Monday, September 29, 2008



"The world economy is enjoying a glorious run. In 2003, 2004 and 2005, it had its best years since the early 1970s. Yet that is no encouraging parallel. The torrid expansion of the early 1970s led to a period of inflationary turmoil. We must ask whether the extraordinary growth of recent years also hides dangers – different, perhaps, but still significant. The answer, alas, is yes....

What we are discussing then is the possibility of a disorderly unwinding of the external deficits, the trigger being a sharp slowdown in US household demand that would stimulate domestic pressure for both a currency realignment and protection. If, as is likely, this also weakened foreign demand for US assets, US long-term interest rates would rise, threatening the Federal Reserve’s ability to loosen monetary policy while also retaining credibility....

In short, the world economy confronts not just a risk, but a test: that of managing a decline in the huge excess of US household spending over incomes. Will it be able to manage this easily? The answer is: only if others are able and willing to expand demand substantially, in their turn. What are the chances of that? It is hard to feel optimistic".

"A Slowing US Could Brake the World", 26 September 2006 in

With the rejection by the American House of Representatives today of President Bush's plan for a 700 Billion Dollar fund to purchase the debt held by American financial institutions, in order to re-liquefy the American financial system, the description of the current situation as one of 'crisis', appears to be on the mark. And, yet this 'crisis', is not one which has emerged full-blown like Athena from Zeus's head. Indeed, some farsighted observers, such as Martin Wolf, in the column quoted above, were warning that the growth spurt in the American economy, dominated as it was by an extremely unhealthy combination of: extremely low interest rates (negative when taking inflation into account) since 2001, a series of housing booms, in the USA, UK, Ireland, and most other parts of Europe, resulting in both the aforementioned variable as well as the massive lending by surplus countries of the world (PRC, Japan, the other BRIC countries, some members of the EU) to the USA and the other debtor countries just mentioned, coupled with a massive expansion of financial services industry debt, wherein by anno domini 2007, the same had liabilities of approximately almost 120% of the entire American Gross Domestic Product. The upshot was an archetypal boom (2002-2005, followed by a bubble (2006), and, now of course a bust. With so many seemingly impregnable American, and, now West European financial firms falling like bowling pins. One after the other in quick succession.

Whether or not the today's rejection and the fall the American stock market (the worst in the last ten years), as well as the secular decline in both American and world share prices in the past year or so, means that we are going to be subject to another recession on the scale of 1973-1974, 1980-1982, has yet to be seen. It could well be the the current economic and financial spasm , is just that: more of a momentary hiccup, rather than something more serious. Alternatively, it could very well be, that what the prescient Martin Wolf described more than two years ago, as a process of "unwinding" of external deficits, aka massive amounts of debt, which was equally massively leveraged will have the end result of a prolonged economic slowdown. Not only in the USA, but, indeed worldwide. In short a repeat of the Japanese experience of the 1990's, but over the entire globe, rather than in just in one country.

What the diplomatic consequences both short and long-term to the latter outcome, is something that I would like to discuss in my next entry. In which I explore both the precedents from the past as well as what I believe to be the likely end-results of the current financial debacle.

Thursday, September 25, 2008


"Well, a lot of that’s going to be up to those of us in NATO, at the European Union and the United States, to make certain that Russia understands that any further push would not be beneficial to them. But the truth of the matter is they achieved none of their strategic objectives in attacking Georgia. They attacked a small neighbor with overwhelming regional military force. Now, you and I would have known that that was possible before they did it. They did not succeed in bringing down Georgian democracy. They did not succeed in destroying the Georgian economy. They have recognized Abkhazia and South Ossetia, these breakaway regions, and their diplomatic company is Hamas and Nicaragua. That’s hardly a diplomatic triumph.

And there has been – and all that they’ve done is to call into question their suitability for the diplomatic, economic, and security institutions of an integrated international community. And for a country whose president, whose new president has said that he understood that Russia’s future really rested in integration into the international community, that Russia doesn’t want to be just an energy supplier for the world, it wants to be a country that draws on its brainpower, its ability to do the kinds of things that we do in the Silicon Valley where I’m from, that Russia is never going to succeed trying to be 19th century Russia that beats up on small neighbors.

So this hasn’t been – this hasn’t worked out very well for Russia, I think....

Well, we all know that Russia is not a debtor nation because it is – because of the price of oil, essentially. That’s really what this is. And Russia can continue to be a kind of tertiary resource supplier for its entire existence, or it can try to diversify its economy. It can try to deal with, by the way, the crippling problems that it has, including a sadly unhealthy population, a birthrate that is not going to even succeed in replacing the Russian population. It can deal with the fact that it doesn’t have the infrastructure that it needs to be a diversified economy. Or it can be a resource supplier. And the leverage, really, rests in the fact that I think that Russians have become accustomed to some of the benefits of having broken out of Russia’s – or of the Soviet Union’s isolation, whether it is travel or the 30-year mortgages that are very popular in Russia, or the ability for Russian businesses to actually have a role in the international economy. That’s what’s at risk if Russia tries to have it both ways: 19th century Russia or Soviet tactics, and trying to be a part of the international economy. Russia can’t have it both ways, and that’s the leverage".

American Secretary of State Rice, 23 September 2008,

"We don't believe it's right to make very the important items on our agenda hostage to the emotions and to feeling of being offended. There should be no such feeling," Lavrov said. "We acted [in Georgia], as I said, on the basis of international law, we have been protecting the lives of the Russian peacekeepers who had been attacked by their Georgian comrades, because there was a joint peacekeeping force....a combination of reasons -- first of all, moral, legal, [and] pragmatic" made Russia's military intervention in Georgia "the only possible solution."

