The market for state territory - Pass the hemlock

The Economist has published an intriguing little article today—asking us to imagine a world in which countries still traded land for money....

Hellenic opinion was outraged last year when Frank Schäffler, a German politician, advised “bankrupt Greeks” to “sell your islands…and sell the Acropolis too!” That is hardly practical politics: as long as Greece remains a democracy, the political, and perhaps biological, lifespan of a leader who proposed hauling down the flag over even the tiniest Aegean outcrop would be measured in hours.

The furore obscured what Mr Schäffler was proposing: lease, commercial sale or a transfer of sovereignty. The government is already selling some land. The Institute for Strategic and Development Studies, a think-tank in Athens, says the Greek state has €35 billion ($47 billion) of property immediately available, which could cover 10% of its debt. KAPPA, a business lobby, suggests €75 billion. Stefanos Manos, an ex-finance minister, says a new state investment company could manage and dispose of property worth €200 billion. But just imagine that the exasperated northerners were dreaming of something more radical: fully ceding sovereign authority.

Territorial swaps for cash seem unthinkable today. But they were once common, especially when European powers were jostling for land in the New World. The United States’ 1803 purchase of the Louisiana territory from Napoleon for $15m (now $312m) is the most famous case. Germany bought the Caroline Islands, in the Pacific, from Spain in 1899 for 25m pesetas ($107m today). And during the First World War America paid Denmark $25m ($530m) for what are now the United States Virgin Islands, mainly to stop Germany buying them.

In an era of self-determination sales of territory have come to seem anachronistic. But leases, involving a de facto transfer of control, are common. In 2010 Russia extended a deal granting Finland a canal for 50 years, and gave Ukraine concessions worth €30 billion to park its fleet at Sevastopol for 25 more years. Michael Strauss of the Centre for Diplomatic and Strategic Studies in Paris sees “no obvious reason” why countries have stopped buying and selling land. “It’s a totally legitimate way for sovereignty to change under international law.”

Arturas Zuokas, the mayor of Vilnius, has made a teasing offer to Greece; he suggested his country acquire an island as “an exclusive place for rest in the Mediterranean” and “a great global advert for Lithuania”, featuring a spa, museums and a theatre. But he did not say whether he wanted title or sovereignty. Lithuania is forecast to be the euro zone’s fastest-growing economy in 2012, but the €7m on offer would only nibble at Greece’s debts.

The thinness of the market gives little indication of what sovereignty is worth. One guide might be the net present value of future tax payments, minus the net costs of public services disbursed there. Greece’s unusual habits with tax and spending could distort that indicator; but it could tempt an outsider to try to run the territory better. Auctions are the best way of setting prices—but would risk jangling nerves. Iran might find an Aegean island a handy way of foiling NATO’s planned missile-defence shield. Perhaps Greece could scare Germany into softer terms just by threatening such a sale.

Many a private-equity firm has overestimated the profits to be wrung from buy-outs, and the sovereignty market may be no exception. When America bought Alaska from Russia for $7.2m (now $113m), in 1867, some called it folly—and how wrong they were, American schoolbooks declare. But the sceptics might be right. David Barker, a professor at the University of Iowa, says that despite its oil wealth, Alaska was so costly to develop that the Treasury has lost money on the deal.

Intervention, Libya, and the Future of Sovereignty

Anne-Marie Slaughter, the Bert G. Kerstetter '66 University Professor of Politics and International Affairs at Princeton University, previously the director of policy planning for the U.S. State Department and dean of Princeton's Woodrow Wilson School of Public and International Affairs, writes today in The Atlantic regarding the significance of NATO's current intervention. Professor Slaughter (great name!) believes that "International law -- and the governments that bring it into being -- are (in) the process of redefining the definition of sovereignty"....

UK recognises Libyan rebels, expels Gaddafi's London staff

The Guardian is just one of several newspapers today that carries the lead UK story regarding the ongoing conflict in Libya. This article reports on a significant shift in recognition by HM Government, with no small significance for Gaddafi's legitimacy and Libyan sovereignty:

Britain is expelling the Libyan chargé d'affaires and all eight remaining Libyan embassy staff in London after David Cameron and William Hague ruled that Libya's national transitional council (NTC) was now the "sole governmental authority" in the country.

The chargé was summoned to a meeting at the Foreign Office, where he was given three days to leave Britain. Other diplomats at the Libyan People's Bureau, in Knightsbridge – which has been under heavy police guard since the launch of the military campaign in March – have been told to leave over the course of the summer.

