17/06/2014 Newsnight


17/06/2014

Is Iraq forcing us into bed with Syria and Iran? China's property bubble. What's Labour for? Fukayama and the end of history. The Isle of Man space program. With Jeremy Paxman.


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Transcript


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If you thought Middle East politics were complicated, they just got a

:00:07.:00:12.

whole lot more complicated. At what point do figures who have a common

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enemy, like these three, become effectively allies. We will hear

:00:18.:00:23.

from the Deputy Prime Minister of the newly-enlarged Kurdistan.

:00:24.:00:28.

Remember when this signified the end of history? We hear someone who

:00:29.:00:34.

still thinks that. You have heard of offshore banking,

:00:35.:00:39.

the Isle of Man is now doing offshore space programmes. How does

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that work again? It's pure coincidence of course that

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the Foreign Secretary today announced the time was right to

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reopen the British Embassy in Tehran, but having spent so much

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blood and treasure taking part in George W Bush's invasion of Iraq,

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both London and Washington are keen to find any friends they can in the

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Middle East, no matter how unexpected they might seem. The

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catastrophe sweeping through northern Iraq seems to be remaking

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the map of that part of the world. Our diplomatic editor's report has

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some flashing images. The swift advance of Sunni militants in

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northern Iraq is seen as game changer. How does it change things,

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for some the significant point means this sudden victory creates

:01:41.:01:43.

opportunity for strategic partnership between the US and Iran.

:01:44.:01:47.

I do think the time has come that people are beginning to waken to

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that Iran is the most stable country in south-west Asia, Iran is demo

:01:52.:01:59.

graphically, militarily, national cohesion-wise, probably the best

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ally that anyone could have in the region if one were able to achieve

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that. It is clear now that Iran and the United States, which has moved

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its carrier group to the gulf, have a common interest in the survival of

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the Nouri Al-Maliki Government in Baghdad. But you could add others to

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this coalition of the apparently irreconcilable. Israel and the Sunni

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monarchy in Jordan both also strongly identify ISIS as a

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strategic threat. And the question now is if they can all agree that

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the movement is a problem in its advances in Iraq, what's their

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attitude going to be to ISIS in Syria.

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Here is the man who ran the Foreign Office Syria desk until last year

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and now advises the Syrian opposition. I don't think that there

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is any alternative than to maintain the current policy, posture with

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respect to the Assad regime. I don't think it is a viable policy to

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recalibrate in the way that you are suggesting. I have heard this, I

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don't think it is something that western Governments would consider

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seriously. I think there is only one viable option in Syria, which is to

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continue bolstering and reinforcing the efforts of the moderate Syrian

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opposition forces on the ground in Syria who have been fighting the

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extremist threat in Syria for the past year and continue to do so. And

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while even the Israeli leader, who has visited Syrian war wounded being

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treated in his country, has apparently decided that even Assad

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would be better than a ISIS victory, he and many others in the region are

:03:44.:03:48.

all too aware that doesn't necessarily make their enemies

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enemy, Iran, their friend. Iran is playing it like a chess game and its

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objective is the jackpot which is the control of Syria, Iraq and

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Lebanon, through its militias that it has on the ground. The United

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States is playing it more like a poker game, aiming for a quick win

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without looking at the larger strategic picture. In places like

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this suburb of Damascus, the Free Syrian Army has local truces with

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Assad's forces. But as a BBC team there discovered, even that is a

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fragile arrangement. How well is the ceasefire holding here? (Gunfire)

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TRANSLATION: Not very well, you can hear the clashes. Moderate Syrian

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groups like this are fighting ISIS as well as the regime. Increasing

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aid to the FSA could be the most likely western response to Jihadist

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games, rather than cosying up to President Assad. The moderate forces

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on the ground have been fighting on two months now for some time. They

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are doing that with limited capabilities. I think the time has

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come now to redouble those efforts. And the signs are in some of what

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has been happening over the last few months with western and Arab policy

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is there is a recognition that more needs to be done with those moderate

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forces. And certainly redoubling those efforts, stepping up those

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efforts is the way to go. But the success of President Assad in

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holding on to power, and the failure of the international diplomatic

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process designed to ease him from office does beg questions of western

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policy. While open alliance will remain too distasteful for Britain

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or America, a resumption of some secret co-operation with Iran and

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Syria is quite possible. Let's try to make a little more sense of this

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now with my guests, a fellow in the Middle East Chatham House, and a

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journalist and author of The Road from Damascus. I suppose all bets

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are off now aren't they in the Middle East? It is a good sign now

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that the west is seriously considering talking with Iran,

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specifically on the Iraqi file. The Americans and Iranians share

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strategic interests in Iraq, they both support the demographic process

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and the Iraqi Government, they share a common enemy in ISIS. The recent

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developments are encouraging I think. It will also open up the

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discussions over the nuclear file and broader Middle East. It is a

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funny situation when Iran is a potential ally in Iraq and

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continuing enemy in Syria? Well, if it is an enemy in Syria I think the

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west is very confused at the moment about what it is doing. It seems, I

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don't think there should have been sanctions on Iran in the first

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place. But it does seem very upsetting that there is a

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reroachment with Iran over ISIS. In Syria Iran has militias on the

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ground supporting the regime slaughtering the people, and in Iraq

