonel Gaddafi to the ICC for having acted against his opponents in pretty much the same way as China did in 1989 when faced with the Tiananmen Square revolt. Chinese troops then may have fired into the crowds from footbridges rather than helicopters or fighter planes, but there is little doubt that Deng Xiaoping would have ordered even greater force to be used had it been necessary.

            Today´s China, much more than that of 1989, is insistent on the importance of multilateral institutions and agreements. Its government has now laid down an apparent marker in the leading multilateral institution that it considers the use of murderous force in the suppression of an uprising to be a crime for which government leaders can and should be held accountable.

            This will be a marker of which it will be important to remind China when next Tibetans or the Muslims of Xinjiang go out into the streets. Until then, or a new Tiananmen protest in Beijing, we cannot know how seriously to take it. But it could well represent a kind of coming of age: the point when China´s increasing exposure around the world (there are a reported 30,000 Chinese workers in Libya) force it also to take a more responsible international stance. And perhaps, just perhaps, the time when it would respond to domestic dissent through a massacre has now passed.

            The second clear consequence, which affects the West and China equally, can be seen in the rise in the price of oil. Whether oil continues to surge towards $120 a barrel, or even to pass its 2008 peak of $150, will largely depend on whether Libya´s unrest really does turn into civil war, and even more on whether unrest spreads to Saudi Arabia and the smaller Gulf oil producers.

            The bet, surely, should now be that sooner or later it will do so. The same conditions, of fast population growth, high youth unemployment, readier access to information, extreme income inequalities and inflexible, often gerontocratic regimes apply there, in spades. So although this will not inevitably result in interrupted oil supplies or a big price-shock, governments should be planning now for the possibility that such a shock might happen.

            A sharp oil-price rise would be like a big tax on all oil-consumers, and would bring us clearly into double-dip-recession territory. The tempting response in Britain will be to cut our own fuel taxes in order to stem the rise in retail petrol prices. The right response, however, if the coalition really believes in joined-up government, will be to leave fuel taxes alone and instead to cut other taxes—probably VAT or even income tax.

Supposedly, the government wants greater energy efficiency and fewer greenhouse-gas emissions, so it should let higher prices do their work, while compensating people´s incomes and supporting the economy through these other means. For George Osborne, an oil shock would be just the sort of force majeure clause he needs to invoke to bring on a fiscal plan B.

The third broad consequence of events in Egypt, Tunisia and now Libya is one that casts us far into the future. It is the consequence for the European Union of the now possible, even likely, spread of a democratic revolution across a wide swathe of North Africa and the Middle East. We should be patient in assessing how far that revolution will go, just as in the first months after the Berlin Wall fell in 1989. But also, like then, it will pay to plan ahead.

The evolution of the EU has consisted of a series of ideas that seemed far-fetched when they were first mooted but which later came to seem inevitable. The next such idea is likely to be the expansion of the EU to encompass the southern coast of the Mediterranean. Such a body, born let´s say in 2030 or 2040, could even have a rather familiar acronym, EMU, this time applied to something Britons should feel rather keener to embrace: European and Mediterranean Union.

Given that France, Germany and several other EU countries cannot even accept the idea of membership for Turkey, which is already a democracy, this will certainly seem far-fetched. But think back to the early 1990s: it quickly became clear that Western Europe had a huge interest in fostering the stability, friendliness and economic development of its neighbouring former Soviet satellites, which it did in a long, slow process that culminated in full EU membership for ten of them well over a decade later.

Not all the former Soviet satellites became democracies, and not all have now joined the EU. The same will probably apply in North Africa and the Middle East. Still, the huge interest and historic opportunity that today´s Arab awakening offers to Europe will become clearer and clearer, in the next months and years, for both good and ill.

America is the western country with the tricky military issues in the region, and which will be held responsible for what does, or doesn´t, happen in Palestine. Europe, as after 1989, mainly has economic and cultural links to offer, or to contend with, given our colonial pasts. A formula needs to be found to offer membership of EMU as an incentive for democratic and economic reform, just as for central Europe after 1989. By allowing the EU to become even more of a multi-speed, or multi-system entity than it is today, such a move could also help to bury the full federalist agenda once and for all.

Mostly, though, it would simply be the right thing to do. Mediterranean, in its Latin root, means middle of the earth, after all, not some kind of southern frontier. It is part of Europe´s neighbourhood.


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