Russian Foreign Minister Sergei Lavrov, addressing the Council on Foreign Relations, 24th September 2008, in

One of the upshots so far of the meetings at the United Nations in New York this week, is that due to the irrational American animus vis-`a-vis Russia, the contact group ("3 plus 3") handling the matter of Persia's quest for nuclear weapons will not meet, much less impose more sanctions. As readers of this journal may recall, back in early to mid-July, when EU foreign policy supremo Javier Solana went to Tehran to make a modus vivendi proposal to the Persians, there was a deadline of approximately six weeks for the Persians to either accept the proposed offer or not. That deadline has long since past. And, yet here we are in New York in the latter part of September, and, the contact group is not even meeting, much less willing to contemplate further sanctions on the regime of mad mullahs (see: "Moscow's Iran Policy: a question of balancing priorities", 24 September 2008, in

What exactly is the logic of the American position vis-`a-vis Moskva? How much exactly does the USA wish to lose or destroy in its quest for attempting to damage Russia? Does not Rice, Bush, Hadley, et. al., realize that Russia has more leverage than the USA at the current time, and, push comes to shove, will not be be shy in using said leverage? To give one example: Russia in the Spring of 2008, gave NATO forces in Afghanistan permission to cross Russia proper in order to supply its troops in the former country. Convoys coming from the northern part of the country being safer than those entering from the south, aka Pakistan. Indeed, just this past week, Pakistan temporarily banned some supply convoys, as a tit for tat, in response to American cross border incursions (see: Instead of the lightweight Rice indulging lectures which have very little in the way of credibility worldwide, she and her cohorts in the American government would be better off, doing a very hardheaded calculation about the costs involved in pursuing an essentially illogical policy towards matushka Roissya. Before more than merely the meetings of the contact group on Persia are lost or cancelled.

Monday, September 22, 2008


"[China is]a neighbour with one billion people equipped with nuclear bombs and has expanded its military outlays by double digits for 17 years in a row, and it is unclear as to what this is being used for. It is beginning to be a considerable threat....He went on: "We would not be saying that [China] is a threat if the content of its military expenses are clearly known... the lack of transparency fans distrust."

Then Japanese Foreign Minister, Aso Taro, 22 December 2005, in

"I think there is a connection between Israel's international standing and our internal situation. They are not disconnected, because our ability to achieve our objectives depends, among other things, upon the world’s willingness to accept some of our fundamental principles, and to support or at least not oppose the actions we must take.

We must first remind ourselves of the common denominator between all of us here. I repeat it like a mantra, because it has to be the writing on the wall, and it is Israel’s supreme goal: its existence as a Jewish and democratic state, with those values integrated rather than in conflict, a state that is as secure as possible and living in peace with its neighbors in the Land of Israel.

I believe it is possible to integrate both these values at once. The need to do so unquestionably mandates certain political decisions, as they also pertain to the Israeli-Palestinian conflict. But this writing has to be on the wall, because all of our decisions derive from it. I am speaking now of the decisions made by the people sitting in government meetings. Options in the Middle East always involve choosing between bad options in complex situations, and there’s usually a clash between the long run and the short run. Just looking at our most recent decisions - you can paint a short-term picture of calm that still may cost us strategically in the long term. We must always consider whether the price is worthwhile and if the alternative would have exacted a higher strategic price or not. We cannot allow ourselves to look only at the short term....

We have no choice; we know that part of our struggle for survival involves paying the price, whether immediately or later on. We need to make the calculations but all in all the Israeli public knows, and the leadership most certainly knows, that advancing the subjects strategically important to us entails paying a price, sometimes on the spot. The rest of the world, mainly meaning some of the European countries for our purposes, understands the threat, but some are unwilling to pay the price.

Therefore the negotiating process I'm currently conducting with the Palestinians must be very specific regarding borders, security and the solution of the conflict, so that the agreement that I hope we can draft and sign will express what I think are the interests of both sides, but certainly Israel's interests, and not be yet another paper sketching out a few principles which becomes another point of ongoing frustration, as has happened so far.

No doubt this dialogue serves Israel's interests but also answers Israel's needs in the international context - though I admit that I the main if not only thing I take into the room when I meet with the Palestinians is Israel's interests, and less the international context. First and foremost we must safeguard Israel's interests. But in this case I think Israel's interests have something in common with improving our status in the international community. The actions we take and the decisions we make today are meant to serve our long-term interests and are not just something for the "here and now" and tomorrow morning’s headlines".

Israeli Minister of Foreign Affairs, and Deputy Prime Minister, Tzipi Livni, Address to the Institute of National Security Studies, "The State of the Nation", 22 June 2008, in

Rarely does it occur that two prominent, foreign ministers / ex-foreign ministers, become shoe-ins, to become Prime Ministers, on the very same day. Which is what occurred today in Japan and Israel. Both prospective appointments, I would argue are good news overall. In the case of Aso Taro, he is a nationalist of the school of ex-Prime Ministers Koizumi & Abe, under whom he served as foreign minister. Suspicious of China and North Korea, Aso, is a strong proponent of Japan's alliance system with the USA and Australia. In addition, he is an adherent of the need for Japan to psychologically throw-off the shackles of the post-war occupation. Something which he, as the scion of two of post-Tokugawa Japan's, greatest political leaders: Okubo Toshimichi, and Yoshida Shigeru, is well-placed to do. A Roman Catholic like his grand-father (Yoshida), Aso is someone who has had a life-long contact with and experience of the West. One can only hope that his term of office will be a long one, and, that under his leadership, Japan experiences a renaissance, both politically and economically. And, of course also hope that his Liberal Democratic party wins the next upcoming election.

In the case of Israel, while I cannot speak as positively for the selection by the governing Kadima party, of Foreign Minister Livni, it is still very much the case of faute de mieux. With at this point, any one, other than ex-Prime Ministers Netanyahu and Barak, being a better choice than the hapless and overwhelmed, not to speak corrupt, Prime Minister Ehud Olmert. Whose penchant for 'masterly inactivity' and ineptness, was exposed for all to see during the 2006 War with the Lebanon. And, while I can hardly applaud, someone whose antecedents are those of the old, 'Revisionist', terrorist Likud, the fact of the matter is, that in the current Israeli political climate, Livni, is by far the best possible selection for the post of Prime Minister available. If nothing else, as indicated by her speech earlier this year, she seems to recognize the fact that without forward movement on the peace front, Israel's room for diplomatic and other maneuver, will become more and more limited. With its strategic and other positions, still relatively strong in the short term, it behooves Tel Aviv, to forge ahead with peacemaking with both the Palestinians and with the Assad Fils regime in Damascus. American caveats notwithstanding. It would appear on the surface, that under a new administration in Washington, DC., that Livni will indeed press forward with precisely that goal in mind. Let us wait and see.

