Turkey

Turkey.

Thought for the day

The un-secularisation of the country now begins with the recent announcement that the Turkish Prime Minister Recep Tayyip Erdogan premier is calling for the lifting of the ban on women wearing head scarves, particularly in universities. His argument is that it deprives many women from higher education. The call for the lifting of the ban is also supported by the President Abdullah Gul both of whom are members of the AK party. They and their party are noted for being the protectionist Islamic and are denying that they want to move to a religious state.

Although Turkey is currently a secular democratic country, so far backed by the weight of the armed forces; with this move there could well be problems ahead. Turkey is a large Muslim albeit secular country with a large population of which a majority are actively pro Islamic. The country has the superficiality of being westernised in its outlook and is still looking to become a member of the EU even though behind the gloss of modernism lies a vast under class that may not share either in the wealth of the modern economy or believe in the equality of the sexes.

It may seem that the repealing of the ban will appeal to some women who adopt a dubious Islamic dictate but are excluded from public service because of it or indeed help those that may have chosen not wear a head covering thereby extending their ‘freedom of choice’ too or any others that have been forced not to attend universities because of family pressure and the ban, as it infringes religious doctrine but the ‘freedom’ offered from lifting of the ban will be short lived.

In looking at the culture of Turkey the most obvious point that cannot be avoided is that Turkey as is currently formed is a young state. It does not have the ingrained secularist ethos that the rest of Europe has gained over a long period of time. It is still a patriarchal society, Muslim with a strong undercurrent of religious domination of modes of behaviour and still treats females as second class citizens. It has a large peasant type population that is held in position by the tension of political powers that play for control balanced between the two opposing systems of secularism and religious doctrine

Far from being seen as a move to aid the freedom of choice in whether to wear or nor wear a head scarf, in a surprisingly little time it will become compulsory to wear one and from that will spring the movement of greater Islamic control of the population with the raise of fundamentalist actions and opposition.

If the EU is intent on completing Turkey’s membership of the EU, it would be as well if it looks closely at what is moving in Turkey and if possible help shape the ground to maintain a secular movement. It cannot afford to ignore this seemingly innocuous development of lifting the ban, a process that also looks to re write the Turkish constitution. As a country and a people, having Turkey as a full member of the EU has much to recommend it but this move by the PM and president will fall into the hands of power that will be very troublesome. To use a metaphor it looks like the west will see the first turkey to celebrate Christmas and pluck itself in preparation.

21.9.07

© Renot 2007

Northern Rock

Northern Rock

The recent fiasco of the imminent supposed collapse of Northern Rock is a thing of wonder. That it has caught so many pundits off guard in such a offside way with the fall out off sub prime mortgages; yet it is not surprising as most economists see the market as a perfect operating system that is self regulating, self correcting and operates under a light oversight regime particular in the USA and UK. The ‘market’ is not independent of human actions. For some time the pressure that has built up to start the current fallout has been due to the over extension of credit in the USA, thus far aimed at the sub prime housing mortgages but inevitably the whole of the American economy that is bathing in debt, all supported by the propping up of the dollar. In the current climate the banks and these two governments must be held responsible for pushing money into the hands of un- credit worthy soles, all for the sake of keeping the confidence of the market high. Both governments must take the blame for allowing the financial system to operate in a way that paid little attention to the fundaments of good financial house keeping and the (adjusted) maxim, income over expenses nineteen and six- bliss, expenses over income twenty and six- sick.

It is little wonder that the reaction to withdraw money from NR has occurred. any reasonable person at risk of loosing any finance deposits over £32K would be mad to trust the espoused comment from the UK treasury that “your money is safe” (up to this limit) and implies but not explicitly stated that the rest will be safe, albeit that it will not let a bank default unless it has been rash in its business activities. This is clearly not good enough for savers with moderate funds when there have been many incidents that conclusively show one cannot trust governments. It is only now some 4 days after the bank run that a statement has been declared that ALL deposits will be guaranteed safe! (This time).

Northern Rock will go. It will be made to carry the responsibility of the debacle that has thrown that whole UK banking system into scrutiny and their bullish dealings in the expanding credit market.

So what happens now? The USA will reduce its interest rate to stave off any bad feeling about the economy and their housing market retrenchment. The UK will follow suit. Stock markets will rise for a while until it become clear just which banks are affected by potential housing market liabilities or where the bad debts have fallen. No doubt credit will be much harder to get on the cheap. This mean that the long suffering savers may for a change get a better deal instead of being ripped off by the system that rewards heavy borrowers with the past low credit cost, increased asset value beyond inflation, low inflation period and an economic policy that encourages spending to boost consumerism.

Both the USA and the UK government of the past 15 years have been unwise in ignoring the boom in un-serviceable credit and although in both countries the economics of housing has a distortion effect on their economies, giving way to the pressure by sectors of the market to bale them out with interest rate cuts is not a good thing. There has been a trend in the movements of interest rates that has pushed them up to counter ‘inflation’ however the greater pressure is the slow down in the world economy that will force rate much lower leading to a build up of a deflation period in 18 months.
In addition this current reluctance of interbank lending will inevitably start off a discussion on the strength of the dollar. If the US does not do something soon about its deficit, dollar holders will begin to wonder just how long they should continue to see the dollar as the global reserve currency. Now that will cause pigeons to fly.


