The Qatar crisis flared up when the official Qatar News Agency quoted Sheikh Tamim, the Emir of Qatar, as saying that “there is no wisdom in harbouring hostility towards Iran”. These words not only effectively supported Iran, but criticised the US and Saudi Arabia’s policies towards it. Qatari officials quickly announced that the news agency had been hacked, and the report was “fake news” – but it was too late.
For Saudi Arabia, which views Iran as its main rival and is taking every opportunity to isolate it, these words were intolerable. It promptly corralled its allies in the Middle East (notably the UAE, Egypt and Bahrain) to collectively cut off their relationships with Qatar and impose a series of sanctions. These, Riyadh said, would be lifted if Qatar agreed to a list of 13 “non-negotiable” demands, including cutting diplomatic ties with Iran, shutting down the al-Jazeera news network, and ending “interference in sovereign countries’ internal affairs”.
In doing so, Saudi Arabia took a gamble. Qatar has two options: accept Saudi Arabia as a “big brother” and comply with its diktats, as most of the Gulf states do, or continue with an ambitious and relatively independent foreign policy and further incur the Saudis’ wrath.
If Qatar chooses to comply with even some of Riyadh’s demands, the gamble will have paid off; Saudi Arabia could finish the crisis confident that Qatar will fall into line against Iran as most of the region does. But if Qatar opts for defiance with Iranian support, the sanctions and restrictions the Saudis have imposed will look like one big miscalculation – an attempt to discipline a small neighbour that instead drove it into the Iranian fold.
The list of thirteen demands to which Qatar must respond within ten days appears to reflect longstanding desires -- although not publicly stated until very recently -- by Riyadh and Abu Dhabi, of which Doha has been dismissive. Yet it is hard to see how this list was formulated with the intention of achieving a resolution rather than a complete undermining of diplomacy. There appears little way Doha can save any face. Perhaps the list reflects an opening maximalist salvo designed to prompt negotiation, but the prerequisite for agreement on all points suggests otherwise.
Qatar has to:
The list does not amount in so many words to a call for regime change in Qatar, but rather to one for altered policies. Nevertheless, Doha is likely to view it as pressure to remove Emir Tamim bin Hamad al-Thani and his father, Hamad bin Khalifa, known as the "father-emir" and still regarded, especially by the UAE, as the power behind the throne since his abdication in 2013.
The prominent role in the confrontation of four countries -- Saudi Arabia, the UAE, Egypt, and Bahrain -- is easily explained. Saudi Arabia has long been irritated by Qatar, the huge gas reserves of which give it financial independence from the kingdom. The UAE has resented the support Qatar has given to the Muslim Brotherhood, members of which have plotted against the ruling family in Abu Dhabi, the leading emirate of the confederation. President Abdul Fattah al-Sisi of Egypt overthrew the Muslim Brotherhood regime, which survived in power for two years largely because it was propped up financially by Qatar. Bahrain has had a history of land disputes with Qatar -- and while these were resolved in 1994, ill will persists, encouraged by Riyadh.
Prime Minister Narendra Modi’s inaugural visit to the Trump White House this week was fraught with uncertainty, with recent irritations in the relationship (visas and climate change), a softening in US policy on China, and tension between Trump’s transactional instincts and the longer-term approach taken by his two predecessors on the US-India relationship. But in the end, the visit proved straightforward, hurdling the low bar set in advance.
A substantial joint statement released on Tuesday stressed a slightly different order of priorities to previous such documents, highlighting – in this order – terrorism, stability in the Indo-Pacific, free (and, notably, 'fair') trade, and energy. While the South China Sea wasn’t mentioned in a passage on freedom of navigation, as it was three years ago, this is hardly surprising: it’s been dropped before, and the Trump administration has walked a fine line on the issue, to avoid jeopardising Chinese support over North Korea.
Far more important was the language used on regional connectivity, where both sides underscored 'the transparent development of infrastructure and the use of responsible debt financing practices, while ensuring respect for sovereignty and territorial integrity, the rule of law, and the environment'. This was an obvious rebuke to China’s Belt and Road Initiative (BRI), and these specific points – transparency, sustainability, and sovereignty – directly echoed India’s searing attack on the project last month.
