FLASH December 2014 | publicatii - Politica La Est

FLASH December 2014

According to its dictionary definition, flash is a transitive and intransitive verb that means „to cause light to appear suddenly or in brief bursts from something, or appear in this way”, „to reflect light suddenly or briefly, or make a source of light reflect from a surface „ , „to signal to somebody or communicate something by quickly turning lights on and off”, etc. This definition would explain our reading suggestions for those who follow www.politicalaest.ro We would like to shed some light on the ways one could gather information about the intricacies of international relations, at a time when the international system is dominated by uncertainty, when Pax Americana seems to be weakening, when China's dynamism has transformed it into the world's largest economy, when Russia is unyielding in its struggle for power, when the Islamic Jihad takes a statal form in order to adjust to a system it wants to change (or dominate?).
It would be published on a bimonthly basis (we only hope to have the necessary stamina for this endeavour, as regards the ”raw material”, we will have no problem).  Hopefully, it would be always  in Romanian and English and our purpose is to go beyond the mainstream analysis and investigate the point of view of IR enthusiasts worldwide (be they commentators, bloggers or those unnoticed open microphones that constantly cause politicians diplomatic problems). Sometimes we will amuse ourselves ”professionally” by exploring other horizons, not only those pertaining to inter- or intrastatal relations.
We are welcoming whoever would like to intervene or propose alternative analysis of current subjects to our „FLASH” editors.
When John Kerry announced, on November 24, 2014, that the Iran nuclear talks have been extended by seven months, he added a significant detail. Alongside the equally important delclaration -“we would be fools to walk away” – he added “If you are looking for a zero sum game in nuclear negotiations, you are doomed to failure.” The Vienna negotiations over Iran's nuclear programme will go on for another seven months, but the tumultuous evolutions on the global stage, especially those from the Middle East, will undoubtedly leave their mark. (http://www.nytimes.com/2014/11/25/world/middleeast/iran-nuclear-talks.html?_r=0 ). In the contemporary world everything is connected in the international arena, so that the events unfolding in Ukraine, the evolution of the ruble, the negotiations with Iran or the trajectory of the Islamic caliphate are all interdependent.
An excellent microhistory of the 2014 negotiations between the allies and Iran is presented in the article US and Allies Extend Iran Nuclear Talks by 7 Months: A Deal May Be Reached with Trust, But Not with Certainty”” posted on December 8, 2014 on the ‘greatcharlie’site ( Commentary and advice for foreign and defense policymakers, political and business leaders and policy aficionados worldwide.). Because we are faced with such an important dossier, extremely relevant for contemporary international affairs, let us focus on the final part of this analysis, that invokes useful historical facts: “faith will be required to formulate a final decision on a deal under current circumstances. Clearly, some reasonable doubt exists, at least among Western partners in the P5+1, over whether the terms of a deal would be observed. With circumstances in the world seeming off-balance, George William Rutler, pastor of Saint Michael’s Church in New York City and author of Cloud of Witnesses, recently reminded greatcharlie.com of a live radio message by King George VI on New Year’s 1939, offering reassurance to his people. It would have an important effect on the listening public as they moved closer to war. King George VI acknowledged that there was uncertainty over what the new year would bring. He explained, “If it brings peace, how thankful we shall all be. If it brings us continued struggle we shall remain undaunted.” He went on to quote a poem from Minnie Haskins of the London School of Economics entitled “The Gate of the Year” (The Dessert 1908). It seems apropos to present that quote here at the end of 2014, given the situation the leaders of the P5+1 nations will face in 2015 over the nuclear negotiations.
“I said to the man who stood at the Gate of the Year:
‘Give me a light, that I may tread safely into the unknown!’
And he replied: ‘Go out into the darkness and put your hand into the Hand of God.
That shall be to you better than light and safer than a known way’.
