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October 2006 Country Archive

PUBLISHERS OVERVIEW OCTOBER '06

IS THIS THE END OF 'THE EUROPEAN IDEA'?

The shock announcement on the 25th of September by Manuel Barrosso, the European Commission President that EU expansion is to 'pause' after the conditional acceptance into membership of BULGARIA and ROMANIA, has thrown the chancelleries of Europe into disarray. Those two will be the last states to enter until the EU has reorganized its institutional framework, but even a few moments reflection suggests that this is about much more than making a few tweaks to the existing treaties.

This is a crisis! In reality, nothing less than the future of the whole 'European Idea' is now at risk!

A perfectly sensible new constitutional framework agreed at member government level was endorsed by near to eighteen member states' legislatures, but voted down by the electorate in two important states, France and the Netherlands, largely for reasons unconnected to institutional re-organisation - more as a protest against expansion. Whichever way one looks at it, the EU Commission can justifiably claim enlargement fatigue. A twenty seven member body is per se unwieldy, let alone a larger one, although that bridge was crossed on 1 May 2004 when in one move, ten new entrants were accepted. But the big, even agonizing questions for some, are these :-
How long will institutional reorganization take to achieve? Will it be done with reasonable haste, or with deliberate slowness? Ultimately must it be submitted by referenda to the electorates in France and Netherlands or others, who can of course use it to vote enlargement down again, or even as a means of protesting something unconnected in their domestic politics, as happens in some referenda? Can reorganization, as distinct from enlargement take place by member government agreement, rather than by national referenda, which should perhaps be saved for the bigger issues of the future of the EU?

The answers to these questions are key now to the future of the whole European Union idea and we suggest that a great and overdue debate defining this very European Idea should now take place, and that the leaders of the European Community be prepared to campaign to carry the majority of the citizens with them. 

THE EXCLUDED
CROATIA, the most advanced EU candidate next in line to BULGARIA and ROMANIA, as we report, is in shock and feeling betrayed, but apart from that advanced Balkan country, the geopolitical reasons for continental expansion have not gone away. SERBIA, that was to have been given assurances about eventual entry, as perhaps a necessary bromide after Kosovo is inevitably amputated; MACEDONIA; ALBANIA; BOSNIA-HERZEGOVINA; MONTENEGRO, all are on the outside looking in, and this one historic opportunity of forever closing down the Balkans as Europe's pre-eminent tinderbox, could be lost. 

If membership were to be frozen at twenty seven countries, which could grow and prosper, alongside a handful of neighbouring but excluded European loser-nations -and those in the Balkans no less, it is a sure-fire recipe for violent trouble. No doubt European Commission representatives dealing with each of these countries right now, will be falling over themselves to reassure their 'clients,' that the train will start rolling again, as soon as the track is made secure. We hope that this is so. But consider say, if you were responsible for what could without redress, become a permanently excluded SERBIA. Wouldn't you be tempted to approach fellow slav and orthodox RUSSIA to be a wealthy and powerful patron and become the driving force, replacing the prospect of the EU in your country? Or ALBANIA, should it revive its one time client status with PR CHINA and give them territorial rights on the European mainland - a Hong Kong in reverse for the 'Asian century'? Even more serious perhaps, ALBANIA whose government is currently set on a modernizing course and accepting the norms to qualify for EU membership, if with no further hope of that and destined to remain outside the community, could quickly revert to becoming out of control as a criminal state, and even more of a portal into Europe for organized crime and illegal immigration. 

What about UKRAINE looking west? Are those forty eight million people to be told that they will never now join the Europe of the EU, that they must look instead east, to rejoining the nascent Russian empire and give Moscow everything it desires, with a great boost of slav citizens to be as they were before, cannon fodder for Russian adventurism? And TURKEY? Whatever else, TURKEY was anyway ten to fifteen years away from membership, even if the decision would be to admit them. But in context, we are being told on the world political front that the west must encourage and build bridges to the moderate Moslems of the world and here is a country that fits that description precisely. A strong confident Europe could rise to the challenge of admitting TURKEY, even if the free movement of labour were inevitably to remain restricted. 

