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October 2007 Country Archive


The geopolitical event of the past month has been the faux bombing by Israel of Syria, to which we refer both in our reports on SYRIA at length, and NORTH KOREA, briefly. 
In a world packed with incident - none more newsworthy or compelling than this story, we have heard a truly unprecedented silence from the two nations at the centre of the event, or non-event. Even more surprising, the rumour mill of the US media, usually well fed with administration tid-bits of an anti- Syria, anti- Iran kind, dried up. This left the field almost entirely to the bloggers and the Vice-president’s man, the warmonger John Bolton, who was available for interview almost anywhere. Certainly able to put the neo-con line together for the likes of Fox news; the Murdoch press; the hate-jocks; etc, if not able to speak with any authority on the event itself. The effort is understandable if one considers what a triumph this would be for the neocons, if they could down two birds with one shot – portray SYRIA as a nuclear rogue, at the same time as scuttling the NORTH KOREAN peace talks. 

In the circumstances, since nobody who actually knows is saying, we too run through some no less authoritative, if unsubstantiated theories, confident that we will not be contradicted by inconvenient facts. 

Many moons ago we warned that SERBIA might well reject joining the EU in favour of linking up with RUSSIA, their historic protector and patron. In this month’s issue on SERBIA we trace that history and see the emotional ties - and they are certainly felt in RUSSIA too - between these two slav orthodox nations. We also report the attitudes of the current political leaders and give some indications of how RUSSIA has systematically been, and is, buying into the Serbian economy, with some weighty investments. Interested readers of our reports since the new state of MONTENEGRO went independent, will have seen what we have seen, that there has been a disproportionate amount of Russian investment there. We joked (?) that ‘RUSSIA has bought MONTENEGRO’. The point is that SERBIA is a landlocked state and in the days of the recently terminated Yugoslav federation with MONTENEGRO, apart a lengthy riverine route to the Black Sea, via several other states, MONTENEGRO with Mediterranean ports, was their outlet to the world. Since RUSSIA with its merchant shipping is obviously capable of servicing and supplying a powerful economic presence in the heart of the Balkans - which with the advent of other Balkan states already inside or are candidates for EU membership, is beginning to look something like EU Central - there is a powerful logic for Moscow to play the Serbian card. Of course, there are other voices in SERBIA that want in to the EU, and regard that as the appropriate future for their hitherto contrarian nation. It is the international decision taken over Kosovo, that will determine the outcome of this issue and since it looks overwhelmingly that it will achieve its independence, the reaction of the Serbs of Serbia proper, is likely we believe to create an open door for a de facto Russian enclave, deep within Europe. The beauty of it in Russian terms, is that it doesn’t require Moscow to actually do anything politically dramatic, merely to give the nod to several of its larger companies to continue with, consolidate and expand their existing interests in Serbia – and Montenegro. 

With more percipience than we could have known, only two weeks after our red alert on mercenaries in IRAQ, (September Overview : “Gurkhas” & “Whistleblowers”), the lid blew clear off the kettle with the Iraqi government demanding that the US withdraw the services of one of the biggest of the mercenary organizations, whilst IRAQ revokes their licence. In the event, the protests from the Iraqi government are likely merely to show up the fundamental truth that given a crunch, the elected IRAQ government is actually nothing other than a puppet of Washington. Although they are being very persistent this time, they will probably not be allowed to revoke the licence, because that has major implications about the troop numbers (of all sensitive things), many more of whom would be needed to handle ‘security’ in the absence of the mercenaries. Probably a compromise will be found with some ‘bad apples’ being expelled (if they haven’t already been withdrawn), Blackstone, the offending contractor perhaps assigning its business to another security firm, and transferring its in-country personnel to them, with large sums of money easing the way. 

When this war is over and as with Vietnam, the US media is un-muzzled by editorial self-censoring, two frightful truths will emerge. The first is the sheer scale of the civilian casualties through conflict unleashed by the invasion, after the breakdown of the stability that existed under Saddam’s regime – the catch-all phrase is ‘collateral’ casualties. In the context of such casualties, it was well known and mourned in the US that 58,000 young US servicemen died in the Vietnam conflict with 350,000 other casualties. It was considerably later that it emerged that as many as three million Vietnamese including soldiers, but mostly civilians, died violently or as a result of the war in that same period – a ratio of about 50:1. 