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itself where it has encouraged the most sectarian instincts of the

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Al-Maliki Government. What we have seen in Iraq is not the success of

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ISIS, which is a weak group, it is the failure of the Iraqi state and

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of course the collapse of the Syrian state. Iran, along with other

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countries too, but Iran is very complicit in that collapse in both

:07:32.:07:35.

countries. I think it would be, in the short-term, maybe beneficial to

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deal with Iran. I can see why people want to because Iran has an

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organised military, and it is an organised country and they can go

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in, they could establish order if they wanted to in Iraq. In the

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medium and long-term it is a disaster because Sunni Arab

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communities are going to be more enraged and become maybe the

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sectarian backlash that has been overexaggerated which will be bigger

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if they see Iran walking over Syrian and Iraqi sovereignty. I don't think

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it is fair to compare Syria with Iraq, the Prime Minister unlike with

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Syria isn't a dictator that has inherited because of his father. It

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is unfair to portray ISIS as Sunni, they are also killing Sunnis as well

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as Shias. This uneasy relationship between ISIS and other insurgent

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groups won't last forever. They are strange bed fellows and it is a

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marriage of convience. In coming weeks we will see Syria with

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infighting between the rebels, you will have ba'athist insurgents and

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Sunni and Shia all fighting each other as well as the Iraqi

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Government. It is important to stress something people don't

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realise since January it was a grey area which side ISIS is on. Since

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January there is no excuse for the greyness, all of the Syrian

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opposition group, the Islamist and Islamic front, even the victory

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front that is Al-Qaeda linked, all of these groups have been fighting

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against ISIS. So ISIS is a common enemy of everybody, it seems, but it

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is helping Assad really, . But that means President Assad is on the same

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side as much of the west? In fighting ISIS? Well he is producing

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the chaos in which ISIS thrives. Whenever he has been following a

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scourged earth policy in Syria, any part of the country which he can't

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control he has been devastating, from aerial bombardment and other

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means, sieges and so on. That means there are massive refugees flowing

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out of the country. It means that there are no schools, no hospitals

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working, no economy going. Into this chaos it is very easy for, and

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sometimes with the help of neighbouring states, we were talking

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about Turkey earlier, it is very easy for international Jihad

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tourist, psychopaths and kneelists to come -- nihilists to come in. It

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has got so strained in Iraq that they have been able to come back in.

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These people come wherever there is a chaos. Assad has created a chaos

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in Syria by committing a near genocide and massive "ethnic

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cleansing". This ref news in Syria started -- revolution in Syria

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started and continues as a fight for democracy and freedom and freedom of

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expression, it was remarkable that it wasn't sectarian for the whole of

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2011 and then under the strain of Assad's war it began to come down.

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There is no question that Assad created the chaos, but ISIS is a

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monster of its own. There is a seemingly endless supply of funds

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coming from western allies, Saudi Arabia and Qatar and Kuwait. From

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private donors absolutely. The Governments are doing very little to

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combat. One viable policy of the west, if it doesn't want to get

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engaged militarily in Syria is to do more to stop its allies, to do more

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to pressure its allies to stop ISIS getting funds from these private

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donors? I agree absolutely, it is very important too. But I think

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making a deal with Iran is the wrong idea. Make the Saudis or pressure

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them and other gulf countries the UAE and the Kuwait, make them

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pressure private donors, who may be important people to stop donating,

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they are not helping the Syrians. Even the Syrian Islamists don't want

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the ISIS people there. They are obviously not helping the Iraqis,

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they are confusing the issues and actually making it more difficult

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for Sunni Arabs to get their rights. The Iranians are a reality on the

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ground in Iraq. If the west seriously wants to combat ISIS it is

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about time to start talking with Iranians on Iraq. I'm happy to see

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Barack Obama saying he won't take action until Al-Maliki changes his

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approach to the Sunni-Arab issue. I hope he's also leaning on the

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Iranians, they need their military security help to face this monster

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that has just exploded, the reason this monster has exploded is because

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of the sectarianism, you are quite right, the democratically elected

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Iraqi Government and because of the genocide going on in Syria which

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Iran is supporting which, is radicalising Sunnis around the

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world. It takes two to Tango, Iran is not operating out of a vacuum in

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Iraq, there is the Saudis, Qatar, and other states involved in Iraq,

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and variously in domestic affairs. Thank you very much. Sandwiched amid

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all of this is the autonomous region of Kurdistan which stretches across

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Syria and into Iraq and Iran. The in coming Deputy Prime Minister spoke

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to me shortly before coming on air. I asked him whether he thought Prime

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Minister Nouri Al-Maliki was capable of holding the country together?