"THE CONFEDERATE STATES OF EUROPE"
Leaving aside for now the bigger, longer-term issues of UKRAINE and TURKEY, to permanently exclude the six small Balkan states would be like a United States of America having been formed with six continental American states remaining permanently outside the Federal Union - (to avoid which a bloody civil war was fought). A rogue 'Yugoslavia' - six or more Balkan states, an integral part of our small continent with a massive capacity for trouble, are perhaps a parallel for the Confederate States of America. The European Union should once each has duly qualified, surely be able to absorb these Balkan 'tiddlers', just as they have done with Malta and Cyprus. 

These are geopolitical imperatives of which the European leaders are well aware. Those politicians may not be individually big enough to rise above their narrower national politics, when the tabloid press and rabble-rousers of their countries give them a hard time on short-term issues. But on HOW and with what urgency the Europeans approach these institutional changes that are now needed, will depend Europe's global position in say twenty years. Europe is just one bloc within a world where the USA presently dominates and other challengers are making rapid progress. East Asia is every day spectacularly rising. South Asia's economy and therefore political weight is growing to levels appropriate to its enormous proportion of the human race, and RUSSIA with its new status as an energy superpower (and still possessing 9000 nuclear warheads), is determined to rise again, this time as a militarily invulnerable, world economic power. 

It would be a tragedy of historic proportions, even perhaps a costly one in blood and treasure, if narrow nationalist prejudices and short term racist attitudes largely fuelled by the fear of a tiny number of terrorists within the continent, meant that the European cake was only half-baked and left to sag on the shelf that way, whilst the rest of the world moves on.

AS EAST ASIA DEVELOPS : HOLD ON TO YOUR HATS
The west has not yet got a real fix on the Shanghai Co-operation Organisation (SCO) except that it is obviously a vehicle for RUSSIA and China to build a platform to resist US global penetration where it affects them - principally in Central Asia. Whilst developments here - they have a line to IRAN and INDIA who are both observers -will be watched closely, we point out that economic developments in Asia may well take the west by surprise. Already there is work going on in several Asian centers to develop an Asian 'Euro'-style common currency. In our KAZAKSTAN report we tell of the visit there of Japan's Prime Minister, as well as to neighbouring UZBEKISTAN. Both country reports examine Japan's engagement in central Asia. It is our opinion, backed by the Japanese Ambassador's comments, that we should expect an Asian Common Market to emerge, sooner rather than later, a truly formidable economic grouping capable of altering the economic balances and comfortable assumptions current in the west. The fact that Japan has a new Prime Minister who wasn't even born until after WWII is important psychologically, in Japan's relations with such as China, South Korea etc. 

NORTH KOREA'S UNFOLDING DRAMA
Followers of the NORTH KOREA story know that even a world in turmoil has few unfolding dramas with stakes as high as this. We offer an update and appraisal of the current situation there.

HAS RUSSIA GONE GREEN?
Heaven must be rejoicing! Vladimir Putin seems to have gone green! Never before known for his concern for the environment, he has within the space of a month authorized the stoppage of two oil projects on environmental grounds because, we are told, of his sensibilities for mother Earth. Last month after a Russian state owned oil company was frustrated in the purchase of the Lithuanian Mazeikiu Oil refinery (the government there chose to sell their stake to a Polish company) the oil that came from Russia to be refined isn't coming any longer. It seems that about the same time that the contract was signed with the Polish company, it was discovered by the Russians that that particular oil pipeline had leaks harming the environment and suddenly needed to be taken out of commission for a year or two. LITHUANIA updates on that, and they have found an interesting way of retaliating which RUSSIA likes not at all. This month it turned out, as we report in RUSSIA, that since Shell have been unwilling to allow Russian state gas monopoly Gazprom, to butt in and take a chunk of the Sakhalin island development (now there is no risk, the investment is made and the commencement of supply to Japan is imminent), Putin's environmental watchdogs have belatedly discovered green concerns about salmon fishing rivers on Sakhalin, and removed the permit for Shell and their Japanese partners to develop. Add to this the punishment meted out to former Russian colonies GEORGIA and MOLDOVA marked down for the impertinence of asserting their sovereignty, where their wine and foodstuffs have been barred from their traditional (for at least a century) market of RUSSIA, on the grounds of newly discovered hygiene quality and one might think that RUSSIA had the greenest of green regimes - but sadly it is not so. It is in fact a travesty of the real ecological blight that is commonplace and a low priority for government in RUSSIA.