This diplomatic subtweet is especially notable given that the Trump administration, unlike India, sent a delegation to Beijing’s flagship BRI summit in mid-May, headed by the National Security Council’s senior director for East Asia, Matthew Pottinger. While Tuesday’s statement shouldn’t be taken as a sign that the US is following India’s hard-line approach it may well help create a coherent narrative that can be taken up by US partners in Asia – notably Japan and Australia – who wish to engage with the scheme, but remain wary of its longer-term security implications.
Russia's military modernization efforts are entering a critical stage. The state armaments program (GPV), covering 2018-2025, is due to be finalized in September. The plan will determine not only the country's weaponry capabilities well into the 2030s, but also the strategic direction of the Russian military at large. Early indications point toward a significant downgrade in Russia's maritime ambitions as Moscow amps up its focus on continental power.
As Russia evaluates where its military will be heading over the next several years, the Kremlin's primary constraint will be financial. After almost two decades of explosive growth, Russia's defense budget has started to face considerable headwinds in recent years, since a sharp decline in oil prices in 2014 curtailed the country's financial freedom. Its fiscal challenges culminated this year, when the Kremlin cut the defense budget by 5 percent. The reduction, the first since the 1990s, means Russia won't be able to achieve its official goal of modernizing 70 percent of its forces by 2020. The total funds in the 2018-2025 GPV are expected to be just half of what the Defense Ministry was hoping for. Consequently, the Kremlin will have to make tough decisions about how the Russian military prioritizes its investments. Economic turbulence and industrial issues have already delayed finalizing the GPV by two years, and Russia can no longer afford to postpone decisions on matters of its military future.
Key parts of the Russian navy, meanwhile, are in desperate need of funding. Though the navy has undergone some notable modernization programs over the last decade, for the most part it still relies on small or aging warships. The Russians have not built a new type of surface warship larger than a frigate since the end of the Cold War, and the country's sole aircraft carrier, the Admiral Kuznetsov, was first launched in 1985. If Moscow wants a powerful oceangoing navy with large surface warships and carrier aviation, it has no choice but to allocate substantial funds to its navy as part of the 2018-2025 GPV.
But it's already becoming clear that the necessary funding won't materialize. The Russian Ministry of Defense appears to be prioritizing established — and less risky — weapons programs over new ones. That puts Russia's navy at a disadvantage because the force has not undertaken a large surface combatant program since the Soviet Union collapsed. Furthermore, the limited defense budget will focus on cost-effective weapons systems rather than on pricey flagship programs, leaving no room for the enormous expense of building large warships. Dimming Moscow's maritime prospects all the more, Deputy Prime Minister Dmitry Rogozin, a key figure overseeing the defense industry, said in May that unlike the United States, Russia is not a maritime power. Instead, he emphasized, it is a continental power. (In the same vein, Rogozin questioned the need for Russia to field an aircraft carrier.) A meeting in mid-May between Russian President Vladimir Putin and Kremlin military leaders confirmed these statements, and Russian media later announced that the development of destroyer warships and a new aircraft carrier would be indefinitely postponed.
The tabs on their shoulders read “Special Forces,” “Ranger,” “Airborne.” And soon their guidon -- the “colors” of Company B, 3rd Battalion of the U.S. Army’s 7th Special Forces Group -- would be adorned with the “Bandera de Guerra,” a Colombian combat decoration.
“Today we commemorate sixteen years of a permanent fight against drugs in a ceremony where all Colombians can recognize the special counternarcotic brigade’s hard work against drug trafficking,” said Army Colonel Walther Jimenez, the commander of the Colombian military’s Special Anti-Drug Brigade, last December. America’s most elite troops, the Special Operations forces (SOF), have worked with that Colombian unit since its creation in December 2000. Since 2014, four teams of Special Forces soldiers have intensely monitored the brigade. Now, they were being honored for it.
Part of a $10 billion counter-narcotics and counterterrorism program, conceived in the 1990s, special ops efforts in Colombia are a muchballyhooed American success story. A 2015 RAND Corporation study foundthat the program “represents an enduring SOF partnership effort that managed to help foster a relatively professional and capable special operations force.” And for a time, coca production in that country plummeted. Indeed, this was the ultimate promise of America’s “Plan Colombia” and efforts that followed from it. “Over the longer haul, we can expect to see more effective drug eradication and increased interdiction of illicit drug shipments,” President Bill Clinton predicted in January 2000.
