A propos of Richard’s post on how the French used to behave in Cote d’Ivoire, let’s not forget how another member of the Security Council P5 – Russia – is behaving right now. Why, you might wonder, should Russia be blocking moves in the Security Council to step up the international community’s level of intervention in Cote d’Ivoire?  

Concerned about implications for its own restive regions, such as Chechnya, Russia has traditionally sought to thwart Security Council actions regarding nations’ sovereignty. But one western diplomat said Russian considerations over Ivory Coast were “90 per cent about oil, 10 per cent about sovereignty”.

Lukoil, Russia’s second biggest oil producer, has stakes in three deep-water blocks off the Ivorian coast, part of a largely untapped 1,000km oil frontier. Lukoil acquired its interests during Mr Gbagbo’s rule and changes of power in Africa have often been followed by reviews of oil and mineral rights.

First there was BRICs. Then came CIVETS. Then we were presented with BASIC, CRIM, BRICK, CEMENT, BEM, N11 and the 7% Club. Now barely a week goes by before someone tries to float another ‘useful’ investment acronym.

Behind the dense forest of exotic acronyms is a simple fact: the catch-all classification ‘emerging markets’ has lost much of its usefulness. It was invented in the 1980s, by World Bank economist Antoine van Agtmael, to replace the now-defunct acronym LEDCs (or ‘less economically developed countries’) by which the West had until then blithely referred to the rest of the world. The term ‘emerging markets’ served as a useful way to refer to fast-growing although crisis-prone markets like Russia, China and Mexico.

Within the term ‘emerging markets’ was quite a 1980s-assumption: these markets would follow the development route laid down by ‘developed’ economies, until they arrived in the neo-liberal end point reached by the US, the UK and other western countries. And the phrase also came to have strong associations with the currency and debt crises of the 1980s and 1990s.

But things have changed. The bigger emerging market countries have now overtaken the weaker developed markets, not just in total GDP, but also in the pricing they pay on their sovereign debt. Emerging market countries like China and Russia have accumulated trillions of dollars in foreign exchange reserves, and are now the main creditors of western sovereigns. In the 1980s, emerging markets depended on the west for capital inflows. Now the situation is reversed, and the US and EU depend on China to buy their sovereign debt.

It was partly to recognize this shift in economic power to emerging markets that Goldman Sachs economist Jim O’Neill introduced the now-famous acronym BRICs (Brazil, Russia, India and China) in 2001. It was a runaway success. A decade on, and MSCI has launched a BRIC index, there are several BRIC-focused funds, BRIC-focused blogs, BRIC conferences, and the leaders of the BRIC countries even held their own BRIC summit in 2009. 

However, the success of the acronym, and the increase in capital flows to BRIC markets that followed, quickly led to questions and criticisms of the BRIC tag. In 2008, for example, when Russia’s economy slid into recession following the war with Georgia and the Credit Crunch, some analysts suggested Russia should be dropped from the grouping. This suggestion was sufficiently alarming to Russia that it organized not one but two BRIC summits in Russia in 2009. . (more…)

Two years ago, Georgian forces shelled the capital of the breakaway region of South Ossetia hitting the base of Russian peacekeepers as well as civilian housing. Russia responded immediately with a massive ground and air assault and in five days inflicted a heavy defeat on its tiny neighbour, occupying a band of Georgian territory into the bargain.

The conflict had several immediate results.

Already fraught relations between Moscow and Tbilisi plunged to new depths and diplomatic relations were severed.

Russia and three other countries recognised the independence of the breakaway Georgian regions of South Ossetia and Abkhazia.

And relations between Russia and the West – the US and the EU – deteriorated to their worst level since the collapse of the USSR – there was even talk of a new Cold War from western politicians.