It merely demonstrates that any leverage the Russian government can pull through any of its agencies, is available to create Putin's big picture which is oil and gas dominance, as a substitute for erstwhile Soviet military power, in the build-up to a new Russian empire. In Sakhalin it will next be about tax bills, in which as the Khordokovsky case demonstrated, considerable ingenuity will be displayed. "Think of a number - and double it," seems to be the Russian taxman's mantra in such circumstances. 

TOP DOLLAR
Its not often that RUSSIA's Gazprom would so shift its negotiating position as to pay $6 billion more than it had planned to do - 50% more per cubic metre of gas than it is currently paying! TURKMENISTAN this month describes the deal which has of course major implications for user nations, mainly European, as well as geo-strategic 'partners' whose potential deals now look rather sick. Briefly, having secured the Turkmen's output, Russia now controls ALL Central Asian gas exports to Europe. Where that leaves UKRAINE, hoping to cut a deal directly with the Turkmen, less rapacious than that they get from Gazprom, is unclear. Our AZERBAIJAN report considers Yushchenko's recent efforts on a visit there. His support for their position vis-a-vis ARMENIA, on the disputed enclave of Nagorno- Karabakh, is also significant. It is diametrically opposed to that of RUSSIA whose client ARMENIA is, and who has historically propped them up militarily. 

The Russians will pay US$100 per thousand cu metres. But watch what they will charge in Europe. Actually, this gas will probably in the first instance take care of Russia's domestic demand, thus freeing up equivalent quantities for more lucrative export. 
But there is another side to this which relates to TURKMENISTAN's notorious management -actually its tyrannical president. A lot of bluster at that level is accompanied by imprecision about what the country can actually produce, from what are its undoubtedly vast reserves. From 2007 they are contracted to supply Gazprom with 50 billion cu metres annually (up from 12 billion this year)! 

Since 1991 or thereabouts when the USSR collapsed, there have been schemes afoot to supply INDIA and PAKISTAN with Turkmen gas - a brilliant wheeze except that the pipeline would have to come through AFGHANISTAN and tribal PAKISTAN! No surprise it hasn't got off the ground yet, but as we report in INDIA, the Asian Development Bank and others are seriously working on this Trans -Afghan Pipeline (TAP). The question now is, even if the security in transit could be handled - a big 'if'- is TURKMENISTAN capable of supplying any big quantity from existing fields after this new commitment to Gazprom? Will it become a matter not only of building a pipeline but of developing a new field? Alternatively, is it feasible to take supplies from KAZAKSTAN? Meanwhile, as we also report, China is offering to develop a new field on the Amu Darya river, not yet in production, and build a pipeline to China with an annual capacity of 30 billion cu metres for their consumption. 

POLAND : KYRNICKA CONFERENCE ENERGY SCRAMBLE
In the light of Russia's perceived intention of becoming 'THE' energy superpower of Eurasia it is interesting to see those nations with the most hands-on experience of RUSSIA working up their alternative power options as we describe in POLAND

PUTIN'S FUTURE
We have opined in an earlier (archived) issue that Putin will just stand down when his time is up in 2008, but we can only speculate. And so we point to the BELARUS report where we quote some of the players in the Russia-Belarus Union who claim to know. 