Reports about Iraqi civilian fatal casualties are various - the three main sources all appear to use objective assessment methods, but of course it must be infinitely hard to gather such civilian stats in wartime conditions. Current estimates range from between 100,000 and 655,000 civilian dead over four years of war, whose deaths can be attributed to the conflict. Sadly more than 3,000 US soldiers have been killed to date, so as in SE Asia, for every American boy killed, a very much larger number of civilian Iraqis have died. The true figure will eventually come out, but much later, just as it did in Vietnam. 

The second hidden truth is the scale of the uncontrolled ‘licence to kill’, given out to the mercenaries in IRAQ, many of whom are former professionals of the US military, and various other armies around the world, (a bit like the French Foreign Legion but without the discipline). Attracted by the high pay and perhaps the adrenalin-rush that danger on this level can create, they are equipped and trained and conditioned, not just to protect their charges, but unfortunately for brutality of any sort. There are undoubtedly pathological killers amongst them, who have a charter here enabling them, like all the rest, to act outside of any military law or control, and also be specifically excluded from Iraqi civilian prosecution. Any criminal case depends on the evidence surrounding it, but even the most blatant murder witnessed and sworn to by the most credible witnesses, will not cause these mercenaries to face justice - anywhere. 

The new IRAQ oil law – the principal piece of unfinished White House business before the US will seriously contemplate withdrawing significant numbers of troops – is again running into trouble. The oil law proper, is still unapproved and its final draft has seriously upset the Kurds, as it has significantly changed from the draft that they had earlier effectively signed up for, and they will not support the new one. 

External oil experts are raising doubts about it, because they say it does not provide sufficient guarantees to investors and is vague on key issues. But in addition to that, the parallel law intended to pass at the same time, is far from agreed, because this is the specification of how the oil revenues are to be shared out – imagine! That is horrendously complicated because broadly speaking, there is oil in the Shia south and the Kurdish north, but not in the Sunni centre, so no equitable geographical division is apparent. It will be the smokiest of smoke-filled back rooms where the split-up of the stricken country’s only big money,` between IRAQ’s power brokers, is finally agreed. 

President Karzai, like IRAQ’s President Maliki, and PAKISTAN’s President Musharraf is proving to be a less than perfect vehicle for promoting US policy in their countries. For some reason these men object to having their strings pulled – and their peoples appear to quarrel with the idea that their national policy is made in Washington. How quaint, how unreasonable! 

To be Secretary of State in this Bush administration is not an easy passage and the White House has never lost its bad habit – although with less success than with Colen Powell - of seeking to run foreign policy from the Vice-President’s office. Karzai definitely went ‘off message’ when he invited IRAN’s President Ahmadinejad to a friendly reception in Kabul last August, and insisted to the world that IRAN was a ‘helper’ in AFGHANISTAN’s situation, at the very time when American officials are involved in a public relations campaign to convince the world that IRAN is actively working to destabilize AFGHANISTAN and IRAQ

There is a serious problem in AFGHANISTAN, as in IRAQ, of the widespread collateral deaths and injuries caused to non-combatants, through air-strikes. Karzai is the recipient of his people’s outrage and anguish in this matter and makes sure that it is publicly and widely understood, that he is criticizing NATO and the Americans on this score. It is of course a terribly difficult situation when close air support is the one major advantage ground troops have against Taleban fighters. Much of the fighting is in and around villages still occupied by their civilian residents, who often are unassociated with the Taleban from the mountains, that may have taken over theirs and neighbouring homes. As long as fighting continues it seems, so also will collateral casualties.

