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February 2011 Country Archive

PUBLISHERS OVERVIEW FEBRUARY '11

 

ARABS STANDING UP


Only two weeks ago when we published “World Democracy in January 2011’ we talked of:-

“the long established (22 strong) Arab League whose best performer, it’s most democratic member the UAE, ranked 73d out of 150 nations in the world; whose worst performer – no prizes for guessing Somalia, came 147th.”

We commented prematurely possibly that, “it looks like Arabs don’t do democracy”.

Well, we can see from events in Tunisia and Egypt just two weeks later that it’s not for want of courage! Let’s hope that their bravery changes their realities and the world’s perceptions.

Our current reports on LIBYA, SYRIA and SAUDI ARABIA, all address this and also look at their neighbours. Libya is next to Tunisia and indeed to Egypt. But apart from having in common discontented populations, Tunisia and Egypt are substantially different to Libya. They have an urban middle class whose youth have been very much engaged in the unrest. Syria is again different in that the government, high military command and civil leaders are from the same large clan, the Alawites, who had a knockdown drag-out fight with the Islamists some years ago, which crushed the fundamentalists and confirmed the Alawite monopoly of power. The president al Assad, has just recently said that ‘Syria is stable’.

In Libya, Qadaffi family power is ultimately based on tribalism – they would hope this disturbance will pass them by. Currently, Saudi Arabia’s biggest problem as we explain, is that it is in danger of becoming involved, even infected by the travails of its poor southern neighbour Yemen, which already has a civil war in the south and another in the north, added to which Al Qaida is active there. Much less western orientated than the North African states, Yemen’s protestors may well be more Islamic than the others, we discuss the implications in the Saudi report.

Nobody can be sure where this uprising in the streets is going to - maybe nowhere significant - but it looks otherwise. The best news to us was that the events in Egypt involved the same kind of youth/ working class/ middle class mix, as in Tunisia. The Moslem Brotherhood, the only (banned) organised opposition there, are fundamentalists who assassinated President Sadat, and although it is said that they had eventually supported current protests, their characteristic Islamic banners have not been prominent in the street, except outside Egyptian embassies in western countries . They must, as a clandestine organised group, be scheming how to take advantage of a potential vacuum in power. Egypt however is fortunate in having a world-class leader in waiting, Mohammed ElBaradei, Nobel prizewinner and for long the UN Director General of the IAEA, currently back in Cairo.

Mubarrak is said to have pointed out the parallels with his situation and the overthrow of the tyrannical Shah of Iran, after a popular uprising like this. That his tyranny could perhaps be replaced with a substantially worse regime of fanatical priests. That is indeed a timely warning. Western chancelleries will be exercised as to whether people power as we are witnessing it, often with no clear leadership, can produce progressive governments, or will they sink back into the arms of the organised Islamists, who have leaders-in-waiting, usually in exile, for just this kind of opportunity.

A Reforming President Reforms
Whatever happened to that promising young President Obama? He came in riding on a wave of reform and what was his biggest problem? The finance industry, to be sure. It has had the most fearful effect not just in the US, but in the wider world - and if you get right down to it, the crisis all came about because of human greed. Many analyses * and reviews have been offered, some of them of a very high calibre from which non-specialists like ourselves, have formed certain conclusions. It seems that Wall St capitalism has been patched together by massive subventions of taxpayer’s money, but its self-serving rottenness has been paraded around the world for all to see. The idea of taking a fee for setting up a customer with some kind of an exchange instrument and then quietly betting (and doing their best to make sure) that it would fail, is so perverse, it’s almost funny - except for the victim.

The US Finance industry is said to have 5000 lobbyists working on their behalf. A lobbyist, often a former congressman or an ex-congressional or White House staffer knows what his paymasters want of him. It is his job to find out what key congressional decision makers who could help in this quest, want for themselves. To anyone outside the USA lobbying like this sounds like simple corruption, but lobbying is done at least in part, openly, so it’s not that simple –even if it is corrupt!

Third world politicians are often excoriated for seeking election in order to get rich! So what’s the difference, would be a fair question?

Obama has had a couple of years in the job, talked to some experts, made decisions, or didn’t make decisions - and from 2008 watched from the top of the heap, as the rest of us did from the sidelines, at the events playing out in Wall St, and its far flung dominions in America and the world.