Hague announced the expulsions at a Foreign Office press conference on Wednesday as he invited the NTC to nominate an ambassador and other diplomats to take over the Libyan mission. The foreign secretary said: "The prime minister and I have decided that the United Kingdom recognises and will deal with the national transitional council as the sole governmental authority in Libya.

"This decision reflects the national transitional council's increasing legitimacy, competence and success in reaching out to Libyans across the country.

"Through its actions, the national transitional council has shown its commitment to a more open and democratic Libya, something that it is working to achieve in an inclusive political process. This is in stark contrast to Gaddafi, whose brutality against the Libyan people has stripped him of all legitimacy."

Hague said Britain – which has temporarily closed its embassy in Tripoli – now runs its largest diplomatic mission in north Africa after Cairo in the Libyan rebel stronghold of Benghazi. This will be designated as an embassy if the NTC requests an upgrade.

The decision to recognise the NTC as sole governmental authority led to the unfreezing of £91m in UK assets belonging to the Arabian Gulf Oil Company, a Libyan oil firm under the NTC's control. Foreign Office sources said the assets were unfrozen after the NTC gave assurances that the funds would be used to purchase fuel and not arms, which would be illegal under UN security council resolutions.

There's a video of the announcement as well...

South Sudan becomes an independent nation

The big news this morning, of course, lies in the realisation that every world map previously published is now out of date... Considerable coverage is being given across all channels on South Sudan's declaration of independence as a new and separate country from its northern counterpart.

BBC News captures the essentials in its main article, which also includes maps and excellent video on both the South Sudanese declaration of independence and the story behind it:

South Sudan has become the world's newest nation, the climax of a process made possible by the 2005 peace deal that ended a long and bloody civil war. Sudan's President Omar al-Bashir and UN Secretary General Ban Ki-moon are among international dignitaries attending celebrations in the capital, Juba.

Sudan earlier became the first state to officially recognise its new neighbour. The south's independence follows decades of conflict with the north in which some 1.5 million people died.

Celebrations in Juba began at midnight (2100 GMT). A countdown clock in the city centre reached zero and the new national anthem was played on television.

South Sudan became the 193rd country recognised by the UN and the 54th UN member state in Africa.

Officials had planned for people to hold quiet celebrations at home, with the formal declaration of independence due later on Saturday. But the people clearly couldn't wait. Two hours before midnight and lines of cars zoomed around town packed with people waving flags and waiting to celebrate. When the final countdown arrived, the atmosphere was wild. Groups ran down roads, dancing to drum beats. Soldiers and policemen joined in too, waving paper flags and laughing. A sign read: "Congratulations, free at last, South Sudan." But the people didn't need to read the message - they were already dancing and leaping with happiness.

"It is a shout of freedom," said Alfred Tut, lifting his head back and screaming.

The BBC's Will Ross in Juba says the new country's problems are being put aside for the night, and there is an air of great jubilation. People are in the streets, cheering, waving South Sudan flags, banging drums and chanting the name of President Salva Kiir Mayardit, he adds.

A formal independence ceremony is due to be held later on Saturday. The Speaker of the South Sudan Legislative Assembly, James Wani Igga, is expected to read out the Proclamation of the Independence of South Sudan at 1145 (0845 GMT). Minutes later Sudan's national flag will be lowered and the new flag of South Sudan will be raised.

In addition to Mr Bashir and Mr Ban, attendees will include former US Secretary of State Colin Powell, the US permanent representative to the UN, Susan Rice, and the head of the US military's Africa Command, Gen Carter Ham.

Under the Comprehensive Peace Agreement, a referendum was held on independence, which was favoured by more than 99% of voters. The new country is rich in oil, but one of the least developed countries in the world, where one in seven children dies before the age of five. Unresolved disputes between the north and south, particularly over the new border, have also raised the possibility of renewed conflict.

On Friday, Sudan's Minister of Presidential Affairs, Bakri Hassan Saleh, announced that it recognised "the Republic of South Sudan as an independent state, according to the borders existing on 1 January 1956", when Sudan gained independence from Britain.

BBC News: Argentine leader says UK 'arrogant' over Falklands

The president of Argentina, Cristina Fernandez de Kirchner, has called Britain "arrogant" for refusing to negotiate on the Falklands.

She was speaking a day after UK Prime Minister David Cameron said the issue of sovereignty was non-negotiable. President Fernandez called his refusal to hold talks on the sovereignty of the Falklands, or Malvinas, arrogant and bordering on stupidity.