Today, however, more than 460,000 acres of the Colombian countryside are blanketed with coca plants, more than during the 1980s heyday of the infamous cocaine kingpin Pablo Escobar. U.S. cocaine overdose deaths are also at a 10-year high and first-time cocaine use among young adults has spiked 61% since 2013. “Recent findings suggest that cocaine use may be reemerging as a public health concern in the United States,” wrote researchers from the U.S. Substance Abuse and Mental Health Services Administration in a study published in December 2016 -- just after the Green Berets attended that ceremony in Colombia. Cocaine, the study’s authors write, “may be making a comeback.”
DATONG — "It's the end of a story," sighs Chen Yixian.
The slender 56-year-old wears a permanent smile, but it can hardly conceal his despair as he watches bulldozers and trucks laboriously pushing their loads in the distance. In this huge open-pit mine at Sandu, 400 kilometers southwest of Beijing, all color seems to have disappeared. Coal is everywhere, the mountain excavated a little more each day. The intermittent palisades cannot prevent the thick black dust from invading the surrounding roads and villages. Mining activity in the province of Shanxi is visible for miles around: not only the pervasive dark dust, but also the smell of sulfur that permeates the atmosphere.
On this spring day, the sky is blue and the sun is visible, a luxury in a region that is among the most polluted in China. It is also the result of a fall from grace of a once glorious industry.
A few years ago, Chen Yixian was rubbing his hands together. He came to Shanxi as a miner before deciding to buy a mine with other investors in 2006. "At the time, you could buy a big mine for a few million yuan," he recalls. He witnessed the surge in the price of coking coal, boosted by the extraordinary demand of a Chinese economy with double-digit growth rates. "The inhabitants were even digging behind their houses!" he recalls. The wealthy owners of private mines made millions.
The Trump administration’s China policy is currently focused almost exclusively on North Korea. But Beijing’s growing power and expanding regional and global objectives demand that Washington come to grips with a broader China strategy.
It is imperative to assess China’s current and planned capabilities, its objectives and strategy. Unlike in its recent history, China is now a rising global power. Its economy is the second largest in the world, directly behind America’s. The United States supported China’s rapid industrialization after President Richard Nixon’s opening. Later, it took advantage of the U.S.-backed liberal international order, including the global trading system, to export goods in enormous volume to markets around the world. China has also committed economic espionage against America, using cyber and other tools to steal intellectual property. Additionally, China is using regulations to compel U.S. firms to share their core technologies as a condition for gaining access to Chinese customers, even as relatively unfettered access to American markets continues to fuel Chinese growth.
China’s economic growth has brought hundreds of millions of its citizens out of poverty, but not without negative consequences: among them the long-standing one-child requirement, large-scale environmental pollution, and the growing gap between the very rich and everyone else.
China holds more than a trillion dollars in U.S. debt, and has become America’s largest trading partner. In 2015, U.S. trade with China totaled $659.4 billion—with the American trade deficit standing at $336.2 billion. Access to the American market has been vital for China’s spectacular growth and remains vital for its future.
Suddenly this summer a young Frenchman, a virtual unknown on the global stage only three years ago, became the Western world’s great liberal hope. The successive presidential and parliamentary victories of Emmanuel Macron and his Republique En Marche have lifted not just the hopes of a nation long burdened with déclinisme, but also the spirits of European and American observers who feared France was the next domino in the seemingly relentless march of populism and authoritarianism.
Inevitably, commentators have looked to the past to explain the present moment. On this side of the Atlantic, parallels have been made between the youthful and charismatic Macron and our own John F. Kennedy, while on the other side he has been measured against the lofty likes of Charles de Gaulle and Napoleon Bonaparte. (I myself have put such comparisons to print, both in RealClearWorld and in other publications.)