It was as though the citizens were all passengers on a great ocean-going liner trusting the professionals to do their work competently, and get them safely to their destination. Then the crew decide they can make more money going to a new destination of their own choosing, not to benefit the shareholders who own the liner, certainly not the passengers, but to make money for themselves. The passengers on the same ship are carried along with them and dumped at the far end to pick up the pieces of their own lives, whilst for the crew its “I’ll be gone, you’ll be gone!”

So they took their money leaving chaos behind and left. But did they?

Many found it as astonishing as we did, when Obama’s appointees to the top government financial and economic posts were effectively from the same crew! What a heaven-sent opportunity lost for a clean-out, and the appointment to become his closest advisors of such luminaries as those who had been right, who had sounded the alarm over and again, but nobody was listening. Such people as Joseph Stiglitz, George Soros, Paul Krugman, Nouriel Rabbini, Robert Shiller, and more.
Why did it have to be Wall St big shots, or, if there were overwhelming reasons for their inclusion, why were not the very top people of a new minting? Good brains abound and the US has its share of economics Nobelists and the like, fresh and untarnished by this. Does it mean that there are only half a dozen people, all of whom have been working in the self-same disgraced finance industry, capable of running the US economy, for good or for bad?

It is said that Obama intends to use the ‘Fed’ – ‘the dog that didn’t bark’ to ensure future regulatory measures. Ben Bernanke who leads the ‘Fed’ is surely a broken reed, given his seamlessly maintaining his predecessor Alan Greenspan’s culpability in restraining the regulators, when they were really needed. Is he not tarred with the same brush? What kind of confidence can he enjoy, for very shame? The problem is that the Dodd Frank financial act, intended to avoid any repetition of these dismal events, was so amended by lobbyists, that it is now the calibre of these regulators rather than the letter of the law, that controls the future.

The effects of course have been shattering for many of the ordinary victims in the USA, but the financial industry is truly global. Some countries, who in effect have no financial industry, came through in good shape. Others like the UK and France have had the prospect of disaster on their own doorstep, having had to expensively bail out some of their banks and then increase taxes on their citizens and cut back on cherished legislative programs. Right now the UK government is the major shareholder in two otherwise defaulting banks. At least they took George Soros’s idea, which Gordon Brown adopted, of an equity stake in return for recapitalising the banks, unlike the US government, which appears to have gifted the enormous sums poured into the big name banks. The UK government is of course now in a good position to initiate the obvious steps of the deposit holding banks being separated from their investment arms which could be sold off, or of keeping the state in there with a majority interest, including on the board - but will they?

The old argument against nationalisation was a throw-back to the war years, that the state was inefficient, being bureaucratic, as it was, in the kind of decision-making involved in modern business, but the abject failure of unrestrained capitalism in its ‘innovations,’ rather more than counterbalances that argument.

In the financial world everyone looks at what Wall St is doing. In fact the need for orchestrating this internationally is very high. President Sarkozy of France this year presides over the G20 and has declared that he hopes to have that most powerful of international bodies use its weight to make banking a respectable business once again. We hope for all our sakes that he succeeds, but we can imagine the Republicans now in a majority in the House, chewing on that and the idea of ‘foreigners’ telling them how to regulate their banks, although since they owe so much money around the world they would at least have to listen carefully.

The rest of us are left with the worries of whether Obama has ‘got it’ about Wall St, and can the ‘good guys’ possibly come out on top?

* Don’t miss the movie “Inside Job”. Also read Joseph Stiglitz: “Freefall”

Farce bows to Force
Why do nations use up so much energy pretending to be what they are not? RUSSIA comes to mind in seeking to represent itself as democratic, as having achieved the rule of law. The irony is that EVERYONE, its own citizens and foreign observers know that it is not even close! Nobody with any other choice would choose to seek justice in its courts. What foreign investor could countenance sueing the Russian government in their own courts?

What you can read in the newspapers or see on TV may or may not be true, but you realise that nothing that is embarrassing to the authorities is going to be featured, unless it is something so enormous as a terrorist explosion, a submarine being lost, an airliner lost, a train crash, or a coalmine collapsing. What a contrast with the west where most days the front pages carry at least one story critical of government about far less momentous events.

