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May 2010 Country Archive


Nuclear weapons... Speaking truth

The US does many things that worry its friends, but it does have this re-assuring habit of doing some rather vital things in the open. Looking around at the other known nuclear weapons powers, does the UK or France have such a public review? Actually, the Liberal Democrats in the current British elections have brought it out as an issue, to the dismay of the Labour government and the Conservative opposition party who had been content to leave it alone.

What about PAKISTAN or INDIA? It is inconceivable that either would use the weapon except in retaliation against the other. That assured retaliation was the formula of deterrence that worked between NATO and the Warsaw Pact for more than forty years. With the collapse of the USSR, RUSSIA inherited all the very considerable FSU stocks which came about, with active cooperation and cash payments by Washington DC. They rightly saw this as a better outcome than to have a nuclear-armed, independent KAZAKHSTAN, or UKRAINE, which had earlier held quantities by the succession code at the demise of the USSR . Now RUSSIA has agreed with the US that they will both reduce existing large stocks and not seek new versions of existing weapons.

China is a nuclear weapons state but it also has a large conventional military and threatens no one with its nuclear force, which, it could be said, guarantees it against any nuclear attack.

NORTH KOREA, a well-known maverick amongst states, sounds a jarring note. They loudly insist that the world take notice of their efforts, and uses the weapon they have, in their terms, to deter any invasion by South Korea and its US ally, against which they have for sixty years past regularly threatened to retaliate, if invaded.

IRAN, not yet a nuclear power - with little hard evidence that it is even close – which after the pre-invasion accusations against IRAQ is a situation we have to distrust -has drawn the hostility of the world, orchestrated by the US, because it is believed by many to seek a nuclear weapon - which it denies. But why would Iran ever need such a weapon? How about because it genuinely fears Israel, the US client and rival of IRAN as the top regional military power?

Israel of course has never admitted to even having the weapon, deciding presumably that continuing dumbness is better than speaking with forked tongue. But what if Israel simply gave it up? Why else would Iran seek any longer to counter with their own. If Israel were persuaded to dismantle their nuclear force, say accepting as all NATO nations did, a guaranteed US umbrella for their own security, would that not remove the insecurity that motivates them?

We have always understood why Israel, on behalf of its formerly oppressed Jewish population, wanted to be beholden to no-one, in terms of its ultimate guarantee against invasion. But the objective weakness of that position is that there would seem to be no conceivable situation in which Israel could actually use, even threaten to use the weapon, say against Iran, without ‘reaping the whirlwind.‘ That is the certain prospect of jump-starting high priority, nuclear weapons programmes, potentially amongst all those Arab nations with whom they have not yet made peace, and with whom they are out of sympathy. How could SAUDI be restrained from seeking their own weapon in such circumstances? Wouldn’t LIBYA revoke their agreement not to develop a nuclear weapon?

How much better that Israel’s security is guaranteed by the US, or by the US with other nuclear powers acting together, and that they themselves relinquish nuclear power status, as the quid pro quo.

Alternatively, would the US guarantee Iran against any Israeli nuclear attack as a q p q for abandoning nuclear weapon ambitions? Of course this absolutely is never going to happen - but leaving aside ’the lobby’, why objectively should that be? The reason is that Israel has brilliantly managed to place itself in a unique stance amongst nations whereby any and all criticism of it, is denounced as anti-semitic – calling up memories of the Nazi persecution and then its super-efficient lobby, particularly in the US, goes on the warpath.

But this in real terms, is insufficient reason that Israel as a nuclear power, should set itself above all those other international considerations which every other nuclear power is under pressure to address. Principally, to shrink or dismantle their nuclear weapons holdings, and eliminate perceived threats by diplomatic means.

