Russia's New Balkan Playground

Judy Dempsey - November 25, 2014

After Angela Merkel delivered a trenchant foreign policy speech at the Lowy Institute for International Policy in Sydney on November 17, the German chancellor took part in a follow-up discussion. Her comments about Russian President Vladimir Putin were not only highly critical of his actions over recent months. Merkel also said she was not convinced that he would stop at Ukraine.

She warned that the EU had to take a tough stance vis-à-vis Russia. "And that doesn't just apply to Ukraine," she said. "It applies to Moldova. It applies to Georgia. If the situation continues, we'd have to ask about Serbia. We'd have to ask about the Western Balkan countries."

Over the past few years, the EU's policy toward the states of the Western Balkans - Bosnia and Herzegovina, Kosovo, Macedonia, Montenegro, and Serbia - has been one of benign neglect, to say the least.

There has been one exception. Catherine Ashton, the EU's former foreign policy chief, invested huge amounts of her time in negotiating a reconciliation between Serbia and Kosovo after Kosovo declared independence from Serbia in 2008.

Mexico Is Fed Up and This Time, It's Different

Kristal Alley - November 22, 2014

Only a few short years ago, Mexican youths sported knock-off Ralph Lauren polo shirts to mimic the narcotraficantes, or drug traffickers, who were as fashionable as they were infamous. The blue "narco-polos" signified J.J. Balderas, the green, La Barbie. Around the country, ordinary Mexicans turned to Jesús Malverde, the so-called patron saint of drug trafficking, to solve their ills.

In the green leafy suburbs of Mexico City, it was common to hear people opine that perhaps the government was going too far in combatting the drug cartels. After all, President Felipe Calderón's campaign against the cartels had arguably increased violence in the country as new branches of cartels fought to assert control in areas where the federal government had successfully caught and imprisoned a cartel chief. Even then-U.S. Ambassador to Mexico Carlos Pascual argued that the rise in violence could be a direct result of Calderon's military measures. That is not to say that Mexicans were not concerned about the increasing influence of drug cartels in their country. They were just not convinced that a government war on organized crime was the best way to solve it. Perhaps a softer approach was in order.

In 2012, Mexico elected Enrique Peña Nieto President. Peña Nieto campaigned on a platform that promised a different approach in combatting drug trafficking, organized crime and corruption. However, swept under the headlines of much-needed reforms to energy and education is the fact that the number of "disappeared" continue to grow; more than 22,000 people are officially listed as missing. In the two years since Peña Nieto took office, not much has changed.

Today, a new rallying cry against living in a narco state is taking hold. Ya me canse - a phrase meaning "enough, I am tired" - is trending on Twitter and is painted on banners carried by thousands of protesters who continue their demonstrations in the capital and around the country. Award-winning Mexican filmmaker Natalia Beristain is producing #YaMeCanse YouTube videos. In her productions, Beristain laments "I'm tired of vanished Mexicans, of the killing of women, of the decapitated, of the bodies hanging from bridges, of broken families, of mothers without children, and children without fathers."

The Costs of Losing Strategic Patience in Syria

J. Dana Stuster - November 22, 2014

After three years of strategic ambivalence followed by three months of strategic shift, President Barack Obama may be considering another change in strategy for Syria. He's convening a team to assess the administration's current plans, CNN reported on Wednesday night. That team may consider accelerating and expanding U.S. assistance to Syrian opposition groups and targeting Assad regime forces. 

Consistently reassessing strategy is good policy, and the administration is right to take a hard look at its plans for Iraq and Syria. But immersing the United States deeper into Syria's civil war was a bad idea three years ago, it was a bad idea in August, and it's still a bad idea today. America has one vital interest in Syria: preventing the Islamic State from staging a terrorist attack against the United States or its allies. We have no national interest and we lack the political will as a nation to commit to ending the Syrian civil war. Without these elements, we shouldn't try.

Any effort the United States makes to try to build a Syrian opposition to defeat the regime of Bashar al Assad - or to provide support against regime forces ourselves - will be a half-measure. Intervention advocates know this - their plans range from the politically unviable to the strategically underwhelming. Some suggest training a few thousand Free Syrian Army rebels to fight against the Assad regime (and, we hope, against the Islamic State when it suits their interest). Others have larger plans and have suggested forming a 60,000-strong opposition army of moderate Syrians, with leaders handpicked by a Western coalition. All of the proposed strategies rest on dangerous assumptions about what the United States can actually accomplish. The United States may be the indispensable nation, but that doesn't make it omnipotent.

