Turkish voters approved a new constitution this weekend, greeted in Brussels – if not Paris and Berlin – as a key step on the road to EU membership.
But recent commentary and headlines – particularly in the US – have claimed Turkey is turning its back on the West as the rift between Turkey and Israel deepened following the killing of 9 Turkish citizens by Israeli forces when they raided a Turkish ship trying to run the blockade of Gaza in May.
Turkey is an ally of the US and a staunch member of NATO, it has also been trying to get into the EU for more than twenty years, so why are some commentators saying Ankara is turning away from the West? (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…)
– This week’s Economist sees Lexington bemoan those advancing the discourse of American exceptionalism, suggesting that “[t]he last thing the country needs is to be distracted from its practical problems by the quest for an elusive greatness”. Elsewhere, The Spectator’s Coffee House blog remembers Jimmy Carter’s fabled 1979 speech in which he spoke of a US “crisis of confidence”.
Delivering the annual lecture at The Ditchley Foundation last week, Strobe Talbott suggested that the “promise” of the Obama Presidency – both in the domestic and the international arenas – is now “at risk”. “[W]hatever fate is in store for the current president of the United States”, Talbott argued,
“one thing is for sure. His success in tackling the major issues of our time will depend on his establishing a degree of common purpose with his partners in national governance at the other end of Pennsylvania Avenue and with his partners in global governance around the world.”
– Elsewhere, over at The Cable, Josh Rogin reports on the slow progress of reviews into US development policy – the Presidential Study Directive on Global Development and the Quadrennial Diplomacy and Development Review. The Economist, meanwhile, highlights Brazil’s growing identity as a significant aid donor.
– Finally, the head of the UK Financial Services Authority, Adair Turner, cautions against the default acceptance of prevailing economic ideology, suggesting that policymakers would do well to draw on a diversity of economic opinion. Joseph Stiglitz, meanwhile, explores the Keynesian prescription for the global economy.
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.
One of the most significant developments at Copenhagen was the emergence of the BASIC coalition – Brazil, South Africa, India and China – which negotiated the final details of the Copenhagen Accord with the United States.
My understanding is that BASIC was formed at China’s instigation. China agreed a Memorandum of Understanding with India in October 2009, committing the two countries to working closely together at Copenhagen. It then invited Brazil and South Africa to join the party, at a meeting in Beijing a week before Copenhagen started. Sudan was also invited to represent the G77.
According to Jairam Ramesh, India’s environment minister, the four countries decided that they’d walk out of Copenhagen together if necessary:
We will not exit in isolation. We will co-ordinate our exit if any of our non-negotiable terms is violated. Our entry and exit will be collective.
During Copenhagen, China worked extremely closely with India, with the two delegations meeting up to six times a day. It also engaged intensively with the other members of BASIC. In the final meeting with the Americans, China agreed to accept a limited international monitoring of its targets (India claims to have pushed China on this point).
The decision was also taken to drop language, setting a deadline for turning the Copenhagen Accord into a legally binding agreement. South Africa and Brazil both appear to have been unhappy with this decision.
Since Copenhagen, the BASIC countries have met once and have agreed to continue to get together on a regular basis. They want the Copenhagen Accord to set the stage for a ‘twin track’ agreement – with tough and binding targets for developed countries through Kyoto #2 and voluntary commitments for themselves under a new agreement.
No-one really knows how the US would fit into this picture. It is also increasingly clear that they and the US left Copenhagen with quite different impressions of what will happen next. The US believes that large emerging economies now have “very explicit activities and obligations”. I don’t think they believe they are committed to anything significant, beyond what they agreed at Bali or put on the table on a voluntary basis before Copenhagen started. (more…)