Tuesday, September 09, 2008

Sarkozy in Moskva: What did he achieve?

«on s'en va. Ce n'est pas négociable, nous ne pouvons pas accepter l'invasion d'un pays indépendant....les retrait des forces russes sur leurs positions du 7 août, c'est notre ligne rouge».

Nicolas Sarkozy in Moscow, as per Le Figaro, "Russie: Sarkozy a failli quitter la table des discussions," in

It would appear from the discussions held on Monday in Moskva that the Kremlin, after a bit of hard bargaining (whether in reality or just for show is a different issue...), gave in to EU entreaties by agreeing to withdraw its troops from Georgia proper by the end of the current month. Whether Sarkozy's threat to 'on s'en va,' forced Medvedev's hand, or whether this particular Russian concession was always intended to be used at some point or other, is of course impossible to say. All we can do, is to congratulate Sarkozy and the EU President Barroso, for not caring to indulge in the Cheney line of recriminations and invective vis-`a-vis Medvedev & Putin. On essentials of course, Russia has not given anything that it really wanted to give up. Indeed, the more cynically inclined are not even sure that Russian forces will withdraw to the lines agreed to on Monday. Such cynicism being confirmed by today's decision that in the future both South Ossetia and Abkhazia will be garrisoned, not by Russian 'peacekeepers', but by regulars (see the relevant article in Novosti "Regular Troops to be deployed in Abkhazia, South Ossetia - Lavrov," in However given the subsequent decision by the EU today in Ukraine to forgo offering Kiev a clear path to membership in talks today in Kiev (see:, and, the decision by the American administration to take a more measured line towards Matushka Russia in the aftermath of the Russo-Georgian War (see: "U.S. Rules Out Unilateral Steps Against Russia," in, it appears that Russia has correctly judge the right time for a concession on the Georgian issue, whether real or imaginary we shall see soon enough. For now all one can do is to congratulate the French President on his diplomatic fortitude. And, hope that Moskva's willingness to talk and respond to its EU partners, will be reciprocated by, if not all, then most of the latter. For that also we shall see soon enough.

Monday, September 08, 2008


"Since I was elected president of France 15 months ago, I have wished for France to regain its place on the International Chessboard".

Nicolas Sarkozy, President of France, 3 September 2008.

Indeed, Monsieur Sarkozy, this descendent of Hungarian noblemen, of emigre stock, has re-established France's presence on the "International Chessboard". With his "Mediterranean Summit" held in Paris in July, as well as his attempts at peacemaking efforts in the Russo-Georgian War, Nicolas Sarkozy has been a whirlwind of activity. However a cynic may ask if all of the hyper-activity from our little Hungarian pomeshchik, is intended more for home consumption than for any substantive purpose. For example, in what concrete way has France re-established herself in the Near and Middle East in the past 15 months? At first, Sarkozy was perceived as pursuing a radically (for France) pro-American line. Especially as it relates to the ongoing negotiations with Persia over its nuclear program. In the past four months however, Sarkozy has in essence done a 'flip-flop' (to use a demotic phrase), and, gone over, if not to Teheran's side, than at the very least, to one of Persia's closest allies, Damascus. And, while Sarkozy has not in the least toned down or overtly changed his stand on the dangers of Persia having the potential to manufacture nuclear weapons, the upshot is that by his ongoing discussions with Assad Fils, Sarkozy has aligning himself at least rhetorically with Damascus on the need to resolve the standoff between between the West and Teheran via 'dialogue'. Aka appeasement. At this point of course, Sarkozy does not appear to be heading in that direction substantively. However in the absence of a clear strategy to 'turn' Syria, from its current alignment with Persia, there does not appear to be much logic, in diplomatic or strategic terms to Sarkozy's windmill of activity. Or if there is, the logic is not yet apparent to this observer. Whereas De Gaulle, Couve de Murville or Pompidou, would have pursued the Syrian connection for purposes of using any and all means to turn Syrian into a Frency ally, Sarkozy does not appear to be that singleminded in concrete terms in doing so. Indeed, as per the interview, any concrete improvements in Franco-Syrian relations appears hostage to improvements to the overall EU-Syrian connection. Something that any of the three above referenced gentlemen would have scorned for its timidity. In diplomacy as in other areas of life, once must strike while the iron is hot. And, not allow it to temper. I am not sure that Sarkozy is familiar with this particular aspect of diplomacy or International Relations. That being said, I hereby urge all and sundry to read and enjoy the interview with the French President, which I found originally in the always wonderful

The Syrian daily Al-Watan published an interview with French President Nicolas Sarkozy today, in advance of his visit to Damascus. [1]

Following are excerpts from the interview:

"The Road to Peace in the Region Passes Through Both Our Countries"
Interviewer: "What message would you like to communicate to the Syrians on your first visit there as president of France?"

Sarkozy: "My first message to the Syrian people is one of friendship. Throughout history, our countries have maintained close and warm ties, although it must be admitted that these were sometimes fraught with complications. Nevertheless, in spite of the difficulties that have attended these ties, the friendship between our people has never been severed. This is a most precious asset, and we must guard it at any cost…

"This visit is taking place under special circumstances, for our countries intend to turn over a new page in our relations. This new page is very dear to my heart, since within its framework Syria has been gradually making choices that the world expects from it - [and] in this way it will reinstate its position among the nations. By visiting Damascus, I would like to convey to the Syrian authorities how crucial it is for them to continue on this course. Syria is an important country, capable of making an indispensable contribution to the settlement of problems in the Middle East, and it is essential that its role in the region should be positive.

"I envision a future in which [we] follow the course of cooperation between France and Syria. True, we are independent countries, and at times each of us has its own private interests. However, I am convinced - as I mentioned to [Syrian President] Bashar Al-Assad on July 12, when he arrived in Paris - that the road to peace in the region passes through both our countries."

Interviewer: "Some publicists have been discussing strategic ties between Paris and Damascus. Are we in a position today to speak of France's forceful return to the Middle East chessboard?"

Sarkozy: "Since I was elected president of France 15 months ago, I have wished for France to regain its place on the international chessboard. As for the Middle East, a region close to my heart, I want my country to assume the highest responsibility in serving the cause of peace. To this end, we must gain the trust of all sides. Accordingly, I have instituted several significant reforms in our Middle East policy - including even breaking away from [the Middle East policy of previous French president Jacque Chirac].