In light of recent events though, another towering but also glowering historical figure seems more apt. Unlike de Gaulle, Bonaparte, and even Kennedy, this individual hasn’t a single street or monument named after him in Paris, and few biographers have taken up the task of writing his life. Given the terrifying events orchestrated by Maximilien Robespierre, this general neglect is understandable. And yet, certain aspects of Robespierre’s ideas and ideals bear an odd resemblance to those now brandished by France’s new president.
Behind Macron’s rise was the festering of scandals in French political life. Not surprisingly, the term dégagisme, shorthand for a desire to “throw the bums out” and first coined in the heat of Tunisia’s Arab Spring movement, became a popular rallying cry for both the hard left and hard right during the presidential and legislative campaigns. What other fate could be reserved for the traditional parties, be they the conservatives or the socialists? After all, were they not led on the right by the self-obsessed Nicolas Sarkozy and self-righteous Francois Fillon, and on the left by the risible Jerome Cahuzac and repellent Dominique Strauss-Kahn, all accused of sundry financial and personal shenanigans?
Cooperation among Southeast Asian states has never come easy, but the surge of Islamist militancy in the region is encouraging Malaysia, Indonesia and the Philippines to give it another try.
This week, the three countries formally launched trilateral patrols in the Sulu and Celebes seas — a vast expanse that has become a hub of piracy, militancy and smuggling. They have discussed the possibility since 2016, when the Abu Sayyaf, a jihadist group aligned with the Islamic State, conducted a string of kidnappings in the Sulu Archipelago. Whatever differences that may have impeded the patrols, however, were put aside during the siege of Marawi city, a provincial capital in the restive Philippine region of Mindanao.
Of course, the patrols alone will not rid the Philippines or its neighbors of jihadists. The same issues that have routinely hindered collective action throughout Southeast Asia will limit the scope of the program, if not undermine its effectiveness altogether. But the initiative does amount to a step toward regional integration, even as it proves the indispensability of the United States and its allies in Southeast Asia — playing directly into U.S. strategy in the Asia-Pacific.
A Divided Region
The resurrection of the Quadrilateral Security Dialogue (QSD), a proposal that would bring Australia into a strategic grouping with India, Japan and the US, has again been floated, this time in ministerial talks between Australia and Japan in Tokyo.
Australia has a perfect right to form associations, groupings, dialogues and alliances with whomever it chooses. Foreign, including Chinese, criticism should not be regarded as a barrier. However wise statecraft does not deal only with entitlements and rights, it also considers consequences, need, timing and the best use of limited resources. The option of pursuing a four-way strategic grouping between Australia, India, Japan and the US needs to be considered from these perspectives.
With regard to consequence, it would be irresponsible not to consider the impact on China’s security perceptions. Will a Quad arrangement increase perceptions among China's leaders that the US is leading an effort to contain China’s rise? Probably, because we know that, historically, China has feared encirclement.
Will it strengthen the influence of hawks in the PLA who regard peaceful coexistence with the US and other Asia Pacific great powers as fanciful? Again, probably.
Last week, Taiwan became more isolated than ever. Panama is the latest country to break relations with Taiwan, known officially as the Republic of China, and instead recognize Beijing, the People’s Republic of China, leaving the island nation only 20 countries that recognize its legitimacy. This trend is not new: The two Chinas have battled for recognition since they separated after the Second World War. Yet this holdover conflict from the Cold War really only matters today for Taiwan and mainland China. For those countries that receive economic benefits for recognizing one over the other, it is only a matter of who offers more investment, aid, and infrastructure.
This game of winning over countries with aid and infrastructure has been the norm since mainland China and Taiwan separated in the 1950s, following China’s brutal civil war. After being run out of the country by Mao Zedong’s Communist Party, the nationalist Kuomintang led by Chiang Kai-shek established their government in Taipei, declaring Taiwan to be the “real China.” The People’s Republic of China, on the other hand, sees Taiwan as a renegade province and has as its ultimate goal its reunification with the rest of China -- their so-called One-China Policy. Since then, the two nations have been fighting over who is the “real” China by obtaining the recognition of other countries.