Foremost among the assumptions of interventionists is that an American intervention would hasten a conclusion to the war. Yet interventions don't end civil wars, they prolong them - and that's in situations when the intervening nations actually commit to winning the war. Don't take my word for it. Read George Washington University professor Marc Lynch, or the overwhelming body of academic research he cites on the subject. Or, if you have the clearance - I don't, but the New York Times knows someone who does - read the CIA's in-house report on U.S. support to insurgents. They concluded that it doesn't work and would probably be a bad idea, and their conclusions reportedly convinced President Obama. Until now.

For Once, a Positive Crisis

Edward Goldberg - November 21, 2014

The original meaning of crisis is a turning point, decisive or crucial in time, whether good or bad. The overused negative interpretation is that of a time of danger or threat. The United States is now living a real crisis - one that relates directly to the old meaning of the word.

The change in the global energy landscape - primarily due to America's fracking industry as well as advances in energy conservation - is decisively altering the American economy and America's role in the world.

Domestically, over a year's time, the drop in energy prices will allow every American household to save on average over $500. This beats any middle class tax cut. And these savings do not take into account diminished inflation as cheaper energy whether from manufacturing, farming, or shipping work their way through the economy.

Globally, the United States is now in a unique competitive position. It spends significantly less money abroad to import oil, giving its balance of payments a huge boost, and the oil it does import (America cannot produce certain grades) is on the whole cheaper than the oil other countries import.

Russia Cracks Down on Offshore Havens

Svetlana Sukhova - November 21, 2014

Originally published in Kommersant.

MOSCOW - There is nothing new about offshore tax shelters. In ancient Athens, after the government decided to levy a 2% tax on all trade operations, merchants started avoiding the city, conducting business on the surrounding islands instead. Those Greek islands became the first offshore tax havens.

The current offshore landscape evolved in the middle of the 20th century, as former British colonies decided to follow the Swiss banking example and provide clients with completely anonymous accounts, in addition to very low tax rates.

Many of these banking havens would eventually be targeted by law enforcement agencies who suspected them of laundering money for criminal organizations. Still, despite the attention, it hardly managed to kill the offshore model. Now most reputable banks and companies don't like to deal with firms that are "registered" in Belize or the Cayman Islands, but they don't have anything against the "special economic zones" that abound in Ireland, Gibraltar, Hong Kong or the United Arab Emirates.

What Is the U.S. Military Building in Chad?

Nick Turse - November 21, 2014

Admit it. You don't know where Chad is. You know it's in Africa, of course. But beyond that? Maybe with a map of the continent and by some process of elimination you could come close. But you'd probably pick Sudan or maybe the Central African Republic. Here's a tip. In the future, choose that vast, arid swath of land just below Libya.

Who does know where Chad is? That answer is simpler: the U.S. military. Recent contracting documents indicate that it's building something there. Not a huge facility, not a mini-American town, but a small camp.

That the U.S. military is expanding its efforts in Africa shouldn't be a shock anymore. For years now, the Pentagon has been increasing its missions there and promoting a mini-basing boom that has left it with a growing collection of outposts sprouting across the northern tier of the continent. This string of camps is meant to do what more than a decade of counterterrorism efforts, including the training and equipping of local military forces and a variety of humanitarian hearts-and-minds missions, has failed to accomplish: transform the Trans-Sahara region in the northern and western parts of the continent into a bulwark of stability.

That the U.S. is doing more in Chad specifically isn't particularly astonishing either. Earlier this year, TomDispatch and the Washington Post both reported on separate recent deployments of U.S. troops to that north-central African nation. Nor is it shocking that the new American compound is to be located near the capital, N'Djamena. The U.S. has previously employed N'Djamena as a hub for its air operations. What's striking is the terminology used in the official documents. After years of adamant claims that the U.S. military has just one lonely base in all of Africa -- Camp Lemonnier in the tiny Horn of Africa nation of Djibouti -- Army documents state that it will now have "base camp facilities" in Chad.

Erdogan Targets Turkish Bank as 'Internal Enemy'

Luke Rodeheffer - November 21, 2014

Turkish President Tayyip Erdogan recently convened the country's National Security Council in a record-breaking ten and a half hour session. The meeting ended with a continuing series of investigations and government actions targeting Bank Asya. Associated with the Fetullah Gülen Movement (FGM), the bank has been under a great deal of scrutiny following Turkish government reviews of recommendations from the President that the FGM should be officially registered as an ‘internal enemy'.