"I have acted in the same way with regard to Israel as well, since the intensity of the friendship between France and Israel is no different from that between France and Israel's Arab neighbors, or from our steadfast commitment to the establishment of a Palestinian state.

"I treat Syria the same way as well: From my point of view, the main thing is to create an opening for dialogue - but it must be a determined dialogue, which will enable genuine progress.

"Our return to the Middle East was also heralded by the Mediterranean summit, held July 13-14 in Paris, which proved to be a great success. All but one of the leaders of the countries that lie north and south of the Mediterranean attended the opening of this great cultural project, which I believe signifies that France, and certainly Europe, has returned to the region.

"In a July 12 joint French-Syrian declaration, France committed to take steps essential to the ratification of the cooperation agreement between Syria and the European Union."

Interviewer: "Has there been any progress in this area? Has a date been set for the ratification [of this agreement]?"

Sarkozy: "We are working on the cooperation agreement together with our European partners. We must amend the agreement initialed three years ago and adapt it to [present circumstances]. Syria has undergone substantial development since that time. I believe that we all must make an effort to ensure that the new version [of the agreement] is more closely matched to the economic reality in today's Syria. Syrian authorities are interested in it as well.

"It is difficult to speak of a date for the ratification of [the cooperation agreement], since the process by which [such] cooperation agreements are forged is complex, and they require the sanctioning of all [EU] member countries. We are sparing no efforts to further this issue."

Interviewer: "On many occasions, you have stressed your support for indirect negotiations between Syria and Israel. The fifth session of these negotiations is planned to take place in Turkey in the near future. However, there are still many obstacles on the way to peace - in particular Israel's new threats against Lebanon. What function can France serve in promoting the peace process and establishing overall peace in the region?"

Sarkozy: "The indirect negotiations between Syria and Israel are very good for both countries, as well as for the region and for the entire world. You say that there are difficulties. This is only natural, for creating peace is not an easy endeavor by any means. Much effort is required for this purpose, as well as determination [on the part of both sides].

"Accordingly, I would like to congratulate the Syrian and Israeli leaders for their courage and discernment in engaging in this process. I would also like to stress what a wonderful job Turkey has done in this area.

"As I have said in the past to President Assad, France will certainly be prepared to accompany the sides on their way to peace and conciliation, should Syria be interested in this. We are publicly assuming this responsibility, since we are aware that both sides have pinned their hopes on us, and we will never disappoint them."

"Interviewer: "President Assad has recently declared that only by means of dialogue can regional problems be resolved. What is the state of affairs at this point in time regarding dialogue with Iran?"

Sarkozy: "I am likewise convinced that we must resolve the Iranian crisis through dialogue, since it is the only way to escape a tragic alternative that no one desires: either an Iranian bomb, or the bombing of Iran.

"For this reason, in 2003 the international community opted for the European states' initiative of adopting the strategy of intensive dialogue, involving clear proposals and sanctions, in the event that Iran refuses to fulfill its international obligations. I hope to continue following this strategy.

"Recently, [E.U. foreign policy chief Javier] Solana has made the Iranians a new proposal on behalf of six countries - a far-reaching proposal that offers the Iranians all the guarantees. So far, [however,] Iran has not come back with a serious answer. I am much grieved by this, since I believe that finally a real opportunity exists for solving this crisis in a manner acceptable to everyone, [and therefore] I hope that the Iranians will rescind their decision.

"I trust that dialogue with Iran will continue, and that its leaders will realize what danger has been posed to their country by this gamble. I call on them to ponder the verdict that future generations will pass on them for their decisions today.

"Iran must choose [its path]. No effort must be spared to convince Teheran to choose cooperation over isolation and conflict."

[1] Al-Watan (Syria), September 3, 2008.

Thursday, September 04, 2008


"There’s no attempt in Washington to convert Russia into a big enemy. The Cold War is over. What we’re concerned about, of course, are some of the steps that Russia has been taking recently, of course, with its attack on a neighbor, meaning Georgia, and its continuation of activities that give us concern in Georgia.

Russia is isolating itself. The United States is not trying to paint Russia as an enemy. We’re very concerned about its behavior and what that means for the future of the U.S.-Russia relationship. And we’ll be examining – we’re looking at all aspects of our relationship with Russia in terms of how we go forward. But there’s no attempt in Washington, here in the State Department or in the other elements of the U.S. Government, to paint Russia as an enemy".

Robert Woods, 4 September 2008, Spokesman, United States Department of State, in

"After your nation won its freedom in the Rose Revolution, America came to the aid of this courageous young democracy, we are doing so again as you work to overcome an invasion of your sovereign territory and an illegitimate unilateral attempt to change your country's borders by force that has been universally condemned by the free world. Russia's actions have cast grave doubt on Russia's intentions and on its reliability as an international partner -- not just in Georgia but across this region and, indeed, throughout the international system."

American Vice-President Richard Cheney in Tbilisi, 4 September 2008

Based upon the statements made today in Tbilisi by Mr. Cheney and yesterday's announcement by American Secretary of State Rice, of a One Billion Dollar economic aid programme for Georgia, it is not difficult to see that in certain respects the underlying aim of American policy in the Kavkaz region has not changed in the least: to build up forces of 'countervailing power', vis-`a-vis Matushka Russia (for the aid programme, see: Saakashvili's Georgia being the first of these. The fact that the results on the ground between the 8th of August and the 12th indicated that nothing came of the prior American attempt, does not appear to have impressed itself very much in the American mindset. However, in point of fact, it is Moskva which is in the driving seat at the moment. Both Turkey and Azerbajian (the first leg on Cheney's trip to the region), being both studiously neutral about Russia's de facto annexation of Georgia's breakaway territory. Just as they were studiously neutral about the Russo-Georgian War preceding it (for this see: some very good articles in Similarly, Ukraine which is the last leg of Cheney's trip, has suddenly seen the downfall of its 'pro-Western', reformist Cabinet, with a majority of the deputies in the Rada, now opposing membership of NATO (like in that respect Ukrainian public opinion), and the anti-Russian stance of President Yuschenko (see the relevant article in today's Financial Times, in Similarly, if one reads carefully, the tea leaves of say the British Foreign & Commonwealth Office, it would appear that not even the USA's closest European ally, the UK, shares Official Washington's animus towards Russia, nor its plans to attempt to re-build, an anti-Russian bulwark in the Kavkaz area (see: "Georgia: latest Developments," in & The real issue for at least this diplomatic observer, is as follows: is there any sense in attempting to build an anti-Russian phalanx in the Caucasus? The answer to my mind was self-evident, avant the Russo-Georgian War, and, nothing that has occurred since has caused me to change my mind about the matter. Unfortunately the same cannot be said for our anti-Russian ideologues in Washington, DC. All to no good whatsoever, both short-term and long-term for eveyone involved except for the Chinese and the Persians...

