So, Burnham has won the by-election handily, making him probably the next Labour leader. There’s little more to say on him at present, but I thought this from Ian Leslie, https://open.substack.com/pub/ianleslie/p/andy-burnham-is-going-to-be-yet-another?r=22u0c&utm_campaign=post&utm_medium=web, summed it up nicely. I sincerely hope to be wrong.
I’m currently reading Children of Abraham by Marc David Baer – thinking this will need to be a book review post, which I will hopefully get around to over the next week or so.
This week, we take a look at Egypt and Sri Lanka, along with an interesting thought piece on the UK.
- Nick Corvino of ChinaTalk heads to Egypt’s new administrative capital, imaginatively called “The New Capital” to assess China’s involvement.
- It’s worth having a scan of the article just for the photos alone – eerie, gigantic buildings in the desert with no sign of humans.
- Corvino notes that while Egypt / China can authorise construction, and then build at scale (unlike most of the US and the UK), the actual constructions don’t seem to be nice to live in. Some of this he puts down to leap-of-faith bets and authoritarian desires for less walking (fewer chances to spontaneously organise a protest), but most of it is corruption and optics.
- Two very interesting points:
- What’s emerging in Egypt and Indonesia and China looks like one half of a widening split: authoritarian and semi-authoritarian states with the capacity to build at an extraordinary scale, and liberal democracies that have lost much of that capacity, gridlocked by process, litigation, and political fragmentation
- The actual dividing line, therefore, might not be China versus everybody else, but between countries with entrenched rule of law and weak political consolidation on one side, and countries without either constraint on the other.
- I guess a simple take is what do we prefer – a lack of homes for everyone, or massive ghost cities with little to show for all that investment? Maybe a slightly more interesting take is how long it would take the West to rediscover/rebuild that capability again – would it take us decades even if building on that scale was legalised tomorrow?
https://panmureliberum.com/need-for-speed-must-be-part-of-andy-burnham-s-economic-argument-1/
- Simon French of Panmure Liberum raises an interesting point that Burnham (or whoever is the next Prime Minister) needs to rediscover pace in the UK’s governance.
- Whilst there have been recent encouraging signs on major infrastructure projects being fast-tracked and exempted from tactical lawfare from opponents, this cultural trait runs much deeper. It has been building for decades under governments of all colours.
- French cites separate examples from construction (HS2, Heathrow, COVID inquiry, defence, Social Care) as areas that have been beset by delays, from reviews to legal challenges.
- Ultimately, though, we have to go back to incentives, and as we have seen, in particular in construction, this is an inbuilt feature of a system that ignores price.
Ongoing Commissions into the future of Social Care and Pensions will take years to report despite everyone close to these issues being aware of the policy imperatives, and trade-offs. It speaks to governments who play for time, rather than grasping the nettle.
- Ultimately, we get the economy and politics that we deserve – we give regions and areas little incentive to vote for growth, and then despise the results that this leads to. Areas around social care, pensions, and the COVID inquiry have to please everyone, and therefore please nobody. Until we get a grip on our regulatory sandbox and our overcentralisation, it’s unlikely that we’ll re-emerge as one of the world’s most dynamic economies.
https://www.youtube.com/watch?v=1S2wwbX_p_E
- Jon Y of Asianometry (there is an accompanying write-up on his website) goes into detail about Sri Lanka’s organic fertiliser debacle in 2021.
- I vaguely remembered both reading about the ban and thinking “strange”, and then seeing the accompanying economic disaster and thinking “yep”, but this was a great deep dive into the thinking (or lack of it) behind the ban and other key details.
- Obvious things that I didn’t know:
- The soils are diverse but poor, due to sitting on old crystalline rock.
- Part of the ban was due to the Sinhalese Buddhist religion that most of the Island follows, with an emphasis on purity and self-reliance.
- There was talk of moving towards more of an organic fertiliser, but this was expected to be phased in over a decade or so.
- The rest is quite an epic narrative of state failure and incompetence, including turning to the Chinese, and then trying to go back on their deal, before eventually accepting an IMF bailout.
