Sunday, August 31, 2008

Why Mr. Darling must now resign

The Chancellor of the Exchequer, Britain's Finance Minister, is an enigmatic figure. Alistair Darling has established himself as a managerial technocrat, of the type much favoured by the former Prime Minister, Tony Blair, yet he also managed to retain a working relationship with Gordon Brown- the the point that Brown trusted him enough to hand over the Finance Ministry to Darling upon his elevation to Number 10.

His public image is dominated by his grey hair and seemingly grey personality- hence his nickname of the Badger. This seemingly buttoned-up Morningside personality has, however, been making statements that are so emotional that they show a man at the end of his tether.

Spending some part of his holiday on the Western Isles with a Guardian journalist might be seen as an error of judgement, were it not so carefully judged. His complaints that he no longer gets back to Edinburgh, nor goes to the Cinema suggest a man firmly buried by work pressure. What really shows this though, is the fact that he has lost all sense of proportion.

It is extremely arguable that the current financial crisis is a bad one, but it is highly questionable as o whether it is bad as 1981 or even the 1970s. To suggest as the chancellor has now done that the financial crisis is the worst in 60 years is probably hyperbole. Even if it were not, it is foolhardy for the Chancellor to express his worries quite so candidly.

Business and the financial system rests on confidence. For the Chancellor to be so gloomy about Britain's economic situation undermines confidence. In short, by his public musings Mr. Darling is helping to create the prospect that he most fears.

Gordon Brown may wish to continue the wasteful profligacy that has undermined the financial health of the country, but by so public a jeremiad the Chancellor also demonstrates his lack of confidence in the Prime Minister's policies.

It is quite clear that he should leave office as soon as possible- he does not understand what he is doing and can only inflict further damage by staying.

The GOP and the Big Easy faces the worst

As it Hurricane Gustav bears down on New Orleans, it seems that the Big Easy is going to be struck by a very big storm again.

Hurricane Katrina left the city in tatters, and three years later much of it remains beyond repair. The hurricane was in many ways the final straw for America's patience with the Bush administration. The President was praising Michael Brown, the responsible official in the FEMA, despite the fact that it was obvious that he was totally out of his depth. That Mr. Brown had no qualifications appropriate for his office saving his friendship with Mr. Bush brought home the level of patronage and cronyism in the administration of the hapless 43rd President.

Now Hurricane Gustav is bearing down on the New Orleans just as the Republicans gather to nominate John McCain and his surprise running mate, Sarah Palin, at their convention in Minneapolis.

Governor Palin seems to have been chosen to trump the supposed lack of experience of Sen. Obama- however the blatant tokenism of her choice is truly cavalier. This is a person who does not have the qualifications to run anything outside of politics, and whose education and experience could hardly be more limited. Yet the American people are being asked to put her a heartbeat from the Presidency while also choosing the oldest first term candidate in history.

Mrs. Palin is said to be a creationist- certainly she advocates the teaching of creationism on an equal footing with Science. As a poster on Politicalbetting.com noted, one with so literal a view of the Bible will clearly understand that by sending Hurricane Gustav to remind Americans of the lowest hour in the Bush administration, the Almighty seems to be sending a clear message to the Republican Party:

"Thou hast stood against my commandments for justice, therefore may I wax wrath and now smiteth thee!"

Friday, August 29, 2008

Night-mayor in Beijing and Caracas

Well, look lets face it, we all cringed a bit when Boris Johnson tuned up at the bird's nest stadium in Peking looking- frankly- rather scruffy. The fact that he seemed to be treating the great occasion with a certain amount of levity was certainly noted with disapproval by his Chinese hosts.

Personally I was only relieved that he did not drop the Olympic flag- and a couple of times I must say my heart was rather in my mouth. It was not a particularly auspicious start to the next four years of London as an Olympic city.

On the other hand, though, it was clearly gall and wormwood for Ken Livingstone to have to merely watch the spectacle that he had rather hoped to have been at the centre of.

After the announcement that Livingstone is now to be the paid advisor of the windbag wannabe dictator of Venezuela, Hugo Chavez, it quite brightens my day to think how much Ken must have been consumed with envy.

Personally, I hope that he stays in Caracas for a very long while, since it may take a while for the people of London to forgive this self-serving bile-meister.

Russia: Staring down the barrel of a gun

Since the Russians launched their well-planned war against Georgia on August 8th, there have been several opportunities for Russia to reduce the increasing tension with NATO. However, at every stage, the Russian Federation has played hardball. Firstly they have failed to implement the August 15th ceasefire agreement which they themselves signed- keeping their troops well inside Georgia proper. The Russian army has looted the port of Poti and stolen not only Georgian property, but also the property of several other nations too. The have repeatedly attacked rail and road links and have successfully disrupted oil transit from Azerbaijan to the West. As humanitarian aide comes into the only functioning port under Georgian control- Batumi- Russian naval vessels have harassed the incoming shipments and the NATO warships that have entered the Black Sea. Any criticism has been greeted with extremely aggressive- in fact bellicose- language. By recognising Abkhazia and South Ossetia, the Russian Federation has made plain that it intends to annex both territories. The expulsion of the Georgians from South Ossetia leaves a population of only about 30,000 left, while the population of Abkhazia has fallen from 570,000 in 1991 to around 100,000 today, as a result of the complete expulsion of all Georgians. These micro-states are highly unlikely to survive- and it is now clear that in due course, the Kremlin intends to "admit" them both to the Russian Federation.