Though there have been no official comments on FGM's status, Erdogan's administration has been carrying out a campaign to eliminate perceived FGM movement within Turkey following a major scandal that broke in December 2013. The scandal implicated then-Prime Minister Erdogan's cabinet on charges of corruption, and the administration has reacted by purging hundreds of law enforcement officials and other state employees suspected of having ties to the movement.

But what does this have to do with the bank? Bank Asya is one of the country's top ten largest banks with nearly 300 branches and controls $14 billion in assets as of 2011. Yet, despite a great deal of its growth coming over the past decade of AKP rule, it was started through investments of $1 million raised in 1996 by FGM members, which has caught Erdoğan's eye.

Will Asya assets be transferred to state banks?

The Realist Creed

Robert Kaplan - November 20, 2014

All people in foreign policy circles consider themselves realists, since all people consider themselves realistic about every issue they ever talk about. At the same time, very few consider themselves realists, since realism signifies, in too many minds, cynicism and failure to intervene abroad when human rights are being violated on a mass scale. Though everyone and no one is a realist, it is also true that realism never goes away -- at least not since Thucydides wrote The Peloponnesian War in the fifth century B.C., in which he defined human nature as driven by fear (phobos), self-interest (kerdos) and honor (doxa). And realism, as defined by perhaps the pre-eminent thinker in the field in the last century, the late Hans Morgenthau of the University of Chicago, is about working with the basest forces of human nature, not against them.

Why is realism timeless and yet reviled at the same time? Because realism tells the bitterest truths that not everyone wants to hear. For in foreign policy circles, as in other fields of human endeavor, people often prefer to deceive themselves. Let me define what realism means to me.

First of all, realism is a sensibility, a set of values, not a specific guide as to what to do in each and every crisis. Realism is a way of thinking, not a set of instructions as to what to think. It doesn't prevent you from making mistakes. This makes realism more an art than a science. That's why some of the best practitioners of realism in recent memory -- former U.S. National Security Adviser Brent Scowcroft and former U.S. Secretary of State James Baker III -- never distinguished themselves as writers or philosophers. They were just practical men who had a knack for what made sense in foreign policy and what did not. And even they made mistakes. You can be an intellectual who has read all the books on realism and be an utter disaster in government, just as you could be a lawyer who has never read one book on realism and be a good secretary of state. Former U.S. Secretary of State Henry Kissinger was unique because he was both: an intellectual realist and a successful statesman. But successful statesmen, intellectual or not, must inculcate a set of beliefs that can be defined by what may be called the Realist Creed:

Order Comes Before Freedom. That's right. Americans may think freedom is the most important political value, but realists know that without order there can be no freedom for anyone. For if anarchy reigns and no one is in charge, freedom is worthless since life is cheap. Americans sometimes forget this basic rule of nature since they have taken order for granted -- because they always had it, a gift of the English political and philosophical tradition. But many places do not have it. That is why when dictators are overthrown, realists get nervous: They know that because stable democracy is not assured as a replacement, they rightly ask, Who will rule? Even tyranny is better than anarchy. To wit, Iraq under Saddam Hussein was more humane than Iraq under no one -- that is, in a state of sectarian war.

The Foreign Policy of a Failed Presidency

George Friedman - November 19, 2014

We do not normally comment on domestic political affairs unless they affect international affairs. However, it is necessary to consider American political affairs because they are likely to have a particular effect on international relations. We have now entered the final phase of Barack Obama's presidency, and like those of several other presidents since World War II, it is ending in what we call a state of failure. This is not a judgment on his presidency so much as on the political configuration within it and surrounding it.

The midterm elections are over, and Congress and the president are in gridlock. This in itself is not significant; presidents as popular as Dwight Eisenhower found themselves in this condition. The problem occurs when there is not only an institutional split but also a shift in underlying public opinion against the president. There are many more sophisticated analyses of public opinion on politics, but I have found it useful to use this predictive model.

Analyzing a President's Strength

I assume that underneath all of the churning, about 40 percent of the electorate is committed to each party. Twenty percent is uncommitted, with half of those being indifferent to the outcome of politics and the other half being genuinely interested and undecided. In most normal conditions, the real battle between the parties -- and by presidents -- is to hold their own bases and take as much of the center as possible.

Putin Is Merkel's Biggest Security Challenge

Judy Dempsey - November 19, 2014

On the evening of November 15, German Chancellor Angela Merkel was driven in a white BMW to the Hilton Hotel in downtown Brisbane, the capital of the Australian state of Queensland.