Britain defeated an Argentine invasion of the islands in 1982. The Falklands are at the centre of a territorial dispute dating back to the 19th Century. Argentina has repeatedly requested talks on the islands' future sovereignty.

But most Falkland islanders wish to retain British sovereignty and 14 June is marked as Liberation Day in the capital, Port Stanley. In the House of Commons on Wednesday Mr Cameron said "as long as the Falkland Islands want to be sovereign British territory, they should remain sovereign British territory - full stop, end of story."

President Fernandez described his comments as an "expression of mediocrity, and almost of stupidity". She said the British "continue to be a crude colonial power in decline".

But during Wednesday's Prime Minister's Questions Conservative MP Andrew Rosindell urged Mr Cameron to remind President Barack Obama that "the British government will never accept any kind of negotiations over the South Atlantic archipelago".

Earlier this week a British man became the first Falkland islander to choose Argentine citizenship. James Peck was handed his national identity card by President Fernandez, during a ceremony to mark the 29th anniversary of the end of the Falklands War. Mr Peck's father Terry was a member of the Falkland Islands Defence Force and died during the conflict.

Sandy Woodward, the retired admiral who led the British taskforce which set sail for the Falklands in 1982, told a newspaper earlier this week he feared the islands were "now perilously close to being indefensible".

He told the Daily Mail: "Twenty-nine years ago today, we re-claimed the Falklands for Britain in one of the most remarkable campaigns since the Second World War.

"The simple truth is without aircraft carriers and without the Americans, we would not have any hope of doing the same again today."

Thomas L. Friedman: Tribes with Flags

Widely-respected New York Times Op-Ed columnist Thomas L. Friedman has a brilliant piece out today discussing the widely varying standards of statehood and sovereignty in the Middle East. Here's a flavour:

David Kirkpatrick, the Cairo bureau chief for The Times, wrote an article from Libya on Monday that posed the key question, not only about Libya but about all the new revolutions brewing in the Arab world: “The question has hovered over the Libyan uprising from the moment the first tank commander defected to join his cousins protesting in the streets of Benghazi: Is the battle for Libya the clash of a brutal dictator against a democratic opposition, or is it fundamentally a tribal civil war?”

This is the question because there are two kinds of states in the Middle East: “real countries” with long histories in their territory and strong national identities (Egypt, Tunisia, Morocco, Iran); and those that might be called “tribes with flags,” or more artificial states with boundaries drawn in sharp straight lines by pens of colonial powers that have trapped inside their borders myriad tribes and sects who not only never volunteered to live together but have never fully melded into a unified family of citizens. They are Libya, Iraq, Jordan, Saudi Arabia, Syria, Bahrain, Yemen, Kuwait, Qatar and the United Arab Emirates. The tribes and sects that make up these more artificial states have long been held together by the iron fist of colonial powers, kings or military dictators. They have no real “citizens” in the modern sense. Democratic rotations in power are impossible because each tribe lives by the motto “rule or die” — either my tribe or sect is in power or we’re dead.

It is no accident that the Mideast democracy rebellions began in three of the real countries — Iran, Egypt and Tunisia — where the populations are modern, with big homogenous majorities that put nation before sect or tribe and have enough mutual trust to come together like a family: “everyone against dad.” But as these revolutions have spread to the more tribal/sectarian societies, it becomes difficult to discern where the quest for democracy stops and the desire that “my tribe take over from your tribe” begins.

South Sudan backs independence - results

BBC News Online brings news of the official announcement today of the results from the recent week-long referendum in southern Sudan:

Southern Sudan voted overwhelmingly for independence, election officials have confirmed.

Southern Sudan voted overwhelmingly for independence, election officials have confirmed. They said nearly 99% of the voters in January's referendum were in favour of dividing Africa's biggest country.

Earlier, Sudanese President Omar al-Bashir again said he would accept the outcome of the vote. The poll was agreed as part of a 2005 peace agreement ending more than two decades of civil war between the south and north Sudan.

Although the vote was peaceful, tension remains high in parts of the oil-rich border region. At least 50 people were killed over the weekend in fighting between soldiers in south Sudan's Upper Nile state.

On Monday, the Southern Sudan Referendum Commission announced in Khartoum that 98.83% of the voters had backed independence.

"Those who voted for unity were 44,888, that is, 1.17%. Those who voted for separation were 3,792,518, that is, 98.83%," commission head Mohamed Ibrahim Khalil said.