On December 15, 16 and 17, the ruble has collapsed. Russia's Central Bank has unsuccessfully tried to halt the ruble's slide. International press has started asking: will Russia manage to restore confidence in the ruble or does Putin have to go? In a post on his Financial Times blog (December 16, 2014 ), Tony Barber writes that basically the Russian social contract, that dates back to 2000 when Putin first came to power, is breaking down: ”Like many a tsar and communist party leader before him, Putin was saying that, when the going gets tough in Russia (and, from the Kremlin’s perspective, it has been tough most of the time since the 13th-century Mongol invasion of Kievan Rus’), order must trump liberty – that’s the way the narod likes it.He wasn’t necessarily wrong. But the flip side of Putin’s political philosophy is that, when a Russian leader fails to provide order, he loses his legitimacy with the masses – and with at least some of his closest supporters. The social contract is torn up. So is that other contract, the undisclosed one among the ruling elite. The people instinctively sense that it’s time for a new leader. So do the holders of political, economic, military and police power. This is the reason why Putin’s inability to halt the rouble’s collapse is so important.”
         Equally interesting are the comments that follow. One in particular briefly presents a history of Putin's relationship with semia/Russian oligarchs:
” Tsubais and Gref appeared in Davos this year and tried to negotiate a way for Russia to get out of the Ukranian mess. Some weeks later Srelkov , Borodai and some other 'leaders' of the Novorasiya-Danietsk experiment resigned cursing publicly the 'traitors in Kremlin' who chucked them out with the threat of cutting off all aide, while they sung Putin's praises . Then Yeftuseyev was arrested.
It was quite obvious that some faction inside the Kremlin walls had told ( at least attempted to tell) Putin that enough was enough with the confrontation with the West. It was really good he brought Crimea back into the fold of 'Rodina'. It was not so nice ( but what the hell!) showing some real teeth to the arrogant Sikorsky and making him choke on his attempt to reassert Polish authority over Ukraine, by snatching away two Oblasts ( Lugansk and Donetsk) . But ! But enough was enough !
Vladimir Vladimitovits was a hero of the people with 80% or more approval ratings, but American sanctions were starting to bite where it hurt. So it would be better for Mr. Putin to come to some terms with the West, or else !
The KGB-FSB Palkovnik, member of the famous Peterski, seems to have stood his ground.
In some notable speeches since September he denounced the West and its ambitions on Russia's vast resources. His words had the ring of sincerity. He reiterated Russia's claim to what it considers its own since time immemorial. And challenged the West to do its worst !
In between, the Serious Fraud Office in England has uncovered a massive money laundering operation through Moldova and Latvia. Funds to the tune of 20bn dollars were siphoned out of the country just by one group of clever boys. A couple of other similar stories were hushed before they hit the press. God knows the real scale of this funds exodus. It was obvious that those who warned Putin really meant their 'else' and had started moving their money out in haste. Some-times so hastily that they made elementary mistakes.
Then, the tsunami of the oil price collapse hit. And the exodus became a stampede. It took less than a month for even the simple man in the street to get the drift and start hoarding Foreign Currency. And today the stampede became a classic panic run !
This article should be considered as a harbinger of things that could be coming. The fall of the rouble has taken such a momentum not because Russia does not have reserves. Nor because Russia is heavily indebted abroad. Most of the debt to the abroad is owed by companies which could go belly up without a lot o repercussions on the Russian budget.
Neither is the drop of the Ruble justifiable by the state of the Russian Economy, nor by inflation, not even by the drop in oil prices which Russia could weather for at least 3 years without major earth movements.
It has come because everybody is convinced that the power struggle behind the Kremlin walls is going on strong and the outcome is uncertain. Putin is not the mortally ill Yeltsin for a 'Semia' ( family) of oligarchs to take over power. And the oligarchs who challenged him back in the early 2000 are mostly destroyed and destitute. But Putin is not invulnerable and his policies have hurt a lot of people in the country. So the Tzar is being disputed, his power is not so absolute, and suspicion has crept in about what is about to happen.
This suspicion-cum-fear for tomorrow's news is what is fueling the massive dollar buying. Russians know better than anybody that in times of turbulence the only really stable value is the greenback. So they turn their own backs to the Ruble en mass.
If Putin will survive this is anybody's guess. One thing is certain. The unfolding route of the Ruble has already made a big dent in his shiny armor. Vladimir Vladimirovits seems to be as mortal as the next man. „
It is not the only comment of this analysis that is worth reading. The crisis of the Russian ruble will open up new ways to solve the situation in Ukraine. Will Putin fold and de-escalate the situation in Ukraine, in exchange for the international support of the ruble? (http://blogs.ft.com/the-world/2014/12/what-putins-inability-to-halt-the-roubles-collapse-says-about-him/)
Undoubtedly, the Ukrainian crisis is at the forefront of the international agenda. It outshines the events in the Middle East (where ISIL determined a reconfiguration of regional alliances, some quite unnatural) or those from East Asia, where the situation is menacingly approaching a solution in the Korean Peninsula or the perspective of early elections that will bring about even bolder moves from Prime Minister Shinzo Abe, provided that he wins.
