Weekend Box: Rach Makes Stateside Splash, Horti-Culture Wars & more
Welcome to The Weekend Box, Audley’s weekly round-up of interesting or obscure political, business and cultural news from around the world.
Image credit/World Economic Forum on Flickr/License
LABOUR’S RACH MAKES STATESIDE SPLASH
Last week, the New Statesman magazine named Shadow Chancellor Rachel Reeves the most influential person on the left of British politics today. Her standing, one place above Labour leader Keir Starmer, reflects the importance of economic credibility to Labour’s hopes of winning the next election.
This has always been their Achilles heel. The belief that Labour governments ‘always spend too much’ explains much about the party’s repeated failure to unseat even the most unpopular Tory governments. As Margaret Thatcher put it, “the trouble with socialism is that you eventually run out of other people’s money.”
Thus, the stakes for the Shadow Chancellor’s trip to New York and Washington this week were high.
Firstly, the optics mattered. The pictures of Reeves standing in the New York Stock Exchange – and her decision to take the Financial Times’s political editor with her – helped to reinforce a key Labour message: this Labour Party is not the one run by Jeremy Corbyn.
But the substance mattered too.
Reeves used a speech at Washington’s Peterson Institute to outline her vision of ‘securonomics.’ The label may be ugly, but the policies and positioning are smart. Securonomics will “allow Britain to embrace the opportunities of the future built on the rock of financial stability and economic security,” “forge a new partnership between an active state and dynamic open markets,” and foster “a new era of global partnerships between nations with shared values and interests.” It consciously embraces Bidenomics in a bid to build a new “green special relationship” between the UK and the US.
The visit overshadowed the Labour leader’s own big speech on the NHS, but he knows he can do nothing unless Reeves can convince people to make her Britain’s first female Chancellor. Her deft handling of her trip to the East Coast this week suggests she’s more than capable of that.
INDONESIA: PRES JOKOWI’S CAPITAL IDEA
Around the world, many capital cities struggle with the pressures of increased populations, constraints of geography, legacies of poor or corrupt urban development and climate change. None more so than Jakarta, Indonesia, which has a list of problems and legacy issues that few can compete with.
These days, the port city whose population has grown from around 1 million in 1945 to over 30 million today, has around 40% of its area below sea level. As the Java Sea levels rise, the city sinks, due to a ‘pancaking’ effect caused by uncontrolled well-digging and construction. The city is polluted, frequently flooded, often gridlocked and out of space.
One man who led many heroic attempts to tackle the city’s problems is former city Governor and now-President Joko Widodo. For two years as Governor, Widodo, a former slum resident, tried to improve Jakarta through engineering projects like new sea walls and better public transport networks. On becoming President, however, he has decided that Indonesia needs a new capital.
Widodo chose a fresh site in Borneo, some 800 miles away from Java, for his concept: a green metropolis called Nusantara. It means ‘archipelago’ in traditional Javanese, appropriate for a country spanning 17,000 islands. After developing plans at breakneck speed and committing some $30bn of funding, Widodo has plans for a city designed to be 75% green space, renewably powered and with sustainable infrastructure. Yet with Phase 1 government buildings due to be built within 2 years, no construction has begun and the project has failed to attract the domestic and international investment needed to cover 80% of projected costs.
Widodo needs to achieve irreversible progress or political commitment before his term ends next year, or the concept will fail. Plans keep shifting and some dismiss the scheme as a vanity project. Yet Widodo’s approval ratings were 76% this year and many back Nusantara as a venture that could unite the country while providing a model capital fit for the future.
AI: ARTIFICE & INTELLIGENCE
Hardly a day goes by without AI developments making the headlines in some way, but this has been a particularly busy week of stories about the technology that is rapidly changing our lives - for both the better and worse.
On Monday, the internet was swamped with an AI-generated image of an explosion next to the Pentagon. The photo was shared not only by members of the public, but by respected financial news websites and on an Indian television network. The stock market took note and as the image circulated, the S&P 500 index fell 0.3%.
The tales of AI causing havoc are almost too numerous to count. Spare a thought for a man in China who joined his friend on a video call. Seeing his friend’s face and hearing his voice, he followed his friend’s advice when told to transfer 4.3m yuan, circa half a million pounds. Of course, it wasn’t his friend at all but a deepfake and the police are now ‘working to trace’ his funds.
It’s no wonder former Google boss Eric Schmidt joined the chorus of tech giants expressing concern about AI’s growing power. He warned an audience at the Wall Street Journal CEO Council in London that AI has the potential to harm or kill “many many people” in the near future: “Reasonably soon… these systems will be able to find zero day exploits, cyber issues or discover new kinds of biology… When that happens we want to be ready to know how to make sure these things are not misused by evil people.”