The war has been a blatant land grab by Russia against Georgia and all the weasel words from the Kremlin on "self determination" and making parallels with the situation in Kosova can not hide the fact that the Kosovars were being attacked by the Serbs and that Kosova, with a population of nearly 2 million, is genuinely able to be independent. In Abkhazia and now in Ossetia, the victims have been the Georgians, and their "independence" is a fig leaf for Russian annexation. Meanwhile, the population of ethnically cleansed "South Ossetia" is now smaller than that of Lichtenstein.

The response from the West to this extraordinary breach of international law was initially confused and divided. However the initial dismay at the Russian invasion has given way to the clear recognition that Russia regards itself as a rival and not a partner to the West. The result has been an increasingly determined stance against the Kremlin. Divisions remain, but even in the most dovish states, there is a recognition that a significant response is required.

However as the air has been filled with talk of sanctions, the Russian response has grown even more aggressive and shrill. The signature of the Polish-US accord on missile defense has seen the Russians threaten a nuclear response. Threats of even the mildest of sanctions have been greeted with threats that Russia will cut off oil and gas supplies altogether.

The European Summit convening on Monday will be a sombre affair indeed. The more hostile the Russian stance, the more united of purpose must the NATO and EU allies be. The fact that the French foreign minister has already indicated that sanctions are on the agenda suggests that, though the doves may fight a rearguard action, they have lost the argument. The furious Russian response- threatening a suspension of all energy supplies may give pause for thought, but may even actually reinforce the determination of the allies to unite in the face of the Russian threat.

However tension is now dangerously high. Russia has acted illegally and has refused to make even the slightest concession to global feeling. The luke-warm communique at the end of the Dushanbe summit of the Shanghai group of Central Asian states reflects the deep concerns amongst those states and the Chinese at Russia's actions. Russia is increasingly isolated.

The question is now that Russia has shown its willingness to unleash warfare on a neighbouing state, how far is it prepared to go to bring other countries it believes should be in its orbit under the direct control of Moscow? The evidence is that there is no clear control over the Russian military.

This is not simply a return to the cold war- there is a real risk that we could face an actual war- a hot war, possibly including a nuclear attack- which the Russian high command now openly suggests is a part of Moscow's strategic planning.

The crude and brutal aggression against Georgia is that dangerous. Unless Russia acts to cool the situation very quickly, it will certainly face sanctions and isolation. How it responds to these will be critical. The slightest miscalculation will put Russia and the rest of the world into a collision course that will lead to war.

A war between nuclear states.

Thursday, August 28, 2008

Greetings Pop Pickers...

Compiling lists always struck me as a mildly weird thing to do ("Top 50 all-time great Mr. Spock moments on Star Trek" is a very minority interest).

On the other hand bloggers are indeed a fairly strange bunch, so it does seem that people do take notice of Iain "Fluff Freeman" Dale's annual list of top UK bloggers, and sure enough Fluff, sorry- Iain- has come out with his annual view of the top bloggers in different categories.

I think last year I was seventh or eighth in the Lib Dem list.

This year- prepares modest shrug and rueful smile- well, eleventh or twelfth. Given that I simply cannot blog every day, and that much of my blogging is on fairly obscure stuff, I am mildly surprised to be in the list at all, especially when I see good bloggers like Julian at Orange by Name considered to be "below" me on the list.

On the other hand the list of bloggers who care enough to take an interest and actually put together the list is a very short list: so step forward and take a bow, Iain Dale- not 'arf....

Wednesday, August 27, 2008

Hoy's the Boy

It did do my heart good to hear the triple gold medal winner soon to be "Sir" Chris Hoy speak such sense:

"I was proud to represent Scotland in the Commonwealth Games.
That's something I will always cherish.
"Scotland is part of Britain - they are not mutually exclusive. I'm a proud Scot and I'm a very proud Brit as well."

As the increasingly obese Alex Salmond tries to use sport as a political football for his own narrow separatism it is good to know that real winners understand that the reality of success is the result of years of hard graft and nothing to do with the pathetic gesture politics of the SNP.

Wednesday, August 20, 2008

Fighting the last war- the end of effective deterrents against the Russian threat

Today is the 17th anniversary of the August coup in Moscow. The hardliners of the Politburo conspired with the Soviet military and security services to overthrow the reforming Communist, Mikhail Gorbachev. However, as we know, the coup failed and the Soviet Union disintegrated.

In the past week, we have had to confront the fact that the defeat of the hardliners was by no means as complete as it seemed at the time. The secret organs of the Soviet state have turned out to be far more robust than we had hoped. Indeed, almost any figure of consequence in the modern Russian Federation- seemingly with the sole exception of President Dimitri Medvedev himself- is a former member of the Soviet security services.

The education of the so-called "Siloviki"- the "security people", has been rather unusual. The core values of the KGB and the GRU were based upon a ruthlessly Manichean view of the world- Leninist conspiracy would undermine the capitalist "Imperialists". Any victory of the Soviet state was, ipso facto, a defeat for the hostile "Imperialist" powers and vice-versa. The strategic battle for control could not be seen in win-win terms, but only in a zero-sum game.

This has shaped the thinking of almost all of the power elite of the Russian Federation. In that sense, Russia is- and sees itself as- rather more than the legal successor to the Soviet Union. As I have previously noted, Vladimir Putin regards the fall of the USSR as a colossal geo-political defeat for Russia, and therefore his primary security goal is to restore decisive Russian control over the geo-strategic space of the former Soviet Union.

