Egypt, Foreign Affairs, Politics, Society

Opinion: Inclusive democratic governance in Egypt must be a priority…

The prospect of a military intervention in Egypt looks inevitable given the country’s chaotic transition.

If the generals do seize the mantle of leadership that others have failed to effectively grasp, their move would suggest something much deeper than crass opportunism. Paradoxically, any military coup would underline one of the most striking features of Egyptian politics since the January 25, 2011, uprising: the absence of a political vision that should have been central in unifying the country.

The popular revolt that has seen millions of people take to the streets maybe a catharsis of empowerment that the Tamarud (or Rebellion) Movement has generated, but by itself this will not produce new leaders capable of deflecting the military’s renewed efforts in shaping the course of political change. In any event, the generals will be sailing against the headwinds of widespread public dissent.

To appreciate the challenges facing Egypt we should be clear who bears the most responsibility for this crisis. That responsibility sits firmly with the Muslim Brotherhood and its Justice Freedom Party. The Brotherhood has failed to grasp the important task of how elected leaders in any society should define a new basis for democratic national unity. Central to that is the need to create a symbolic language that promises both inclusion and reconciliation. Language is not merely about a perfunctory readiness to share power with rivals, but, along with reconciliation, must be pivoted around public acts and rhetoric that reassures those who have the most to fear from the type of democracy unfolding in Egypt.

It has been on this level that President Morsi of Egypt has failed, and why so much of the post-mortem analysis of the transition misses the point. The defenders of the Muslim Brotherhood have portrayed a story of efforts to include non-Islamists in the Cabinet of Mr Morsi and of the assembly that was drawn up to write a new constitution. They have, though, been carefully selecting their details.

Mohammad Morsi promised on his inauguration day to represent ‘all Egyptians’. Yet, in the year that followed, Brotherhood leaders communicated intolerance and arrogance to both their secular rivals and their Salafi competitors. Such language has only reinforced the commitment of the Brotherhood’s rank and file to marginalise and humiliate their rivals.

This humiliation came to a head in December 2012 when secular activists were taken hostage by Brotherhood radicals and tortured. The Internet videos of Brotherhood extremists delighting in the pain and degradation of their prisoners destroyed any basis of trust there might have been.

But if the Brotherhood bears most of the responsibility for the current crisis, the leaders of the Tamarud Movement must also face some tough questions. Having brought millions of people into the streets, what is its game plan? How, too, will the Tamarud avoid signalling to all Egyptians that the price its followers must now pay for two years of bad leadership is yet another form of political exclusion or a political process that might ultimately end up being controlled by the military?

Under Hosni Mubarak the Muslim Brotherhood had been prisoners of a system that denied them any hope of exercising any real political power. Freed from such shackles by the January 25 uprising, they sought immediate political vengeance.

But if the Brotherhood is at fault by taking revenge, the leaders of the Tamarud must now face the challenge of putting aside their own desires (or that of their followers) for score settling and focus instead on building a grass-roots political party that can help Egypt back to inclusive democratic governance.

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Britain, Defence, Government, Scotland

Lib Dems say Trident should be replaced on the cheap…

TRIDENT

A senior Liberal Democrat within the UK coalition government has suggested that Britain should ‘move on from the Cold War postures of the past’ and get by with a cut-price nuclear deterrent.

Treasury chief secretary Danny Alexander said a government review had identified ‘alternatives’ to a full like-for-like replacement of the Trident deterrent.

The review was ordered because of a Coalition split over the £20 billion cost of replacing Trident.

Whilst the review is expected to conclude there is no serious alternative to the submarine-based system if Britain wants to maintain a continuous deterrent safe from enemy attack, Mr Alexander has said there are alternatives in moving from the Cold war postures of the past to a new future with a deterrent that is credible and one to which the UK can play a role in supporting disarmament.

Trident: Lib Dems want alternatives

Trident: Lib Dems want alternatives

Trident relies on four Vanguard submarines based at Faslane on the Clyde to provide a continuous deterrent. A cheaper system involving only two would, according to supporters of those wishing to maintain a full Trident complement, expose the UK to periods of vulnerability.

Conservative MP Julian Lewis said Mr Alexander’s comments suggested the Lib Dems would push for a reduced deterrent that would put Britain at risk. ‘It is the height of irresponsibility,’ he said.

John Woodcock, Labour MP for Barrow, where Britain’s submarines are built, said:

… Few will take the Liberal Democrats seriously if they claim Britain could make do with a part-time deterrent.

Faslane and the neighbouring Coulport naval base employ 6,700 people.