Taming the Banks
Everything we have ever said –and that’s quite a lot - about the international banking industry being the bandits of our time, was confirmed by the announcement of the US Attorney of a $1 billion action against Goldman Sachs. Of course that’s good news for the legal profession since vast sums will be spent by the big Bank to brush aside these impertinent regulators. Were it still the G.W.Bush regime, we doubt that this action would have ever happened, but it isn’t – and it did! Interestingly in the British elections, currently in progress, the hitherto third-ranking party, the Liberal Democrats have suddenly shot up to challenge for the leadership in the opinion polls. They are the only party in the UK election who have stated clearly and unambiguously, that the banks must be broken up, so that the conventional Main Street retail banking occupation of taking deposits, savings and providing commercial borrowing – all of which are guaranteed by government, must be separated from investment (or casino banking, as it is appropriately becoming known), so that the latter activity would no longer be guaranteed by government. The gambling of fortunes to be made and lost, would be financed by shareholders of the financial investment companies, not by millions of helpless account holders who get no benefit if their money achieves great success for the bank, but are in the frontline if the bets go sour. Just consider that absurd reality, as it still stands until legislation changes it. : A bank gambles its deposit holder’s money, who if it goes well receive no reward for the exposure of their money – that goes out on dividends to shareholders and bonuses to staff. But when it goes badly- witness the sub-prime mortgages, then the State (that is the account holders in their other role as taxpayers), pick up the tab. It’s hard to credit but y’know what? Breaking-up the banks seems like common sense – and that has a resonance at election time.

…and it’s not just the banks
There is an even more urgent problem emerging, associated with the speculative world of finance and that is the predisposition of big-time gamblers to short-sell international currencies, as is currently continuing with Greece, and threatens other smaller European economies (and not so small, Spain’s economy is five times the size of Greece). The role the short-sellers adopt is inevitably to discipline lax economies, by functioning as self-appointed prefects of the international system. They are not elected officials nor placed there by any neutral authority – they are as presently constituted, a part of the excrescence of unrestrained capitalism which has plunged much of the world into its present economic misery. Of course they are only there because they want to make as much money as possible in the knowledge that some of their bets will go sour. They rely heavily on ratings agencies employed by …you’ve guessed it, the banks. They ponderously mark national economies up or down in the full knowledge of the effect of their actions, so these ratings agencies, of whom we heard a lot – mostly bad- during the mortgage mania, are in a position to manipulate national economies, were they so-minded. At the least, they act as economic target-finders – for financial speculators.

But would they manipulate for financial benefit? Standard & Poor? Fitch? Moodies? Naaah!

They take on an enormous responsibility measured by the effects of their opinions, which are financial weapons of mass destruction, as they hasten to explain their position. But after all, in return for big fees, the three above agencies gave AAA ratings to the bundled crap mortgages that were so recently traded between financial institutions like ‘pass the parcel’, so the judgement on a mere nations economy must come easily to them. The fact is that many economies have missed, and some will continue to miss their step, but the CRA’s being culturally American ‘for profit’ organisations, they read social welfare – pensions, universal health benefits, annual vacations entitlement as a weakness, a sign of a society’s overindulgence and rate down accordingly. There are undoubtedly slackly-managed economies and nations that have constantly borrowed irresponsibly, to fill the gap between income and expenditure, and in economic hard times discipline is needed. But when the beneficiaries of market corrections are the speculators, their methods not necessarily being honest, and the losers are that nation’s citizens and its existing lenders, then it cannot be tolerated that such supervision can be made by ‘for profit,’ suspect agencies, described as a picture of ‘ethical decay’ by those reporting the US Senate sub-committee now engaged with the ratings agencies enquiry, some of the evidence in which would curl your hair!

It may be that the world needs the functions of the likes of CRA’s, but their irresponsibility, abetted by a sensation-seeking media, surely militates in favour of a World Bank / IMF type of institution that delivers sober judgements, not primarily delivered via the media, and that has some responsibility to the nations and peoples of the world, not to the market speculators.

