146. Putin vs. Prigozhin, the power of Lebedev, and the battle for Southeast Asia

26:19To first of all, two MI6 guys went to CM to tell him face to face, we strongly recommend you do not try to put Lebedev into the House of Lords because of the families continuing connections with the top levels of the Putin regime. They even sent somebody to the palace to ask if the Queen might intervene. And the Queen apparently said that this would be, there's a risk that that would look like she was interfering in the political process. I mean, it is incredible. You had two members. You had David Clark who was on this committee, whole lack the House of Lords Appointments Commission, saying they had never known a situation where whatever objections were put forward, the word came back from Downey Street, this has to happen.

27:02And a little bit of ureury, I felt slightly sick. Well, the whole thing was complete, completely, but it's not. No, when I was watching, when I was watching Lebedev, I've seen it before, but watching in that context, the film of Lebedev taking his seat in the House of Lords. And being sworn in as Lord Lebedev of Siberia. Of Siberia. It's just an extraordinary provocation. They must have been laughing their heads off of that point. The Russians. It's completely astonishing. But can I just take it back one stage? I mean, why is it that, well, I suppose we sort of know, but it is two things. It's money and newspapers are at the key of this.

27:40And it's astonishing. The contacts and the power you get with money. When you look at those photographs of Lebedev throwing parties, you see J .K. Rowling there, you see Tony Blair there, you see Peter Madison there, you see George Osborne there, you see the editors, the major newspapers there, they're all there. And I cannot imagine why famous actors there. What on earth do they think they're doing? I mean, I go back to this question from the deputy chair of the Italian foreign ministry. There are other ways to have fun rather than going to parties hosted by by oligots. Well, maybe we can we'll perhaps do this in the Q &A because we did get quite a lot of questions about what we thought about Kierstarm, R &W, St.

28:22John others being at Murdoch's party this week, for example, which is then which is that I stopped going to even when I was running for the leadership, even when I was running going to the first. I stopped going to those quite a while back, but not while I was there, I'll be honest. But the reason they go is that it's considered incredibly important. And sorry, just to bring it back to me, I mean, I noticed this Lebedev's power in two ways. One of them was in a very sort of soft power way when I was the minister of the environment and effort, Dean with international conservation. He kept reaching out trying to invite me to go to events in Africa on conservation of big cats.

28:56I think it was about lions. And people from his office would come and say it's going to be amazing. It's going to be this great gathering in South African country with all these billionaires. And we're going to bring together an amazing new initiative to save the lion. So that was the approach when I was environment minister. Right. Then when I was running to be London mayor, of course, getting lovely messages saying, well, from you've got any Lebedev saying, you know, we got what's happening? It's just, well, we're going to have to sit down, Rory now, I think there's a lot to talk about. And again, the immense temptation, if I'm going to be honest, I'm running to be the independent candidate to be mayor of London.

29:28I want endorsement, be nice to have the evening standard coming out strongly in his favor. The temptation, which other politicians must have felt to the N .C. degree. Yeah. And so Boris is writing this. He needed the standard, or it was very, very helpful for him to become mayor of London to keep his path. And somewhere along the line, he made friends with this guy and he ultimately promised him, I guess, that he was going to make him a lord. But if you think about what we know about the way that Johnson conducts himself anyway, think about him then add on the context of his got rid of his bodyguards.

30:03Heaven knows what he got up to. One of the MI6 guys is interviews. Actually said that just the fact of doing it puts him in a vulnerable position, open to blackmail and the lies. I think it's horrifying. I'd love us to come back to this, though, because I think I'm still very, very troubled by this question of the influence of money, the influence of the media on our political system and the way and the way in which and the and the cross -party nature of it. Why is it that actors, novelists, politicians and particulates, politicians we have to worry about are sucked into this horrible, horrible world of feeling they have to go and turn up to these parties, make friends with these people.

30:42And of course the incredible influence that gives these people on directing policy. I, by the way, just before we go to the break, I am a little bit like you. I think I'm putting myself in the same camp here. I got an approach from Lebedev. I can't remember what year it was, but I got an approach. Would I go and have lunch with him? This is after I left number 10. And so I went to some sort of rather odd Japanese restaurant in London, Meta. And I have to be honest, I took a he sort of gave me the creeps. I think the a beard that is that well trimmed, I'm always going to be suspicious of. The only point of having a beard to me is you never need to shave.