But Trident is based solely in Scotland. The Scottish Government have promised that Trident will be removed if the people of Scotland vote for independence in next year’s independence referendum. There is much antipathy in Scotland in maintaining a nuclear deterrent on Scottish soil, although it is believed the missile deterrent would have to be phased-out over a period of time due to decommissioning and other demobilisation considerations.

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Britain, Consumer Affairs, Economic, Government, Politics

Consumer Affairs: Payday loan firms…

PAYDAY loan firms will not be banned from charging excessively high interest rates, despite a promised Government crackdown on sharp practices in the industry.

Leading companies were summoned for talks in Whitehall with Consumer Affairs Minister Jo Swinson MP, today, amid a myriad of concerns that they are driving desperate families to financial ruin.

In a toughly-worded intervention, Miss Swinson, the Member of Parliament for East Dunbartonshire, said she is determined to curb ‘irresponsible behaviour which exploits vulnerable consumers in financial strife’.

The minister of state confirmed payday loan firms such as Wonga will not be ordered to cut their interest rates. The LibDem MP cited concerns that people could be forced into borrowing from even shadier loan sharks.

Critics of payday loan firms insist that the exorbitant interest rates, which can reach 5,000 per cent a year, are the root cause of misery suffered by hundreds of thousands of people taking out payday loans.

Recently, the Archbishop of Canterbury, Justin Welby, called for a legal cap on payday lenders and the level of interest they are allowed to charge.

The Archbishop said:

… Once you have taken out the loan, it is difficult to get out of the cycle. With the rates offered, simply paying off the interest becomes a struggle.

Consumer organisation Which? published a study showing a million families a month are forced to take out payday loans. It found some 400,000 people take out the high interest loans to pay for essentials such as food and fuel. A further 240,000 need the cash to pay existing loans.

Which? says that almost half of the people taking out payday loans could not cover their repayments, forcing them deeper into debt as their ‘short-term’ loans are ‘rolled over’, with fresh interest added.

The Whitehall summit comes days after the £2 billion industry was referred by the Office of Fair Trading (OFT) to the Competition Commission. It will have the power to ban or limit the industry’s products, but will take up to 18 months to report.

It is understood the OFT has given the 50 lenders until the end of July to respond to calls for them to clean up their act or face closure. Five firms have since surrendered their licence, but only 20 have responded to date.

Labour MP Stella Creasy accused ministers of being too cosy with the industry. She said:

… Having a summit about payday lending without talking about capping interest rates is like discussing arson without mentioning matches.

In reply that interest rates should be capped, Miss Swinson said that could shut down short-term loans and force people towards illegal loan sharks or by taking other extreme measures. She has suggested, though, that the focus should be on limiting the ease with which loans are ‘rolled over’.

The Consumers Affairs Minister also raised concerns about automatic payment systems that let lenders raid bank accounts of clients to claw back money they are owed.

COMMENT

Payday lenders are notorious by the way in which they operate and the rates they charge should be capped. This opinion is based on the assumption that lending money to people with poor credit histories at sky-high interest rates is wrong. Unfortunately, the problem of unsecured lending is a warren of complexity.

The empirical evidence elsewhere is important to consider. In many other countries, including France, Germany, Australia and Japan, and in many states in America and provinces in Canada, interest rates are capped at a ceiling – such as 36 or 48 per cent a year. But this means that companies cease to offer loans to risky customers, who are then forced into the hands of illegal loan sharks, often run by organised crime gangs. Arguably, it is better to have payday lending in the legal economy, where it can at least be regulated, than to drive it into the criminal underworld.

Stella Creasy MP has campaigned tenaciously against irresponsible lending. She has said that the problems with a rate cap should not mean that we cannot act. Rather, she says, we must work harder and learn from others how best to act. She has proposed a cap on total repayments to try and break the cycle on compound interest and rollover debts that end up many times the size of the original loan. A way needs to be found without choking off the legitimate market for emergency short-term borrowing.

This, however, should be just the start of a programme of reforms to limit abuses in the payday-loan market. Further issues should be addressed by the Competition Commission following the investigation launched last week.

The Commission’s task is to look at unfair competitive practices that are suspected of giving borrowers a bad deal, such as convoluted information about interest rates and how they are applied. Lenders are also known to make it hard for borrowers to switch to a rival company.

A plethora of reforms are needed within the payday-loan industry. Any programme of serious reform should start first with the underlying causes of problem borrowing. Advertising, for example, should be restricted, on similar principles that have already been applied to the advertising of alcohol and tobacco. Adverts for payday loans could carry information about where to get debt advice. Payday lenders could be required, too, in paying a levy to fund helplines and services to help with addictive and self-destructive behaviour that leads to indebtedness in the first place, or to support the work of credit unions.

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