While other leaders of the G20 group of leading economies were finessing the final communiqué of their summit, Merkel went on to spend four hours in the hotel with Russian President Vladimir Putin to discuss the Ukraine crisis.

Their respective foreign policy advisers - Merkel's Christoph Heusgen and Putin's Yuri Ushakov - were not admitted, nor were note takers or interpreters. Merkel has fluent Russian, Putin fluent German. Jean-Claude Juncker, the European Commission president, joined the discussion halfway through.

This was Merkel's second lengthy meeting with Putin in just four weeks. On October 17, she met him in Milan. That yielded no results. Putin was not willing to give up eastern Ukraine.

War Games in El Dorado

Daniel McGroarty - November 17, 2014

As U.S. President Barack Obama wades through an alphabet soup of Eastern summits that underscore his pivot to the Pacific, media coverage has focused on the U.S.-China rivalry, spiced by the awkward encounters between the American president and the most powerful person in the world according to Forbes Magazine, Russian President Vladimir Putin.

Meanwhile back in the Western Hemisphere, a much less heralded event is taking place that is equally instructive for the future of global competition and conflict: Brazil is conducting its most extensive war game to date, sending forces deep into the Amazon rainforest to hone Brazil's capacity to secure the region against invaders.

This is no eco-warrior task force, with Brazilian brigades fanning out to protect flora and fauna. Brazil's Amazon is home to vast mineral wealth, not to mention water resources - a precious commodity in a world with a population projected to reach 10 billion by 2050.

The exercise is a testament to Brazil's strategic foresight: In the resource-development world, where massive, multi-billion dollar mining projects can take a decade to develop, it's already 2025 - at least. Given that the mines being planned today will in most cases operate for 25 years, it may already be 2050 for resource planners.

Inside the Mind of Serbia's Richest Man

Agenzia Nova - November 17, 2014

"My mother died when I was in prison. She was over 90, but it wasn't illness that killed her. She died of sadness. My father died shortly after her."

Miroslav Mišković does not show any emotion as he tells his story - not a flicker of an eye. And it's only after an hour and a half of exclusive conversation with Nova's special correspondent that he agrees to talk about his family. Serbia's richest man is also an iron man, and that's exactly the impression he wants to give. But his direct gaze, the challenging tone in his voice, cannot conceal his bitterness over the wrong he feels has been done to him, the offense he has suffered.

On Dec. 12, 2012, he was arrested on the orders of Belgrade's special court for organized crime, which accused him of distorting the market through financial operations that increased the value of a number of companies operating in the road maintenance sector. Mišković did not control these companies, he did not hold any positions on their boards, and the criminal nature of the operations was open to question. But he was kept in prison for more than 7 months, and the case caused a sensation. Not just because Mišković is Chairman of Delta Holding, Serbia's most important private company. Not just because he was the first person, in 2008, to represent the Balkans on the Forbes list of the richest people on the planet. Not just because he's a glamorous personality who surrounds himself with beautiful women whom he appoints to positions of great responsibility. But also because of the political implications of the case.

Right after his arrest, the Serbian Prime Minister, Aleksandar Vucic, declared that "there are many politicians on Mišković's side", and explained that the "system" the magnate had put in place included "monthly payments to many people, of sums ranging from 30,000 to 50,000 euros, paid from Mišković's own pocket". In the indictment, however, the word "corruption" does not appear once, and nearly two and a half years on from the arrest, no one has named any names: of corrupted or of corrupters. "In 25 years we have never done business with the state or with state-controlled companies", states Mišković. "If you don't do business with the state, there can't be corruption. I still don't know what I'm accused of".

Conditions Favor an Expansion of Putin's Aggression

Andy Langenkamp - November 17, 2014

Eight thousand glowing balloons were released last week to mark the 25th anniversary of the fall of the Berlin Wall. Unfortunately, the geopolitical context of this beautiful event is less airy and luminescent, as relations between the West and Russia sink to a post-Cold War nadir. 

Nobody expects Russian President Vladimir Putin's regime to relax its aggressive posture. However, could we be taken by surprise, just as Henry Kissinger was when the Soviet Union collapsed? Kissinger recently told Foreign Policy: "I thought I would see the collapse of the satellite empire. I did not think the Soviet Union would collapse or the Soviet system would collapse." Could Putin's leadership experience a like collapse? Or, on the other hand, could Russia further strain the pitch of its confrontation with the West?