North Korea: Unreality rules OK
There is absolutely nothing new in describing this left-over communist state in terms of unreality, except that South Korea has become infected with the same strange virus. Life goes on, except for forty six young naval personnel of the South Korean navy who died in an incident of major proportions on 26th March. Our report this month describes how NORTH KOREA holds international festivals, and otherwise celebrates springtime. Politically the month witnessed that most extraordinary of political events, the annual mustering of the Supreme Peoples Assembly (but just for a day or two), where these quite serious people listen to a budget that contains no hard numbers, accept reports that tell nothing useful, notwithstanding that a recent switch in currency left domestic Korean savers gasping at the daylight robbery of this commanding clique of great and dear leaders. And all this, in an economy that has been in freefall for at least the last twenty years. This and other normal activities have carried on, whilst a very large elephant has dominated the room in both Koreas. The 1200 tonne corvette that sunk on the 26th March close to the maritime borders, it has now been established by a team of experts, including Australian and US as well as South Korean specialists, did so as the result of a major external explosion. The belief is that it was a torpedo. But whatever, it broke the warship into two pieces. Within 24 hours of the event South Korea’s president said they were not assuming that North Korea was responsible. Pyongyang itself has denied its involvement. However, the South Korean public and particularly the families of the dead want more – specifically revenge, or if not that, then justice. Investigation is expected to come up with more than what has been released at present, If it does implicate North Korea, it is unlikely that the South will attack the North in retaliation, but rather will refer the evidence and the search for justice to the UN. Given Pyongyang’s permanently aggressive posture towards Seoul and the known circumstances, the obvious cause (that many will have already decided), is that it would have had to have been a North Korean torpedo. That would qualify as realism! Meanwhile………

Taiwan: Look out World
Our report on TAIWAN tells of an Asian nation which has recovered from the downturn and is looking at growth figures of 5% and more. Foreign currency reserves are greater than those of India or South Korea and smaller only than those of Russia, Japan and China. If nothing else, it demonstrates that the historical accidents and incidents that led up to its creation as a modern trading nation some sixty years ago, drawing on the abilities of a Chinese mercantile population, plus the freedom to trade in the free-market capitalist world, demonstrates one version of what the world might expect in this century, of its mighty neighbour to the north. The free market island entities of Singapore and Hong Kong had given a pretty good indication of what the rest of the world would see from the Sino-world and Taiwan, slightly bigger than those two, confirms it We have admired the way that Taiwan chose to become a democracy. It was not imposed from outside. Both Singapore and Hong Kong have combined personal freedoms and the rule of law with their mercantile ability. In Taiwan, that remains the constitutional position (even though it is currently shaky in the instinctively authoritarian grasp of KMT President Ma). It will be revealing as to whether this home-grown democracy can endure as the island becomes even more successful, with China itself looking for a resumption of imperial power, but itself also facing unresolved questions about it’s top-down system of governance.

The examples of Sino-enterprise given here represent quite long established trading democracies which in the context of the vast motherland, raise questions that affect the whole world. The Chinese economic recovery, since Deng Xiao Ping pointed the way, has astonished the world, as it steadily climbs to the top of the international economic league table, challenging not only Japan, but the USA itself. China was once regarded as a vast, desperately poor semi-continent, formidable in war perhaps, but repressive of its outlying domains and subject peoples. As the economy has taken off and the scale of its penetration of prosperous western markets affected all their economies, particularly that of the USA, economic fates have become entwined. In this period, more liberties as well as greater prosperity have trickled-down in China as the economy grew. The monopoly of power of the cadres of the Communist party, itself larger than the populations of most nations, really depend on continuing success, the forward movement of the economy, and the spread of prosperity.

It was an infinitely wise decision by Deng to release his nation’s vast enterprise and resources onto the world, on competitive terms. No Chinese leaders have yet seen it as expedient to similarly revolutionise the political system by creating a democracy, by all means with ‘Chinese characteristics’ or to even get close. But that is not to say that it will never happen. We remember that Taiwan was originally a military dictatorship, which gave way to a top-down KuoMinTang fascistic regime, but it was the people of Taiwan themselves, not an outside power, once having made their mark on the world, that moved towards a democratic entity and put a constitution in place that reflects that. Why? We would suggest that Taiwan’s business class, by now well acquainted with the western world and the way people there lived, found that they made more money with less anguish by adopting the political systems they saw in these other countries. Hong Kong and Singapore both learned about nationhood within the British Commonwealth, therefore with a body of law and pattern of administration that they adapted to their own needs. But Taiwan, a fully internationalised small country did it the hard way, but did it after working through and supervening the ‘old’ ways. What chance then that China itself might, over time, reflect the same process for the same reasons?