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Prime Minister Al-Maliki's policies to date have not done a good job of

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keeping this country together. His sectarian ways have really caused a

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sectarian response from many parts of the country. So unless there is a

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rapid change of policies coming out of the federal Government I'm afraid

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this country is facing more and more crises. Do you think it will break

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up? It has the risk of breaking up unless there is a serious dialogue

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with a serious change in attitude from the federal Government. Because

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this country has not been able to govern in a way that's made

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everybody feel part of this country, we in Kurdistan have had our

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complaints. Clearly many in the centre and west of the country have

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had their grievances. They are now showing their grievances in a very

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different way. Do you fear ISIS? ISIS is a real threat, it is a real

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threat to Iraq, it is a threat to stability and some of what we have

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seen over the last few days have caused us much concern, so we're

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very concerned about the current situation and we're hopeful that

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through our efforts and through the efforts of others we can calm the

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situation and we can try to live in a stable country. It is a very odd

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situation, isn't it, from an outsiders point of view, you look in

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and you see Mr Al-Maliki, President Assad, President Obama, the Kurdish

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authorities, all effectively on the same side? Well, sometimes people's

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national interests and strategic interests sometimes you know

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overcome internal differences, but obviously there is all kinds of

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complication to this, there is not a zero sum game, there are threats

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caused byies circumstance but there are also major disappointments in

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the way that Prime Minister Al-Maliki's Government has

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functioned to date. It is not a black and white situation Jeremy. At

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the end of all of this of course Kurdistan could end up leaving Iraq,

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couldn't it? I think it is more likely that Iraq could end up

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leaving Kurdistan. We have done everything we can to make this

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country successful, we have done everything we can to make this

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country look very different to what it used to look like during Saddam's

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days and prior to that. But regrettably politics has failed in

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Iraq, and people have not stuck to the principles that formed the

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post-Saddam Iraq. We have continued to stick to the principles that we

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fought so hard for during the days when we were in the opposition and

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when we drafted the constitution of the country, we have committed to

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that constitution, but if others are not committed to that constitution

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then ultimately it will lead to more chaos and potentially the break up

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of the country. Thank you very much for joining us. My pleasure.

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The Queen was wheeled out, military bands played, speeches were made and

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human rights protesters were ignored. It was another visit from a

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Chinese notable today, no mention was made of supression of dissidents

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and that sort of thing, because today Britain was busy oiling up to

:16:45.:16:49.

the Chinese premier in the hope of getting some business. But while

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Chinese growth is often seen as an unstoppable force, there are growing

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worries about just what is happening in its property market. Our

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economics correspondent weighs it up.

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In Britain we love to talk about house prices. It is an obsession.

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Recently we have begun fretting about another bubble. But the

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property market we should be worrying about is not in London or

:17:16.:17:18.

the south-east of England, it is at the other end of the world, in

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China. There are rising fears that China has become consumed in a

:17:23.:17:27.

credit and property bubble that dwarves anything in Britain or the

:17:28.:17:33.

west. I think Chinese real estate is probably the most important sector

:17:34.:17:37.

in the world economy. Because so much of what China has imported over

:17:38.:17:44.

the last five-to-fifteen years, actually, which is consistent with

:17:45.:17:48.

its remarkable and perhaps unique economic success and construction

:17:49.:17:53.

has really driven a lot of the world's economy. Something happens

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to China real estate, we will all feel a little bit of that news. As

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the Chinese premier continues his visit to the UK, it is the Chinese

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property market that is keeping people awake at night. When the

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global crisis hit, China launched its on stimulus, banks were told to

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lend, state-owned companies were instructed to invest and it worked.

:18:18.:18:22.

Whilst the US and Europe languished in recession, China's economy grew

:18:23.:18:26.

strongly. But what really drove that growth was a huge increase in

:18:27.:18:30.

construction, much of it funded by debt. House building soared from

:18:31.:18:36.

around six million units a year before 2008 to over ten million a

:18:37.:18:41.

year recently. Here in leafy North London it is quite hard to build new

:18:42.:18:47.

houses and so prices are rising. Over in China though they have the

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opposite problem. Too many houses have been built, supply is

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outstripping demand, and in some urban areas one in five properties

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are now standing vie cannot. Chinese growth has finally begun to slow,

:19:00.:19:05.

property prices are falling and the big fear is a housing slowdown will

:19:06.:19:09.

hit the rest of the economy. The debate now is between those who

:19:10.:19:13.

think China can achieve a soft landing and those who think it is

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heading for a hard one. A hard landing, in which the property and

:19:19.:19:22.

credit bubbles burst and growth collapses would have a huge impact

:19:23.:19:26.

on the global economy. One investment bank has estimated it

:19:27.:19:31.

would mean world GDP would be 2. 5% lower in 2016. That's almost $2

:19:32.:19:37.

trillion. But not everyone is running scared of the hard landing

:19:38.:19:44.

just yet. Urban populations their demands for housing are mostly met,

:19:45.:19:48.

but there is a large contingent of rural population that doesn't have

:19:49.:19:51.

housing yet. It is very much in the Chinese dream to own a property in

:19:52.:19:56.

urban areas, so there will still be pent-up demand for housing coming

:19:57.:20:02.

from the rural population. I think the medium-term horizon is enough

:20:03.:20:06.

demand for housing. China's property market is looking distinctly ropey.

:20:07.:20:13.