The perils of seeking to stand as a candidate in RUSSIA against the officially approved candidate of the party of power, have been well chronicled recently following the Regional elections. There is a power structure to which you either belong or you do not. If you do, as an insider you can aspire to power through the approved party structure. Outside of that – not, forget it!

If you rely on such whimsy as constitutional rights, you are quite likely to get bloodied. The party of power in RUSSIA is just as it was when it was called the communist party. They can and do use the police force and the courts system to terrorise political opposition. That same police force, with honourable exceptions, is widely corrupt and is not above fixing evidence, framing people, terrorising folk if they take against a citizen, or their political superiors tell them to do so.

The power brokers can actually do anything, because the administration and the ruling party are permanently one and the same and all the power of the establishment is available to them. But still there is this thin pretence that the days of one-party rule finished with the communists. The idea that the establishment encourages, that corruption was/is limited to a handful of business oligarchs, is absurd when in reality, it permeates officialdom high and low, certainly at every level of government, and it is indeed the way it has always been.

Russia this February issue looks at the ‘railroading’ of Khordokovsky – a clever man, but not so clever that he couldn’t see his fate when he took on Putin. It is amazing because in his earlier life in communist days, the young Khordokovsky was a leading light in the communist youth – the point being that he must have known from then what these people were, and how the gigantic machine would roll over him, and anyone like him.

Russia has been neatly described as “an oligarchy run by the security services,” Apply that fact to any situation and you will understand not to expect anything different to happen, for at least a generation.

China too has a constitution. It is quite an impressive piece of work. But although this nation is so strict with those who dare to dissent on almost any edict or regulation, the fact is that there are wide differences between what a citizen CAN do and what the Constitution says he is entitled to do. It is of course a straightforward indictment of any state that ignores its own basic rules; it tells of the fragile condition of the system of justice. In fact if a dissenter points out that the constitution is being breached, if they persist and are well enough known, they can be pursued for the crime of “inciting the overthrow of State power and the socialist system and the People’s democratic dictatorship,” precisely the charge against the now celebrated Nobel Laureate, Liu Xiaboa, whose crime it was to call for fundamental human rights and reform in his country.

Afghanistan: Army or Police?
378,000 new personnel is it! Effectively the plan for maintaining order and keeping the Taliban at bay, but there is no agreement about how many should be police and how many army. It seems that as the force grows, there are not the trainers and mentors coming forward from the IFOR countries as expected in ‘the plan,’ but more importantly, there are serious questions about the quality and capabilities of the recruits.

Whatever, 2011 does look like being a decisive year as IFOR countries decide that this is when their disengagement from AFGHANISTAN will commence.

The US military high command, haunted by the ghosts of defeat in Vietnam, still believe that it is possible to achieve a military victory over the Taleban. We look at the Taleban in this issue and how they are reacting to this.

IRAN scored against the US some kind of reprisal against the sanctions placed on them by the UN, orchestrated by the US. Fuel tankers coming from Iran were blocked at the Afghan frontier – an indication of how Iran can hit back, which caused some difficulties for the IFOR.

An indication as to the future economy of a peaceful country comes from the international competition for the iron ore deposits at Hajigak. 22 companies (15 of which are Indian, no doubt to the chagrin of Pakistan), are competing. The point we make is that the best hope of wealth for this country is probably that which nature has bestowed, in the form of minerals, etc; rather than any expectations that this will be a future industrialised nation.

The parliament has now at last been seated. Apparently Karzai was unhappy with the fact that the line up is too close between his supporters and the rest, but he wasn’t able to get the disqualifications of elected members, he had hoped for.

Iraq: Maliki passes the test
That is the 90 days max the president gave him to form a government. We describe who got what jobs. Because of the multiple aspects of political life in IRAQ there are inevitably strange bedfellows. It may be recalled that a part of the price to be paid to Allawi was that he would get to chair the new Council for Strategic Policies, which sounds great, but nobody yet knows what it is for – apart from placating the frustrated winner of the election. It is a good time to see how the factions –ethnic, religious, ideological will live with each other, particularly as the terrorists, presumably al Qaida in Mesopotamia, are busy murdering Shia as they tend to congregate at this, their holy time of the year. This is an attempt –they don’t give up easily- to set off a knock-down drag-out fight between the majority Shia ‘heretics’ whom they detest, and the substantial minority Sunni to whom they relate as not being heretics. All of this a matter of who was the legitimate successor (fourteen hundred years ago) to the prophet Mohammed in the 7th century, but the partisans on both sides are quite willing to carry on fighting.

