May 17, 2013

Berlusconi's Bunga-Bunga Parties Featured Women Dressed as President Obama


Oh boy:

Silvio Berlusconi’s private disco featured women dressed not just as sexy nuns and nurses but also as President Barack Obama and a prominent Milan prosecutor the former Italian premier has accused of persecuting him.

Those are some of the details that have emerged Friday during the first public sworn testimony by the Moroccan woman at the center of the sex scandal involving Berlusconi.

I've never had the opportunity to host (or attend) a bunga-bunga party, but President Obama's likeness is about the last thing I'd want to see.

And food for thought: would Berlusconi's ladies have had to dress up as John McCain, if he won the election?

(AP Photo)

May 16, 2013

If You Are in the Business of Exporting Toilet Paper, Good News


Venezuela really needs some:

To avoid getting caught with their pants down, Venezuelan officials say they will confront a toilet paper shortage by importing 50 million rolls to meet demand.

Toilet paper is just one of the basic goods and foodstuffs that have been disappearing from store shelves over the past few months, as the government and private companies blame each other for the scarcity.

Venezuelan Minister of Commerce Alejandro Fleming announced the toilet paper measure on Tuesday, the state-run AVN news agency reported.

Repeating the government's stance, he blamed the media for provoking fear in consumers, who in turn begin hoarding items.

Venezuelans use about 125 million rolls a month, Fleming said.

(AP Photo)

May 9, 2013

This Is What Passes for Entertainment in China

In the Shanghai Wild Animal park, they race black bears and monkeys on bicycles (for some reason). It doesn't end well for the monkey.

April 29, 2013

A Brawl on Mount Everest


Many climbers have endured dire risks attempting to conquer the forbidding peaks of Mount Everest, but it's usually risks of the natural variety. Three climbers from Europe encountered a different challenge: a mob of 100 angry, stone-throwing Sherpas at 24,750 feet.

The reports of the incident are somewhat confused, but it appears the three climbers (who were all experienced), were asked to wait as their Sherpas rigged some ropes. They ignored the Sherpas and climbed ahead, kicking ice down on top of them. This lead to an angry confrontation at base camp where 100 Sherpas attacked the climbers, in some cases lobbing rocks at them. The climbers were rescued by other nearby mountaineers.

Nepalese officials are still trying to sort out what happened, but one of the climbers, Jonathan Griffith, attributed the Sherpa's rage to "a far more deep rooted and long term problem, which is the way that Nepalis feel treated by Westerners on the mountain."

(AP Photo)

April 3, 2013

'Bieber Fever' Now a Legitimate Excuse in Norway


While the world has taken note of a new Bird Flu variant in China, another, arguably more insidious, threat has flown under the radar: Justin Bieber.

Now comes word that a school in Norway has rescheduled exams in a preemptive strike against the notorious Bieber Fever. Five schools in Alesund will have their midterm exams rescheduled since those tests were due to coincide with a visit from the teen pop sensation.

John Stoll reports:

“We considered that this was a battle that we could not win this time,” Roar Aasen, the principal of the Blindheim secondary school in Alesund, told national broadcaster NRK. He expects Mr. Bieber’s upcoming show to lead to sparse classroom attendance.

Five hundred students will be affected. Alesund is about an eight hour drive from Oslo, or an hour by plane...

This year, half of the girls at Mr. Aasen’s school are expected to attend one of Mr. Bieber’s Oslo shows, according to interviews done by NRK. The Norway stop is the beginning of a Nordic leg of his current tour, which will take him through Copenhagen, two stops in Sweden and Helsinki.

Foolish capitulation or prudent precaution? You decide.

(AP Photo)

March 18, 2013

Greek Soccer Player Banned for Nazi Salute


Giorgos Katidis got himself banned for life from the Greek football federation for making a Nazi salute after scoring a goal.

The 20-year-old pleaded ignorance, writing on Twitter that "I am not a fascist and would not have done it if I had known what it meant." He has also issued a public apology.

His coach (a German) also backed him, telling Reuters that Katidis "most likely saw such a salute on the internet or somewhere else and did it without knowing what it means."

The video of Katidis' infamous shot is below. Judge for yourself.

Whatever Katidis' motivations, Greece has seen the rise of fascist-style parties, like Golden Dawn, as its economic crisis grinds on.

(AP Photo)

March 12, 2013

Ukraine Has Trained Attack Dolphins ... and They're on the Loose


Apparently Ukraine had re-started a Soviet program to train dolphins to sniff out underwater mines and kill enemy divers. Who knew? Also, three of those trained attack dolphins are now on the loose:

Apparently they swam away from their trainers this morning ostensibly in search of a "mate" out in open waters. It might not be such a big deal except that these dolphins have been trained to "attack enemy combat swimmers using special knives or pistols fixed to their heads." So if you are planning a family holiday to the Black Sea this week, I think it's best you avoid any "friendly" dolphins that might approach - especially if they have KNIVES or PISTOLS strapped to their heads.
That sage advice courtesy of scientist Justin Gregg [via MSN].

(AP Photo)

March 5, 2013

British "Batman" Actually Just Stan the Food Delivery Man


On Monday we took note of a British Batman who appeared to have apprehended a wanted criminal and deposited him in a British jail before vanishing without a trace.

Well, wouldn't you know, it turns out this caped crusader's secret identity has been revealed and it's not all that inspiring: he's 39-year-old Stan Worby, a food delivery man.

Also, he didn't capture any criminal. He was, in fact, just accompanying the wanted man for "moral support" and wore the bat suit as a joke.

Why Is the UN Dysfunctional? Maybe Because Everyone's Drunk


This really happened:

At a General Assembly budget committee meeting on Monday, the United States ambassador for management and reform at the UN stood up to scold his colleagues for always showing up drunk to negotiations. "There has always been a good and responsible tradition of a bit of alcohol improving a negotiation, but we're not talking about a delegate having a nip at the bar," said Joseph "The Fun Police" Torsella. "We make the modest proposal that the negotiating rooms should in future be an inebriation-free zone."

If Torsella sounds like a buzz kill (or a Buzz Killington), he's evidently responding to a real problem. The AFP reports that some negotiators were showing up "falling down drunk" and too intoxicated to work at all.

(AP Photo; Ed Note: Not the UN, but close!)

March 4, 2013

Batman Captures Criminal in Britain


A man dressed as Batman apparently captured a wanted criminal and dragged him into a police station in Bradford, UK. He disappeared thereafter without revealing his true identity.

From the looks of him, this British Batman doesn't appear to be following Bruce Wayne's exercise regimen.

February 19, 2013

Can a Facebook Game End the Global Sex Slave Trade?

The New York Times' Nicholas Kristof and author Shery WuDunn are attempting to raise awareness of the global trade in sex slaves through an unorthodox method: they've created a Facebook game about it.

Dubbed Half the Sky, the game is backed by an A-list of corporate sponsors and philanthropic interests like the Ford Foundation and Zynga (the creators of Farmville). The more you play, the more charitable donations you unlock.

February 18, 2013

Why Elderly South Koreans Are Killing Themselves


South Korea's 65-plus population has seen a nearly fourfold increase in suicides in recent years, according to the New York Times. In 2000, 1,161 elderly Koreans committed suicide. In 2010, that number surged to 4,378 -- one of the highest elderly suicide rates in the develop world.

According to the Times' Choe Sang-hun, one reason for the desperation of South Korea's elderly is the fraying of a "Confucian social contract" where parents depleted their savings in an effort to propel their children into the world only to rely on those same children for care in their later years:

But as South Korea’s hard-charging younger generations joined an exodus from farms to cities in recent decades, or simply found themselves working harder in the hypercompetitive environment that helped drive the nation’s economic miracle, their parents were often left behind. Many elderly people now live out their final years poor, in rural areas with the melancholy feel of ghost towns.

Such social shifts are not uncommon in the industrialized world. But the sudden change has proved especially wrenching in South Korea, where parents view their sacrifices as the equivalent of a pension plan and where those who are suffering are falling victim to changes they themselves helped unleash as they rebuilt the economy from the devastation of the Korean War.

(AP Photo)

February 14, 2013

The Next Thing to Worry About: Drug-resistant Tuberculosis Plague


There's no shortage of things to get your stomach in knots over, but just in case you were casting about in search of something fresh, researchers have found a "totally drug-resistant" strain of tuberculosis in South Africa that could kill an unspecified (but potentially large) number of people if it spreads unchecked. One virulent strain of TB broke out in New York in the 1980s and killed 90 percent of the people who contracted it. It's not clear if this current strain packs a similar punch, but researchers are reportedly working over time to study and contain it.

Besides from the obvious public health consequences, a recent report in Reuters noted that a global pandemic would cost the global economy billions. China took a $14.8 billion hit from the SARS virus, which also reduced global GDP by $33 billion, according to the World Bank. Let's hope it doesn't come to that...

(AP Photo)

Iceland Is Trying to Ban Porn on the Internet


Iceland was hailed as something of a model country by liberals for their tough approach on their banks and politicians following the financial crisis. Now, though, the country is considering using Chinese-style web filters to censor porn:

The unprecedented censorship is justified by fears about damaging effects of the internet on children and women.

Ogmundur Jonasson, Iceland's interior minister, is drafting legislation to stop the access of online pornographic images and videos by young people through computers, games consoles and smartphones.

"We have to be able to discuss a ban on violent pornography, which we all agree has a very harmful effects on young people and can have a clear link to incidences of violent crime," he said.

Methods under consideration include blocking access to pornographic website addresses and making it illegal to use Icelandic credit cards to access pay-per-view pornography.

It is already illegal to print and distribute pornography in Iceland, so this is more of an extension of existing law rather than a brand new assault against salacious material. Still, the country would be the first Western nation to ban web porn.

Iceland is currently exploring the technical ins-and-outs (if you will) of implementing the ban, but a government adviser sounded hopeful, saying, "if we can send a man to the moon, we must be able to tackle porn on the internet."

(AP Photo)

February 8, 2013

All Dogs in England to Be Fitted with Microchips by 2016


While it may be a conspiratorial fever dream among some in the U.S., "microchipping" is coming to the UK:

Come 2016, English and Welsh authorities will require all of the country's pups to have embedded microchips, so they can be returned to their owners if ever they run astray. The United Kingdom's Environment Department says some 60 percent of the country's 8 million dogs already have the tags, but beginning in three years, owners who don't spring for the device could be forced to pay fines of up to £500 (about $780). Cat microchipping will remain optional, since felines are less likely to wander outdoors.

Frankly, if the Internet has taught us anything it's that cats are the real menace here. Do we really want them running wild and untraceable?

(AP Photo)

February 5, 2013

Three Ways Iran Embarrassed Itself (Recently)

1. They paraded around a supposedly "indigenously built" stealth fighter that defense analyst Dave Majumdar said appeared to have no room for fuel, radar and weapons, after calling it a "joke" and a "GI Joe toy."


2. They boasted loudly about launching a monkey into space and returning him alive, until some analysts pointed out that the "before" and "after" monkeys looked completely different. There was also no independent verification of the rocket launch, further raising suspicions about whether the launch even occurred.


3. Their global retaliation efforts against the U.S. and Israel have largely been bungled, lead by "low-rent, kooky terrorists" who spend time at brothels and carry incriminating documents and cellphones.


(AP Photo)

February 4, 2013

These Are the Most Expensive Cities in the World to Live In


The Economist Intelligence Unit (EIU) is out with their annual Worldwide Cost of Living Survey (registration required) and Asia and Europe top the list with the world's most expensive cities to live in. The top five most expensive cities are (from most to least):

1. Tokyo, Japan
2. Osaka, Japan
3. Sydney, Australia
4. Oslo, Norway
5. Melbourne, Australia

While Europe is well represented in the top ten, the EIU notes that Asia is gaining fast. Ten years ago, they note, there were no Australian cities in the top 50, let alone the top five. North America, by contrast, fails to crack the top 20.

South Asian states, particularly India, have some of the least expensive cities to live in. But who earns the bottom spot as the least expensive city in the world to live in? Tehran, Iran. Karachi, Pakistan and Mumbai, India.

You can purchase the full report here.

(Image: HyperLemon)

(An earlier version of this post referred to Tehran as the least expensive city: it is the eighth least expensive, according to the EIU.)

January 31, 2013

The 10 Worst Places in the World to Be a Journalist


Reporters Without Borders has released its annual press freedom index and some not-so-surprising names grace the "worst of the worst" column for 2013. Here's the "bottom 10" of the list, starting at the very worst:

1. Eritrea
2. North Korea
3. Turkmenistan
4. Syria
5. Somalia
6. Iran
7. China
8. Vietnam
9. Cuba
10. Sudan

Europe, particularly the Nordic countries, continued to score well with Finland, the Netherlands and Norway rounding out the top three. The U.S. placed 32nd.

The emerging powers of Brazil, Turkey, Russia, China, India and South Africa were "found wanting" and lost ground in this year's ranking. Some well-established democracies also struggled. Italy, Hungry and particularly Greece and Japan were singled out for criticism for laws that restrict journalism.

(Image: Reporters Without Borders)

July 12, 2012

Mystery Object in Baltic Sea May Be Secret Nazi Weapon, Not UFO


Evidently people thought the picture above of a mysterious object resting at the bottom of the Baltic Sea was the Millennium Falcon. Sadly, that's not the case, but the emerging explanation is still interesting:

Divers exploring a 'UFO-shaped' object in the Baltic sea say that the strange, curved object might be a Nazi device lost beneath the waves since the end of the Second World War.

Sonar scans have shown that the device, raised 10ft above the seabed and measuring 200ft by 25ft, could be the base of an anti-submarine weapon.

The weapon was built with wire mesh which could have baffled submarine radar, leading enemy craft to crash - much in the same way as turning out a lighthouse could be used as a weapon against shipping.

But now former Swedish naval officer and WWII expert Anders Autellus has revealed that the structure - measuring 200ft by 25ft - could be the base of a device designed to block British and Russian submarine movements in the area.

The huge steel-and-concrete structure could be one of the most important historical finds in years.

June 1, 2012

Awful in Borneo

There seems to be a rash of crazy stuff in the world of late - a man eating the face off another man, a Canadian porn star mailing limbs to Parliament - and now this from Borneo:

Pony is an orangutan from a prostitute village in Borneo. We found her chained to a wall, lying on a mattress. She had been shaved all over her body....

You could choose a human if you preferred, but it was a novelty for many of the men to have sex with an orangutan....

It took us over a year to rescue her, because every time we went in with forest police and local officers we would be overpowered by the villagers, who simply would not give her up. They would threaten us with guns and knives with poison on them. In the end it took 35 policemen armed with AK-47s and other weaponry going in there and demanding that they hand over Pony.

Some days it's very hard to have any faith in humanity. (H/t: Max Fisher)

April 6, 2012

World to End in 2030

According to Australian researcher Graham Turner, who has re-examined findings from a 1970s study making the same prediction:

The study, initially completed at MIT, relied on several computer models of economic trends and estimated that if things didn’t change much, and humans continued to consume natural resources apace, the world would run out at some point. Oil will peak (some argue it has) before dropping down the other side of the bell curve, yet demand for food and services would only continue to rise. Turner says real-world data from 1970 to 2000 tracks with the study’s draconian predictions: “There is a very clear warning bell being rung here. We are not on a sustainable trajectory,” he tells Smithsonian.

Color me skeptical.

February 28, 2012

How Much Pirate Treasure Is Still Left Underwater?

Rob Goodier tries to find out:

All this undersea treasure hunting got us wondering: Just how much money is out there buried at sea? We put the question to marine archeologists, a historian, and a shipwreck hunter. Their answers ranged from "Who knows?" to "$60 billion"—and each was instructive.

An estimate of the value of sunken treasure in the world begins with a guess at the number of sunken ships. James Delgado, director of the Maritime Heritage Program at the National Oceanic and Atmospheric Administration (NOAA), estimates that there are a million shipwrecks underwater now.

December 1, 2010

WikiLeaks: Why Not Target China?


Thomas Friedman asks what it would look like if WikiLeaks poached China's secrets. He does it to set up a faux cable highlighting America's domestic shortcoming, but it's a question I had been asking myself after reading Glenn Greenwald's defense of the organization:

Ultimately, WikiLeaks' real goal appears to me to be anti-authoritarian at its core: to prevent the world's most powerful factions from operating in the dark.

So has WikiLeaks targeted authoritarian powers like China or Russia? The WikiLeaks Wikipedia page says that one of its founders was a Chinese dissident so it's possible they've been poaching secrets from China, Russia and other authoritarian powers, but clearly not with the intensity that they've gone after the U.S. Or maybe they just have not had the good fortune (in their view) to hook up with the Chinese or Russian equivalent of a Bradley Manning, the alleged source of their U.S. material. But this just belies Greenwald's assertion about the organization's "anti-authoritarian" posture - real authoritarian states don't cough up their secrets that easily and truly "anti-authoritarian" organizations just don't scoop up the low-hanging fruit from flawed democracies and call it a day.

Then again, it's not clear that Greenwald has an accurate sense of international media freedom. He writes in a different post on WikiLeaks:

Simply put, there are few countries in the world with citizenries and especially media outlets more devoted to serving, protecting and venerating government authorities than the U.S.

Obviously this is just hyperbole. But still:

Of the 196 countries and territories assessed during calendar year 2009, 69 (35 percent) were rated Free, 64 (33 percent) were rated Partly Free, and 63 (32 percent) were rated Not Free. This represents a move toward the center compared with the survey covering 2008, which featured 70 Free, 61 Partly Free, and 64 Not Free countries and territories.

The survey found that only 16 percent of the world’s inhabitants live in countries with a Free press, while 44 percent have a Partly Free press and 40 percent live in Not Free environments.

The U.S. media can be servile, corrupt and biased but the idea that there are few other countries in the world whose media is more subservient to government power than America ignores a rather huge swath of world media that is actually run by the state.

(AP Photo)

Which Cities Have Emerged Strongest from the Recession?

The Brookings Institution has kicked off an interesting project measuring the economic performance of the 150 largest metro areas in the world before and after the Great Recession. You can read the full report here. (pdf)

The cities that have performed the best during the recovery of 2009-2010 are:

1. Istanbul
2. Shenzhen
3. Lima
4. Singapore
5. Santiago

The first U.S. city to make the list is Austin at 26th.

June 22, 2009

Russia: Hedging Its Bets and Drinking Less Cognac

Russia's geopolitical position has been historically vulnerable - its history shows succession of challenges and opponents that eventually led to a military confrontation with Moscow. So its not surprising that from time to time, Russia would hedge its bets and try to burn candles at both ends in order to keep its neighbors in check. The strategy worked well in the Middle East - Russia is seen as a key player and power broker for both Israel and its Arab and Iranian neighbors.

When it comes to China, Moscow has been developing a strong military-economic relationship with its giant neighbor for the past two decades, seeking to avoid any major internal or external component to jeopardize these ties. So its comes as a surprise that Russia has had a hand in the development of a third generation advanced fighter jet for the Republic of Taiwan - mainland China's official opponent. This was reported recently by Agence France-Presse, referring to the Chinese edition of The China Times. The information source argues that technology for the fifth generation F-35 Lightning II, which is currently being developed by the American corporation Lockheed Martin for the United States and its allies, was used in creating the Taiwanese fighter.

According to The China Times, Taiwan has begun work on a new military aircraft after appeals to the U.S. with a request for the sale of 66 fighter aircraft F-16C/D. Washington, as previously reported, denied this request, not wanting to spoil relations with Beijing. Chinese journalists also point out that the plane, developed by a public company Taiwan Aerospace Industrial Development Corporation (AIDC), has two engines and has a short take-off capability. Its development, according to The China Times, was completed only after Russia sent its experts to Taiwan - the source did not specify what Russian organization or company they represented.

This is certainly a new turn for the Russian defense industry and presents a dilemma for the United States. Washington and Taipei have a very close defense relationship, even if certain military hardware is not sold to the ROC from time to time. Taiwan is one of the high-tech sources for a great deal of technology that powers high-tech American industry, as well as American military developments. Russians were always keen on seeing first hand how far Western - and US in particular - military development has advanced, since at this time, Moscow can only watch on the sidelines as America and her allies implement next- generation high-tech military gear. Did the Russians get a chance to see first hand the advanced technology that Washington sold to Taipei, and did they take good notes to take back with them? An even larger question is what this news may do to the Moscow-Beijing military cooperation. Russia has sold a wide variety of advanced high-tech aircraft to mainland China recently, including Su-27 multi-role fighter bomber. China, making sure it was able to level the playing field, quickly reverse-engineered the Russian plane and began its indigenous production under J-11 designation.

Russians recently expressed concern that China is making plans to produce its own version of an even more advanced plane that Russia sold to Beijing about 8 years ago - Su-30 Flanker multirole fighter, a more advanced version of Su-27. Since all of Taiwan's military aircraft are designed and fielded against mainland China, Russian know-how now is part of ROC's high-tech air force pointed at the mainland. One has to wonder what Beijing thinks about all this, and whether Moscow's action was a pay back of sorts for China deciding to copy Russian technology.

Russia and Belarus announced their join military exercises to take place later this year. Designated "West 2009", the strategic exercise will take place in autumn 2009, and will consist of a series of defensive drills. Russian and Belorussian General Staff of the Armed Forces in their respected Ministries of Defense recently completed the planning. The main arena of exercises will be Obuz-Lesnovsky site on the territory of Belarus, where the maneuvers will begin on September 30, 2009. The exercises will include aircraft landing with arms and military equipment for up to 600 people.

At around the same time, from September 27 - 28, there will be a separate exercise developed by the Russian General Staff that will include approximately 13,000 troops, with about seven thousand troops from Belarus, and six thousand from Russia.

On June 16, ITAR-TASS news agency, citing the Russian Armed Forces Chief of General Staff General Nikolai Makarov, reported that the tensions between Moscow and Minsk on other issues (such as previously reported arguments over the official union between two countries) will not affect plans for the "West 2009" exercise: "I think politics is politics and the military must do their job, and not confuse one with another", - stressed the Russian general.

While military issues give major headaches to many Russian officials, one of the best ways to get rid of such discomfort - not to mention the need to be in a good mood - was high-quality Armenian cognac. Armenia - and her neighbor Georgia - are some of the oldest wine and liqueur producing regions in the world, with local development dating back thousands of years. For resource-poor Armenia, export of its wine and cognac was a significant source of much-needed income. But the global economic slowdown has affected even the seemingly endless Russian appetites for strong alcohol - production of cognac in Armenia in 2009 will decline by 55-60 percent, according to the assessment of the Union of Armenian Winemakers. The drop in sales volumes is due to reduced consumption of cognac in Russia, the principal market for this products. According to the Union Chairman Avag Arutiunian, between January and April of this year, the decline in the production of brandy was 45.3 percent. Arutiunian added that such a drop in sales could result in a reduction of 20-40 per cent of Armenian grape preparation, putting many of the country''s wineries in a difficult situation. Production of cognac in Armenia grew steadily since 1999, resulting in global recognition and demand for "Ararat" and "Noah" brands.

And while Russians may drink less Armenian brandy, they certainly keep their neighbors guessing over the next Russian Ambassador to Ukraine. According to several sources, among the candidates for the post of Ambassador is Mikhail Zurabov, described by recently removed former Ambassador Viktor Chernomyrdyn as a "normal, young, dark-haired and ministerial." The Press Secretary of Russian President Natalia Timakova refused to comment on the possibility of appointing Zurabov. "We are guessing", - said Oleg Grishin, the press secretary of Ambassador Chernomyrdin, noting that Zurabov is mentioned as the first on the short list of possible candidates. The source close to the presidential administration said that the former minister has long been applied to the important diplomatic work, and is noted as the key team member of Vladimir Putin's cabinet. Zurabov worked as the Minister of Health until the fall of 2007, and has been serving as the Adviser to President Medvedev on issues of social reforms.

June 21, 2009

Peru-Bolivia: Hanging by a Thread

Peru-Bolivia relations are hanging by a thread, opined one Peruvian senator this past week. Although neither country is threatening to cut diplomatic ties with the other, the causes of the conflict are ideological and are unlikely to subside in the near future.

First there is the back and forth over the Bagua incident, where at least 34 Peruvians were killed in a showdown between the police and a group of Amazonian Indians. The latter were blockading a road that leads into the Amazon region which President Garcia would like to open up to foreign investors. President Evo Morales of Bolivia has called the government crackdown “genocide.”Morales is also fundamentally against opening up the Amazon. In a letter to indigenous leaders, Morales states that “free trade agreements break up harmonious human relationships with nature; they commodify natural resources and national cultures; they privatise basic services; they try to patent life itself."

Peru responded to the genocide comment by recalling its ambassador to Bolivia back to Lima for consultation. The government has stated that there is no excuse for Morales to refer to the Bagua incident as genocide since a United Nations special rapporteur on the situation of human rights and the fundamental freedoms of indigenous peoples declared this past week that no genocide has occurred. The Garcia government sees the Morales administration as meddling into Peruvian sovereignty and has even implied that Bolivia has manipulated the Peruvian indigenous groups in order to stir them to action.

Despite the outcry, the Garcia administration was forced to repeal the two decrees that were the cause of the crisis in the first place. On Thursday, Congress passed the bill repealing the decrees by a total of 84-12. President Garcia even admitted that it was a mistake not to consult the heads of the indigenous groups prior to implementing the decrees. This may signify that the political elite in Peru are coming to terms with the fact that indigenous groups in Peru are much better organized politically than they were in the past.

Garcia and Morales have never been on good terms since both came to power in 2006. Garcia was highly offended when Morales openly sympathized with Garcia’s main opponent, Ollanta Humala, in the 2006 elections. Humala, who comes from Incan descent, beat Garcia in the first round of voting but was knocked out in the second round when corruption allegations surfaced right before the elections.

Garcia and Morales have also knocked heads on granting political asylum to each others’ nationals. This past May, Peru granted political asylum to three former Bolivian cabinet officials accused of involvement in the killing of 63 protestors in the Andean city of El Alto in 2003 during the Sanchez de Lozada administration. The protestors (mostly Aymara Indians) were frequently blocking access to the airport as well as to oil and gas supplies. After Morales (who is also an Aymara Indian) came to power in 2006, Bolivia indicted 17 former government officials for the 2003 incident. Former President Gonzalo Sanchez de Lozada, who fled to the United States, was tried in absentia in May.

In 2007, Bolivia granted political asylum to Walter Chavez, a former member of the Peruvian revolutionary group Tupac. Chavez was facing charges of terrorism by the Peruvian government. At the time, he was working as a political aide for Morales.

The divide between Garcia and Morales is deep. Morales opposes Garcia’s push for a regional trade pact with the European Union and also criticizes Peru’s free trade agreement with the United States. Garcia is an economic liberal, while Morales is a Bolivarian leftist. If Peru’s large indigenous population continues to mobilize, then right-of-center parties may not last long in Peru. In the meantime, however, it is hard to see how Peru-Bolivia relations improve.

June 14, 2009

Peru: The Anti-Venezuela

On June 5, an ongoing dispute between the Peruvian government and the indigenous groups that occupy the Amazon region erupted in bloody mayhem. Since then, both sides have been trying to win the publicity battle. For investor-friendly President Alan Garcia, a victory would mean one thing: not following Venezuela and Bolivia as a lynchpin for foreign investors.

So far, the facts as to what happened June 5 are a bit fuzzy. As a result, both sides are trying to advance their own version. Thousands of Indians had been protesting the government’s decision to allow investors into the Amazon region to look for gas and oil. A blockade of Indians at the Bagua province forced the police to try to recover the main roads. This led to the deadly confrontation. The government places the official count of dead Indians at 10. Indigenous leaders, however, say that hundreds of protestors are still unaccounted for and that police threw some of the dead bodies into nearby rivers.

President Garcia has taken a proactive stance by defending the government’s decision to open up the Amazon region and by condemning the protestors that he believes caused the ruckus. This past week, the Interior Ministry’s office released a video that shows graphic footage of some of the police officers (24 in all) that were killed in the incident. In the video, Garcia says that the brutal police killings shows the “ferocity and savagery” of the indigenous leaders that are leading the protest. One leader, Alberto Pizango, fled to Nicaragua after being accused of sedition for inciting the violence.

In an effort to quiet the Indians, Garcia decided to suspend the decrees that originally caused the protest. However, indigenous leaders are not satisfied since he did not repeal them. This past week, thousands of protestors emerged across Peru to show their disapproval for Garcia’s policies. In some instances, police were forced to spray tear gas into the mobs.

At the heart of the issue is Garcia’s desire to see Peru continue its China-like economic growth through foreign investment. Some analysts believe that Peru’s growth may enable it to be the only Latin American country to remain untouched by the worldwide recession. Furthermore, Peru enjoys the competitive advantage of being surrounded by Venezuela, Bolivia, and Ecuador, all countries that have chosen to nationalize their energy industries. With an abundance of resources and very little regional competition, Peru has attracted investors from around the world. Garcia would like to keep Peru’s reputation for being a stable country for business.

Nevertheless, the Peruvian government has failed to take into account the political effect of not including the Indians in the negotiations over the Amazon region. There are more than 50 indigenous groups that live in the Amazon, an area that encompasses two-thirds of Peru. They represent only 1% of Peru’s total population. Because of the Indians’ small numbers, the Peruvian government has never seen the need to negotiate with them directly. However, Peru’s indigenous groups are much more organized than they used to be as evidenced by the mass protests throughout Peru this past week. The Bagua incident even caught the eye of American actress, Q’orianka Kilcher, who came to Lima to support the Indians.

Time will only tell if Garcia has pushed the Indians too far. Deadly protests are certainly not good for business.

Russia: Near Abroad Boiling All Over

Georgia is still experiencing wide-scale opposition unrest, while its government is not giving ground in a stand-off that is lasting several months. The opposition is now resorting to physical attacks on the members of Mikhail Saakashvili's government, though the attacks are not serious at this point. On June 12, a group of opposition activists - about few dozen people - attacked the car of David Bakradze, the Georgian Parliament Speaker. Some oppositioners shouted "Shame!", kicked and beat the car with sticks, while others pelted the automobile with stones and bottles. As police tried to clear the way for Bakradze's car, an altercation ensued, with several of the activists hurt as a result.

A day earlier, government opponents hurled eggs at the car belonging to the chairman of the Georgian Election Commission Levan Tarkhnishvili. According to the eyewitnesses, the incident occurred on Thursday evening at the Rustaveli Avenue when Tarkhnishvili came to the nearby theater. Interfax News Agency reported that one of the oppositioners grabbed the official's jacket and demanded an answer to the question as to why Tarkhnishvili "sold Georgia out.". Afterwards, the Georgian opposition activists threw eggs at the official's SUV.

June 12 marked the first time in the past two months that the Parliament of Georgia held an official plenary meeting. Starting in April, when anti-government protests commenced across Tbilisi, the deputies were working on a limited schedule, primarily conducting field meetings of parliamentary committees, so as not to provoke a clash with protesters in the capital. Acording to the Russian information agency REGNUM, Georgian President Mikhail Saakashvili has been forced to change residences due to ongoing protests. He moved from the capital Tbilisi to the another residence, located in Adjara region (about 250 kilometers from the capital, on the black sea coast). He still refuses to reign his post.

Saakshvilki's opposition continues to blame him in mismanaging the country's politics and resources. On June 12, Georgian opposition leader David Gamkrelidze accused Mikhail Saakashvili that he sold to Russia the country's only main railroad. Speaking at a meeting held in front of the Parliament of Georgia, Gamkrelidze said: "What other crime can the country's main official do? We already have a divided territory, strategic objects are sold to Russia...the country lost investments because of President's actions...." Gamkrelidze also noted that the contract for the sale of the rail road has not yet been signed, due to the fact that protests continue in Tbilisi. According to the Interfax News Agency, Chairman of the "Russian Railroads" Vladimir Yakunin is due to arrive in Georgia, with one of the possible topics for his visit to be the discussion over the sale of the Georgian railway. The representatives of "Georgian Railways" Joint Stock Company, denied information on the planned visit by Mr. Akunin.

In a move sure to further shake up the tumultuous Russia-Ukraine relationship, by the special decree of the President Medvedev, Victor Chernomyrdin was released from the post of Russian Ambassador to Ukraine. He was appointed to another post - a special representative of President of the Russian Federation on economic cooperation with former Soviet States.

Chernomyrdin, speaking at a June 11 reception at the Russian embassy, dedicated to the Day of Russia, bid farewell to Ukraine: "I am finishing my stay in Ukraine ... Thank you for everything" - said the already former ambassador.

Chernomyrdin was appointed an Ambassador Extraordinary and Plenipotentiary to Ukraine in May 2001. Prior to that, he was a deputy of the Russian State Duma, and president of the board of directors of Gazprom, Russia's mainstay energy giant. A seasoned and experienced politician, he served as Chairman of the government under President Boris Yeltsin in 1992-1998. In March 2009, Russian President Dmitry Medvedev awarded to Chernomyrdin the "Order of Merit" for his contribution to strengthening the international authority of Russia.

The Russian Ambassador was not always well received in Kiev - largely due to his sharp comments about the host country. For example, in February 2009, the Ukrainian Ministry of Foreign Affairs delivered an official note of protest to the Russian diplomat, because "he allowed himself to say unfriendly and very undiplomatic comments about the country and its leaders." In particular, Chernomyrdin said about Viktor Yushchenko - Ukraine's President - that "at first impression, he looks like a normal guy," but then expressed his hope that "more normal, sober people" will come to Ukraine;s government in place of its President. in Russia, Chernomyrdin is famous for his iconic quote: "We wanted to do better, but ended up as always."

President of Belarus Alexander Lukashenko has instructed officials to prepare proposals on the introduction of customs and border clearance on the Belarusian-Russian border, similar to that which exists on the Russian side. At present, there is no official customs structure in place between the two countries. The move is explained as a possible response to the fact that Russia has not provided a $500 million loan to Minsk, an act that triggered an angry reaction from the Belarusian president.

June 7, 2009

Russia Scaling Back at Economic Forum

The global crisis continues to affect Russia, including its premier economic forums, long held as indicators of the country's economic health. The mood is very different this year at the St. Petersburg Economic Forum, the main economic and investment event in the Russian Federation, which draws the top commercial and political elites from all over Russia and the world. The Forum's budget is scaled back significantly, and even the entertainment for the rich and influential will be different - last year's "Pink Floyd" concert will now be replaced by the music group "Duran Duran." The guest number has been cut from 2,500 to just 1,500, and each will be fed by traditional Russian cuisine at 100 Euros per person. Last year, participants arrived on private yachts that barely fit on the embankment of the Neva River. Now, according to the St. Petersburg Governor Valentina Matvienko, everything should be done "modestly, but with dignity." This year, instead of sailing to town on their yachts and private ships, the businessmen will arrive on their personal aircraft - St. Petersburg "Pulkovo" airport is prepared to accept 150 private planes.

At the opening of the Forum, Anatoly Chubais - former MP and Chairman of Russian Nanotechnologies State Agency - signed an agreement to create the largest production of solar cells in Russia, and commented on major economic issues and trends: "No one can say what will happen to the economies of China and the United States. It is now clear that Russia is fully dependent on them." Alexander Shokhin, President of the Russian Union of Industrialists and Entrepreneurs, joked: "If we all stand on our knees and pray for the U.S. economy to revive, our country will also bounce back from the crisis."

Elvira Nabiullina, Minister of Economic Development, confirmed that the risk of the "second wave" of the crisis still exists, but in her opinion, Russia has all means to weather the troubles. According to Sergei Polonsky, chairman of one of the largest real estate companies, "this autumn in Russia, there will be a sharp increase in property prices - real estate will cost more than before the crisis."

Russian business was presented in the former imperial capital by the country's commercial elite, since the absence at the forum can be regarded as a sign that one's company is in trouble. Politicians and economists have also sought to reassure investors and businessmen - the Head of Russian Savings Bank German Gref said that the fall in GDP in Russia is slowing down every day: "In the second half of the year, we will see stabilization, after which the country will begin the economic revival."

At the forum, Minister Nabiullina met with Catherine Ashton, European Commissioner for Trade. Both discussed the possibility of Russia's entry into the World Trade Organziation. Nabiullina noted that this year Russia marks the sad date - 16 years of country's attempts to join the WTO. At the end of negotiations, it was stated that Russia may join WTO before the end of the year.

Belorussian President Lukashenko spoke to the Russian media about his country's relationship with the Russian Federation, noting that his republics's strategic support for Moscow is "priceless." With that backdrop, he noted that Russian economic assistance to Minsk during current global crisis is "inadequate." Speaking of the external threats to Russia (in particular, on the part of NATO), he said that "no tanks ever had an easy path through Belarus towards Moscow, and this will remain for the time being." The President urged Moscow to pay closer relationship to the strategic importance of Belarus to Russia: "You think that ten million people who are now a shield for Moscow - is that free? Is Belarus unimportant to you? Important. Who now performs an important function? Belarus - Air Defense, Army and so on. You that think that all of this should be pro bono?"

In the autumn 2008, Russia has agreed to grant Belarus a two billion dollar stabilization loan, but so far, Minsk has received only $500 million from this amount. Some observers believe that further financial support depends on the consent of the republic to recognize Abkhazia and South Ossetia, which was long sought from Belarus by the Russians.