31:17When you have a beard and yet you clear you all so shave every day or have yourself shaven, I think there's something a bit wrong. So I can't, I just didn't take the guy at all. It's the only time I ever met him. But I remember his opening gambit was something like, you know, everybody I meet in London tells me that if I'm to understand how British politics works, I have to speak to you kind of thing. Bullshit, flattery, bloody, bloody, bloody, even I was asking if my advice is to who I thought you should appoint as his next editor of the standard, his next editor of the independent. And I just thought, I don't know anything to do with this.

31:49So the next time I've got an invitation to one of his parties, I think I might have went to one of them. But no, not for me. I mean, I for me, I think it's there, but for the grace of God. I mean, in the end, I said no to the parties. In the end, I didn't go to Africa, in the end, I didn't meet him. And you didn't become London mayor. Right. Okay, time on that for a break.

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33:35As far as expectations go, why meet them when you can shatter them? What we choose to challenge, we challenge completely. We are professional grade. Visit GMC .com to learn more. It's the Smuckers Uncrustables podcast with your host Uncrustables. Okay, today's guest is rough around the edges. Please welcome crust. Thanks for having me. Today's topic. He's round with soft pillowy bread. Hey, filled with delicious PB &J. Are you talking about yourself? And you can take him anywhere. Why do you invite him? And we are out of time. Are you really cutting me off? Uncrustables are the best part of the sandwich.

34:40Sorry, crust. Moves make kind of lame songs. But they sound pretty sweet dear wallet. BNC bang. Brilliantly boring since 1865.

34:54Welcome back to the rest of the policies. I'm the honest Campbell. And with me, Rory Stewart. And you wanted to get us onto the economy, right? Well, I just think two things really. I think it's just interesting that having just spent this two part with John Major and the second part very much about his time as Prime Minister living through the horrors of the exchange rate mechanism day back all. And the sense of the country just thinking, you know what? Not sure these guys can manage the economy anymore. And I wonder if Rishi Srinak is in a similar place right now. He did seem just that he just had a sense of somebody desperately trying to pretend that he was powerful in the face of an economic storm that was coming his way.

35:33But he actually has very little power. Well, I think it's true, isn't it? I mean, I think the awful truth is that politicians have to try to take responsibility, have to project themselves as controlling things, but sometimes things that happen in the economy are not within their control. And he believed, and I think a lot of people inside the treasury believed that inflation would come down in Britain. In fact, there are a lot of big experts out projecting that, including I think Bank of England people. But it's turned out not to be true. Inflation has remained very, very stubbornly high in Britain.

36:05And of course, that is a big problem, big big problem for cost of living because it wages inevitably don't keep up. People find that all the goods they're buying are getting more and more expensive and they're totally squeezed. But the medicine, which you used to deal with that, which is to raise interest rates, then crushes the economy because it makes it much, much more difficult to borrow and drives up the cost of mortgages. So he's trying to do two things. He needs to bring inflation down and he needs economic growth. And at the moment, he doesn't look like he can have both because as he tries to bring inflation down, he's going to be hissing growth and inflicting a different form of pain on people in this case.

36:44Many people who don't have fixed rate mortgages, floating mortgages, may end up having to pay six thousand pounds more a year on average. Also, when he came out with his five priorities that he sort of has on the backdrop pretty much everywhere he speaks, the Tories were so bullish about the way things were going at that time that they said that they'd actually picked them because they felt they were easy to do. So if you go through them one by one, half inflation, well, there's been no fall and what's more core inflation is rising, grow the economy. We've got the forecast of the second lowest growth in the G7.

37:19Reduced debt. We're now more than 100 % of GDP. Cut waiting lists. NHS waiting list at record high and they're going to get even higher with yes and other stripe by the junior doctors with whom the government yet again just seemed not to be treating. And then stop the boats and we've had more than 10 ,000 small boat crossing so far this year. So heaven knows what's happening with these non -priorities. If this is what's happening with these so -called priorities. And the reason this is a big problem for the Conservative government is that those priorities pretty accurately reflect the priorities of the British public.