The increase in Russian influence over the former Soviet space might not, of itself, prove any kind of threat to World peace, were it not for the way that the Siloviki view power projection. Maintaining the zero-sum game view of geopolitics in the post-Soviet space leaves little room for non-Russian influence and no room at all for alliances across the former Soviet frontiers. The Siloviks do not respect the idealist school of international relations, and take an ultra-realist position in terms of the military balance.

NATO has therefore made a series of strategic blunders over the past few years. Despite the criminal nature of the Milosovic regime in Belgrade, Russia regarded Serbia as a friendly power- linked by history, language and Orthodox culture. "He may be an S-o-B, but he is *our* S-o-B" sums up their view fairly accurately. In that sense, what worried Russia was not the use of hard power- the NATO bombing- but the extent of Western support for the revolution that ultimately overthrew the regime.

When, in due course, the Rose revolution took place in Georgia, and the Orange revolution in Ukraine, the Siloviki believed that they were facing a challenge that was not only undermining Russian influence on the former Soviet space but which, indeed, posed a threat to their own rule in Moscow. The consequence has been that Russian hardliners now view any democratic movement anywhere in the former Soviet Union as implicitly hostile. As a result they have supported the existing authoritarian regime in Uzbekistan - at least partly to eject the American base there, while also rolling back the "tulip revolution" in Krgyzstan in order to achieve the same goal in that country. Perhaps the first critical NATO blunder was to establish bases in those two countries, particularly since Moscow began to see democratic change as a challenge to dominant Russian influence.

The next critical blunder has been to dilute and to over-extend the military power of NATO. When the bloc was formed, NATO was an integrated military alliance that fully expected to have to face a military challenge from Soviet aggression. However, following the end of the Soviet Union, it has ceased to be a military alliance but has become as much a diplomatic forum- and one struggling to find a real role. In the end, NATO membership has become simply a badge to denote support for Euro-Atlantic values. The irony is, that despite Russian concerns, NATO is not only far less inclined to oppose Moscow, it is actually not militarily prepared to do so.

The Russian aggression against Georgia now shows that Russia is quite willing to use overwhelming force against any country that it deems hostile. It judges, probably rightly, that neither the United States, Britain nor France is now prepared to use nuclear weapons to defend the newly expanded alliance. This leaves a security vacuum at the heart of Europe. NATO was built upon the strategic reality that in the face of a Soviet attack, such weapons would be used: mutual assured destruction thus became the ultimate reality and, it tuned out, a highly effective deterrent against Soviet attack.

NATO is not merely abandoning nuclear deterrents, but is leaving a fatal ambiguity in the minds of Russian strategic planners. The "empty words" that NATO has used against Russia show the alliance to be divided. The onslaught of Russian subversion against Germany and other powers has essentially paralysed any unity of purpose within the alliance- and left NATO's northern flank very exposed indeed. Russia has been infuriated by the hostile rhetoric, but is now contemptuous of NATO's ability to defend itself.

Russia will not respond well to the increasing independence of Ukraine, and will certainly seek- through all means- to impose its will there. Although some rather ill-informed observers have argued that the Russian minority renders Ukraine defenceless, in fact only 17% of the population is Russian, and of these the majority identify clearly with the Ukrainian state. What may actually render Ukraine defenceless is the lack of political will to support the legitimate Yushchenko government in the face of Russian threats. The Siloviki have already demonstrated that they are prepared to use assassination as a weapon against their enemies- including an attempt on President Yushchenko himself.

In the past year we have also seen deliberate Russian subversion against a NATO state: Estonia.
In the light of what has happened in Georgia, it now seems foolhardy to delay the establishment of a large-scale and permanent NATO presence in the Baltic. The repeated violation of NATO Baltic airspace is only reinforcing the Russian impression of NATO weakness. In addition, it seems clear that Swedish and Finnish applications to join NATO should be actively supported- and as quickly as possible.

Good fences make good neighbours, and the ambiguity that both the Bucharest summit and yesterday's Brussels summit is creating is highly destabilising. When dealing with the Siloviki, it pays to be very clear about where the boundaries are. Leaving the impression that NATO is no longer prepared to commit to the full defence of it members could be fatal. Leaving the impression that Ukraine is still part of the Russian sphere could be just as dangerous as defying such influence. As Russia continues to delay its withdrawal from Georgia- and to prolong its punishment of a previously loyal Western ally- the West must not merely talk- it needs to make a practical demonstration of the limits of its future tolerance.

A failure to do so will destabilise the whole of European security- and allow the restoration of Russian power even beyond the former Soviet border. Those who believe in political or national freedom would not survive long under the rule of the Siloviki, most of whom who still remain loyal to their origins as the Soviet secret police.

Monday, August 18, 2008

How to win friends and influence people

It still looks like the Russians are stalling on even beginning their withdrawal, and the increasingly blood curdling threats against all and sundry suggest that all is not well in the Kremlin.

The longer the Russians continue their occupation, the more united the voices in Europe calling for sanctions are becoming. While it is disappointing that Germany remains "unconvinced" about taking firmer measures, the tart comments from Helmut Schmidt are placing the dove-ish foreign ministry in Berlin firmly on the spot.

Even with Germany, Russia has severely damaged its long term relationship.

Unless we see a withdrawal and a far more conciliatory tone from Moscow, the scale of the likely sanctions is only likely to grow.