Wednesday, September 03, 2008


"One such reality is the return of Russia to global politics, the global economy and finance as an active, full-fledged actor. This refers to our place on the world energy and grain markets; to our leadership in the field of nuclear energy and space exploration; to our capabilities in the sphere of land, air and sea transit; and to the role of the ruble as one of the most reliable world currencies.

Unfortunately, the Cold War experience has distorted the consciousness of several generations of people, above all political elites, making them think that any global policy must be ideologized. And now, when Russia is guided in international affairs by understandable, pragmatic interests, void of any ideological motives whatsoever, not everyone is able to adequately take it. Some people say we have some “grievances,” “hidden agendas,” “neo-imperial aspirations” and all that stuff. This situation will hardly change soon, as the matter at issue is psychological factors – after all, at least two generations of political leaders were brought up in a certain ideological system of coordinates, and sometimes they are simply unable to think in categories beyond those frameworks. Other factors include quite specific, understandably interested motives pertaining to privileges that the existing global financial-economic architecture gives to individual countries....

Fyodor Tyutchev [a 19th-century Russian poet] wrote that “by the very fact of its existence Russia negates the future of the West.” We can refute Tyutchev only by acting together – building a common future for the whole Euro-Atlantic region and for the whole world, in which security and prosperity will be truly indivisible....

We see nothing in our approach that would be contrary to the principles of rationality, intrinsic in Europeans’ attitude to the world. Acting differently means piling up problems upon problems and making the future of Europe and the entire Euro-Atlantic region hostage to hasty decisions. That would be a huge waste of time, resulting in a multitude of lost opportunities for joint action. We are not hurrying anyone; we only urge all nations to think together about what is awaiting us. But a breakthrough into our common future requires new, innovative approaches. The future belongs to them.


"The Georgia crisis revealed a new strategic force in the Kremlin that opposes both Putin and Medvedev. We still cannot name its players, but we are aware of its interests and impact on events in the same way that astronomers discern a new but invisible planet by recording its impact on known and visible objects in space....

I call these camps, respectively, Russia's global and national kleptocrats. Both sides firmly agree that there is nothing that the "weakened and cowardly West" can do to restrain Russia, a nuclear and petroleum superpower, beyond financial retribution against those Russian rulers with vast assets abroad.

But the national kleptocrats seem to believe that they can live without overseas assets, or without educating their children and maintaining residences in the West. Instead, they are content to own properties in elite residential areas around Moscow and in Russia, such as Rublyovka, Valday, and Krasnaya Polyana.

Both Putin and Medvedev (and their television propagandists) currently reflect the views and goals of the global kleptocrats. Neither leader wants to capture Tbilisi. Putin, of course, would have been glad to see Georgian President Mikheil Saakashvili, his sworn enemy, put in a cage. But other, more down to-earth considerations are more important to him....

I cannot predict who will win this growing confrontation. But even if the global kleptocrats sustain their more "moderate" position on Georgia, theirs could be a Pyrrhic victory. Every day and every hour, by means of their own propaganda, these globally minded kleptocrats, are setting the path to power for the nationalists."

Andrei Piontkovsky is an independent political expert and a researcher at Russian Academy of Sciences in Moscow, "Russia's Georgian Policy Splits the Kremlin," in

As I made mention previously, it is not a straightforward proposition, that the so-called, 'Medvedev Doctrine', is in fact a new way forward in Russian policy. It could very well be that it is merely a rather shiny gloss on Russian policy that was implemented in the Georgian War. And, nothing more. As the two above articles excerpted seem to indicate, there is not either an 'ideological' basis for a clear and consistent Russian foreign policy (viz Lavrov). Nor, as per Piontkovsky, is there perhaps an even consistent, 'materialist' (in the Marxist sense) basis for an agreed and new Russian foreign policy. However, in such matters, people do differ. Especially when we are confronting, as we most definitely are, a new phenomenon, in International Relations. Consequently, I would like to introduce to my readership, the following article by the American online journal,'s George Friedman.

To my mind, the article's main flaw is that he makes a logical jump, to the ne plus ultra, of where, if one were to take what Medvedev says entirely, one hundred percent seriously, would dictate Russian policy were to go. A struggle for power, with the current and perhaps declining hegemon, the USA and its European allies. And, while there is certain threads which you could argue, indicate that this is in fact the underlying rationale for Moskva's policies going forward, I for one an a bit skeptical that such in fact is the case. I refuse to believe at this point, that Putin and Medvedev are in reality, ready to throw caution to the wind, and, engage in an open struggle for power, with say, NATO, over the Crimea. Especially, if that involved openly attacking a sovereign government without much in the way of justification. And, as I have said before, the jeu which was played out in Georgia, is an entire different type of jeu then what would involve actively intervening in say the Crimea. Until I see much greater evidence that Messieurs Medvedev and Putin are adventurers, I am disinclined to see that they will engage in any frontal assault on the existing status quo ante, in Europe proper. As for the various American responses to this alleged Russian challenge: on that I am in full agreement with Dr. Friedman. Especially, his concluding prognosis that under current circumstances, it is more likely than not, that American policy would endeavor to muddle through and not, to attempt to re-position itself by offering concessions and attempting to 'buy-off', either Russia or Persia. That type of quid pro quo exchange has always been fundamentally alien to American diplomacy, and, I do not see any change in that particular posture. And, of course I whole heartily agree with Friedman's statement that at present that Europe (in and out of the EU) is as far as power relations go, merely a damp squib. Rien plus.