We report in “Drugged Growth,” on the latest in the saga of the Afghan Poppy harvest, which has risen to new heights. A poisonous relationship has developed, we report between the British and Karzai who are against the president because of his perceived unwillingness or inability to fight corruption within the government. It is suggested that Karzai’s constant reshuffling of ministries is leading to short-term attitudes amongst key members of his cabinet such as filling their pockets with as much, and as quickly, as possible. Members of his administration retaliate by pointing out that the UK under Tony Blair, (for unknown reasons and with extraordinary recklessness), took responsibility for the ‘war on drugs,’ which is now a humiliating disaster. We report the latest US wheeze of seeking to pay regional governors more than they are presumed to be receiving at present from the drug traders, to shut down the illicit trade in their provinces. (We predict that this will cause a lot of slide rule work in gubernatorial palaces). But in the north, where cultivation of poppies was never very widespread, the farmers there are now switching to marijuana. Well, it will appear in a different set of statistics. 

It is of course there is only question that matters for the political classes of RUSSIA, as well as to the outside world’s RUSSIA watchers: Who will replace Putin, given that the earlier question - will he actually go, is finally resolved? This month we review the latest twists and turns and in line with our reasonable successes in prediction (we have been reporting RUSSIA through 320 issues over more than twenty years), we have an off- the- wall idea of our own That is that Vladimir Putin may, after laying down presidential responsibilities, take on the oversight of his infant creation we refer to as OGEC, the gas equivalent of OPEC. 

RUSSIA’s fossil-fuel wealth as well as oil, lies particularly with gas. There is probably a lot more still to be discovered given the huge terrain of RUSSIA, and inaccessibility of many promising areas. Discovery is for the commercial companies, but the welding into a geopolitical force of Russia’s vast reserves, together with those of the likes of Algeria, Qatar, Turkmenistan, Kazakstan and others, within a mutually beneficial producers cartel, might be deemed by him as a worthy next, if not final project. He has been for nearly eight years leader of a nation whose strength curiously has turned out to be in the ownership of the means of production, to echo the communist manifesto, to the extent that RUSSIA is now referred to as an energy superpower - and that has geopolitical consequences if an OGEC could become fact. 

It is a characteristic of ‘half-democracies’ like this one, that there is sufficient transparency to see that a lot is going on but enough opacity to make precisely what that is, far from clear. Here we have ‘a sort of’ democracy with an independent judiciary not unblemished, and a media free - if less than totally pure. A country where historically, elected politicians relied on big tribal and regional groupings, from where they could engineer coalitions. Then after some very unsatisfactory Prime Ministers had disgraced themselves by world-class levels of corruption, the military chief stepped in. This was provoked by the PM of the time who came quite close to killing him by refusing the civilian airliner on which he and his wife and many civilians were traveling, permission to land on any Pakistani airfield. This in the knowledge that there were only minutes worth of aviation fuel left to continue flying. 

Musharaff’s response then, having survived, appears to have been one of fury rather than cool calculated planning. He set out to clean up PAKISTAN’s government, a task comparable to Hercules confronted by the Augean Stables; cobbled up an arrangement with the remainder of the politicians to become the executive president, and got the judiciary to regularise the arrangement. The two most recent prime ministers were exiled, with warrants for their arrest on charges of corruption available, if they decided to come back without permission. 

All of this has been happening in the only Islamic nation to possess an atomic bomb, a society which is plagued by a mushrooming religious fundamentalist movement, who would dearly love to get their hands on the levers of power (including of course the bomb), and to implement shariah law. A nation in whose wild untamed mountainous tribal areas, the remnants of al Qaeda are believed to be holed–up. This in a region where fighting between the Pakistani army and the tribesmen is more or less constant. 

There matters lay until the imminence of the constitutional requirement for elections caused the present level of political activity. We report some of the latest moves as election dates move inexorably nearer. The presidential election is due on October 6th, but it is an event that could still be stalled by his opponents maneuvering via the courts, to block Musharaff’s candidature, although that has failed so far. 

Musharaff’s mission, has been to clean up the notorious levels of corruption in his country, de-escalate Kashmir tensions with INDIA, and generally to improve relations with the giant neighbour to the south. But his main objective backed by the army, remains to try to drag PAKISTAN into the 21st century - much as his role model Kemal Attaturk did, in turning 20th century TURKEY into a secular state. There is much to do. If Musharaff is not there, it is unlikely that anyone else on the horizon has the stature or the vision to lead the nation out of its corrupt politics and fundamentalist marshland, onto the firmer ground of the modern world. 