Khaki Coloured Revolutions
Velvet, that’s for GEORGIA, Orange is for UKRAINE, Tulip was for KYRGYZSTAN but now, it all looks to have gone khaki coloured. GEORGIA got themselves a posturing egotist as president whose shortcomings originally were overlooked, simply because he was not Moscow’s man. The fact is that he was his own man and in his lack of balanced judgement, precipitated an invasion by the recent super power. It certainly made the non-American members of NATO breathe a sigh of relief that despite Washington’s pressure, they had dug in their heels against admitting GEORGIA to membership. Remember NATO’s fundamental doctrine that an attack on one must be regarded as an attack on all?

UKRAINE, following its elections, inevitably is changing. The Orange movement was like a dog injured in a traffic accident that bites itself at the place where the pain is worst. Self-inflicted injury, except that clearly, we the onlookers, did not immediately know that the players detested each other from early times. Again there is the reality and the appearance. Any dispassionate analyst of this period of Ukrainian politics will fairly quickly strip away the superficial and conclude that at the top – that obviously includes the parliament as well as the leaders, it is all mainly driven by money. The peddling of influence has a high value which has been the making of some very rich men – and women. Exactly the same forces that produced the oligarchs in Russia were and are at work in producing and sustaining Ukrainian oligarchs.

We never were convinced by KYRGYZSTAN and the overthrow of their former president – (on the grounds they said, of his corruption), as ushering in any honour-bright successor. The version of this remote republic achieving a democratic independence after the break-up of the USSR was largely got up by the non-specialist international press, who originally were swayed for one thing by Mrs Thatcher, but they of course quickly forgot it when it was no longer a story.

This IS Central Asia – that’s how things are done there, sadly, but that is reality.

Iraq election results still in limbo
As our May Update makes clear the recent decision to recount votes cast in Baghdad can upset the declared results of Alawi’s party, being two seats ahead of that of al-Maliki. Whoever comes out ahead still will need coalition partners, and the candidate most feared perhaps by the US, Moqtada Al Sadr with forty elected seats, is in a strong position to hold the balance of power. The current al Sadr is the third generation of a Shi-ite dynasty of popular leaders of the lowest echelon in society. His grandfather and his father were both leaders of this eponymous faction. Both were brave, uncompromising, and both were ultimately murdered by Saddam Hussein’s thugs. Moqtada Al Sadr similarly has shown his courage by having remained in Saddam’s IRAQ, always under threat of the same fate as his forbears. Similarly, he never compromised with the US forces, regarding them as what they undoubtedly were, foreign invaders, and that their presence in IRAQ therefore was illegitimate. That stance in today’s IRAQ has stood him in good stead, but it is yet to be established if he will now continue to adhere to the democratic process, which currently seems to have placed him in a power-brokers position. Meanwhile alongside the ongoing democratic process, violence continues. Two leaders of al Qaida in Mesopotamia were recently killed. This anti-terror success, was followed by an answering spate of horrendous bombings, the victims being mostly Shi-ite civilians, the prime targets of al Qaida’s religious hatred.

Afghanistan : A phoney war - inside the war
Much of the problems and proposed solutions circulate around the controversial figure of Mohammed Karzai. Our May Update looks at this in more detail and the contradictions in continuing to support him. He is seeking to appear independent to the movers and shakers of Afghan society and somewhat to the chagrin of the western powers, doing this with some success.