Do read the rest of the article—One new country coming up....!

South Sudan referendum: 99% vote for independence

BBC News Online has a summary report of the first complete results:

Some 99% of South Sudanese voted to secede from the north, according to the first complete results of the region's independence referendum.

A total of 99.57 percent of those polled voted for independence, according to the referendum commission. Early counting had put the outcome of the ballot beyond doubt, indicating Southern Sudan had secured a mandate to become the world's newest nation.

The poll was agreed as part of a 2005 peace deal to end two decades of war.

Final results from the 9-15 January vote, which Sudanese President Omar al-Bashir has said he will accept, are expected early next month.

If the result is confirmed, the new country is set to formally declare its independence on 9 July.

 Read the rest...

BBC News: Sudan - One Country or Two?

BBC News Online features a convenient and (carto)graphic summary of the issues surrounding the referendum to be held in southern Sudan this Sunday:

http://www.bbc.co.uk/news/world-africa-12115013

The Sudanese referendum will (failing any catastrophes) form the main global news story over the first non-holiday weekend of New Year 2011. The BBC provides a convenient summary:

Sudan - Africa's biggest country - seems to be on the verge of splitting in two. Southerners will vote on Sunday whether or not to leave the north. These maps show the extent to which Sudan is already two nations - a richer, Arabic-speaking, Muslim north and a poorer south devastated by years of conflict and neglect.

The internet provides any number of convenient resources for this important event. Wikipedia, of course, represents a convenient starting point:

http://en.wikipedia.org/wiki/Southern_Sudanese_independence_referendum,_2011

Guardian: WikiLeaks: Shell's grip on Nigerian state revealed

The Guardian outlines the latest scoop from the Wikileaks cables exposé: From the oil-rich nation of Nigeria, US embassy cables reveal a top Shell executive's claims that company 'knows everything' about key decisions in Nigerian government ministries.

Full article: http://www.guardian.co.uk/business/2010/dec/08/wikileaks-cables-shell-nigeria-spying

Clearly, these revelations have considerable significance for the apparent capacity of multinational companies to compromise the sovereignty of states in the developing world (the article notes that 70% of Nigerians live below the poverty line, despite the oil).

A brilliant example of recent globalisation or something that has already gone on for centuries?

Anglo-French armed forces plan greater military co-operation

The Guardian (amongst others) brings news that the UK and France are currently destined for greatly enhanced military co-operation—the respective governments insist that sovereignty will be retained nonetheless...

http://www.guardian.co.uk/politics/2010/oct/27/britain-france-plan-military-cooperation

Britain and France are putting the finishing touches to plans for unprecedented co-operation on defence across all three branches of the armed forces, ranging from military operations to simulated nuclear tests.

What is described as a "whole package" of measures, including a major army exercise in Flanders, will be unveiled at a summit meeting between David Cameron and France's president Nicolas Sarkozy in London on 2 November, top officials say.

The two countries account for what one senior diplomat called a "critical mass" of Europe's military capabilities, including 45% of all EU military spending, half the total number of armed forces, and 70% of military research and development in the EU.

...

The extraordinary tempo and detail of work carried out by senior British and French military staff has been triggered in part by similar financial pressures facing the two countries and the realisation that their forces will be much more effective acting together.

The two governments are acutely aware of the political sensitivity of military co-operation. They will insist that national sovereignty will be preserved and there will be no question of "sharing" weapons systems, including aircraft carriers.

Joseph S. Nye: The Future of Power

Joseph S. Nye,former US Assistant Secretary of Defense, Harvard University professor and author of The Future of Power, provides an up-to-date perspective on the "future of power" in our increasingly multipolar world:

Global government is unlikely in the twenty-first century, but various degrees of global governance already exist. The world has hundreds of treaties, institutions, and regimes for governing interstate behavior involving telecommunications, civil aviation, ocean dumping, trade, and even the proliferation of nuclear weapons.

But such institutions are rarely self-sufficient. They still require the leadership of great powers. And it remains to be seen whether this century’s great powers will live up to this role.

As the power of China and India increases, how will their behavior change? Ironically, for those who foresee a tri-polar world of the US, China, and India at mid-century, all three of these states – the world’s most populous – are among the most protective of their sovereignty.

Some argue that our current global institutions are sufficiently open and adaptable for China to find it in its own interests to become what Robert Zoellick, president of the World Bank, once called a “responsible stakeholder.” Others believe that China will wish to impose its own mark and create its own international institutional system as its power increases.