Iran remains unreachable
The two day negotiations held in Turkey between IRAN and representatives of the EU, USA etc came to naught. The westerners wanted to talk detail on Iranian nuclear intentions. Iran wanted, who could believe this, to talk about Israel and its existing nuclear weapons. That must have been a conversation stopper, but Iran’s point is hardly unreasonable. Since Iran and Israel find themselves as declared enemies for reasons that are not quite clear to the rest of us (that is before the threats started), but bottom line - probably about military superiority in the middle-east, it is obviously a problem for both Iran and the west that such double standards exist.

Do the powers accept the Israeli failure to admit ownership as being a means of denying being a nuclear power? They would have felt foolish in the extreme trying to argue that case, yet here is Iran trying to get on the same footing, and look at the trouble it’s causing.

So, no progress on the nuclear front, except they talked, and may do so again.

No More Mr Nice Guy
In BELARUS, hopefully Europe’s last in a line of hateful and despicable dictators, Lukashenko, has behaved fully in character following elections - in which he declared himself the winner of course, but added a demonstration of his character by arranging for the other candidates to be seriously beaten up and then imprisoned. So he gets a 4th term and the unhappy people of Belarus try to get on with their lives. Belarus offers a snapshot of what Soviet Russia was really about. Russia today is actually better than its former satellite. Power there remains in a few select hands, but the gulags have gone. People can leave the country to travel and military service is abolished. But Belarus is in the dark ages. We have not regularly reported Belarus for quite a time, partly because as long as Lukashenko is there – three terms already - it’s a hopeless case. This election did offer the possibility of change yet as we can see that has come to nothing, except that neighbouring Poland is lending a helping hand to the remaining democrats, as our report tells.

Turkey finding its place in the world
TURKEY today, on any issue is much more inclined to take a position which reflects its real power in the fractious neighbourhood of the middle-east, (rather than just echo the US position, as was the case during the cold war years). Turkey for seven centuries was a major military power and built a large empire, including not only all of the Arabian peninsula, but all along the north African coast to the Atlantic. Everywhere the Sultan’s appointees ruled. Turkey’s European empire, included Albania, Serbia, Hungary, Macedonia, Bosnia, Bulgaria, Greece, Romania. The professional Ottoman army was for a long time the best and most feared in Europe, the first to deploy heavy artillery and even reached as far as the gates of Vienna, at its 17th Century zenith.

So Turkey is used to being a great power and whilst that light to some extent went out, or at least dimmed, after its defeat in WWI and the collapse of the Ottoman empire, the period since WW1 has seen a remarkable transition, led by the national hero Mustapha Kemal. This Moslem nation has learned to put religion in its place and become secular in the affairs of the world. As a key member of Nato – the only one except Norway sharing a border with the USSR, it built up a powerful military, and although there has been no shortage of tensions between the military and the nation’s politicians, that has now largely been resolved.

All of this adds up to the fact that Turkey is both a regional giant politically – it is the doyen of Turkic speaking nations, so now includes influence, investment, etc; deep into Central Asia and the Caucasus - and militarily after 40 years of Nato very powerful. It is ‘good news’ for the world at large, in that it has shown the way in secularising an Islamic state, which many countries (Pakistan comes to mind), could gain enormously if they could emulate it. Further, although their democracy has glitches, they are serious about it and also serious about receiving the respect which all of these credentials show that they deserve.

With this background, it seems absurd that Israel should have so antagonised them over the matter of the Mavi Marmara flotilla draped in Turkish flags, a peaceful seaborne publicity-seeking protest, by mainly Turkish sympathisers for the population of the permanently besieged city of Gaza. After a botched assault by Israeli commandos eighty miles offshore, thus by some definitions piracy, the outcome was that nine unarmed protestors of Turkish nationality on the vessel were executed, for it is claimed, using chairlegs, iron bars, knives etc; to resist the commandos. The term ‘execute’ seems the appropriate one when one protestor took four bullets in the brain, indeed there were thirty bullet wounds shared amongst the nine dead, who being unarmed clearly could not fire back. Israel has just held a judge-led enquiry and surprise, surprise, finds everything was as it should be. The UN had earlier published a report which talked of “an unacceptable level of brutality.” That sounds about right to us.