Taiwan has been losing its allies to mainland China since the 1970s, after it lost the recognition of the United Nations and powerful allies such as the United States. Given the PRC’s growing economy and political influence around the world, most countries have found it more beneficial to side with the Asian giant. When it comes to Panama’s change of recognition, it is right to assume this decision was mostly due to China’s growing investment in the country. The PRC is Panama’s second-largest trade partner. Furthermore, Beijing has spent billions in infrastructure around the Panama Canal, including in the construction of a new box terminal and the development of seaports, coupled with new trade and maritime agreements.
The change was a blow to Taiwan. Panama was one of Taiwan’s oldest friends and one of its most important remaining allies -- the remaining 20 nations are small, developing countries in the Caribbean, Central America, and Africa. In severing ties with Taiwan, Panama’s government recognized the PRC as the only China and the Chinese Communist Party as its only legitimate government. Furthermore, as with all nations that side with the PRC, Panama pledged to break all diplomatic relations and contact with Taiwan. Taipei believes that Panama “decided to switch diplomatic engagement toward the Beijing authorities for economic gain.” Meanwhile Panama’s President, Juan Carlos Varela, only mentioned that this change was the “correct path for his country,” without addressing Panama’s growing ties with China.
Homer said “It is a wise child that knows his own father.” Well, Ivanka Trump surely did a much-needed goody for her dad by convincing him of the great importance of apprenticeships, a woefully underappreciated vehicle for supporting human capital development and boosting economic growth.
Last week President Donald Trump signed an executive order to increase apprenticeships and job-training programs. While this new action is not a departure from the past -- the Obama administration actively supported apprenticeship training and Hillary Clinton championed it during her campaign -- there are some unique features of the new directive, projected to cost $200 million. First, the executive order takes some authority away from the U.S. Department of Labor and instead outsources more to third-party companies and schools. Companies, trade associations, and unions will in fact develop their own apprenticeship program guidelines. Second, Trump’s order will create a task force to evaluate the 43 separate work programs costing nearly $17 billion a year and carried out by 13 federal agencies.
As Labor Secretary Alexander Acosta points out, the skills gap is especially challenging for the U.S. economy, especially in fast-growing sectors such as financial services, health care, and information technology.
Although the federal government has regulated and certified apprenticeships since 1937, these programs have never really received the attention and promotion they deserve. The norm has been for the private sector to hire from vocational and technical schools and to train employees on the job.
It does not take much vision to predict that making Prince Mohammed bin Salman, the new Crown Prince, and removing Prince Mohammed bin Nayef from any position of power, will lead to a flood of new speculation about the possible tensions with the Saudi royal family, the motives involved in changing the succession, and how the resulting changes will spill over into a host of changes in less important positions.
It takes even less vision – just reading the reporting during one or two prior major changes in succession will provide all the necessary examples – to predict that the vast majority of this reporting will be pure speculation and wrong. Guessing about the Saudi royal family went from a national to an international sport at the time of Nasser, and the game – like all other forms of phantom sports leagues – is likely to continue indefinitely. This is particularly likely because the past shows that the full circumstances and facts behind many shifts within the Saudi royal family never do become fully known, and any really good conspiracy theory can live forever.
In any case, what is done is done and America has far more serious priorities. What is far less speculative is the fact that Saudi Arabia is a key strategic partner of the United States at a time of great uncertainty, and finding the best ways to serve common strategic interests is already a critical challenge.
Regardless of all the circumstances surrounding the succession, and the personalities involved, the rise of Prince Mohammed bin Salman as the new Crown Prince marks a key time to consider how best to develop some common approach to a host of truly critical strategic issues where neither the United States nor Saudi Arabia have a clear and convincing strategy.
Earlier this month Panama established formal ties with the People's Republic of China (PRC) immediately after severing diplomatic relations with the Republic of China (ROC), as Taiwan is officially known. The question that is now being insistently, even fastidiously, asked is which state will be the next to switch from Taiwan to China?
Some analysts have envisioned a possible diplomatic chain reaction, prompted by Panama's crossing of the Taiwan Strait. According to this domino-effect scenario, after Panama's departure a good number of the 20 allies the ROC is left with (mostly small or minuscule developing states) would be convinced of the inevitability of changing over to China. Thus, they would abandon ship en masse within months.