Further delays will see an increasingly determined NATO and the EU. This is a major miscalculation from the Kremlin and one that has already caused significant damage.

Friday, August 15, 2008

What does Russia want?

Under the Tsars, Russian government was "autocracy, mitigated by assassination". Even after the State Duma was established in 1906, there was little restraint upon executive power. After the Bolshevik revolution, the dictatorship of the Communist Party was even less a government of laws. Untrammelled executive power under the psychotic Josef Stalin led to the Terror of the Purges and the creation of the camps described so powerfully by Aleksander Solzhenitsyn. Unlike the efficient German Nazis, few records were kept of the numbers involved, but millions were killed and tens of millions imprisoned under exceptionally harsh conditions.

The 1980s saw an attempt to escape that grim legacy, however the process of liberalisation led to the inevitable demise of a society and a state built on terror. This liberalisation and the fall of the Soviet Union is what Vladimir Putin has already characterised as the greatest "geopolitical catastrophe of the twentieth century". Moreover, Putin is the head of a network of individuals linked together by certain characteristics, of which the most important is a previous membership of the KGB, GRU or other secret organs of the Soviet state, the so-called "Security people", the Siloviki.

The Siloviki has ended the attempt to create a state of laws in Russia. Any interest deemed to be hostile to Kremlin interests, or those of the supporters of the Kremlin, is likely to be subject to arbitrary arrest and legal sanction without due process. Hence the fall of Yukos, whose ownership presumed to trespass upon the interests of Vladimir Putin. The harsh punishment of Khordokovsky, and mysterious death of the British head of the associated Bank Menatep, was an example to others, and also allowed the creation of state corporations under Kremlin control. Senior figures in Russian government- including Putin- were able to take significant stakes in these and to use them as further patronage. Across Russian oil and gas, then minerals and mining, and then other sectors, a network of favoured corporations has grown: Rossneft, Gazprom, Norilsk, Severstal and so on. The rule of the Siloviki is coterminous with the rule of the oligarchs, since they are now very largely the same people.

Within Russia a growing list of sectors have been deemed to be strategic. These now include, not just extractive industries, but land ownership, and now even the trading of grain. This list, like much else in Russia, is rather arbitrary- reflecting the interests of the Siloviki - rather than a concerted strategic plan. However disputes between individuals and groups of Siloviks do occur and this has led to a spate of assassination, including such figures as the Deputy Chairman of the central bank. Public debate has also largely been ended as independent media has been eliminated.

The failure of law within Russia has also meant that Russia has chosen to ignore most international legal agreements. Agreements concerning the creation of BP-TNK, for example are deemed enforceable only as far as BP has the means to physically defend itself- and the legal infrastructure of Russia does not support non-Russians. The Sakhalin-2 agreement was largely abrogated at Russian insistence. Some have argued that these agreements were unfair and that Russia has only been "taking back what is hers anyway". In fact this misses he point, the agreements were not particularly unfair and were freely entered into by Russian parties who still retain ownership interests. The message is clear: Russia does not consider herself bound by any agreement. Any legal agreement can be abrogated at any time and for any reason.

This is why inward investment into Russia is collapsing. The inability to enforce contracts and the absence of rule of law makes it highly problematic and potentially lethal to invest in Russia.

Despite this, the Russian economy has a veneer of prosperity. Since 2003, the price of crude oil has risen steadily. The result has been a transformation in the finances of the Russian Federation. After the domestic debt default of August 1998 (which co-incidentally destroyed the independent banking sector in the country) Russia's state finances have roared back to the point that Russia is now sitting on about $490 billion of reserves. This puts the country about third in the overall level of reserves, behind China and Japan and ahead of Taiwan. However, in sharp contrast to these other countries, Russia faces a significant infrastructure gap. The required investment is probably more than the total reserves by some margin. The Russian balance sheet is liquid, but not particularly strong.

The failure to invest adequately was a significant problem of the planned economy, and ultimately led to the economic breakdown of the Soviet Union. However for the great majority of the years since the fall of the Soviet Union, Russia too has been a net exporter of capital. Russian consumers have a great appetite for luxury foreign brands, and the demand for Russian manufacturing goods has fallen as they can not compete on quality and the high Rouble- the result of the oil boom has meant that they could not compete on price either. The industrial infrastructure of Russia is in a bad way. Less excusably, so is the physical infrastructure- electricity capacity, both generation and especially transmission is on the brink of a major failure, and little has been done to tackle this.

Russia also faces a health and demographic time bomb. Russia has a major IV drug use problem which has contributed to the country now having the largest growth rate in HIV infection in the World- higher than South Africa. This HIV/AID incidence is accompanied by a dramatic increase in multi-drug resistant TB, which is now the highest level in the World. Young men, conscripted into the Russian army have a more than thirty times higher chance of dying than in the British Army- and the British Army is in Afghanistan and Iraq! The brutality of the Russian conscript army is frankly horrifying. This extraordinary combination together with general alcoholism, smoking, poor diet and stress has contributed to a Russian male life expectancy of 54- an African level. The result is that Russia is losing people at a rate never seen in peacetime: over 600,000 a year, with the real prospect of a population fall of one third, from 145 million to 100 million by 2030. The only population generally immune to this fall is, ironically enough, the Chechens- who have large families and don't usually drink.