In an interview, Lukashenko did hint that money was offered for the the recognition of the two break-away Georgian republics: "I said to the Russian leadership that we can solve this problem. But nonetheless, they said that if we recognize Ossetia and Abkhazia, there will be $500 million dollars." During the interview, Lukashenko gave no definitive answer whether his country will recognzie the provinces.

Ongoing opposition protests in Georgian capital Tbilisi are becoming more dangerous to the participants - on June 3rd, unknown individulas kidnapped two female activists of the youth wing of "Democratic Movement - United Georgia," headed by Nino Burjanadze, former Speaker of the Parliament. The criminal investigation has been launched into the event, but the Ministry of Internal Affairs has not officially commented about the incident. The victims reported that the kidnappers pushed them into the jeep, took to the outskirts of Tbilisi, and stopped near the cemetery. The young women were asked questions about their political party, and one of them was beaten. Both activists were released about six hours after the abduction.

Guatemala: The Next Mexico

There is wide speculation that Mexican drug traffickers may be setting up shop in Guatemala in light of President Calderon’s war against organized crime. A recent article in the LA Times, “Drug Violence Spilling Into Guatemala,” highlighted the increasing presence that the Zetas and the Sinaloa cartel are having with the crime-ridden Central American country. The transfer, however, may be more indicative of the adaptable nature of drug trafficking than of any real success of Calderon.

Since 2008, there have been at least 30 members of the Zetas arrested in Guatemala. The Zetas, former Mexican special forces turned drug traffickers, have been working with members of Guatemala’s special forces, the Kaibiles. In a recent raid that left five anti-drug agents dead, Guatemalan forces retrieved eight anti-personnel mines, 11 M60 machine guns, bullet proof vests and two armored cars that investigators say belong to the Zetas. There were 3,800 bullets and 563 grenades recovered that defense officials say once belonged to the Guatemalan military.

Guatemala seems like a logical choice for drug traffickers wanting to escape the heat of President Calderon’s war. It has all the characteristics of a country where drug lords can hide with impunity. High corruption and weak institutions have ravaged Guatemala since it ended a 36-year civil war in 1996 between the military and leftist political groups. Poverty is rampant; less than 10 percent of the population owns 70 percent of the land. This means that rich drug lords will find no shortage of peasants (and government officials) willing to help out for a few extra bucks.

Criminals and gangs already operate within Guatemala with impunity. Most Guatemalans have no faith in the police to end crime. According to the UN, fewer than 5 percent of all crimes even go to trial. Guatemala has a paltry police force of only 20,000 officers. In last year alone, there were over 6,000 homicides in Guatemala which experts say were mostly drug-related.

Furthermore, Guatemala is going through a political crisis right now that could possibly end in an all-too-familiar military coup. On May 10th, Rodrigo Rosenburg, a Harvard-educated lawyer, was gunned down while bicycling on a busy avenue. Fours days before his murder he made a video in which he began by saying, “If you are watching this message it is probably because I have been murdered by President Álvaro Colom…” Rosenburg claims that the Guatemalan president has been funneling drug money through some of the social organizations that his wife runs. President Colom, who in 2007 became the first leftist to win the Guatemalan presidency since the CIA ousted Jacobo Árbenz in 1954, must defend himself against these charges as well as involvement in the murder if he wishes to stay in power. Guatemala is already approaching failed statehood. Any political crisis may only hasten its decline.

The United States government has apportioned $10.6 million of the multiyear $1.4 billion Merida Initiative to go to Central American countries. Guatemala has already received its first installment of $10.6 million. However, some of the same arguments that were made against sending money to Mexico can be more accurately made against Guatemala. First, with so much corruption, how can the United States be sure that the money is being used properly? Second, will a militarized approach that has been the focus of Plan Colombia and the Merida Initiative be successful in ending drug trafficking in Guatemala?

Calderon’s crackdown in Mexico has no doubt led traffickers to find different routes to the United States. However, the United States and Latin American countries have been successful in shutting routes before (the Caribbean route through Miami in the 1980s). With so much money to be made, traffickers have shown the ingenuity to simply find different ways to get to the United States. The latest interest in Guatemala among drug lords is only in keeping with the adaptable nature of the business.

Meanwhile, Guatemala teeters towards becoming the next Mexico.

May 31, 2009

Russia: Some Confidence Amid Economic Warnings

Russian political establishment is brimming with rumors over possible "retirement" or "alternate promotion" for Anatoly Srdyukov, the country's Defense Minister. Currently, he took two weeks off for vacation, which he will spend in Russia. As reported by the daily "Izvestia", "according to experts, there are many formal reasons for the departure of Defense Minister Serdyukov. The main reason is the reversal of military reforms that he championed for a long time In fact, recently, Defense Minister admitted that the country will have to wait with the formation of the "new" Armed Forces. Even the redesign of the military uniform itself has been canceled - the army has no money. The ongoing reduction of all troops from 1.2 million to 1 million active personnel has not gone well - officers complained about lack of severance payments and lack of promised housing."

There are even predictions of possible successors to Serdykov - all of them with actual military experience and credentials. However, Kremlin officially refutes Serdyukov's possible resignation. "There is no reason for this - this is nothing more than unfounded rumors," a high-ranking source told "Izvestia." The paper notes that at a recent military panel, President Dmitry Medvedev publicly and fully supported Serdyukov's military reforms.

While Russian economists and politicians are battling the ever growing economic downturn across the country, Russian defense exporters are preparing for a brighter outlook for domestic military hardware. Russian helicopter industry is gearing up for the global growth in civilian, military and dual-use rotocraft. In order to gauge the global demand, Moscow launched in 2008 an exposition called "HeliRussia", in which domestic and international companies exhibit their products for an international audience. According to Andrei Reus, Chairman of "Oboronprom" Defense holding - which includes domestic helicopter producers - Russia is steadily gaining momentum in rotocraft production. This year alone, the holding company plans to produce 200 new helicopters, and by 2015 - to take 15% of the world rotorcraft market.

Heli Russia took place in Moscow for the second time, aiming to demonstrate the achievements in the design, construction and maintenance of helicopters. Chairman Reus is optimistic: the portfolio of orders for the helicopters produced in Russia is 400 units for the next few years. Oboronprom's ultimate aim - to bring sale profits to 400 billion rubles($13 billion). Given such a huge number, is such a prognosis realistic, with intense competition from American and European firms in the global rotocraft industry?

It appears Russian helicopter companies are not just banking on the new orders, but on the long-term maintenance of existing machines all over the world. This year, domestic designers have something to be proud of - they started serial production of two combat helicopter models - Mi-28N and Ka-52. There is also ongoing work on the new transport helicopter Mi-38, which will soon be presented to the international as well as the domestic market. The situation for the domestic helicopter industry is so optimistic that for the first time in many years, Russian engineers started talking about launching work on a fundamentally new class of high-speed next-generation helicopters. This project will be the joint work of "Kamov" and "Mil" companies, which are designing Ka-92 and M-X1 models. Both are still in the mock-up stage - however, according to the chief designer of "Kamov Helicopters" Sergey Mikheev, designers in both firms are actively working on the concepts. Both firms are trying to catch up and compete with American "Sikorsky" company, which is developing X1 and X2 high speed helicopters with reconnaissance and intelligence applications. However, even with the new and advanced machines up win the air, the world will still fly on older Mi-8 Soviet-made models for the next 40 years, according to designer Mikheev. Mi-8 helicopter was put in serial production in late 1960s, and is the most massively produced rotocraft in the world.

This past week, Prague hosted a forum titled "Dialogue of Civilizations", which brought together Russian ad European economists and policymakers to discuss current problems, such as economy and social development. The forum's president, Vladimir Yakunin, spoke at length about what awaits Russia and Europe in the next decade. According to Yakunin, "the wild disparity between the value of the real economy and paper money has long been clear. Once again, humanity - and Russia in particular - had received confirmation of the biblical commandment "do not make idols unto yourself to worship." First, there was an idol in the form of socialist theory, which, perhaps, remains the most advanced theory. Then we announced on the ruins of the socialist system that socialism is completely discredited - which is only partly true. And then we got caught hold of the neo-liberalism - the theory of post-modern or, as it is called, the information world."

Yakunin further explains: "The current crisis has proved that there is no absolute truth. And when we unquestionably accepted certain designs, which originated from seemingly safe sources - the United States or Great Britain - the negative result was predictable and straightforward. When we choose shrubs for the summer planting area, we are looking for plants that are adapted to the environment in which we grow them. If such plants are not adaptable, then we keep them at home in pots. Its the same with the economy - we can't blindly take anything and try to forcibly introduce into another society. This, I believe, is a very serious, cruel lesson - and not only for Russia."

Yakunin further echoed the growing sentiment in Russia, which advocates for the country's unique approaches to economic, social and internal problems: "During the conference, we devoted a lot of time understanding what is a natural process of interaction, and what is standardization and unification of norms. We are opposed to standardization. Even if there is a universally recognized human value, we must understand that what is "value" for Europeans, may not be the same for the Arab or African society." On the ongoing crisis, Yakunin was pessimistic: "Our Center for Problem Analysis and Public Management makes a pessimistic forecast, assuming that the crisis may come in waves and new wave could bring down the global economy in 2017. We are not able to predict the level of such a future crisis, but it is possible to reduce the the level of risk by making conservative decisions - because the errors associated with risk taking often manifest themselves over decades."

When asked to what extent Russia can consider itself to be a European country, Yakunin answered: "Europe - its not just about geography - its culture, religion, history, tradition. From this point of view, Russian people and people from Poland or Germany have much less in common, than we have with our neighbors from Kazakhstan, although they are not European. With Kazakhs, we share a common culture,common history, we have a large common ideology... When we talk about how Russia relates to Europe, we are primarily talking about the economic system. However, Russia has not yet determined who she is - Asian or European? My personal feeling is that I am a citizen of Russia, I am Russian - and that is enough for me."

Venezuela: Chávez's Persecution, and No Debate

Jorge Castañeda, Mario Vargas Llosa, and Enrique Krauze at the Cedice symposium.

Simon Romero of the NYT reports on Raul Baduel's arrest, Chávez Seeks Tighter Grip on Military, the purpose being

Since February, Mr. Chávez has moved against a wide range of domestic critics, and his efforts in recent weeks to strengthen his grip on the armed forces have led to high-profile arrests and a wave of reassignments.

These are seen here as part of a larger effort by Mr. Chávez to cement loyalty in the military, where some officers are growing resentful at what they see as his micromanagement and politicizing of a proud and relatively independent institution.

Romero's article names former members of the military Raúl Baduel, Carlos Millán, Wilfredo Barroso and Otto Gebauer, all who have been arrested. Jaime Requena, biology professor at the Foundation Institute of Advanced Studies of Venezuela, was fired from his job after criticizing science funding under Chávez.

But Requena, Baduel, and the others are not alone.

Readers of this blog remember that Chávez is actively persecuting the opposition: Manuel Rosales obtained political asylum in Peru after finding out that he had been sentenced to a 30-year jail term without a trial. The governors of the states of Miranda, Carabobo and Táchira, states that Chávez does not control, are under pressure. The mayor of Caracas had the most populous borough removed from his authority and placed under a Chávez appointee. Vehement Chávez critic and journalist Teodoro Petkoff is under investigation.

In the middle of this oppression, Cedice (Centro de Divulgación del Conocimiento Económico), a Venezuelan pro-free trade think tank, is holding a very high-profile symposium. The national guard, an education ministry official and state TV interrupted the seminar, in an effort to shut it down. But there was more to come.

This week Chávez demanded that Globovisión, the last remaining independent TV station in the country, be punished, i.e., closed. A property of station president Gillermo Zuloaga was raided last week and now Zuloaga is charged with the "illegal storage" of Toyota pick-up trucks.

Globovisión has not demurred; to the contrary. Globovisión broadcasted the attempts to shut down the Cedice seminar. Additionally, when writers Álvaro Vargas Llosa and his father Mario Vargas Llosa were detained upon arrival at Caracas airport, the station broadcast live Álvaro's call from the airport and later interviewed him live as soon as he was released on Wednesday.

The news of the Vargas Llosas' detentions rippled through Latin America: a committee of the Brazilian senate was to ask the Venezuelan government for an explanation for the "humiliating act."

Both writers, along with Mexican historian Enrique Krauze, former Mexican foreign minister Jorge Castañeda and Colombian writer Plinio Apuleyo Mendoza are featured speakers at a conference on freedom and democracy at Cedice, a Venezuelan think tank. During a TV interview, Álvaro Vargas Llosa explained that,

“We have come to share the idea that political freedom is fundamental for Latin American civilization. The ideas that economic freedom and respect to private property are basic ingredients for prosperity.”
Chávez is in the middle of a four-day-long cadena, celebrating the 10th anniversary of his TV program Aló Presidente, which all licensed TV and radio stations in the country have to broadcast live. During yesterday's rambling monologue he invited the conference speakers to debate him live at 11AM Saturday morning. Mario Vargas Llosa agreed almost immediately after Chávez issued the invitation, on the condition that it would be a debate with Chávez himself. Enrique Krauze also agreed, requesting that there be clear rules for a debate so it wouldn't become a [Chávez] monologue, saying
"It would be a splendid opportunity for the Venezuelan TV audience, who for ten years have watched president Hugo Chávez daily for four or five hours, in an almost total monologue."
Jorge Castañeda also agreed under the same conditions.

I have met Mario Vargas Llosa and he is a brilliant speaker, a most erudite and knowledgeable man with a first-rate mind. I have also met Enrique Krauze, who is equally impressive. You better have all your ducks in a row if you're going to debate any of the two, much more so if you are going to debate the two together.

Chávez must have recognized that; he backtracked.

At first Chávez refused to debate Mario Vargas Llosa, stating "In order for me to debate Vargas Llosa, he would have to be president of Peru," but later on he stated he would moderate the debate between the Cedice participants and his - unnamed - supporters,

"I can help as moderate the debate, but the debate is among intellectuals, and I am simply a president, a soldier."
Of course, Mario Vargas Llosa, upon hearing that, deplored that Chávez is not a man of his word and denounced that Chávez wasnot interested in a dialogue, since "autocrats do not know how to dialogue."

Chávez canceled today's TV show with no explanation.

Mexico: Electoral Purity

What do you do if you are a Mexican politician wanting to get your message out to the public? Well if you are Demetrio Sodi, a PAN candidate for one of the 16 jefes delegacionales that make up Mexico City, you sneak an interview during the semifinals match between two of Mexico’s most popular soccer teams. Of course, Sodi’s interview has not been without a great deal of controversy.

Sodi’s main opponent, Ana Gabriela Guevara (PRD), a retired track star, is claiming that Sodi violated election rules by spending more money than is allowed for the interview. Sodi says that he just happened to be at the game and so the commentators asked him a few questions. He denies paying Televisa (the company broadcasting the game) anything. Guevara and the PRD claim that no broadcasting company gives out free interviews during such an important soccer game and so Sodi must be cheating.

Guevara and Sodi are running for the delegation of Miguel Hidalgo, one of the most important jefes delegacionales in Mexico City. Some of the ritzy neighborhoods and famous landmarks of Mexico City lie in Miguel Hidalgo. Furthermore, Miguel Hidalgo is the only jefe delegacional that is currently controlled by the PAN. The importance of the race means that the IEDF (Electoral Institute of the Federal District) has had to intervene. It will be until at least October before the IEDF reaches a decision on the case.

The IFE (the federal version of the IEDF) has also been busy with complaints about other illegal political practices. The General Counsel of the IFE has recently agreed to more than double a fine against the PAN for distributing ads with the headline, “PRImitivo.” This is a word that combines the PRI party with the Spanish word for primitive. The PAN were originally fined 465,800 pesos on the 20th of April. This past week, the IFE unanimously agreed to increase the fine to 931,600 pesos. On the other hand, the IFE refused this week to stop pro-Pan advertisements by a wrestler, Místico, and a taekwondo medalist, Iridia Salazar. The report by the IFE determined that “the promotional statements are not susceptible to producing irreparable damage to the complaining party, neither does it violate the governing rules of the electoral process, and so it does not encompass a constitutional violation (my translation).”

This has all occurred in a week when government officials have been forced to deny claims that a recent crackdown on mayors in the state of Michoacán was politically motivated. The government believes that the mayors and local officials that were arrested all had ties with La Familia, a drug organization that operates in Michoacán. La Familia has recently been designated by Mexico’s Attorney General as being the most dangerous gang in Mexico because of its ability to influence politicians through bribes and intimidation. The debate over the purity of the government’s motives will more than likely continue for the coming weeks while the mayors are tried in court.

May 24, 2009

Russia: Medvedev Says Summit Going Well

According to President Medvedev, the ongoing Russia-EU summit in Khabarovsk is going well. This time, the meeting took place in Russia's remote corner of the Far East, a great distance from Western Europe and its EU member states. "I hope we will continue to have such meetings at various locations in my state. Russia is a large country, with lots of remote and unexplored corners," said Medvedev at a press conference."We talked about current issues of our time such as the financial crisis, the measures being undertaken in our countries to combat this problem, and concluded that the end of the crisis is not yet near, and no one has any idea when we will reach that stage. A similar incident took place in Januray. Perhaps this is a subject that is worthy of the highest attention," said Medvedev.

He noted that at the summit, participants discussed energy security. Medvedev believes that the leadership of the European Union has shown interest in the initiative of the Russian Federation to establish a new legal framework for international cooperation in the energy sector: "It seemed to me that our European partners showed an interest in this idea," as Medvedev expressed hope that the discussion of the Russian initiative will continue, stressing that its implementation is "manifestly in the interest" of European partners.

"At the summit there was also talk of a strategic dialogue. We returned to the subject of a new basic agreement," explained the Russian President. "We are satisfied with the pace of these discussions. The very conversation on this dialogue indicates the similarity of our positions. Hopefully, further harmonization of conditions will take place without undue delay," said the president. He noted that during the summit, the sides exchanged views on the unsettled situations in Europe, such as Cyprus and Kosovo, discussed the security situation in the Caucasus, and the conflict between Georgia, South Ossetia and Abkhazia. "We have talked about the situation in Moldova, discussed the Middle East problem, discussed the Iranian nuclear program, discussed the situation in Afghanistan and Pakistan," said the president. "It was a constructive, candid conversation, which is very gratifying, since such candor is important to dealing with situations in different places," said Medvedev. "I am pleased with the outcome of our joint work," summed up the Russian president.

Meanwhile, official indicators painted a worrying picture for foreign direct investment in Russia - it fell by at least 30% in the first quarter of 2009, while direct investment has fallen by 43%. Foreign investors view Russia as unattractive because of the debt burden of companies and frequent intervention by the authorities. However, experts note that they expected greater drop in FDI in Russia. Now, given the devaluation of the ruble, investors are interested in import-substituting industries. The statistic notes that most of the money that came from abroad is of Russian origin.

According to Rosstat - Russian Statistics official agency - in the first quarter of 2009, foreign investments in the Russian economy fell by 30% to 12 billion dollars. At the same time, the number of direct investment fell to 3.182 billion dollars, which is 43% lower than in 2008. The most active investors in the Russian economy are companies from the Netherlands, Luxembourg, Germany, Greece, Great Britain, the United States and France. The share of these countries accounted for 76.2% of all foreign money poured into the Russian economy. One financial analyst who asked to remain anonymous noted that the list of these investment leaders are headed by Netherlands and Cyprus - countries with lots of offshore companies, so often what should be "foreign" investment actually turns out to be money previously withdrawn from the country by the Russian entrepreneurs.

The newest and most expensive US fighter planes - the F-22 Raptors - are getting their official workout. On May 21, they were scrambled to intercept two Russian Tu-95 strategic bombers off the coast of Alaska. The contact with American planes was confirmed by Lieutenant Colonel Vladimir Drik, Assistant to the Chief of Russian Air Force. Tu-95MS aircraft performed air patrols over neutral waters of the Arctic Ocean and in the vicinity of the Aleutian Islands. The Russian crews were practicing their skills in flights over unmarked terrain. It should be noted that the Russian strategic aviation has begun to regularly carry out training flights of patrolling the neutral territory. Russian military insists that its aircraft are not violating the borders of other states, although NATO fighters often are scrambled to escort Russian Air Force bombers in flight. A similar incident took place in January of this year, when four American F-15 fighter plane escorted two Tu-95 bombers off the coast of Alaska.

The Trial Chamber of the Berlin Court ordered the German newspaper Bild to publish a retraction of the fact that Yuriy Lutsenko, the Head of Ukrainian Ministry of Internal Affairs, and his son Alexander, staged a drunken brawl at the Frankfurt airport, according to the Ukrainian agency UNIAN, with reference to the Ukrainian Minister's lawyer Genadi Lewinsky. "The court rendered a decision in relation to the Internet edition of Bild, which obliges it to publish a retraction," said Lewinsky. The German newspaper Bild reported that on May 4, German police detained Lutsenko together with his son after a supposed run-in with local law enforcement. According to the newspaper, the Minister and his 19-year-old son were under "severe influence" of alcohol and because of their "inappropriate" behavior, they were not allowed to board their flight to Seoul.

Mexico: Dirty Politics

The head of the left-wing PRD (Party of the Democratic Revolution), Jesús Ortega Martínez, has asked the heads of the other two major political parties (PRI and PAN) in Mexico to refrain from a “campaign of disqualifications” that have caused political apathy among Mexicans. Ortega noted that this “politics of the alleyway” only hurts democracy in Mexico. Ortega cited three recent instances that have contributed to the perception among Mexicans that politicians are self-serving and corrupt.

First, two books released this year have cited alleged corruption with previous presidents. Carlos Ahumada, a businessman convicted of corruption related crimes in Mexico City in 2004, has released Derecho De Replica (Right of Reply) which tells a story of a corrupt former PRI President Carlos Salinas. Starting in 2004, Ahumada had videotaped himself (his face covered) offering bribes to different associates of Andrés Manuel Lopez Obrador, the PRD candidate running for president. Salinas then orchestrated the release of the videos in an effort to discredit Lopez Obrador. He also used the videos to negotiate with PAN president Vicente Fox for the release of his brother, Raul Salinas, who had been convicted of homicide charges. Ahumada’s book made public suspicions that had already existed among many Mexicans; that Salinas contributed to Lopez Obrador’s .56% marginal defeat in 2006.

The other book released this year that has caused a political stir was former PRI presidential candidate Roberto Madrazo’s book, El Despojo (The Plundering). Madrazo has accused former presidents Ernesto Zedillo and Vicente Fox of protecting certain drug cartels. He also accused President Calderon’s administration of being the head of a system that is opposed to true democratization.

The second reference that Ortega made was to the brutal fight between PRD Senator Ricardo Monreal of Zacatecas and Zacatecas Governor Amalia Garcia. This past week, allegations were made that 14 and ½ tons of marijuana were found at a chili-drying facility owned by Monreal’s brother, Cándido Monreal. Ricardo Monreal has stated that the marijuana was planted at Cándido’s property by the Monreal family’s rivals, Zacatecas Governor Amalia Garcia and her daughter, Senator Claudia Corichi. The Monreal and Garcia families are competing for Mexico’s fractured leftist party in Zacatecas. The allegations have caused Senator Monreal to take a leave of absence from his Senate seat until the allegations are cleared up. For Garcia, she has been forced to deal with a 53 man prison break in Zacatecas which included known members of the Zetas.

Lastly, Ortega made reference to former PRI President Miguel de la Madrid’s comments concerning his hand-picked successor, Carlos Salinas. De la Madrid stated that he regretted choosing Salinas as his successor because he thought that Salinas was corrupt and that his brother, Raul, was involved in the drug trade. In 1995, Raul was sent to prison on homicide charges. The charges were dropped a decade later, possibly because of the influence of Ahumada’s videotapes. A few hours after de la Madrid made the comments, he renounced them stating that he had misspoken because he was old and infirm. Nevertheless, Raul has become of symbol of the corruption that existed within the PRI party when they dominated Mexican politics for 71 years (until President Fox and the PAN came to power in 2000).

Politics in Mexico has always been rough. With congressional elections due in July, one can expect that it will only get rougher.

May 17, 2009

Russia: Decoding Georgia and Economy

Russian media is trying to figure out where the political opposition in Georgia is heading - and whether their present course of action is beneficial for Georgia and future Russia-Georgia relations. As reported by the daily "Izvestia," "any agreement between current belligerents that leaves in power the leader of the "Rose Revolution" is akin to political suicide for the opponents of the president. The resignation of Saakashvili, by contrast, guarantees them a long and comfortable existence. The dilemma stems from the social order - according to the opposition leaders, "we did not bring people to the streets, they brought us out. ...""

The Russian paper analyzes further: "Saakashvili himself is resented by most of the population. A month ago, his approval rating did not exceed 11%. It is said that now, it's even lower. We can argue for a long time why Georgians together traditionally choose a national leader, and then just as traditionally band together for his overthrow. But the situation with Saakashvili is a unique one. Giorgiy Gachechiladze, host of a live reality show "Camera Number 5," reads a long list of sins of the President under the title why he should go. The list is bloody, and not just because of the war in South Ossetia. The Rose Revolution of 2003 - with all its democratic trappings - in fact turned out to be "a revolution against the handkerchief." But Saakashvili-liberal was in the process transformed into Saakshvili-bolshevik, whose aim was to create a new type of Georgian citizen. Ideally, the result of this experiment should have been a satisfied, obedient, confident and selfish man. Looking at some of the government authorities, we are convinced that the president has succeeded in his aims on a certain level. But then the process stalled - either the Georgians did not want to give up their personal advantages and disadvantages, or they refused to give up their identity, history, culture - and freedom. That sounds, perhaps, a bit stilted, but this is indeed the case."

Citing past support from the West, Izvestia notes that "at this time the Americans are perceived to hold neutrality in Georgia. It is said that Washington banned the President of Georgia from using force against the demonstrators. Nevertheless, the level of anti-Americanism in the ranks of protesters is considerably high. Especially after the comments of Matthew Bryza,representative of State Department, and U.S. Ambassador to Georgia John Tefta. The protesters are chanting: "Bush is gone - they [diplomats] remained." And most of the protesters are just laughing at the Europeans, since a prominent British political figure blamed the Georgian opposition by saying that "... in the UK, such issues are dealt with in Parliament." Izvestia notes that today, the Georgian parliament consists of only two real opposition figures, a dozen representatives of the "so-called opposition" and some one hundred supporters of President Saakashvili.

For its part, the Georgian opposition is ratcheting up pressure on the current administration - starting May 14, a new wave of protest commenced in Tbilisi, calling for the resignation of President Mikhail Saakashvili. The new protests should conclude with a mass popular demonstration on May 26, Georgia's Independence Day. If that actually takes place, the Georgian leader, known for his passion for pompous activities, may "lose" the traditional yearly military parade on Rustaveli Avenue in the center of the city. Therefore, the authorities are trying to divide the ranks of the opposition. The opposition maintains that its main requirement is holding of early presidential and parliamentary elections.

Meanwhile, Sergei Bagapsh, President of Abkhazia (a Georgian break-away province), was recently asked by a journalist whether, in the near future, Abkhazia will turn to Moscow with a request to join the Russian Federation. Bagapsh retorted back: "How can we contact Russia on this matter in the near future, if Russia has recently recognized us as an independent state?" Russia has recently officially recognized Abkhazian and South Ossetian borders as official borders of independent countries. Georgia, United States, European Union and a host of other countries maintain the territorial integrity of Georgia that includes these two breakaway regions.

Russia is seriously banking on the emergence of Asia as a counter-weight to the United States in global affairs, and is making necessary preparations for such a reorientation. Daily "Izvestia" comments on this emerging trend: "Asia seems tired of looking U.S. "in the mouth", putting its well-being at the mercy of the world's largest economy. It is the Asian countries that are most interested in changing the existing world order. What was the situation like before? China was producing consumer goods, selling them mostly in the United States, lending America huge sums of money to stir up consumer mindset. China itself was running up huge dollar reserves. This might as well have continued, if not for the crisis."

The paper further reports that in early May, China, Japan, South Korea and ASEAN countries (Singapore, Philippines, Thailand, Indonesia, Vietnam, Laos, Cambodia and others) have agreed on the establishment of a regional foreign exchange reserve of $120 billion that would be allocating funds in the form of loans to countries - members of the pool- during financial crisis. "This is not just some Asian fund of Mutual Assistance - this smells like an alternative International Monetary Fund. In the near future, according to the experts, the Chinese yuan could be the leading currency for settlements in the Asian region. Then, given the enormous industrial and consumer turnover of Asian countries, they no longer will need to accumulate huge dollar reserves."

The argument for Russian role in this emerging economic reality is broken down accordingly: "So whats for Russia in all of this? At present, we stand on the sidelines of the revolutionary transformation of the economic world order. We pray for high oil prices. Why? So that once again we can accumulate dollar reserves and invest in the United States? What for? At the same time, Russia does not belong to any serious economic bloc."

"The world will be divided into three main regions: the Americas, Europe and the East, warn the economists. United States will lose some of its power, the leadership will shift towards Asia. That is why America is in a hurry to make friends with China, in order to prevent the creation of a powerful Asian bloc. Where is Russia in the new structure of the world? The East, of course, is closer to us. Already, 96% of Russia's far eastern exports are geared for consumption by the neighboring Asian countries. We need to unite with them - especially in an era of globalization."

Mexico: Looking to 2012 Election

Marcelo Ebrard has announced his intention to run for president in 2012. Ebrard is a member of the PRD (Party of the Democratic Revolution) and is currently the Head of Government of the Federal District (sometimes referred to as the mayor of Mexico City). His presidential aspirations have not been without some controversy.

First, there is the matter of PRD unity. Ebrard, for the most part, got his start by aligning himself with Andres Manuel Lopez Obrador, the unsuccessful candidate for president in 2006. Lopez Obrador made Ebrard the chief of police in Mexico City while Lopez Obrador served as the mayor of Mexico City. Lopez Obrador and Ebrard had worked together to implement recommendations by Rudy Giuliani, when he came to Mexico City in 2003 to look for ways to improve security. When President Fox directly fired Ebrard in 2004 after an angry mob lynched some undercover cops, Lopez Obrador later reinstated Ebrard as Secretary of Social Development. Lopez Obrador lost a very close presidential election (an election that he still believes was rigged) in 2006 to President Calderon. Now, Ebrard’s emergence is creating a rift within the PRD that may have already existed for sometime.

Jesus Ortega Martinez, the leader of the PRD, has made it clear that Ebrard has every right to position himself for the presidency. While he rejected that Ebrard’s declaration closes the path of Lopez Obrador to become the nominee of the party, he admitted that any candidate within the party wishing to run for president lacks a lot time. Ebrard has already gained the support of many of the left-wing groups that encompass the PRD. The Izquierda Democratica Nacional has declared that it would support Ebrard. Jesus Zambrano, head of the Nueva Izquierda (the New Left) stated that he applauds Ebrard’s entrance into the race, but he also cautioned that this does not mean that the PRD already has a candidate.

If the Ebrard-Lopez Obrador split has the potential of breaking apart the PRD, then one would not know from watching the responses from the PAN (President Calderon’s party). At the very least, the PAN is not taking a chance that the PRD will be irrelevant in future elections. This past week the head of the PAN, Cesar Nava, stated that while it is okay that Ebrard has presidential aspirations, it is not okay for him to use public resources as the mayor of Mexico City to build on those aspirations. Nava’s comments are more than likely an indication of how political opponents of Ebrard will criticize him in the future.

Meanwhile the coalition that President Calderon built in order to come to power in 2006 has been slowly crumbling in the past year. This past week, Elba Esther Gordillo, a former member of the PRI party and the current head of Mexico’s largest teacher's union, emphasized the costs that Calderon’s war against crime has created. Her comments were made in front of the president, when the two were celebrating the Day of the Teacher. Elba is arguably the most powerful woman in Mexico and her support in 2006 was essential for Calderon to sneak by Lopez Obrador. In Mexico, presidents serve only one term and it is not yet certain who will emerge to run in President Calderon’s party.

May 10, 2009

Taiwan: Controversy over Chinese University Enrollment

Police officers tackle a group of five college students protesting against the opening up of Taiwanese universities to Chinese students at a temple ceremony where President Ma Ying-jeou was speaking on May 3rd. (Source: Liberty Times, Tsai Wen-chu)

One of the main ideas of Taiwan President Ma Ying-jeou’s rapprochement strategy towards the People’s Republic of China (PRC) is that increasing civilian exchanges between the two sides will promote greater understanding, build trust, and decrease the likelihood of armed conflict. In the past, Ma has often advocated the idea of allowing Chinese students to enroll in Taiwanese universities. Last week, his administration attempted to take a step closer towards making this a reality, but the opposition Democratic Progressive Party (DPP) - which has a small minority in the Legislature - resorted to obstructive tactics to keep this from happening.

Opponents of this policy fear that the Chinese government would exploit this to extend their influence in Taiwan. Some students in Taiwan also fear that they would face almost impossible competition for both university admission and jobs after graduation. An editorial in the Liberty Times, one of Taiwan’s leading newspapers, expresses a common fear amongst Taiwan independence supporters:

[Chinese students] will occupy educational resources for local students, or some among them may have political directives to supervise the speech of professors or develop spy networks. What is even more worthy of concern is that these Chinese students who are close to the marrying age and have lived in Taiwan for an extended period of time would engage in close relations with local students. This would greatly increase the probability of marriage and accomplish President Ma’s plan: to quickly allow young people between the two sides to become friends. At that time, the presence of this increasing number of Chinese spouses in Taiwan will complicate the existing problems of residence and employment for this group.

Supporters of the policy to allow students from China to study in Taiwan feel that this would alleviate the problem of a domestic over-supply of college and university seats. An editorial in the China Times, a pro-unification newspaper in Taiwan, puts forth the argument for engagement:

If Taiwan is scared of anything, it’s China. There is only one term that can be used to describe this fear: meaningless. Taiwan has always sought to learn from the United States. Why can’t it learn from America’s foreign student policy? After opening its arms to the world, people who go to the U.S. to study and stay behind to work end up serving America. This is very good. Those who return to their home countries become a pro-U.S. force. Even better. Human talent has always been an extension of a nation’s borders and influence. Taiwan does not need to block its sons and daughters from going to school on the mainland in the same way that no one thinks that there is anything wrong with studying abroad in the United States, England, or Japan. Taiwan also does not need to block mainland youth from coming to Taiwan to study. As long as they have an interest, they should be welcomed. Starting from the youth, cross-strait academic exchanges will promote greater mutual understanding and friendliness. Human talent is not like agricultural products which need to be protected. What it needs, instead, is competition. There is no way to stop the greater trend towards cross-strait exchanges. A fear of mainland educational credentials will only stunt Taiwan’s competitiveness.

In the end, there is merit to both sides of the debate. While the Liberty Times editorial takes on a shrill nativist tone, the Chinese Communist Party (CCP) does, indeed, have an entire government agency called the United Front Work Department that is devoted to extending China’s influence throughout Taiwan’s political, business, civilian, and academic sectors of society. These “united front tactics,” as they are known, have already been successful at exerting leverage over Taiwanese businessmen operating in China, as well as engaging their one-time Nationalist (KMT) rivals in undermining the previous DPP administration. No matter how warm relations between the two sides become, the ultimate goal of the CCP government remains to subsume Taiwan’s sovereignty under the PRC.

A true resolution of the cross-strait stand-off can only occur when either side changes their fundamental view of their concept of national sovereignty. Now with this opening up in cross-strait exchanges, will Taiwan be able to change China? Or will it be China that changes Taiwan? The Ma administration is purportedly betting on the former, but so far events appear to pointing towards the latter.

Russia: Mr. Lavrov Goes to Washington

Russian Foreign Minister Sergey Lavrov paid a high-profile visit to Washington, DC, where he met with President Obama and Secretary of State Hillary Clinton. According to the daily "Izvestia," Lavrov went to the shores of the Potomac not at the very best moment for bilateral relations, given the commencement of NATO exercises in Georgia, and the controversy around two Russian representatives to NATO. Russia's permanent representative in the alliance Dmitry Rogozin earlier said that the Russian side will not participate in the ministerial meeting of the NATO-Russia Council, which is scheduled to be held in Brussels on May 18-19. Yet it seemed that the Russian side achieved its planned objectives - following his meeting with Secretary Clinton, Lavrov told the journalists: "We hope that soon all possible obstacles to the resumption of the NATO-Russia Council will be completely eliminated- and these constraints are entirely artificial in nature."

As before, the Russian political establishment is trying to determine if the current administration will be more pragmatic on the missile defense issue. To that end, Lavrov said: "Our American partners have confirmed that they are studying Russian-proposed revisions on that issue." According to Lavrov, last year's crisis in the Caucasus and the current global financial and economic crisis sums up the 20-year period after the fall of the Berlin Wall and the demise of the Soviet Union. Speaking at the Carnegie Endowment for International Peace in Washington, the Russian Foreign Minister said that these events "set the limits of what is possible for inertial policy pursued all these years, including the political and psychological inertia of Russia's containment policy. Now we know what can happen if the notorious triumfalizm and faith in the victory of the Western world revolution are pursued to their conclusion."

Lavrov stated that the Soviet and American models of social and economic development - socialism and liberal capitalism, developed to their pure and often absurd form - each in its time, proved to be a failure. "It is now clear that we need a middle ground, something balanced, something not so categorical and uncompromising," said Lavrov. In his own words, the current economic development is undergoing "a paradigm shift - back to a socially oriented economy and sustainable development, requiring a greater role for nation -states." All this, according to Lavrov, creates a "brilliant set of conditions" to "draw the last line for the period of the Cold War and the subsequent misunderstanding between United States and Russia. To miss such an opportunity would be very unfortunate."