Why Ukraine? First of all, because Russia does not seem to be willing to accept any compromise, although the ruble has lost more than half its value against the dollar since the beginning of 2014 and oil prices will continue to go down. Second of all, because Germany seems to be willing to abandon the old Ostpolitik, based on Helsinki-1. Third of all, because the United States, especially the US Congress, has become increasingly active in asking Russia to respect the international legal order. Last but not least, because it it obvious that Russia's actions indicate that it wants to replace Pax Americana with a new global order, in which it would deserve a more prominent place. In other words, Russia seeks to put in place a post-Pax Americana order. A truly bold move is necessary in order to move forward and shift the situation in one way or another.
         Precisely such a move is invoked by Gideon Rachman in an article published in Financial Times on December 8 - ‘Chess moves to transform world politics’. The presupposition of the British commentator is the following: “At the moment, international politics looks badly in need of some brilliant new thinking. Many of the big powers are in a diplomatic mess. America is back at war in the Middle East. Russia is isolated. China has antagonised almost all its neighbours. Britain is drifting to the margins of Europe. The geopolitical chessboard seems to cry out for bold new moves. What might they be?”.
         Rachman indicates four such chess moves and explains them, offering his own perception regarding their feasibility in the real world:
a.    The New Yalta defence, in other words a division of the world into spheres of influence, as in February 1945, at the Yalta Conference of the Big Three. Though somewhat mythical and not entirely consistent with the historical truth, the Yalta conference secured peace for more than half a century. Rahman writes: “Mr Putin’s dream is to be granted a renewed Russian sphere of influence over most of the former Soviet Union. Some in the west are tempted by a new Yalta. Others find the idea sinister and distasteful. Mr Putin did himself no favours when, discussing the idea of great-power bargains, he suggested the Hitler-Stalin pact of 1939 had got an unfairly negative press. Bad move. Chances: 3/10”.
b.   The Perfidious Albion counter, in other words what England has done for centuries in order to maintain the European balance of power, threatened by the Habsburgs, Napoleon, Wilhelm or Hitler. Rahman writes:”The European chessboard currently looks perfectly set up for a classical deployment of the Perfidious Albion counter-attack. There is a growing rift between France and Germany and raging antagonism between northern and southern Europeans. However, the British seem to have lost their chess-playing abilities and are proving remarkably inept at building alliances. Unable to achieve their ends through diplomacy and cunning, the British are now considering leaving the EU altogether. This is the equivalent of responding to a weak position by turning over the board and stalking out of the room – not so much a tactic as a temper tantrum. Chances: 0/10 (under current conditions)
c.    The Mad Mullah gambit or the US-Iran rapprochement and the reconfiguration of the Middle East, a durable hotspot. This particular move seems to be underway, as we distinguish the contours of an unofficial alliance between the two powers against the Islamic caliphate in Syria and Iraq. Rachman writes: ”Some Americans also argue Saudi support for jihadism is a bigger threat to the Middle East than Iran’s regional ambitions and that the sophisticated, worldly Iranians are ultimately more attractive partners than the backward fundamentalists of Riyadh. Strike a deal on the nuclear issue with Iran, lift economic sanctions on the country and you have a new Middle East in the making.”  The likelihood of such a scenario is low - 2/10, because Israel and Saudi Arabia will strongly oppose it, says Rachman.