No country is ever experiencing this kind of build-up in debt without it

:20:14.:20:17.

ending in tears. If something is unsustainable it will eventually

:20:18.:20:21.

end. But that eventually could be further away than many seem to

:20:22.:20:27.

assume. Time and time again in the last two decades, China's economic

:20:28.:20:32.

performance has confounded its critics. Whether or not it can avoid

:20:33.:20:36.

a property market crash is one of the really big questions in global

:20:37.:20:39.

economics. It probably makes more sense to worry about condough prices

:20:40.:20:51.

in Nanjing than the cost of a semi, in Dorking. There were interesting

:20:52.:20:56.

inflation figures out today? As interesting as inflation gets. These

:20:57.:20:59.

were very interesting? They are of interest to those who are not

:21:00.:21:02.

economists. Inflation has fallen all the way down to 1. 1.5%. That is the

:21:03.:21:07.

lowest inflation has been in five years. What is interesting about

:21:08.:21:11.

that is this isn't really supposed to happen. The last few years the

:21:12.:21:16.

economy hasn't been, until very recently, the economy wasn't growing

:21:17.:21:18.

very strongly and inflation was high. Now the economy is growing

:21:19.:21:22.

very strongly indeed and inflation is low. Usually it would be the

:21:23.:21:26.

other way around. And alongside this, very low price rises, but

:21:27.:21:31.

quite big moves in house prices, 10% across the country. Almost 20% in

:21:32.:21:36.

London. But most of us have got accustomed to being told by

:21:37.:21:40.

politicians that inflation is the enemy and eats up people's savings

:21:41.:21:43.

and the like, surely very low inflation is a good thing? You might

:21:44.:21:47.

think that, but what you really want is it is like Goldilock's porridge,

:21:48.:21:55.

not too hot and not too cold, just right. The Bank of England has a

:21:56.:22:02.

target of 2%, it is not low it is 2%, at the moment inflation is below

:22:03.:22:04.

target. This is confusing analysts out in the City. Only last week the

:22:05.:22:10.

Governor of the Bank of England, Mark Carney, stood up and said we

:22:11.:22:14.

might have to raise interest rates, the reason you raise interest rates

:22:15.:22:17.

is because inflation is too high. Today we find out it is a bit too

:22:18.:22:20.

low. You are not seriously suggesting there might be an attempt

:22:21.:22:24.

to stoke up inflation a little bit? It seems unlikely that we might try

:22:25.:22:29.

to stoke up inflation, we might get to that point, that is the point the

:22:30.:22:34.

European Central Bank are at. The reason the Bank of England can't do

:22:35.:22:37.

that is because of what is happening in the housing market. You can't cut

:22:38.:22:41.

interest rates when the housing market is up 20%. They might use

:22:42.:22:46.

some of their new tools. What is the outlook for inflation, if you asked

:22:47.:22:50.

people in Whitehall they are looking at what we covered in the top of the

:22:51.:22:53.

programme. They are looking at the Middle East and Ukraine. And they

:22:54.:22:57.

are thinking back to early 2011 during the Arab Spring when unrest

:22:58.:23:01.

in the Middle East, the oil price goes up and pulls up inflation, very

:23:02.:23:04.

bad for the economy and for consumers. Thank you. Ed Miliband,

:23:05.:23:12.

what's he for? The question that bedevils modern politics may finally

:23:13.:23:15.

get an answer over the next few weeks. The Labour Party has set up a

:23:16.:23:19.

number of inquiries to tell it what it ought to do with itself. What was

:23:20.:23:23.

once done by core conviction and block votes at Labour Party

:23:24.:23:27.

Conferences, is now the businesses of think tanks and policy wonks. The

:23:28.:23:31.

first inquiry into what it ought to promise in social policy reports the

:23:32.:23:36.

day after tomorrow. Chris Cook reads this sort of stuff for fun. Radical.

:23:37.:23:42.

Radical. Radical. Radical. Radical. It is clear what word Ed Miliband

:23:43.:23:46.

would use about himself, and we're about to find out if it is true.

:23:47.:23:57.

John Cruddus, his policy thinker has commissioned three big reports, the

:23:58.:24:01.

first from IPPR, comes out this week, Labour will have to decide

:24:02.:24:04.

which bits of it make it to the manifesto. A lot of people in the

:24:05.:24:09.

Labour Party think that Ed Miliband needs to promise to build a bold new

:24:10.:24:15.

design for Britain. To come up with what they call "the big offer". They

:24:16.:24:21.

feel if he will win back blue collar voters in particular and match the

:24:22.:24:25.

popularity for his promise to freeze gas prices, he needs a range of

:24:26.:24:28.

other radical policies. I think there is big policy ideas out there

:24:29.:24:32.

that attract a lot of popular support, like common ownership of

:24:33.:24:37.

railways. But there is also ideas like contribution in welfare and

:24:38.:24:40.

contribution in the boardroom as well as the benefits office, that if

:24:41.:24:44.

Labour embraces in terms of policy will have more effect in persuading

:24:45.:24:50.

voters we are on their side. Labour can't spend big so one of the ideas,

:24:51.:24:55.

to use the jargon, that more investments matched by less

:24:56.:24:58.

entitlement. That means spending money on things that will cut

:24:59.:25:04.

benefits spending later. We pay ?24 billion in housing benefit and we

:25:05.:25:08.

pay ?1 billion to build new houses, it plays into the hands of landlords

:25:09.:25:12.

putting up the rents and all your money is getting swallowed in terms

:25:13.:25:16.

of what you send out to your landlord. That is not straight

:25:17.:25:20.

forward. Let's say you want to spend less on housing benefit because you

:25:21.:25:24.

are going to build more house, that's fine, but you have got to

:25:25.:25:28.

build the houses first. Before people can live in them. So in the

:25:29.:25:33.