May 9 marks the 64th anniversary of Soviet victory over Nazi Germany in World War Two. From 1945 till the end of the USSR in 1991, Soviet Union marked that date with massive military parades across the entire country. Following the collapse of the state and until the election of Vladimir Putin as President in 2000, the celebrations were more muted, with less emphasis on the showcase of Soviet past and present military strength. After 2000, the military parades were once again in vogue, eagerly embraced by all generations of Russian citizens. More than nine thousand troops, 100 military vehicles and 69 helicopters and planes took part in the Saturday march on Red Square, the main Victory parade in the country. This was largest show of force since the Soviet times, and became a kind of a rehearsal before the V-day festivities in 2010. Similar parades and marches were held in all major cities and most countries of the former USSR.

Opening the parade on Red Square, the President and Commander-in-Chief Dmitry Medvedev, stressed that the lessons of the Great Victory over fascism are relevant today, when once again there are those who "engage in military adventurism." The head of state assured that any aggression against the citizens of Russia will get a decent response, and that the future of Russia is a peaceful, successful and happy. Addressing the veterans, the President stressed that one of the major concerns of the state is to ensure their welfare: "The power of spirit and devotion to the homeland have helped you, dear soldiers, to overcome the difficult and long road to victory. You turned the course of world history. You gave life and liberty to the future generations, to all of us. That is why none of the current problems will prevent us from fulfilling our moral obligations to you." He added that WW2 has taught people to fight until ultimate victory, to be strong in the face of difficulties: "Protecting the homeland is our sacred duty, it is a moral basis for all generations. And today, the heirs of the heroes of that war are keeping and enhancing victorious traditions. Among them are those who in real battle have proven high fighting efficiency of modern Russian army."

Russian military showcased its latest tactical and conventional weapons on parade, such as GAZ-233014 "Tiger" armored car (Russian answer to American Hummer), BTR-80 and BMP-3 infantry fighting vehicles, T-90 main battle tanks, anti-tank missile system "Sprut", self-propelled artillery howitzers "Msta-M", tactical missile systems "Iskander-M", portable air defense systems "Buk", anti-aircraft missile systems S-300 "Favorit" and S-400 "Triumph", as well as mobile ground missile complex "Topol." Moldova, Ukraine, Turkmenistan and Belarus also celebrated May 9 victory with parades, attended by the heads of state and Presidents Voronin, Yushchenko, Berdimuhammedov and Lukashenko, respectively.

May 3, 2009

Chinese Sphere: Obama's First 100 Days

Views of President Obama’s first 100 days in office have been positive overall in the Chinese-language media. The Global Times, a subsidiary of the Chinese government’s official newspaper, People’s Daily, published the comments below from Wu Xinbo, Associate Dean of Fudan University’s International Relations and Public Affairs Institute:

Upon Obama’s assumption of office, Sino-U.S. relations underwent a stable transition and embarked on a new development track. This never happened in the past. At the outset of the Clinton and Bush presidencies, Sino-U.S. relations experienced great turmoil. However, it is different with Obama. This is primarily because the Obama administration sees China as part of the solution to the problem rather than as part of the problem itself. This is a positive sign.

An editorial in the Sing Tao Daily, Hong Kong’s second largest newspaper, has this to say about Obama’s foreign policy:

Obama’s “smart power” diplomacy has shattered Bush’s militaristic unilateralism. This has been regarded favorably worldwide. He laid out a clear timetable for troop withdrawal from Iraq and even drew a clear line between himself and some of the Bush administration’s policies that violated human rights and ethics. This included closing down the Guantanamo detention center in Cuba and publicizing information about prisoner abuse.”

Singapore’s largest Chinese-language newspaper, Lianhe Zaobao, feels that Obama’s “rock-star quality” is a valuable political resource for the U.S.:

Wherever he goes he is like a rock star: people go crazy and the media swoon for him. … For Obama, no matter how opposing one’s ideological stance may be, people generally admit that he is a sincere person. This kind of packaging practically speaking is a very valuable political resource. No matter whether domestic or international, the public feels that he is a rare leader and is willing to give him a chance. Especially in light of the mess that Bush left behind, people are even more willing to sympathize with the new president.

Russia: Economy and Near Abroad

This past Friday, President Dmitry Medvedev held a meeting on budget preparation prior to his upcoming address to the nation. He said that by 2011, new anti-crisis measures adopted will incorporate the strengthening of social assistance. In particular, the President requested that the budget take into account the allocation of funds for pensions, benefits and pursuing an active policy of employment creation. Medvedev also stressed that recklessly spend money on assistance programs during a crisis is not allowed, as he called on the officials to be "very judicious" with the use of the treasury. The President also stressed that certain budget expenditures are being increased in order to deal with more pressing problems of regular citizens: "It is necessary to deal with the modernization of social networks, services, transport, communications, energy and financial infrastructure," said Medvedev.

In a parallel development, Russia may return to the practice of borrowing large loans from the World Bank, said Russian Minister of Finance Alexei Kudrin on his recent visit to Washington. The Russian budget deficit would be such that a number of large projects could come under the threat of failure. In order to continue such projects, the Russian government is willing to take multi-billion dollar loans from the World Bank. If the crisis continues across the Russian Federation, such borrowing abroad will increase. According to Kudrin, "World Bank's lending tools are long-term in scope and are relatively cheap. They focus on infrastructure projects, which coincides with the objectives of the Russian budget." Kudrin further said that the WB's share in financing a project to reform the housing sector could increase. A 15-year, $200 million loan for such a project was already approved in February 2007.

Several years ago, Kudrin was stressing that Russia does not need IMF credit, which provides funding to countries experiencing problems with the financing of the budget deficit or balance of payments. But experts agree that today, Russia has no choice but to again borrow money. According to financial analytical group "Sovlinka", "the likelihood that Russia once again get in debts is there. According to the forecasts of Kudrin himself, the Russian Reserve Fund (money set aside from once-high oil and gas revenues) will be enough only until the end of 2010. If the economic crisis continues and the budget will be executed with a deficit, it is clear that the government will use various methods of financing, including the placement of Eurobonds, the increase in domestic debt, reducing inefficient budget expenditure - and external loans."

Ukrainian Prime Minister Yulia Tymoshenko - a power rival to President Yuschenko and a possible candidate to her country's highest political post in the upcoming elections - visited her Russian counterpart Vladimir Putin in Moscow over the past week. This high profile visit was postponed several times before, and both sides pinned a lot of hopes on this face-to-face meeting between such key countries. Timoshenko announced that after meeting her counterpart, Russia will take part in the modernization of the Ukrainian gas pipeline grid, providing basic maintenance and spare parts, without taking any share or control of such system that is vital to Ukrainian energy policy: "Russian Prime Minister stressed that his country does not seek to manage Ukraine's gas transportation system."

Commenting on the Tymoshenko's visit to Moscow, Ukrainian experts say: "... this is the final casting call, a showcasing of Tymoshenko in the Kremlin before the start of the Ukrainian presidential election campaign." The experts did not rule out that Moscow may soon be visited by Viktor Yanukovych, the leader of the Party of Regions, who was once a strong Kremlin ally and whose refusal to cede power was the catalyst for 2004 Ukrainian Orange Revolution. "Yanukovych will follow Tymoshenko as another "candidate of the Kremlin," so that the major presidential candidates will compete not for the protection of Ukrainian national interests, but for greater or lesser commitment to the Kremlin's policies."

At the meeting, Russia and Ukraine have exchanged their draft intergovernmental agreement on cooperation in gas sphere. Russia hopes to sign an intergovernmental agreement with Ukraine as soon as possible in order to avoid another round of gas price wars. "I think that our meeting was effective, which gives every reason to assert that Ukraine and Russia are partners, good neighbors and states which base their relations on the basis of equality of national interests," summarized Tymoshenko at the end of the summit.

Moldovan President Vladimir Voronin stated that Moldova would seek the signing of an Association Agreement with the European Union: "We are interested in the fact that this would be an agreement that involves a free trade regime with the EU and free movement of citizens of the Republic of Moldova to the European Union," - said Voronin on Thursday at a meeting of the National Commission for European Integration. Moldova recently was hit by mass protests by opponents of recent elections, which brought to power Voronin's Communist allies, and which were considered fraudulent across Europe. The president's press service commented that "In the near term, the Moldovan authorities should focus on negotiations on the cooperation with the European Union."

April 26, 2009

Chinese Sphere: Jackie Chan and Freedom

Jackie Chan speaks at the "Creative Asia" panel discussion in the Boao Forum (Source: Xinhua)

Action movie star Jackie Chan caused a stir in the Chinese-speaking world with his remarks at the China-hosted Boao Forum last week. During the “Creative Asia” panel discussion, Chan was asked a question related to the Chinese government’s restrictions on filmmaking. He responded with the following (a video of a portion of his remarks can be found here):

Recently I’ve felt that in these 10 years since Hong Kong returned [to China] – I grew up in Hong Kong, and from its return until today, I’ve slowly come to see – I don’t know whether it is good to have freedom, or is it good to not have freedom? I am really confused now. Too much freedom will create a situation like the way Hong Kong is today – very chaotic. Furthermore, it will create a situation like Taiwan – also very chaotic. I’ve slowly come to realize that we Chinese need to be controlled after all. [laughter and applause from the audience] Once control is gone and there is an opening up, we will end up doing whatever we want without restraint.

The foreign media has focused on the outrage sparked by Chan’s remarks in China, Hong Kong, and Taiwan. Although the public mood in Hong Kong and Taiwan generally seems to be one of resentment and anger, there are also voices that are more sympathetic towards the actor. The nature of responses in the Chinese-language media seems to track how favorable an outlet is towards a greater Chinese identity in general and the Beijing government in particular.

Continue reading "Chinese Sphere: Jackie Chan and Freedom" »

Russia: Georgia and Its 'Potato President'

Russian media is continuing to actively cover anti-government protests taking place in neighboring Georgia. The opposition is currently picketing all across Tbilisi, the country's capital, with many people camping out on the streets in spite of government pleas. Moreover, many opposition groups have erected make-shift "jail cells", with people staying "behind bars" as a protest against government policies that they see as repressive.

On Thursday, several women from pro-Saaksashvili's "National Movement" party forced their way onto the opposition and cut the plastic covering such makeshift "jail cells" with large kitchen knives. According to the daily "Izvestia", the opposition did not resist such action from the "attackers"- who included Georgian refugees from Abkhazia in their ranks. The newspaper reported of the possibility of a real and serious clash between pro- and anti-government forces - "on the streets surrounding the central square, there stood a groups of intimidating looking men. Pro-Saakashvili's knife-wielding women - who receive unrecorded salaries for their work - were more than defiant. One of them even sought to clear the central Rustaveli Avenue of this "rural population, these cells and debris." Others called for new opposition arrivals from the provinces to return home, telling them not to pollute Tbilisi but to plow and sow in their villages. As always, the police did not intervene in the proceedings. Pro-Saaksahvili's people left as soon as the opposition leaders appeared on the square."

This stand-off shows no signs of abating. "Ivestia" further reports that "People no longer have fear in them - they do not pay attention to any restrictions, nor to the the machinations of the Tbilisi City Hall. And the City hall is trying to complicate the picketer's life to the maximum - there is no garbage collection, and there are no biotoilets available. However, opposition returns the favor - on Thursday, they cleaned "their part" of Rustaveli Avenue, Liberty Square, the Presidential Residence and the government areas, and brought all refuse and garbage to the main entrance of City Hall."

Meanwhile, President Mikhail Saakashvili is trying to show that there is nothing happening in the country. He recently held a meeting of government to discuss potato harvest, thus earning yet another nickname form the opposition - "Potato President." His "right hand", the Speaker of Parliament David Bakradze, stated that the issue of early presidential and parliamentary elections was not even considered.

Continue reading "Russia: Georgia and Its 'Potato President'" »

Mexico: National Security and Human Rights

In a week that has been dominated in the United States by talk of CIA interrogations and declassified photos of torture, much of the same conversations have been circulating in Mexico (that is, until the outbreak of swine flu in Mexico City in the last couple of days which now is the leading story). Except in Mexico, the debate has been focused on the military which is increasingly being used to try bring security back to Mexico.

A report issued in March by Mexico’s National Audit Office declared that more than half of Mexico’s municipal police officers are not qualified to effectively carry out their duties. Furthermore, the police are seen by the general public as highly corrupt in contrast to the more respected military. As a result, President Calderon’s fight against the drug cartels has been led by the military, which are deployed in various hot spots around Mexico.

One of these hot spots is Ciudad Juarez. The location of Ciudad Juarez near the United States ensures that ninety percent of cocaine entering the United States passes through this city. This has made Ciudad Juarez a battleground for drug gangs in the past few years. In March, President Calderon ordered the military to take over Ciudad Juarez. The police department is being run by a retired general. The citizens of Ciudad Juarez now see soldiers just about everywhere they go.

The results of the crackdown have been amazing. In the first two months of 2009, there were 434 murders in Ciudad Juarez. In March, when the military took over, there were 51. In April so far, there has been 22 murders. Jorge Alberto Berecochea, a retired Air Force lieutenant colonel now running one of the police districts, says, “Ciudad Juarez, right now, I’d say it’s the safest city in Mexico.”

However, with an increased military presence often comes increased complaints of human rights violations. Last week a 21-year old man, Javier Eduardo Rosales, was found beaten to death on a motorcycle trail outside of the city. Rosales and another man were (according to the other man) allegedly detained by the military and taken to an undisclosed location where they were beaten. Rosales was allegedly beaten more extensively because he had serpent tatoos which led the military to believe that he was a member of Los Aztecas, an enforcer group for the Juarez cartel.

Mauricio Ibarra of the National Human Rights Commission has noted that human rights complaints have increased since Mr. Calderon has militarized the drug war. Among the complaints against the military, which Mr. Ibarra says have been corroborated through the comparison of medical exams, are the use of electrical shocks, detaining suspects for longer than 12 hours without charging them, beating suspects wrapped in blankets so that bruises do not show, and putting splinters underneath the toenails of suspects.

Human rights groups are most upset with President Calderon’s proposal to modify the Law of National Security. Mr. Calderon is seeking tougher sanctions on violent crimes. He wants stiffer penalties for military deserters and an enhanced security role for Mexico’s domestic intelligence agency. Under Mr. Calderon’s proposal, groups of suspects would be charged individually for weapons found in a vehicle or house that all of the suspects occupied. There would also be special punishments for possession of more than 50 rounds of ammunition or for altered guns. Human rights groups say that some of Mr. Calderon’s proposals violate international law because they contradict agreements Mexico has made in the past. They also say that his proposals will further lead to impunity for soldiers conducting anti-narcotics operations.

The debate in Mexico over national security and human rights will more than likely continue in the near future. For Americans, this debate should sound familiar.

April 19, 2009

Mexico: Reactions from Obama's Visit

Cautious optimism describes the Mexican reaction to President Obama’s first official visit to Mexico on Thursday. The U.S. president met with his counterpart, Felipe Calderon, to discuss how each country could solve shared problems in a new era of a growing partnership. Of course, at the top of the agenda is the drug war that has claimed more than 10,000 lives since Mr. Calderon took office in 2006.

The differences in the two leaders' approaches have to do less with substance and more with time. Mr. Calderon needs for the United States to take concrete steps to lower American demand for drugs and to limit the flow of guns into Mexico. Furthermore, he needs this to happen now. His PAN party faces congressional elections in June. If Mr. Calderon cannot convince Mexico that his tactics for fighting the drug cartels are working, then his party will lose its majority in both houses of Congress and Mr. Calderon will find it ever the more difficult to execute his policies.

On the other hand, Mr. Obama must lower expectations. Former Ambassador to Mexico, Jeffery Davidlow, explains that President Obama is a pragmatist and that he will not promise anything to Mexico unless he is sure that it can be accomplished politically. For example, this past week Mr. Obama rebuffed the Mexican request for the United States to pass a renewal on a ban on assault weapons that Mr. Bush had allowed to expire during his term. Mr. Obama stated that while he thought a renewal is a good idea, he proposed instead to encourage the U.S. Congress to ratify an arms trafficking treaty President Bill Clinton signed in 1997. The treaty calls for countries to crack down on the illegal export of weapons, share gun-tracing information and extradite gun-smuggling suspects to other countries.

What criticisms have been levied at Mr. Obama this past week have usually come in the form of accusing the President of not providing enough plans for action. Hillary Clinton’s acceptance of co-responsibility for the drug problem a couple of weeks ago was a home run diplomatically. Now, Mexican leaders and journalists want to know how the United States is going to take responsibility for arms trafficking and drug consumption. An editorial in the left-leaning La Jornada sounded a pessimistic note at the promises that Mr. Obama has made. It stated that Mr. Obama’s promises have not been signed into law and that American foreign policy is still as “neo-colonial, predatory, and unilateral as it always has been.”

Nevertheless, most thinkers in Mexico are cautiously optimistic. They understand fully the severe obstacles that must be overcome, yet they are confident that both the United States and Mexico will work as partners in the future. A columnist for Excelsior observes that promises made in the past at meetings between Mexico and the United States have failed. Yet this meeting was different because of the shared nature of drug violence. He continues:

Everyone knows that the violence that lives in Mexico derives from narcotrafficking and insecurity, but much less is said of the kidnappings that occur in Phoenix and Houston, of the bodies, including decapitated bodies, that appear also on the other side of the border, or of the criminal networks that begin in South America and have a powerful presence in Mexico, but grow and develop in San Diego, Seattle, or New York. (My translation)

His point is very poignant. Mexico and the United States need each other and it seems that President Obama understands this.

Chinese Sphere: China’s Human Rights Action Plan

Last Monday, the Information Office of the State Council released the Chinese government’s first-ever human rights action plan. The introduction to the document stated that it was developed in response to a “United Nations' call for establishing a national human rights action plan.” This most likely refers to the Vienna Declaration and Program of Action that was adopted during the 1993 World Conference on Human Rights. The declaration “recommends that each State consider the desirability of drawing up a national action plan identifying steps whereby that State would improve the promotion and protection of human rights.”

Specific human rights are divided into three broad categories: 1. Economic, social, and cultural rights, 2. Civil and political rights, and 3. Ethnic minority and disadvantaged groups’ rights. This categorization follows three of the UN’s core human rights treaties: the International Covenant on Economic, Social and Cultural Rights, the International Covenant on Civil and Political Rights, and various conventions on the rights of ethnic minorities, women, children, and the disabled. China has signed and ratified the Economic, Social, and Cultural Rights treaty. China has also signed the Civil and Political Rights treaty, but not ratified it, most likely due to provisions it makes for, among other things, periodic elections and universal suffrage.

An editorial published in the 21st Century Business Herald, one of China’s largest business newspapers, sees the publication of this report as beneficial for the advancement of human rights:

Since 1991 when the concept of human rights started to be formally used in white papers, the Chinese government has issued 40 human rights-related documents. The “Action Plan” differs from past reports which have typically described the work that China has already done. This is the first time that specific goals and timeframe have been set for the development of the nation’s human rights…From this day forward this report can serve as a yardstick to measure the Chinese government’s progress or regression in the development of human rights. It also enables individual citizens and local governments to see a clearer long-term direction.

In an editorial in Lianhe Zaobao, the largest newspaper in Singapore, sees this plan as having the potential to fundamentally change China:

With regards to the phenomenon where people from different provinces make their way to Beijing to present petitions, this action plan commits to opening up various channels such as the Green Post, dedicated phone lines, websites, and e-mail accounts that would make it convenient for the people to present their petitions. The government would also set up a nationwide complaint information system and a state-level office to deal with these complaints.

Under a broad concept of human rights, these commitments made by the Chinese government cannot be said to encompass the full meaning of human rights. However, what cannot be denied is that these specific proposals are very relevant to China’s current situation. It can be said that abuse of the law and the lack of citizen recourse is one of China’s most widespread social problems. Of course, it is worthy to pursue the ideal where the people have the right to choose their own leaders, but at this current stage, if China is able to solve these various abuses of power, that would be a large step forward of historical significance.

While the plan does not address certain rights that democracies would consider fundamental such as free press, free speech, and open elections, the document does seem to be trying to define a more prominent role for individual citizens within the strictures of China’s constitution and laws. For example, under the “right to oversee,” the plan states that “the state will guarantee citizens' rights to criticize, give advice to, complain of, and accuse state organs and civil servants, and give full play to the role of mass organizations, social organizations and the news media in supervising state organs and civil servants.” While this right may have already been a part of Chinese law, it has never been enforced. However, now that this document is out there, citizens, NGOs, and other social groups may have more leverage in claiming their rights and opposing abuses of power at the local level. Perhaps this is the CCP leadership’s way of bringing about the political reform that is needed to make citizens happy and uphold the legitimacy of CCP rule.

April 12, 2009

Cuba: U.S. Embargo to End?

The Fifth Summit of the Americas is coming up next week, on April 17-19 in Trinidad-Tobago. The Summit's theme is “Securing Our Citizens’ Future by Promoting Human Prosperity, Energy Security and Environmental Sustainability.” It will be interesting to watch what the Obama administration has planned for the Summit regarding Cuba.

As readers may recall, last February the Lugar Report concluded that "progress could be attained by replacing conditionality with sequenced engagement, beginning with narrow areas of consensus that develop trust," and recommended changing US policy towards Cuba. Following the report, in March the omnibus spending bill changed travel restrictions on American citizens with family in Cuba to once a year, and last week the Wall Street Journal reported that President Obama plans to lift U.S. restrictions on Cuba, allowing Cuban-Americans to visit families there as often as they like and to send them unlimited funds.


This week the Congressional Black Caucus visited Cuba and reportedly met with Raul and Fidel Castro, who they lavishly praised. As with the Lugar delegation, members of the CBC did not meet any dissidents or any members of Cuba's pro-democracy movement. However, CBC recommended that the embargo be lifted.

Following the CBC's return, CNN released poll results stating that two-thirds of Americans surveyed think the U.S. should lift its travel ban and 71 percent of those polled said that the U.S. should reestablish diplomatic relations with Cuba.

On Thursday the Cuban American National Foundation released a report advocating change in the US's relations with Cuba, a drastic change from their prior hardline stance. The

Since the end of the Cold War our policy toward Cuba has remained static, reactive and focused on responding to developments following the demise of Fidel Castro. That policy, in our opinion, does not advance or promote the best interests of the United States or of the Cuban people; it relegates the U.S.’s role to that of passive observer rather than active supporter of the process of democratization for one of our closest hemispheric neighbors.

The recommendations listed herein chart a new direction for U.S.-Cuba policy, one that is guided by a deep understanding of the Cuban people, the impact of five decades of totalitarian rule, and a firm belief that the tides of change are swept in by the grass roots efforts of common people who have acquired confidence in their abilities and feel empowered in their responsibilities. Our recommendations are a break from the past because they seek to adapt to the realities of the present, which require a measured and incremental path that allows for adjustments along the way based on empirical evidence and evolving dynamics on the ground in Cuba.

The report also stresses the input of the Cuban people and the fostering of a Cuban civic society towards the aim of a successful transition to democracy.

Clearly, American attitudes towards relations with Cuba have changed.

In the island, however, the European Union's decision last year to lift sanctions against Cuba,

Cuban dissidents also vehemently opposed the lifting of the sanctions, believing that this action would “punish” the Cuban people and allow Havana to continue violating human rights. According to the leaders of the dissident group Agenda for Transition, any action taken by the EU to normalize relations with Cuba would be understood by Cuban authorities as affording legitimacy to the government’s recent actions and would “[punish] those who fight for democracy.”
What is in store for the Summit of the Americas? Jeffrey Davidow, the U.S. official heading preparations, stressed that Pres. Obama seeks a "new beginning" with Latin American countries, focusing on the economic crisis, energy, and security threats during the Summit.

While stating that it would be counterproductive for the summit to focus on Cuba, Davidow said that Obama may announce the easing of travel restrictions and remittances. How will that be different from the April 4 announcement remains to be seen.

Mexico: Drug Armies vs. Calderon's Army

When Felipe Calderon became President in December 2006, he immediately declared war on the drug lords. He has staked his presidency (as well as the congressional elections coming up in June) on the government’s ability to return a sense of security to Mexico. Presently, there are over 45,000 troops and 5,000 federal police deployed to hot spots around Mexico. This past week Calderon’s army was hard at work, taking down some tough characters.

The problem is that Calderon is not the only commander-in-chief of an army in Mexico. All of the major drug trafficking organizations have at their disposal sicarios, or enforcers. This trend started when Osiel Cardenas, the former head of the Gulf cartel (presently sitting in a Houston prison), convinced several members of Mexico’s special forces to quit the army and help the Gulf cartel solidify territory. When Cardenas was arrested and subsequently extradited to the United States in 2007, the Zetas started flying solo. Their expertise of special operations has made them a formidable foe of the Army regulars.

This past week the military was able to kill a Zeta boss in Zacatecas. Israel Nava Cortes was responsible for establishing Zeta control in several states in Central Mexico. It was rumored that Nava Cortes was Guatemalan. However, representatives from the federal police dispelled this rumor, stating that Nava Cortes was Mexican.

The confusion over Nava Cortes’ nationality comes after reports suggest that the Zetas have been working closely with the Guatemalan special forces (known as kaibiles). The reports suggest that the Zetas, as well as the Sinaloa cartel, have been trying to establish alternate routes from Colombia through Central America. Mexican and U.S. maritime operations have put intense pressure on the drug cartels at Mexico’s coasts.

The Zetas are not the only sicarios in Mexico. This past week also saw the arrest of 21 enforcers for drug trafficker “El Teo” Garcia. They were arrested while trying to pull off murders of two federal police agents in Baja California. Reports indicate that the weapons confiscated during the arrest had been used in no less than eight other homicides in Mexico.

Garcia used to be a lieutenant in the Tijuana cartel. However, in early 2008 he had a falling out with one of the heads of the Tijuana cartel, Fernando Sanchez Arellano (“the Engineer”). Sanchez believed that Garcia had caused too much attention to be drawn to the Tijuana cartel due to Garcia’s penchant for kidnapping physicians. Garcia supposedly fled the city in April, but is rumored to have returned in August, since the high violence levels have returned this fall. He is now unofficially aligned with the Sinaloa cartel in an effort to destroy his former comrades.

Despite the successes in Baja California, the bloodshed continued in Chihuahua. There was at least eight “narco-executions” this past week. The tortured body of a man was found in a center for drug rehabilitation in Ciudad Juarez. There was also between 15 and 20 federal agents that were accused of abuse of power and complicity in the drug trade. Chihuahua continues to lead the country in drug deaths with 590 in 2009 alone.

Meanwhile, in Congress the Chamber of Deputies will begin discussion Monday on whether to decriminalize small time marijuana use. The forum will bring together experts from around the government and private sector. The forum is being called mainly because of the belief of many experts in Mexico that the prohibitionist policies have not produced the desired effects.

Russia: Unrest in the Periphery - And at Home

Russia's periphery is once again rife with unrest and dissatisfaction, but the Russian government tried to keep stability at home by reporting to the State Duma on its progress in 2008. This past Monday, Prime Minister Vladimir Putin spoke before the full parliamentary session. Putin assured the deputies that "Russia will overcome the crisis," and characterized an anti-crisis program recently given to Duma for discussion as "the light at the end of the tunnel." Regarding the scope of growing difficulties in the country and the need to invest in numerous social programs, Putin assured the parliamentarians that "Many out there are simply jealous of Russia! I know what I am talking about!", hinting that the situation in other countries is more dire.

However, just a few days after Putin's address to the Parliament and his assurances that the government is handling the crisis, nearly 300 officer reservists held a protest on Saturday, April 11 in Vladivostok, in the Russian Far East region. The officers, belonging to the "Union of Officers of Vladivostok", protested against the recently launched military reforms. Demonstrators asked to repeal the Government's plan for the implementation of military reform, which, in their view, means "the deprivation of the defense capacity of the country through the dismissal and breach of the social guarantees of servicemen." Participants were asking for the salary and pension increase of military personnel to the level of civil servants, to provide apartments to the discharged officers in places of their own choosing, to pay the debt owed to military retirees, as well as to raise pensions to widows of dead officers. This action took place under the banner "People and army are one! Save the army - save Russia!", with participation from the Communist Party and local citizen's organizations. Last October, Defense Minister Anatoly Serdykov announced plans for major reform in the Russian military, and his actions immediately started running into serious opposition from the military's rank and file.

On April 10, Moldovan authorities reported that they have captured the main organizer of mass anti-government protests that swept the capital Chisinau this past week. The Prosecutor General's office announced that they have in custody Mr. N. Iordan, a Romanian citizen. When authorities searched him, they discovered in his possession maps of Chisinau, photos of administrative buildings and several bottles with "flammable liquids." Mass riots and clashes with police took place in Chisinau on April 7th, 2009 during the opposition protests, whose members were dissatisfied with the results of the April 5 parliamentary elections. The demonstrators stormed the parliament building and the Administration of the President of Moldova, and smashed, looted and set fire to the buildings. Shortly after the riots subsided, Moldovan President Vladimir Voronin, leader of the governing Communist Party, said that neighboring Romania was to blame for the unrest. The Ambassador of Romania was quickly expelled from Chisinau. On April 9, the Moldovan Parliament deputies stated that the leadership of the country has evidence that Romanian citizens have participated in the "pogroms," and could be seen on the security videos. The government did not specify how it was able to find out the nationality of rioting persons just by looking at their faces. Meanwhile, Bucharest officially rejected Moldovan claims and stated that it had nothing to do with recent mass protests.

Russian government has so far supported President Voronin's rule in Moldova, as a "guarantor" of sorts against the West's advancing interest in Eastern Europe. Certain Russian commentators are calling for a sobering look at such a political entanglement. Sergey Kolerov, Chief Editor of the "Regnum" Information Agency, argues that when it comes to the question of getting rid of Voronin and Communists in Moldova , Russia and the West are in fact "situational allies": "The problem is that this matter is taking place without the participation of Russia, and since Moscow refuses to intervene in the current situation, it therefore cannot utilize the results of what is taking place in Chisinau. ... There is no doubt that once the opposition leaders take control of the situation in the country, they will then forget about so-called "unity" with their patrons in Romania."[ In late 1980s and early 1990s' Moldova experienced unrest and civil war after the majority of the people called for an actual union with neighboring Romania. A pro-Russian area called Transdniester Republic broke off from Moldova and remains an independent entity to this day.] Kolerov further argues: "The authorities in Russia should remember that by supporting Voronin - the "guarantor of democracy," who uses the Moldovan Constitution as he pleases - Moscow is in fact acting against the will of the overwhelming majority of the citizens of Moldova. If people follow through with the portrait of Voronin - which was thrown out of the windows of government buildings - by tossing the living Voronin out the window, the calls for "cleaning the asphalt of Chisinau with Russian blood" will ring again, just as in the early 1990's. If this is a reflection of public opinion in Moldavia, then this should not surprise Moscow - Russian diplomacy (but not Russia and its citizens!) deserves such an attitude."

Picking up where Moldovan actions left off, mass anti-government protest is taking place in Georgia's capital Tbilisi. "We will do everything to disrupt the work schedule of President[Saakashvili] and his entourage," - promised Levan Gachechiladze, the opposition leader. Gachechiladze was of the opinion that similar actions may soon begin across Georgia. On April 9, the leading opposition parties of Georgia began to protest, demanding the resignation of President Mikhail Saakashvili. Some carried slogans that said: "We will not disperse till the usurper will retire!" and "Misha, don't bite out neckties!"(in reference to this infamous video of stressed-out Saakashvili during last August's armed conflict with Russia.) Others openly shouted "We are so tired of Misha! Why do Americans love him so much?" The protesters gave the president till 4:00pm on April 10 to comply with their demands. Saakashvili did not accept the ultimatum, and expressed his willingness to "dialogue with the opposition", while confirming that he did not intend to leave his post before the expiration of his official duties.

Opponents of the president blame him for drawing Georgia into armed conflict with Russia last August, as well as the for the loss of break-away provinces of Abkhazia and South Ossetia. The April 9 rally drew, according to various sources, anywhere from 50,000 to 100,000 people, and was peaceful. The participants have dispersed by Thursday evening. Next day, on April 10, a crowd of approximately 20,000-25,000 people gathered in the center of Tbilisi, to continue the protest. Russian President Dmitry Medvedev earlier remarked that he refused to talk to President Saakashvili, and will start dialogue with his eventual replacement.

The echoes of the Russian-Georgian war last year are still felt in Moscow. This time, the Russian Military has recognized one successful item fielded by the Georgians - their use of Israeli unmanned aerial vehicles against advanced Russian army. On April 7, 2009, "Kommersant" newspaper reported that Russia will purchase 3 types of Israeli UAV's to the tune of $50 million, with half the amount already been transferred to the supplier. The selection of foreign UAV's is explained by the fact that Russian developers have not been able to offer Moscow a competitive alternative. Deputy Defense Minister Vladimir Popovkin explained this decision at the April 10 press conference - Israeli unmanned aerial vehicles will be used to develop principles for the application of such technology, and not for actual military combat. At the same time, Russian military intends to boost the development of domestically-produced unmanned aerial systems. In late February 2009, a senior source in the Defense Ministry announced that by early summer of this year, Russia should develop a new unmanned aerial vehicle for tactical intelligence purposes.

Western Europe: From Mahmoud to Downing Street

Let's start this week's round-up off with a bang: German newspaper Der Spiegel published an interview with Iranian President Mahmoud Ahmadinejad on Saturday. In it, Ahmadinejad speaks at length about George W. Bush, American policy towards Iran, and his view on Barack Obama and the future of Iranian-American relations. Unlike what one would have expected, Der Spiegel did not treat the president with kid gloves. The interview grants the American reader a great glance into the European psyche: on the one hand, Europeans distrust Ahmadinejad and believe diplomacy will most likely be useless; on the other hand, they encourage exactly that - more diplomacy - nonetheless.

Ahmed Marcouch, a Dutchman of Moroccan heritage, made the news this week for taking a rather confrontational approach to make his ethnic minority neighborhood more tolerant towards homosexuals. Muslim immigrants are infamous for their lack of tolerance towards gays and lesbians. Hate-caused violence against them has increased significantly in recent years. Marcouch tries to do something about this growing problem by, among others, opening a gay bar and organizing a soccer match between Moroccan and gay teams.

After tough negotiations, Danish Prime Minister Anders Fogh Rasmussen was accepted as the new secretary general of NATO. Although most member states had no problem with Rasmussen, Turkey had serious reservations. The prime minister was, Ankara said, outspokenly anti-Turk, anti-Islam, and allowed a pro-PKK network to operate freely in his country. In the end, Rasmussen agreed to do something about the network and he offered his 'political apology' for the infamous Mohammed cartoons that caused major riots in the Muslim world a few years ago. The somewhat hidden apology received much attention in Europe, with many conservatives denouncing Rasmussen for being a 'sellout' and opportunist.

Local Dutch councils that register the ethnic origins of young trouble makers and other at-risk youngsters have been ordered to stop it immediately by the privacy watchdog CBP. "There is no legal foundation for processing ethnic details," the CBP said in a statement on its website. "This means that the use of these particular personal details ... is illegal and should be stopped immediately." The news is a terrific blow to the councils and, of course, to right-wing politicians like Geert Wilders who want to engage in more ethnic profiling rather than in less.

Lastly, trouble in Britain: last week, stories broke saying that senior aides to Prime Minister Gordon Brown had sent slanderous emails about Tory and opposition leader David Cameron to a host of people. Saturday, aide Damian McBride was forced to resign. In his emails, McBride spread rumors (to other Laborites) about the private lives of Cameron and his fellow Tory leaders. Even though the aide from hell was fired, the Tories are slammed Downing Street No. 10 nonetheless: Shadow Home Secretary Chris Grayling said: "If this is symptomatic of the culture of Downing Street under Gordon Brown's leadership it is a disgrace. What on earth are Gordon Brown's team doing indulging in the politics of the gutter when they should be sorting out the very real problems of the country."

The above should be comforting to Americans who can now realize that American politicians are not the only ones who love to play it dirty.

The writer is editor of

China: Healthcare Reform

The big news in China last week was the unveiling of the government's healthcare reform plan that would seek to provide "safe, effective, convenient, and affordable" health services to the entire population by 2020. The government is planning to spend 850 billion yuan (US$124 billion) towards building new rural hospitals and clinics and will regulate the prices of "essential" medicines. Different tiers of health insurance will be set up to cover citizens according to their employment status and whether they are urban or rural.

This is significant because affordable healthcare is not in the reach of the vast majority of Chinese citizens. As a result, families tend to save more in case a health emergency should occur. American economists who complain about Chinese currency manipulation have long called for the Chinese Communist Party (CCP) government to implement measures to lower the national savings rate and stimulate domestic consumption (see this Senate hearing testimony from the Peterson Institute for Intenational Economics for an example). This healthcare reform plan seems to be an answer to their wishes.

