Wednesday, 27 February 2013


I recently enjoyed reading Enrique Krauze’s “Mexico, a biography of Power 1810 to 1970”
It approaches the history of the country through the biographies of the succession of strong leaders who dominated the country for the last 200 years, starting with the revolutionary priest, Miguel Hidalgo, the theatrical General Santa Anna, the French backed Emperor, Maximilian,  through the  pure blooded Indian Benito Juarez, to the  modernizer who would not give  up power, Porfirio Diaz.

Then came the Revolution of  1910 which ushered in almost  20 years of civil war, first between the  revolutionaries themselves, and then between the  Revolution and Catholic guerrillas, the ”Cristeros,” who objected to the restrictions the Revolution was placing on the work of the church.

He deals with the formation of the PRI, the party that dominated Mexican politics for most of the twentieth century and which has recently returned to the Presidency again after an absence of 12 years.
In some respects the conflicts of the twentieth century Mexico had their origin in the colonial period when Mexico was part of the Spanish monarchy. The Catholic Church became an instrument of government under the Spaniards but also supplied much of the leadership of Mexican society, including the priest leaders who shook off Spanish rule.

After independence, the church was allied with conservative forces in Mexican society. When the French backed Hapsburg Emperor of Mexico, Maximilian was overthrown, with US support, by Benito Juarez in 1867, most of the churches privileges and property were taken away 
It is therefore something of a mystery, not explained in the book, as to why the “Liberal” generals, who, 40 years later, led the Revolution of 1910, were so hostile to the Catholic Church, seeking to licence and limit the activities of priests, and close church schools.

This led to a bloody guerrilla war, chiefly in western Mexico, where lightly armed but mobile “Cristero” guerrillas defied the battle hardened, but immobile, Mexican army for years. Some these same passions arose in the Spanish Civil War, which broke out in 1936, only a few years after the Cristero rebellion ended.

Like all Latin American countries, a theme of Mexican history is the relationship between the European settlers and the native American populations. In some countries like, Argentina and Uruguay, the natives were almost wiped out by disease and land grabbing. In Mexico, the population  was reduced to almost a  fifth of  its former size by the introduction of European diseases to which the natives had no immunity. As a result, Mexico and Ireland had the same population in 1840!
Land rights were a hugely contentious issue, with the natives asserting ancient rights to common land, and modernizing, European or mixed race, farmers wanting to take the land over for commercial production. Interestingly the Emperor Maximilian gave more  support to native land rights than did any of Mexico’s own leaders, including the man who overthrew and executed him, Benito Juarez, who was himself  of native blood.
Mexico is one of the emerging economic powers of the world, and understanding its history is a worthwhile exercise.

Thursday, 21 February 2013


One of the events that shaped my youth was the Cuban Missile Crisis of October 1962.

Like almost everybody else I believed that the Soviet plan to locate nuclear armed missiles in Cuba was a direct threat to the United States and that, in facing down that threat, President John Kennedy had saved the world (and his own country) from an imminent threat. 

“Standing up to the Soviets” was supposed to been shown, by the Cuban missile success, to be the best and the safest policy to secure peace. 
From that lesson came the US policy that standing ones ground was the right policy to follow in South Vietnam.

The murder of President Kennedy just a year after the Cuban Missile crisis meant that historians (who like their books to sell) did not question the Presidents policy on Cuba very rigorously.  It also meant that other Presidents, like Johnson and Nixon, were the ones who took the responsibility if bad things flowed from trying to apply the supposed   lessons from the Cuban Missile crisis. 

A new book has been published by Stanford Press which calls all this into question.

It is “The Cuban Missile crisis in American Memory” by Sheldon M Stern

This book  is reviewed, in” the Atlantic” magazine, by Benjamin Schwartz.
It shows that the Kennedy Administration itself provoked the crisis by deploying, earlier in 1961, Jupiter missiles aimed at the Soviet Union in Italy and Turkey.

These missiles were not a mere deterrent. They were aggressive in intent because they were
        immovable, and
        above ground.

They could thus only be militarily useful in the event of nuclear first strike by the US against the Soviet Union, because, if the Soviets themselves  had decided to use nuclear weapons first, they would have made sure to  knock these  missiles out of commission, in the first seconds of their attack. 
The Soviet decision to send missile to Cuba was a response to this deployment of missiles in Turkey and Italy a few months earlier by President Kennedy,  and  was an attempt to get  himto understand how the Soviets felt about the missiles in Italy and Turkey.
Many thought that, because Cuba was so close to the US, deployment of Soviet missiles there was a unique new risk to the US.

Schwartz says this was not so that there was a negligible difference in flight times to targets in  the US as  between intercontinental  missiles based in the Soviet Union, and those to be  based in Cuba.
Schwartz claims that President Kennedy knew that the  proposed Cuban based  missiles  did not pose a special new threat, but that he felt he had to be SEEN not to back down in face of the Soviet move.

For that he was prepared to run a real risk of a nuclear war.

He could have asked the Soviets, at the outset of the crisis, to trade” no Soviet missiles in Cuba”  for “no US missiles in Turkey”, but he did not make that offer at that time. 
Eventually that was precisely the deal that did end the crisis.  But , according to Schwartz, “Kennedy threatened to abrogate (the deal) if the Soviets disclosed it” .

For domestic purposes, he wanted the Soviets to appear to have backed down.
The lesson here is that politics can get in the way of realistic security policy.