AFGHANISTAN - A POPPY STORY
Consider these statistics which are included in this month's AFGHANISTAN report:
1) "The yearly shortfall in cereal production is of 1.2 million tonnes out of a total consumption of 6 million tonnes, leaving 2.5 million Afghans at risk." 
2) "The new poppy crop 50 % higher than last year will add a new boost (to the economy)". Hurrah for boosts to the economy but it's an acknowledged crop - a part of the agri-business - what kind of madness is this? It is true that the cereal shortfall is due to drought but clearly opium poppies are a preferred crop, so our wretched heroin users in the US and Europe and Russia will continue to get supplies whilst someone will have to pay to import cereals, or the people here will starve. The US Congress funded a massive campaign to eradicate the poppy menace (and there was video footage to be seen of well-dressed local officials beating up individual poppies on camera), but which resulted in a crop 50% higher than last year! Common sense dictates a more obvious solution. Let the UN or the US persuade the appropriate global big-pharma companies to form an intervention buyer joint corporation, to pay the farmers a standard basic price for their harvest, less than the price of cereals. Let them take away the quantity of opium usable for world-wide medicinal purposes and burn the rest, subsidized by those agencies who seek to stop the trafficking. That cuts out the criminal networks who currently control the market and would probably be a cheaper solution than any yet tried. 

IS SOUTH AFRICAN DEMOCRACY GOING DOWN THE TUBES? 
The news that the trial of Vice President and aspiring president of SOUTH AFRICA, Jacob Zuma on the serious charges of corruption against him, had been stopped on technical grounds, is deeply disturbing. We give a full review of this and of the implications for the leadership of this most advanced of African nations. 
It would have been a different matter if in court he had faced and defeated the charges of corruption, (based on what appears to be overwhelming evidence of receiving large amounts in corrupt payments from foreign arms contractors). But on the technical grounds given for dismissal in such a grave matter, it means that he doesn't have to answer any charges. Although it appears to remain open to the prosecution to reinstate the charges against him, there is a massive build-up of political pressure from his allies to drop the charges - amazingly led by the Congress of African Trades Union and the South African Communist party, to whom it seems, top level ministerial corruption on this scale is unimportant - certainly less significant than having him as their albeit tainted candidate to succeed to the presidency of South Africa. For many other South Africans, Zuma represents the worst in African politicians: belligerent, shameless and prone to spreading obviously false rumours about shadowy plots against him 

For Africa as a whole, what it does mean as of now, along with his earlier acquittal where he received the benefit of the doubt on a rape charge, is that he is untouchable. He is the quintessential African 'Big Man' and even in a nascent democracy like SOUTH AFRICA, which hitherto had led the field in adopting the norms of modern nation states, it now appears - and this signal goes out to all of Africa, that after all Big Men remain above the law. 

The Scorpions, that group of crusading policemen and lawyers in S.Africa, will be seeking other indictments that can be brought. It will be interesting meanwhile to see how his tax lawyers advise, if Jacob Zuma is required to pay tax on the hundreds of thousands of dollars that he has received. 

BLOWING IN THE WIND 
A sign of things to come: We report in IRAQ that in the Kurdish autonomous region, the leader Massoud Barzani issued a decree not to fly the Iraqi flag and to replace it with the Kurdistan flag. This is coming to be the worst TURKISH nightmare, shared to some extent by IRAN and SYRIA, that a quasi-independent Kurdistan will energise the Kurdish independence movements inside their own countries. There are over thirty million Kurds overlapping these modern political boundaries with no state of their own - and they are now feeling their muscle, due to the autonomy their people have achieved in IRAQ

Control of the Iraqi armed forces was in September passed over to the government by the Americans and we can now expect protracted political infighting over ministerial control. 
It is moot as to whether the oil ministry where the heavy money is, or the control of the armed forces where much power theoretically resides, is the most desirable to the more or less venal politicians who scramble for power in this wretched country. Life for its citizens is generally regarded now as far worse than it was under Saddam Hussein. The former leader's show-trial took a hit when the government summarily 'removed' the carefully selected chief judge. But hey, isn't this now a democracy where courts are independent of the elected pols? Compare and contrast with say, Nuremberg; The Hague, etc. 

PAKISTAN'S MUSHARRAF SOLDIERS ON 
Pervez Musharraf recently in the USA and the UK, must sometimes feel that he is in a permanently revolving door, the same problems coming around and around. He won't surrender the C-in-C position in PAKISTAN's armed forces, which he decided not to relinquish, notwithstanding holding his nations's presidency. It may be that like Putin in Russia who surrounds himself with former spooks and military types, perhaps because he can trust and rely on them the most, so Musharraf whose whole career had formerly been a military one needs to be sure of his closest colleagues. In interviews, he gave a robust response to being easy on the Taleban and effectively said that PAKISTAN is at the very sharpest point of the war on terror. There have been three attempts to assassinate him, partly because his government and his much maligned military intelligence agency I S I, have been highly effective in catching leading Al Qaeda personnel and many lower level terrorists, far more, he points out than any other country engaged in the war on terror.