In the Southern Metropolis Daily, one of China's leading commercial newspapers, Beijing-based economist Chen Qinglan writes that this plan is a step in the wrong direction:

True healthcare reform must have a clear direction, and that should be to stimulate the supply of healthcare services and products. This is the path towards truly solving the healthcare system's problems. Specifically, we should: 1. Cancel restrictions on the inflow of private and foreign capital and open up the market. Encourage private capital to purchase stock and buy up public hospitals. Completely open up the healthcare market no matter whether it is for non-profit or for-profit hospitals. Allow private capital and public interest organizations to freely participate; 2. Cancel regulation of drug prices and let the market determine the prices of medicine and healthcare services. This would rationalize the allocation of healthcare resources; 3. Break the monpolistic and privileged position of public hospitals. The tasks of managing and supervising public hospitals by government health departments should be separated; 4. Open up the health insurance market; 5. Open up the establishment of privately-run medical schools and training organizations to stimulate the cultivation and supply of healthcare professionals.

By marching out under the banner of "public interest" and denying marketization, the government is comprehensively intervening in public healthcare services and returning to the planned model of the past. We will definitely be beset by inadequate supply of healthcare services, subpar service quality, non-proactive doctors, slowdown of technical innovation, and other old problems, once again falling into a vicious cycle. Once this model fails, it will be the people who pick up the bill.

Chen's criticism is timely in light of the fact that last month, Chang Gung, a hospital group founded by late-Taiwanese entrepreneur Wang Yung-ching, was forced to scale back its plans to expand into two more Chinese cities because its flagship hospital in Xiamen was having trouble hiring sufficient doctors and nurses and running at a profit. The Chinese government does not allow Chang Gung to register as a non-profit entity, so it does not enjoy the tax breaks and subsidies that are available to local public hospitals. The CCP's healthcare reform proposal does not seem to address this problem.

April 5, 2009

Europe: All Summit, All the Time

Here are a few reactions to the last few days' G20 events in London, Strasbourg and Prague. All translations are mine.

“Que Vive le G20!” hailed French daily Le Monde in an editorial on Friday. Stopping short of declaring a "new world order," the paper does proclaim that

London just killed the G8. It’s this annual summit, between the Americans, Japanese and Europeans, that made a claim to manage somewhat the affairs of the planet, despite being wholly unrepresentative of today’s world. The G20 properly reflects the division of economic power at the beginning of the 21st century: gaining in power, everyday more evident, are giants of the “global south” including China, India and Brazil. Even while excluding Africa, the G20 is more representative than the UN Security Council, the composition of which reflects the balance of power that issued from World War II.”

The left-leaning daily lays the blame for the economic crisis squarely at the feet of the United States, and talks about how U.S. President Obama deals with that perception, using Obama’s maneuverings between the Chinese and the French on the topic of tax havens as an example.

“The episode illustrates the approach Obama employed throughout his first international summit: in the background, almost withdrawn, minding to not focus attention on the American position, even knowing that is the object of scrutiny, above all because the United States is the author of the crisis. The G20 members had enough tact not to make him acknowledge that too much, he said, even if there were smatterings of remarks about “Wall Street” or “this or that bank.”

Dutch newspaper NRC Handelsblad this morning noted one example of the process and cost of Obama’s negotiating method. Obama spoke with Turkish President Abdullah Gul, seeking to bring Turkey into the fold after the controversial appointment of Danish Premier Anders Fogh Rasmussen as NATO’s Secretary General.

The American President Obama spoke with his Turkish colleague Gul (Saturday) morning and guaranteed that the new secretary general would appoint a Turk as one of his undersecretaries-general, said Premier Erdogan, from Ankara. Turkey would also receive more high-level positions at NATO military headquarters.

The Netherlands’ other paper of record, Volkskrant, issued its own note of approval on Rasmussen:

... Rasmussen ... is above all pragmatic. He is intelligent, socially capable, and has an aversion to big theories and intellectual debates: characteristics that make him well-suited to lead an organization like NATO, with its diverse membership.

Italian journalist Enrico Franceschini, writing in his blog on La Repubblica, has a long list of “consequences” of the summit. Among them:

... Multilateralism is back, after eight years during which Bush’s America strove to do everything by itself (with visible military, political and economic results). Not only is a problem that once would have been handled by the G8 now entrusted to some twenty countries and institutions, but the IMF and the World Bank are again in the foreground as agents of any solution ...
... The “ultra-liberal” market is no longer dogma ...
... “Old Europe,” as American Secretary of Defense Donald Rumsfeld used to dismiss it in the early days of the Iraq war, is not in decline, is still there and continues to matter, with France and Germany as its guiding axis, and everyone acknowledges its weight ...
... China made its debut as a 21st-century power on a world stage. President Hu Jintao dusted off Teddy Roosevelt’s old motto, “Speak softly and carry a big stick;” which in their case is 1.2 billion Chinese and the “hottest” economy on the planet ...

Continue reading "Europe: All Summit, All the Time" »

Russia: Medvedev Speaks Frankly on G20

Russian President Dmitry Medvedev was generally satisfied with his meetings at the G20 Summit in London, having covered a wide range of issues - from the economy to global security to relations with America and with Russian neighbors.

At a press conference after the summit, President Medvedev called the forum a major step forward compared to the previous one. "If the first summit in Washington was somewhat introductory - some of the things that we discussed were very general in nature - now, it is very different," said the Russian leader. According to him, the joint declaration that has just been adopted contains a very specific set of topics and decisions on overcoming the global financial and economic crisis. "In this sense, I believe that the work which was carried out, culminated in the proper result. This is a step forward, a step in the right direction," said Medvedev, admitting also that the attending parties have not been able to resolve all issues.

Medvedev also stressed that G20 members will get back to discussing the idea of a "supranational currency," which has been suggested by the Russian side: "No one expected that today we are going to take a decision on this subject. The challenge now is for our national currencies to feel normal, but that does not mean that we are satisfied with the overall situation of national reserve currencies," explained the President. Medvedev also remained positive on his meeting with the US President Barack Obama, calling him a "constructive man" who gave very specific answers to the questions raised: "I am glad that I got acquainted with the President of the United States. It was a good meeting. It seemed to me that we have been able to establish contact. There are many topics on which he and I see eye-to-eye - that I can say with absolute precision," said Medvedev, stating that there were still differences with the American side on many issues.

One common area with the US is the issue of financial bonuses at companies that are receiving government assistance. According to Medvedev, heads and CEOs of companies that get such assistance must "behave decently" and limit the size of their bonuses: "It is up to the companies whether to pay bonuses or not. But if a company is public or a company is owned by the state in whole or in substantial part, I believe that our dear managers, directors of the companies must practice self-restraint, even if they already have agreed to pay a high compensation," said Russian President.

At the summit, President Medvedev also spoke with the students at the London School of Economics, answering questions on Russia's relationship with the West and NATO. He briefly touched on the subject of protests in London, which led to some unrest in the city, saying that people should have the right to protest, but that he gets tense when talking about it: "I grew up in a country where there have been many revolutions, and I am always careful when referring to such popular expressions of discontent," joked Medvedev.

Russian president called on NATO to be more responsible when making decisions, not to create problems for themselves and not to exacerbate relations with its neighbors, including with Moscow: "NATO needs to think about that, to preserve the unity and not to create problems with its neighbors. Before you decide to increase the size of the alliance, think about the consequences," stressed Medvedev, adding that "... frankly I told all this to my new comrade Barack Obama." According to the Russian President, NATO should be responsible for making these kind of decisions and act on the principle of "do no harm": "You need to think about what would be the relations within the alliance, because the admission of new members brings new responsibilities and new challenges," said Medvedev, noting that "it's not easy to talk to all NATO members," although he declined to mention specific countries.

Turning to the issue of missile defense in Europe, Russian President once again called the possible placement of such a system an "error on the conscience" of the previous U.S. administration: "I think that all sorts of protective measures, such as missile defense - namely, a means of protection, including from threats that come from nations with unstable regimes - these kind of protective measures should be implemented together", said Medvedev, adding that many of his European colleagues share this stance. However, he encouraged those present at the London School of Economics briefing that "there is every chance that Russia would not need to deploy its Iskander missile systems in the Kaliningrad region in response to the deployment of U.S. missile defense system in Europe: "We had a conversation on this subject with the President of the United States. At least I can say that today, there is a desire from the United States to listen to our arguments. They do not try to cut us off and say that this issue is resolved."

Responding to the question from a Georgian student, Dmitry Medvedev stated that he does not want to have any relations with Georgian President Mikhail Saakashvili, or to communicate with him: "Everything that happened during last summer in the Caucasus is on the conscience of the Georgian leadership. This is my official stance. If the power ... changes [in Georgia], I am ready to discuss any topic. Russia wanted to have kind and good relations with Georgia."

Meanwhile, Georgia would like to continue its security relationship with the United States, and recently offered to send its troops to Afghanistan. President Saakashvili announced this initiative at a briefing with the Deputy Chairman of the Joint Staff of the US Armed Forces General James Cartwright. However, experts are certain that Georgians will not receive special dividends even if a limited contingent of Georgian troops will get to Afghanistan. An example of such reasoning is the fact that no meeting recently took place between US Vice President Biden and the Speaker of Georgian Parliament David Bakradze. At the briefing with Saakashvili, when General Cartwright unexpectedly advised Georgia to maintain peaceful relations with its neighbors, the pro-government TV company "Rustavi-2" quickly interrupted a live broadcast.

Mexico: Time for a Plan B

Mexico has longed complained about the ease with which drug lords can obtain high-powered weapons from the United States. Understanding the domestic political restraints to stricter gun control laws in the United States (Mexico’s gun laws are much stricter), Mexican and American officials seem to be opting for plan B: better monitoring at the border.

Following a high-profile visit from Hillary Clinton last week, Attorney General Eric Holder and Secretary of Homeland Security Janet Napolitano both went to Mexico to meet with their counterparts and to discuss arms control and anti-narcotics cooperation. Sec. Napolitano announced plans to spend more than $400 million to enhance surveillance equipment and entry ports along the border. Mexico, for its part, will expand a pilot program launched in Matamoros that calls for greater inspections for trucks entering into Mexico. Sec. Holder tried to assure his Mexican counterparts that the loose American gun laws would not impede the United States from attacking the illegal trafficking of arms.

Mexican Attorney General Eduardo Medina Mora said that Mexico and the United States have decided to share information and to work together to investigate and fight arms smuggling. However, President Felipe Calderon, from the G-20 summit in London, emphatically rejected the possibility of any joint military operations with the United States. Mexicans remain highly suspicious of the American military, a view that goes back to the Mexican-American war from 1846-48.

Secs. Holder and Napolitano were greeted in Mexico on Thursday with the news that Mexican authorities had captured one of the top drug lords for the Juarez Cartel. Vicente Carrillo Leyva, 32, was captured while exercising in a park near his home in Mexico City. He is the son of Amado Carrillo Fuentes, the former leader of the Juarez Cartel who died in 1997 during plastic surgery. Despite the success of Carrillo’s capture, Mexico’s message remains the same. If the United States continues to arm drug traffickers, then Mexico’s efforts will be in vain.

March 29, 2009

Mexico: U.S. and Shared Responsibility

News in Mexico this week was dominated by the arrival of Secretary of State Hillary Clinton for a two-day visit. With drug violence rising, Mrs. Clinton tried to dispel rumors that the Obama administration believes that Mexico is a failed state. Furthermore, Mrs. Clinton tried to make it clear that the United States shares responsibility for the violence in Mexico because of the high American demand for drugs and because of the arms that are brought into Mexico from the United States.

Mrs. Clinton noted that the United States is going to provide $80 million worth of Black Hawk helicopters to Mexico. Some of the funds used for these additional helicopters will come out of provisions of the Merida Initiative, a three-year $1.4 billion dollar security aid package for Mexico signed by President Bush last year. The Obama administration also announced that it would send additional federal agents and intelligence analysts to the border in an effort to prevent the violence from coming into the United States.

Mrs. Clinton also reassured Mexico that a current trading dispute would be resolved promptly. The Obama administration scrapped a program last week that allowed some Mexican trucks to operate within the United States. Some labor unions have argued that the Mexican trucks do not meet safety standards required in the U.S. and that many American jobs will be lost. Under NAFTA, the United States is supposed to allow Mexican trucks access to American roads. The Mexican government responded by raised tariffs on 90 U.S. products entering Mexico.

President Calderon expressed optimism with what Mexico sees as a changing attitude from Washington. He stated that while Mexico does not rely on financial support from the United States to fight drug cartels, more action is needed from the United States to curb demand in the United States and to limit the flow of arms into Mexico. Foreign Minister Patricia Espinosa also commented that more was needed from the United States but that Mrs. Clinton’s comments go very much along the lines of cooperation that the Mexican government has been trying to build.

On Friday, President Calderon met with three U.S. congressmen, Silvestre Reyes, Ike Skelton, and Howard Berman and asked them to negotiate more restrictions on the sale of guns in the United States. Representative Reyes noted that while the U.S. Congress is open to discussing the issue, there is presently no plan to take legislative action for implementing gun control laws. Mr. Reyes did say that the U.S. congress would like to increase funding under the Merida Initiative to Mexico.

There was some skepticism in Mexico about President Obama’s alleged choice to be the new U.S. ambassador to Mexico. El Universal was reporting that the Obama administration has nominated Carlos Pascual, a Cuban-American, to be the new ambassador and has submitted Pascual’s name to the Mexican government. Pascual is a former ambassador to Ukraine and a fellow at the Brookings Institute. He is also an expert on failed states. Mexican leaders do not want to be lumped into the category of failed states and have wondered if the type of messenger will indicate what the message will be. Anyway, there is no word so far from the State Department or the Obama administration if Pascual is indeed the new ambassador.

Debate in Mexico has also converged on the proper role of the United States in this new era of ‘co-responsibility.’ President Calderon was quick to deny claims that he asked the Obama administration for more funds to fight narcotraffickers. He proclaimed that Mexico does not rely on the United States for financial assistance. On the other hand, La Jornada featured an interview with President Oscar Arias from Costa Rica, who argued that the United States should allocate more funds through the Merida Initiative to Mexico and Latin America if it wants to have more prosperous neighbors during this economic crisis.

Chinese Sphere: Tibetan Serfdom

Chinese President Hu Jintao visits an exhibition marking the 50th Anniversary of Democratic Reform in Tibet, at the Cultural Palace of Nationalities in Beijing. (Xinhua)

This year marks the 50th anniversary of the Tibetan uprising against Chinese Communist rule in the region. Throughout this month, the Chinese government has been imposing a lockdown in areas with large Tibetan populations and banning foreign journalists from those areas. Yesterday, seemingly in an attempt to negate the anniversary of the uprising and further solidify Chinese Communist party (CCP) rule over Tibet, the government designated March 28 to be Serfs’ Emancipation Day to commemorate the freeing of Tibetans from serfdom under the Dalai Lama. Here is the official view from China Daily:

More than 1 million serfs were freed in Tibet in 1959, eight years into the region's peaceful liberation and shortly after a failed uprising of its feudalistic upper class.

Earlier, about 95 percent of Tibet's 1.14 million population were serfs, owning no more than 5 percent of the social resources. The local upper class, comprising only 5 percent of the region's population, ran a brutal, theocratic rule.

In January, Tibet's 382 legislators, mostly with a serf background, unanimously endorsed a bill, declaring March 28 as Serfs' Emancipation Day during the local people's congress' annual session in Lhasa.

A People’s Daily editorial calls this a triumph of “democratic reform:”

Democratic reform is yet another great contribution that the new China has made to the work of global human rights. The darkness and cruelty of the old Tibet was heartless and ruthless towards humanity and human dignity. The carving out of eyeballs, breaking of joints, cutting off of feet, and other cruel punishments inflicted upon serfs and slaves were absolutely horrifying. Democratic reform shattered the system which divided people into castes. It abolished the old Tibet’s laws and barbaric punishments. It liberated a million serfs and slaves from inhuman oppression. Through the national constitution and laws, it provided guarantees of dignity and rights accorded to citizens. From this time forth, a people’s democratic political system was established. The shackles that obstructed the democratic political development were utterly broken.

An editorial in Sing Tao Daily, the second largest newspaper in Hong Kong, does not see any hope for any forward movement in relations between the CCP and the Dalai Lama:

Beijing and the Dalai Lama’s representatives have not been able to make progress in talks. The root problem is that though the Dalai Lama does not insist upon Tibetan independence, his proposal for a high level of autonomy for a greater Tibetan region is difficult for Beijing to accept. The Dalai was born in Qinghai, and many of his protectors who fled with him are from Tibetan regions in Sichuan. The government-in-exile cannot ignore their interests. This greater Tibetan region encompasses a quarter of China’s territory. It is impractical to demand that Beijing make such a concession.

In an op-ed in the Apple Daily, one of the largest newspapers in Taiwan, former deputy secretary-general of Taiwan’s National Security Council Antonio Chiang sees the Chinese government’s handling of Tibet as ultimately harming the national interest:

The CCP’s hostility towards the Dalai Lama has deepened. Hope for reconciliation between the two sides has shattered. The situation has deteriorated and each side has become further radicalized. This is in no way beneficial for China’s peace and stability.

There is an abundance of talent in the ranks of overseas Tibetans. Their experience in exile has trained them extremely well, especially in the areas of diplomacy, public relations, lobbying, and international organizations. They have also cultivated much talent in the political, cultural, and educational fields…

The Dalai Lama will not remain cooped up for the long-term in India’s northern mountainous regions. His habit of traveling around the world will not change. Wherever he goes, that country and China will experience very unpleasant tensions. This is an acute irony in China’s desire to cultivate the image of a great nation.

To the CCP, the Tibet issue is inextricably tied up with its notion of Chinese sovereignty. Practically speaking, if Tibetans were granted the autonomy that is called for by the Dalai Lama, how seriously would that compromise China’s national security? It is hard to imagine that India would seek to exploit Tibetan autonomy in order to advance territorial claims.

However, in the same way that the CCP has framed the issue of Taiwan and Xinjiang, they have all become part of a “national myth” of Chinese sovereignty and identity, and the CCP has staked its legitimacy upon nothing less than the maximalist goal of establishing its unchallenged rule over these areas. It is a high stakes zero-sum game, and anyone who deals with Beijing in these sensitive issues must be cognizant of this and plot his strategy accordingly.

Russia: Visa-Free Trips to America?

There is a serious buzz in the Russian establishment following the statement by US Consul General Kurt Amend that Washington is not just deliberating the introduction of visa-free regime between Russia and the United States, but rather considers such move one of its foreign policy goals. However, according to Russian experts, such policy does not seem feasible in the near future, but rather reflects the desire of the United States to use this idea as one of the trump cards in the forthcoming talks between Presidents Medvedev and Obama. "We are discussing this issue with the Government of Russia, how we can move on this matter. We believe that it is necessary to do so gradually, step by step. This process must be mutual, and is our overall goal," said the American Embassy official this past Friday to "Russian News Service" radio station. Amend also pointed out the recent trend in reduction of number of refusals in visa issuance to Russians. "In 95% of all cases, visas are issued," emphasized Consul General and stated that in 2008, the U.S. Embassy had issued 170,000 visas for Russian citizens.

In October 2008, three former Soviet republics - Latvia, Estonia and Lithuania - as well as a number of Eastern European countries, were added to the visa-free travel regime with the United States. Maxim Minayev, leading expert at the Center for Political Studies, believes that this statement by Consul General fits the general trend of Russian-American relations, which the Obama administration recently dubbed "Reset": "I do not think that the representatives of the diplomatic mission of the U.S. can afford reckless statements. Their positions in large part must conform to the general views on the development of bilateral relations that are developed in Washington."

According to Minayev, visa-free regime usually characterizes a high degree of confidence on the part of America towards its allies: "Such a declaration for the United States is a demonstration of a high degree of allied relations. Plus, it is also the desire to obtain from those allies further dividends in the bilateral relations." Minayev noted that for the Eastern European countries, visa-free regime was a cost for participation of their military contingents in Afghanistan, while recent granting of such regime to South Korea reflects a long-standing military alliance with America.

"The introduction of visa-free regime with Russia means that we are either going to be strategic allies, or Washington is waiting for us to give significant concessions in addressing key international issues. This, obviously, involves Iran and support for actions in Afghanistan, including the inducement of Moscow to agree to the emergence in Central Asia of an alternative to the Manas military base," said the expert.

Eager to offset the effects of the global financial crisis on their economy, Russians are seriously deliberating the creation of an alternative reserve currency to the US Dollar. Recent proposals by Russians to establish such currency did not receive much attention until last week, when China put its support behind this idea. At one point the idea was also picked up by the most distinguished global economists. The world is now seriously talking about the possibility of the emergence of supranational Reserve unit, based on Special Drawing Rights - quasi-currency of the International Monetary Fund.

The dollar recently suffered another blow, inflicted by Dominique Strauss-Kahn, Head of the IMF, who said that discussions about new global reserve currency are legitimate and could be held in in the coming months. According to Russians, Strauss-Kahn's haste is obvious - if a new reserve currency emerges that is based on the SDR, then the International Monetary Fund will be the most powerful entity on Earth - the issuer of the world's money. This attitude suits Russia just fine - now, the prospect of creating a new, non-dollar currency becomes short-term, rather than a long-term project.

Russia responded immediately to such developments - on Thursday, March 26, First Deputy Foreign Minister Andrey Denisov suggested convening an international conference with the authorized representatives of governments and financial experts to discuss the creation of a single global currency. According to the diplomat, such conference should be the next step after the upcoming G-20 London Summit and after June conference at United Nations. However, the discussions, even at the highest levels, are not enough - there should be policy decisions agreed upon by all countries. "This is an issue that must be discussed in order to develop a consensus, its not enough to solve this by a simple majority. It must be agreed by virtually all participants of the international economic and financial exchange. Only then can this idea be realized," admitted Denisov.

In the ongoing public relations battle over Soviet history in the Baltic countries, Russian "Studio Third Rome" released a film called "Baltics: This History of so-called "Occupation." The film tells about the years when the Baltic countries were part the USSR. It tries to answer questions such as why Estonia, Latvia and Lithuania were considered to be "showcases of socialism," were on a special account with the Soviet leadership and were receiving large investments into their economies. The film also asks why, after the proclamation of independence and accession to the European Union, people's lives there have not become better and richer.

After the collapse of the Soviet Union, the Baltic countries decided to "cross off" the legacy of Soviet industrial development. The film showed the destroyed sections of the industrial plants, rusting piers at Klaipeda shipworks, deserted beaches of Jurmala, the "vacation pearl" of the Baltics. The directors and producers visited the Ignalina nuclear power plant, which the EU at the request of the Lithuanian authorities will have to close next year. The film asks if destruction of the Soviet economic legacy is worth it for the Baltic states. The picture also tries to show that the current financial crisis has already confirmed the "malignancy of non-Soviet economic inheritance."

March 22, 2009

Puerto Rico: Acevedo Declared Not Guilty

Former governor of Puerto Rico Aníbal Acevedo Vilá has been declared not guilty on all nine counts of corruption after a trial where the defense did not call any witnesses and 10 people indicted with Acevedo had plead guilty before the case went to court.

Here are copies of the original indictment (PDF files) and the second indictment.

Puerto Rico Ex-Governor Is Acquitted of Graft

The former governor, Aníbal Acevedo Vilá, along with 12 associates, had been charged with participating in an elaborate scheme to pay off more than $500,000 in campaign debts going back to 2000. The criminal indictment made public last March also accused Mr. Acevedo of using campaign money to pay for several family vacations and for $57,000 worth of “high end” clothing.

The trial lasted a month, and though prosecutors called about 30 witnesses and the defense called none, the jury made its decision quickly and unanimously.

Manuel Ernesto Rivera, writing for AP, reports,
Authorities last year accused Acevedo and 12 associates of participating in an illegal scheme to pay off more than $500,000 in campaign debts.

One by one the associates began to plead guilty, leaving only Acevedo and Inclan to stand trial. One co-defendant agreed to testify against Acevedo in exchange for having charges against her dropped.

Prosecutors presented some 30 witnesses, while defense attorneys surprised the courtroom earlier this week when they rested their case without calling a single person to testify. Acevedo's lawyers urged the judge to dismiss the case for lack of evidence.

In November, Acevedo lost to Fortuno in his bid for a second term. A month later, Barbadoro dismissed 15 of 24 charges against Acevedo, ruling that U.S. federal prosecutors improperly interpreted election laws.

The AP has a list of Key events in the case against Puerto Rico's ex-governor.

Acevedo, a Democrat, is the only governor to have faced federal charges since the island became a Commonwealth. He lost his bid for re-election last November in a landslide to Luis Fortuño, a Republican who was the island's Resident Commissioner in the US Congress.

Europe: Crisis Takes Center Stage

As was the case in the United States last week, the economic crisis dominated the news in Western Europe.

Shortly after the American Congress passed a law taxing AIG bonuses at a rate of 90%, a debate ignited in the Netherlands, for instance. This small European country, home to some of the world's biggest banks (like ING), has, like America, bailed out several banks and mortgage lenders in recent months. Shortly after being bailed out those companies plan to 'reward' some of their employees with massive bonuses. Left-wing parties Groenlink (the Greens) and SP (Socialist Party) were joined by the right-wing PVV party of Geert Wilders calling for a similar 90% tax rate. Dutch minister of finances Wouter Bos responded to the calls for a 'supertax' by saying that although he disapproves of bonuses for individuals responsible for the near collapse of banks, he's not yet willing to tax their bonuses at such a high rate.

Swedish conservative-liberal Prime Minister Fredrik Reinfeldt lashed out at EU members who advocate borrowing large sums of money in order to spend their way out of the economic crisis. "A lot of E.U. member countries are now in huge deficits. That’s a problem now and will be a problem for the future," Reinfeldt said. He went on to criticize the Obama administration on the same grounds: "The huge deficits in the U.S. are a problem both for them and for the world because it’s actually taking away a lot of resources from credit markets all over the world, which creates problems for others."

The above makes Reinfeldt the first well-known European leader who publicly criticizes Washington for its handling of the economic crisis. Thus far, most Europeans have refrained from commenting on Obama's policies, even though they consider those policies unwise and counterproductive in the long run.

Turkey's economy, which was one of the fastest growing and most stable developing economies in the world, has collapsed: Its budget deficit has increased by 824%, the economy will shrink by as much as 7% this year, and unemployment has hit an all-time high.

Turkey lived above its means under the leadership of Prime Minister Recep Tayyip Erdogan. It borrowed many billions from the IMF, individuals and foreign governments. This was acceptable when the economy was thriving, but became untenable at the moment the international crisis hit.

The crisis wasn't the only thing European newspapers wrote about, however. The British Telegraph found out that the DVD box Prime Minister Gordon Brown received when he visited Washington D.C. earlier this month wasn't merely thoughtless and cheap, it was also useless. After having complained about the present for a few days, Brown decided to make the best of it and put the movie "Psycho" in his DVD player. He clicked on play, sat down and waited for the movie to start ... only to see a pop-up screen appear saying "wrong region": the DVDs can only be viewed in a Region 1 player (North America).

Lastly, French President Nicholas Sarkozy is becoming so unpopular that the French are turning his least favorite book into a national bestseller. Sarkozy has frequently expressed his disdain for "La Princesse de Cleves" (The Princess of Cleves), a novel by Madame de La Fayette, which was published in 1678 and is taught in most French classrooms. The French have now responded by making it a symbol of dissent: Sarkozy's popularity falls while sales of the book are rising.

Russia: Former Republics Revolt

Georgian President Saakashvili's government is actively hunting for Russian spies - the timing of this operation perhaps coincides with the recent Hart-Hagel Commission report that recommends putting Georgia's NATO inclusion on hold in favor of better relations with Russia proper. In the Georgian city of Zugdidi, there was a massive operation to arrest a single person. Georgian special forces arrested a citizen of Russia Vladimir Vahaniya. During the search of his home, police discovered two grenades and automatic weapons. The court sentenced Vahaniya - a businessman, doctor, author of several books, a former member of the Russian prosecutor's office and a candidate for the State Duma in 2003 - to two months preliminary detention.

As the daily "Izvestia" reports, "today Vahaniya probably curses the day when Mikhail Saakashvili gave him a second, Georgian citizenship, which is granted to citizens of other countries only by the Presidential order, and only for services to the state of Georgia. Saakashvili signed the decree 11 months before Vahaniya's arrest in Zugdidi." According to "Izvestia," Vahaniya's arrest coincided with the promotional campaign of the Georgian authorities, who claimed that the planned large-scale anti-government protests to take place in April were planned by the Russian secret services. Vahaniya therefore suits the role of an "agent" - he lived in Russia for the past 30 years, and chaired a Union of the military and law enforcement officials of Moscow region.

Georgia is not the only country actively engaged in seeking out pro-Russian elements amongst its population. Life may get more uncomfortable for the Russian citizens of Latvia, a republic with the largest post-Soviet ethnic Russian population in the Baltics. According to the daily "Gazeta," Latvian nationalists proposed to their compatriots to photograph license plates of cars from the Russian and Soviet symbols, and send pictures to the police. Such a "Rolodex," in their opinion, will help to identify "the most aggressive colonists" of their country. Of particular interest are license plates with the Russian flag, Russian national emblem, the flag of the Soviet Union - as well as the actual plate numbers of cars with such symbols.

The Club of Latvian Nationalists announced on their website that: "It seems that in recent months, people are paying attention to the fact that on our streets there are too many cars with visible Russian or Soviet flags. It is clear that in this way, the car owners have demonstrated their loyalty to the policy that is hostile to Latvia. The collected information can be useful for identifying the most aggressive colonists, which is especially important prior to May 9 (Commemoration of the Soviet victory over Nazi Germany), and prior to the upcoming elections." Latvian security forces have no intention to take any action, considering such actions only as a publicity stunt by the nationalists.

In order to counter real and possible threats to his country, Russian President Dmitry Medvedev announced that Russian army will soon be a totally new, modernized and battle-ready entity. "We have never had such favorable conditions to create a modern, efficient army," - said the President at the Annual Military Review in Russia. According to Medvedev, the country should see a "new look of our army and navy have by December 1 of this year."

Explaining the upcoming changes, Medvedev clarified that they will include "transfer of all military units to the category of permanent readiness." Such a force could have "peace-time composition" - without additional military units - and should be able to effectively counter the emerging military threat. "This is a key component of the new model, the new image of the Armed Forces," stressed Medvedev. He further pointed out that a "modern, well-trained and equipped army with the newest weapons is the best guarantee against any potential aggression or external pressure." Russian head of state further outlined specific threats that such army should confront: "The analysis of the military-political situation in the world shows that some regions retain the threat of a serious potential conflict. Such threats can spark local crises that are also exacerbated by the international terrorism. There are also continued attempts to expand NATO's military infrastructure near the borders of Russia."

China: Government Blocks Coca-Cola

Last week China’s Ministry of Commerce announced its decision to block Coca-Cola’s acquisition of Huiyuan Group, China’s largest privately-owned beverage company. The proposed buyout raised alarm that not only would Coke gain a monopolistic position in China’s beverage market, but also that a well-known domestic brand would be eliminated by a foreign company. This was the first such case that was decided according to China’s two year-old Anti-Monopoly Law.

The Commerce Ministry’s official announcement states:

Upon investigation, the Commerce Ministry has determined that this consolidation would have a negative influence on competition. The Coca-Cola Company would possibly use its dominant position in the carbonated beverage market to tie up fruit juice sales or implement other business conditions of an exclusionary nature to consolidate and limit competition in the juice beverage market. This would lead to consumers being forced to pay higher prices for fewer selections. Concurrently, due to the effect of current brands restricting market entry, it would be difficult for potential competition to eliminate these competitive restrictions. Also, consolidation would also squeeze the survival space of domestic small and medium-sized beverage companies. This would have an adverse influence on the competitive state of the Chinese juice beverage market.

In a commentary in the Southern Metropolis Daily, one of China’s leading commercial newspapers, lawyer and economist Ma Guangyuan asserts that 80% of Chinese netizens were opposed to the deal. It is unclear how he came up with that figure, but it cannot be denied that the case was controversial. As a result, the Commerce Ministry’s decision was not made solely according to the merits of the case:

In my estimation, the [reasons] provided by the Commerce Ministry lack direct evidence for how a marriage between Coca-Cola and Huiyuan would influence other people’s livelihoods. Instead, their reasoning is based on indirect judgments. This is probably the hidden danger that will cast doubt on this decision for days to come. The ministry’s official announcement revealed a detail that supports this point: the Commerce Ministry … requested that Coca-Cola provide a proposal for a possible solution, but Coca-Cola’s preliminary and revised proposals failed to obtain the ministry’s approval.

Because the announcement did not give any specifics, we do not know anything about the recommendations given by the ministry. We also do not know anything about the alternate proposals provided by Coca-Cola. However, according to external sources, the Commerce Ministry wanted Coca-Cola to give up the Huiyuan trademark after the acquisition. If that is true, than it implies that the merger would not have set up any competitive obstacles or restrictions. The problem still seems to be wrapped up with the preservation of national brands and other non-legal issues.

March 15, 2009

Russia: Crisis Forces Food Reduction

Russian economy begun to actively respond to the needs and demands of the local population by drastically slashing the amount of food and agricultural imports to the country. That does not bode well for the Russian people nor for the import-export sector which rose in trade volume over the last few years. Before the advent of the crisis in 2008, many staple food products were imported, since the vast agricultural potential of the Russian Federation that has not been realized following the breakup of the Soviet Union in 1991.

In February 2009, Russia reduced food imports to 21.8% compared to February 2008, as reported by the Federal Customs Service: "Thanks to the devaluation of the ruble, foreign goods went up in price by more than a third, so domestic importers can not buy in the previous volumes. Additionally, local demand leaves much to be desired due to the crisis."

According to the official data, Russia imported less than half the alcohol as compared with last year - a first-of-a-kind reduction in the last 8 years. Import of fish and sea products fell by a third, import of milk products fell by almost 37%, while most felt are going to be reduction of meat and beef products by an estimated 11%. Russian domestic producers cannot yet satisfy the domestic demand with locally grown meat products, and general population still relies on foreign exporters.

Continue reading "Russia: Crisis Forces Food Reduction" »

Chinese Sphere: Rubber Stamp and Baseball

The Chinese government wrapped up its annual dual legislative sessions last week with 97.4% of the 2,898 representatives voting their approval for Premier Wen Jiabao’s work report that set an economic growth rate for 2009 of 8%. Although largely seen as rubber stamp parliaments, the Chinese Communist Party (CCP) has in recent years tried to play up their credentials as the voices of the people in response to citizens’ desires to have a greater say in public affairs. In the Southern Metropolis Daily, one of China’s leading commercial newspapers, an op-ed written by a professor at the China University of Political Science and Law criticizes the sub-optimal quality of the briefings given by government leaders. From these criticisms, one can get an idea of what these legislative sessions can be like:

Continue reading "Chinese Sphere: Rubber Stamp and Baseball" »

March 8, 2009

Russia: Managing the Political System

March 2, 2009 marked the one-year anniversary of President Medvedev's rule. Russia's ruling party, "United Russia" (Edinaya Rossia) held a forum titled "Strategy-2020," which was devoted to summaries and conclusions about the President's first 12 months. The current economic crisis took center stage during the party discussions. The most notable comment was delivered by Vladislav Surkov, First Deputy Head of the Presidential Administration, who assured the audience made up of party functionaries, economists, journalists and political experts that while the Russian political system works effectively, calling for major changes would be an "extremely risky speculation."

The discussion revealed an interesting cross-section of the current Russian opinion about both the domestic policies and Russia's place in the international system. Valery Fadeyev, Chief Editor of the "Expert" magazine, stated at the meeting that the Medvedev-Putin tandem leadership has improved the political system of Russia, as "it has become stronger, since each of the leaders brings his own qualities into the system." According to Fadeyev, "policy is a difficult thing to begin with, and it's not logical to resist the current situation when Putin is still a strong leader." It is this political system, according to political expert Oleg Pavlovsky, that protected Russia from the fate of Iceland, Hungary, Latvia and Ukraine, "which is already not bad."

The latest Russian sociological studies also reveal a certain paradox: on the one hand, people are very realistic in evaluating the economic crisis and its aftermath, while on the other hand, they fully support the current government. According to economist Michael Yuriev, "there exists no political system that would be good at everything, each has its detriments." As for the economic crisis, Yuriev thinks that under the current circumstances, it is important that Russia's long-term strategic interests would not be affected by the current needs of the Russian economy. "If we begin to pursue policies that would limit our dependence on the global economy, we will pay some of the costs of this policy in the future, but they would be small - and we would obviously benefit in the short-term. Otherwise, we do not know what would be the future result from our total integration, but the fact that we could lose now is very clear."

The economic crisis may have irrevocably affected Russia's already gloomy demographic situation. The first months of the crisis put an end to governments talks on the expected demographic breakthrough, which was predicted by Russia's leaders over the last few years. The expected boom in fertility rates has been one of the most important discussion subjects for both President Medvedev and then-President Putin. The demographic issue even took center stage during Medvedev's election campaign. By the end of 2008, Russian Health Ministry still gave optimistic predictions on this issue. However, there has been no discussion of Russian demographic situation at the highest levels of power for the past several months, while the experts argue that the country faces a demographic decline.