short-term that means spending more and that opens Labour up to

:25:34.:25:43.

accusations of profligacy. We will send out the questions of whether

:25:44.:25:47.

people can trust politicians, frankly the people who got us in the

:25:48.:25:51.

mess in the first place we have spent the last four years getting

:25:52.:25:55.

out of. There is a real credibility problem with those who made the

:25:56.:25:58.

mistakes, haven't apologised for them and shown no signs of learning

:25:59.:26:03.

lessons. That is one of the strong messages we will repeat now and

:26:04.:26:07.

through to the election. Their policies don't match up to the big,

:26:08.:26:11.

bold radical network they have been espousing for the last few years. In

:26:12.:26:15.

short voters might feel that what they actually get from Labour

:26:16.:26:18.

doesn't quite match up to what's on the box. Scars of old Labour defeats

:26:19.:26:32.

on credibility, particularly 1992, run deep through the party. Talk for

:26:33.:26:35.

example of nationalised railways will set nerves on the party's right

:26:36.:26:40.

jangling. So there is a quiet debate going on about all of this inside

:26:41.:26:46.

the machine. There is a difference of opinion between weather the

:26:47.:26:51.

Labour Party should simply hope for a small technical win, presuming

:26:52.:26:56.

that if we just hold on to the foot that we got in 2010 and get some

:26:57.:27:01.

Liberal Democrats over, Ed Miliband can become Prime Minister. But there

:27:02.:27:04.

is another path open to us, it is harder and more ambition, and that

:27:05.:27:09.

is to -- ambitious, that is to speak to voters left behind by politics,

:27:10.:27:13.

who may have stopped voting or considering UKIP these days. That

:27:14.:27:16.

will require big policy ideas and big changes in the way we organise

:27:17.:27:20.

as a party. So the argument isn't really about radicalism or not,

:27:21.:27:25.

restoring the contributory principle to welfare, for example, is radical

:27:26.:27:29.

but uncontroversial. The real question is whether Labour dares to

:27:30.:27:33.

be radical in areas where it opens them up to attack. The real test

:27:34.:27:38.

will be where it must spend money, like on social care and housing, and

:27:39.:27:43.

on contentious areas like the public ownership of rail or energy.

:27:44.:27:49.

So the Prime Minister polished his shoes for the Chinese premier today

:27:50.:27:53.

while the Foreign Secretary said it was time to reopen the embassy in

:27:54.:27:58.

Iran. How the world turns? The speed with which an apparently pacified

:27:59.:28:02.

Iraq has collapsed into Civil War is another warning not to take anything

:28:03.:28:07.

for granted. It is 25 years now since the events of a revolutionary

:28:08.:28:12.

year. The Berlin wall, a physical symbol of the Cold War was torn

:28:13.:28:16.

down. A wave of protests spread across Eastern Europe from Poland to

:28:17.:28:21.

Romania. In China, students faced death whilst protesting in Tiananmen

:28:22.:28:26.

Square. And a brilliant young American political scientist,

:28:27.:28:33.

Francis Fukiama, said the end of communism might bring the end of

:28:34.:28:37.

history, he added a question mark in the original version. What do we

:28:38.:28:42.

make of it now. He joins me from Stamford university, author of The

:28:43.:28:47.

End Of His treatment we are joined by Simon Sharman and Melissa Lane,

:28:48.:28:54.

from Princeton is here in the studio. It didn't end did it? You

:28:55.:29:00.

have to understand the term "end" properly. End meant not termination,

:29:01.:29:05.

the question was in the grand philosophical sense of the evolution

:29:06.:29:09.

of human societies in what direction was history pointing? And for 100

:29:10.:29:15.

years progressive intellectuals believed it was pointing towards a

:29:16.:29:19.

communist utopia. I made the simple observation in 1989 that it didn't

:29:20.:29:22.

look like we were going to get there. If we were going to end up at

:29:23.:29:26.

any place it would be something like liberal democracy and the market

:29:27.:29:30.

economy, and I think that still is the most likely termination point of

:29:31.:29:35.

the whole modernisation process, 25 years later. Melissa Lane what do

:29:36.:29:39.

you think? The professor suggested that we couldn't judge his thesis

:29:40.:29:46.

yet, we weren't at the end, we could just see the end in the future. The

:29:47.:29:50.

thesis didn't explore the tensions between liberal democracy and

:29:51.:29:53.

capitalism. Those are the tensions we are seeing ever more alive today.

:29:54.:30:02.

Simon Sharma? Well I think actually what really happened, which is

:30:03.:30:05.

extraordinary, is that a small obstinate, violent, vicious little

:30:06.:30:10.

terrier bit us in the leg while we were looking at the great

:30:11.:30:15.

philosophical horizon. That was religious fanaticism. What the model

:30:16.:30:19.

did not predict was the massive return of systems of belief. Partly

:30:20.:30:25.

it was hopeless at predicting it, and it is hopeless talking about it

:30:26.:30:29.

now. I wonder how many in your magnificent 25 years, how many

:30:30.:30:33.

nights you have spent on Newsnight with people talking about religion

:30:34.:30:39.

and spirituality and mass allegiance. We are still hopeless at

:30:40.:30:43.

constructing an argument for liberal tolerant society. We need to go back

:30:44.:30:52.

to Locke, Jeff Jefferson, and others. Those in the grip of

:30:53.:30:57.

fundamentalism is simply a plutocratic device for getting more

:30:58.:31:01.

and more consumers goods unless you are starving to death in the middle

:31:02.:31:05.

of a miserable desert somewhere in Asia or Africa. So what the end of

:31:06.:31:09.

history failed to predict was that history was looking backwards

:31:10.:31:15.

towards religion, ethnicity, tribalism and nationalism, and that

:31:16.:31:18.

is what we have to deal with. History does tend to look backwards?