Despite the glitz of Moscow and St. Petersburg, the reality of infrastructure decay and demographic breakdown makes conditions for the average Russian pretty bleak. The large disparities in wealth is creating the conditions for radical militancy. The Kremlin, of course is well aware of this and has co-opted potential radicals to its quasi-fascist Nashi groups, who have been used to intimidate usually non Russian targets.

Fundamentally, the problem remains that Russia has failed to establish legal security within its borders. As a result, the Kremlin is hardly likely to worry too much when it comes to international law. Even if one accepts, and I do not, the moral equivalence of Kosova and South Ossetia and the Russian occupation of Georgia proper and the NATO bombing of Belgrade- the fact is that troops under Russian command are committing atrocities quite deliberately. The brutality is an act of policy intended to send a wide message. It is also a breach of every international law of war, from the Geneva Conventions to the United Nations Charter.

Occasionally, my friend Edward Lucas and I have asked ourselves what would happen if Russia, instead of threatening its neighbours, offered a friendly face and peaceful solutions. However I am beginning to think that this is to overlook one critical fact: Putin is serious when he says that he intends to restore the geo-political space occupied by the former Soviet Union. He therefore does not recognise any legitimacy in the current democratic governments in the former Soviet Empire. He truly intends- as he says- to restore that geo-strategic space, and he intends to eliminate any Western influence in that space- this includes bringing an end the democratic governments that are integrating or seeking to integrate with the West.

That Russia has legitimate international geo-strategic interests both within and beyond her borders is not in doubt. However, The West can not abandon the Baltic Countries, to which we are linked by friendship and by treaty. Indeed the threat to the Baltic may be be less, simply because it was the occupation of 1940 that insidiously undermined the legitimacy of the Soviet state, as Solzhenitsyn himself noted. The key targets then, after Georgia, are Ukraine and Moldova and the West must consider its strategic options in both these cases. In both, we should be aware that Russia- the lawless state- is likely, as it has done already, to use lawless methods. However it would be both a betrayal of our democratic values and an unwarranted concession to a hostile power to abandon Ukraine to Russian control.

Despite the shock of the violence in Georgia, the fact remains that the challenge of Putin's Russia is not of the same order as that from the Soviet Union- I have highlighted only some of the weaknesses that the Kremlin must face. Furthermore, the likely much weaker global economy has a disproportionate effect on Russia as energy prices fall rapidly. The demographic weakness of Russia is also substantial- there is therefore only a limited window of opportunity for Putin to play his zero-sum game with the wider world. China, in particular is gathering influence, not only in the central Asian states, but in Russia itself, and this too will reduce the freedom of manoeuvre that the Silovik state will have.

Furthermore, the corporate Russian state has increasing business interests beyond its own borders. Thus far the acquisition of international corporations has not been a particular problem. However, it is now clear that Western governments will examine this interests with increasing care. The lawless methods of Russia could be transferred to the West, and it is therefore right that these links should be checked. Nevertheless, the more money that Russia invests overseas, the more hostages she leaves against her own good behaviour. Sooner rather than later, isolation would also create serious problems for Silovik corporate entities.

After the humiliation of the West in Georgia, Putin has shown his hand- but it is one with many weaknesses, and the West can now assess its own strategic interests. A return to a policy of containment and limited isolation does seem the most likely short term policy, but the West understands the nature of the threat. At a time when we can finally begin to see a reduction in the military commitment to Iraq, if not yet in Afghanistan, the military overstretch of the US and UK will be reduced. We are vulnerable- but only for a short period, and permanent bases in the Baltic and the completions of US missile treaties in the region will underline to Russia the limits that the West will accept on Russian adventurism- and where a cold war becomes a hot one. The first priority mu be to unsure the early exit of Russian troops from Georgia proper, and since Russia does not intend to abandon Ossetia or Abhazia, to secure those borders completely.

For those full of hope that Russia too might one day become a democratic and open society, the last few year have been a tragic disappointment. "хотели как лучше, получилось как всегда" [they wanted to do as good as possible, but it turned out like always].

In the face of "like always"- we must respond to the challenge of a hostile, would-be expansionist and generally lawless state. I believe we can meet this challenge and that Silovik lawlessness and brutality can be successfully controlled.

Thursday, August 14, 2008

The recklessness of Russia

In the last few days, Russian military vessels have attacked and sunk Georgian naval vessels. However those Russian ships are based in Sevastapol- under the remit of an agreement with the host nation: Ukraine.

Ukraine does not support the use of its ports in a vicious war against a friendly country. It has indicated that it will not permit those ships that participated in the action to return to Ukrainian ports.

If Russia intends to break the blockade, then it will essentially be attacking Ukraine in the same way as it has already attacked Georgia.

This is playing with fire.

The rape of Georgia has already humiliated the West and killed tens of thousands.

Unless the Kremlin pulls back from the brink, we could indeed be looking a a major war.

Wednesday, August 13, 2008

Georgia: seven days on and how Russia can lose

All of the Western powers accept that the invasion of Georgia will fundamentally change the way that NATO and the European Union deal with the Kremlin.

However there is a deep disagreement about how far the West is able to go in punishing the Russian Federation for the illegal invasion of its sovereign, democratic neighbour. Some would argue that Russia has grown so strong that it is inevitable that the West will be forced to cave in.

Fortunately a group of states- roughly speaking in the North and West of the NATO alliance and led by the United States- has made it quite clear that they intend to go beyond a token slap on the wrist.