37:52It's not a bad list of five things that the public really want to happen. And his failure to deliver on them is devastating. But of course they're all connected. I mean, as I said, it is some that the debt, the inflation, the growth, yeah. I mean, I dug into this quite a lot when I was preparing for a question time, which we'll talk about in question time. But one of the things that I was I didn't really get this out because it didn't really come up. But looking at the whole thing about mortgages, if you look at the rates for mortgage boroughs in European countries, 3 .89 % Germany, 2 .61 % France, 3 .6, Netherlands, 3 .55 Ireland, that gap between them and us means that we are going to end up paying more on our mortgages.

38:37And the composite across Europe is in April for one to five year maturity was 3 .71%. So it's true that everybody is having to struggle with this. But we do seem to be hit hardest. And I'm afraid we're back to the elephant in the room since Brexit on five major metrics. Our recent economic forms have been won for real GDP growth per head investment, productivity, inflation and trade. We've been hit on all five of them and that is a fact that nobody seems to want to address. The other consequence of this is at some point we are likely to see the impact on house prices. As mortgages become more and more unaffordable, it's going to be more and more difficult for people to afford to buy a house.

39:17And prices are going to start falling. And that's going to really test one of the big questions in British politics. We keep hearing in British politics that people want more affordable houses, that house prices are crazy. But that of course is true for the 40 % that don't own houses. For the 60 % who own houses, it's going to be unbelievably painful to discover that the nest egg that they've built up is beginning to lose value. And they're going to have less to draw on when they retire. So it's really testing this question. Do people actually want lower house prices? And what's going to happen politically as those house prices come tumbling down?

39:55Well, especially as our housing debate in this country has been utterly fixated since Margaret Thatcher's day between these two twin poles of rising house prices and Thatcher selling off the council houses. And actually we've ended up in a position where social housing is a real challenge. And actually I'll just throw you a question, Roy, maybe to conclude this part of our discussion. It was a question that came up for the Q &A, which was directed at you, fair enough, you don't want to see building on a green bill, but where are we going to build the new homes that we need? I'd start in London.

40:27So the Mererv London has thousands of acres of Mererv London Transport for London land, which hasn't been adequately developed. You could be building and he should be building not private sector building. I mean, I think the most horrifying thing which was started under Boris Johnson, continued under Speak, can as mayor is this very, very ugly 9 -L most development. Many, many of those apartments, this is down on the edge of Battersea. Many of those apartments unoccupied, perfect spot to drive ahead with social housing. The Mererv London should be building hundreds of thousands of affordable Mererv London owned government housing to manage for the next 50 or 100 years.

41:04It would be a fantastic investment. Right, but if we're talking about leveling up, I mean, fair enough, we may need more homes in London, but we need there is a housing shortage for the next generation right around the country. There is, but it's most acute down in the southeast. I mean, West Cumbria in fact has some of the lowest house prices in the country. And I would really like to see a Merrill candidate, and they're just in the process of selecting conservative Merrill candidate, but it doesn't matter which party they come from, commit to building hundreds of thousands of state owned houses in London.

41:37Okay, let's go do, as you say, we very rarely talk about south East Asia, and we're back to our old friend, populism and authoritarianism. We've got election coming up in Cumbria. Who do you think is going to win that election, Rory? It's a very, very, very tough question. It could possibly be Honsei, who's now preparing his great son to take over. So give us a bit of a sense of your sense of Cambodian politics. And then maybe I'd love to step back and just set the bigger Southeast Asian picture. I was actually just going to start on that bigger picture, Freedom House, which stood a Tracks Democratic strength across the world.

42:14They have ranked four Southeast Asian countries, partly free, Indonesia, Malaysia, the Philippines, and Singapore. Six countries they define as not free, Brunei, Cambodia, Los Myanmar, Thailand, and Vietnam, and only one country is Timor as free. And Cambodia, it is hard to imagine anywhere more completely and totally authoritarian. Honsei has been around for 1998, has he been in power? The main opposition party, Candle Light Party, has been basically wiped out. They've been barred from the election. Apparently they didn't fill in their forms properly. It's the old Russian trick. So you're essentially going to have the CPP, Honsei's party, even though 10 other parties are registered, they're basically sort of parties that make you think there is some competition.

43:05But he's going to win and he's going to probably get every single seat in the assembly. And as you say, he wants his son, who in the manate, to take over, but he's basically going to go around the place saying he's not ready yet. I've probably need another couple of terms. And then he can take over. Then I can head over. The story of Southeast Asia really matters to the world because it is one of the most dynamic economic regions in the world. And it's there right on the cusp between China and the United States. It's had incredibly economic growth, lifted enormous numbers of people out of poverty.