Such a 'great escape' scenario is unlikely to happen for a number of reasons, its plausibility notwithstanding. First of all, Panama is a case in its own right. The Panama Canal bestows on the Central American state an importance and geopolitical weight transcending its actual size. Beijing can thus be expected to give special attention to Panama, even after the fanfare marking the establishment of relations subsides. By contrast, the other countries recognising Taiwan are not graced with a similarly strategic global trade artery. Nonetheless, in Taipei they are treated like diplomatic aristocracy. For them, Taiwan is a generous aid provider and attentive development partner, which is presumably going to try even harder to keep them from leaving the fold. The fewer allies Taiwan has, the more aid it can allocate to each.
Chinese investment in Panama has also increased sharply in the recent years, and Beijing's ships are the second-most frequent users of the Canal. This represented a strong incentive for Panama, which was reportedly long-ready to take the jump. By contrast, the circumstances of several microstates siding with Taiwan are markedly dissimilar. Their geopolitical and economic marginality makes them relatively indifferent to China's power and sufficiently content with the assistance that Taipei provides in exchange for recognition. Furthermore, the risk of finding themselves third-tier partners and 'diplomatic plebeians' soon after changing recognition to Beijing is substantial. Finally, letting China in could have destabilising consequences, such as increased pressure for Chinese immigration, economic colonialism and resource predation. Tellingly, back in 2010, when asked why his country should stick with the small fish (Taiwan) instead of going for the big one (China), Palau's House Speaker Noah Idechong suggested the big fish 'could sink' Palau's boat.
Social democratic Prime Minister Sorin Grindeanu's small camp of loyalists could barely hide their embarrassment following the recent vote in parliament. Only hours earlier he could be seen smiling confidently, convinced of his victory against party boss Liviu Dragnea. But the story didn't end quite as hoped for the "dissident" Grindeanu.
When Grindeanu was appointed prime minister in January following the stellar election win by the Social Democratic Party (PSD), it was clear that he was expected to be little more than Dragnea's puppet.
Dragnea himself was forbidden by law to take office following a conviction for electoral fraud and a trial over his misuse of office. But he had a simple solution, hoisting political loyalists and the pseudo-liberal junior coalition partner ALDE into the cabinet while the actual business of running the government would be conducted through PSD officials.
It was when Dragnea sought to use his authority to soften corruption laws that the split came. Grindeanu didn't want to play anymore, as some of the largest mass demonstrations since the end of the Cold War took to the streets, and the suddenly the courageous prime minister saw his chance.
Forgive me for complaining, but recent decades have not been easy ones for my peeps. I am from birth a member of the WHAM tribe, that once proud, but now embattled conglomeration of white, heterosexual American males. We have long been -- there’s no denying it -- a privileged group. When the blessings of American freedom get parceled out, WHAMs are accustomed to standing at the head of the line. Those not enjoying the trifecta of being white, heterosexual, and male get what’s left.
Fair? No, but from time immemorial those have been the rules. Anyway, no real American would carp. After all, the whole idea of America derives from the conviction that some people (us) deserve more than others (all those who are not us). It’s God’s will -- so at least the great majority of Americans have believed since the Pilgrims set up shop just about 400 years ago.
Lately, however, the rules have been changing in ways that many WHAMs find disconcerting. True, some of my brethren -- let’s call them one percenters -- have adapted to those changes and continue to do very well indeed. Wherever corporate CEOs, hedge fund managers, investment bankers, tech gurus, university presidents, publishers, politicians, and generals congregate to pat each other on the back, you can count on WHAMs -- reciting bromides about the importance of diversity! -- being amply represented.
Yet beneath this upper crust, a different picture emerges. Further down the socioeconomic ladder, being a WHAM carries with it disadvantages. The good, steady jobs once implicitly reserved for us -- lunch pail stuff, yes, but enough to keep food in the family larder -- are increasingly hard to come by. As those jobs have disappeared, so too have the ancillary benefits they conferred, self-respect not least among them. Especially galling to some WHAMs is being exiled to the back of the cultural bus. When it comes to art, music, literature, and fashion, the doings of blacks, Hispanics, Asians, gays, and women generate buzz. By comparison, white heterosexual males seem bland, uncool, and passé, or worst of all simply boring.