Meanwhile the realities of the war show that even before the completion of ‘the surge’ of incoming troops, whilst the ISAF allies are having some success on the plains driving the Taliban away for the time being, the confrontation in the highlands is hardly taking place, except for special forces. Any glance at an atlas will show that this country is mostly mountainous.

There are, as is more frequently these days being put about, more stories of potential deals with the Taleban and this month’s AFGHANISTAN Update has more on that. Saudi, Pakistani and Afghan sources are conveying the idea of a prospective deal and the Taliban seem not disinterested. It is said that the Americans are divided between those who want to leave Afghanistan a practicing democracy, with women’s rights established and corruption tamed; as opposed to those, they might describe themselves as ‘realists’, who can’t see that as achievable, and really only need a plausible guarantee that if ISAF leaves, neither al Qaida nor any other international terror group will be allowed to operate from there, as they freely did before 9/11. The story will continue to unfold, but it has obviously reached a critical point, if one or the other of these US factions gains a preponderance, but when the champion of one side is the Secretary of State, and on the other the Vice-president, no quick resolution is likely.

Saudi Arabia, Syria : Israel & Iran
Both the SYRIAN and SAUDI updates cast different perspectives on the situation of IRAN and also on Israel, reflecting the genuine fears of a renewed Israeli-Arab conflict, fuelled it would appear by ‘news’in the Israeli media, that SYRIA has transferred ‘Scud’ missiles to Hezbollah. It is a story which has not gained too much credibility in the US because there is a lack of evidence and after the lessons of the anti-IRAQ propaganda build-up, such unverified news from Israeli sources is suspect.

It is just the sort of story that Israel could disseminate at a time when the heat is on to stop building new settlements on Palestinian land, and to get serious about negotiating with the Palestinians.

The Egyptian press forecast that the story is a precursor of another Israeli invasion of the Lebanon and possibly SYRIA, but they are no more reliable than the Israeli media.

Saudi sources were commenting on who is the super power, Israel or the United States, when Netanyahu refused to stop building illegally in the disputed territory. Saudi we hear is to build a nuclear reactor to supply electricity for Riyadh. A civilian purpose, but it will be the first reactor to be built in the region. They will be required to sign the nuclear non-proliferation treaty (NPT) but this presents the problem of Israel, which has never admitted possession of the requisite nuclear technology and therefore will not sign the NPT. Both of our reports address the Iranian situation

Iran: Who is Co-operating with them?
This month’s Update on IRAN lists the nations that are co-operating with IRAN in supplying them with gasoline, of which the nation has a big deficit, as distinct from unrefined oil of which they are rich. But cars need gasoline and that has to be imported, as it can be seen, from far and wide.

As we report, IRAN’s priest-ridden government has opted in favour of shutting down such tender shoots of democracy that emerged, in and around the recent, clearly fraudulent elections. The story of a crushed opposition aiming at democracy is a sad one for us to recount, but that unfortunately is where things are at. Disarray is apparent at the UN at what measures to take next, in seeking a joint effort to wean IRAN away from what appears to be a military nuclear programme. However, as we report, there seems a possibility that earlier moves for a quid pro quo approach to get IRAN around a negotiating table, may be closer to success.

The government of Ahmadinejad unsurprisingly is experiencing considerable difficulties in their domestic programme with unpopular plans to make cuts in subsidies in food and energy costs.

Pakistan: Nawaz Sharif gets closer to power
South Asia’s cool-hand politician, Nawaz Sharif, is inching closer to the power he seeks in Islamabad. His adversary President Zardari, widower of the assassinated Benazir Bhutto, is effectively now reduced to a figurehead with the legislation passed that shifts important powers formerly held by the president, to the office of the Prime minister.That position is currently held by Syed Yusuf Raza Gilani of Zadari’s PPP, who in truth, having displayed his competence, is an obstacle to Nawaz Sharif’s achieving power in PAKISTAN who has to defeat the PPP to get there.. Gilani recently had a short but cordial meeting in the neutral territory of Bhutan with India’s Prime minister Manmohan Singh, as we report in this issue’s INDIA. They met previously ‘in the corridors’ of US President Obama’s nuclear security summit.