Israel has fewer friends in the world than it used to have, which has much to do with the world watching the blocking of progress in achieving the ‘promised land’ of Palestine, a matter which has been outstanding for some sixty years. But Turkey and Israel used to get on together famously. Their militaries exercised together, they were friends. Is it that Israel now rests entirely on the fact that its lobby in Washington can deliver US aid any time it wants, that it has no need of regional friends?
This issue we look at the prospects for Turkish elections in July. The outlook looks good for the incumbent AKP to have a third electoral victory in July. They have done remarkably well. They took over an economy with a 70% annual rate of inflation and reduced it to single figures. The economy is now booming after experiencing the full brunt of the global crisis.

The Kurdish rebels have been quelled. Ankara kept itself out of the Iraq War. Turkey is an oasis of stability in the Middle East, indeed, its logical local leader.

The Koreas get to talk
South Korea and the DPRK - the north, have agreed to meet and who knows, it might even happen. Our NORTH KOREA report looks at the developments emerging in the new year, one such is the annual joint publication of three newspapers, those of Party; Youth & Army. Apart from the mind-bending length of the editorial title –it runs to thirty six words (which you will have to look at our report to comprehend). They summarise the objectives for the coming year, but not succinctly! (We also offer a link to the full text if you wish to do that to/for yourself). There is also one of those well beloved ten year plans coming up. The really important thing is the prospective meeting between nations at a level on which they can agree, on the basis as Churchill put it, that “jaw-jaw is better than war” The last year certainly had its horrors, first with the sinking of the South Korean corvette and then the unprovoked artillery barrage on to a peaceful island near the frontier. Either of those events in earlier times, would have probably caused a full scale war to break out.

Pakistan government survives – just!
We do and have in the past, had stories to tell about ungovernable nations, and Pakistan probably tops the list for its general hopelessness. This month’s report chronicles the government hanging on by its eyelashes, as a coalition partner resigns, leaving the government without a majority. The issue was that the rising prices had reached a point where the MQM party resisted the necessity to pass on the increase in international oil prices to consumers. The government caved in and the MQM were smartly back in their ranks, leaving the nation’s treasury to face the prospect of absorbing the increase in cost, to keep the price at the petrol pumps from rising. That means in a fundamentally bankrupt country that the IMF funded by the richer nations of the world, will be carrying the additional costs, and this is a nation where the richest, including many politicians, don’t pay any taxes at all.

TAIWAN'S report necessarily concentrates on the top level meeting between Obama and Hu Jintao. At a previous meeting the term ‘core interests’ arose as China’s list of non-negotiables. Again it is being deployed. It was made clear that Taiwan and Tibet are in that category, but now has been added the South China Sea, which of course no US government could recognise as simply a Chinese lake.

PHILIPPINES: Life is hard on the archipelago with never enough work and never enough money. This issue celebrates the fact that recent research established that 93% of Filipinos enter 2011 in a spirit of optimism. This is simply explained as relief that the new president is trusted not only to give positive leadership, but also to change direction from the crime, corruption and blatant scorn for the constitution typified by the preceding government of Gloria Macapagal Arroyo.

Central Asia
Turkmenistan, Kazakhstan, Uzbekistan

The Central Asian state of TURKMENISTAN has large reserves of natural gas, ranking fourth in the world after Russia, Iran and the USA. In an effort to reduce Russia’s domination of the market, it has signed an agreement with PAKISTAN, INDIA and AFGHANISTAN to commit to supplying the proposed Trans-Afghanistan Pipeline Project, also known by the initials of participating nations as TAPI. Pakistan and India badly need additional energy resources. But the proposed pipeline route is risky as it goes through war-torn Afghanistan, and relies on good relations between India and Pakistan. The pipeline would go through Kandahar, a Taliban stronghold. The Taliban are unlikely to want the government-backed project to encroach on their turf and might try to prevent the pipeline from ever getting off the ground. The pipeline would pass through Pakistan's volatile Baluchistan region, where militants are in the midst of a violent campaign for independence. Precedents elsewhere suggest that large and continuing ‘informal payments’ will be necessary along the route, to tribal leaders etc, to secure continuous transit.