We review the recent elections as indeed the serious western press has done, not just in its editorial pages but also in large paid-for advertising pages. Why, one wonders after scanning this, is President Nazarbayev even trying to get the chair of the 56 nation OSCE, the political democracy watchdog? He is bound to have difficulty with that objective given that following the election, his own party now has every one of Kazakstan’s parliamentary seats, and he has chosen to pursue the Orwellian line, that this is a wonderful thing for plurality. 

Kazakstan, through its only president to date Nursultan Nazarbayev, has become such a towering force in the world of energy supply, that it seems strange that his friends don’t counsel him that it is too soon to also be seeking to head OSCE, a body whose practical purpose is to monitor democracy in elections, via observers on the ground. These scrutineers are bound to report their observations, which the world media will then relay. It is clear that Kazakstan has not itself reached that level of democracy that comes with years of stability and has yet to form an Open Society. It may or may not be that Kazakstan is the least of the offenders in Central Asia. Certainly it presents a far better record than neighbouring UZBEKISTAN, but there is a way to go before it can offer world leadership in the field of democracy. 

It is surprising that President Nazarbayev seeks this particular prize, because he has seen such economic success during his watch, along with important regional political clout that there is no question that he has to be a very skilled political operator. So much so, that RUSSIA, China, the EU, and USA all find him to be good news; he has managed to avoid being anybody’s creature and all have high hopes for their relationships with him. 

Back in 1991 when independence was thrust upon him - unasked for - as with all the other all-Union Soviet republics, his economic situation looked bleak. Everyone knew this vast territory, equivalent to half the landmass of the USA, contained just about every mineral known to man. But the distances from markets were so great, transport and communications so thin, that prospects did not look good. Oil changed all that! Vast quantities were discovered, along with similar amounts of gas, just at the time when world prices were beating all previous levels. From then on, the future was assured. 

Fortunately, unlike for example AZERBAIJAN, another post-soviet beneficiary of oil demand, there is some degree of trickle-down of oil wealth to the population, where income per head is rising steadily. Also this population is very diverse ethnically. As the dominant personality, the president provides the glue to make the nation work. Shrewdly he moved his capital to a prestigious new city built at Astana, far nearer to European Russia – some 40% of his population at independence were ethnic Russians - moving from Almaty, its previous location much further south, almost on the Kyrgyz border. 

There is another element in the leadership, along with that of TURKEY which this new nation can offer to central Asia, and that is the pan-Turkic union, appealing to an ethnicity that runs from the Chinese border (actually inside western China but they don’t talk about that), to the Republic of Turkey’s shores on the Mediterranean. Although moslem, after seventy years of communism, the FSU republics are not what could be described as religious. Islam here is more cultural than theological. Indeed all of these Turkic states including Turkey itself, are constitutionally secular – an important feature in today’s world, and today’s Asia.

Good political and macro-management therefore is self evident, but these are his strengths – the only way appears to be up, even though democratic development is inevitably lagging behind the pace of economic growth . 

There is small doubt that the storm will hit, whether it is in the form of increased sanctions which to be effective will be designed to hurt; or military intervention, and the time is rapidly approaching. The UNSC are now considering and arguing the question of sanctions but have deferred decisions until November. What is quite clear is that simultaneously, the US, Israel and IRAN itself, are reviewing the military options available to them. RUSSIA, China and the EU powers are all preparing their positions for each contingency. Inevitably there is a lot of huffing and puffing, not least the emergence at a military parade in Tehran of a new missile, purportedly with a range of 1000 miles plus (think Israel). Whether it is more than a painted tin cylinder we do not know. When North Korea sought to convince the world that they had teeth, they fired a few missiles off by way of demonstration – that was at least convincing as to the hardware, even though they appeared to be wildly inaccurate. IRAN would certainly be embarrassed if their rocket hit the wrong country, so we don’t know how real this threat it is. But it is significant in demonstrating the gamble that Tehran is taking. Do they demonstrate their ability to respond to attack by showing that they could cause an unacceptable level of pain in return, as did NORTH KOREA; or do those measures cause the very provocation that brings about the nemesis that the posturing seeks to avoid? 