The Arbitration Institute of the Stockholm Chamber of Commerce has preliminarily ruled in favor of the Ukrainian state-owned oil and gas firm Naftohaz Ukrainy over Russian Gazprom’s claims regarding its natural gas supply. The same court is yet to rule on another contract between Naftohaz and Gazprom—on gas transportation via Ukrainian pipelines to the European Union. Both were signed for ten years in January 2009. Irrespective of the final ruling on the gas supply, expected later this year, Naftohaz has avoided bankruptcy. Naftohaz now might resume buying gas from Gazprom if prices are suitable, in spite of the Kremlin’s ongoing “hybrid” war against Ukraine.
In 2009, Gazprom blackmailed Kyiv into signing a gas supply contract with a take-or-pay clause, obliging Ukraine to purchase more gas than it could consume, while at the same time forbidding Ukraine from re-exporting gas bought from Russia. Ukraine also has been unhappy with the prices set by the contract. Naftohaz, in spite of buying less gas from Gazprom than prescribed by the take-or-pay clause, had not been punished by Gazprom until the anti-establishment (EuroMaidan) revolution in Kyiv and the subsequent annexation by Russia of Crimea (with the port city of Sevastopol) from Ukraine in 2014.
Russia canceled the discount from the contract price that Ukraine had been granted in exchange for agreeing, in 2010, that the Russian Black Sea Fleet would stay at the Sevastopol base until 2042, rather than 2017. As a result, the price for Naftohaz soared by 80 percent as of spring 2014. This prompted Naftohaz to sue Gazprom in Stockholm; and Gazprom sued Naftohaz for bills unpaid in 2013–2014, as well as for breaching the take-or-pay clause. Later on, Naftohaz sued Gazprom over the gas transportation contract, requesting higher gas transit fees and complaining that Russia pumped less gas to the European Union via Ukraine’s pipelines than agreed in 2009, although the contract did not specify penalties for that. Ukraine stopped buying gas according to the 2009 contract, although it bought some gas from Gazprom in line with the one-off deals mediated by the EU in 2014–2015. Since November 2015, Ukraine has not been buying any gas from Gazprom, relying on domestic production and imports from the EU (see EDM, February 11, 2016).
The Stockholm court forwarded its interim ruling on the gas supply contract to the litigating parties on May 31. The judges turned down Gazprom’s main claims over the take-or-pay clause, which exceeded $47 billion and could have bankrupted Naftohaz. Indeed, Ukraine’s annual GDP is only around $100 billion. The ruling also envisages Gazprom revising the 2009 contract price as of 2014, in line with EU gas hub prices, and allows Naftohaz to re-export gas (Naftogaz.com, May 31; Kommersant, June 1). With revised prices, which may turn out to be lower than those paid by Naftohaz to EU-based suppliers at present, Naftohaz might resume buying gas from Gazprom. Naftohaz head Andry Kobolev said he wanted to make Russia’s Gazprom one of the regular gas suppliers to Ukraine on par with others (5 Kanal TV, June 5). The Stockholm court is still expected to specify, in its final ruling, which of the EU hubs it had in mind because the final new gas price for Naftohaz will depend on that detail.
French President Emmanuel Macron would like to work with Russian President Vladimir Putin in an effort to seek mutually acceptable solutions to crises that have bedeviled ties between the West and Russia over the past few years, France’s ambassador to the United States, Gérard Araud, said in an Atlantic Council phone briefing on June 19.
Unlike the Soviet Union, Russia “is not an existential threat” to Europe, said Araud.
“Russia has done things that we don’t accept, but at the same time Russia has its own legitimate interests, so let’s talk with the Russians to see whether we reach compromise deals which are mutually acceptable,” he said.
In his meeting with Putin in Versailles in May, Macron showed he was not shy about raising contentious issues when he brought up the torture and harassment of gays in Chechnya and promised military action should Russia’s Syrian allies use chemical weapons.
A foreign country may be a problematic partner for the United States for two basic types of reasons, both of which apply to Saudi Arabia. First, the partner’s foreign policies may range from misguided to immoral, or risk sucking the United States into conflicts in which it is not, or should not be, a party. Saudi Arabia’s calamitous war in Yemen is currently the leading example of this sort of problem. More recently has come the economic and diplomatic offensive against Qatar, which threw a wrench into the Trump administration’s aspirations regarding regional security, and in response to which the State Department this week delivered a bemused scolding.