:31:19.:31:24.

I think that overstates the importance of religion in the

:31:25.:31:27.

contemporary world. We need a little perspective here. In the 40 years

:31:28.:31:35.

between the 1970s and the crisis of 2008, we went from 35 democracies in

:31:36.:31:40.

the world to 120. A lot of them are very, very imperfect, for the last

:31:41.:31:45.

few years a lot of them have been backsliding, Turkey, Nicaragua,

:31:46.:31:49.

Burma, that is a positive case though. So there have been setbacks,

:31:50.:31:54.

but the world is a very, very different place than it was two

:31:55.:31:58.

generations ago. I think democracy has become the norm. I think even in

:31:59.:32:02.

the Middle East, where you have the centre of this kind of religious

:32:03.:32:07.

low-based politics, very many people do not want ISIS, this kind of

:32:08.:32:11.

radical Jihadism, they want Governments that are responsive and

:32:12.:32:15.

actually a lot of the calls for Sharia Law are due to the fact that

:32:16.:32:19.

the Governments there are so authoritarian and unresponsive and

:32:20.:32:22.

unconstrained, that they actually do want something like the rule of law

:32:23.:32:28.

to reduce corruption. So I think this popular mobilisation for more

:32:29.:32:33.

responsive Government still remains extremely powerful force all over

:32:34.:32:40.

the world. But there is an alternative future being sketched

:32:41.:32:43.

out by these people. Whether or not you agree with them they are

:32:44.:32:46.

sketching out an alternative future, aren't they? Some of them are the

:32:47.:32:55.

jury is still out on how many people will flock to the standard. It is

:32:56.:33:00.

interesting how many people in t Muslim world are not flocking to

:33:01.:33:03.

that standard and the Arab Spring was pulling in the opposite

:33:04.:33:08.

direction. We don't know what it will be. It was a colossal failure.

:33:09.:33:14.

The Arab Spring was a colossal failure. Not in Tunisia. The party

:33:15.:33:20.

it brought to power were the Muslim Brotherhood who have been replaced

:33:21.:33:23.

by an authoritarian antidemocratic regime. I was speaking about Tunisia

:33:24.:33:29.

not Egypt. Well that doesn't suggest to me that the Arab Spring, a moment

:33:30.:33:35.

of brief honeymoon euphoria was any kind of template for what is

:33:36.:33:38.

unfolding now. The trouble is we talk about terrorism, we talk about

:33:39.:33:45.

terrorism and that is a lazy way to describe immense communities gripped

:33:46.:33:49.

by systems of belief. Burma is not an encouraging case. Burma is the

:33:50.:33:53.

case where you actually have Buddhism on the violent March

:33:54.:33:57.

against Muslims. That is not a particularly encouraging situation.

:33:58.:34:03.

Can we explore this other area that you mentioned earlier which is this

:34:04.:34:08.

tension between liberal democracy and market capitalism which seems to

:34:09.:34:13.

be evident now? I think it is all the way back to Greek society and

:34:14.:34:16.

Greek ideas that you have to have political equality. And the question

:34:17.:34:21.

is can you have that with economic inequality. With rising economic

:34:22.:34:25.

inequality I think the cause of political equality is becoming

:34:26.:34:28.

fragile and more and more difficult to be confident that democracies can

:34:29.:34:33.

maintain that in a meaningful way. If you add to that the constraints

:34:34.:34:37.

caused by environmental pressures I think liberal democracy and

:34:38.:34:40.

capitalism as a recipe for the future is looking increasingly under

:34:41.:34:46.

strain. What do you make of that argument? Well I agree with Melissa

:34:47.:34:51.

completely that the rising degree of unequality in countries like the

:34:52.:34:55.

United States and Britain is a very major challenge. Because if you

:34:56.:34:58.

don't have a broad middle-class I don't think you will have the kind

:34:59.:35:07.

of broad support for democracy that the system needs. I'm not sure it is

:35:08.:35:11.

capitalism per say is producing this. One of the highest rates of

:35:12.:35:17.

inequality anywhere is the only half marketised China. It is the progress

:35:18.:35:21.

of technology itself that is destroying a lot of middle-class

:35:22.:35:26.

jobs. It is not clear to me there is an alternative system out there that

:35:27.:35:29.

will produce the kind of wealth we have come to expect from modern

:35:30.:35:32.

economies that is actually going to solve this problem of middle-class

:35:33.:35:38.

decline. Do you think the world has become a safer place though in the

:35:39.:35:45.

last 25 years? No. Not really. I think I agree with the last point of

:35:46.:35:53.

both Francis and Melissa, but I think one extra turn of the knife is

:35:54.:35:59.

the slow death of the planet. The wars we have not yet seen as wars,

:36:00.:36:05.