IRAN and PAKISTAN signed up in Ankara to a pipeline to transit gas to energy-short PAKISTAN and probably on to INDIA, which is likely to be included. However quite separately, the TURKMENISTAN government have reopened the prospects for the TAPI pipeline from that country, transiting AFGHANISTAN and PAKISTAN to INDIA and the questions are whether either one or both will be completed. Future reports should make this clear.

Philippines: the moment of truth approaches
The internal problems of Thailand have provided much of the South East Asian news for some weeks, no doubt to the relief of the contending political forces lining up to do battle in the Philippines – not only figuratively during the massive elections (the Presidency, and a total of 17,943 national and local posts) but also the shooting war in many constituencies, for which this nation is infamous, not only at election times. We give a description of the main presidential candidates and their prospects for success, and find ourselves in agreement with many others in observing the conduct of the out-going president, as pretty well showing a common thread for her seeking to retain real power, even after relinquishing the nation’s top post. But there will be a new president after these May elections and it won’t be Gloria Macapagal-Arroyo. Three candidates dominate and out in front is ‘Noynoy’ Aquino III, the scion of the house of Aquino, son of the late President Corazon of that clan. A former president of little merit, Joseph ‘Erap’ Estrada is running, not to promote one or another political idea but for the perfectly good reason, in the Philippines, that he “wants to be president again”. We also report in this issue on the outcome of the arrest of regional political bosses, in the world headlined story of the massacre of fifty seven people in Mindanao. They belonged to a rival political grouping seeking to register in the elections, plus some journalists - this is now the worst country in the world to be a journalist –almost as lethal an occupation there as a Trades Union organiser.

India’s problems with violence
Our May report looks not only at the latest developments in the Mumbai terror attack and the outrages of Islamic extremists, but also at the Naxalites, a ‘Maoist’ group concentrated in remote regions that still represent the ‘old left.’ They originated in West Bengal back in 1967 when the Communist Party of India split into two wings. They are not just a relic of political theory. About 1000 / 1500 of them recently killed 76 paramilitary troops in an intense jungle fight.

Meetings between Prime minister Manmohan Singh together with his Pakistani counterpart, Syed Yusuf Raza Gilani have taken place both in Washington, at President Obama’s nuclear security summit, also at the independent Himalayan state of Bhutan, where both were attending the SAARC summit. Reports suggest that they can do business together as practical men, which given the mutual problems facing them, could only be good news.

India’s cricket league is a high-roller sports enterprise with vast sums involved. A scandal that we describe, involving personally wealthy junior ministers in the government, has terminated in their being forced to resign.

Bangladesh Mutiny Outcome
Last year this South Asian country captured the fleeting attention of the rest of the world with the bloody story of a military mutiny of border guards. In all, 74 people died. Now, 56 border guards have recently been sentenced to seven years in jail for their part in it. We report on the main elements of this story including the sobering news that the military, who had relinquished power to a civilian government only two months previously, were extremely dissatisfied at their handling of the crisis. The mutiny had ended with a grant of amnesty before the government discovered the bodies of the commanders and senior officers dumped in the sewers, or in shallow graves, whereupon the amnesty was revoked. 79 border guards earlier have been sentenced for varying sentences, many more trials have yet to take place. We also give news of a new intelligence apparatus unsurprisingly created, due to these events