Second, internal fragility may risk having the foreign regime suddenly come apart. This not only would mean that the partnership with the United States also would come apart. It also could mean that close association of the United States with the old regime earns it lasting animosity from the new rulers and from the discontented foreign populace that supported political change. For an example of this dynamic, one need look only to the other side of the Persian Gulf. The close association of the United States with the Shah of Iran became a major ingredient in post-revolutionary anti-Americanism in Iran. Even after the Shah had been deposed, his admission to the United States for medical treatment was the immediate trigger for seizure of the U.S. embassy in Tehran and a hostage crisis that lasted more than a year.
The association of the United States with the Saudi regime, which has endured so long and has become so taken for granted that it routinely gets referred to as an “alliance,” makes it easy to overlook what an anachronism that regime is and how fragile is such a medieval configuration within the context of the twenty-first century. An extended royal family, whose name is part of the country’s name (imagine if the United Kingdom were instead called “Windsor Britannia”), benefits from enormous but publicly uncounted rake-offs from the country’s oil wealth. That wealth has for many years been critical to buying subservience and complacency from the general population, although now and then indications emerge—such as the Saudi origins of most of the 9/11 hijackers—that not all is well beneath the surface complacency. Besides relying on what the oil money can buy, the regime also has relied heavily on religious sanction to sustain its legitimacy. As part of that reliance, the deals struck with the ulema or clergy have sustained some of the anachronistic features of the country, such as women not being allowed to drive.
The large size of the royal family means not only large rake-offs but also substantial potential for divisions within the family. One of the biggest, and surely one of touchiest, issues, has been leadership succession. The founder of the Saudi kingdom, Abdulaziz Ibn Saud, bequeathed an odd succession plan with the throne first passing to one of his oldest sons but then going, brother to brother (or half-brother) through other sons of Abdulaziz. Because he had more than three dozen sons, this arrangement could persist for a long time. But everyone knew that eventually the kingdom would run out of sons of even the unusually fecund Abdulaziz, and the throne would have to pass to the next generation. The sons and grandsons of Abdulaziz surely have had different preferences and views as to who in that next generation should get the top job. Latent instability can become overt conflict if discontented members of the ruling clan look for ways to exploit discontent in the wider population.
The latest Saudi transition had been predictable since soon after King Salman ascended the throne on the death of his older half-brother Abdullah in January 2015. Within three months, Salman had positioned Muhammad bin Salman, the eldest son of his third wife, as his intended eventual successor. The only question was when the transition would occur. It has now happened, although raising new questions: When will MbS, as he is known, become king in name and under what circumstances?
Those answers are hard to guess, but the king's now-dismissed predecessor, Muhammad bin Nayef, or MbN, was long perceived by many as a stopgap. Additionally, although an experienced minister of interior and the kingdom's counterterrorism chief, he was scarred by the 2009 experience of having a supposedly surrendering jihadist meet him wearing a rectal device.
King Salman's own health is also uncertain. At eighty-one, he walks with a cane and, when meeting foreign leaders, sits before a computer screen to remind him of his talking points. Once reputed to be the House of Saud's institutional memory, Salman now often displays a puzzled visage and has leaned increasingly on MbS for advice, apparently regarding him as almost a reincarnation of King Abdulaziz, known as Ibn Saud, Salman's father and the founder in 1932 of Saudi Arabia.
Unlike Salman's other sons, one of whom has a doctorate from Oxford, MbS was not sent abroad for education. At thirty-one, MbS wears sandals rather than the Gucci shoes favored by some of his cousins, and does not speak fluent English. He is said to allow his views to be challenged -- but does not change them. His greatest strength, or weakness, may be his ruthlessness. A widely believed anecdote is "the bullet story." As told (to the author) by one of the crown prince's cousins, after leaving university in Riyadh, MbS sought to establish himself in business. At one point, he needed a judge to sign off on a deal. When the judge refused, MbS removed a bullet from his pocket and told him he had to sign. The judge acquiesced but complained to then king Abdullah, who banned MbS from his court for several months.