Planned joint exercises have been cancelled, and Russia's exclusion from the G-8 appears all but inevitable. As the fighting continues, those who have advocated a softly-softly approach to Russia- such as Germany- are reluctantly facing the need for a tough response.

Of course these last few days most of us have been outraged at Russia's actions. Now we must, in the bleak light of the new situation, begin to plan how best to meet the challenge of the aggressive and reckless Putin regime.

Despite much rather defeatist talk, in fact the West holds a strong hand- and the threat of Russia is not in the same league as the threat that the Soviet Union posed even twenty years ago. The USSR was economically isolated, Russia ostensibly wishes to join the global economy, indeed despite the windfall of high energy prices over the past few years, the infrastructure and the manufacturing base of Russia have withered in the face of neglect on the one hand and the high Rouble on the other. Russia continues to face a demographic implosion which, according to CREES, on current trends will leave the country populated by less than one hundred million by 2030, a fall of almost a third from today's population.

Ironically, the weakness of the Western economies that seems likely over the next two years will have a dramatic negative influence on Russia, with the forecast of a fall to $70/bbl looking far more likely than the suggestion that oil will rise from today's price of $114/bbl. Although Russia has largely paid off its debts and indeed amassed a large reserve, the scale of infrastructure breakdown is way beyond even the roughly $ 490 billion they have accumulated. In short, despite the government surplus, Russia has not invested. Russia's balance sheet is liquid but, in the long term, not very solid. Further weakness in energy prices will require significant government expenditure cuts. Nor is China likely to take up the slack, since the Chinese economy too has begun to slow dramatically. Meanwhile, Russia has had to deal with resurgent inflation- already topping 14%. The narrowness of the Russian economy is a significant weakness, and following the BP-TNK fiasco, international investors were already getting cold feet about the breakdown of rule of law in the country. International capital will demand an increasing risk premium for its investments in Russia, and vital inward investment in industry is now unlikely to take place.

Following the final agreement on the Russo-Chinese border, which was signed three weeks ago, it is clear that the previously hostile relations between the two states were set to warm. However, despite the irritation that the Chinese leadership clearly feel concerning Western support for Tibet, the scale of the Western, especially American, relationship with China is a massive multiple of anything Russia can offer. Of course China has strengths in this relationship- its large holdings of US securities gives China significant leverage. However the Chinese idea of "face" means that pressure exerted would be kept within certain limits- for the size of holdings are such that they constitute a symbiotic relationship, with China providing liquidity to fund American purchases of Chinese goods. Russia's bluster and violence are a sharp contrast to Chinese restraint. The result is that far from Russia using China, China will use Russia as a lever for warmer relations with the West, which in any event will now seek much warmer relations with Beijing, as George Bush's presence at the Olympic Games opening ceremony already makes plain.

I do not often agree entirely with David Cameron, but it would be churlish to deny that his piece in today's Telegraph is absolutely appropriate. the Russian rampage that is continuing through Georgia is an outrage that can not go unanswered. In my opinion, Russia has much to lose- it is time to speak quite bluntly and to demonstrate totally clearly that without a return to civilised behaviour, Russia will face the same treatment as its legal predecessor the Soviet Union: containment and isolation- backed by a credible threat of force should Russia cross the line once more.

Monday, August 11, 2008

Russia: Defying the laughter of tyrants

I have spent an emotional day with Georgians.

"My best friend- I have known him since he was six- is in the artillery in Gori. I do not know if he is dead or alive".

"The lines are down, I don't know where my family is"

Make no mistake -this was a war of Russia's choosing.

As the government of Georgia make a stand in the compound in Tbilisi, Russian troops have roamed at will across the country.

The defeat is complete, but Russia continues to pretend that Georgia fights on.

The latest nonsense is "Georgian agents are creating terrorist incidents in Russia". Only someone educated with the tin ear of the Stalinist could think that anyone beyond themselves could believe such a complete lie.

In my opinion, Russia can no longer be treated as anything but what she has become: a treacherous aggressor, contemptuous of human life.

People in the West are wringing their hands and saying "but what can we do- surely nothing?"

Do Russian spies not function with impunity? Expel them.
Is investment going to Russia? Stop it.
Is technology going to Russia? Ban it.
Do Russians enjoy shopping in the West- no visas.
Russian cyber attacks? Close the Russian Internet access to the outside world, as it is reopened, close it again, and again- replicate the cyber attacks they launched against Georgia (oh, and NATO, last year).
Does Russia like i-phones? No export of any technology.
Does Russia wish to join WTO? Stop it
Are they members of the "G-8"? No, you mean G-7.
Abrogate all military treaties including START.
EBRD and EIB investments in Russia? Suspend them.
No most favoured nation status- extra tariffs on Russian exports.
Russia craves respectability? Deny it- it is a thuggish third rate power- it will be hurt by a concerted boycott- so hurt it!

Do not panic about the gas- Qatar has more, and Russia has no one else they can sell it to in the face of a boycott- they are as dependent on us as we are on them.

What can you do personally? Why not ask your pub to boycott Baltika? As for Stolichnaya- Polish Wodka is better tasting anyway- Ask for Belveder (Belwederska), or Poctocki.

Please feel free to add any further ideas.

Russia: Actions have consequences

Both AP and the BBC have confirmed that Gori and Senaki- entirely Georgian cities, a long way from either South Ossetia or Abhazia have been occupied by Russian troops. The overthrow of Georgia's democratic regime appears to be under way.