10.9.07

Nuclear Question

Nuclear Issues.

So far general support for the further development for nuclear power generation, as the only immediate low carbon option, is still low. A number of issues still cause some disquiet.

In the governments energy white paper there is still an incredible dearth of information on how to deal with the after life of the waste of nuclear production. There is much discussion to promote the building of nuclear power plants but very little coming from the CoRWM, on what to do with the residue. It is as if the intent is to press on with the development of generating facilities by the government no matter what the opposition is and then use a catch all argument to justify how and where waste treatment should be done and held afterwards; all in order not to hinder positive progression of a build program.

There is also a strong move towards facilitating a much easier legislative and planning easement for developing nuclear facilities (and major infrastructure projects) leaning much more toward the privatisation of building, ownership, operating and choice of generating locations. Although in principle the utilisation of existing sites may be preferred by authorities, this is by no means one that a private developer would want if it is cheaper for them to place facilities closer to the consumer – this is not going to be a popular idea.

The only advantage for the government in allowing the private sector to take control of the nuclear power generation is that the initial capital cost falls onto private providers thus saving pressure on the PSBR. This is not a cheap option. For the private sector the balance will be in extracting maximum profit, avoiding long term risk and having a guaranteed end user for the life of the facilities before handing them over to the state, just like some new NHS hospitals. The hand over of course will be just as the decommission and waste storage cost start to kick in. Given this strategy there has to be a lack of confidence in the private sectors ability to perform consistently in the public interest and absolutely no confidence in their managing waste for 10k or 1m years! There is far too much short termism in this process of the rush for nuclear.

The past generation of nuclear facilities have been built near the coastal areas for the supply of cooling water and minimising exposure risk to populations. If sea level raises 1mt in 100 years, (a not unreasonable assumption) the new generation plants will have to be built more inland, on higher ground, or there will be a requirement for major sea defences to be built to surround them. It is not clear how this issue will be surmounted or who pays for the solutions. It might be assumed that Environmental Agency will have to fund flood defences of nuke facilities; it does not do so for industry developments, why should it underwrite the cost for a ‘private’ nuclear programme?

So far as can be assessed just now, the cost of building a nuclear generating facility presuppose an instant capital cost of £1.2bn but this excludes interest & inflation cost over the build commission time, this might add another 1.5 -3% of the entire project however nothing is allowed for the cost of decommission or waste reception and forever storage or defensive ground works, all of which could easily exceed the initial build cost. The assumption in this cost structure is that the long term associated cost will not be written into the private sectors justification of cost configuration but will be charged later to the public purse long after the private providers have moved on or ceased to be. It could be argued that on a total written in overall cost basis, the (cradle to grave) financial burden would not be attractive for private providers unless the sale cost of energy provision is high enough and of a volume output that provides a short pay back remuneration time span that also allows for a set aside ‘bond’ to cover such after life expenditure. This is not going to happen.

It is clear that the all arguments will be manipulated to insure that future generation will have to pick up the cost associated with nuclear power for the sake of getting the facilities built now. It notionally takes 10 years to build a plant with a 60 year life span and 30 years decommissioning period but the after life can last 10,000 + years or if future technology allowed perhaps 250 years to dispose / neutralise externally. As the pressure of strategic issues increase with climate change etc there has to be a powerful argument for the government to hold ownership of all such facilities and not pursue another faulted PFI

The government is in a predicament in that the spread of new nuclear facilities has to be located in ‘safe’ environmental areas, on higher ground than in the past and placed in comparatively low density population areas close to cooling resources. This limits the location opportunities to selective geographic areas and with the devolvement of certain powers to both Scotland and Wales (and before long N Ireland); there will be more resistant than in the past in certain parts of UK to the placement of facilities in their patch. The SNP have already stated that it will not want anymore nuclear sites in Scotland. Some high stake deals will be in play with the SNP & the new GB Scottish PM, for there cannot be seen to be parsimonious support on a strategic energy requirement that will affect the whole of the UK. Pursuing a narrow ethnic nation faction to the exclusion of energy resources cannot survive alone; the cost of doing nothing is too great.

The new fast track planning process that aims to get around public resistance is a step to neuter the chattering unfriendly masses on infrastructure projects. Sweeteners, added values, independence and planning gains will all be on offer to push build programs forward but will it be enough to save the union over nuclear?

31.8.07
© Renot 2007

Today 10.01.08 the government has announced that it will be seeking to allow the private sector to build new nuclear generation facilities and that there will be no need for any government subsidies to aid them. The trough of profits is overflowing with snouts eager to feed on the subsidies free energy made possible and supported by the artificial carbon tax comparable. This is the only way that nuclear energy can be made viable and private sector developers have been given a unspecified unlimited golden share to cash in on at any stage in the future when things prove difficult.