After a decade of Darfur it’s time to stop appeasing Sudan’s criminal cabal

The number of victims continues to rise.

The UK has appeased some extremely dubious leaders of oppressive regimes over the years. Today, as we mark the tenth anniversary of the start of systematic ethnic cleansing, killing, rape and torture of Darfur’s population, it’s fair to say we have the measure of President Bashir. After all, he remains the only sitting head of state to be indicted by the International Criminal Court for genocide. This is a man – and a criminal regime – we should not do business with.

Yet Her Majesty’s Government continues to do so – from providing taxpayers money to train Sudanese military, police and security personnel to hosting trade delegations to boost UK economic links with the country. Just this month the UK participated in the Doha aid conference which aims to reconstruct war-torn Darfur – committing to continue the £25m the UK has provided yearly. Few would deny that Darfuri’s urgently need reconstruction funds and aid. But the Doha process works directly with the Khartoum regime – the same criminal cabal which continues to bomb Darfuri villages, ethnically cleanse civilians with the wrong religion and skin colour, and deny access to international humanitarian agencies.

This is not only an absurd waste of taxpayers’ money – it’s also insulting and totally disrespectful to Bashir’s victims. No one knows the true figure – the UN stopped counting in 2008 – but estimates suggest at least 200,000 people have so far been killed, with more than 2 million displaced. Just this week, renewed government air strikes and fighting between rebel forces and killed dozens and displaced many more. Working with the regime, on reconstruction, business, or human rights, gives it the international legitimacy it desperately craves, re-focusing attention away from the very reason why Darfur – and the rest of the country – needs our help. Bashir and his cronies have systematically destroyed the potential of an entire nation. Under his iron rule, Sudan has become a ruthless police state, extreme Sharia law is violently imposed, and the ruling party has worked consistently towards a unified pure Arab Islamist state. Millions of citizens have been killed, thousands are still in refugee camps across Sudan’s border with its neighbours, and the stability of the entire region continues to be shaken by his warmongering.

In 2006 William Hague, now Foreign Secretary, lamented that: ‘International attempts to stop the government in Khartoum from killing its own people have been thwarted by other countries more interested in pursuing their economic or political advantage than in promoting human rights.’ We aren’t the worst offender – but the UK insists on continuing to engage with the regime despite the fact they have not kept their word on any of the numerous – worthless – peace agreements they have signed.

The Darfur10 campaign – led by charities and NGO’s like Waging Peace – is a stark reminder to the UK and international community, that the conflict is far from over. Until we see real progress towards peace the UK must take a much more robust stance. This means pressuring the UN to finally implement its many resolutions – starting with freezing the finances of those who orchestrated – and profited – from the genocide and imposing travel bans for high-ranking officials. More importantly, no-fly zones would finally put a stop to government's gunships which continue to bomb Darfuri citizens, and an increased, more active peacekeeping force in the region could start to offer civilians protection from government sponsored violence.

Today should be an opportunity to remember the thousands of Darfuri civilians who have suffered because of this conflict. Yet the fact that the number of victims continues to rise ten years after it began is a sad indictment of the entire international community’s continuing appeasement of this abhorrent regime.

 

Two girls in Darfur, who lost their homes to the conflict. Photograph: Getty Images
Ralph Orlowski / Getty
Show Hide image

Labour's investment bank plan could help fix our damaging financial system

The UK should learn from the success of a similar project in Germany.

Labour’s election manifesto has proved controversial, with the Tories and the right-wing media claiming it would take us back to the 1970s. But it contains at least one excellent idea which is certainly not out-dated and which would in fact help to address a key problem in our post-financial-crisis world.

Even setting aside the damage wrought by the 2008 crash, it’s clear the UK’s financial sector is not serving the real economy. The New Economics Foundation recently revealed that fewer than 10% of the total stock of UK bank loans are to non-financial and non-real estate businesses. The majority of their lending goes to other financial sector firms, insurance and pension funds, consumer finance, and commercial real estate.

Labour’s proposed UK Investment Bank would be a welcome antidote to a financial system that is too often damaging or simply useless. There are many successful examples of public development banks in the world’s fastest-growing economies, such as China and Korea. However, the UK can look closer to home for a suitable model: the KfW in Germany (not exactly a country known for ‘disastrous socialist policies’). With assets of over 500bn, the KfW is the world’s largest state-owned development bank when its size is measured as a percentage of GDP, and it is an institution from which the UK can draw much-needed lessons if it wishes to create a financial system more beneficial to the real economy.

Where does the money come from? Although KfW’s initial paid-up capital stems purely from public sources, it currently funds itself mainly through borrowing cheaply on the international capital markets with a federal government guarantee,  AA+ rating, and safe haven status for its public securities. With its own high ratings, the UK could easily follow this model, allowing its bank to borrow very cheaply. These activities would not add to the long-run public debt either: by definition an investment bank would invest in projects that would stimulate growth.

Aside from the obviously countercyclical role KfW played during the financial crisis, ramping up total business volume by over 40 per cent between 2007 and 2011 while UK banks became risk averse and caused a credit crunch, it also plays an important part in financing key sectors of the real economy that would otherwise have trouble accessing funds. This includes investment in research and innovation, and special programs for SMEs. Thanks to KfW, as well as an extensive network of regional and savings banks, fewer German SMEs report access to finance as a major problem than in comparator Euro area countries.

The Conservatives have talked a great deal about the need to rebalance the UK economy towards manufacturing. However, a real industrial policy needs more than just empty rhetoric: it needs finance. The KfW has historically played an important role in promoting German manufacturing, both at home and abroad, and to this day continues to provide finance to encourage the export of high-value-added German products

KfW works by on-lending most of its funds through the private banking system. This means that far from being the equivalent of a nationalisation, a public development bank can coexist without competing with the rest of the financial system. Like the UK, Germany has its share of large investment banks, some of which have caused massive instabilities. It is important to note that the establishment of a public bank would not have a negative effect on existing private banks, because in the short term, the UK will remain heavily dependent on financial services.

The main problem with Labour’s proposal is therefore not that too much of the financial sector will be publicly owned, but too little. Its proposed lending volume of £250bn over 10 years is small compared to the KfW’s total financing commitments of  750 billion over the past 10 years. Although the proposal is better than nothing, in order to be effective a public development bank will need to have sufficient scale.

Finally, although Brexit might make it marginally easier to establish the UK Investment Bank, because the country would no longer be constrained by EU State Aid Rules or the Maastricht criteria, it is worth remembering that KfW’s sizeable range of activities is perfectly legal under current EU rules.

So Europe cannot be blamed for holding back UK financial sector reform to date - the problem is simply a lack of political will in the current government. And with even key architects of 1980s financial liberalisation, such as the IMF and the economist Jeffrey Sachs, rethinking the role of the financial sector, isn’t it time Britain did the same?

Dr Natalya Naqvi is a research fellow at University College and the Blavatnik School of Government, University of Oxford, where she focuses on the role of the state and the financial sector in economic development

0800 7318496