they are wars for water resources, for example. Melissa and Francis are

:36:06.:36:09.

quite right to suggest that for example the nasty surprise of

:36:10.:36:14.

massive pollution in China has put an incredible dent in the way in

:36:15.:36:18.

which the entire authority of the country legitimises itself. And over

:36:19.:36:24.

the next 25 years, over the next 50 years, without being sanctimonious

:36:25.:36:28.

about having to face climate change, it will have both a political and

:36:29.:36:35.

economic impact. For teeth of that particular difficulty it is starting

:36:36.:36:39.

to bite. You were nodding vigorously there Melissa? I think that is

:36:40.:36:43.

absolutely right. If we go back to the end of history thesis, part of

:36:44.:36:48.

the thesis was we had to restore, consciousness, ideas, ideology as

:36:49.:36:53.

the driving moators of history, not material forces. But the environment

:36:54.:36:56.

is a major weak-up call from the material forces. We need now to

:36:57.:37:05.

intergrate the role of forces, and that is something that the history

:37:06.:37:09.

thesis didn't fully do. You don't feel then that the world has become

:37:10.:37:14.

a much safer place? I think there are different time horizons of

:37:15.:37:19.

safety, and if we are looking 20, 30, 50 years down the road. It is

:37:20.:37:24.

far from safer. That is because you worry about resource wars is it?

:37:25.:37:29.

Resource wars, and simply climate change. Global warming. You know

:37:30.:37:38.

dirty bombs. Hang on. Let's give Francis a little bit of a chance to

:37:39.:37:44.

get a word in edgeways here. Come on. Look I do think that a little

:37:45.:37:53.

bit of impericim would help. If you look at the levels of violence they

:37:54.:37:59.

are going down. A lot of political scientists follow this exactly. The

:38:00.:38:03.

possibility of a major war between two big industrialised countries,

:38:04.:38:07.

which is what we experienced in the two world wars in the 20th century,

:38:08.:38:11.

the chance of that is vanishingly small. So I think you know

:38:12.:38:20.

responding to the headlines you get the impression there is ever

:38:21.:38:22.

increasing chaos in the world, but in fact we live in a world knit

:38:23.:38:26.

together through a system of globalised trade and investment that

:38:27.:38:30.

has produced a tremendous amount of prosperity and quite a lot of piece

:38:31.:38:33.

throughout very much of the world. You were trying to say something? I

:38:34.:38:38.

have to say that is the view from Palo Alto, which is a beautiful

:38:39.:38:43.

place. The view from the Democratic Republic of Congo, or the view from

:38:44.:38:47.

south Sudan, the view from the hellish low intensity wars that go

:38:48.:38:53.

on and on and on and on. Massive violence against women and children.

:38:54.:39:00.

When in the last 100 years couldn't you have picked examples of this.

:39:01.:39:06.

But as I said, if you do this on a really empirical basis, I think

:39:07.:39:10.

there is no question that the number of conflicts and their intensity has

:39:11.:39:14.

fallen over the last two generations. The last word Melissa?

:39:15.:39:18.

The yes of the end of history was really whether the ideas had come to

:39:19.:39:22.

an end. I think actually as we see all the challenges we face we

:39:23.:39:26.

realise we need new ideas and we can't rest completely with the old

:39:27.:39:29.

ones. Thank you very much. The Kennedy

:39:30.:39:35.

Space Centre, the CosmoDrome and now the Isle of Man, 45 years after

:39:36.:39:39.

Armstrong and Aldrin became the first men to walk on the moon, the

:39:40.:39:43.

conquest of space has changed out of recognition. Armstrong may have come

:39:44.:39:48.

in peace for all mankind, but space today is more about commerce. We

:39:49.:39:53.

report now on the rival to NASA to be found in the middle of the Irish

:39:54.:40:02.

Sea. I think there is a real space treasure in here. This is fan it is

:40:03.:40:11.

a tickets I have always wanted to see one of these.

:40:12.:40:16.

These Russian-built spacecraft were designed back in the 1970s, but they

:40:17.:40:24.

have proved themselves in space. American lawyer here has bought them

:40:25.:40:29.

with the idea of putting space tourists into space. It will cost

:40:30.:40:35.

upwards of ?50 million to do it. This This last been in space. There

:40:36.:40:40.

is hardly any leg room at all. But I would do it. I mean even though it

:40:41.:40:44.

is not comfortable, I would pay the money and get out there. What I find

:40:45.:40:50.

slightly freaky is I'm sitting in a Russian space capsule in a hanger in

:40:51.:40:54.

the Isle of Man. Who would have thought it, it is quite bizarre.

:40:55.:41:00.

Those spaceships are part of a space revolution on this tiny island. It

:41:01.:41:05.

is 32 miles long with a total population of only 85,000 people.

:41:06.:41:10.

But it is prosperous, because it is not part of the EU or the UK. Which

:41:11.:41:15.

means it can set low taxes and give generous Government grants. There

:41:16.:41:20.

are 30 space-related companies on the island. Including four of the

:41:21.:41:24.

world's top ten satellite organisations. Together with experts

:41:25.:41:29.

in space finance, regulation and law, this builds up to a $300

:41:30.:41:36.

million a year industry. The island's Government has a history of

:41:37.:41:42.

chasing new areas of business. Hello, lovely to see you in the Isle

:41:43.:41:47.

of Man. The space breakthrough came in 2001. At that time we were

:41:48.:41:51.

looking for new things for the Isle of Man to do. We have a very

:41:52.:41:56.

successful ship registry here. Very successful aircraft registry and the

:41:57.:41:59.