The Cold War analogies led some commentators to argue Russian foreign policy had taken a decisive anti-western turn and things could and/or should never be the same again

Two years later, the one thing that seems unlikely to ever be the same again is the shape and size of Georgia. If recognition from Russia was not enough, the recent International Court of Justice opinion that Kosovo’s unilateral declaration of independence was not against international law, makes it even less probable Tibilsi could regain control of its lost regions. (more…)

Much of the opposition to START (see previous posts) is embarrassingly hackish. Take this ‘analysis‘ from the Foreign Policy Initiative’s Jamie Fly and John Noonan:

A nuclear free world isn’t an ignoble goal, but it needs to be approached realistically. Focusing on the stockpiles of the United States and Russia and limiting U.S. options for use of nuclear weapons does nothing to change the calculus of Tehran and Pyongyang.

Henry Kissinger, who is now among the chief proponents of nuclear disarmament, wrote in 1957 in his landmark study Nuclear Weapons and Foreign Policy that “A renunciation of force, by eliminating the penalty for intransigence, will therefore place the international order at the mercy of its most ruthless or irresponsible members.”

Our unwillingness to penalize countries such as Iran, North Korea, and Syria for their illicit activities only empowers them. It sends the message to other states potentially seeking nuclear weapons that the path to a weapon can be pursued with few repercussions.

If President Obama were truly concerned about the future of the international nonproliferation regime, he would follow his recent disarmament “accomplishments” with some serious action to ensure that rogue regimes realize that there is a price to be paid by those who choose to pursue nuclear weapons.

You have to love the “If President Obama were truly concerned…” line. Of course, the President is just pretending to be worried about the issue – it’s all part of his cunning plan to sell America out to foreign and socialist overlords. Or something like that.

A causal reader would also be left thinking that Kissinger opposed the treaty, when of course he is right behind it, issuing a joint statement with George Shultz, William Perry, and Sam Nunn:

We strongly endorse the goals of this Treaty, and we hope that after careful and expeditious review that both the United States Senate and the Russian Federal Assembly will be able to ratify the Treaty.

Obama is following the (bi-partisan) playbook that Kissinger, Schultz, Perry and Nunn set out in their 2008 A World Free of Nuclear Weapons op-ed. It recommended:

• “Changing the Cold War posture of deployed nuclear weapons to increase warning time and thereby reduce the danger of an accidental or unauthorized use of a nuclear weapon.
• Continuing to reduce substantially the size of nuclear forces in all states that possess them.
• Eliminating short-range nuclear weapons designed to be forward-deployed.
• Initiating a bipartisan process with the Senate, including understandings to increase confidence and provide for periodic review, to achieve ratification of the Comprehensive Test Ban Treaty, taking advantage of recent technical advances, and working to secure ratification by other key states.
• Providing the highest possible standards of security for all stocks of weapons, weapons-usable plutonium, and highly enriched uranium everywhere in the world.
• Getting control of the uranium enrichment process, combined with the guarantee that uranium for nuclear power reactors could be obtained at a reasonable price, first from the Nuclear Suppliers Group and then from the International Atomic Energy Agency (IAEA) or other controlled international reserves. It will also be necessary to deal with proliferation issues presented by spent fuel from reactors producing electricity.
• Halting the production of fissile material for weapons globally; phasing out the use of highly enriched uranium in civil commerce and removing weapons-usable uranium from research facilities around the world and rendering the materials safe.
• Redoubling our efforts to resolve regional confrontations and conflicts that give rise to new nuclear powers.”

Is there any issue serious enough not be used as a partisan football in the US? I fear not.

It seems that the START treaty is going to struggle to make it through the Senate, despite President Obama’s confidence that a swift passage is possible.

Today, Joe Lieberman (an independent these days, who caucuses with the Democrats) took to Fox News to claim that ratification would be impossible unless the administration extracted concessions from Russia on missile defence and began to build a new generation of nuclear weapons:

We have to make darned sure our nuclear warheads are capable, are modern as world leaders arrived in Washington for the start of a major nuclear summit. I’m going to be real hesitant to vote for this treaty unless we have a commitment from the administration that they’re prepared to modernize our nuclear stockpile.

For the Republicans, Lamar Alexander said there was ‘not  a chance’ of ratification in 2010 – and that consideration of the treaty should wait until 2011.

What credibility does Obama’s nuclear strategy have if it lacks backing at home? Not much, I fear.