The countries of the European Union have been more willing to experiment with limiting state sovereignty, and they may push for more institutional innovation. But it is unlikely that, barring a disaster like World War II, the world will witness “a constitutional moment” such as it experienced with the creation of the United Nations system of institutions after 1945.

Today, as a universal institution, the UN plays a crucial role in legitimization, crisis diplomacy, peacekeeping, and humanitarian missions, but its very size has proven to be a disadvantage for many other functions. As the 2009 UN climate-change summit in Copenhagen demonstrated, meetings of 192 states are often unwieldy and subject to bloc politics and tactical moves by largely extraneous players that otherwise lack the resources to solve functional problems. As US Secretary of State Hillary Clinton put it recently, “the UN remains the single most important global institution…but we are constantly reminded of its limitations….The UN was never intended to tackle every challenge; nor should it.”

Indeed, the main dilemma that the international community faces is how to include everyone and still be able to act. The answer is likely to lie in what Europeans have dubbed “variable geometry.” There will be many multilateralisms and “mini-lateralisms,” which will vary by issue with the distribution of power resources.

For example, on monetary affairs, the Bretton Woods conference created the International Monetary Fund in 1944, and it has since expanded to include 186 countries. But the dollar’s global pre-eminence was the crucial feature of monetary cooperation until the 1970’s. After the weakening of the dollar and President Richard M. Nixon’s decision to end its convertibility into gold, in 1975 France convened leaders of five countries in the library of the Chateau de Rambouillet to discuss monetary affairs. The group soon grew to seven, and later broadened in scope and membership – including Russia and a vast bureaucratic and press apparatus – to become the G-8.

Subsequently, the G-8 began the practice of inviting five guests from the emerging economies. In the financial crisis of 2008, this framework evolved into the G-20, which boasts a more inclusive membership.

At the same time, the G-7 continued to meet on a narrower monetary agenda; new institutions, such as the Financial Stability Board, were created, while bilateral discussions between the US and China played an increasingly important role. As one experienced diplomat put it, “if you’re trying to negotiate an exchange-rate deal with 20 countries or a bailout of Mexico, as in the early Clinton days, with 20 countries, that’s not easy. If you get above 10, it just makes it too darn hard to get things done.”

He’s right, of course. After all, with three countries, there are three bilateral relationships; with ten, there are 45; and with 100 players, there are nearly 5,000. That is why, on issues like climate change, the UN will continue to play a role, but more intensive negotiations are likely to occur in smaller groups such as the Major Economies Forum, where fewer than a dozen countries account for 80% of greenhouse gas emissions.

Much of the work of global governance will rely on formal and informal networks. Network organizations (such as the G-20) are used for setting agendas, building consensus, coordinating policy, exchanging knowledge, and establishing norms. As Anne-Marie Slaughter, Director of Policy Planning in the US State Department, argues, “the power that flows from this type of connectivity is not the power to impose outcomes. Networks are not directed and controlled as much as they are managed and orchestrated. Multiple players are integrated into a whole that is greater than the sum of its parts.”

In other words, the network provides power to achieve preferred outcomes with other players rather than over them.

To cope with the transnational challenges that characterize a global information age, the international community will have to continue to develop a series of complementary networks and institutions that supplement the global framework of the UN. But if major countries are divided, it is unlikely that even network organizations like the G-20 can set the agenda for the UN and the Bretton Woods financial institutions to act upon.

In the immediate aftermath of the 2008 financial crisis, the G-20 seemed to help governments to coordinate their actions and avoid rampant protectionism. The world waits anxiously to see how it will perform when it meets again in Seoul this November.

Kosovo: Declaration of Independence - Sovereignty

The Guardian has a very useful interactive published back in July, revisiting the history of Kosovo, and culminating with the recent news that the International Court of Justice has ruled that Kosovo's Unilateral Declaration of Independence (UDI) from Serbia in February 2008 did not violate international law:

http://www.guardian.co.uk/world/interactive/2010/jul/22/kosovo-serbia

By way of quick context, upon Kosovo's UDI in 2008, Serbia and Russia immediately declared the action illegal—meanwhile, the United States and much of Europe rushed to recognise the newly-declared state. Clearly, this Kosovan example represents a very useful recent example of recognition and incipient sovereignty in action.

Economist Videographic: China's Territorial Claims

The Economist today published a videographic exploration of China's territorial claims, a prime resource in understanding the larger ambitions of a rising superpower and apposite on the concept of sovereignty: