Gordon Brown must let the Chagos Islanders go home

Conservation projects should not stop the exiled islanders from returning.

Whoever came up with the bright idea that turning the Chagos Archipelago, part of the British Indian Ocean Territory, into a Marine Protected Area (MPA) would be a fitting and lasting legacy for Gordon Brown's premiership must be scratching his or her head. The two genies -- Mauritius's claim to the territory and the position of the exiled Chagos Islanders who were removed from their homeland by the British authorities -- are now well and truly out of the bottle.

Last month a workshop was held at Royal Holloway College to discuss the socio-economic implications of the proposed MPA. The Mauritian High Commissioner, Abhimanu Kundasamy, who was due to give an opening address pulled out at the last minute on instructions from Port Louis.
In a letter to the Times a few days later Kundasamy spelt out in no uncertain terms how his government viewed the British government's initiative over the MPA. "The right of Mauritius to enjoy sovereignty over the archipelago, and the failure of the promoters of the marine project to address this issue meaningfully, are serious matters," he warned. "There can be no legitimacy to the project without the issue of sovereignty and resettlement being addressed to the satisfaction of the government of Mauritius."

But the plan to turn an area of 210,000 square miles -- twice the size of Great Britain -- into a marine reserve has some very influential supporters including many of the leading conservation groups in the UK including the Linnean Society, the Marine Conservation Society, the Royal Botanic Gardens of Kew and the RSPB operating under an umbrella organisation, the Chagos Environment Network, which is backed by the Pew Environment Group, a large and very influential US environmental charity, which persuaded President George W Bush to declare the Northwestern Hawaiian Islands a MPA in 2006. And it is clear that although these conservation groups give a nod towards the exiled Chagos Islanders, whose case is currently before the European Court of Human Rights, they would be very happy if they were not allowed the right of return.

In fact, their attitude well illustrates a general problem with a traditional and conservative approach to conservation that has a long but not very glorious history. Last year leading US investigative journalist, Mark Dowie, published Conservation Refugees: The Hundred -Year Conflict between Conservation and Native Peoples where he exposed some of the injustices that have often been at the heart of many apparently successful land conservation projects.

At Yosemite in the eastern Sierra Nevada Mountains of California, for example, there was a concerted and ultimately successful effort from the mid-19th-century until 1914 when the area became a national park, to expel a small group of Miwak Native Americans who are thought to have settled in the valley some 4000 years ago.

Similarly, nearly all of the other national parks in the USA, including Everglades, Glacier, Grand Canyon, Mesa Verde, Mount Rainier, Yellowstone, and Zion, were created by expelling, sometimes violently, tribal peoples from their homes and hunting grounds so that the areas recovered could remain in a "state of nature" free from human contamination.

This process has been replicated in other parts of the world as well. Indeed, Dowie estimates that over the last 100 years at least 20 million people, 14 million in Africa alone, have been displaced from their traditional homelands in the name of nature conservation by consciously employing "the Yosemite model" (which in Africa was renamed "fortress conservation") often with the tacit backing of NGOs like The Nature Conservancy, the World Wide Fund for Nature, and the African Wildlife Foundation.

Exactly 40 years ago, British social anthropologist Mary Douglas pointed out that in assessing risks to environments caused by "human folly, hate and greed" it was vitally important to achieve a moral consensus by carefully scrutinising the concepts and theories which powerful groups used to explain things to themselves (and others).

But Douglas also issued the warning that relying on mainstream scientists who had absorbed not only the biases of their own professions but were also possessed by the emotional (and she might have said political) attachment to system-building was of little use for guidance in trying to resolve serious environmental problems. Insight was much more likely to come from those operating at the margins or where a number of disciplines intersected, she claimed.

History has proved Douglas right. According to Mark Dowie and others, the old model of conservation which falsely opposed nature (good) and culture (bad) is being replaced with something much more dynamic, a new transnational conservation paradigm. A younger generation of scientists recognise that properly engaged indigenous and traditional peoples have a vital role to play in preserving fragile ecosystems.

Which brings us neatly back to the Chagos Islanders. They may be relatively recent inhabitants of the Chagos Archipelago (they first arrived in 1783) but no one can legitimately claim that they do not possess the status of an indigenous or traditional people just like those descendants of former African slaves and Indian indentured labourers who live on other Indian Ocean islands like Mauritius, Reunion, Rodrigues and the Seychelles.

While the evidence is clear that uncontrolled fishing can have catastrophic consequences, the idea that a small settlement of Chagossians involved in subsistence fishing and a carefully controlled number of eco-tourists would destroy the pristine qualities of the proposed MPA in the Chagos Archipelago is nothing short of preposterous, and flies in the face of evidence from other parts of the world like Australia, Chile, Indonesia and the Philippines where indigenous and traditional peoples are fully involved in the conservation and maintenance of marine reserves.

Traditionally minded environmentalists may be able to line up a fair number of scientists and traditionally-minded conservation groups to back their argument, but the truth is that the argument has moved on as witnessed by the signatories of a petition organised by the Marine Education Trust to allow the islanders to return to their homeland in the proposed MPA who include Andrew Balmford (Professor of Conservation Science, Cambridge University), Barbara Brown (Emeritus Professor of Tropical Marine Biology, Newcastle University), David Bellamy ( Professor of Adult and Continuing Education, Durham University) and Thomas Eriksen ( Professor of Social Anthropology, Oslo University).

Why have these people signed up? Well, it's not just because of evolving social and political realities, which have undermined a hierarchical view of the world, informed by the principle that conservationists always know best. It is also because the old opposition between nature conservation, where humans were seen as "the enemy" in the preservation of biological diversity, has been rightly found wanting, and is being slowly but surely being replaced by a much better model.

So here is some advice for Gordon Brown about a lasting legacy for his time in office: let the Chagos Islanders return to their homeland and settle the issue of sovereignty of the Archipelago with Mauritius once and for all.

Dr Sean Carey is Research Fellow at the Centre for Research on Nationalism, Ethnicity and Multiculturalism (CRONEM) at Roehampton University

MILES COLE
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The new Brexit economics

George Osborne’s austerity plan – now abandoned by the Tories – was the most costly macroeconomic policy mistake since the 1930s.

George Osborne is no longer chancellor, sacked by the post-Brexit Prime Minister, Theresa May. Philip Hammond, the new Chancellor, has yet to announce detailed plans but he has indicated that the real economy rather than the deficit is his priority. The senior Conservatives Sajid Javid and Stephen Crabb have advocated substantial increases in public-sector infrastructure investment, noting how cheap it is for the government to borrow. The argument that Osborne and the Conservatives had been making since 2010 – that the priority for macroeconomic policy had to be to reduce the government’s budget deficit – seems to have been brushed aside.

Is there a good economic reason why Brexit in particular should require abandoning austerity economics? I would argue that the Tory obsession with the budget deficit has had very little to do with economics for the past four or five years. Instead, it has been a political ruse with two intentions: to help win elections and to reduce the size of the state. That Britain’s macroeconomic policy was dictated by politics rather than economics was a precursor for the Brexit vote. However, austerity had already begun to reach its political sell-by date, and Brexit marks its end.

To understand why austerity today is opposed by nearly all economists, and to grasp the partial nature of any Conservative rethink, it is important to know why it began and how it evolved. By 2010 the biggest recession since the Second World War had led to rapid increases in government budget deficits around the world. It is inevitable that deficits (the difference between government spending and tax receipts) increase in a recession, because taxes fall as incomes fall, but government spending rises further because benefit payments increase with rising unemployment. We experienced record deficits in 2010 simply because the recession was unusually severe.

In 2009 governments had raised spending and cut taxes in an effort to moderate the recession. This was done because the macroeconomic stabilisation tool of choice, nominal short-term interest rates, had become impotent once these rates hit their lower bound near zero. Keynes described the same situation in the 1930s as a liquidity trap, but most economists today use a more straightforward description: the problem of the zero lower bound (ZLB). Cutting rates below this lower bound might not stimulate demand because people could avoid them by holding cash. The textbook response to the problem is to use fiscal policy to stimulate the economy, which involves raising spending and cutting taxes. Most studies suggest that the recession would have been even worse without this expansionary fiscal policy in 2009.