But who can seriously doubt that US and Israeli air forces are practicing hard against the contingency that they will be called upon. Were it not for the Congress, it would probably already have become a done deed. When that ol’ George.W. Bush puts his Commander-in-Chief hat on, and starts talking earnestly to camera about Iranian-delivered mushroom clouds over American cities, then the planes could be flying before the Congress ‘gets its boots on’. 

Moscow and Beijing have a serious predicament here. No more than Washington do they want a rogue Islamic state brandishing nuclear weaponry, a nation that makes its decisions based upon ‘expert’ modern-day interpretations of the teachings of a sixth century prophet. (It’s difficult enough for the west that President Bush, like Moses, takes his instructions from God). RUSSIA and China are a lot closer to IRAN and its 1000 mile rocket, than is the USA. But they are also resisting US hegemony in geopolitics, and can be counted upon to be massively outraged if the US, or its Israeli client actually does attack IRAN, until at least ALL alternatives have been exhausted.

In that context we again point out that the one-on-one negotiations between the US and IRAN have yet to happen which are clearly a massive missing piece on the chessboard, having been seen to have been the pivotal point in de-escalating the other nuclear crisis with NORTH KOREA

There is also in both the US and IRAN the matter of internal politics. One senses from his rumblings that V-President Cheney, with just over a year left in office, would dearly like to go out with a big bang – and incidentally leave a really, really big foreign policy snafu for the incoming Democrats. The citizens and politicians of IRAN must be feeling the lack of the respect that a nuclear weapon gives, since they are faced by at least two nuclear powers, which will not discourage them from seeking some sort of parity, as NORTH KOREA seems to have done. Meanwhile at the UN, President Ahmadinejad has insisted that his nation is pursuing only a civil nuclear program and that there is nothing any further to debate. There are discussions still to be held between the IAEA, the UN’s nuclear watchdogs and IRAN, who have promised to answer all outstanding questions, whilst the US believes that they are playing for time. 

It is for the rest of us a matter where for want of positive input, perhaps we really do have to ‘hold our breath’.

INDIA – Economic forecasts - and for Asia generally
According to a very recent report in the Wall Street Journal, Asia is likely to grow this year at a faster rate than initially expected. In its Asian Development Outlook 2007 Update, the Manila-based Asian Development Bank raised its 2007 growth forecast for Asia (excluding Japan) to 8.3% from 7.6% in the March outlook, and its forecast for 2008 to 8.2% from 7.7%. 
The Asian Development Bank expects India’s economy to grow 8.5% this year and next, up from its prior forecasts of 8% for 2007 and 8.3% for 2008.
China and India combined, account for 55% of developing Asia’s gross domestic product. The report also says that the main challenges to growth next year are contingent on whether distress in credit markets deepens, and spills over into the wider financial system and real economy. 

Meanwhile, Standard & Poor say that after the US financial crisis the markets of LATVIA and BULGARIA are faced with the highest risk rate of all Eastern European countries. 
Among reasons for that are their strong dependence on foreign investments, the changed crediting criteria and their low productivity. According to analysts, investors are getting more cautious and direct investments will thin out. 
Next come Turkey and Romania. 
On the other hand, Russia, Ukraine and the Czech Republic have the lowest risk ratings. 15 countries with so-called developing markets have been analyzed. Of them 11 are in Eastern Europe. 

We report the run-up to the Polish elections on which a lot depends, not just for the Poles, in this significant EU country of forty millions. We review Poland’s place in the world and not least its part in ending the Soviet empire. Who remembers that story will recall the city of Gdansk where the first shots of WWII were fired by the German navy, and forty years later came the drama of the famous Gdansk shipyards. In the 1980’s there, some feisty trades unionists stared down the communist puppet government in Poland, which grew remorselessly into the upheaval that displaced the Soviet empire in Europe - and then the world. One of the heroes of Gdansk, Bogdan Borusewicz, previously not affiliated to any party, has joined up with Civic Platform, the principal opposition where he has been rapturously received just before the election. 