I’ve been wondering whether the new US-Russia nuclear pact is a cert for ratification (it needs 67 votes to get through the Senate). If this treaty (uncontroversial as it is) was rejected by Republicans, it would raise serious questions about whether the US can any longer be regarded as a coherent foreign policy actor.

Asked about this, President Obama sounds reasonably confident that all will run smoothly. He also has harsh words for Sarah Palin too, who has suggested that American citizens would ‘rise up’ against his ‘unbelievable’ and ‘unacceptable’ nuclear posture (great cartoon version of her oratory, here).

STEPHANOPOULOS: So, you have no doubt you’re going to get the eight Republicans you need to ratify this treaty?

OBAMA: Well, you know, the — listen, I’ve now been in Washington for long enough that, for me to say I have no doubt (LAUGHS) about how the Senate operates would be foolish. I feel confident that leaders like Dick Lugar — who actually was somebody I worked very closely with when I was in the Senate on issues of bomb control — when they have had the opportunity to fully evaluate this treaty, [they] will come to the conclusion that this is in the best interest of the United States. But I will also say to those in the Senate who have questions, is that this is absolutely vital for us to deal with the broader issues of nuclear proliferation, that are probably the number one threat that we face in the future.

STEPHANOPOULOS: I want to get to some of those broader issues. Because you’re also facing criticism on that. Sarah Palin, taking aim at your decision to restrict the use of nuclear weapons. Your pledge not to strike nations, non-nuclear nations, who abide by the nonproliferation treaty. Here’s what she said. She said, “It’s unbelievable, no other administration would do it.” And then she likened it to kids on the playground. She said you’re like a kid who says, “Punch me in the face, and I’m not going to retaliate.” Your response?

OBAMA: I really have no response. Because last I checked, Sarah Palin’s not much of an expert on nuclear issues.

STEPHANOPOULOS: But the string of criticism has been out there among other Republicans as well. They think you’re restricting use of nuclear weapons too much.

OBAMA: And what I would say to them is that if the secretary of defense and the chairman of the Joints Chiefs of Staff are comfortable with it, I’m probably going to take my advice from them and not from Sarah Palin.

STEPHANOPOULOS: But not concerned about her criticisms?

OBAMA: No.

It’s commonplace to describe the financial crisis as a once-in-a-century event, but I question whether that is the case. Perhaps we’re not in the midst of a short-lived financial shock, but a long crisis that stretches back into the 1990s.

Here’s Paul Blustein on Alan Greenspan:

The Fed chief told the G-7 that in almost fifty years of watching the U.S. economy, he had never witnessed anything like the drying up of markets in the previous days and weeks.

Greenspan wasn’t speaking in Autumn 2008 when Lehman’s collapsed, however, but ten years’ earlier in the wake of the spectacular blow-up of Long-Term Capital Management, which lost $4.5 billion almost overnight in what the fund’s principals post-rationalised as a 100-year flood.

Long-Term (with its superbly hubristic name) was brought low by derivatives, just as Lehman’s would be a decade later.

(Robert Rubin, Clinton’s Treasury Secretary, was one of those left picking up the pieces – part of ‘the committee to save the world’, with Greenspan and Larry Summers. Rubin went on to preside over Citigroup as it needed a succession of massively expensive bailouts, when its derivatives tanked in the subprime crisis.)

The proximate cause of Long-Term’s failure was Russia’s Rouble crisis, when the country defaulted on its debt after the IMF refused to mount a second bailout.

The Russian crisis itself came in the midst of a long series of dramatic economic failures that hits the world between 1997 and 1999, mostly in East Asia (Thailand, South Korea, Indonesia etc), but which also battered Brazil and would devastate Argentina in 2002. Blustein again:

Time and again, panics in financial markets proved impervious to the ministrations of the people responsible for global economic policymaking.

IMF bailouts fell flat in one crisis-stricken country after another, with the announcements of enormous international loan packages followed by crashes in currencies and sever economic setbacks that the rescues were supposed to avert.

(more…)

- With the US and Russia finally concluding negotiations on a new nuclear arms reduction treaty, Julian Borger assesses the deal’s significance. Josh Rogin, meanwhile, wonders whether Obama will be able to get the treaty past Republicans in the Senate.