Fiscal stimulus changed to fiscal contraction, more popularly known as austerity, in most of the major economies in 2010, but the reasons for this change varied from country to country. George Osborne used three different arguments to justify substantial spending cuts and tax increases before and after the coalition government was formed. The first was that unconventional monetary policy (quantitative easing, or QE) could replace the role of lower interest rates in stimulating the economy. As QE was completely untested, this was wishful thinking: the Bank of England was bound to act cautiously, because it had no idea what impact QE would have. The second was that a fiscal policy contraction would in fact expand the economy because it would inspire consumer and business confidence. This idea, disputed by most economists at the time, has now lost all credibility.

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The third reason for trying to cut the deficit was that the financial markets would not buy government debt without it. At first, this rationale seemed to be confirmed by events as the eurozone crisis developed, and so it became the main justification for the policy. However, by 2012 it was becoming clear to many economists that the debt crisis in Ireland, Portugal and Spain was peculiar to the eurozone, and in particular to the failure of the European Central Bank (ECB) to act as a lender of last resort, buying government debt when the market failed to.

In September 2012 the ECB changed its policy and the eurozone crisis beyond Greece came to an end. This was the main reason why renewed problems in Greece last year did not lead to any contagion in the markets. Yet it is not something that the ECB will admit, because it places responsibility for the crisis at its door.

By 2012 two other things had also become clear to economists. First, governments outside the eurozone were having no problems selling their debt, as interest rates on this reached record lows. There was an obvious reason why this should be so: with central banks buying large quantities of government debt as a result of QE, there was absolutely no chance that governments would default. Nor have I ever seen any evidence that there was any likelihood of a UK debt funding crisis in 2010, beyond the irrelevant warnings of those “close to the markets”. Second, the austerity policy had done considerable harm. In macroeconomic terms the recovery from recession had been derailed. With the help of analysis from the Office for Budget Responsibility, I calculated that the GDP lost as a result of austerity implied an average cost for each UK household of at least £4,000.

Following these events, the number of academic economists who supported austerity became very small (they had always been a minority). How much of the UK deficit was cyclical or structural was irrelevant: at the ZLB, fiscal policy should stimulate, and the deficit should be dealt with once the recession was over.

Yet you would not know this from the public debate. Osborne continued to insist that deficit reduction be a priority, and his belief seemed to have become hard-wired into nearly all media discussion. So perverse was this for standard macroeconomics that I christened it “mediamacro”: the reduction of macroeconomics to the logic of household finance. Even parts of the Labour Party seemed to be succumbing to a mediamacro view, until the fiscal credibility rule introduced in March by the shadow chancellor, John McDonnell. (This included an explicit knockout from the deficit target if interest rates hit the ZLB, allowing fiscal policy to focus on recovering from recession.)

It is obvious why a focus on the deficit was politically attractive for Osborne. After 2010 the coalition government adopted the mantra that the deficit had been caused by the previous Labour government’s profligacy, even though it was almost entirely a consequence of the recession. The Tories were “clearing up the mess Labour left”, and so austerity could be blamed on their predecessors. Labour foolishly decided not to challenge this myth, and so it became what could be termed a “politicised truth”. It allowed the media to say that Osborne was more competent at running the economy than his predecessors. Much of the public, hearing only mediamacro, agreed.

An obsession with cutting the deficit was attractive to the Tories, as it helped them to appear competent. It also enabled them to achieve their ideological goal of shrinking the state. I have described this elsewhere as “deficit deceit”: using manufactured fear about the deficit to achieve otherwise unpopular reductions in public spending.

The UK recovery from the 2008/2009 recession was the weakest on record. Although employment showed strong growth from 2013, this may have owed much to an unprecedented decline in real wages and stagnant productivity growth. By the main metrics by which economists judge the success of an economy, the period of the coalition government looked very poor. Many economists tried to point this out during the 2015 election but they were largely ignored. When a survey of macroeconomists showed that most thought austerity had been harmful, the broadcast media found letters from business leaders supporting the Conservative position more newsworthy.