43:39Many, many companies who are talking about de -risking away from China, looking at moving their manufacturing facilities to Indonesia or Vietnam. The question of India's relationships were completely fascinating now. But the political story is also tells that very odd story that we keep coming back to, the way the world's changed since the 1980s. So initially from the 1980s onwards, it looked very optimistic in Southeast Asia. So Philippines, you remember, Marcos went, emelled a Marcos with hundreds of shoes, and Corioquino came in, democracy came to Philippines, and then Suhaso fell in Indonesia, in 1998, after the financial crisis, Indonesia set off on a democratic path.

44:23But the outliers here were, as you say, Vietnam, Laos, Cambodia. And then most tragically of course, which we talked about a bit, Myanmar, where in the 2014 onwards, the lady Al -Sang Suqi came back, people thought, okay, this is the great progress again towards democracy, and that has collapsed back into horrendous military dictatorship, a failed state, an ongoing insurrection, where the people are 3D printing weapons and attacking the military. And then we've talked to us about Thailand, which is still in a state of paralysis, still trying to work out where to go with this very odd relationship between the military, the king, and the ruling elites on the one hand.

45:03And this new opposition coming up, so it's broken apart the assumption that we all had in the 90s, that economic growth and prosperity went along with democracy. These are countries growing quickly, perhaps the most dynamic economic region of the world, and it's not really going down a democratic region. And the other point that we've sort of raised in different parts of the world, is this sense that these often very right -wing, quite brutal leaders, nonetheless able to build, as genuine, even though they might be rigging and fixing elections, but there also is a genuine sense of popularity for some of them, like Deterte and the Philippines, who is utterly brutal in this war on drugs, and just literally people go around sort of just topping people, and yet has a popularity.

45:47Now succeeded by Marcos's son, further named on mother. Yes, yeah, exactly. No, you're right. These brutal, brutal populism emerging, which you saw there. I also think there's a very interesting question of how China handles this relationship. I mean, China is immense in this region. So, you know, China's exports from Indonesia to China are about 24 % of all of Indonesia's exports. It supplies from China about 29 % of all its suppliers compared to about 6 % from the US to get a sense of the discrepancy. Perhaps most striking of all, Indonesia, which is meant to have the great navy in the region.

46:23I was just talking to an amazing guy called Arnavese that is a professor at Yale. He pointed out that the Indonesian navy has 10 or 11 frigates, half of which are left over from the Dutch, you know, decades old. China has had since 2007, 70, 70 destroyers near Indonesia, and that's see. So, yes, growing, yes prosperous, yes dynamic, but a very, very difficult relationship to China. The other really interesting thing that's been happening amidst the whole sort of global focus on Ukraine. I think in relation to Southeast Asia, the Americans have maybe slightly taken there after the ball because they've got so much else to focus on.

47:08So, for example, they're not being as aggressive as they have been in the past about human rights in that region. And the other thing that's happening is that within central Asia, in particular the well -known Starns, Moscow is losing influence there and China is moving in there as well. And there was a very interesting, was it last month or the month before it, middle of May, I think it was. There was this China Central Asia Summit where Xi Jinping met with the leaders of Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, Uzbekistan, all the stands essentially, and was sort of wrapping them into the Silk Road and the whole, you know, Belt Initiative.

47:50So, they are on the move in so many ways. And I think that this is a very interesting example of where the big picture message is, oh well, China's very supportive or quite supportive of Putin. Meanwhile, they are seeing the weakening of Putin in the Starns. And we saw that by the way in relation to our previous discussion about Belarus because the Kazakhs did not want to be involved in the deal to try and resolve the dispute between the Russians and the Vagregree. And Nora apparently did the Iranians and that's why it was left at Lukashenko. Sorry, back to Cambodia. No, no, well, I think just to conclude, if you care about the world, you need to think about Southeast Asia, 700 million people, very dynamic economies, going to benefit enormously from companies trying to move away from China.

48:37Big question about where Indian influence is going to go. And of course, Indonesia largest Muslim population in the world as well. So there's so much that we haven't covered there and we need to think about as these places get more and more powerful and don't underestimate the Philippines economically. It's a place that was always traditionally written off in the 70s and 80s, written off because it had incredible investment in education and English language, but never really seemed to be performing. But finally, all that investment seems to be paying off. The Philippines economy is going going gangbusters.