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China: Careful Steps Toward E-government

Last week the Chinese government held its annual meetings of what, on paper, are its highest consultative and legislative bodies, the Chinese People’s Political Consultative Conference (CPPCC) and the National People’s Congress (NPC). They are largely viewed as rubber stamp parliaments by foreigners. However, the central government in recent years has tried to play up their credentials as representatives of the people. The People’s Daily, the government’s official newspaper, launched the “E-Two Sessions” website last week where netizens can submit, discuss, and vote on proposals for new laws. An editorial uses some pretty lofty rhetoric in describing the website as a major step forward in participatory government:

This is a witness to the ever-increasing maturity of Chinese netizens. Using their mouse clicks to express their wishes for the motherland, using their keyboards to type out their hopes for the revival of the people, our netizens have become more mature. Their outlooks have become broader. Their attitudes have become more rational. They offer advice for the nation through their writings. They consciously assert their identities as citizens and incorporate social justice and national affairs into their outlooks. This reflects their passion for bearing the responsibility for the nation and participating in the political process. The popularity of the “E-Two Sessions” website is the best witness to netizens’ growing sense of civic consciousness and increasing rationality in expressing their opinions.

And what are the top five proposals with the most votes? As of this writing, they are:
1. Government and party officials of county-level and lower should not have their own special drivers.
2. Cancel requirements for private businesses to apply for licenses in order to increase employment.
3. Distribute subsidies for senior citizens.
4. Crack down heavily on corruption.
5. Enable those who have lost their jobs through reform of state-owned enterprises to also enjoy the benefits of economic reform.

Note that those are just the titles of the proposals. All of them link to separate web pages which contain comprehensive descriptions as well as sections for leaving comments and voting. How much this website will actually affect the proceedings of the Two Sessions is uncertain. And with the Internet in China, one should always approach whatever content, especially that coming from government channels, with a measure of skepticism.

Western Europe: Not a Boring Week

Just like in the United States, last week was quite interesting for the Europeans. All major stock markets crashed, especially the Dutch AEX index, which hit rock bottom yesterday. Whereas the index stood at 700 points in 2000, it dropped below 200 points Friday.

Not only did the Dutch stock market collapse, Dutch Prime Minister Jan Peter Balkenende also told the nation the current crisis would turn out to be the worst in 80 years. These remarks came only a few months after he and his Minister of Finances Wouter Bos said this country would not suffer from the crisis at all. Instead of looking at his own role, Balkenende and his fellow coalition members are busy trying to find scapegoats.

Dutch princess Máxima (wife of crown prince Willem Alexander) has found some: she blames banks for the crisis. They behaved irresponsibly, she says, and blames their "overzealous marketing" for creating the circumstances in which all Dutch will carry the financial burden of the banks' greed. It was a remarkable comment considering the Dutch Royal Family doesn't, normally at least, comment on politics. It functions as a symbol, not as a political powerhouse nor as a representative of public opinion.

Meanwhile, the Brits were angered by the way Prime Minister Gordon Brown was received in the White House earlier this week. Obama, British journalists complained, gave the distinct impression he wasn't interested in Brown nor in what he had to say. The present British press corps, meanwhile, was told to wait outside in the freezing cold while the two men talked about nothing at all. When the meeting had ended these journalists were tired, cold and hungry while Obama quickly moved on to do other things.

To make matters even worse, the Brits complained, Michelle and Barack Obama insulted Brown, his wife, their children and their entire nation by giving them useless, irrelevant and thoughtless presents. Brown received a 25-DVD box (with, among other movies, ET and Star Wars in it) while his two sons received models of Marine 1, the president's helicopter. Heads of state normally exchange thoughtful, valuable presents, so the Browns had truly tried their best to give Obama and his two daughters something they'd appreciate.

At the same time that the Brits were fighting with the White House about the reception Brown received in Washington, the Germans were fighting among each other about how to commemorate the Berlin wall. Some believe it to be an important part of German history which should be remembered by the nation, others complain their "wounds take more time to heal."

Whatever the Germans will decide, one thing is clear: last week wasn't exactly boring here in Europe. If politicians weren't fighting with each other, they attacked CEOs of banks; if citizens weren't complaining their governments weren't doing enough to end the economic crisis they declared war on each other over a wall that was destroyed 20 years ago; and if Brits didn't throw custard in the face of their own politicians, they dreamt about doing so to President Barack Obama.

March 1, 2009

Russia: Kremlin Tightens the Belt

The Kremlin continues to battle the effects of the global economic slowdown on Russia, and this time, President Dmitry Medvedev is setting an example by planning to cut into his administration's budget and personnel. By March 1, all major administration departments must present the plan to Medvedev's assistant on how they will cut their expenses. There are also concrete plans to cut up to 100 staffers from the Administration's payroll. Earlier, the Russian President said that in tough economic conditions, "... we must start with ourselves; President's Administration is not a large organization, but it must lead by example." Currently, Medvedev's offices employ approximately 1,600 people across the country, and the outgoing 100 are most likely going to be staffers close to retirement or those working in various regional offices.

In order to stimulate its flagging economy, Russian Ministry of Economic Development has put forth a plan to Prime Minister Putin in order to support greater competition within the country. The plan, developed 'till the fiscal year 2012, will be supported by specific anti-monopoly legislation, which is being developed by both chambers of Russian Parliament. According to Putin, this legislation "should give the Federal Anti-Monopoly Service greater authority to interdict unsavory business practices and the abuse of monopolistic behavior on the market, but at the same time it should free entrepreneurs form excessive controls." The plan will devote special attention to so-called "natural monopolies" and should simplify taxation of Russia's financial systems in order to stimulate financial trading in the country. Until recently, "natural monopolies" included Russia's oil, gas, metals, energy and certain industrial and armaments entities that so far contributed the most to Russia's economic growth. The government plan also seeks to simply access to the natural monopolies' infrastructure, as well as lowering the cost of access to electric grids and small business participation in state orders.

While Russia struggles to steady its economy and come up with ways to instill confidence in its domestic market, many leading Russian policy experts put the blame on the ongoing crisis at the feet of the "global elites", emanating from America. Aleksei Pushkov, Director of the Institute of International Affairs at the Diplomatic Academy (Ministry of Foreign Affairs) and Professor of the elite Moscow Institute of International Relations (MGIMO), states that the global financial elite feels the responsibility for the ongoing crisis, but refuses to talk about it. "At the recent Davos Economic Forum, many leading officials and managers of the global banks and financial institutions simply did not show up. There was a feeling that the very model of global capitalism developed over the last three decades is itself in crisis."

He further stated that "here, we are talking about the neo-liberal model of development. It was believed until recently that globalization and global economic integration will create conditions for the uninterrupted growth of economic well-being. In practice, however, it contributed to the spread of America's financial crisis all over the world. It was globalization that spread the virus that first struck the U.S. economy." Professor Pushkov also thinks that America's attempts at creating global hegemony and uni-polar world have crumbled: "The neo-liberal economic model manifested itself in politics after the fall of the Soviet Union and the end of the Cold War. In 1991, United States was saying that it remained the only global leader. Then-president George Bush was talking about the New World Order. Even in the United States, it is now acceptable to talk about this uni-polar "moment" that lasted 'till about 2003-2004, when America overestimated its capabilities and begun its policy of regime change in the Middle East, starting with Iraq. That "moment" lasted about 10-14 years and came to and end during the presidency of Bush Jr. Barack Obama is a president of universally accepted 'multi-polar world.' By electing him, America showed everyone that it is refusing to be the hegemon. If the country thought differently, then the next president would have been John McCain - the continuation of George W. Bush policies."

Russia continues its plan for decreasing economic and military-industrial cooperation with Ukraine. This was confirmed by the Vice Premier Sergei Ivanov, who remarked that Moscow is not able to unilaterally break its defense cooperation with Kiev. "We continue to depend on each other, since the Russian-Ukrainian cooperation in the defense industry was developed in the Soviet years," said the former head of the Defense Ministry. "But even before the Georgian aggression [in August 2008], there were adopted a number of measures aimed at ending the industrial and military-technical cooperation with Ukraine. This is an inevitable process, as we see what is happening with our neighbors. We cannot take risks, especially given the desire of the Ukrainian leadership to join NATO."

This past Wednesday at the Kremlin, President Dmitry Medvedev met with the President of Yemen Ali Abdullah Saleh. The outcome of the negotiations was Yemen's desire to assist Russian ships involved in the fight against piracy in the Gulf of Aden. "We would like to talk about what is necessary to continue providing the Russian warships with all necessary facilities in terms of countering piracy in the region," said Saleh. Yemeni President stressed that "the issues of countering the pirates are of great importance to Sana'a." For this purpose, Yemen will host a regional center dealing with anti-piracy efforts. President Saleh also remarked nostalgically that ".... we have longstanding friendly relations with Russia. I am talking about those long-standing relationships that bind the Arab world, including Yemen, yo the Soviet Union." Throughout the Cold War, Yemen was divided into a communist South Yemen and a pro-Western North Yemen. In the 1970s, Soviet Navy gained access to South Yemeni facilities and maintained military presence in the Gulf of Aden. The country was eventually peacefully unified in 1990, as the Cold War was coming to an end.

Chinese Sphere: Searching for Transparency in Government

One of the Chinese Communist Party’s (CCP) key challenges in preserving its ruling position and maintaining domestic stability is carrying out political reform to correct for the excesses and imbalances of the past 30 years of economic growth. The CCP has ruled out Western-style democracy, so it must search for other ways to fight corruption, improve efficiency, and strengthen local governance capacities. A few weeks ago, a People’s Daily editorial called for government officials to be willing to withstand scrutiny by the country’s 300 million netizens. Last week, a National People’s Congress delegate from Guangzhou called for video feeds of the city government’s meetings to be accessible by the Internet (article in Chinese here). An editorial in the Yangcheng Evening News, one of China’s largest circulating newspapers, voiced its approval:

In practice, televising the government’s decision-making process on the TV or Internet would better protect the public’s right of knowledge, participation, expression, and monitoring. It would contribute to reducing policymaking mistakes and decrease the costs associated with policymaking and implementation. … TV or Internet video feeds of the decisionmaking process for policies affecting people’s livelihoods demonstrate the government’s openness, democratic nature, and resolve to eliminate conflict of interests.

These calls for using the Internet to foster an open government do not sound much different from what some citizens in the U.S. have been advocating. It will be interesting to see how significant a role the CCP allows the Internet to play in making politicians more transparent and accountable.

Controversy over the possibility of Taiwan signing a Comprehensive Economic Cooperation Agreement (CECA) with China intensified last week with opposition parties threatening to launch an impeachment effort against the president if it goes through. Government officials have described it as a free trade agreement that Taiwan needs to sign in order to remain competitive after China, Japan, and South Korea enter into free trade agreements with ASEAN over the next few years. However, none of the agreement’s details have been made available to the public, and the government will only submit it to the legislature for review after it has been signed. The Apple Daily, one of the leading newspapers in Taiwan, weighs in on this situation:

[President Ma] has indicated that the CECA would immediately take effect after signing and would then be sent to the legislature for review. This drew the immediate criticism from both the KMT and DPP. In terms of democratization, this is without a doubt a step backwards. The Constitution grants the president the authority to enter into agreements with foreign countries. However, it also grants the legislature the authority to review the signing of agreements. It is the norm in democracies for the parliament to perform an ante hoc review rather than a post hoc ratification – only the rubber-stamp National People’s Congress of China “enjoys” the right of post hoc ratification. Is Taiwan’s legislature a local branch of the National People’s Congress?

What President Ma is exercising is somewhat equivalent to the Fast Track negotiating authority that U.S. presidents used to enjoy before it expired in 2007. The root problem, however, is not really over procedure, but the fact that he is signing a CECA with China. It also does not help that the CECA name sounds similar to CEPA, the Closer Economic Partnership Agreement signed between Hong Kong and China. Now, if the Ma administration was about to enter into an FTA with the U.S., there would not be nearly as much suspicion and controversy.

February 22, 2009

Russia: Hyperventilating over the Economy

In a sign of how serious the ongoing financial crisis is in Russia, the daily "Izvestia" published an article urging the readers not to panic or be depressed from the grim news about the state of the Russian and global economy. The article featured prominent psychologists urging people not to get emotional, but rather seek to analyze the gloomy data in order to truly discern what this crisis means to them personally. "Try to understand to what extent you are going to be touched by these changes," writes one such expert. "As your colleagues or friends lose their jobs or have their salaries cut, try to anticipate major changes to your lifestyle and try to adapt right away. If you think your salary will be cut, try to seek a part-time job. Also, you should know your rights as a worker - try to find out what you are entitled to in these uncertain times."

While this particular advice may be well-intentioned, the rest of the article does not contribute to lowering the already-high blood pressure of an average Russian citizen - it lists a dozen executives who have recently committed suicides by various means due to the effect of the worsening Russian economy. If there is ever a silver lining - if it can be called that - amidst this gloomy economic data, it's the fact that Russian citizens lived almost the entire decade of the 1990s in a perpetual economic, social and even personal crisis. As Russia continued to experience terrible after-shocks form the collapse of the Soviet Union, its people had to adapt to conditions and circumstances that most Americans would reject outright as unacceptable. Therefore, today's Russian people are somewhat better prepared to weather the economic storm than their American counterparts, if only because they are used to prolonged instability and economic uncertainty.

As US President Obama announced that he will hold American mayors responsible for proper spending of the massive economic stimulus, Russian President Medvedev announced that he will fire governors who are incapable of performing their job. Medvedev specifically stated the ongoing economic crisis could not be used by the governors in their defense. "This is your moment of truth," said Medvedev in his address to the heads of the regions. "And I hope you understand that." At the same time, the Russian president called on the federal officials to pay better attention to the needs of the regions, making it clear that not just governors could be held responsible. This past week, Medvedev already fired 4 regional heads. "We have no right to relax," stated the president. "Our economic situation is complicated, and we have to save federal funds on all levels."

Meanwhile, official government data gives more grim news for the Russian economy. Elvira Nabiullina, Economic Development Minister, stated that the "situation is changing - but not for the better. Main problems are lack of credit, lowered foreign and domestic interest towards Russian products, unemployment and lowered personal incomes in the population." According to Nabiullina, Russian GDP contracted at 2.4% in January 2009 alone.

Nonetheless, Russian armed forces would not suffer even in the midst of the ongoing economic crisis. "There are key areas where we have no right to cut expenses," said President Medvedev, "and they include the new look of our military, the ongoing modernization, and the social improvements amongst the military cadres." One such important reform will be the salary increase amongst the junior and senior officers in the military, making an average pay equivalent to $3,375 per month. Russian officials hope that such monthly salary will return prestige to the military service, with said reforms slated to take place after 2012. However, the economic crisis could postpone such reforms till 2016.

Russian military exports could increase even more with this week's visit to Moscow by Mustafa Mohammed-Nadjar, Iranian Defense Minister, who reminded his Russian counterparts that Iran has a robust domestic defense industry with a defensive purpose. While stating that Iran has not attacked anyone over the past 30 years, the defense minister also expressed great interest in Russian advanced military technology. He drew attention to the fact that Iran and Russia have common threats and opportunities in the region, "and when it comes to certain questions, our positions and interests completely dovetail. We are always ready to utilize advanced military technologies and equipment - Russia has such capability and we intend to use it, as before."

Chinese Sphere: Russia Sinks Chinese Ship

While Secretary of State Clinton’s visit to China has grabbed the headlines of the mainstream media, Chinese netizens on the free-for-all discussion forums like Tianya have been abuzz with talk over the sinking of a Chinese cargo ship by the Russian Coast Guard near Vladivostok. About half of the crew of 16 are missing at sea. Russia claims the cargo vessel was smuggling items and refused to stop after Coast Guard ships fired warning shots. China’s foreign ministry has lodged protests with the Russian government and demanded an investigation.

The sinking has generated thousands of messages on the international relations section of the Tianya discussion forums. Most of them, understandably, seethe with rage, like this post which has been viewed over 15,000 times and received over 360 responses:

One can see the Russian frigate firing upon the Chinese cargo vessel from the video footage. At the moment when the ship was struck and causing shards to fly through the air, sounds of mocking laughter can be heard. One can see from the camera angle that the video was taken by a soldier on the Russian frigate. In another shot, besides the cameraman one can also see two other Russian frigates sailing in the waters. In other words, three armed Russian frigates had surrounded the cargo vessel. There was no way a cargo vessel could have broken their net and escaped, but the Russian frigates still fired 500 rounds – and the Russians even got a good laugh out of it. If this is not unacceptable, than what is?

Other posts like this one call for calm:

In the face of the Russian sinking of our cargo vessel, the Chinese government has been consistent in maintaining a calm attitude. Everyone complains about how China shows weakness when encountering international conflicts, but it is exactly this “weakness” that has given us a stable lifestyle and enabled the Chinese economy to develop rapidly.

Meanwhile, last Wednesday the Taiwanese government announced that with an 8% fall in GDP during the fourth quarter of 2008, the nation was officially in a state of recession. This was the largest ever single-quarter decline in GDP in Taiwan’s history. This also gives Taiwan the dubious distinction as one of the worst-performing industrial economies in the world according to The Economist.

An editorial in the Liberty Times, a leading pro-Taiwan independence newspaper, writes:

Every country has been hit by the global financial crisis. However, The Economist states that out of the 55 countries it tracks Taiwan has been hurt the most. Why is this? The reason is Taiwan’s economy relies heavily upon exports, and these exports and investments rely heavily upon China. Once exports to China steeply decline, Taiwan’s economy will sink into contraction. Last December’s exports to China dropped nearly 54%, resulting in the shocking 8.36% drop in GDP in the fourth quarter. January exports to China dropped nearly 59%, so we should not be surprised to see more depressing economic figures for the first quarter. … Taiwan still suffers from a China-dependence blood disease that other countries do not have to worry about.

Taiwan president Ma Ying-jeou has been resolute in pressing ahead with signing a Comprehensive Economic Cooperation Agreement (CECA) with China, which would further liberalize trade and capital flows between the two sides of the Taiwan Strait. This has generated controversy in Taiwan due to fears that not only would it increase Taiwan’s dependence on the Chinese economy, but that it would also send a signal to the world that the agreement is paving the path for political integration.

February 15, 2009

Russia: Open Line of Communications

Taking his cues form the Obama administration's current efforts and from FDR's "fireside chats" on the radio during the Great Depression, Russian President Dmitry Medvedev pledged to continuously update Russian citizens via TV about government efforts to combat current economic crisis. "It is important to tell the truth in our lives," said the head of state at the official announcement of this outreach, which should commence shortly and will be televised on all major Russian television stations. Medvedev is planning on meeting with chief anchors of each of the TV stations in order to talk about his government's efforts in a straightforward fashion.

" I am certain that the government must talk openly about the difficulties we are currently encountering and about solutions that are taken in order to overcome the crisis." Medvedev is convinced that such dialogue with the worried population of Russia should be held on a regular basis. The President also noted that Russia is hopeful about the "signals coming form the new White House administration, which is striving to cooperate on all current problems. We are counting on that."

Russian government remained satisfied by the work of the G8 group in finding solutions to the financial crisis, even though Russia was not actively participating in the final document that outlined efforts by the world's leading economic powers to combat the ongoing problems. "Russia is satisfied by the overall result," said Deputy Prime MInister Alexei Kudrin. "Of course, we would like the communication between Russia and other states to be much better, because the main discussion took place beyond the scope of this final document. This document reflects what we were able to compromise on." The key issues discussed by the G8 involved financial structure reforms, as well as reforms of the IMF and World Bank, such as increasing the resources of these institutions during the crisis.

Meanwhile, Russian Foreign Minister Sergey Lavrov offered high praise to the US Secretary of State Hillary Clinton. "She is an experienced politician, she has her own convictions and has a very strong team that is currently forming the the State Department," said Lavrov. "I think she will bring her style and her experience to the American foreign policy. We have already exchanged our points of view - by phone and on paper - and this exchange leads me to believe that she will, no doubt, serve the interest of the United States, but also taking into consideration the fact that such interests may benefit from a more equal and mutually-beneficial cooperation."

At the same time, Russian government and security experts remained critical of US President Obama's recent plans to reduce armaments, including nuclear weapons. Lieutenant-General Gennady Evstafiev (Ret.) of the External Intelligence Service (SVR), recently commented on the Russian view of such arms reductions to the daily "Izvestia." In particular, Evstafief noted a few issues that, in his opinion, are not getting due coverage by the White House. "Such deep reductions in Russian and American nuclear arsenals are impossible without involving other countries in the process. While such potential discussion may go well with France and the United Kingdom, questions still remain about the nuclear armament of China. Beijing's constantly growing nuclear arsenal is not limited by any international treaties, and does not allow for any transparency. Obviously, Russia and China are strategic partners, but the overall discussion on strategic nuclear armaments should not leave any questions."

General Evstafief also noted that any deep cuts in strategic nuclear armaments must be underpinned by a strong level of mutual trust between the two countries. "But currently, United States has not reversed any of its mistaken and destabilizing assumptions, such as NATO's advance to the east, placement of military infrastructure in eastern European countries, militarization of space and the Arctic, militarization of Ukraine and Georgia and the doctrine of offensive capability beyond the NATO zone." He further noted that "in order to move towards nuclear armament reductions, United States should show us and the entire world that it respects international stability and mutually-beneficial partnership. However, this hasn't happened yet."

Evstafiev also noted that in order for the nuclear armament discussion to truly have effect, US must be impartial and objective to the spread of nuclear technology in general. "America is very sensitive when it comes to Iran's nuclear potential, but basically looks the other way when it comes to Israel's, Pakistan's and now even India's nuclear arsenal, thus undercutting the International Non-Proliferation Treaty." The General also drew attention to America's "overwhelming superiority in conventional weapons - especially high tech. US is capable of concentrating massive offensive groups practically anywhere in the world, with support of a wide military infrastructure - which is getting closer and closer to Russia's borders. And now imagine how differently US may have behaved during Georgia's aggression against South Ossetia if it wasn't sure of the adequacy and guarantee of Russian nuclear response."

Underscoring Moscow's global reach in military exports, Russia and India recently agreed to jointly develop a fifth generation jet fighter. This announcement was made by Mikhail Pogosyan, Chief of "MiG" and "Sukhoi" aircraft design bureaus, and took place during the "Aero India-2009" international air show. For the first time, such joint fighter model will be fielded by both Indian and Russian air forces, and the first prototype of this plane is expected to fly this year. Previously, Soviet Union and later Russia supplied New Delhi with base export models that were a notch below those aircraft fielded by Soviet/Russian air force proper. Currently, India is a key customer of Russian avionics technology, including Su-30 multi-purpose combat fighter. Russia has been supplying India with military aircraft for several decades, while also remaining a steady seller of aircraft and air system to China - India's main competitor in Asia.

China: Cooperation on Climate Change?

Hillary Clinton gave a speech at the Asia Foundation last Friday to set the stage for her upcoming visits to Japan, South Korea, Indonesia, and China. This will be her first overseas trip as Secretary of State, and it is notable that she has chosen Asia as her destination. In her remarks, Clinton brought up climate change as one of the potential areas of cooperation between the U.S. and China:

We will work hard with the Chinese to create partnerships that promote cleaner energy sources, greater energy efficiency, technology transfers that can benefit both countries, and other strategies that simultaneously protect the environment and promote economic growth. While in Beijing, I will visit a clean thermal power plant built with GE and Chinese technology. It serves as an example of the kind of job-creating, bilateral, public-private collaboration that we need so much more of.

A commentary in the Southern Metropolis Daily, one of China’s leading commercial newspapers, also thinks this is a good idea:

The U.S. led the way in two technological revolutions. The first was with the atomic bomb, which revolutionized warfare. The next was with computer networks which revolutionized telecommunications. Everyone has witnessed how these revolutions have fundamentally changed the face of the world. Would it be possible for China to play a part in a revolution in the much discussed area of energy technology? This will only take place if there is deep cooperation between China and the U.S.

With regards to bearing responsibility for reducing global emissions, China obviously has its own circumstances, interests, and positions. The importance of the “Roadmap for U.S.-China Cooperation on Energy and Climate Change” lies in the realistic path it provides for achieving a win-win result through dialogue and negotiations. The roadmap emphasizes that technological revolution in the areas of energy and the environment not only requires the cooperation of our two countries, but also for the government, private enterprise, and the general public to work together. This point is particularly interesting for China. … China can continue its path of development as well as become a model of a low-carbon economy for the world. This is a goal worth pursuing.

The Bush administration did not place a high priority in addressing the climate change issue. When it rejected the Kyoto Protocol in 2001, one of the main reasons cited was that developing nations like China were not required to make any reductions. Since then, the climate change community has been hoping that the largest emitters of the developed and developing world can work together to tackle the issue.

It appears that Secretary Clinton is taking the first step in this direction. She is bringing along special climate change envoy Todd Stern with her on this trip, so this may be her attempt to place her imprint on the U.S.-China relationship. Climate change would be a new front in this bilateral relationship that, up until recently, has largely revolved around trade, human rights, Taiwan, and North Korea. It will be interesting to see what effect adding climate change to the mix will have on the other issues.

February 14, 2009

Venezuela: At a Crossroads


While Venezuela prepares for another Constitutional referendum, the country is in turmoil.

Back in December 2007 Hugo Chavez held a referendum to change the Venezuelan constitution. The 69 amendments would have ended presidential term limits and centralized Chavez’s power, even when he already controlled the National Assembly, the Supreme Court, almost every state government and the entire federal bureaucracy. The changes were rejected by 51% of the voters. However, Chavez didn’t give up on his power consolidation goal. Last year he enacted 26 new laws by announcing initially only their title, not their content, and continued to push for ending presidential term limits. This Sunday, the country votes again on term limits.

In the period since the 2007 referendum, Chavez has continued to nationalize the private sector, including food production and distribution, steelmaking, cement companies, and the Banco de Venezuela. Oil revenues are mismanaged: A computer belonging to FARC members proved that Chavez had sent hundreds of millions of oil dollars to the Colombian terrorists, with which he had made common cause. The oil industry, on which the Venezuelan economy is more dependent now than when Chavez first took office, is behind on billions of dollars in payments to private oil contractors from Oklahoma to Belarus.

The business environment has been rated by The Economist as the world’s second-worst. The country’s official inflation rate of 31% is the highest out of the 82 world currencies tracked by Bloomberg.

During his years in office Chavez has forged increasingly strong ties with Iran. Last December Italian newspaper La Stampa (link in Italian) reported that Iran is going through Venezuela to dodge UN sanctions and use Venezuelan aircraft to ship missile parts to Syria. La Stampa reported that Venezuelan airline Conviasa transports computers and engine components from the Iranian industrial group Shahid Bagheri, which is involved in Iran's ballistic missile program. Iran Air initiated direct air service between Tehran, Damascus and Caracas at Chavez’s invitation. Western anti-terrorism officials are concerned that Hezbollah may be using Venezuela as a base for operations. Hezbollah activities may include kidnappings, extortion and drug trade.

Internally, the political opposition has few resources and no unified leadership (link in Spanish). Student demonstrators have been tear-gassed and fired at with rubber bullets by police. Chavez banned Lech Walesa from visiting the country and meeting with student leaders on Thursday. However, the opposition managed a large demonstration against the constitutional amendment last weekend, and met on Friday with EU delegates who are in Venezuela to observe the electoral process even when the delegates have not been granted official observer status.

The government’s propaganda for a YES vote is constant and everywhere as the referendum nears.

Continue reading "Venezuela: At a Crossroads" »

February 8, 2009

Of Beef and Money in Uruguay

uruguaybeef1.jpgLast week I came across two interesting articles which at first sight only appear to have in common that they talk about Uruguay. Both relayed some promising news.

The first one, at The Economist, talks about how Uruguayan banks welcomed a 41% increase in deposits by non-residents in 2008.

As I mentioned in my January 11 post, when the pension nationalization law passed in Argentina last year ten bank-owned pension funds - worth over $26 billion in total - were taken over by the government. The reaction from the Argentinean people was felt immediately. Those who could took their money out of the country, and capital outflows reached 7% of GDP in 2008. A lot of that money came from Argentina.

The other article, on Uruguayan beef, was from Bloomberg. In 2006, Argentinean farmers turned away from beef, both in response to the rise in soybean and other commodity prices, but also because of export caps imposed as an anti-inflationary measure by then-president Nestor Kirchner - the current president's husband. However, not all farmers switched crops. Some farmers sold their holdings in Argentina and moved to Uruguay in search of lower taxes.

Like export-destined Argentinian cattle, Uruguayan cattle are raised free of antibiotics, grass fed high-quality grasses, alfalfa, lotus, and clovers, and are free of bovine spongiform encephalopathy (mad cow disease).

This report from the US Department of Agriculture contrasts Uruguay's reaction to that of Argentina during the 1999-2001 recession, explaining how the Uruguayan government allowed market conditions to drive the recovery of the beef sector. Uruguay also instituted a comprehensive national animal identification program aimed at animal disease control, quality beef production and marketing. This ensures that ranchers and producers were complying with sanitary requirements and also fights illegal smuggling.

As a result, Uruguay is now aggressively targeting foreign markets for their beef exports. Because of this, the beef farmers are poised to benefit from a drop in demand and new Korean government restrictions on US beef. It's not only the Koreans who want Uruguayan beef. According to Bloomberg, Uruguay is the only South American country allowed to export fresh beef to the US after the US banned fresh beef exports from Argentina and Brazil due to sanitary issues. Uruguayan beef is also in demand in Russia and the EU.

In contrast to the wave of recent nationalizations in Argentina, Venezuela and other countries, Uruguay now allows a third of its agricultural property to be owned by foreigners.

Foreign investors are buying: Brazil's Marfrig Frigorificos & Comercio de Alimentos SA, the world's fourth-biggest meat packer, bought four Uruguayan slaughterhouses last year. PGG Wrightson Ltd. of New Zealand and George Soros's Buenos Aires-based Adecoagro have bought prime land near Uruguay's western border with Argentina.

The competitive advantage over Argentina is based on a flat 25% tax on farmers' incomes, quality products, lack of price controls, policies that encourage foreign investment and no tariffs on farm exports. Uruguay's bureaucracy is small enough that, as Uruguayan farmer Alberto Gramont put it, "if you want to speak to a minister you just ring him up."

In prior years Uruguay renegotiated its foreign debt and avoided default, another factor in its favor. The government has no desire to take over private banking funds, pension or otherwise, either.

As such, the Uruguayan economy is better placed to weather the world economic downturn.

That is good news for the region.

Fausta also blogs at Fausta's Blog

Russia: Armies, Borders and Politics

Russian news this past week has been dominated by security-oriented content, starting with the ongoing discussions with the United States on reducing nuclear armaments. Vice-Premier Sergey Ivanov, representing the Russian side, stressed that when it comes to moving past nuclear-armaments agreement that expires at the end of 2009, his country would like a greater role for the United Nations, maintaining international security and stability and development of the strategy to combat emerging threats. Key issues for Russia at present are international agreement on non-proliferation of nuclear weapons, prohibitions on nuclear weapons testing and prohibitions on chemical and biological armaments. Ivanov also stressed that Russia would like negotiating sides to agree on prohibition of placing nuclear weapons beyond the borders of US or Russia.

Russia's security in its near abroad got front page coverage when Alexander Golovin, Special Representative of the Russian President on issues of Demarcation of Borders with former Soviet states talked on determining Russian official border with "two newly created countries - Abkhazia and South Ossetia." Moscow held negotiations with Georgia on the status of Russian border in breakaway regions of Abkhazia and South Ossetia, but "after Georgian aggression in August last year, both sides no longer meet. We are now preparing to hold such talks with Abkhazia and South Ossetia - as independent states, and as determined in our joint agreements on friendship, cooperation and mutual assistance. This process is at the initial stages - we are still forming official delegations (for such talks)."

The key issue here is that Russia is willing to treat both former Georgian provinces as independent states - not as parts of Georgia, or constituent republics of Russia or even official Russian territory. Such stance puts it directly in odds with the United States and her European allies that call for the respect of territorial integrity of Georgia, which would include such breakaway provinces as parts of Georgia proper. "Abkhazia and South Ossetia are two countries that are allies of Russia," said Golovin. "During Soviet period, there were administrative borders between Russian Soviet Federal Socialist Republic and Georgian Soviet Socialist Republic in the Abkhazian and South Ossetian regions. Today, it is important for us to confirm such borders as official state borders between the Russian Federation, Republics of Abkhazia and Republic of South Ossetia."

Recently, Russia spearheaded the creation of the Collective Rapid Reaction Force made up of the militaries of the former Soviet countries that form the Commonwealth of Independent States. An analysis of such an alliance in daily "Izvestia" described such force with the potential to turn into "... a powerful military-political block. One just has to look at the map in order to see that countries making up such rapid reaction force - Russia, Kazakhstan, Belarus, Uzbekistan, Tajikistan, Kyrgyzstan and Armenia - are essentially making up the rump Soviet Union. Even without Ukraine."

The analysis presented the strengths and benefits of such military alliance by country. "What do Russia, Kazakhstan, Belarus and Uzbekistan have in common? They all have stable political regimes, which is very important in context of the ongoing global economic crisis. Russia and Kazakhstan have very strong economic footing - they have plenty of energy resources, most importantly oil and natural gas. This economic potential is enough for these two states - first of all Russia - to become the leading powers of this new block, bringing their allies to their (economic) level."

Other countries of this alliance bring major benefits as well - "Armenia should be considered as a strategic bastion of the Rapid Reaction Force in the South Caucasus region. Moreover, Yerevan can bring its partners other benefits- we must not forget how strong is the influence of Armenian diaspora in the United States, France and other Western countries. The opinion of such diaspora is not easy to ignore."

While Tajikistan and Kyrgyzstan have weak economies, small militaries and have recently be plagued by political instability, "... the time for color revolutions is over. the self-preservation instinct calls on people to consolidate, not to rock the boat. This instinct call on leaders of these countries to embrace their natural allies. For the United States, both Tajikistan and Kyrgyzstan are important so long as America is engaged in the war in Afghanistan. But it will not stay there forever- sooner or later, the US and NATO will leave the region. And then Bishkek and Dushanbe will again turn into distant periphery for Washington and Brussels. But for Moscow and Alma-Ata these states will never become unimportant - and this is they key to the long life of this new military-political block. We as countries need each other, and are willing to risk in order to keep our partners safe and sound."

Meanwhile, President Dmitry Medvedev made a major step towards relaxing official rules for registration of political parties. Until now, in order to be considered an official party in the Russian Federation, such party had to have 50,000 members. Medvedev's proposal lowered that number to 45,000. Another clause in his proposal calls on parties to continuously renew the party leadership ranks, and to let go "of eternal leaders." The majority of Russian Duma deputies consider this only the beginning of party reforms - there are indicators that more steps in easing of official party rules will be undertaken.

"Further benchmarks will lower the number of party membership to just 40,000 people - in our opinion, it is the most optimal number," said Vladimir Pligin, Chairman of the Duma Committee on Constitutional Legislation. "These initiatives have one goal - to strengthen the political structure of our society. Through such parties, various population groups should take part in government work and in official decision-making process," said Andrey Isaev, Chairman of the Duma Committee on Social Politics.

Chinese Sphere: Wrinkles in Relations

The People’s Daily, the Chinese government’s official newspaper, published an interesting commentary titled, “Learn to Listen to Public Opinion from the Internet.” Penned by an associate professor at the Central Party School, the country’s premier institution for the training of future CCP cadres, it addresses the recent “human flesh search” phenomenon, how it has led to the downfall of certain government officials, and the attempts of one city to ban them:

The development of the Internet is not just an information revolution. It is also an essential part of the development process of political democracy. Through this important bridge to public opinion, the party and government can, with the help of the people, perfect the management mechanism of cadres, the disciplinary mechanism of party members, and the enforcement mechanisms of the judiciary.

Today, there are quite a few officials who are feeling more pressured, that it’s tough to be an official because there are countless eyeballs keeping close watch over them. If you are carrying out your duties responsibly, what do you have to be afraid of? Some people feel pressured because they cannot abuse their power and engage in under-the-table transactions any longer. Now there are many officials who have changed their behavior, become more disciplined, and do not dare to exceed their authority.

Is the Chinese government allowing the Internet to develop into a kind of civil society? Or is this an attempt by the central government to keep the local government in line?

While room for expression seems to be expanding in China, journalists in Hong Kong working beats in China are finding their activities coming under tighter restrictions. Ming Pao, the leading newspaper in Hong Kong, laments this recent development:

Today the Hong Kong and Macao Affairs Office of the State Council announced the “Regulations for Hong Kong and Macao Journalists Reporting in the Mainland.” The key portion of those regulations is that journalists in the Mainland must carry and be ready to produce at all times a press pass issued by the Liaison Office of the Central People’s Government on behalf of the All-China Journalists Association. This is a restrictive rule which only adds to the obstacles faced by Hong Kong and Macao reporters operating in China. This very clearly goes against the trend of the Mainland opening up. Also, there needs to be strengthened communication and increased understanding in order to speed up integration between the Mainland and Hong Kong and Macao. These new rules will most certainly hinder that vision from coming true.

The restrictions may be due to the Chinese government’s wariness over the abundance of sensitive political anniversaries this year, such as the 20th anniversary of the Tiananmen Square Incident.

The gloomy outlook for the Chinese economy has caused much worry in Taiwan where exports to China dropped nearly 40% last year. The Liberty Times, one of Taiwan’s leading newspapers, sounds an alarm over the island’s over-dependence upon its neighbor:

It can be said that in the face of the global financial tsunami, China is already drowning and is in no position to help others. This is not surprising. Recently China’s leader reiterated that China could only take care of itself and was not able to save the world. This statement clearly tells us that Taiwan’s economy cannot rely on China. It’s a dead end. Regretfully, President Ma, who continues to relax restrictions on investments in China, seems to be totally oblivious. ...