As another Democratic US President  seeks to deal with  further risks of nuclear proliferation, it is wise to reflect on the real lessons of the Cuban Missile crisis.

Saturday, 16 February 2013


I spent last week in Mexico on a mission, in my capacity as President of IFSC Ireland, to promote closer economic links between Ireland and Mexico.

I  met the Governor of the Mexican Central Bank, Agustin Carstens, the Mayor of Mexico city, Miguel Angel Mancera, the Governor of the state of  Jalisco, Jorge Aristoteles Sandoval, the Governor of the State of Nayarit, Roberto Sandoval , the Mayor of Guadalajara, Ramiro Hernandez Garcia and a wide cross section of business interests .I also had the honour of addressing the Congress of the state of Jalisco and the city Council of  Zapopan, and of visiting the Mexican Stock Exchange.

Mexico suffered a grave financial crisis in 1994/5. There was a property bubble and a threat of a banking collapse, averted by an intervention by President Clinton. The crisis led to an 18% loss in Mexican  GDP.

Since then, Mexico undertook  substantial  structural reform, including passing a Fiscal Responsibility Law (similar to the Fiscal Compact recently adopted by the euro zone) seven years ago, which places constitutional limits  on deficits. 
Thanks to all the measures taken, Mexico now

  1. has a Debt/GDP ratio of only 36% (as against an average ratio of around 90% in the  euro zone). As a result Mexico can now borrow on better terms than the United  States
  2. has unemployment  down to around 4.5%(as against  11.7% in the euro zone) and  
  3. has  an economic growth rate of 3.5 % .  Mexico is winning back business from China because Chinese wage rates are being made uncompetitive by labour shortages, and transport costs to market are less from Mexico than  China. 
  4. is  educating more engineers annually than the United States. A very large proportion of  Mexico’s population are still in the education system, and  that means it has big growth potential in a few years time

All this is heartening news for countries like Ireland, Portugal, Greece and Spain, who are also emerging from major financial crises. They can look at the example of Mexico’s recovery from financial crisis.
Mexico still has important challenges to overcome.

  1. The full potential of its substantial  oil and gas resources is not being exploited because it is under the control of  an inefficient state monopoly. This will be changed this year.
  2. It’s Judicial system is in need of reform
  3. Its formal labour market is rigid, and more than half its working population is in the informal or black economy, which deprives participants of access to credit, training and career prospects. Social  security reform is under way to tackle this problem.
  4. There is insufficient accountability for results in its education sector. This is linked  to power of the Teachers  trade union
  5. Water shortages are an increasing problem for household and for agriculture. This is an area where Irelands Green IFSC may be able to help in mobilizing international finance for infrastructural investments. 

Mexico has benefitted from opening up  its market to competition and is looking forward to greater transatlantic  trade and investment  arising from the  recent announcements of Presidents Obama and Barroso. Export and investment oriented European countries, like Ireland,  need to look to opportunities  in countries like Mexico . 

Saturday, 2 February 2013


8 out of 10 businesses in Ireland are now optimistic about their  growth prospects in the next two years .
Two thirds expect to expand  in Ireland in the coming years and  half intend  expanding abroad.
A majority intend hiring new staff in the next 2 years, with a strong emphasis on IT and digital skills. Already we hear of vacancies for staff with IT skills notwithstanding the high level of unemployment. 
Irish owned businesses are more optimistic than foreign owned ones
The survey showed that 6 out of 10 of the companies enable their staff to work from home during part of the working week. 77% of businesses supply laptops for work outside the office, and 79% supply smart phones for the same purpose.
Those businesses, which allow some working from home, tend to be more optimistic about their future, and more likely to be contemplating hiring more staff, than ones who do not provide for work from home at all.
The survey was carried out by Amarach consulting for UPC in August 2012. It involved interviews with 200 decision makers in businesses, large and small, native and foreign owned.


To my surprise, the survey suggests that only 53% have a business website . This may explain why Irish based businesses sell much less abroad over the internet, than Irish consumers buy over the internet from foreign websites.
Historically, Ireland, despite its high tech record in other fields, is coming from behind in terms of development of an economy based of use of the internet.
The Boston Consulting Group measured what it called “e intensity” by comparison with GDP per head in 2010 in a number of economies.  “E intensity” measured the reach of the internet infrastructure, amounts spent via internet and the degree to which business , consumers and government are involved with the internet.
With a a higher GDP per head in 2010, Ireland 50% less” e intensity” than the UK, and almost 100 less than Korea, which had then a GDP per head that was half Irelands.
Ireland lagged behind Denmark, Sweden ,Netherlands and Finland ,all of which had roughly the same level of GDP per head as Ireland in 2010
Ireland was at the same level of “e intensity” as Spain and Slovenia, which had considerably lower GDP per head in 2010.
Having said this, one should add that GDP is not a good measure of Irish spending capacity, and the figures date back to 2010,since when a number of things have changed.
There is a huge global market for all thing Irish, and a lot of effort goes into promoting the image of the country. This makes it really surprising that the Amarach survey showed that only 53% of the businesses they surveyed had a website from which they could sell their goods and services to a  global market.
Sending sales people abroad to drum up custom is expensive. Setting up a website is not !
Irish Americans and other members of the diaspora should be a priority  target market for the sale of Irish goods and services.