49:13Yeah. The other thing that we've talked a lot about corruption in relation to to Putin and people that, according to global witness, and this is some years ago now, who kind of track corruption around the world. Hun Sen and his family, they were reckoned to be, you know, up in the billion dollar class, which is not, you know, it's not about going when you're on a pretty small salary, even though you've been there since 1998. Well, it's just to be invested wisely. That's the, yeah, yeah, yeah, yeah. He's probably got premium box, probably lucky on the premium box. Yeah. He's also a big supporter of Donald Trump.

49:47Hun Sen. Right. Yeah. So there we are. Good. Okay. Well, let's try to finish with one upbeat thing because we don't want to finish on the world's Donald Trump. Well, let's go Guatemala. Go on. Is that going to cheer us up? What it might do? There was an election there at the weekend. Yep. And we haven't got all the results yet. But one thing that was very interesting in the campaign was a lot of indigenous women activists who clearly had read the best -selling book, but what can I do? And anyone who's listening to this podcast is not yet bought, but what can I do? Please, but what can I do? Well, actually, I've got to say they've advertised that I've plugged it and you've plugged it kindly on my behalf.

50:25Anybody who has listened to this podcast and hasn't bought it yet is never going to buy it. I see a speed plug so much. But no, but they essentially what's happened there is that a group of women who have felt that they've not been listened to and not respected, I mean, the political process there, you've got 44 % of the population are indigenous and yet they have about under, you know, single figures in terms of representation in the Congress. So is a group of women who just decided, you know what, we're going to get out there and we're going to do it and start it out on their local councils and then have built up and now we've actually, you know, started to win representation at a higher level.

51:05So I just wanted to say that's maybe a happier note on which to end. The maybe next week we can come back and reveal what the final result was because they're still trying to work it out. Yeah, amazing. I mean, I just caught a New York Times article on this, which talking about the fact that a lot of the leading candidates have been excluded from the election, which was seen as another kind of worrying sign that what, man, for sure, like a lot of Central America is going the wrong direction on democracy. Well, the whole thing about getting rid of candidates is, you know, it's a very, very, common thing.

51:35And just maybe to wrap on this, we talked a few weeks ago about the Greek election and our friend Tim Bale, who's a bit of a elections geek, he pointed out at the time that there was this thing in Greece called the winners bonus and the reason why the Greek Prime Minister went for a second election was because he felt that on the second time round, he would get this winners bonus and so it has turned out. So what's the winners, Ben? Sorry, I don't understand. What's the winners? So basically, there is a thing called bonus seats. It's a system of reinforced proportional representation. So for example, if the first party gets 25 % the bonus is 20 seats.

52:17So it's a PR system where the higher up you are, then you will get these additional seats. I get it, I get it, I get it. The idea is to give a bit more. But the ones who don't reach the threshold are knocked out. So it's a sort of mixed system where you don't end up with quite such potentially kind of compromised coalition governments. You give a bit more power to the one that comes first. Correct. So the parties which don't reach a, I think it's a 3 % threshold, they kind of just, they get left out. But that means that there is more space then for the parties that do better to get more seats under a bonus system.

52:54And that is why he went for a second election. Right. And Tim, Tim's a supporter of this, so he remains neutral on this. He just thought this is something we should know. I don't know if he's a supporter. He's just somebody who likes us to be factually accurate when we're talking about foreign elections. Very good. Well, thank you, Tim, very much for that. And a final shout out, Alistair, because I'm looking for something to finish on cheerily, to an amazing image that I can see behind you of what seems to be a tree of the day on a canvas. And finally your bookcase, it's like a winter tree landscape reflected in a canal with with a window reflecting on it.

53:25Rory, because we've got the builders in at the moment. Yeah. That is actually the wrong way around. It's, it's a, you've got to imagine it sideways. Okay. I'll tell you what I'll do. I'll take a picture of it. Yeah. And we can put it in the show. It's a picture of a tree on Hampstead Heath. Lovely. It's pretty nice. Yeah. If you only got it for a present a few years ago. All right. Well, on that, I think we're going to call it to an end. Thank you very much. Oh, best. Speak to you soon. Bye -bye.