Ukraine opens doors to Russia
UKRAINE’s brief Orange revolution is clearly over with the return to power of pro-Russian President Viktor Yanukovich in the recent election. RUSSIA’s Prime minister Putin had a major diplomatic victory in April, by striking a deal with the new government that will allow Russia's Black Sea Fleet to remain based in Ukraine until 2042, a quarter of a century after it was supposed to leave in 2017. Russia has capitalised on its growing soft power and substantial energy reserves to clinch the deal, agreeing to give Ukraine multi-billion dollar discounts on the price it pays for Russian natural gas in return. Although this in practical terms is quite sensible for Ukrainian interests, their opposition politicians claim the deal violates the country's constitution and have vowed to mount a legal challenge. All this marks a dramatic renewal of Russia's fortunes in Ukraine. The previous Ukrainian president, Viktor Yushchenko, was a fierce opponent of the Russian fleet's continued presence. He regarded it as a hostile force that was preventing his country from joining both the EU and NATO. In reality, the EU would have had little to say about that, but since NATO was unlikely to extend membership to Ukraine, principally because the population was so divided on the issue, it is hardly significant. The reality is that by democratic procedures Ukraine has once again moved closer to Moscow, but it is a democracy with a constitution, and the opposition will have further opportunities to make their mark.

Russia: “The ice has broken”
A diplomatic victory for both RUSSIA and the West has just been achieved – the signing by Presidents Obama and Medvedev of the New START treaty, a major breakthrough in the reduction of the world’s nuclear arsenals. In the view of Mikhail Gorbachev, which we quote extensively, writing in the New York Times: “the ice has broken”. The treaty resumes the process initiated in the second half of the 1980s, which made it possible to rid the world of thousands of nuclear warheads and hundreds of launchers. The strategic arsenals of the United States and Russia have once again been placed under a regime of mutual verification and inspections. He says that by agreeing the treaty the United States and Russia have demonstrated that they can solve the most complex problems of mutual security. This offers hope that they will work together more successfully to address global and regional issues. No positive interest was being served by the post- USSR atmosphere of mild mutual hostility that has marked exchanges until now. President Obama saw that and happily President Medvedev also.
Above all, Gorbachev asserts that with the treaty, the two biggest nuclear powers are saying to the world that they are serious about their Nuclear Non-proliferation Treaty obligation to move toward reducing, and eventually eliminating nuclear weapons.

Turkey, Armenia & Nagorno Karabakh
TURKEY’s relations with the US are specially important because of the AZERBAIJAN - ARMENIA dispute over Nagorno-Karabakh. The Turks want this dispute over soon. They have nothing to gain by its continuance. Our update reveals that there has been ferocious diplomacy between Ankara and Yerevan of late. An official said the signing of protocols between Turkey and Armenia would not harm Turkish-Azerbaijani relations because ‘the two are sister countries’. He said Azerbaijan and Turkey would discuss lifting visa requirements and come to an agreement soon.

The co-chairs of the Organization for Security and Cooperation in Europe’s Minsk Group – Russia, France and the United States – are currently holding peace negotiations between Armenia and Azerbaijan. However, planned joint military exercises by Azerbaijan and the United States were cancelled in mid-April against a backdrop of strained ties between Washington and the oil-producing former Soviet republic.

This cancellation by Azerbaijan followed its sharp criticism of Washington's role in its conflict with Armenia over Nagorno-Karabakh. Diplomats say the criticism reflects Azeri anger over U.S. support for a deal between Armenia and Azerbaijan's close Muslim ally, Turkey, to mend ties and reopen their border. Azerbaijan, an important supplier of oil and gas to the West, fears the deal will weaken its hand in talks over the rebel territory

Bulgarian instability
Political instability and economic uncertainty dominate Bulgarian politics. BULGARIA’s GERB ruling right-wing party has narrowly failed to get enough parliamentary votes to impeach socialist President Georgi Parvanov. It was the first impeachment motion in the nation's history. It all arose from a political dispute between the president and Finance Minister Simeon Djankov. Mr. Parvanov had called for Djankov's resignation after Djankov appeared to disparage the president on a television talk show earlier in April. The GERB had accused the president of violating the constitution and meddling in government affairs. The president's role is mostly ceremonial, and many legal experts said that even if the motion had passed, it would probably have been rejected by Bulgaria's constitutional court. Additionally, the Greek debt crisis has not only triggered fears about the stability of the euro-zone, but concerns that it may foil Bulgaria's aspirations to join the euro, despite the country's self-proclaimed budgetary rigour. Bulgaria is particularly vulnerable because of its strong trade and investment links with Greece and the substantial stake Greek banks have in Bulgaria's banking sector. Greek banks account for almost 30% of total assets and 40% of loans in the Bulgarian banking system, higher ratios than in any other eastern European countries.