However for a different reading of the Russian policy, by all means read and enjoy Dr. Friedman's article:

The Medvedev Doctrine and American Strategy, September 2, 2008,
By George Friedman

"The United States has been fighting a war in the Islamic world since 2001. Its main theaters of operation are in Afghanistan and Iraq, but its politico-military focus spreads throughout the Islamic world, from Mindanao to Morocco. The situation on Aug. 7, 2008, was as follows:

The war in Iraq was moving toward an acceptable but not optimal solution. The government in Baghdad was not pro-American, but neither was it an Iranian puppet, and that was the best that could be hoped for. The United States anticipated pulling out troops, but not in a disorderly fashion.

The war in Afghanistan was deteriorating for the United States and NATO forces. The Taliban was increasingly effective, and large areas of the country were falling to its control. Force in Afghanistan was insufficient, and any troops withdrawn from Iraq would have to be deployed to Afghanistan to stabilize the situation. Political conditions in neighboring Pakistan were deteriorating, and that deterioration inevitably affected Afghanistan.

The United States had been locked in a confrontation with Iran over its nuclear program, demanding that Tehran halt enrichment of uranium or face U.S. action. The United States had assembled a group of six countries (the permanent members of the U.N. Security Council plus Germany) that agreed with the U.S. goal, was engaged in negotiations with Iran, and had agreed at some point to impose sanctions on Iran if Tehran failed to comply. The United States was also leaking stories about impending air attacks on Iran by Israel or the United States if Tehran didn’t abandon its enrichment program. The United States had the implicit agreement of the group of six not to sell arms to Tehran, creating a real sense of isolation in Iran.

In short, the United States remained heavily committed to a region stretching from Iraq to Pakistan, with main force committed to Iraq and Afghanistan, and the possibility of commitments to Pakistan (and above all to Iran) on the table. U.S. ground forces were stretched to the limit, and U.S. airpower, naval and land-based forces had to stand by for the possibility of an air campaign in Iran — regardless of whether the U.S. planned an attack, since the credibility of a bluff depended on the availability of force.

The situation in this region actually was improving, but the United States had to remain committed there. It was therefore no accident that the Russians invaded Georgia on Aug. 8 following a Georgian attack on South Ossetia. Forgetting the details of who did what to whom, the United States had created a massive window of opportunity for the Russians: For the foreseeable future, the United States had no significant forces to spare to deploy elsewhere in the world, nor the ability to sustain them in extended combat. Moreover, the United States was relying on Russian cooperation both against Iran and potentially in Afghanistan, where Moscow’s influence with some factions remains substantial. The United States needed the Russians and couldn’t block the Russians. Therefore, the Russians inevitably chose this moment to strike.

On Sunday, Russian Prime Minister Dmitri Medvedev in effect ran up the Jolly Roger. Whatever the United States thought it was dealing with in Russia, Medvedev made the Russian position very clear....

Thus, the Georgian conflict was not an isolated event — rather, Medvedev is saying that Russia is engaged in a general redefinition of the regional and global system. Locally, it would not be correct to say that Russia is trying to resurrect the Soviet Union or the Russian empire. It would be correct to say that Russia is creating a new structure of relations in the geography of its predecessors, with a new institutional structure with Moscow at its center. Globally, the Russians want to use this new regional power — and substantial Russian nuclear assets — to be part of a global system in which the United States loses its primacy.

These are ambitious goals, to say the least. But the Russians believe that the United States is off balance in the Islamic world and that there is an opportunity here, if they move quickly, to create a new reality before the United States is ready to respond. Europe has neither the military weight nor the will to actively resist Russia. Moreover, the Europeans are heavily dependent on Russian natural gas supplies over the coming years, and Russia can survive without selling it to them far better than the Europeans can survive without buying it. The Europeans are not a substantial factor in the equation, nor are they likely to become substantial.

This leaves the United States in an extremely difficult strategic position. The United States opposed the Soviet Union after 1945 not only for ideological reasons but also for geopolitical ones. If the Soviet Union had broken out of its encirclement and dominated all of Europe, the total economic power at its disposal, coupled with its population, would have allowed the Soviets to construct a navy that could challenge U.S. maritime hegemony and put the continental United States in jeopardy. It was U.S. policy during World Wars I and II and the Cold War to act militarily to prevent any power from dominating the Eurasian landmass. For the United States, this was the most important task throughout the 20th century.

The U.S.-jihadist war was waged in a strategic framework that assumed that the question of hegemony over Eurasia was closed. Germany’s defeat in World War II and the Soviet Union’s defeat in the Cold War meant that there was no claimant to Eurasia, and the United States was free to focus on what appeared to be the current priority — the defeat of radical Islamism. It appeared that the main threat to this strategy was the patience of the American public, not an attempt to resurrect a major Eurasian power.

The United States now faces a massive strategic dilemma, and it has limited military options against the Russians. It could choose a naval option, in which it would block the four Russian maritime outlets, the Sea of Japan and the Black, Baltic and Barents seas. The United States has ample military force with which to do this and could potentially do so without allied cooperation, which it would lack. It is extremely unlikely that the NATO council would unanimously support a blockade of Russia, which would be an act of war.

But while a blockade like this would certainly hurt the Russians, Russia is ultimately a land power. It is also capable of shipping and importing through third parties, meaning it could potentially acquire and ship key goods through European or Turkish ports (or Iranian ports, for that matter). The blockade option is thus more attractive on first glance than on deeper analysis....

In the present situation, the Russian response would strike at the heart of American strategy in the Islamic world. In the long run, the Russians have little interest in strengthening the Islamic world — but for the moment, they have substantial interest in maintaining American imbalance and sapping U.S. forces. The Russians have a long history of supporting Middle Eastern regimes with weapons shipments, and it is no accident that the first world leader they met with after invading Georgia was Syrian President Bashar al Assad. This was a clear signal that if the U.S. responded aggressively to Russia’s actions in Georgia, Moscow would ship a range of weapons to Syria — and far worse, to Iran. Indeed, Russia could conceivably send weapons to factions in Iraq that do not support the current regime, as well as to groups like Hezbollah. Moscow also could encourage the Iranians to withdraw their support for the Iraqi government and plunge Iraq back into conflict. Finally, Russia could ship weapons to the Taliban and work to further destabilize Pakistan.