The shock across the world is palpable.

The actions of the Putin regime are simply outrageous.

No state that defies Russia, even within its own borders, can now be considered beyond Russian interference, up to and including acts of war against civilians.

The Bear believes itself invulnerable and will maintain violent pressure, legal, or illegal in any way it sees fit.

This is an unquestioned return to the evil ways of Stalinism, and can only be resisted by any freedom loving people.

In my view Russia has already put itself outside the civilised world. Unless and until the Russian Federation withdraws its troops to the status quo ante and agrees to enter substantive talks. then NATO should make quite clear that it will not recognise any puppet regime put in place by Russian bayonets in Tbilisi. It should also impose blanket sanctions are all levels, including those I suggested previously.

I notice that the meetings today were explicitly G-7- so I guess Russia is already expelled from the former G-8. Exit from the Council of Europe, and breaking off of all EU-Russia military co-operation talks, must of course follow. Unilateral American withdrawal from Cold-War era agreements, such as START may also bring home to the Kremlin the seriousness with which the West views this.

If Georgia can continue to resist, then it should be made clear that all material humanitarian assistance will be granted, including equipment requested by Tbilisi. If Georgia falls, then Moscow should face a diplomatic freeze out- entry to the WTO will be suspended indefinitely, membership of all European financial and diplomatic bodies, including the OSCE, suspended. Financial sanctions should follow: for example, suspension from the BIS.

Since it is clear that Russian holdings of US securities constitute a potential threat to US financial stability, I believe it is actually imperative that Russia derives no benefit- Lawyers tell me that there are appropriate measures under various acts that could be invoked. I agree that this is difficult- but it is not insurmountable and must be addressed.
Russia is clearly an aggressive enemy- Perhaps the one, single, positive feature of the wars in Iraq and Afghanistan is that NATO troops are well prepared- Russia may have taken advantage of the distraction of the West to conclude a deal with China and unleash bloody war on Georgia, but they have now played their hand. The West must now consider its own cards.
No one can now doubt that Putin and his regime are a threat to global peace. Now we are warned, we can begin the fightback against this outrage.
To end Russian hegemony to Georgia is now the first battle against the expansionist thugs whose KGB and GRU days were not so far in the past as we had hoped.
We did not permit the Gestapo to take power in Germany after the fall of Hitler, it now seems crazy that we even hesitated when the Siloviki returned to power in Post-Soviet Russia. We will need to deal with the consequences of such folly until Russia either comes to its senses or is brought under control.
Until then, a Second Cold War is inevitable.

Blog war

Since Russia has launched cyberattacks against Georgia in parallel with their continuing military assault, I feel obliged to highlight sites that the Georgians have been able to use to get information about what is happening in the Russian invasion.

The Foreign Affairs Ministry site: http://georgiamfa.blogspot.com/

Also the President of Poland has established a site on his own Home page in order to get further information out: http://www.president.pl/x.node?id=479

Most .GG websites are at best only intermittently accessable as a result of the Russian cyberattacks.

Russian government actions over the past 96 hours- picking a fight with their small neighbour and then responding is overwhelming and totally disproportionate force have been a massive wake-up call and warning for all of us.

I, and others like Edward Lucas, have warned for some time about the nature of the Putin regime- their can be no doubt about their intentions, determination and recklessness with human life.

The West faces a simple choice: determined resistance to the tyrannical regime of the siloviki now, or open warfare when that regime finally pushes its luck too far.

It is a tragedy that the Georgian people have had to pay the price for Western blindness and willingness to placate the Kremlin.

Despite the tragic blunder of Iraq, despite the greed and folly that have led to the credit crunch, I do not think that it is too late to rally those who believe in the open society. It is time to do so.

Za Wasze Wolnosci i Nasze!

Sunday, August 10, 2008

Deliver Us from Evil

I can not deny that I am much troubled by the appalling news from Georgia. The obvious determination of Russia to destroy the hard-won independence of the country is the writing on the wall for the future. Russia has gone well beyond hard-ball. The bombing of Tblisi, and the news that the Georgians are evacuating Gori- a city well inside Georgia proper suggests, pehaps, that Russia intends to occupy much of the entire country.

The message that the Kremlin is giving is that any state that presumes to challenge Russian power can expect the use of every weapon in the Russian armoury against them. It means to that the probing and challenging at every turn that NATO has had to deal with over the past few years will now be stepped up. Russian money too can be used as a weapon- and it will be. My friend Edward Lucas has written well on the subject of the New Russian Hegemony, but even he is shocked, as am I, by the naked brutality that the Siloviki have displayed.

Troubled at heart I decided to leave London for a drive. I stopped at Waltham Abbey and inspected the purported grave of Harold II Godwineson- the last Saxon King of England, though in fact Godwine himself seem to have been a Dane. It did not seem a particularly happy example, since I see so many serious challenges to Britain, both internally and externally- it would not really be such a "Black Swan" to many of us, if we were living in the last days of the state that began nearly 950 years ago, with the Norman conquest.

My next stop was Greensted-juxta-Ongar where the oldest wooden Church in Britain stands. Although founded by St. Cedd in around 660, it now seems that the church itself was mostly constructed in the ninth century. Inside it is small, but it expresses the kind of ancient society that so inspired JRR Tolkien. The people who built the church were still speaking Old English.