Wen Jiabao stated that it would be difficult for China to maintain an 8% GDP growth rate. Anyone who is sensitive towards the Chinese economy will easily detect the warning signs of deterioration in the Chinese economy from Wen’s remarks. At this present moment what the government should be doing is maintaining a safe distance from China.

Taiwan President Ma Ying-jeou has been expending a lot of political capital in efforts to reduce tensions with China through closer economic exchanges, which were largely supported, and scaling back efforts to increase Taiwan’s international space, which was much more controversial. Now that it appears that the economic links are not going to deliver the goods in the near term at least, the Ma administration has been trying to put a positive spin on its cross-strait policy. However, it will be hard-pressed to tout any accomplishments in enlarging Taiwan’s international space because there simply are none. Even when presented with an opportunity recently to re-establish diplomatic relations with Malawi, the Ma administration has chosen to decline out of unwillingness to displease China. With this kind of foreign policy, one wonders what occupies the time these days of Taiwan’s Ministry of Foreign Affairs?

February 1, 2009

Russia: Chicken legs and Russian economy

Russian news has focused on alleviating country's growing economic hardships and on trying to determine the future course of US-Russia relations.

Prime Minister Vladimir Putin sent a major signal to the new American administration by stating at the Davos Economic Forum that a new chapter in US-Russia relations is only possible if Russia is removed from the Jackson-Vanik Amendment (JV). The Jackson-Vanick Amendment was passed by US Congress in the mid-1970s in order to limit and restrict trade with the USSR because of the way the communist superpower prohibited the emigration of Jews and other minorities. Following the collapse of Soviet Union in 1991 and the relaxation of all emigration laws- resulting in the outflow of millions of people to the West, Israel and America - all former Soviet states inherited the Jackson-Vanik Amendment in their bilateral relationship with the United States. Since 1992, Congress voted to remove the JV condition from practically all former Soviet Republics - except Russia. Ukraine was removed from the JV Amendment in 2006, Azerbaijan and other new American allies were removed in 2007 and 2008.

For Russia, the Jackson-Vanik Amendment is a political and personal - not economic - issue. Given the growing trade between the US and Russian Federation since 1992, every American president waived the JV clause every year in order to facilitate bilateral economic cooperation. But the US Congress refuses to graduate Russia from said Amendment, citing new reasons each year, including the need to protect US domestic poultry producers from unfair practices of their Russian competitors. At Davos, Putin spoke in no uncertain terms that the original conditions for this Amendment have long since expired: "Russia does not want an exclusive relationship with the world economic powers. We just want openness in return for openness. USSR no longer exists, and there is no restriction on Russian Jews' immigration overseas."

Putin's personal message to the Davos participants expressed years of frustration with the US Congress, when every year since the early 1990s, the Russian government and various groups and organizations arguing for greater US-Russia economic relationship were frustrated by yet another refusal to remove Russia from the JV Amendment. "When the US Congress yet again refused to remove Russia from the Jackson Vanik Amendment, citing the need to protect the market for the chicken wings, I got a letter from a powerful Israeli politician who told me that he did not spend time in Soviet jails because of poultry (possibly alluding to his time as a political prisoner in Soviet Union for his desire to leave the country), and it's not even clear what they are doing in their Congress," said Putin as the audience reacted in shock at his statement.

To further prop up the Russian economy, Prime Ministers of Russia and Belarus signed joint an anti-crisis plan. "This is a very good plan," said Belorussian Prime Minister Sergey Sidorski. "It will support the economies of our two countries, will not allow them to fall below the 2008 levels and will hopefully even allow for some growth." The plan was the main item of consideration at the meeting of Ministers of the "Unionzied State." Russia and Belarus signed the official charter in 1996 that called for a full union between the two countries, but the actual implementation and the eventual merger of the two states has been a very slow and arduous process, encountering resistance either from Moscow or from Minsk. (An important note - when then-President Putin announced that he would not run for his country's highest office in 2008, many in the international political establishment thought that he would be able to force the final union between the two countries and become the President of said new state).

In further deliberation about the fate of US-Russia relations, Viachelsav Nikonov, President of "Politica" Fund, cautioned against having too many expectations for the improvement in the way Moscow and Washington view each other. "United States remains the world's most powerful state despite the economic downturn. By the time Obama was inaugurated, two major crises resolved themselves - Israeli action in Gaza and Russia-Ukraine gas row. Nothing should have or could have cast a pall on the new President's first days in office." Nikonov cited a possible visit by President Obama to Russia in April of this year, but was not optimistic that there will be major shifts in US-Russia relations. "American foreign policy is geared towards US global domination. There are countries that interfere with that plan - whether they actually desire to do so or not. Obviously, Russia is one such country."

He also noted that the NATO eastward expansion plan that would incorporate Ukraine and Georgia was "hatched " by the administration of then-President Bill Clinton, whose former officials now fill the ranks of Obama's administration, including former first lady and current Secretary of State Hillary Clinton. "That means both Ukraine and Georgia can remain areas of sharp geopolitical competition between America and Russia. Still, the overall competition between our countries may lessen also because Russia is not a priority for Obama's administration - the current economic crisis and the need to stabilize the Middle East are more important for the new American President."

Meanwhile, Russian President Dmitry Medvedev congratulated the winners of the prestigious global off-road auto race "Dakar" - the Russian team of KamAz auto manufacturers. Medvedev expressed his support for holding similar international auto races between Kazan (Russia) and Ashgabad (capital of Turkmenistan in Central Asia), traversing different terrain from forest to steppe to mountains to deserts. He also promised to personally conduct negotiations on this issue with presidents of Kazakhstan and Turkmenistan.

China: Tough Economic Times Ahead

The Chinese world spent most of the past week celebrating the lunar new year and has started returning to the work of pushing the economy forward bit by bit. At the World Economic Forum in Davos, Chinese premier Wen Jiabao optimistically predicted that his nation's GDP growth would hit the magic 8% mark this year, popularly considered to be the rate China would need to reach in order to continue to provide employment for current and new workers.

Apart from doubts over the accuracy of officially reported statistics, there are indications that China's economy is being hit hard by the global financial crisis. Many Taiwanese businessmen originally posted to China have been recalled to Taiwan or laid off. Millions of migrant workers are also finding themselves without a job to return to after the new year.

Lan Weiwei, the deputy editor-in-chief of Southern Metropolis Weekly, shares on his widely read blog about his experience returning to his hometown for the new year:

This year's winter will probably be even longer than expected. Everybody wishes that it could be like previous years where after the fifth or sixth day of the Chinese new year they would be rushing back to the city to work. The situation this year is a lot different. Although the official day to start work this year has moved up a day earlier than previous years, it seems like people are not in such a hurry to get back to work. ... Before, there were people who were indispensable to the factories or companies they worked for. This year, they have become idle.

This is especially the case for my relatives and childhood friends who have been working in Guangdong. Most of them do not know whether they will have jobs this year. Some of them who worked at factories were told to return home and wait there until they received notification to go back to work. They realize, however, that the notification this year will arrive later than usual.

Venezuela: More Anti-Semitism

The End of Venezuela as I Know It posts,

I'm putting as a picture, a poster made by the White Hand (Student) movement for the campaign against the Amendment that it could allow Chavez or any other to be re-elected as president indefinitely. It says "They offer us living in peace but they can't control the violence of their groups?" I'm not publishing this poster today because of the NO campaign. I'm doing it because last night, a group of armed men entered a synagogue causing damages and leaving hate messages on the walls of the temple. I often feel confused about the ways the Revolution defines itself, specially when it comes to define the enemies.
Here's the poster:


The poster asks,

They offer us to live in peace, but they can't control their sympathizer's violence?
Indefinite re-election... Better NOT
The End of Venezuela's point is that the revolution needs new enemies, and the Jewish community is now becoming a scapegoat.

Noticias24 has photos of the vandalized synagogue:



Out. Die now.

YNet reports that the synagogue was vandalized late Friday night by armed assailants. Noticias 24 says that it was a group of as many as fifteen people who vandalized the synagogue. On January 21 and 22 the exterior of the synagogue had already been vandalized with graffiti.

It wasn't the first anti-Semitic graffitti to appear in Caracas.

Jews assassins terrorists

Jews I sh*t on your star

Last July I translated at my blog an anti-Israel ad that apparently was paid for by the governor’s office of the State of Anzoategui.

Fausta Wertz also blogs at Fausta's Blog

January 25, 2009

Chinese Sphere: Ringing in the New Year

For Chinese communities around the world, this week marks the beginning of a week-long holiday to mark Chinese New Year, or Spring Festival as it is usually called. The significance of the holiday is on the same level as Christmas for the Western world and also involves family reunions in one’s hometown. One of the phenomena associated with the Spring Festival is the massive outflow of people from the cities where they work back to their hometowns. Even in an island as small as Taiwan, every time Chinese New Year rolled around there would be massive traffic jams on the highways with hundreds of thousands of people leaving Taipei for their hometowns down south. The scale of the travel situation in China is even more mind-boggling where you have an estimated 188 million people making the journey home, and that is only for the railways.

A blog posting in China comparing the differences between how holiday travel is handled in the U.S. and China has struck a chord, receiving over 100,000 views and 1,100 comments. Popular novelist and former Atlantic Council senior fellow Yang Hengjun attributes China’s travel problems to two main factors: 1. The inability of regular citizens to change their official residence (known as hukou in Mandarin) which greatly limits the social services that migrant workers and their families can access outside of their hometown. This often ends up separating parents from their children who can only receive schooling in their hometowns. 2. Train and airplane tickets are snatched up by those with special connections to the government.

Yang writes, “Unlimited authority, abuse of power, an unfair system, monopolistic corporations, social inequality, and corruption has made the Chinese New Year travel rush not a transportation problem, but a social and political one. That is what causes so many people to get angry! … In the U.S., apart from a small minority of government officials who are traveling for business dealing with national interests, those who are traveling for personal reasons are all treated the same in the purchasing of tickets. Even if you were traveling on business for your company or the government, you need to go through the same process as an illegal immigrant worker in a Chinese restaurant: purchase tickets online or line up at the counter, first come first serve. … In China, one’s level in society basically determines whether you are able to get a ticket, and the highest level is, obviously, the ‘servants of the people.’ Have you ever heard any public servant or their family members complain about not being able to get tickets?”

For Taiwanese businessmen working on the other side of the Strait, the new year usually means either getting on a plane back home or flying one’s wife and kids out to China. However, the global financial crisis has changed this dynamic this year. An article in Commonwealth, the leading general affairs magazine in Taiwan, explains how economic difficulties in China have affected cross-strait travel: “The Fu-hsing Travel Agency pointed out that in the past there would always be tons of people flying to the mainland to visit relatives or go on tours, and demand for seats outstripped supply. This year that demand has decreased significantly. ‘There are already airline companies that are selling direct flights to Shenzhen for an extremely low price of NT$7,000 [approx. US$212], but this still hasn’t attracted any buyers,’ a representative from the travel agency said.

This year, China-based Taiwanese businessmen will have a particularly cold Spring Festival. Those who are unlucky have been laid off and sent back to Taiwan. Some are temporarily unable to reunite with their family.

Mr. Chen, who has been ‘recalled’ to Taiwan, said with a note of sarcasm, ‘This year it’s my turn to go back to Taiwan to see my family. During the past decade, whether Taiwanese businessmen spent their Chinese new year in Taiwan or China was an indicator of which location was more attractive. Mr. Chen plans to see how things go in Taiwan for the next year or two, and then make a decision once the economy recovers.

‘It’s hard to say whether I’ll return to the mainland. After this shuffling of the deck, I think new opportunities will appear on both sides,’ Chen said optimistically.”

Russia: Not Swept Up in Obama-Mania

As Russia watched the historic inauguration of US President Barack Obama, there was plenty of commentary about the Jan. 20 event that took place in Washington - from positive and cautious optimism to pragmatic remarks about what the new American president means to Russia, its near abroad and Russia's relations with her neighbors.

Daily "Izvestia" published several opinions on the way Russian political observers saw the inauguration. Almost all of them commented on president-elect's mistake in saying the oath of office, as well as other interesting moments. Many writers quickly took the attention away from amusing moments to the grave concerns about the American economy and the fate of the global financial crisis. "The future is shrouded in darkness, and today's throngs of enthusiastic supporters screaming "Omaba!" will, once things turn for the worse, may be screaming something entirely different," writes political commentator Maksim Sokolov. He further remarked with skepticism that "emotions and effort are well-combined when it's clear how to use one's efforts for best results. But all that we now know about concrete plans of this new American President is boiled down to the slogan. "For all that is good, against all that is bad, and let no one be upset. Technically, he was elected as a wonderful, pleasant and harmless healer."

Turning to the on -going economic crisis, Sokolov writes that " ... in his defense, even more mature and experienced colleagues of the new president do not know the way out of the current economic hardship. The difference between them and Obama is that his colleagues were not elected to office on an emotional wave of hope and change and therefore are not really responsible to anyone for the results of their actions. But Obama is responsible."

Other articles also turned their attention to the Inauguration Day. An "Izvestia" article commented that "... in contrast to the overflowing streets of Washington on Jan. 20, one cannot help but think back to May 2008, when the the procession of the new Russian President Dmitry Medvedev moved towards the Kremlin on empty - almost dead - Moscow streets. But we should not compare the two events - after all, it [the Inauguration] is a typical American showboating. The harsh reality is already setting in - US Dollar, instead of rising on the wave of this presidential euphoria, instead fell against the Russian ruble - while our currency rose in the evaluation. Party is over, so to speak."

Russian political establishment continued to isolate Georgia and to limit any remaining trade with the Caucasus country. On Jan. 20, Russian President Medvedev signed a law that prohibited any deliveries of defense and dual-use materials to Georgia. Medvedev also requested the creation of official legislation that would limit or prohibit military-technical cooperation with countries that deliver Russian or Soviet military hardware to Georgia. The second initiative is clearly aimed at Ukraine, since Moscow accused it of aiding Georgian military during the August 2008 war. However, "it would not be possible to completely cut off military-technical cooperation with Ukraine, since the interdependence of military-industrial complexes of our two countries is too great, dating back to the Soviet times." In another not-so-subtle hint at Kiev, Russian daily "Vzglyad" accused Ukrainians of arming separatist Tamil Tigers movement that fought against the government of Sri Lanka. Quoting a former Tiger commander, the paper wrote that Tigers bought military hardware in Ukraine up until recently, at lowered prices. Such hardware included artillery systems, small arms and other equipment.

January 18, 2009

China: The View of Bush Legacy

During President Bush’s final press conference last week, he was asked indirectly about his views of America’s damaged “moral standing.” Bush defended himself spiritedly saying, “I strongly disagree with the assessment that our moral standing has been damaged. It may be damaged amongst some of the elite, but people still understand America stands for freedom, that America is a country that provides such great hope.” He went on to name some parts of the world where the U.S. was still held in high regard, and China was one of those countries.

So how does China, or, more specifically, members of the Chinese media feel about Bush’s legacy? A commentary in the Southern Metropolis Daily, one of China’s leading commercial newspapers, mentions how Truman left office with very low approval ratings, but his legacy was later on vindicated. The writer pins Bush’s place in history squarely upon the Iraq war and comes up with a measured assessment: “People say that history often repeats itself, and it’s hard to say that it will not do the same for Bush in how his stature may be revised the same way that Truman’s was. However, the difference is that the emergence of Europe and Japan along with the end of the Cold War serve as the basis for Truman’s place in history. The basis for Bush’s legacy has yet to be determined.

"Moreover, what makes it even more uncertain is the promotion of his Middle East democracy strategy in Muslim countries where there lies a wide gap between them and Western ideals. If Iraq is able to continue moving forward in the development of its democracy and rule of law and go on to influence other Middle Eastern countries, there will be greater hope of a comprehensive realization of Bush’s Middle East democracy project. However, if Iraq goes backwards in democracy and its sects are unable to cooperate, leading to widespread chaos with global effects, than history will render a judgment that Bush will not like. But that is the impartial judgment that he has no choice but to accept.”

The People’s Daily, the official newspaper of the Chinese government, casts U.S.-China relations in a guardedly optimistic light in an editorial titled, “Sino-U.S. Cooperation Leads to World Peace.” Although Bush is not mentioned directly, his administration’s policy of encouraging China to become a “responsible stakeholder” is discussed. The timing and nature of the article also indicates that it was written in response to Bush’s oncoming departure.

“In recent years, amidst the efforts of the international community to resolve problems of a global nature, the fruits of the Sino-U.S. ‘global relationship’ are gradually being seen. Room for cooperation and opportunity has continuously growing larger, and mutual trust has also been increasingly strengthened. It can be said that the harder the global problem, the more it shows the necessity and importance of Sino-U.S. cooperation. … The Sino-U.S. relationship is made up of the world’s largest developing country and the largest developed country. They have the common responsibility for the peace and development of mankind.”

The absence of criticism and forward-looking nature of this editorial seems to indicate that the Chinese government has been pleased with how the Bush administration has conducted its dealings with them and hopes that they will see the same from the Obama administration.

Russia: Separatism at Home and in Near Abroad

Russian news devoted time and attention to the current problems and concerns in its near abroad. Daily Izvestia published a report from Abkhazia, a break-away region of Georgia that achieved independence together with South Ossetia in the early 1990s. Just like its former Georgian counterpart, Abkhazia is at the epicenter of the continuing stand-off between Russia and Georgia over the international legitimacy of the territory's status. Russia recently launched a massive campaign to award Russian passports to the resident of Abkhazia, and currently more than 80% of the people living in the province have Russian citizenship. The article describes Abkhazia's strong pro-Russian sentiment, and its hopes for common borders and a customs union with Russia and Belarus.

The province's Foreign Minister Sergei Shamba told reporters that Abkhazia already designated two plots of land in Sukhumi, the capital city, for the constriction of the Russian Embassy and Russian Ambassador's future residence, with "... construction to be undertaken by the Russian Ministry of Foreign Affairs ... which should be completed in two years and the diplomatic mission will have 30 diplomats." Shamba noted that Abkhazia has a representative office in Moscow, staffed by 12 people and that "soon enough, our Ambassador will submit his credential to (Russian President) Medvedev. We were already offered several mansions for out future permanent embassy."

The article's description of fait accompli concerning Abkhazia's relationship with Russia is a cause of concern to the European Union and the United States. The international community has tried to resolve the status of Abkhazia for the last 15 years, with no apparent success. Georgia considers Abkhazia part of its territory, the international community - including the United States - supports the territorial integrity of Georgia that includes Abkhazia and South Ossetia (where war was fought in August 2008). On the other hand, Russia threw its full military and diplomatic support behind the breakaway states that are on track to joining the Russian Federation in one way or another - as a constituent republic, as a unionized territory, or a legal territorial entity. Given the fact that similar status issues regrading South Ossetia were settled by war, there is concern that Abkhazia may become another source of military conflict between Russia and pro-Western Georgia.

In Georgia proper, Izvestia reports on the political scandal involving television stations that are favorable in their coverage to President Mikhail Saakashvili. The TV stations reported that future US Secretary of State Hillary Clinton pledged to defend Georgia and Ukraine against Russia's "imperial ambitions." Pro-Saakashvili politicians and political experts tried to convince the population that such statements are a continuation of George W. Bush's foreign policy that maintains strategic partnership with Georgia. However, political opposition reported that Senator Clinton never pledged such policy in her Senate confirmation, and opposition media published the entire 16-page transcript of Clinton's congressional hearings. According to leading Georgian political opposition experts, "such attempts to state that "Obama cannot live without Saakashvili" is pure disinformation. Saakashvili is a great student of Brezhnev and Goebbels." Izvestia noted that President Saakashvili's press office did not refute oppositions' claims about Senator Clinton's actual words.

The question of separatism and breakaway tendencies received additional coverage in an interesting article that described the attempt by Russia's Sverdlovsky Oblast - which encompasses energy-rich Ural region - to secede from the Russian Federation in early 1990s. Online publication "Noviye Regioni" published a remarkable report on the exhibition devoted to the 75-year history of the Ural region. The exhibition featured "Ural Franks", printed in 1991 for use as official currency. Apparently, 56 million of these "franks" were printed in order to fight the inflation of the Soviet rubble that reached nearly 1,000% following years of economic liberalization launched in 1987. Following the deteriorating economic climate, Sverdlvosky Oblast held a popular referendum in early 1990s, in which more than 60% of the population supported the session of the Middle Ural region from the Russian Federation. The idea to use Ural franks as official currency alongside Soviet rubble was even floated to Egor Gaidar, then Economic and Finance Minister of the Russian Federation (still part of the USSR in 1991) and future Economic Minister of independent Russia. There are some uncomfortable parallels between the crashing Soviet economy that facilitated the breakup of the USSR in 1991 and the current worsening economic situation across Russia, which today affects many regions, including Sverdlovsky Oblast.

Turning to the incoming administration of the President-elect Barack Obama, business daily "Vzglyad" published a farewell review of Secretary of State Condoleeza Rice. The paper noted that Rice was one of Russia's strongest critics, especially during the August 2008 war between Georgia and Russian Federation over South Ossetia. The paper quotes Russian Foreign Minister Sergey Lavrov stating that he tried to ask Rice over the years to put pressure on Georgia in order to prevent military conflict, with Secretary of State failing to restrain her allies. He noted that for Moscow, the political dialogue with incoming Secretary of State Hillary Clinton will be much more cordial than with Rice.

Canada: Coalition and Equalization

The French World Beat is taking a break this week, as news are pretty slow on the other side of the Atlantic, aside from the Gaza crisis, that is. But some interesting issues have come from up north. Less than two full months after two elections (federal and provincial in Quebec), let's discuss the forces involved in Canadian and Quebecer politics for 2009.

Ten seats short of a majority in the House of Commons, Mr. Harper's government was almost overthrown by what Don Martin from the National Post describes as a "hodge-podge coalition led by the Liberals" just before the Christmas holidays. Drawing his last card of 2008, the Prime Minister suspended Parliament for a month in order to buy time and hoped for divisions within the Liberal Party over Mr. Dion's leadership to soar and disrupt plans for a coalition. Now, Mr. Harper's plan at least partially worked, as prospects for a coalition government overthrowing the Tories in the House are slimmer now than they were a month ago. How is that?

First, the Liberals have themselves a new leader in the person of Michael Ignatieff. It was widely known that while Mr. Dion, still the leader of the party, signed the coalition deal with the NDP and the Bloc, Mr. Ignatieff was the least enthusiastic of liberal heavyweights regarding this situation. Second, the liberal MPs, especially Ontarians, can read polling numbers: The idea of a Liberal-NDP coalition supported by the Bloc might get some traction in Quebec and liberal Toronto, but the majority of Canadians remain opposed to the idea. And who could blame them? In the ROC (Rest Of Canada, outside Quebec), electors favored the Tories over the Liberals or the NDP by a significant margin. Especially for Westerners, the idea of handing over the government to a Liberal-NDP coalition is tantamount to a coup d'etat. Third, Mr. Harper modified the initial budget propositions that started the fire. He backed down on cutting public financing for political parties and he is now promoting a stimulus package to jump start the economy in 2009.

Regarding this latest issue, it is interesting to note that Mr. Harper's right-wing ideological zeal, prominent at the end of 2008, has paved way to a more pragmatist approach. Indeed, Mr. Harper, instead of cutting a budget deal with the opposition, launched a series of discussion with the country's 10 provincial PMs. His guess was, and still is, that if he can satisfy the demands of most provinces with his budget, Ignatieff will have no choice but to back down and and vote with the government.

How did the provinces answer to Mr. Harper's economic stimulus package and plans to reorganize equalization* payments? Most did so positively, as PMs from British Columbia and Ontario labeled the discussions as productive and very constructive.

But, yet again, when you read the Quebec media, you get a whole different story.

"Charest hits a wall," titles Le Devoir. After the first few rounds of discussion, it became quite clear that Mr. Harper's equalization program changes did not cut it for PM Jean Charest's government, leading him to qualify the Tories' brand of federalism as "not so open" to traditional Quebec nationalist demands. Coming from a PM whose defense of federalism and Canadian unity in front of sovereigntists came in the form of enchantment by Mr. Harper's apparent "open federalism" just two years ago, this would be funny if it were not so sad.

Quebec will probably lose hundreds of millions of dollars every year in equalization payments with the new formula, which amounts for at least two preliminary conclusions:

First, after suffering a crippling defeat at the hands of the sovereigntist Bloc Québécois in Quebec in the latest federal elections, the Tories have mostly given up on Quebec. They bet that the 10 ridings they lack to form a majority government could be won in Ontario, B.C. and the Maritimes, but not in Quebec. The "open federalism" concept (an updated version of the "renewed federalism" from the '90s), praised by Tories and Quebec federalists just a few years ago, seems long gone.

Second, Quebec federalists, and especially Mr. Charest and his Liberal Party, have lost one of their main argument against sovereigntists. This amounts to the desert of ideas that is now crossing the federalist option in Quebec. While sovereignty as a political option is not showing upward or downward signs, federalism definitely lost the initiative in the last few months.

With a newly reinvigorated Parti Québécois and its 51 MPs in Quebec, sovereigntism and nationalism could be headed for a comeback in the coming months and years.

*Note : Equalization is a constitutional obligation of the federal government to redistribute revenue from wealthier provinces to poorer ones.

January 11, 2009

Russia: Rising Tensions with Ukraine

Russian news have been dominated by the growing row with Ukraine over deliveries of natural gas. The entire dispute has been "economically politicized," with both sides blaming the other for non-compliance and belligerence at a time of dropping winter temperatures across Eastern and Western Europe.

Daily Izvestia blamed Ukraine for thwarting the creation of independent commission made up of Russian, Ukrainian and European technical observers in order to mediate the dispute. The newspaper stated that Ukrainians refused to let Russian in, while citing that Ukrainians continued 'till the last minute to illegally siphon off gas for their own use, as "recently, nearly 86 million cubic meters of other people's gas have disappeared in the Ukrainian steppes." Today, as exactly two years ago in a similar dispute, the Russian side blames the Ukrainians for stealing some of the gas intended for the markets in Central and Western Europe. Russian Gazprom chairman Aleksei Miller expressed his concern that since Ukraine blocked the creation of an international observation commission to oversee the end of the dispute, the only people who may be observing the situation are members of the European Commission - themselves career politicians and clerks who may have never seen gas pipeline equipment in their entire life. The newspaper stated that EC's conclusions about the dispute will be undoubtedly politically motivated. "All blame is on the Ukrainian side," Miller was quoted by the paper.

On Friday, the energy dispute took on another dimension, as Kiev Economic Court concluded that the terms of Russian gas transit through Ukrainian territory in 2006 and 2007 are deemed illegal. The five-year contract - signed in 2006 and set to expire on December 31, 2010 - was considered unlawful because the Ukrainian signee, Igor Voronin, former Assistant to the Chairman of national "Naftogas" company, had no government authorization to sign such a contract with the Russian side. As of now, the terms of Russian gas transit through the Ukrainian territory are still undefined.

Izvestia reported on the "persecution" of Russian sailors in the Black Sea port of Sevastopol. Ukrainian Interior Ministry arrested several sailors of the Russian Fleet for "lack of proper registration." The paper commented that such "hunt for the Russian sailors always resumes at the onset of another crisis between Russia and Ukraine." Last time such action was undertaken by the Ukrainian authorities in August 2008, following Russia-Georgia war, when Russian Black Sea fleet returned from a mission to Abkhazia, a break-away region of Georgia.

Russian President Dmitry Medvedev called for greater military-technical cooperation for the Commonwealth of Independent States Members (former Soviet republics) with Russia. "The majority of defense industries across Russia and FSU were based on a single Soviet complex, and still depend on each other to a great degree," stated Medvedev. "The maintenance of such ties increases mutual combat readiness and guarantees collective security in the face of rising threats." The article comments that the strength of today's Russian Army is the result of work of hundreds of defense industries across former Soviet Union. Therefore, future success of the Russian military is not possible without close cooperation with former Soviet partners.

President Medvedev also announced the plan to make purchases of Russian military equipment easier for the CIS members, starting with the ease of delivery of spare parts. This would simplify the purchasing process by former Soviet countries and their militaries - all part of the continuing push by Moscow to become the top defense exporter in the world.

China: All over the Map on Gaza

In line with its desire for stability both at home and in the international system in order to foster its ongoing “peaceful development,” the Chinese government has been generally opposed to Israel’s recent actions in Gaza. When Israel began launching airstrikes two weeks ago, the initial reaction from the Chinese foreign ministry was an expression of “serious concern” and a condemnation of “actions that have caused civilian casualties.” After ground operations commenced, Chinese President Hu Jintao addressed the situation in Gaza as a “humanitarian crisis” and called for all sides to “immediately stop their military activities.” On Jan. 7, China was one of the 14 UN Security Council members who voted in favor of the resolution calling for a ceasefire and the full withdrawal of Israeli military forces from Gaza.

The Southern Metropolis Daily, one of the leading commercial newspapers in China, draws attention to a Jan. 5 blog posting by Renmin University professor Zhou Xiaozheng in which he proclaims that Israel is a “good country” and praises various aspects of Jewish culture and civilization. The sociology professor does not address the Gaza situation, but the timing of his post seems to be a response to the discourse taking place over it, most of it presumably negative towards Israel. Zhou writes, “Chinese are apt to describe their modern history as ‘full of disasters and tragedies.’ Much of that was due to causes originating from ourselves. For the Jewish people, however, the causes are almost all external. All of the enormous calamities they have encountered for the past thousands of years have been solely due to their religious faith. These suffering people who have endured years of wars, who have long wandered in exile, and who have gone through a crucible of famine, torture, killings, and humiliation, have held on to their faith from beginning to end. They prospered in adversity and exhibited stubborn resolve in their growth and development. Not only did they keep from falling down, they were even able to miraculously garner worldwide recognition for their great achievements in technology, military, education, modern agriculture, and other fields.”

Zhou’s blog post has attracted over 350,000 views and nearly 5,000 comments which range from harsh condemnation to unabashed praise. The Southern Metropolis Daily article states that Zhou’s post has given rise to “pro-Zhou” and “anti-Zhou” camps in the blogosphere. The anti-Zhou blogger highlighted by the article writes, “Your defense [of Israel] brings to mind the behavior and actions of Japan and its people. If you choose to ignore their perpetration of inhuman massacres and pillaging, there are also many things you can praise about the various achievements of their culture and civilization. … The problem is that this admiration of Japan’s achievements and my understanding of its crimes of invasion against China, Asia, and the world are two different things!”

The pro-Zhou blogger featured in the Southern Metropolis Daily article writes, “During the War of Resistance against Japan in Shanghai, kindhearted sons and daughters of China, while under attack from the Japanese devils, welcomed Jewish refugees who were fleeing a murderous German Fascist regime. Half a century later, no matter whether China adopted a radical Leftist policy or a pragmatic policy, the Israeli people have always felt a deep gratitude towards the Chinese people. Even after being misunderstood by China for 30 years, this country and its people had still quietly done so much for China. To be frank, as a Chinese citizen, I hold positive feelings towards Israel and the Jewish people. A people that understand gratitude are the true friends of the Chinese people.”

In the absence of strong historical, ideological, or religious connections to the Middle East, Chinese views of the Israeli-Palestinian issue are all over the map as the different viewpoints above illustrate. However, what is notable is that in spite of nearly universal condemnation of Israel’s actions in Gaza and the Chinese government’s critical remarks, there still exists a significant vocal contingent of Israel supporters and admirers in China.

France: From Gaza to Kiev

Two subjects were on top of the list in the French media this week: The hot war in Gaza and the cold war between Kiev and Moscow over natural gas supplies.

Let's start with Gaza. Up until Nicolas Sarkozy's successful bid for the presidency in 2007, the French position on the Palestinian question seemed, at least from this shore of the Atlantic, mostly pro-Palestine. In fact, former president Jacques Chirac was widely perceived as pro-Arab. I need not mention the fact that among Israeli political elites, president Chirac's decision not to run for reelection in 2007 was greeted with sighs of relief. They knew that Sarkozy, the emerging leader of the UMP, was a lot more pro-western and that he had a very good shot at winning the presidency.

Even if I have yet to find a single piece of significant legislation passed by this French government regarding internal affairs, I must admit that Mr. Sarkozy's record on the foreign policy front is impressive. He harnessed France solidly into the Western bloc and it shows in the very moderate comments put forward by the Elysée regarding the situation in Gaza.

But this did not discourage left-wing parties and associations to organize rallies against what they call the "Israeli massacre". On Saturday, the biggest of these rallies so far too place, as organizers claimed the presence of up to 100,000 protesters. A lot of these rallies are taking place in other European countries, as it seems that pro-Palestinian groups are speaking much louder than pro-Israeli ones. But all in all, the only interesting story here is the change of tone that the Sarkozy foreign policy has imposed upon the debate. France can definitely be written off the pro-Arab list of countries.

Aside from the crisis in Gaza, the showdown between Moscow and Kiev regarding gas supplies was the other big story this week. As reported by Le Figaro, Ukraine and Russia did sign on Saturday an agreement regarding gas prices and accumulated debts by Kiev.

I would like to remind our readers that this is not the first time that Moscow has tried to bully Western Europe with its natural gas pipelines. The crisis did get jump-started by Kiev's decision to shut down deliveries to Western Europe, but this is mainly noise. We need to keep our eyes on the ball; the main narrative for this crisis is Moscow's will to bully neighbor countries. From a French perspective, we cannot say that president Sarkozy spoke in full force on this issue. As outspoken as he has been regarding the situation in Gaza, the crisis in Georgia in August 2008 or other topics, he has been remarkably mute regarding Moscow's actions and intentions.

Does the Elysée have a plan to diversify its energy sources in order to rely less upon Russian gas deliveries? Not sure; but if they do have one, we have not heard much of it yet.

Argentina's Outlook: Bleak

After overcoming a severe financial crisis right and foreign debt default at the start of the decade, Argentina is again in the midst of a financial crisis.

A week doesn't go by without news like this, from Goldman Sachs Global ECS Emerging Markets Research:

Government to Update Public Transportation Tariffs on Monday

Public transportation tariffs (buses, trains, and subway) will rise by 20%-25% on Monday.

The measure is driven by the government’s desire to lower costly budget subsides as government revenue is staring to erode on the back of lower commodity prices and the overall sharp deceleration of economic activity.

This is the second tariff increase in six years; the measure is expected to save the government ARS800 million.

Over the last few years Argentina's neighbor, Chile, used the windfall in copper revenues towards a $21 billion special fund that can bankroll future budgets for nearly a decade. Instead, Argentina used the money from high commodity and agricultural export prices (including soybeans) to increase government spending. Both Néstor Kirchner (president from 2003 to 2007) and his wife, Cristina Fernández (president since December 2007) have vowed to reverse free-market policies, and the economy reflects their approach.

Argentina's economy last year was best summarized in this paragraph:

Argentina also embarked on market-unfriendly moves, boosting government revenue by taking control of private pension funds and raising taxes on agricultural exports. Protesting farmers blocked highways throughout the year. Argentinians began withdrawing money from private bank accounts, fearing government seizure.
The farmers were protesting a proposed sliding-scale taxation system for agricultural exports which eventually didn't pass. A pension nationalization law did pass and was made into law on December 2008. Ten bank-owned pension funds worth over $26 billion were taken over by the government, in an attempt to bolster its finances and prevent a second default in a decade.

The Fernández administration denies that motive, claming instead that the pension funds were mismanaged, and that the global financial crisis made it necessary for the government to step in to protect investors.

The country's investors responded with

a mini-flight of capital to neighbouring Uruguay on fears that the government, in emulation of predecessors, would nationalise bank deposits.

A US district court froze $200 million in Argentinian pension fund assets in the US last month,
Judge Thomas Griesa said the assets should not be transferred abroad because they are now Argentine state property following the government's takeover of the private pension system.

He said the assets are subject to US creditors seeking to recover billions of dollars because their administrator is a government entity.

Investors have lost faith as the
Credit-default-swap spreads on its government debt have surged to horrifying levels, signalling that investors see a high risk of default.
The specter of a default has not vanished, in spite of the pension takeover, since its $21bn in debt-servicing obligations is due this year. Jittery investors are also worried that Ecuador's voluntary default on its debt last month might embolden Fernández to follow Ecuador's precedent.

This Stratfor report spells out the fears:

Setting aside the emotional and financial impact to Argentine workers as they contemplate their futures, the government has ensnared itself in an accounting dilemma. If spending continues in the face of falling revenue and limited credit, Buenos Aires eventually will hit a wall. And so far, its only recourse has been to liquidate what few financial assets remain in-country. Although there could yet be a grand scheme that will compensate for this problem, the government has shown no evidence thus far that one exists. The odds of an outright debt default and a return to the economic crisis of 2002 are growing.

The country's economic disarray has even brought about a small-change shortage.

It comes as no surprise, then that even when bond yields might look attractive, "institutional investors remain reticent about having too many holdings in local bonds."

Fausta Wertz also blogs at

December 30, 2008

Venezuela: 2008 in Review

The big news of the year in Latin America undoubtedly was the successful rescue operation carried out by the Colombian military, which released French-Colombian politician Ingrid Betancourt, Americans Thomas Howes, Keith Stansell and Marc Gonsalves, and eleven Colombian officers and NCOs. The success of this operation, which required near perfect execution by a military that only a few years ago could rarely be trusted, dealt a blow to Hugo Chavez’s dream of a Bolivarian empire in Latin America and changed the balance of power in the region away from Chavez. By year's end, Brazil also gained a much higher profile, stealing the limelight from Chavez by becoming a diplomatic power.