At the moment, the United States faces the strategic problem that the Russians have options while the United States does not. Not only does the U.S. commitment of ground forces in the Islamic world leave the United States without strategic reserve, but the political arrangements under which these troops operate make them highly vulnerable to Russian manipulation — with few satisfactory U.S. counters.

The U.S. government is trying to think through how it can maintain its commitment in the Islamic world and resist the Russian reassertion of hegemony in the former Soviet Union. If the United States could very rapidly win its wars in the region, this would be possible. But the Russians are in a position to prolong these wars, and even without such agitation, the American ability to close off the conflicts is severely limited. The United States could massively increase the size of its army and make deployments into the Baltics, Ukraine and Central Asia to thwart Russian plans, but it would take years to build up these forces and the active cooperation of Europe to deploy them. Logistically, European support would be essential — but the Europeans in general, and the Germans in particular, have no appetite for this war. Expanding the U.S. Army is necessary, but it does not affect the current strategic reality....

The United States is therefore trapped by its commitment to the Islamic world. It does not have sufficient forces to block Russian hegemony in the former Soviet Union, and if it tries to block the Russians with naval or air forces, it faces a dangerous riposte from the Russians in the Islamic world. If it does nothing, it creates a strategic threat that potentially towers over the threat in the Islamic world.

The United States now has to make a fundamental strategic decision. If it remains committed to its current strategy, it cannot respond to the Russians. If it does not respond to the Russians for five or 10 years, the world will look very much like it did from 1945 to 1992. There will be another Cold War at the very least, with a peer power much poorer than the United States but prepared to devote huge amounts of money to national defense.

There are four broad U.S. options:

Attempt to make a settlement with Iran that would guarantee the neutral stability of Iraq and permit the rapid withdrawal of U.S. forces there. Iran is the key here. The Iranians might also mistrust a re-emergent Russia, and while Tehran might be tempted to work with the Russians against the Americans, Iran might consider an arrangement with the United States — particularly if the United States refocuses its attentions elsewhere. On the upside, this would free the U.S. from Iraq. On the downside, the Iranians might not want —or honor — such a deal.
Enter into negotiations with the Russians, granting them the sphere of influence they want in the former Soviet Union in return for guarantees not to project Russian power into Europe proper. The Russians will be busy consolidating their position for years, giving the U.S. time to re-energize NATO. On the upside, this would free the United States to continue its war in the Islamic world. On the downside, it would create a framework for the re-emergence of a powerful Russian empire that would be as difficult to contain as the Soviet Union.

Refuse to engage the Russians and leave the problem to the Europeans. On the upside, this would allow the United States to continue war in the Islamic world and force the Europeans to act. On the downside, the Europeans are too divided, dependent on Russia and dispirited to resist the Russians. This strategy could speed up Russia’s re-emergence.

Rapidly disengage from Iraq, leaving a residual force there and in Afghanistan. The upside is that this creates a reserve force to reinforce the Baltics and Ukraine that might restrain Russia in the former Soviet Union. The downside is that it would create chaos in the Islamic world, threatening regimes that have sided with the United States and potentially reviving effective intercontinental terrorism. The trade-off is between a hegemonic threat from Eurasia and instability and a terror threat from the Islamic world.

We are pointing to very stark strategic choices. Continuing the war in the Islamic world has a much higher cost now than it did when it began, and Russia potentially poses a far greater threat to the United States than the Islamic world does. What might have been a rational policy in 2001 or 2003 has now turned into a very dangerous enterprise, because a hostile major power now has the option of making the U.S. position in the Middle East enormously more difficult.

If a U.S. settlement with Iran is impossible, and a diplomatic solution with the Russians that would keep them from taking a hegemonic position in the former Soviet Union cannot be reached, then the United States must consider rapidly abandoning its wars in Iraq and Afghanistan and redeploying its forces to block Russian expansion. The threat posed by the Soviet Union during the Cold War was far graver than the threat posed now by the fragmented Islamic world. In the end, the nations there will cancel each other out, and militant organizations will be something the United States simply has to deal with. This is not an ideal solution by any means, but the clock appears to have run out on the American war in the Islamic world.

We do not expect the United States to take this option. It is difficult to abandon a conflict that has gone on this long when it is not yet crystal clear that the Russians will actually be a threat later. (It is far easier for an analyst to make such suggestions than it is for a president to act on them.) Instead, the United States will attempt to bridge the Russian situation with gestures and half measures.

Nevertheless, American national strategy is in crisis. The United States has insufficient power to cope with two threats and must choose between the two. Continuing the current strategy means choosing to deal with the Islamic threat rather than the Russian one, and that is reasonable only if the Islamic threat represents a greater danger to American interests than the Russian threat does. It is difficult to see how the chaos of the Islamic world will cohere to form a global threat. But it is not difficult to imagine a Russia guided by the Medvedev Doctrine rapidly becoming a global threat and a direct danger to American interests.

We expect no immediate change in American strategic deployments — and we expect this to be regretted later. However, given U.S. Vice President Dick Cheney’s trip to the Caucasus region, now would be the time to see some movement in U.S. foreign policy. If Cheney isn’t going to be talking to the Russians, he needs to be talking to the Iranians. Otherwise, he will be writing checks in the region that the U.S. is in no position to cash".

Tuesday, September 02, 2008


SOCHI, August 31 (RIA Novosti) - 'Russian President Dmitry Medvedev outlined on Sunday the five points upon which Moscow's future foreign policy will be based, and also said that it could if necessary introduce sanctions against other states.

Speaking near the Black Sea resort of Sochi, Medvedev also said that Russia would not alter its decision to recognize South Ossetia and Abkhazia. He also said that Moscow's agreements with them envisaged military as well as economic support.

The five points, Medvedev said, were firstly, the superiority of the fundamental principles of international law.

The second point was that the world must be multipolar.

"A uni-polar world is unacceptable," said Medvedev, adding that Russia could "not accept a world order where all decisions are made by one side, even such a powerful one as the U.S."

"Such a world is unstable and threatened by conflicts," he added.

Thirdly, he said, Russia does not seek confrontation with any other country.

"Russia is not looking for isolation," he said. "We will develop, in as much as is possible, friendly ties with Europe, the U.S., and other countries in the world."