Racism in Central Europe
Our update on Slovakia reminds us that economic insecurity in Central Europe and elsewhere increases the threat of racist extremism. Human rights officials and social experts from Central and Eastern European countries say the new wave of attacks on Gypsies, or Roma, as well as Jews and other minority groups by the new extremist parties are threatening the fragile democracies in several Eastern European nations. Several Roma, including children, have been killed in the past year in violence in HUNGARY. There have also been anti-Roma and anti-Jewish incidents in SLOVAKIA

There is sadly, nothing new in these incidents. The central European nations have always sustained politico / racial extremists, particularly in rural areas and at times of economic difficulties, when work perhaps is scarce, they and their violence prosper.

The Balkans - moves towards reconciliation
We report some encouraging news from the conflict-scarred Balkans. Almost 15 years after the wars in former Yugoslavia, the Serbian and Croatian presidents are leading moves toward reconciliation. SERBIAN President Boris Tadic launched an initiative that resulted in the Serbian parliament’s declaration condemning the 1995 Srebrenica massacre of some 8,000 Muslim men and boys by Bosnian Serb forces. Two weeks later CROATIAN President, Ivo Josipovic, expressed before the Bosnian parliament his “regrets,” for the role his country had played in the 1992 to 1995 war in Bosnia. He also visited the Bosnian village of Ahmici, where Bosnian Croat forces killed 116 Muslim civilians in April 1993. Both Serbia and Croatia, the regional heavyweights to have emerged out of the former Yugoslavia, harbour ambitions of joining the EU. This would be difficult, impossible even, if they did not put their past conflicts behind them.

The situation in BOSNIA remains less hopeful. It is facing crucial elections this year that could well decide its future for decades to come. But the ghosts of Bosnia’s past are shackling its economy, and there may be little prospect of improvement after the ethnically divided country votes later this year. As our update reports, the conflict among Serbs, Muslims and Croats may no longer be waged with heavy artillery and ethnic cleansing, but a toxic combination of de facto partition, obstruction and graft by politicians in each group, keeps a stranglehold on the economy.

Central Asia
In Central Asia, we report on the conflict in KYRGYZSTAN and its effects on neighbouring states. As with the upheaval of 2005, some believe that it was precipitated by Russia. President Putin has vehemently denied it but his government did not conceal its distaste for the toppled regime of Kurmanbek Bakyev. In Kyrgyzstan, troops had opened fire on protesters, who in turn overpowered the police, stormed and looted government buildings and forced President Kurmanbek Bakiyev to flee, first south to the Tajik border and then to leave the country altogether. President Nazarbayev of neighbouring Kazakhstan noted that the heads of many states had expressed concern over the situation. KAZAKHSTAN as the OSCE Chair and KYRGYZSTAN’s nearest neighbour, was invited to take an active part in resolving the conflict. Nazarbayev said that a Kazakh military aircraft took Bakyev out of the country. By so doing, he declared, “we averted a civil conflict between the north and the south. Thus we fulfilled our mission on behalf of the OSCE and those states that were deeply concerned about the situation". Nazarbayev added, "Now it is time to stabilize the situation (in Kyrgyzstan)". Our update also shows that UZBEKISTAN another neighbour with another oppressive regime, is also anxious that the situation be contained across the border. In our update, we note Kyrgyzstan’s place in a wider context - stuck in a struggle between the US and Russia, making the land-locked state the centre of geopolitical manoeuvring. The Americans have a military base in the north of Kyrgyzstan, without which U.S. supply lines to Afghanistan would be significantly hampered. Russia, meanwhile, struggles to maintain what it still sees as its sphere of influence in the former territories of the old Soviet Union.

Clive Lindley

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