- Kenneth Weisbrode explores the “reinventing diplomacy” debate, suggesting that “while America thinks in terms of networks, the rest of the world is busy connecting circuits.” Writing in The World Today, Christopher Hill assesses the current challenges facing UK foreign policy, the difficult decisions that lie ahead, and where future priorities may lie. “If it is to serve us well over the longer term”, he argues, UK foreign  and security policy “needs a radical overhaul of its underlying outlook”.

- Elsewhere, The Atlantic Monthly‘s Joshua Green offers a wide-ranging profile of US Treasury Secretary, Timothy Geithner – “a superstar of the bureaucracy” – assessing his influence on President Obama and his central role in shaping the US response to the global financial crisis.

- Finally, discussing European immigration Brigid Grauman highlights the example of Switzerland, suggesting that the rest of Europe would do well to learn the lessons of participatory democracy in promoting integration and fostering multiculturalism. Over at Foreign Policy, meanwhile, Steve Kettmann assesses the recent buffeting taken by the country’s international image, asking if the Swiss stance on neutrality is still feasible in an age of interconnectedness.

- With President Obama embarking on his visit to Asia, John Plender examines the nature of China’s challenge to US dominance. Cheng Li and Jordan Lee suggest what the President has to do in striking the right tone for US-China relations going forward. Kishore Mahubani, meanwhile, views Asia’s rise through the prism of Francis Fukuyama’s End of History twenty years on.

- In a wide-ranging interview with Der Spiegel, Russian President, Dmitry Medvedev talks about Stalin, democracy and the rule of law, his relationship with Vladimir Putin, and ongoing Western entanglement in Afghanistan.

- Elsewhere, Stefan Theil argues that, aided by the financial crisis, the EU’s global standing is on the rise:

“The EU’s modus operandi — sharing power, hammering out agreements, resolving conflict by endless committee — can be boring and even frustrating to watch”, he argues, “[b]ut in an increasingly networked and interdependent world, it has become the global standard.”

Julian Priestley, meanwhile, suggests four conditions if the EU is to get the most from its “institutional architecture”.

- Finally, writing in the New Yorker, Seymour Hersh explores US concerns about the safety of Pakistan’s nuclear arsenal amid growing instability.

- In the week leading up to the first anniversary of the Russia-Georgia conflict, the FT reports on the lingering regional tensions still apparent, while openDemocracy assesses some of the war’s wider implications for the US, EU, China and Turkey. Georgia aside, James F. Collins, former US ambassador to Russia, highlights the current fragility of US-Russia relations and the importance of “sustained dialogue within a solid institutional framework” if measured progress is to continue.

- Elsewhere, in a taster of the forthcoming Quadrennial Defence Review (QDR), two senior Pentagon officials survey the global landscape and assess what this means for the US’s strategic outlook. The main challenge (alongside adapting to the realities of hybrid warfare and a growing number of failing states), Michele Flournoy and Shawn Brimley suggest, will likely revolve around competition for the global commons (sea, space, air and cyberspace). A successful approach, they argue, should see the US refocus its efforts on building strong global governance structures and taking the “lead in the creation of international norms”. Andrew Bast at WPR comments that this could once again herald a US foreign policy with Wilsonianism firmly at its core.

- Der Spiegel, meanwhile, takes an in-depth look at the growing global market for farmland. In what it labels the “new colonialism”, the article notes the implications of such investment flows for states in Africa and Asia, as well as gauging the impact on local farmers.

- Climatico assesses Nicolas Sarkozy’s climate change credentials, highlighting his “erratic behaviour” on the issue and suggesting that the French stance is one to watch in the run up to Copenhagen.

- Finally, an interesting PoliticsHome poll on attitudes of the British public to the country’s foreign policy. 65% of voters, it indicates, agree that foreign policy has weakened Britain’s “moral authority” abroad – a view held across the political spectrum. Perhaps more strikingly, however, a majority (54%) felt the country should scale down its overseas military commitments, even if this meant ceding global influence. Interestingly, 57% were in favour of humanitarian intervention. Writing in Newsweek, meanwhile, Stryker McGuire adds to the narrative of declinism. The current economic crisis, he argues, has finally put paid to Britain’s attempts to maintain its world role and place at the international top table.