He claimed reasonably enough, that the last military engagement of the cold war, the organized resistance to the Soviet occupation of AFGHANISTAN could not have been won without PAKISTAN's and I S I's active involvement and that this was the final nail in the coffin of soviet imperialism, for which his country does not receive proper credit. He also points out that Al Qaeda was helped to recruit Moslem fighters from around the world, armed, funded and sustained by the west, when it was leading the CIA co-ordinated fight-back against the Russian occupation in AFGHANISTAN, and that today's situation is the bleak inheritance of that cold-war policy. 

We chronicle his current problems, but there are bright spots as well, not least economic. Oil-rich investors from his 'near- abroad' in Saudi Arabia and Dubai, are moving in to take up investment opportunities, that being co-religionists do not have the same risks or illusions of risk, that might deter some investors from other cultures, in the current climate. 

LOVE'S PRICE 
This months' MOLDOVA, where love of RUSSIA is the official ideology of the criminal breakaway enclave of Transnistria, gives some interesting insights into life there. They have recently had a soviet -style referendum (97% in favour of the government line), universally condemned as a travesty, except by RUSSIA, who have actually said little about it. But the Russian media did follow up and we give this non-official Russian view partly for the entertaining way it describes how two senior figures left the KGB to form a company 'Sheriff', and then on "concentrating all profitable private business" into this holding company. ("we have ways of making you concentrate"). They supported the incumbent political boss Igor Smirnoff, and as a result they pay no taxes to the 'republic', nor import duties to the customs department run by Smirnoff's son. But all subsequently is not smooth running, since they then set up and control another political movement which had a majority in the parliamentary elections, and seeks to reduce the powers of their old pal Smirnoff. 

HUNGARY'S EXPOSURE TO CANDOUR
It has to be an unusual situation in western politics when the prime minister of a European nation makes a genuinely candid speech to his party stalwarts in a 'smoke filled back room,' knowing as any politician should, that such statements inevitably would be leaked. We extensively quote his comments, ribald and otherwise, which are like those of a frustrated sergeant-major letting a bunch of dumb recruits have it in the neck. What adds to the incongruity is that it was a victory speech following his re-election and that of his party earlier this year. Essentially he told them (and the world) that he… and they, had been lying to the electorate of HUNGARY morning, noon and night for nearly two years. He is one of those transitory figures that have emerged in the post-communist era of East and Central Europe. First a bright young communist youth-leader, using his connections in the post-communist rush to capitalism, to do very well for himself. And then returning to national politics on the back of his new-found wealth and prestige, which brought him immediately to the top. In many ways it is a story that resembles that of Michael Khordokovsky who had similar ideas in RUSSIA, but then got chopped by the pols once his political ambitions were understood, and who now languishes in a Siberian jail. In Gyurcsany's case it was clearly an excess of hubris in assuming that he could get away with protesting as he does, that only such candour would do the job for Hungary. 

… TO SEE OURSELVES AS OTHERS SEE US… 
Readers from inside the US, conditioned to some extent by Republican -Democrat rivalries may not fully comprehend how their government and thus their nation is currently regarded in the world at large. Inevitably our reports from 44 nations in transition include reactions to the US which it can be said, has not been forgiven for its unilateralism in invading IRAQ

TURKEY which is not by any means the strongest critic of the US, is a moderate Islamic nation and in many - most circumstances, a loyal ally of the US, but we found this quotation about opinion 'on the street' from a Turkish columnist particularly telling :
"Islamists, nationalists, social democrats, Kemalists, liberals, social democrats, leftists, your cleaning lady, the waiter at your favourite restaurant, the owner of the shop on the corner, the taxi-driver, even the modern Turkish youth who try to live like the Americans, are anti-American." 
Isn't that sad? 

Publisher - Clive Lindley

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