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In my view, mediamacro and its focus on the deficit played an important role in winning the Conservatives the 2015 general election. I believe Osborne thought so, too, and so he ­decided to try to repeat his success. Although the level of government debt was close to being stabilised, he decided to embark on a further period of fiscal consolidation so that he could achieve a budget surplus.

Osborne’s austerity plans after 2015 were different from what happened in 2010 for a number of reasons. First, while 2010 austerity also occurred in the US and the eurozone, 2015 austerity was largely a UK affair. Second, by 2015 the Bank of England had decided that interest rates could go lower than their current level if need be. We are therefore no longer at the ZLB and, in theory, the impact of fiscal consolidation on demand could be offset by reducing interest rates, as long as no adverse shocks hit the economy. The argument against fiscal consolidation was rather that it increased the vulnerability of the economy if a negative shock occurred. As we have seen, Brexit is just this kind of shock.

In this respect, abandoning Osborne’s surplus target makes sense. However, there were many other strong arguments against going for surplus. The strongest of these was the case for additional public-sector investment at a time when interest rates were extremely low. Osborne loved appearing in the media wearing a hard hat and talked the talk on investment, but in reality his fiscal plans involved a steadily decreasing share of public investment in GDP. Labour’s fiscal rules, like those of the coalition government, have targeted the deficit excluding public investment, precisely so that investment could increase when the circumstances were right. In 2015 the circumstances were as right as they can be. The Organisation for Economic Co-operation and Development, the International Monetary Fund and pretty well every economist agreed.

Brexit only reinforces this argument. Yet Brexit will also almost certainly worsen the deficit. This is why the recent acceptance by the Tories that public-sector investment should rise is significant. They may have ­decided that they have got all they could hope to achieve from deficit deceit, and that now is the time to focus on the real needs of the economy, given the short- and medium-term drag on growth caused by Brexit.

It is also worth noting that although the Conservatives have, in effect, disowned Osborne’s 2015 austerity, they still insist their 2010 policy was correct. This partial change of heart is little comfort to those of us who have been arguing against austerity for the past six years. In 2015 the Conservatives persuaded voters that electing Ed Miliband as prime minister and Ed Balls as chancellor was taking a big risk with the economy. What it would have meant, in fact, is that we would already be getting the public investment the Conservatives are now calling for, and we would have avoided both the uncertainty before the EU referendum and Brexit itself.

Many economists before the 2015 election said the same thing, but they made no impact on mediamacro. The number of economists who supported Osborne’s new fiscal charter was vanishingly small but it seemed to matter not one bit. This suggests that if a leading political party wants to ignore mainstream economics and academic economists in favour of simplistic ideas, it can get away with doing so.

As I wrote in March, the failure of debate made me very concerned about the outcome of the EU referendum. Economists were as united as they ever are that Brexit would involve significant economic costs, and the scale of these costs is probably greater than the average loss due to austerity, simply because they are repeated year after year. Yet our warnings were easily deflected with the slogan “Project Fear”, borrowed from the SNP’s nickname for the No campaign in the 2014 Scottish referendum.

It remains unclear whether economists’ warnings were ignored because they were never heard fully or because they were not trusted, but in either case economics as a profession needs to think seriously about what it can do to make itself more relevant. We do not want economics in the UK to change from being called the dismal science to becoming the “I told you so” science.

Some things will not change following the Brexit vote. Mediamacro will go on obsessing about the deficit, and the Conservatives will go on wanting to cut many parts of government expenditure so that they can cut taxes. But the signs are that deficit deceit, creating an imperative that budget deficits must be cut as a pretext for reducing the size of the state, has come to an end in the UK. It will go down in history as probably the most costly macroeconomic policy mistake since the 1930s, causing a great deal of misery to many people’s lives.

Simon Wren-Lewis is a professor of economic policy at the Blavatnik School of Government, University of Oxford. He blogs at: mainlymacro.blogspot.com

 Simon Wren-Lewis is is Professor of Economic Policy in the Blavatnik School of Government at Oxford University, and a fellow of Merton College. He blogs at mainlymacro.

This article first appeared in the 21 July 2016 issue of the New Statesman, The English Revolt