Fourthly, Russia will protect the lives of its citizens, "wherever they are."

The fifth point was that Moscow would seek to develop ties in regions with whom it has traditionally had friendly relations.

"Russia, just like other countries in the world, has regions where it has its privileged interests," said Medvedev.'


One is tempted to say a great deal, without however much basis in fact as to its exact meaning, about the pronouncement by Russian Federation President Dmitri Medvedev. Some in Russia, refer to it as the 'Russian Monroe Doctrine'. Others with perhaps a better memory of more recent Russian history, may recall, Stalin's famous speech of January 1946, which was seen by some observers at the time, as the 'signal' for the beginning of the Cold War. In either case, it is difficult at this juncture to hazard a guess, whether Medvedev is merely offering a rhetorical gloss, onto (in the words of Brecht), 'measures taken', or conversely is indeed offering up, to urbi et orbi a new foundation for Russian foreign policy. Indeed, one may argue, if the latter is in fact the case, the first 'doctrine' for a purely Russian foreign policy, since before 1917. At this point, it is rather silly to offer up more than the following though: that once having let the proverbial cat out of the bag, Medvedev and Putin have to a degree, as I put it the other day: 'thrown down the gauntlet'. To Europe and the USA, if not necessarily to the world. Whether it is in fact a challenge to a joust, or merely a form of words, time alone will tell. Time and of course actions, Russian actions in such places as say Ukraine, in the Crimea, Moldova, and, perhaps Kazakhstan. All places where there are substantial Russian-speaking minorities. And, in the cases of the latter two, strategic reasons for Matushka Russia, to intervene. Will Moskva do so? In absence of the most severest provocation, my own surmise is, nyet. For the following reason: while the jeu that was played in Georgia could be strictly controlled by Moskva, any such game would be infinitely much more difficult to control in say such an area as the Crimea. Even if one leaves out the variable of possible NATO intervention, on the side of the legitimate government in Kiev. Only if the regime in Kiev were to collapse, or conversely were to invite Russia, in, would Medvedev and or Putin, take the risk of intervening militarily in Ukraine. Much the same can be said of an military intervention in say Kazakhstan, sans of course the possibility of NATO intervention. In point of fact of course, what Medvedev and Putin, would like to have, is something similar to what every Russian leader has wanted to have since the early 18th century: a system of indirect control over its neighbors. Aka, something along the lines of what was seen as the American 'sphere of influence', in say Central and South America. The problem with such a 'system' (presuming for a second that this is in fact what Moskva does want) is that it depends, upon the great power, the hegemonic one, achieving such power by something other than sheer, brute force. The latter of course only works in a system of 'direct', unadulterated control. With every 'i', doted and every 't' crossed. From the center of course. In point of fact, such a system by its very nature mandates, in something akin to the Hegelian concept of the 'Master - Slave' relationship, in that the latter recognize the former's pre-eminence, without having to beat it out of the latter. In say Gramsci's theory of Egemonia, the Hegemonic classes, establishes its rule, by virtue of not merely sheer force and fraud (`a la Machiavelli), but, more by the fact that the ascendancy, and, the leadership of the Hegemonic classes, comes to seem as 'natural', and, therefore ahistorical, id., est., outside of history, indeed outside of time, and therefore 'normal'. Similarly, it is arguable that the ascendancy of say the USA vis-`a-vis first its Latin American neighbors and later for much of the world, notwithstanding its occasional exercises in coercion, were more arguably held together by being seen, due to its more advanced economy, its more 'modern' social structure, as well as its greater degree of social cohesion, as well as perhaps it more 'Democratic', political structure.

In the case of Russia, from the 18th century to today, its main problem as a great power, is that aside from (partially) the Soviet interlude, it has never been able to exercise successfully its power, indirectly. In almost every case, it has been unable to maintain for more than a short amount of time, a system of indirect rule. The reasons for this being, primarily that in its Western Borderlands, those areas which for much of the period from Peter the Great to 1917, most heavily interested Russian diplomacy, most of the peoples in such areas were: a) richer and wealthier than their Russian counterparts; b) more 'cultured', meaning that said populations, had a higher levels of literacy and urbanization, as well as 'national', or regional self-definition. Hence, rather than Russian hegemony over say Poland (either little or great Poland), seeming to be seen as 'normal', it came to seem as both oppressive (because it was backward) and absurd (because the Poles had no reason for supposing that Russian rule was nothing other than a nullity for them). And, thus the various Polish attempts to wrench themselves free from Russian rule. In say the Baltic States as well as Finland, as well as part of Ukraine, this was also the case as well. Not to speak of independent states in the European state system, say like Serbia, Bulgaria or Romania, in the pre-1914 period. Or much of Central and Eastern Europe, between say 1945 and 1989. In the former case, where the element of coercion was not possible, all of these countries failed to be consistently good allies, notwithstanding all the sacrifices that Matushka Roissya expended on their behalf. In the case of the latter, within a few years, after the defeat of Germany, there was seen no means of ensuring Moskva's hegemony, other than by a coercive and oppressive system of rule, which once the element of coercion was removed by Mikhail Gorbachev in 1989, resulted in the complete downfall of the puppet regimes that Iosif Vissarionovich had installed in the 1945-1949 period. The end result being that Russian influence in almost all of Central and Eastern Europe, with the exception of Serbia (never under Russian domination in the 1989 period) is noticeably absent.

Which brings us up to the present situation. If, Putin and Medvedev wish to enforce or acquire a 'sphere of influence', in Russia's 'Near Abroad', then one can only say that such may perhaps be possible, but only if Russian diplomacy, learns to discipline itself. And, instead of utilizing coercive instruments at the least provocation, `a la Russia's tortured relationship with the deluded and dangerous Saakashvili, where it could be argued, that Russia failed to utilize more effective and more subtle weapons at its command. With the above in mind, it appears that following on that track that latest Putin's trip to Uzbekistan has yielded something along those lines, with Novosti announcing that Putin and Karimov have agreed to strengthen Russia's stranglehold on Central Asia's gas supplies in a new agreement between the two countries (see: "Russia, Uzbekistan to building gas pipe, update price formula," in is only by means such as these, and, those similar to the same, that any form of Russian 'hegemony' can be enforced in Russia's Near Abroad.