And now, by way of Friday afternoon amusement, a selection of headlines from the always-excellent English language version of Pravda: if you haven’t discovered, add it to your favourites immediately.

For where else can you find such an infectious mixture of imperial swagger – “Russia creates its own version of NATO in Central Asia to be prepared for big war“; “Ukraine’s Tymoshenko makes ridiculous offer to Russia’s Putin” - together with touching moments of national self-doubt such as “Europe may not even want to improve ties with Russia at all“, or the heart-breaking ”Russian fighter jets worse than those of USA and Europe?”

The science section is equally diverting. Not for Pravda the hand-wringing about impending environmental catastrophe that you’ll find in the Guardian or the NY Times; instead, Pravda reports with a weary roll of the eyes that “Scientists predict men’s extinction again“, while noting elsewhere that “Vegetarianism proves to be perversion of nature“.

Above all, be sure to check out Pravda’s approach to lifestyle issues, which blends approving reports of bling  being brandished – “Russian billionaire opens Europe’s most expensive luxury hotel“; “Putin and Medvedev to open holiday season in their luxury beach mansions“; or best of all, “Putin makes public presentation of his very serious new car ” - with undisguided bemusement towards those who fail to share its enthusiasm for same (“Russia’s richest man moves to god-forsaken village “).

By way of a small sample of the kind of genius you’re missing out on, herewith the full story on Putin’s pimped-up new ride:

Russian Prime Minister Vladimir Putin made a public presentation of his new Niva vehicle, which he bought about a month ago. The car was unveiled to reporters near Putin’s residence in the city of Sochi in Russia’s south, where Putin conducted negotiations with the prime minister of Turkey.

Putin told reporters that he was enjoying driving his new car, although he only traveled about 300 meters, RIA Novosti reports. Putin did not specify the price that he paid for the SUV.

Putin said that he liked the new wheels of the car, its soft suspension and the powerful engine. The prime minister also said that his car had a special specification, although it was already available at the manufacturing company (Russia’s AvtoVAZ).

“You’d better step aside, guys, it’s a serious car,” Putin warned the photographers, who were taking pictures of the car.

Several journalists had the privilege of driving Putin’s SUV. One of them took a ride around Putin’s residence and acknowledged that the driving was really enjoyable.

A female correspondent of RIA Novosti news agency said that it would be a very good car for a blonde.

A journalist from Turkey was the third to drive Putin’s car.

“Is it really Niva?” he asked Putin after the ride.

“It surely is,” Putin responded.

The journalist wondered if these cars would be available in Turkey.

“This car can be available in many countries of the world. This is a best-seller of AvtoVAZ,” Putin said.

Italian Prime Minister Silvio Berlusconi, who visited Sochi on Saturday, did not drive the car.

“He didn’t drive it, because the car arrived today. If they had delivered it yesterday, me and Silvio would have obviously taken a ride,” Putin said.

The Kremlin has been shaken by the credit crunch, which hit the Russian stock exchange worse than any other exchange in 2008, pushing it down around 65%. The fall in the oil price threatens to push the economy into recession this year, and Russian oligarchs have seen their fortunes halve.

However, the country is still in a relatively strong position compared to its neighbours, and there are signs it is looking to capitalise on this to expand its economic influence in the region.

For the last few weeks, the country’s largest bank, state-owned Sberbank, has been in talks to buy the troubled Bank Turam Alem in Kazakhstan, which had to be nationalised by the Kazakh government earlier this year. It’s the biggest bank in Kazakhstan, and would give the Russian state enormous economic leverage within the country, at a time when Kazakhstan is wondering whether to join the ruble or to set up a new central Asian regional currency.

In Kyrgyzstan, which has also been badly shaken by the economic crisis, Russia agreed a $2bn loan package and $150m ‘grant’ in February. A few weeks later, the government agreed to close down the US air base at Manas. 