On the brink of the new round of 6PT negotiations, we review the situation that the delegates face, when they resume at the end of September. That is IF they resume, because PyongYang has been known to throw wobblies before and to cancel at the last minute. But it does not seem to be that kind of atmosphere this time. We try to ‘cover the waterfront’ in terms of what is currently happening. The first observation to make here is that the US really does appear, from its concessions, to want these negotiations to succeed, which is presumably ‘one up’ for Foggy Bottom over the V-P’s office at the White House. 

What we cannot evaluate is the significance for the negotiations if any, of the ‘faux’ bombing by Israel of Syria, on September 6th. In the absence of clear-cut government statements it has been a speculators charter. What appears to have happened is that a North Korean merchant ship unloaded some cargo in a Syrian port, which was taken by road to an isolated part of that country. Shortly afterwards Israeli warplanes crossed into Syrian airspace and there were explosions in that area where the cargo was delivered. PyongYang protested – we offer suggestions why that might have been.

From those ‘facts’, if that is what they are, the worst case allegations about the cargo are that it was nuclear materials being sold off at bargain basement prices to Syria. This, rather than being consigned to a nuclear trash dump as a result of 6PT agreements, about to be made. We say why we don’t buy that. Our speculation is that it could have been rocket missiles for which SYRIA, like PAKISTAN and others, have already been customers before. Unless headed for terrorists, then not really a big deal, but…. neither SYRIA nor Israel is telling! 

One of the heroes of the cold war was the first president of the Czech republic, Vaclav Havel. He represented the best face of those who were not prepared to be crushed by the communist government of what was then a Soviet satellite – and went to prison for his obduracy. His term as the first post-communist president, confirmed him as a humane, thoroughly decent liberal, rather in contrast to his successor, the current president, Vaclav Klaus. Without doubt a powerful politician, this time of the ‘right’, as distinct from Havel, Klaus came across as ‘take-no-prisoners’ type of Prime Minister and party leader. In his time at Hradcany Castle he has appeared to be a continuing ‘pain,’ despite his limited constitutional powers, to all the subsequent Prime Ministers who have succeeded to that office. But to his everlasting credit he has just made a truly excellent speech at the United Nations, which we report in CZECH REPUBLIC. His sentiments strike a resonant chord, both extolling the sheer necessity of the UN, whilst stressing the need for fundamental reforms in the world body, still operating on rules devised 62 years ago in the wake of WWII. We commend this to all independent minded readers. 

This month’s SAUDI ARABIA report illustrates very well how important SAUDI is to the various almost intractable problems, confronting middle-eastern nations, which we review. The “big news” currently, is the Peace conference specifically on Palestine and the surrounding elements in that long running, now worsening, nightmare. It was Saudi who brought the issue of a settlement back onto the mainstream agenda with their declaration of a peace plan at the Arab League summit last March, which all the other members supported.

But it is not yet certain that they will show up for the conference – they have already set out a precondition that Israel should halt construction on the west bank, in order to make it politically viable for Arab states to attend, given their domestic audiences. There is a sense amongst these states, which is shared by observers, that questions as to just how serious the US is on this issue. The suspicion is that Saudi is so important to America –its third largest supplier of oil - that when the Saudis make it clear that they do not propose to be ignored when they make a major initiative in leading the Arab League to a joint position – a series of proposals which on paper at least, do not sound unreasonable, then Washington cannot brush them off, as they could almost any other middle-east power. But it has to be said that events are not propitious and there are suspicions that the conference could just be to show that positions are locked-down and that there is nothing for it but the status quo.

If however the conference could make significant progress, and demonstrate a promising way forward. If in other words, Condaleeza could pull this off, she would justly establish a reputation as a world-class statesman, and have redeemed herself for those awful ‘Iraqi’ years as NSA to George.W. Bush. There she took her turn to deceive the world about WMD in IRAQ, a script perhaps written by Dick Cheney, but in which, like all of the White House team, she was complicit in what amounted to the ‘framing’ of the nation of IRAQ, to suffer the vengeance of America for the crime of 9/11, in which they were no way involved. 

Our BLOG contains reduced versions of all of the current reports, available for reader comment.

Clive Lindley 

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