Government had the vision to get involved in acquiring things like

:42:00.:42:05.

orbital farming slots. Satellites sweep around the earth in their own

:42:06.:42:10.

protected volume of space, a firing spot. What gives it an advantage is

:42:11.:42:17.

satellite operators have to apply for them in the country, even the

:42:18.:42:21.

Isle of Man. It attempts the island's attempt to capitalise on

:42:22.:42:26.

the third era of space. Space exploration started in the 1950s as

:42:27.:42:31.

a competition. A race to be the first into orbit and the first to

:42:32.:42:38.

the moon. . By the 170s the race was over and collaboration was the key.

:42:39.:42:45.

Apollo, and Soyuez astronauts shook hands in space in 1979. By the 21st

:42:46.:42:51.

century the space station was a multinational project. But still

:42:52.:42:55.

dominated by nation states. I believe we're entering the third era

:42:56.:43:00.

of space, and it is an era of commercialisation. We are launching

:43:01.:43:04.

more and more satellites every day. Space tourism is taking off

:43:05.:43:09.

literally. The global space industry is booming, especially here on the

:43:10.:43:14.

Isle of Man. It looks small scale but this company is part of that new

:43:15.:43:21.

era. His team built space optics for NASA's Mars Rover. The Isle of Man

:43:22.:43:25.

has links to the international space university in Strasbourg. 60 of

:43:26.:43:30.

their graduates work on the island. And the unemployment rate here is

:43:31.:43:35.

just 2%. There are also the advantages of the Isle of Man, it is

:43:36.:43:38.

a very stable and low-crime environment. If you look around you

:43:39.:43:42.

here there is lots of expensive equipment and we know we can lock

:43:43.:43:46.

the company on a Friday or Saturday and come back on the Monday morning

:43:47.:43:54.

and everything will be in its place. Now I don't want to exaggerate the

:43:55.:44:00.

Isle of Man's toe hold on the growing commercialisation of space.

:44:01.:44:03.

But it has formed a whole new industry for the Isle of Man to

:44:04.:44:08.

exploit. Especially in satellite operations. This is the type of a

:44:09.:44:13.

cube satellite, they do simple experiments in space, but they need

:44:14.:44:16.

to get into space, to do that they piggy back on the launch speaks of

:44:17.:44:21.

other big satellites. You might get one big one and 25 of these. Once

:44:22.:44:25.

they are out there, that means there is a who collection of things

:44:26.:44:30.

orbiting the earth every 90 minutes, faster than a speeding bullet. If

:44:31.:44:34.

they collide it causes chaos. To sort out the resulting financial

:44:35.:44:44.

chaos, you need people like Chris. Wherever there is money there is

:44:45.:44:47.

regulation, and space is one of the most regulated industries in the

:44:48.:44:51.

world. Space law, how can it be enforced, it is out there? It was

:44:52.:44:59.

put in there to prevent people claiming Celestial bodies in space.

:45:00.:45:03.

You can't land on the moon and say it is yours. It is from maritime

:45:04.:45:07.

law, it belongs to none and belongs to all. From that noble start space

:45:08.:45:12.

law has grown to cover everything, orbiting the earth. It is complex

:45:13.:45:17.

and comprehensive. It is almost the space version of car insurance. A

:45:18.:45:21.

lot of the companies come here probably, I hate to say it, for the

:45:22.:45:26.

most boring part of space. For us we are excited by this, this is the

:45:27.:45:30.

business of space. In a world gone mad the Isle of Man, and Britain,

:45:31.:45:36.

were seen as the safe, stable bit. The Isle of Man's success brings

:45:37.:45:40.

home the economic opportunities that have been created now that space

:45:41.:45:44.

exploration is moving from a state-funded model to a commercial

:45:45.:45:50.

business. That's about it for tonight. Here is what the producer

:45:51.:45:55.

insists is a quick peek at tomorrow's show. Show you how

:45:56.:46:01.

delightful it is to cycle in London. It is not delightful, it is a bloody

:46:02.:46:07.

nightmare. It is wonderful. This is the most difficult machine I have

:46:08.:46:11.

tried to cycle on, but Newsnight procured it. I'm going over this

:46:12.:46:18.

way, all right. Before we go tonight, a reminder of a momentous

:46:19.:46:24.

week for fans of the selfie, Twitter unveiled a drony account for sell

:46:25.:46:29.

fees taken on cameras mounted on drones. Their first posting was a

:46:30.:46:41.

slick-looking shot of Patrick Stewart at Cannes. We thought of

:46:42.:46:43.

something else. A lot of dry weather to come through

:46:44.:47:33.

the rest of the week, that said it will be a dull and damp start to the

:47:34.:47:37.

day across many parts of England and Wales tomorrow morning. Hopefully

:47:38.:47:41.

things will brighten up. The best of the sunshine will be across Northern

:47:42.:47:43.

Ireland and Scotland. Another

:47:44.:47:44.

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