d.   The Korean opening or the thaw in relations between China and South Korea. The advantages of such a rapprochement would be that the United States would be faced with a rupture between its two regional allies – Japan and Soth Korea, while North Korea, that is heavily reliant on China's security guarantee, would become an unpredictable player : “South Korea relies on the US security guarantee to protect it against the North. Would it be prepared to trade that in return for the uncertain benefits of an alliance with China? Probably not – at least yet. Chances: 3/10”
         Rachman draws our attention to a very relevant detail:the odds are against any of these great diplomatic gambits actually happening. That is partly because, in a democratic age, it is much harder to behave like a Richelieu or a Bismarck. Social media, financial markets, popular movements and terrorist outrages are all capable of upsetting the calculations of even the most brilliant geopolitical strategist. These days a would-be grandmaster, staring at the global chessboard, is liable to find that the pawns have started moving around on their own.” (Gideon Rachman, Chess moves to transform world politics, December 8, 2014 12:52 pm, gideon.rachman@ft.com )
When the history of 2014 is written, it will take note of a large fact that has received little attention: 2014 was the last year in which the United States could claim to be the world’s largest economic power. China enters 2015 in the top position, where it will likely remain for a very long time, if not forever. In doing so, it returns to the position it held through most of human history.Comparing the gross domestic product of different economies is very difficult. Technical committees come up with estimates, based on the best judgments possible, of what are called “purchasing-power parities,” which enable the comparison of incomes in various countries. These shouldn’t be taken as precise numbers, but they do provide a good basis for assessing the relative size of different economies. „ This is the opening part of the article China Has Overtaken the U.S. as the World’s Largest Economy, authored by the American economist Joseph. J Stiglitz. In the beginning we find some noteworthy ideas. From Stiglitz's point of view, China merely returns to this position of world leader, which it held for the most part of history. He goes on saying that this return will be durable, „if not for ever”. Moreover, he mentions that there is a lack of precision coming out from the various statistics regarding this issue, but nonetheless he offers some indicators for an adequate evaluation.
         A relevant detail refers to the way in which the news was received by the two competitors: „Early in 2014, the body that conducts these international assessments—the World Bank’s International Comparison Program—came out with new numbers. (The complexity of the task is such that there have been only three reports in 20 years.) The latest assessment, released last spring, was more contentious and, in some ways, more momentous than those in previous years. It was more contentious precisely because it was more momentous: the new numbers showed that China would become the world’s largest economy far sooner than  anyone had expected—it was on track to do so before the end of 2014.The source of contention would surprise many Americans, and it says a lot about  the differences between China and the U.S.—and about the dangers of projecting onto the Chinese some of our own attitudes. Americans want very much to be No. 1—we enjoy having that status. In contrast, China is not so eager. According to some reports, the Chinese participants even threatened to walk out of the technical discussions. For one thing, China did not want to stick its head above the parapet—being No. 1 comes with a cost.”
         Stiglitz offers his readers historical examples regarding the relevance of these changes for the systemic hierarchy. It is quite obvious that the onset of „the end of Pax Americana” cannot be counterbalanced only by assuming the economical leadership of the system. Military capabilities, technological superiority, economical dynamism or political flexibility are all factors that may and must be oriented towards attaining global leadership from the posture of a hegemon. Here is the example we are offered: „Tectonic shifts in global economic power have obviously occurred before, and as a result we know something about what happens when they do. Two hundred years ago, in the aftermath of the Napoleonic Wars, Great Britain emerged as the world’s dominant power. Its empire spanned a quarter of the globe. Its currency, the pound sterling, became the global reserve currency—as sound as gold itself. Britain, sometimes working in concert with its allies, imposed its own trade rules./.../Britain’s dominance was to last a hundred years and continued even after the U.S. surpassed Britain economically, in the 1870s. There’s always a lag (as there will be with the U.S. and China). The transitional event was World War I, when Britain achieved victory over Germany only with the assistance of the United States. After the war, America was as reluctant to accept its potential new responsibilities as Britain was to voluntarily give up its role. Woodrow Wilson did what he could to construct a postwar world that would make another global conflict less likely, but isolationism at home meant that the U.S. never joined the League of Nations. In the economic sphere, America insisted on going its own way—passing the Smoot-Hawley tariffs and bringing to an end an era that had seen a worldwide boom in trade. Britain maintained its empire, but gradually the pound sterling gave way to the dollar: in the end, economic realities dominate. Many American firms became global enterprises, and American culture was clearly ascendant.World War II was the next defining event. Devastated by the conflict, Britain would soon lose virtually all of its colonies. This time the U.S. did assume the mantle of leadership. It was central in creating the UnitedNations and in fashioning the Bretton Woods agreements, which would underlie the new political and economic order.”
         Stiglitz's analysis also includes other relevant processes to adequately understand the importance of such an event – the fact that the Chinese economy had surpassed the U.S. in terms of purchasing power parity, announced by the IMF in 2014, was expected to happen some 20 or 30 years from now.


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