And yet, on Thursday in the same week, it was announced that AI had aided the discovery of a new antibiotic, capable of killing a harmful bacteria called acinetobacter baumannii – one of three superbugs that the World Health Organization has deemed to be a ‘critical’ threat. Highs and lows.
Nothing a Downing Street roundtable can’t resolve? Luckily Rishi Sunak hosted Sam Altman, CEO of OpenAI, along with other AI leaders on Wednesday to discuss potential for an international regulator for AI (incidentally, something Schmidt said the US was unlikely to create). Whatever form this body takes, it’ll need to act quickly.
JOURNO CRIES FOUL OVER BOE LOWBALLING
A BBC journalist is re-opening banking’s Pandora’s Box with newly published accusations that the scale of Libor misconduct that caused a scandal in 2012 was much greater than originally thought.
Andy Verity’s new book Rigged: The Incredible True Story of the Whistleblowers Jailed after Exposing the Rotten Heart of the Financial System sheds light on the damning evidence suggesting the Bank of England and UK government had pressured Barclays to ‘lowball’ Libor rates during the 2008 financial crisis; evidence that also inculpates the European Central Bank and Federal Reserve, yet which was conspicuously absent from regulators’ public statements after Barclays found itself at the centre of 2012’s interest rate ‘rigging’ scandal.
Libor, or the London Interbank Offered Rate, provides a benchmark for setting interest rates on financial products based on daily interest rate estimates collected from global banks. While Barclays bankers were arrested and the bank fined £290mn in 2012 for submitting lower Libor estimates than were being charged, Verity suggests this was only the tip of the iceberg.
He argues the BoE not only condoned Libor ‘lowballing’ but had engaged in it “on a much greater scale than traders who were jailed” years before the 2012 scandal broke, at the height of the financial crisis. His evidence includes a recorded phone call between a senior Barclays executive and its senior Libor settler about “pressure from the UK government and the Bank of England about pushing our Libors lower”
Interestingly, Verity publishes his investigation as the Social Science Research Network shares its findings that bankers working from home generate substantially less financial misconduct reports and investigations than those working in the office, in part due to “decreased exposure to coworkers who may be guilty of their own misconduct” and “information that could motivate…insider trading or collusion.” A robust WFH strategy could help bankers keep their noses clean, but how our central banks and government respond to Verity’s charges will surely require a much bigger shake-up.
Image credit/Karen Roe/ Wikimedia Commons
HORTI-CULTURE WARS
Champagne, parties, royal visitors, and of course, horticulture. This week the show gardens opened and thousands flocked to the prestigious Chelsea Flower Show, which has now entered its 111th year.
At this year’s show, the main theme was the ‘restorative power of gardens and gardening’, with displays that conveyed powerful social messages about mental health, sustainability, homelessness, and accessibility. One of those displays was Horatio’s Garden which won Best Show Garden for the immersive, calming, and accessible sanctuary it created for people with spinal injuries. The garden, which was designed by Charlotte Harris and Hugo Bugg, counterbalances the sterility of hospital wards and will be relocated for the enjoyment of patients at the Princess Royal spinal injuries centre in Sheffield.
Another stand-out was The Centrepoint Garden. While evoking strong reactions from some visitors for its portrayal of urban decay, the designer Cleve West took home gold and the Best Construction Award for his wild and fragmented habitat. The garden is a powerful metaphor for the work Centrepoint does to help young people find homes and build lives, with a part-demolished house that has been overcome by nature and ‘so-called’ weeds acting as the main focal point.
Those ‘so-called’ weeds, which have featured in 12 show gardens this year, have caused quite a stir among Chelsea Flower Show traditionalists, including Alan Titchmarsh, who is vice president of the Royal Horticultural Society (RHS). He has voiced concerns about the recent shift towards ‘rewilding’ (restoring land to its natural uncultivated state), arguing that gardening “by its very nature is intervention” and that the RHS should stop ‘pandering’ to fashion, and do more to preserve horticultural excellence. Chelsea’s back-to-nature format is not the only thing that has changed. This year it’s less about schmoozing and more about charities, and the social issues they champion through the support of Project Giving Back which has helped fund 15 gardens.
This has also been reflected in its sponsorship, with Chelsea gradually moving away from big corporate sponsors like M&G (which was the headline sponsor for 11 years), towards smaller, eco-focused brands like The Newt. This year’s show is definitely its wildest and weedy-ist, and for all the fauna and fizz, the historic institution is signaling a change in direction.
And that’s it for this week. I hope you found something of interest that you might want to delve into further. If so, please get in touch at cwilkins@audleyadvisors.com.
For now, that’s The Weekend Box officially closed.