But let’s start in January:

The price of oil at the beginning of the year was $100 for Texas crude. In December 2007 Hugo Chavez had lost a referendum on amending the Venezuelan constitution which would have granted him unlimited terms and nearly unlimited powers. People were still using “Por que no te callas” ringtones in their cell phones. The best-selling ringtone used King Juan Carlos’s of Spain’s retort, and relations between Spain and Venezuela had become strained. At year's start, Chavez was proposing the rescue of three hostages, which was rumored to involve the payment of $500 million. The rescue did go through, but not as planned. The son of one of the women, who supposedly was going to be released at that time, not only had already been released, but was living in a Bogota orphanage.

Continue reading "Venezuela: 2008 in Review" »

December 28, 2008

Russia: 2008 in Review

The year 2008 proved to be a very turbulent one for Russia, both domestically and internationally. The year started of on a note of stability and assurance, as former President Vladimir Putin's hand-picked successor, Dmitry Medvedev, former CEO of Russian energy giant Gazprom, easily won presidential elections in March. The election was marked by its lack of any discernible competition from other Russian politicians, with the majority of the country determining that Medvedev's succession was a foregone conclusion. The election itself was a huge disappointment for numerous policy analysts worldwide who predicted that Putin would stay for a third term as President, either as the head of Russia or as head of the union between Russia and Belarus.

Following the election, the country was then witness to a remarkable political transformation as Putin became the Prime Minister in May - officially second in command of the country - leading the world to breathe a sigh of relief, so to speak, that he would still control the levers of power and continue his domestic and international agenda from prior years.

August is now regarded as the watershed moment in Russia's present and future approach to its "Near Abroad," states that used to make up the USSR. On August 7, Georgian forces shelled the positions in Tskhinvali, the capital of the breakaway region of South Ossetia (a strong pro-Russian region that broke away from Georgia in the early 1990s). Russian forces, already having a limited military presence in South Ossetia, responded with a full-scale invasion of the breakaway region and then Georgia proper. Russian military, backed by aircraft, tanks and armored vehicles, steamrolled over beleaguered Georgian forces and in days were mere miles away from Tbilisi, the Georgian capital.

Continue reading "Russia: 2008 in Review" »

China: 2008 in Review

In 2008, the world saw both impressive demonstrations of China’s rising power and capabilities as well as increasingly bolder and complex challenges to the Chinese Communist Party’s (CCP) control over the nation.

In May, a 7.9 magnitude earthquake hit the Sichuan Province that left over 87,000 people dead or missing. The central government went all out in its disaster response with Premier Wen Jiabao flying to the affected area to personally oversee relief efforts. Foreign observers praised the massive scale of the logistical operation and its overall effectiveness as well as the government’s openness in disseminating information and accepting foreign assistance.

The fact that one of the largest-scale Olympic games could still be held just three months after the earthquake struck further underlined the resilience and governance capabilities of the CCP. On August 8, the Beijing Olympics opened with a display of fireworks and choreographed performances whose mammoth scale took the breath of virtually the entire global audience. Combined with the eye-catching architectural designs of Olympic venues, the surprisingly successful effort to reduce air pollution in one of the most polluted cities in the world, and beating out the United States to capture the most gold medals while coming in a close second in the overall medal count, Chinese could hold their heads high and show the world that they had, indeed, arrived, and they were a force to be respected and reckoned with.

Continue reading "China: 2008 in Review" »

France: 2008 in Review

Interestingly enough, Le Monde published Saturday the top stories to forget in 2008. Here are the top five entries :

- Italian president Silvio Berlusconi's racist remarks
- Socialist "fraternity" according to former presidential candidate Ségolène Royal
- The presidential wedding between Mr. Sarkozy and Ms. Bruni
- Sarah Palin's campaign
- George W. Bush's accomplishments

As for the memorable ones, two stories made it to this analyst's list:

1. President Sarkozy's presidency of the European Union
2. Warfare within the Socialist party

Continue reading "France: 2008 in Review" »

December 21, 2008

Chinese Sphere: Direct Connect Across the Strait

On December 15, Taiwan and China officially launched direct airline, shipping, and postal links between each side. Ever since 1949 when the Communists evicted the Nationalists from China, forcing them to set up a government-in-exile in Taiwan, the Taiwan Strait maintained a distinct bumpiness in a world that was going flat. Up until last Monday, all air and shipping activity between the two sides had to be routed through Hong Kong and Macau (air) or Okinawa (sea). The cutting out of the middleman, so to speak, will significantly reduce costs and travel times as a quick look at a map of the region would show.


The Southern Metropolis Daily, a commercial newspaper based in southern China, sees this as a positive development and looks forward to seeing the three links shorten not only the travel distance between the two sides of the Strait, but also the relational: “A change in the nature of economic activity will ultimately lead to a change in people’s hearts. Through closer interaction, there will be mutual understanding of each other’s thinking, a sharing of each other’s markets, and a sharing of common responsibilities. … Although differences still exist over politics, enhanced people-to-people contact can gradually temper the residual effects of ideology.”

In Taiwan, there is a guarded optimism. The Taiwan-based China Times writes, “Whether you are a cabinet official or industry titan, this is the time to think of the best way to make use of this rare historical opportunity and retool industrial competitive strategy. For example, government policymakers should think about how to take advantage of the mainland’s efforts to expand domestic consumption, how to attract Taiwanese businessmen to set up their operating headquarters in Taiwan, and how to develop Taiwan into an operational and logistics center. Now that the three links have been opened, strategies for addressing these issues should be developed without delay.”

Hong Kong stands to lose a significant amount of business from this further integration of China and Taiwan’s economies. Sing Tao, one of Hong Kong’s leading dailies, writes, “Hong Kong has already made plans early on for the opening of direct flights. Affected businesses have also prepared themselves to face this situation. However, the arrival of the financial crisis this year has made Hong Kong’s economic outlook even grimmer. During November, the peak pre-Christmas period for shipping companies, Chinese exports fell from their levels one year ago, the first drop in seven years. In addition to that, Hong Kong’s airport cargo shipping fell 18.7%. Passenger traffic fell 5.56%, the fourth consecutive declining month. Now that Taiwanese businessmen do not need to travel through Hong Kong with the three links in effect, the statistics for Hong Kong may get even worse.”

Russia: How the US Might Save Itself

Russian news is still dominated by discussion on how the United States will rescue its own economy - and what that means to Russia. Business daily Financial News published a panel discussion by Russia's leading economists who proposed very different solutions - from Indo-Pakistan war to confiscation of $100 bills from circulation.

One of the experts, Vladislav Inozemtsev, Director of Center for Post Industrial Research, put the blame for the global financial crisis at the feet of the United States, Arab countries and BRIC members (Brazil, Russia, India and China): "The main problem was that Americans over-consumed, while the rest of the world under-consumed. ... I don't think that this crisis was created on purpose - Americans followed their own policies, seeing that the rest of the world does not want anything in return."

He and one of his colleagues remained optimistic that US economy will recover. Inozemtsev is convinced that Americans will emerge from the current recession in 2009, while Alexei Golubovich, Chairman of the Board of Directors of Arbat Capital Management said that American economy can adapt very quickly to changing circumstances.

However, Igor Panarin, Professor of Diplomatic Academy at the Russian Ministry of Foreign Affairs, is convinced that Americans cannot save themselves or their country from the crisis because of overall fear: "Fear is gripping the country, and with the crisis in the background, such situation can actually lead to civil war. ... President-elect Obama stated on Dec. 7, 2008, that in 2009, 41 states are going to have budget deficits. That means that nine "rich" states like Texas and California are going to have to "feed" the rest of the country. This is dangerous in crisis situation. I consider the US's chances of falling apart at 55%."

(Editor's note: Panarin's statements mirror internal political debate in the USSR on the eve of the breakup of the country. In 1991, Russian leadership, with Boris Yeltsin as the leader of the Russian Federation, no longer wanted to "feed" the rest of the country, as the Soviet economy slowed down considerably with the onset of economic reforms launched in 1986-1987. In Moscow's eyes, it was best to keep its economic resources to itself rather than to send them to Central Asia, the Caucasus or Baltic republics. Therefore, present Russian leadership tends to view the US through the prism of USSR right before December 1991, with one or several American states having predominant roles in the union, with the rest of the states being "fed" by either Texas, California or New York.)

Panarin further stated that in 2009, the dollar's crash is inevitable, "... but Americans are trying to stave that off any way they can. It is also possible that several powerful regional currencies will appear. East Asia will have its own; Middle East/South Asia will have dinar, to be used by Saudi Arabia, India and Iran. Russian rubble can also become a powerful regional currency - for that, we must make Eastern Europe buy our oil and natural gas and pay us in rubles."

Both Inozemtsev and Golubovich thought that a war between India and Pakistan can benefit the US economy, because "... just like Europe used to do, warring countries need weapons and financial credits, and such fighting historically weakened America's economic competitors."

France: Socialists Bent on Self-Destruction

Remember the nasty turn that the French Socialist Party leadership race took not more than a month ago? Reminder: after casting their ballots to make their choice between centre-left (and former presidential candidate) Ségolène Royal and leftist Martine Aubry, Socialists found out that the margin separating the winner from the loser was only 0.04%, and a legal battles over a few ballot boxes ensued.

In the end, it did not get as nasty as it could have. Royalists (supporters of Royal, that is, not monarchists!) showed some sense of party unity by pulling the plug on ongoing legal battles and accepting the verdict of PS militants who picked, albeit by a slim majority, Aubry as their leader.

However, this sense of party unity was doomed not to last long. The scars from the leadership race are still fresh and it is said that Ms. Royal, after having been her party's presidential candidate, cannot get herself to accept the fact that the Socialists have rejected her charismatic personality for a more left-leaning woman.

Now, how did these divisions play out in the latest Socialist drama?

First, remember that France is undergoing yet another battle between the government and students unions. Socialists, in recent years, have shown less and less interest for classic leftist organizations who rely on classic left-wing mobilization like street demonstrations, such as students unions. However, recently, the leftist wing of the party has tried to build back bridges with such organizations in order to help rebuild their party from its base. This leftist wing is identified to Aubry. Of course, centre-leftists identified to Royal disapprove of such moves. And, after the bitterness of the leadership race, it showed. How?

Julien Dray is a Socialist MP from Essone. He is identified with the left-wing of his party. This week, the Ministry of Finance got a warrant to search his office and his home. The warrant also allowed French police to search the offices and properties of left-wing organizations close to Dray such as SOS Racisme and FIDL (a students union). Of course, Mr. Dray claims his innocence as he is being accused of having received large sums of money from these two organizations. They also both deny any involvement in criminal activities.

Officially, the Socialist Party is offering no comment on the matter. But Le Monde reports that anonymous sources from within the PS have been quoted as saying that this affair has a smell of political retribution. Not formally charging anybody of doing anything wrong, of course, Le Monde concludes that the atmosphere within the PS is worse than ever.

Now, if supporters of Miss Royal leaked information incriminating Mr. Dray, it surely adds to the explosive ambiance that has become the norm in the PS. Both wings of the party will grow more and more suspicious of one another, hence seriously increasing the risk that these divisions will grow into a straight-out party split between centre-leftists and leftists.

President Sarkozy, who just recruited an ex-Socialist into his party, the UMP, must be delighted to watch this. Of course, the next presidential election will be held on 2012, so the Socialists have a shot at reuniting in order to defeat Sarkozy. But my guess is, we haven't heard the last of divisions and bitterness in the PS. And with François Bayrou's centrist party still being a player in the next few years, France could be headed for a big political realignment from its center to its left.

Latin America: Summits and Crisis

Leaders of Latin American countries met last Tuesday and Wednesday for the first Latin American and Caribbean Summit on Integration and Development. Like political junkets everywhere, the leaders congregated at a resort area, this time at Costa do Sauípe in the Brazilian state of Bahia. Thirty-three countries, including Cuba, participated.

Latin American leaders hold a series of summits on various subjects throughout the year. In fact, Brazilian diplomat Marcos Azambuja expressed concern that “While the summit comes at a good time, it multiplies the already large number of integration schemes and exacerbates the proliferation of processes and summits. … Brazil is playing on too many fronts and it should simplify and concentrate its efforts.”

Like the Foro de Sao Paolo, the meeting didn’t include the US. Joshua Goodman of Bloomberg News examined the increasing influence of Russia and China in the region, especially when it comes to armaments. However, there are a number of things to bear in mind:

1. The participating countries used the forum to discuss regional issues affecting the numerous subregional blocs in Latin America and the Caribbean.

2. The region continues to meet in order to bring about bilateral free-trade agreements, a trend that has continued after the collapse of the Doha talks.

3. The region continues to be dependent on the export of natural resources, such as oil, which prices have plummeted. This was one of the issues discussed on the summit.

4. The meeting took place a day after Ecuador voluntarily defaulted on its debt. Part of that debt was contracted under the Reciprocal Payments and Credit System of the Latin American Integration Association (ALADI). Last month Brazil recalled its Ambassador to Ecuador when Ecuador said it was not going to pay $460 million owed to Brazil's national development bank, the BNDES. Relations between Brazil and Ecuador were strained also because of Ecuador’s lawsuit against Petrobras planned sale of a 40% stake in Block 18 to Inpex unit Teikoku Oil Ecuador. Ecuador dropped the suit the day the summit started.

5. Thomas Shannon, the top U.S. diplomat for Latin America, explained that

had discussed with Brazil and Mexico ways the meeting’s agenda could be used during the U.S.-backed Summit of the Americas, in April in Trinidad and Tobago.

6. Last but not least, the summit highlights the emergence of Brazil’s diplomatic leadership and influence in the region.

Mayra Pertossi, writing about the Latin American and Caribbean Summit on Integration and Development at Venezuela’s Noticias24, reports that this global financial crisis found Latin America in relatively strong shape, because of the prior boon on oil prices and commodities. However, due to the plummeting prices the region braces itself for a rough 2009. Brazil and Mexico, the region’s strongest economies, won’t remain unaffected, but Argentina, Venezuela and Ecuador will probably be the hardest hit. Argentina faces $200 million in debt due in 2009.

Pertossi states that Chile is the only economy in the region positioned to initiate countercyclical measures. Due to the boom in copper prices, which accounts for 40% of the country’s exports, the Chilean government has set aside a $21 billion special fund, which according to Chilean Interior Minister Andrés Velasco, will finance the budget for the next ten years.

Mexico’s El Universal reported that Felipe Calderón proposed the creation of a regional alliance that would exclude the US, “an OAS without the USA.” Calderón rejected the creation of a multinational force to fight organized crime and the drug trade.

Granma, the official organ of the Cuban Communist Party, also called for the creation of Organization of Latin American and Caribbean States.

France 24 highlighted Evo Morales’s ultimatum to the US demanding an end to the Cuba embargo, but

The summit's host, Brazilian President Luiz Inacio Lula da Silva, distanced himself from Morales's call.
Lula kept a more conciliatory tone and asked for “prudence and political diplomacy," and to wait until Obama is president.

The summit. while being one of many regional summits, foreshadows a number of challenges to the Obama presidency:

The demand to end the Cuban embargo;

Ecuador, Bolivia and Venezuela's stance on the war on drugs, which is tied to terrorism and crime, along with an arms buildup;

The possibility that Ecuador's default may signal a trend of defaults in the region;
And the impact of the financial downturn in Latin American economies.

In addition, Russia and China continue to increase their presence - Russian ships have landed in Cuba for the first time since the end of the Cold War.

We shall find out in April's Summit of the Americas how the Obama administration will start to face these challenges.

Fausta Wertz also blogs at

December 14, 2008

Russia: Seeing Enemies all Around

Russian daily Izvestia ran an article on what it considered to be an anti-Russian film, "Soviet Story," shown on TV in Latvia, Lithuania and Ukraine. According to Alexander Diyukov, president of Russian organization "Historical Memory," the film blames the USSR and Russia for Holodomor and ethnic genocide. "Holodomor" is a Ukrainian term for artificial famine imposed by Soviet leader Joseph Stalin on Ukraine and parts of USSR in the early 1930s, leading to as many as 10 million deaths across the country.

According to Diyukov, "demonization of our country (Russia) is the main purpose of the film which had EU Parliament backing, and Latvian authorities are actively pushing this film in their country and around the world." He further states that film creators are using a "large amount of falsified documents, with a mix of outright lies and manipulation in order to draw an analogy between the USSR with Nazi Germany and to show today's Russia as a neo-Nazi state." Diyukov authored a report in response to the film, titled "Soviet Story: Mechanism of Lies," which was sent to the State Duma and Ministry of Foreign Affairs.

"Latvian authorities are playing a dangerous game by openly falsifying history," said Diyukov. "Latvian school children, after watching this film, will grow up hating our country. But hatred can only beget hatred in return." The article also quoted Vladimir Ivanov, head of Latvia Desk at the Russian Ministry of Foreign Affairs, who said that "the film is similar to Goebbels' propaganda," alluding to the notorious Joseph Goebbels, head of Nazi Germany's propaganda machine.

This past week, Russian Prime Minister Vladimir Putin urged the creation of an "Anti-Crisis Center," which will have the authority of managing the effects of the global financial crisis in Russia. This special commission will have the responsibility to assist large industries and individual citizens, and will be headed by Igor Shuvalov, First Vice-Premier. The article points out that the first priority of the Russian government was to support its energy industry, heavy industry and banks, while the concerns of regular citizens were not immediately on the radar. The Center is slated to designate 100 billion rubles as credit to "strategically important" industries, and 200 billion rubles for the rest of the country.

Two distinct opinions were voiced about US strategic military plans, an issue that gets increasingly large amount of coverage in Russian media following US actions in Iraq and Afghanistan. Daily cites recent report by Washington-based Center for American Progress, which called for stopping the development of anti-missile shields in Poland and the Czech Republic, which Russia considers aimed at itself. The article highlights the argument that "strategic logic of said shield is in question because it needlessly provokes Russia." The articles further cites Congressman John Murtha, who said that American defense spending is expected to decrease in the coming years.

However, Russian military officials and experts do not wish to put much faith in such statements. General Leonid Ivashov, president of Russian Academy of Geopolitical Problems, was quoted by Izvestia saying that "the biggest danger for Russia and other countries is the attempt to construct a unipolar world. We are carefully monitoring what our so-called "strategic partners" in America are doing. United States has steadily increased its military budget over the last several decades, so that now it's the largest in the world. Its vast weapons modernization program is aimed at achieving technological superiority over all other world militaries. That is not done just to hunt Osama bin Laden. It looks like America is geared towards unleashing one big war, or many local wars around the world."

In light of such concerns, General Ivashov openly questioned why decisions regarding Russian Armed Forces are done by civilian leaders without any military background (alluding to current Defense Minister Serdyukov, who has business experience but did not serve in the armed forces), and why the Russian government is aiming at decreasing the ranks of officers and active duty soldiers by hundreds of thousands.

December 7, 2008

Chinese Sphere: Pondering Place in New World

Amidst reports of the ongoing back-and-forth arguments that took place in the U.S.-China Strategic Economic Dialogue over the strength of the Chinese currency, an interesting news item surfaced in the Southern Metropolis Daily, one of China's leading commercial newspapers. In remarks to the paper, Major General Jin Yi'nan, the head of the PLA National Defense University's Institute of Strategy, advocated dispatching the Chinese Navy over to the Gulf of Aden to take care of the Somali pirates. Just last month the pirates hijacked of a Chinese fishing boat and took 15 Chinese hostages.

While Jin was quick to dispel "China threat" concerns, he made clear that the overall message of such a mission went beyond a simple piracy fighting action: "If the Chinese Navy were to rescue hostages and protect the passage of commercial vessels, it would in no way be an economic issue. Rather, it would be an issue of national image. In fact, sending out a naval group is not just to target the Somali pirates. The Chinese Navy would sail from Hainan, through the Malacca Straits, enter the Indian Ocean, draw near to the Red Sea, and take position in the Gulf of Aden. This would be a sign to the world that China will be resolute, determined, and capable of mobilizing its Navy to protect its maritime interests, regional security, and the safety of shipping lanes and passages. That is the most important point."

In a Ming Pao op-ed, convener of Hong Kong's Executive Council CY Leung ponders how Hong Kong can maintain a position of importance in China and the world: "We need to integrate two primary demands: the first is for foreign financial organizations to develop their business in mainland China; the second demand is for mainland China to develop its own sustainable domestic financial industry with the help of Hong Kong. If we are unable to meet both of these demands, the financial center of Hong Kong will lose its 'international' nature and become just like Shanghai. We will also lose our 'Chinese' nature and become just like Singapore. ... If we can carry out this project, we can secure the position of the next generation of Hong Kong residents as well Hong Kong's place in the country."

The closer that Taiwan president Ma Ying-jeou tries to bring the country to China, the more his administration seems to take on facets of its authoritarian neighbor. Police treatment of protesters during the Chinese envoy's visit last month elicited notices from Freedom House, the International Federation for Human Rights (FIDH), and most recently Amnesty International, a dubious distinction that Taiwan has not had since the days when it was a martial law dictatorship. Now Ma has stated that it would not be in the "national interest" to welcome the Dalai Lama, who had expressed a desire to visit Taiwan in 2009. The Dalai Lama last visited Taiwan in 2001 when the current opposition Democratic Progressive Party was in power.

In an editorial, the Taiwan-based China Times writes, "Cross-Strait relations are, indeed, important to Taiwan, and everybody wishes for harmony between the two sides. However, cross-Strait relations should in no way be equated with the national interest. A free economy, democracy, human rights, and national stature are absolutely of greater importance. ... For a long time the message we have given to the international community was that Taiwan stood on the side of democracy, freedom, and human rights and faced suppression from Communist China. Every country, out of consideration for its 'national interest' and Chinese pressure, has sacrificed Taiwan.

"However, there are many international friends who are still concerned about Taiwan's plight. Now that we have rejected the Dalai Lama, have we not just shot ourselves in the foot? Moreover, if we ourselves are unable to withstand pressure from Communist China, how can we ask the international community to support Taiwan?"

Russia: Crisis Hits Real Estate Market

Russian media is proudly writing about the nation's anti-ship frigate Admiral Chabanenko sailing through the Panama Canal this weekend. Daily reported that Russian sailors will meet their Panamanian counterparts and engage them in soccer and volleyball matches. As reported by the Russian Embassy in Panama, "the friendly visit by the Russian frigate will raise the international standing of Panama as a naval power, and will demonstrate to the whole world that the Canal is truly neutral." The paper reported that last time Russian ships traversed the Canal was in 1944, when four Soviet submarines traveled from the Atlantic to the Pacific Ocean after undergoing repairs as part of the Allied war coalition.

The paper also commented on the Russian reaction to the US refusal to discuss President Medvedev's plan for Russian-European Security Cooperation initiative at the OSCE (Organization of Security and Cooperation in Europe) meeting taking place in Helsinki. Russian Foreign Minister Sergey Lavrov proposed discussing Medvedev's plan for an all-encompassing Euro-Atlantic security cooperation that would treat all members equally. Lavrov was quoted as saying that "the OSCE is not fulfilling its major obligation - guaranteeing equal security for all. The presence of certain OSCE missions in some countries is considered by these countries as inequality in itself. ... Currently, OSCE is not able to prevent conflicts, and does not react to the violation of its major principles." Lavrov also called for the investigation into OSCE observer's alleged knowledge of Georgian plans to attack its breakaway, pro-Russian province of South Ossetia in August 2008.

Daily Vremya Novostei is reporting on the Russian plans to build a natural gas pipeline to Tskhinvali, the capital of South Ossetia. The pipeline is to be completed in June-July 2009. The actual pipeline construction commenced in the spring 2007. Prior to the August 2008 war between Georgia and Russia, South Ossetia received its natural gas from Georgia, which itself was delivered from Russia.

The evidence that the global financial crisis is hitting Moscow was highlighted by the Business Daily Vzglyad report that the developers of the much-talked about, ultra-modern high-rise project called "Moscow City" - a series of high-rise commercial and residential properties on the Volga River overlooking older sections of downtown Moscow - are trying to sell off their properties at a loss. One of the main developers- Russian Mirax Group - must return 200 million euros (approximately $300 million) to Credit Suisse in February 2009, if it is unable to get refinancing from the Russian Vnesheconom Bank. The developer must follow that payment with an additional 65 million euros several months later. If the Russian bank will be able to issue credit to the developer, then Credit Suisse, the original lender, will get the "Federation Tower" - one of the the tallest buildings in the complex - as collateral, since all other projects advertised by this developer exit only on paper.

This is a stark turnaround in the fortunes of one of the "loudest" and most-advertised projects in Russia - altogether, "Moscow City" was supposed to be poster child of the resiliency and attractiveness of Moscow real estate market, judged as the most expensive in the world by leading industry indicators. "Moscow City" was planned as a state-of-the-art commercial and residential property complex - yet today, its value is deflating rapidly.

Another developer in the complex, "Russian Land Company"- whose assets were valued at nearly $10 billion before the global financial crisis - is stopping construction on the complex's signature project - "Tower Russia," a 612-meter (2,007-foot) skyscraper that was planned as the tallest building in Europe and second-tallest in the world. The developer cited the financial situation in Russia and the "state of the markets in general" as the reason for its decision. On December 5, Vzglyad reported that "Tower Russia" will be purchased by the British oil company "Sibir Energy" for half the cost.

Russian business experts commented on the drastic effects of the global financial crisis on the once-hot Russian real estate mega-projects: "The crisis greatly lessened the actual value of these projects- or rather, it showed how inflated those projects really were," stated analysts at ProServiceMarket. "The inability to attract additional credit is forcing the developers to shed their once-flaunted projects as ballast." "Vzglyad" concluded that the previous price tag of "Tower Russia" - valued at $2.5 billion - could in reality be nothing more than "smoke and mirrors," just like the value of many other major real estate projects around Moscow.

November 30, 2008

Russia: Georgia Is Unforgiven

Russian Federation cannot and most likely will not forgive Georgian President Mikhail Saakashvili for the August 2008 war, and Russian media take every opportunity to criticize his actions this past summer, blaming him for the Russo-Georgian war. This past week, news on Georgia and the aftermath of the August war were front and center in many Russian publications.

Since the United States continues to back territorial integrity of Georgia, President-elect Barack Obama is often cited in articles associated with the Georgian head of state. Daily cites Saakashvili's recent interview with an Italian newspaper, in which Saakashvili described his recent conversation with Obama, when American President-elect "pledged to support Georgia with all strength at his disposal." Dni quoted Saakshvili saying that while he now takes the blame for starting the conflict, his actions nonetheless were "inevitable ... and adequate in order to defend the integrity of his country."

The article further quotes Dmitry Rogozin, Russian representative at NATO, saying that "when he talks to leading politicians and diplomats - even those who supported Saakashvili initially - they are now starting to laugh at him. Georgia's friends are disappointed with everything having to do with Saakashvili. It seems that Washington "Center," as we kindly call it, has already made a different decision. We [Russians] think that the next President [of Georgia] will be Nino Burdzhanadze." According to Mr. Rogozin, Ms. Burzhdanadze already visited the White House, where she received a blessing from the American leadership to be the next Georgian President.

Dni reported further on the escalating rhetoric between Russia and Georgia. President Saakashvili , in the above-cited interview, made statement that his country had to take "adequate measures" against Russia in the August war because Moscow already begun moving heavy military equipment to the breakaway region of South Ossetia. His words were criticized by Assistant Joint Chiefs of Staff of the Russian Federation General Nogovitsin, who said that Saakashvili's words are "... paranoia. It's not curable. Saakashvili has no other choice but to say all that."

More interestingly, this article also cites former Georgian Ambassador to Russia Erosi Kitsmarishvili. According to Amb. Kitsmarishvili, Georgia was the first to start the August 2008 war, because "... Saakashvili took Secretary of State Condoleeza Rice's visit to his country in July 2008 as the blessing to start the operation in South Ossetia. Moreover, Tbilisi may have had military plans for Abkhazia because Georgian President wanted to move the capital of the country to Sukhumi [now the capital of Abkhazia]."

The same article reported that Saakashvili, his closest supporters and his government are preparing to flee Georgia, and have already started moving money to international banks. The article cites Georgian political opposition's statements that "tens of millions of dollars are being moved to Mexican and Swiss banks. ... We [Labor Party] have enough proof already."

Daily printed the interview with the above-mentioned Dmitry Rogozin, Russian Representative to NATO. Rogozin told Izvestia that the current American administration is trying to leave President-elect Barack Obama "with a difficult inheritance when it comes to relations with Russia, Eastern Europe and Western Europe. ...The faster Ukraine and Georgia become part of NATO, the easier will it be for the [NATO] allliance to hide the evidence of its preparation for attack on South Ossetia and its participation in the "Orange Revolution," [which in 2004 brought pro-Western Ukrainian government to power]. That is why Rice has been constantly on the phone with her European colleagues." Asked why Secretary Rice is trying to pressure Europeans to admit Georgia and Ukraine into NATO, Rogozin replied that "lately, something strange is happening with her. It is important to understand this woman who until recently had the whole world in her pocket. And now that Senator McCain lost, she again has to earn a living by reading lectures."

All attention to Georgia notwithstanding, Izvestia reported on the results of the Russian fleet's recent visit to South America. The paper reported that Russian fleet, headed by the rocket cruiser "Peter the Great," is ready for the first-ever joint Russian-Venezuelan naval exercises. Former Assistant to Naval Chief of Staff Admiral Igor Kasatonov was quoted saying that "We [Russia] are a great naval power, and should be able to cooperate with any country's fleet, especially in regions that are located far from Russia's shores."

France: Mumbai Attack Monopolizes News

Following news outlets worldwide, the French press was in shock this week on the brutal terrorist attacks that took place in Mumbai. There were strong reactions to the survivors who flew back to Roissy on an Air France plane and regarding Pakistan's presumed involvement in these senseless killings.

First, France received and gave assistance to 77 survivors of the attacks (among them 29 French, 19 Italians, 17 Spanish, and 5 Germans) Saturday. A French tourist traveling in Mumbai, Johanna, 24, relates how she witnessed the atrocities in Le Figaro:

"We were eating when our attention was caught by many young people who came in with huge backpacks on their shoulders. They took heavy weapons from their bags, threw 3 grenades and started shooting at everybody with their machine guns. The gunmen were not hiding their faces, looked Indian and particularly young. Some people got out running, others, like us, hid under the tables. All those who took refuge in the kitchen were killed."

But this story is far from unique. Accounts such as this one are, in fact, numerous. And it always poses a problem for the press: how much can you ask of survivors who are still in shock? Among the survivors who came back to France Saturday, a woman answered in her own way by telling the reporter: "This is too much! Leave me alone!"

Now, aside from the individual horror stories, the French media have been keen, as have the Indian ones, to quickly point a finger at Pakistan's fundamentalist-infiltrated secret service. Based on what? On the fact that the only terrorist caught alive who is now in custody is Pakistani and admitted his membership in Lashkar-e-Taiba, a jihadist-separatist group operating in Pakistan-administered Kashmir. Le Monde reports that this militant terrorist group had had links with elements from Pakistani secret service.

On top of all that, Indian security sources have confirmed that the terrorists could not have carried out such an attack without undergoing military training: they were using heavy weapons, communicated and attacked like professional army commandos. These facts do add to the suspicion towards the Pakistani secret service.

Therefor the Al-Qaeda lead has mostly been pushed aside in favor of indigenous terrorist organizations such as Lashkar. Which pushes to ask the burning question: is the epicenter of jidahist terrorism slowly but surely moving towards South Asia?

Chinese Sphere: Reactions to Mumbai Attacks

The Mumbai terrorist attacks figured prominently in the international sections of Chinese language newspapers. In the Southern Metropolis Daily, one of China’s leading commercial newspapers, Zhuang Liwei asserts that while outside groups may have aided the attackers, their primary motivation should be attributed to longstanding discrimination against Muslims in India’s predominantly Hindu society: “Before this Mumbai attack occurred, incidents of Muslim villages being burned, Muslims being murdered, and Muslims being evicted from their homes were occurring on a regular basis. Although the Indian government had made efforts to restrain Hindu radicals, they were of only limited effect because of Hindu’s political influence.

"Overall, Muslim radicals who found themselves disadvantaged had no choice but to resort to a strategy of bloody attacks in order to carry out a balanced resistance. At the same time, the intervention of external Islamic forces also enabled the Indian Muslims to obtain support and resources to continue their hardened resistance against the Hindu camp.” Zhuang goes on to forecast a round of revenge attacks and counterattacks between India’s Hindus and Muslims.

In the Liberty Times, one of Taiwan’s leading dailies, Lee Cheng-hong believes that India’s attribution of the attacks to external forces is a way of covering up its internal contradictions: “India may choose to take the more attractive American path and call the Mumbai attacks India’s 9-11 and put the finger on Pakistan as the mastermind. Thus, India’s next step would be to raise tensions with Pakistan and perhaps even engage in armed conflict. The logic for this course of action is simple and it would work towards sidestepping internal political crises and shift the focus outwards.” Lee also sees this as President-elect Obama's first major foreign policy test.

An editorial in Lianhe Zaobao, Singapore’s leading Chinese-language daily, interestingly blames India’s democracy for the attacks: “Many things about India tell us that oftentimes this ‘world’s largest democratic country’ is confounded by democracy itself. Even today it has still been unable to transform the benefits of democratic theory into reality for managing the nation and improving people’s lives. Instead, certain political forces and special interest groups force the nation’s political machinery to a standstill in pursuing their own interests. This renders the government unable to enact or execute policy, and the natural result in the end is that interests of the majority and all of society are harmed.

"With regards to the Mumbai incident, people cannot assign the entire blame to the lack of efficiency in India’s political system, but there is one point that cannot be denied: if a nation’s policymaking and execution functions are weak and powerless, or are constantly paralyzed, than it would naturally become an easy ‘soft target’ for terrorist organizations or other evil forces to attack. For India, this should be a lesson. For other countries, should this also not be a warning?”

November 23, 2008

France: Whither the Socialists?

Is the Socialist Party Headed for Collapse?

This resounding question was asked this weekend in an op-ed piece in Le Figaro. To the outside observer, another question comes to mind: How could François Mitterand's party slide down so low on the slippery slope of divisions?

Of course, left-wing parties are known worldwide for their lack of discipline when compared to their right-wing counterparts. But this time, the French Socialist Party is evenly - and bitterly - divided between two powerful blocs: center-leftists who support Ségolène Royal and leftists who support Martine Aubry. Indeed, after a vote in which almost 140,000 Socialists cast their ballots in favor of either candidate, Aubry came out on top with a 42-vote majority, a margin of 0.04% between the two candidates!

Such a result was bound to reinforce the growing feeling of distrust between the two coalitions, but the situation has worsened as Ms. Royal has legally challenged the results, which are now being recounted. As they often do in those kinds of situations, accusations of fraud have flown from both sides, contributing to the growing feeling of animosity that has now overwhelmed the Socialist Party.

Indeed, things are definitely looking awful for the Socialists. On the other side of the question, Le Monde asks if Mr. Sarkozy's UMP will be able to benefit from their political foes' misfortune. Of course, UMP officials were eager and satisfied to tell the press that the Socialists had shown the worst side of themselves and that socialism itself was outdated in France.

In my opinion, those left-leaning French electors who may be embarrassed by the main opposition party's divisions are not likely to jump in the UMP boat. In fact, in the same article, Le Monde suggests that such rivalries within the left might spark some "anarcho-unionized" troubles, suggesting that France could be headed for a wave of public strikes. For Le Monde, the only real winners from such a volatile situation on the left are François Bayrou from MODEM (centre) and Olivier Besançenot from LCR (extreme-left).

But for now, all of this is speculation. First of all, we have yet to find out who the real winner of the Socialist race for leadership is and for that, we have to wait for the results of the recount and of possible judiciary actions coming from either Aubry or Royal. Second, European elections will take place next year and they will give us a glimpse of what the balance of power has become on the left side of French politics: Will the extreme-left be able to garner support among disillusioned Socialists? That much will be told by European elections.

However, this much is clear: It's not a good day to be a French Socialist.

Chinese Sphere: Financial Crisis Hits Home

At the outset of the financial crisis, many China-based media commentators were exuding a sense of self-satisfaction toward the troubles the U.S. economy was going through and looking forward to a reconfigured international order with a weakened U.S. and stronger China. However, with recent news this past week of rising unemployment and factory closures in China, the media has dialed back its triumphal declarations and is, instead, calling for businesses to do the right thing and keep their workers on the dole.

In an editorial titled, “Committing to No Layoffs Is an Expression of Corporate Social Responsibility,” the Chinese government’s official Xinhua News Agency writes, “In the face of economic crises, corporations, especially privately-run businesses, can choose to layoff workers in order to reduce risk and costs and achieve the goal of self-preservation. This is a common approach taken by corporations in developed Western nations. However, a responsible corporation should look after the overall interests of the nation and society. It should tightly tie its own fate to that of the nation and the people. … The greater the crisis, the tougher will be the test of a corporation’s moral fiber and social responsibility.”