Putin avails himself of the lack of unity and strong leadership in Europe and the United States as he tests the patience and tolerance of the West, but over the coming months, we will find out whether Putin is able to continue along his authoritarian, nationalist path. Putin faces an array of imminent political challenges: These started with last weekend's G20 summit, and will continue on Dec. 7, when Kiev wants to hold regional elections in the regions of Donetsk and Luhansk. (Ukraine believes the recent vote by the self-proclaimed Donetsk and Luhansk People's Republics is illegal.) Finally, at the end of March, the gas deal between Moscow and Kiev is set to expire. 

Western countries have long seen Putin as a scoundrel - but a scoundrel you could do business with. This has changed, and Putin now has more to worry about as sanctions and low oil prices have partly isolated and pressured Russia's economy. Putin's clique of oligarchs and intelligence operatives have lost a lot of money in the process. As a result, the Russian president is less able to trust his power base of old - which is why he is creating a new one. Putin is increasingly focused on traditional Russian values and nationalism, trumpeting a broad pitch to "the people" and to Russia's religious leaders. 

Berlin and Cape Town: Tales of Divided Cities

Geraldine Gardner - November 14, 2014

WASHINGTON - Twenty-five years ago, hammers began chipping away at the Berlin Wall, dismantling the physical reminder of a divided city that a generation struggled to destroy. The Wall was a global symbol of separation and isolation, but there was also a local reality. Despite the waves of investment that have healed the physical scars of the divided city, there are still some vestiges of the city's two former halves. A recent satellite image of the city at night shows the legacy of two systems of streetlights: the amber-hued streetlights of the former East and the white streetlights of the West. Stark contrasts in key socio-economic indicators still exist between East and West Berlin neighborhoods. This is compounded by gentrification that further concentrates income inequality, poverty, and unemployment in many eastern parts of the city. Many Berliners still reflect on the so-called "wall in the mind."

Klaus Wowereit, the affable mayor of Berlin, famously described the city as "poor, but sexy." Wowereit capitalized on the organic and entrepreneurial development of the creative scene in Berlin that was sparked because the city was affordable, spirited, and open in the post-Wall era. Yet in reflecting on Wowereit's legacy and the massive changes during his 13-year term, it is debatable how much of Berlin's revitalization was due to his policy agenda.

As Wowereit leaves office this December, Berlin faces mounting challenges, including a significant public debt that is almost twice the German per capita average. There are also the infamous examples of infrastructure projects gone wrong, notably the massively delayed and over-budgeted international airport. In addition to these structural and infrastructure challenges, Berlin, like many European and U.S. cities, needs to confront growing inequalities within its borders. Without doing so, the qualities that make Berlin a creative capital and innovation incubator could be endangered. Michael Mueller, Wowereit's successor as mayor, will likely adopt a different approach. As the chairman of Mueller's Social Democratic Party, Sigmar Gabriel, recently said: "Under his leadership, social justice and economic growth will be measures of political action."

The strategies for achieving inclusive and sustainable urban development were discussed at the German Marshall Fund's Atlantic Dialogues last month. Bulelwa Makalima Ngewana, CEO of the Cape Town Partnership, remarked that the importance of sustainability and inclusion has special significance in Cape Town, because 2014 also marks the 20th anniversary of the end of Apartheid. "We've now gotten over the euphoria of freedom and reality has set in," she said. "The gap between haves and have-nots has grown much bigger than we ever thought it could be."

What the World Economy Needs Is Reagan and Thatcher

Fabio Rafael Fiallo - November 14, 2014

The Federal Reserve has injected trillions of dollars of liquidity into markets by purchasing corporate and government bonds in three rounds of quantitative easing. The Fed's efforts can hardly be regarded as an unqualified success in ensuring a robust economic recovery.

True, the U.S. economy has grown by 12 percent since the 2007-2009 "Great Recession," with unemployment falling below 6 percent. Whether or not quantitative easing is to thank for this growth, however, the present recovery is anemic compared to the 35 percent growth achieved over a comparable period following the 1960-1961 recession, and to the 28 percent growth registered after the stagflation of the 1970s.

In Japan, too, aggressive quantitative easing has failed to unambiguously boost the economy and fight deflation.

Keynesian dogmatists have their own theory to explain these meager results - a theory tailored to their infatuation with government spending - and its name has made its way back into the lexicon of conventional wisdom: secular stagnation. The term was coined in the 1930s by Keynesian economist Alvin Hansen. Harvard economist Lawrence Summers resurrected the term, and Nobel laureate Paul Krugman has pushed it further into the mainstream.