Meanwhile, top European Union leaders have been visiting the TURKMENISTAN capital, Ashgabat, to step up its pressure to build a pipeline running from Turkmenistan to Europe. Europe is keen to move on several proposed pipeline projects in an effort to bypass Russia and avoid both the monopoly, and the periodic shortages that occur when Moscow falls out with BELARUS and the UKRAINE – through which most Russian gas is transported to Europe. Those projects include a long mooted pipeline from Turkmenistan to AZERBAIJAN under the Caspian Sea (no small enterprise), that would feed into the proposed Nabucco line and be transported on to south-eastern Europe through TURKEY.

In KAZAKHSTAN, the Nazarbayev regime has been asserting that it is moving towards a democratic, free and lawful society. Constitutional changes appeared to give parliament more powers, including that of overcoming the presidential veto. But Nazarbayev’s powers ensure parliament remains under his control. The parliament passed a resolution in early January effectively making Nazarbayev president for life by suspending presidential elections until 2020, when he would be 80. He vetoed it immediately, showing to the Western world that he is no dictator. But parliament overrode his veto, thus ensuring that Nazarbayev gets the best of both worlds. There is vociferous opposition to Nazarbayev’s life-presidency, especially among young people. Wearing placards with the slogan "Gravediggers of Democracy?", activists protested outside the headquarters of the ruling Nur Otan party on January 11 against a bid to extend President Nursultan Nazarbayev's rule. There should be no doubt that Nazarbayev is absolutely in charge.

The European Union has been welcoming Islam Karimov, serial rights abuser and President of UZBEKISTAN. In 2005 after the mass killing of hundreds of protesters the EU imposed sanctions, including a visa ban and an arms embargo and demanded an independent inquiry into the killings. The sanctions were dropped by the EU in 2009 and nobody was held to account for the killings. The EU (and NATO) need Uzbek cooperation in maintaining supply routes to AFGHANISTAN, and the EU also has an eye on Uzbekistan’s energy reserves. José Manuel Barroso, the commission president, says he pressed Karimov hard on human rights and political prisoners, during talks on security and energy.

Ukraine looks further away
Since the election of Viktor Yanukovich in elections last year, UKRAINE has been leaning towards Moscow in its foreign policy. President Medvedev agreed last April to supply UKRAINE with cheaper gas in return for Russia keeping its Black Sea Fleet in the Crimea until 2042. Ukraine and Russia later signed an agreement restoring the right of Russia’s counter-intelligence services to operate on the base of the Black Sea Fleet, Russia’s policy toward Ukraine is about re-establishing its hegemony in the region so as to become stronger vis-à-vis the West. However, Russia has made only limited inroads into Ukraine’s economy. Ukraine’s oligarchs, who dominate most sectors of the economy, are prepared to challenge this aspect of Russia’s influence. They would lose out financially if Russian businesses took over the country’s energy resources and gas transit pipelines, which the Kremlin has long coveted.

Ukraine’s wish to build relationships elsewhere has become evident recently. Yanukovich went to Japan in January, hoping to forge a new geopolitical and business relationship with the Far Eastern country. Yanukovich pleaded for more business contacts with Japan at all levels.

UKRAINE is also forging a new relationship with AZERBAIJAN in the Caucasus. Energy is at the heart of the matter. Azerbaijan produces a lot of energy, notably oil, while Ukraine consumes a lot. The two countries also want to extricate themselves from super-power domination, Ukraine from RUSSIA and Azerbaijan from the more recent suzerainty of the US.

This February 2011 issue offers the latest updated reports on:-

Afghanistan, Belarus, Iran, Iraq, Kazakhstan, Libya, North Korea, Pakistan, Philippines, Russia, Saudi Arabia, South Africa, Syria, Taiwan,  Turkey, Turkmenistan, Ukraine and Uzbekistan


Clive Lindley
Publisher


Up-to-Date February Reports on all of the above.

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