In Belarus, talks with the IMF have stalled, while Aleksander Lukashenko is seeking a further $2.7bn loan from the Kremlin on his visit to Moscow this week, to prop up the central bank’s reserves. There are also talks to sell one of the country’s biggest banks, BPS Bank, to Sberbank.

In Ukraine, PM Yulia Timoshenko is trying to get a $5bn 15-year loan from the Kremlin to cover the country’s budget deficit, much to the ire of the country’s president, Viktor Yushchenko, who compared the potential deal to the Molotov-Ribbentrop pact.

This was after Timoshenko’s government failed to meet the IMF’s targets for government spending cuts in February, leading to the suspension of the second tranche of the IMF’s $16bn loan package to the country.

No doubt the Kremlin will be telling both Ukraine and Belarus that if they want the emergency cash, they need to give Gazprom more control over the pipelines that take the EU’s gas through these countries.

In Hungary this month, where the economy is also in dissarry and the government desperately needs cash, Gazprom signed two important deals with MOL, whereby the Hungarian government agreed to finance the South Stream pipeline from Russia (which will be a competitor to the EU-approved Nabucco pipeline). Details of the deal are shady, but it may have been that the government got some short-term loan in return for supporting the project.

In January, I reproduced a fine picture of Nicolas Sarkozy atop a French tank in Lebanon. Today, the NYT opens a profile of new U.S. Afghanistan-Pakistan envoy Richard Holbrooke thus:

Stashed in a drawer in his Manhattan apartment between snapshots of family vacations, a photograph shows Richard C. Holbrooke on a private visit to Afghanistan in 2006. He is mugging atop an abandoned Russian tank, flashing a sardonic V-for-victory sign and his best Nixon-style grin. The pose is a little like Mr. Holbrooke himself: looming, theatrical, passionate, indignant.

Three years later, he has inherited responsibility for the terrain he surveyed from that tank.

Now, it is fair to say that neither M. Sarkozy nor Mr. Holbrooke are scared of having their image scrutinized in the public domain. So we offer the readers the chance to compare and contrast their tank-top appearances:

Holbrooke has the edge here: (i) he has made sure that he is seen from below, accentuating his height; (ii) he is dressed for action, whereas President Sarkozy is just a little too dapper; (iii) he is surrounded by people who look like the better-dressed postgrads in a philosophy seminar, but we assume are fearless warriors.

Still, both our subjects do way better than an earlier generation of tank-top politicians.

I give you Thatcher…

…and, of course, Dukakis (whose presidential defeat is often traced to this shot):

Facing such evidence, can anyone suggest politics is not growing more sophisticated?

I see my first ever boss, Geordie Greig, has been nominated as the editor of the London Evening Standard by the new owner of the paper, playboy oligarch and former KGB spook, Alexander Lebedev.

I’ve interviewed Lebedev in Moscow. He is a strange man. Not your typical Russian oligarch at all. He’s something of an outsider in Putin’s government, despite having worked as a spy abroad (he was based here in London during the 1980s, and his job was to monitor capital flows from the USSR).

He’s much closer to Gorbachev, and the two own one of Russia’s few independent newspapers, Novaya Gazeta. People were worried Novaya Gazeta would lose its teeth when a KGB man bought it, but no, it still seems full of brave journalists -  one of which was gunned down in Moscow in mid-January, while walking with a human rights lawyer.

The thing that struck me about Lebedev was how wowed he was by British society. He enthused about a dinner he was at in London, where he sat between Tom Stoppard and Tom Wolfe. His son Evgeny is even more of a butterfly, and he could be the one in the driving seat at the Standard.

What will be interesting is how the paper will report UK-Russian relations, next time Russia is in the news for some aggressive action (shouldn’t be long now), particularly if it took place in London, like the Litvinenko killing. I don’t think Lebedev would sit by and let the Standard slag off the Kremlin, as one previous editor, Max Hastings, is fond of doing – he referred in passing to Putin as ‘Russia’s chief Mafia capo’ in a Mail article last week. Not sure that would wash with the new proprietor of the Standard.

Last week, I saw the leader of the Hungarian opposition, Viktor Orban, call for a new central European security alliance against Russia.