With Singapore now officially in a recession and one of its largest banks announcing layoffs, leading Chinese-language daily Lianhe Zaobao is also using similar language in pleading for businesses to go easy on the layoffs: “Corporations may pursue profit, but they must also be socially responsible. They should care for the welfare of their employees and their families. … In the midst of the rapidly deteriorating global economic situation, it would be unrealistic to expect companies not to engage in any layoffs at all. … However, we sincerely hope that during these difficult times company managers will be able to think carefully and long-term. Value and respect the labor-management-government tripartite negotiation channels and make use of its special advantages. Adopt a ‘tripartite’ approach in dealing with issues such as crisis response and employee lay-offs in order to set a good example of a manager.”

An economic policy consisting of entreaties to businesses to refrain from taking measures perfectly consistent with free market principles would be received with ridicule in Taiwan, so the government can only hope to use fiscal measures to soften the impact of the global economic downturn. However, President Ma Ying-jeou’s administration has resorted to a curious combination of both massive government spending and large tax cuts in hopes to stimulate the economy.

The Taiwan-based China Times writes, “Cutting taxes is like smoking opium. In some situations tax cuts may have a stimulatory effect, but they also have very obvious negative consequences: they decrease government revenue, worsen the nation’s financial state, add to the debt burden of future generations, seep away funds for infrastructure development, and weaken the investment environment. Overall, it causes long-term damage to economic fundamentals. Short-sighted political hacks get caught up in the applause over tax cuts, but they ignore the after-effects of shocks to government debt and infrastructure development. … When our government officials wish to adopt the most appealing policies of America’s Democratic and Republican parties by both increasing spending and cutting taxes, does President Ma not feel the least bit of discomfort? Is there such a thing as a free lunch?”

Russia: Events in Near Abroad Take Center Stage

Russian newspapers are commenting on a wide variety of topics, with the effects of the financial crisis and events in its near-abroad taking center stage.

One of the more important stories over the past week is the difference of opinion between Russian and American presidents over what Ukraine calls "Holodomor," an artificially induced famine by the Soviet government in 1932-33 that killed millions of Ukrainians (and millions of other people across the Soviet Union). The famine's title is a Ukrainian word made up of "Holocaust" and "mor," or famine. Russian daily reported that President George W. Bush addressed Ukrainian people marking the 75th anniversary of the event, stating "solidarity of the United States with the Ukrainian people seeking to remember millions who perished when Stalin's regime created an artificial famine. ... The people of Ukraine are participating in advancing freedom across the world and America is proud to call Ukraine its friend."

The famine of 1932-33 created a huge row between Ukraine and Russia because Moscow refuses to accept blame for the events from seven decades ago, stating that it was the crime of the Communist regime at that time, that millions of other victims of Stalin's brutality perished across Soviet Union in regions besides Ukraine. Moscow therefore refuses to see the Ukraine "Holodomor" as Ukraine sees it - a pre-determined action emanating from Moscow intended to destroy Ukrainian people.

The paper quoted Russian President Medvedev's letter to Ukrainian President Yuschenko: "... Kiev's stance on this famine is meant to sow differences between our countries. ... It is time to look for collective approaches to this issue. The tragic events of the 1930s are being used, in our opinion, in order to achieve short-term political gains." Medvedev is further quoted as saying that "those who are using 'Holodomor' are not interested in scientific and historic data. They misstate facts and falsify victims' numbers. ... To say that there was a predetermined goal to destroy the Ukrainian people is to misstate facts and those who do it seek to create a nationalist subtext for the overall tragedy. ... The actions of Ukrainian leadership are meant to divide (Russian and Ukrainian) our people, united by centuries of cultural, historic and spiritual connections."

Dni reported that Georgian opposition has addressed Georgian people with the calls for President Saakashvili's resignation. The opposition also wants to try American politicians who "brought Saakashvili to power and supported him for the past five years." The opposition hopes that "arrival of Obama would mean the departure of Saakashvili," whom the opposition blames for worsening economic and political situation in the country. At present, Moscow considers Georgian leadership fully responsible for the August 2008 war in the breakaway region of South Ossetia that brought Russian military deep inside Georgian territory.

Daily commented on the recent speech by Prime Minister Vladimir Putin at the annual meeting of the country's largest party, "Ediniaya Rossiya." (United Russia) Putin addressed the party delegates in his new role as "the slayer of crisis," referring to the effects of the current global financial crisis on the Russian economy and society. The paper commented that the "tandem democracy" in Russia became more clear, "with President Medvedev controlling the institutions of power, while Prime Minister Putin controls the finances." The paper argues that Putin's speech to the party and the Russian people underscores the fact that the financial crisis is now directly affecting the country, and that government must do everything it can not to repeat the economic collapse and shocks of the 1990s. The paper further states that Putin's always-high popularity ranking among Russian people will remain high, and may even rise now that Putin has pledged to fight the effects of the global crisis.

Daily Vremya Novostei reported on one of Putin's acts to combat the crisis - Russian income tax will be lowered by 4%, quoting Putin's address to the party delegates: "That means that 400 billion rubbles will remain with the companies and industries and will continue to circulate in the economy."

Daily Izvestia published an interview with Duma Deputy Sergey Markov about the results of the recent G20 economic summit. Markov talked about the "rescue models" for the re-launch of the global economy, stating that US will either accept large-scale investments from China and Muslim countries, or that new "alternative capitalism " models will be explored by a working group proposed by French President Sarkozy. According to Markov, "Russia risks to be on the periphery of these discussions. Its position is right so far - greater cooperation, multipolarity of global centers, greater amount of reserves. Most importantly, we should depend less and less on the US economy." He further stated that "it is important for Russia to change its (economic) ideological orientation and to propose global solutions."

November 16, 2008

Chinese Sphere: World Order and Law and Order

On the heels of the announcement of the Chinese government’s massive stimulus plan, many domestic newspapers weighed in with commentary on the global financial crisis and its potential effect on the nation. The official government newspaper, People’s Daily, sees in the crisis an opportunity to test and strengthen Chinese business enterprises and government officials that survive this crisis. It also sees a vindication of China’s development path:

“Socialism with Chinese characteristics is unprecedented in the history of mankind. We acknowledge that our social structure is not perfect and contains all sorts of inadequacies and problems. However, it does not follow that we should question the path we have taken, nor should we automatically regard the Western model as superior. … We must get past the fallacious notion that ‘all that is Western is advanced,’ and face others with objectivity and rationality. We must be practical and sensible in taking stock of ourselves, forgo superstition, and not blindly follow the crowd.”

Singapore’s leading Chinese-language daily, Lianhe Zaobao, sees China advancing in international stature through this crisis: “In the midst of the bleak outlook surrounding the global economy, the unveiling of Beijing’s market bailout plan has shown that it marches to the beat of a different drummer. China perhaps feels that it needs to let the world know once more that not only is it able to take care of itself, but that the nation’s stability and development is its most concrete contribution to the world economy. Consequently, in the international economic order of the future, China has reason to occupy an important role.”

Meanwhile, Taiwanese society is reverberating from the aftershocks of protests surrounding the November 3rd visit of a Chinese official and last week’s detention of former president Chen Shui-bian on corruption charges. Chen joins seven other current and former government officials, all members of the opposition Democratic Progressive Party (DPP), who have either been arrested or detained during the past few months on separate charges, raising suspicions that government prosecutors have been solely targeting opposition figures.

In an editorial, the Apple Daily, a popular tabloid in Taiwan, writes, “It is a fact clearly witnessed by all that the judiciary has only been going after [opposition party members] and ignoring [ruling party members.] Consequently, the judiciary has gained for itself the unsavory reputation of a political hit man. This has seriously affected the independence and dignity of the law. When the law is unable to remain politically neutral, it will deepen social fissures, lead to further polarization, and betray its mission as society’s arbiter.”

While it may be a stretch to conclude that the judiciary is being controlled by the ruling Chinese Nationalist Party (KMT), it is even more difficult to attribute the one-sidedness of these recent prosecutions to mere coincidence.

France: 21st Century Socialism

This week, the French newspapers were so full of 'isms' such as 'socialism', 'capitalism' and 'liberalism' that one could have believed to be living the 60s all over again. But in the end, the word that got the most traction is 'socialism', for two main reasons.

First, this week featured the opening of the congress of the Socialist Party (France's main opposition party, left-wing). But we'll get back to that.

Second, President Sarkozy has been criticized heavily by some in his own party and abroad (including the U.S. president) for his promotion of a 'renewed capitalism' in the face of the financial crisis. These critics have pointed out that the Bretton Woods capitalist system has been remarkably successful since the end of World War II and that wealth redistribution and protectionist policies do not offer future safeguards against financial crisis such as the one we are facing right now.

The reason why the reform of capitalism was on the agenda this week has a lot to do with the financial crisis itself, but also with the G20 meeting that occurred to find solutions regarding this very crisis. Regarding the meeting, nothing substantial came out of it. The only point of interest from a French perspective was that it gave an updated view of France's diplomatic power. To that effect, Le Figaro reported on the most difficult and the friendliest relations with foreign countries:

- Difficult relations with: Hu Jintao from China, Angela Merkel from Germany, Dimitri Medvedev from Russia and King Mohamed VI from Morocco.

- Easy relations with: Gordon Brown from the U.K., José Luis Zapatera from Spain, Luiz Ignacio 'Lula' Da Silva from Brazil and Silvio Berlusconi from Italy.

As Mr. Sarkozy was making headlines in international news, his political foes from the opposition Socialist Party were making their own in the domestic front as they gathered in Reims to give their party a new program and renew its leadership. Sign of changing times, the race for the job of Party First Secretary after François Hollande called it quits features two women as the front runners. The first is of course Ségolène Royal, who represented her party in the 2007 race for president. She still has charm, wit and charisma, but she carries her unsuccessful bid for the presidency in 2007 as a weight that is turning off many socialist militants. Also, she has been accused within socialist ranks of 'moving towards the center,' or worse: populism!

Her opponent, Martine Aubry, is not as well known by the general public as Royal. However, she is gaining traction among some socialists by running as a 'true socialist' and criticizing Royal's 'move towards the center.' ... So between a center-left candidate who could not gather enough centrist votes to win two years ago (Ms. Royal) and a pure leftist candidate in a country where there are already at least four other parties who rally extreme leftists, my guess is that the Socialist Party is, despite encouraging results in the last municipal elections, going to continue to marginalize itself in the left corner of French politics.

So as much as he wants to reform capitalism abroad, President Sarkozy does NOT want French socialists to reform themselves, because their moving further to the left only strengthens his grip on the presidency. Of course the presidential election is still three years from now, Mr. Sarkozy thus has plenty of time to make gaffes. But if the Socialist Party of 2012 looks anything like that of 2008, he will prevail, once more.

Russia: G20 Summit Takes Center Satge

Now that the US election is over, Russian papers are commenting on the daily issues of concern to Moscow, most notably the G20 summit currently taking place in Washington and the incoming administration of President-elect Barack Obama.

Vgzlyad paper noted one of the first meetings conducted by President-elect Obama's representatives was done with the Russian delegation, represented by the officials from Medvedev's office as well as new Russian Ambassador in the United States, Sergey Kilsyak. The paper also commented on the protests taking place near the summit, as well as citing Venezuelan President Chavez's desire to conduct an alternative summit in his country's capital.

Other papers are actively commenting on the possible makeup of the Obama Administration. Daily Gazeta again reiterated earlier sentiments that Joe Biden will be a hawkish Vice President, reminding its readers that he actively supported "Republican initiative of" Kosovo independence against Russian ally Serbia. The paper also stated that the future Chief of Staff Rahm Emmanuel is a staunch pro-Israel politician and "an advocate of a harsher line in the Israeli-Palestinian conflict," earning the moniker "aggressive Democrat." The same paper also notes Senator Clinton's good chances of beings chosen as the next Secretary of State, quoting her statements that she would like to be a "good partner to President-elect Obama."

Daily Izvestia wrote about Italian Prime Minister Silvio Berlusconi's desire to be the mediator in US-Russia relations. It cited his fears that the placement of Russian short-range missile in the Kaliningrad region is a "return to the Cold War fears." The paper quoted Berlusconi's statement that he "advised Obama to stop escalation of negative rhetoric towards Russia - I think that is more important than Iraq." Izvestia then commented that it was not clear what was Obama's reaction to that conversation after the Italian PM called Obama a "young, handsome and well-tanned politician."

Nezavisimaya Gazeta wrote that US General Henry Obering is "provoking" President-elect Obama by stating that US strategic interests will be diminished if Obama "freezes the anti-missile defense initiative in Europe. "Obering called on the Democratic administration to ignore Moscow's protests and to realize the radar deployment in the Czech Republic and the interceptors in Poland. The same paper discussed in a different article an idea that America does not fear Russia because the current financial crisis will hit Russian's military the hardest, thus diminishing Moscow's ability to actively compete with the United States.

However, the paper proposed that the Russian government will not change its budget, even in crisis, because to do so would be to first admit that Moscow did not adequately prepare for global financial upheavals (which Kremlin will never do); and second, Russian government is actively and successfully "exporting the ideal of a besieged fortress ... surrounded on all sides by Western allies and their anti-Russian satellites, Russia is now rising in global prominence. ... In these conditions, it is simply unthinkable not to give adequate share of the budget to the Russian military."

November 9, 2008

Russia: No Major Changes Expected

Reality is catching up fast for the Russian Federation, which begun to slowly orient its expectations towards Barack Obama's win about two weeks prior to November 4. As the Russian government and its policy analysts expected, Obama's nascent presidency will have mixed results for US-Russia relations, though cautious optimism is starting to take hold. One issue that is already grabbing headlines in Russia is the American attitude towards anti-missile shield in Europe.

As reported by the Daily Vzglyad, Obama reiterated his commitment to the Patriot missile batteries in Poland, signed earlier in August by Secretary of State Condoleeza Rice. The paper commented on Western Europe's desire for a "new beginning in relations between Russia and the US," but remained convinced that President-elect's desire not to deviate form the previous administration's plans signaled that major changes in US-Russia relations are not expected to take place anytime soon.

This attitude is highlighted by another analysis in Vzglyad, in which Russian foreign policy specialists are openly saying that they do not hope, at present, for any warming in US-Russia relations. Mikhail Margelov, Chairman of the Foreign Relations Committee in the Duma Senate (upper chamber of the Russian Parliament) is quoted as saying that major changes will not take place because "too many disagreements have piled up between our countries. ... We are expecting that the US will continue the policy of selective cooperation with Russia, particularly in the area of nuclear non-proliferation and anti-terrorism initiatives." He also called on his colleagues not to "take [Obama's] election promises seriously, since they were only declarations, which are primitive in context - while the reality is always more complex."

An even more direct opinion was voiced in the same article by Alexander Hramchikhin, director of analysis at the Center of Political and Military Studies: "Obama is inexperienced in foreign policy, and will have to heavily rely on his advisors, like Senator Biden, who is more of a hawk than McCain. ... Obama himself is a "black box" - we are not talking about the color of his skin, but about the lack of knowledge on what he will be like as President, since he has absolutely no relevant experience."

Still, there was some cautious optimism voiced by the Russian political establishment. In the same article, Konsantin Kosachev, Chairman of the Foreign Relations Committee in the Duma (and counterpart to Congressman Berman of the House Foreign Relations Committee) stated that "Obama's victory gives hope for a new reality in US-Russia relations, but it's premature to predict when that would actually take place. Obama will be under pressure from his team of advisors, whose approaches to Russia do not differ significantly from that of the Bush Administration." On the other hand, Mr. Kosachev highlighted Obama's biggest advantage in foreign policy: "Obama's thinking is not influenced too much by the Cold War. Senator Obama did not engage in openly hostile rhetoric towards Russia, which gives hope for the strengthening of our cooperation on key issues." More cautious optimism was also voiced by Sergey Markov, Duma Deputy, who stated that he "could actually imagine a personal friendship between Presidents Obama and Medvedev, since they belong to the same generation. ... They are both Internet users, and probably listened to similar music and watched similar films."

Daily Izvestia reminded its readers that Barack Obama was more popular in Russia than John McCain, citing the polling numbers by the official Levada Center. The polls were conducted in late October in eight largest cities across the Russian Federation, and 27% of Russians were favorable towards Senator Obama, while 15% were favorable towards Senator McCain. More than half of the Russian respondents could not say with which American political party can Russian government better deal with; 39% stated they prefer the Democratic party, while only 11% named Republicans.

Daily Nezavisimaya Gazeta attempted to predict that Obama's policy towards Russia will be constructive and will revolve around issues such as nuclear non-proliferation. Assistant Director of Russian Academy of Sciences Viktor Kremenyuk stated that the "starting point in US-Russia relations is now very low, and its up to the leadership of America and Russia to raise our relations to a new level. With Obama as President, both sides can continue working on issues laid out by President G. W. Bush."

Kremenyuk stated that Obama will pay attention to Russia' internal processes, but will not seek to interfere in them. On the other hand, Sergey Karaganov, Chairman of Foreign and Defense Policy at the Duma Senate stated that real changes in US-Russia relations could take place no earlier than in half a year from now. He also stated that "there will be positive changes, but Russia too will have to work hard to escape this "confrontational spiral."

Chinese Sphere: Trepidation over Obama

As with the rest of the world’s media, the Chinese-language press weighed in on what changes, if any, President-elect Obama would bring to US foreign policy. There seems to be an overall sense of appreciation for the historical significance of the election, but also some trepidation over whether an Obama administration would upset the relatively stable relationship that currently exists between the US and China, attested by the fact that the topic of these relations barely came up during the course of the campaign.

In Hong Kong’s Ming Pao, Dong Sheng writes, “In general, there is always bound to be a degree of uncertainty when the US changes presidents. Nevertheless, if the Sino-US relationship was able to emerge from the shadow of the (Yugoslavia) embassy bombing and spy plane incident and develop into what today appears, at least on the surface, to be one based primarily on cooperation, than in the near term there will be no dramatic changes in US-China relations.” The writer is still concerned, however, over how Obama will handle the financial crisis, especially with relation to his expectations of the Chinese government’s role.

Over in Singapore, leading Chinese language daily Lianhe Zaobao expresses concerns over Obama’s trade policies. “Traditionally, the US Democratic Party has a protectionist image, and in the midst of this financial and economic situation those protectionist feelings can be easily stirred up. Consequently, as the guardian of market economics, America needs to continue to speak out for free trade and attack protectionism.”

Taiwan is also nervous about the incoming Democratic administration because the party is seen to be more accommodating to China than the Republicans. The Taiwan-based China Times states, “Obama’s election win has given Taipei some cause for concern for the future development of US-Taiwan relations. This is completely understandable because Obama is a center-left liberal, and this will also be the ideology of his officials who will take over the handling of the US-China-Taiwan relationship. It is likely that in their consideration of US national interests that those of Taiwan's would be neglected.”

An op-ed column in the Chinese government’s official newspaper, People’s Daily, drips with scorn for Obama’s declaration of change. “Obama is a typical American political hack. There is no difference between his thinking and that of the members of the US Congress. If anyone thinks he will change America, he will probably be sorely disappointed.” One of the examples the writer gives is Obama’s conception of America’s role in foreign affairs. “America’s interference around the world will not change. Intervening in the Kashmir issue is part of Obama’s platform. His reasoning, unbelievably, is to enable Pakistan to focus its efforts on fighting terrorism. Americans are still making up reasons to reach their hands into all sorts of places. Sometimes there will not be any valid reason, so they will make something up to convince themselves and ignore what others think. Obama and Bush are the same. Democrats and Republicans are the same. They think America should be in charge of everything that goes on in this world.” The writer concludes, “In seeking out peaceful coexistence and prosperity for mankind, one should not place their hopes upon any country or even any particular leader. People need to work together so that a multipolar world can constrain rogue nations, and universal values can curb unilateral policies.”

France: Obama, Refugees and Internet Jihad

Three big subjects in the French media this week : Barack Obama's historic election, the expulsion of Afghan refugees and Internet Jihad.

I'll pass quickly on the first subject; most everything has been said and done about Obama's victory last Tuesday. Of course, from left to right, the French media are ecstatic. Questions have started to fuse: Would France be ready for a black president? Would France be ready for a female president? In a country where Jean-Marie Le Pen's Front National (far-right) was able to gather 17% of the vote in 2003, it is a legitimate question.

The other big story on the international front was the expulsion of Afghan refugees. The hard-heartedness of France's immigration ministry lived up to its reputation this week: 57 illegal Afghan refugees will be sent back to Kabul, among them a parentless child no older than 10 years old. The left is trying to mobilize its supporters around this issue, but for now, apathy is what seems to be prevailing in the Hexagon.

Le Figaro published Friday a new report titled "Jihadist Propaganda on the Internet: Diagnosis and Perspectives". Among other things, the report states that France is the country with the fifth-most clicks on jihadist web sites, ahead of even Egypt and Saudi Arabia! It also reports that in the last five years, jihadist servers have grown from 75 to almost 200 worldwide.

Also, the report suggests that jihadists have been keen on using the web 2.0, as Ayman Al-Zawahiri did when he chatted and blogged with supporters in 2007 and 2008. But these web sites aren't only used for propaganda; they are now used as much for recruiting and training purposes.

Scary, isn't it?

November 2, 2008

France: Palin, Joe and Bradley

Time for a last review of the French press' cover of the US elections ...

In the last two days the big story both for the left (Libération) and the right (Le Figaro) was the succesful trick pulled on Sarah Palin and the Secret Service by a Quebec comic duo known here in Montreal as Les Justiciers Masqués. Indeed, Marc-Antoine Audette from CKOI radio station was able to trick the Secret Service and Governor Palin and make them believe that he was in fact the French President Nicolas Sarkozy. The conversation lasted six minutes in which the Alaskan Governor did not notice that she was on the laughable end of the joke.

Among other things, the fake Sarkozy told Governor Palin that he sees her becoming President one day. "Maybe in eight years", she replied. They then went on discussing how much they both loved to "Kill those animals," the imposter gleefully adding that it would be wise not to bring along Dick Cheney.

On a more serious note, most leading French newspapers seemed to be obsessed with Joe the Plumber. Interestingly enough, this fact does underline the clear differences between American and French political cultures. In France, the main opposition party is socialist. In the US, socialist means anti-American. In the US, most presidential candidates run as populists. In France, populism is one of the most effective argument that can be made against any candidacy. Hence, Joe the Plumber and his mesmerizing effect on the French press: "Only in the US," they say!

On matters of foreign policy, Le Monde argues in an op-ed piece that Barack Obama will restore broken links with Europe. Indeed, for Felix Marquardt, an Obama presidency would restore America's soft power and trans-Atlantic links. The argument goes as follows: "There is no doubt that the rejection of unilateralism that is present in the speeches of the Democratic candidate will allow the trans-Atlantic links to gain strength. Europeans but above all Americans, who did not imagine that their hyperpower status would be questioned so soon, badly need it to be so."

Finally, and this is where American and French politics meet - the French media made a lot of noise around race, the Bradley effect, racism and so on. I was happily surprised to notice that the "holier-than-thou" attitude which was often present in the French reports concerning race in America has mostly disappeared. Perhaps the recent racial riots that took place in the poorest Paris and Marseilles suburbs made a lot of Frenchmen realize that race and identity were not exclusively American hot topics; they are explosive subjects in France, too. Nevertheless, the overwhelmingly pro-Obama media outlets in France are concerned and fearful of the Bradley effect. I guess we now just have to wait and see.

Chinese Sphere: All Eyes on November 3

There has been a significant thawing of relations between China and Taiwan ever since Ma Ying-jeou assumed the presidency of Taiwan back in May. Formal channels of communication between the two sides, dormant for eight years during the administration of Ma's predecessor Chen Shui-bian, have suddenly been revived.

The key difference has been that Ma has hewn to his Chinese Nationalist Party's (KMT) traditional stance towards the status of Taiwan, which is that the island is a part of China, and the rightful ruler of China is the Republic of China (ROC) government. Disagreement over the "rightful ruler" part notwithstanding, this is good enough for the government of People's Republic of China, which prefers Ma's stance much more than Chen's past insistence on upholding Taiwan's sovereignty and independence.

The topic of cross-Strait relations has been a hot topic in the Chinese-language media this past week, especially in anticipation of Chen Yunlin's Monday visit to Taiwan. Chen is the chairman of the Association for Relations across the Taiwan Straits (ARATS), the body in charge of conducting relations with Taiwan. The visit will be of particular historical significance because he will be the highest-level Chinese official to set foot on the island. An agreement is expected to be signed that would clear the way for direct air, shipping, and postal links between the two sides as well as the creation of a food safety mechanism.

Singapore's leading Chinese-language daily, Lianhe Zaobao, is very upbeat on this meeting. An October 29th editorial states, "From an objective standpoint, this pragmatic cooperation will most certainly bring about tremendous and long-ranging benefits for the two sides of the Strait. It will especially inject vitality into Taiwan which has limited room for development. This kind of mutually beneficial win-win cooperation is also helpful for maintaining stability and peace in the Taiwan region."

However, not everyone in Taiwan is happy about the rapprochement with China. Taiwan's main opposition party, the Democratic Progressive Party (DPP), staged a protest on October 25th which generated a surprisingly large turnout of 600,000. In the October 30th edition of Apple Daily, one of Taiwan's largest circulating tabloids, Lee Wen-chung writes, "Over the course of 12 years of Lee Teng-hui and eight years of Chen Shui-bian's presidencies, Taiwan completed its transition to a democracy in the midst of hardship and formed a shared community. No matter whether your preference is for 'Taiwan' or 'Republic of China,' the names all refer to this land and its people; the dispute over the future of Taiwan can be handled through a democratic process. However, the Ma administration's disregard and concessions over national sovereignty has severely undermined the consensus over this community."

The "concessions" that the writer is referring to include Ma's referral to Taiwan as a "region" in an interview and his willingness to allow Chen Yunlin to address him as "Mr. Ma" instead of "President Ma." The October 30th editorial of the Taiwan-based China Times newspaper declares, "If the Chinese Communist authorities truly understood the Taiwanese people, they should know that there is nothing that can take the place of dignity. Furthermore, if Chen Yunlin is unable to address Ma Ying-jeou as 'president' when they meet, than there is no need, nor is it appropriate for the two men to meet. Ma Ying-jeou is the leader chosen by ballots cast by the people of Taiwan. He is a representative of our national sovereignty. If he is not able to be properly addressed in his own country and is even willing to be called 'Mr. Ma' or other substitute titles, than not only is that a personal insult, but it is also an insult to Taiwan's sovereignty."

The controversy over titles stems from the Chinese government's refusal to acknowledge Taiwan as an independent country. Therefore, Taiwan is always referred to as "the Taiwan region" and its president is referred to as the "leader" in the Chinese media. An op-ed column by Chien Han-sun in the overseas edition of the People's Daily, the Chinese government's official newspaper, gives an example of this: "Ever since Mr. Ma Ying-jeou assumed the leadership of the Taiwan region, cross-Strait relations have been developing in a positive direction."

Along the same vein as the Lianhe Zaobao editorial mentioned above, the writer plays up the economic benefits that closer economic integration will bring to the two sides. His conclusion, however, would not only worry independence supporters in Taiwan, but also the majority that just wishes to keep the status quo of the relationship between Taiwan and China: "I often hear that the 'status quo' should be maintained in the cross-Strait relationship. This simply does not make any logical sense because the 'status quo' changes with time. Yesterday's 'status quo' is different from today's, and todays 'status quo' will be different from tomorrow's. For every single day of the past eight years the DPP had tried every which way to shift Taiwan's 'status quo' closer towards 'Taiwan independence.' Now that the KMT is in power, I hope that every day they will pull the 'status quo' back upon the path of peaceful unification. It is only in this way that the 'status quo' will be meaningful. Otherwise, we will fall into the 'Taiwan independence' trap."

Russia: US Vote Impact Unknown

Russian newspapers seem to be summarizing the impending victory of Senator Obama. Rossiskaya Gazeta (Russian Gazette) cites that Obama may have gotten as much as 55% in early voting drive across the country - noting also that 17% of the people already cast their vote.

The same publication described Obama's enormous campaign finance advantage over Senator McCain - hinting that such advantage may translate into a victory for the Democratic candidate. But it finished the analysis by noting the famous "Dewey Defeats Truman" photo-op that marked perhaps the biggest American surprise over the last 60 years.

Daily Utro (Morning) publication described a conference titled "Russia's Choice- Obama or McCain," in which the participants concluded that regardless of who will occupy the White House, America's pressure on Russia will increase. The experts concluded that Obama will pay more attention to Russia's internal politics, such as freedom of speech and freedom of the press; while McCain will be busy constructing "cordon sanitaire" around Russia by solidifying the alliances with Ukraine and Georgia. Either scenario is deemed unwelcome in Moscow, but the article cites Andrei Kokoshin, Duma Deputy, stating that Russia is willing to continue dialogue with Washington after the November 4 elections.

Daily Vzglyad publication cites that Senator Obama is alreday putting together a White House team that will include Rham Emmanuel as the Chief of Staff. The confident tone of the article suggests a foregone conclusion about the elections.

In a separate Vzglyad analysis titled "Elephants are Hoping for a Miracle," the authors suggest that a McCain victory will be just as unexpected as Harry Truman's 1948 upset over Thomas Dewey. The article notes that so far, McCain is behind by only 5% and he can overcome this gap at the last moment:

At this point, the real nail-biting in the Russian media will begin on Monday, when the U.S. voters will be less than 48 hours from the final decision. Most news outlets at this point are limiting themselves to reports of the early voting results and major polling numbers, which so far put Senator Obama ahead of Senator McCain. At the same time, Russian are no longer optimistic that McCain's possible loss would mean "easier" relations with Obama's administration. The reality of the overall complexity of US-Russia relations is sinking in for Moscow.

October 26, 2008

Chinese Sphere: Interested But Cautious

As is the case in Europe and many other parts of the world, the U.S. presidential election has attracted great interest in the Chinese-language media. Every major newspaper in China, Taiwan, Hong Kong, and Singapore provides daily updates of the race, virtually tracking and explaining whatever the American press is focusing on including poll numbers, campaign contribution hauls, and even Joe the Plumber. Xinhua and the People's Daily, the Chinese government's official news agency and newspaper, as well as Ming Pao, one of Hong Kong's leading dailies, have entire websites devoted to news and analysis of the presidential race.

As alluded to in Nicholas Kristof's latest column, the race element in this year's election is an area of fascination. Many Chinese have a perception of American society as fraught with racial tension. When I was working in Taiwan, one of the most common questions I would be asked was whether as an Asian-American I had ever encountered racial prejudice. In Lianhe Zaobao, Singapore's largest Chinese-language daily, Zhong Bu writes that in the remaining days of the election, three factors will determine the winner: turnout of new voters, how undecided voters cast their ballots, and the Bradley Effect. Zhong states, "American race relations will be tested by whether the Bradley Effect reappears." In the China Times, a pro-China paper in Taiwan, Kuo Chenlung is even more pessimistic, arguing, "The race factor that this election has inflamed will leave a deep scar in American political history. Even if Obama gets elected, it would not eliminate racial prejudice in white people once and for all. And if Obama loses, black people would certainly not accept the results quietly."

In China, the government-controlled media's views of the candidates and the overall democratic process are tepid at best. In the China Youth Daily, the official paper of the Communist Youth League, Li Hongwen complains about how a Reuters article stated that since the only experience Chinese people have with democracy is through a homegrown version of the American Idol singing contest, they do not understand American elections. Li responds, "The writer is the one who does not understand. Chinese people approach serious issues with a trivial attitude, and sometimes they have a serious attitude when handling trivial issues. ... It is not that Chinese people do not understand the American election, it is that they do not want to waste time on other people's affairs." Li concludes with, "Elections are not always about making the best choice. It's more often about making what appears to be the least worst choice. That is what this election is all about."

Earlier this month, the Chinese Communist Party's official biweekly magazine, China Comment, ran a piece written by Feng Ju, a Chinese national working in Silicon Valley. Feng gives a blistering critique of Western democracy with a focus on how it is done in the U.S. Some arguments could find themselves right at home in McCain or Obama talking points -- outsized influence of special interests, irresponsible fiscal policies, and the absence of gun control. However, the author reserves the sharpest criticism for the American judicial system: "The failure of the American judicial system stems from the flaws of American-style democracy: it overemphasizes process at the expense of results; it overemphasizes fairness for the criminal and neglects fairness for the victim; it overemphasizes the rights of the criminal and neglects the rights of victims and their family members. Radical U.S.-style democracy has only resulted in absolute inequality." The writer concludes, "Western democracy is not a silver bullet. Pick the system that works best for you."

It is telling that in this condemnation of the judicial system Feng uses the term "criminal" instead of "defendant" or "the accused."

Russia: All Eyes on Future Relations

For the first time since the early 1990s, Russian media is expressing an intense and detailed interest toward a US presidential election. While mindful of the historic race and the candidacy of Senator Barack Obama, Russian media covers the election with an eye on the future development of US-Russia relations, trying to figure out which candidate would be more open to improving the relations between the two countries. Some media outlets try to predict who would win, others are trying to comment on the polls and attitudes in America and relying on the US media to furnish the results.

This report from business daily Vzglyad (Outlook) is typical - it cites data that Senator Obama has a 10 point lead over Senator McCain. A few online newspapers limit their coverage of the race to just such numbers, given the overall apprehension over the future development of US-Russia relations. Other media sites go a step beyond - the popular online news portal has a large section dedicated to the American election news digest and opinion.

Overall, most Russians - including the government - do not foresee a major change in the bilateral relations. This particular piece symbolizes that sentiment- it's a summary of a call-in radio show in which listeners were asked on the future US relations with Russia and former Soviet states. The result? "The US has a long-term strategy towards Russia and FSU, and the presidential election would not alter such strategy to a great degree." Another answer is also more emblematic of the emerging Russian opinion: "It will be easier to just talk to Obama, while it will be easier to agree and negotiate with McCain."

Other news outlets are openly discussing the impending arrival of Senator Obama to the White House, citing the financial crisis as crippling to the Republicans' chances this year. Daily Gazeta on Friday discussed how just recently, Russian government was looking forward to McCain's presidency as "somewhat confrontational, but rather predictable in its foreign policy." However, now Moscow is "awaiting the arrival of the Democrats, trying to convince itself that they always adhered to a more flexible and multilateral foreign policy, understood the importance of international institutions and did not get involved in every conflict when one of the antagonists would talk loudly about democracy. However, everyone is trying not to bring up the war in Yugoslavia, which took place on the Democrats' watch."

Other news publications offer more direct headlines. "Obama Leads in Early Voting." This article in cites a large turnout across America for early voting, describing that registered Democrats far outnumber registered Republicans at this juncture. Nevada, Ohio and North Carolina are described as some of the areas where Democrats have a numerical advantage in early polls, thereby "greatly complicating Senator McCain's situation."

France: All Obama, All the Time

French national newspapers, much like the American ones, are sharply divided along ideological lines. The right is represented by Le Figaro and the left by Libération and Le Monde. But not unlike the major political parties and the overwhelming majority of French citizens, all three newspapers support Barack Obama for president.

On Monday, the focus was pretty much the same in France as it was in the U.S.: Colin Powell’s endorsement of the Democratic nominee. Le Monde reported that Powell’s endorsement had been seen in the U.S. as a hard blow to John McCain’s fledgling campaign, a view that was echoed on the same day in Libération. Le Figaro went along these lines too, but its article added that this endorsement did not come as a surprise and that for this reason it is not that much of a crucial hit on McCain.

Under American standards, these three leading newspapers would be considered liberal. (Cultural differences matter. In America, ‘liberal’ means left-wing. In France, it usually means right-wing.) It should then come as no surprise then that all three of them have pounded somewhat relentlessly on McCain’s VP pick Sarah Palin for her lack of experience, her populism and her views that, according to some, reach very far to the right.

Accordingly, Thursday’s story in the French columns and blogs that relate to the U.S. election is the Alaska governor’s $150k wardrobe provided to her for/by the Republican party since she was picked as the VP candidate by McCain. Interestingly enough, the most conservative of these three newspapers (Le Figaro) seems to be the one who enjoys hitting on Palin the most; it was reporting that Condoleeza Rice could not bring herself to support the Palin when asked to comment on her candidacy.

As much as they love to hate Sarah Palin, the leading French newspapers love Barack Obama more. In fact, most pundits in France have already called the election for him; the disproportionate number of articles speaking of Obama compared to those speaking of McCain gives proof of that. This opinion trend did not move anywhere at the end of the week. On Friday, Le Figaro focused its attention on the possible Democratic takeover of Virginia, stressing the importance, the wealth and the organization of the Obama machine. Libération, as its self-described ‘socialist’ stance would predict, pounded on McCain for resorting to national security arguments. Its punch line: "When things go bad for the GOP, they wave the red flag of national security."

At the end of the week, the only conclusion I can come up with after reviewing the French press’ covering of the American campaign: Boring. Dead boring. And dead predictable, too. And it’s not just the French press’ love affair with Obama: It’s the general attitude of "Dems good, GOP bad" that has prevailed in France and most of Europe.

Interestingly enough, a McCain presidency and/or a Republican Congress could be good news for the French government as it is trying to export its civil nuclear technology to Asia and North America. If president Nicolas Sarkozy wants to sell nuclear power plants in America, shouldn’t he root for the guy whose support for this kind of energy is the strongest, i.e. John McCain? My guess is, Sarkozy chose to support Obama because acting otherwise would have been tantamount to political suicide.