Continuing my journey, I came to the chapel of St. Peter-on-the Wall: the first chapel built by St Cedd, after his journey from Lindisfarne to bring Christianity to the East Saxon Kingdom of Essex in 854. It stands in lonely isolation on the ruins of the Roman fort of Othona. The sun caught the light of the Blackwater and the open sea. The square stone building has been here for 1,400 years and more. It seemed appropriate to sit for a while in the chapel, bathed in the golden light of the westering Sun. As Nassim Taleb says, we don't know what we don't know, so perhaps faith is not as foolish as it appears. In any event faith has come more easily to me. I contemplated the images in my mind: the burning of Gori, the familiar fear in the faces. My mind dwelt on another war zone which I remember all too well.

I did not really know what to think or pray, however sceptically.

Quietly the phrase came: "Deliver us from Evil".

I silently made the whole prayer.

In that hallowed place, and after a day thinking about centuries, I realised that nature and the planet function on a far longer time scale than humans do, and perhaps this comforts me a little. That a brutal government in the Kremlin holds so much power and threatens us should stir us, should remind us that we have grown fat on prosperity and drawn envious eyes. Yet, we can still return to our core values, to build freedom and the open society. Now, more than ever, we must look to our values and to make amends where we have- as in Guantanamo- betrayed those values.

The simple, poor place reminds me of the value of simplicity- a thing I saw much of walking on the Road to Santiago. The battle for the Open Society is a moral battle. As the devices and desires of our many enemies are made plain, as fear walks abroad, I sense that we will need much courage- moral and physical- in the coming years.

As I leave the little church I am comforted a little- enough to return to my desk and face the latest horrors unleashed in the ancient Kingdom of Colchis.

The defeat of Georgia: A Western response to the disaster

Despite the withdrawal of Georgian troops from South Ossetia, the Russians are continuing their attack. It is now quite clear that Russia intends nothing less than the seizure of both South Ossetia and Abhazia, the total military defeat of Georgia and the overthrow of the democratically elected Georgian President, Mikheil Saakhashvili.

The folly of the Bucharest summit, which failed to invite either Georgia or Ukraine into NATO is now revealed. The objections of France might have been expected, those of Germany are simply reprehensible. The fact that Georgia, like Germany in 1949, faced partial occupation by Russian military forces and a Russian sponsored puppet government in its occupied territory was the reason to bring Georgia into the alliance and not to exclude it. Had the allied powers said to Germany then, "We would like to have you in NATO, eventually, but first please sort out your "internal affairs" with "East" Germany, then the Western powers may well have been defeated by the Soviet Union- to the ruin of us all.

If we were in doubt before, there can be no doubt now: Russia intends to crush all its opponents. They are not a strategic partner, they are a strategic opponent.

The first result of this curiously old fashioned invasion is that Russia must be expelled from The Council of Europe: the organisation that was founded to promote human rights and democracy in Europe. She should not receive an invitation to the group of industrialised countries - no more "G-8" summits.

It is time to return to the Cold war policy of containment. NATO bases should be moved to places like Romania and the Baltic to make it quite clear that the North Atlantic Treaty holds good for these former Warsaw Pact territories. Ukraine should be brought under the Western nuclear umbrella, and any Russian attempt against that country should be resisted fiercely.

Although the world is more interdependent than 20 years ago, the fact is that Russian gas is only one part of the equation: and they have no on else they can sell it to, since their pipes do not go to China, and it will be many years before they do so. In fact Russia is far more dependent on the large Western economies then we are on the much smaller and narrow Russian economy. If Russia chooses to try to use their large holdings of US securities as a political weapon, the US Treasury, or Freddie Mac/Fannie Mae should temporally void those securities held by Russian state and quasi-state actors (the precedent, ironically enough might be the 1998 Russian Partial default) and pay what is due to a trust account only paying out upon the restoration of Russian good behaviour.

Pressure should be put on the large number of Russians who come to the West: in particular the spies should now be expelled en masse. Those who support the Putin regime should find visas for shopping trips to the West much harder to come by.

Russia has crossed the line back to the Cold War, but this Hot War, planned and initiated by the Russian government, if not stopped immediately, should have serious consequences - for Russia.

For the West- it is a deafening alarm bell: we are as much under threat as the citizens of Tbilisi.

Saturday, August 09, 2008

UPDATE: Russia v Georgia

There are now reports that in addition to attacks on the Georgian cities of Poti and Gori, and the continuing fighting in South Ossetia, Russian troops are "invading" the other separatist province, Abhazia. If this is confirmed, then it is quite clear that we are not looking at a response to any Georgian moves in South Ossetia, but a much bigger operation: an attack on the territorial integrity of Georgia that must have been plned for some time.

Russia appears to be attacking its smaller neighbour on all fronts: In the separatist provinces, in Georgia proper and also it has launched large sale DoS attack against Georgian Internet addresses and websites (familiar as a tactic against the Estonians last year).

This is now an act of war, not only against Georgia- which has responded by declaring a state of war, and thus internationalising the conflict by bringing it under the purview of the United Nations- but also the West.

This is the "Rhineland" moment. Should what now appears to be a long planned Russian aggression against Georgia go unpunished, then Russia will feel that it may proceed with impunity against any other of its neighbours. This includes states protected under the North Atlantic Alliance. In short, unless the West intervenes now, we could be facing an all out conflict situation before too long, as Russia continues to proceed with its wilfully reckless and dangerous defiance of all norms of civilised behaviour. Russia refuses to respond to British pressure on the murder of Alexander Litvinenko. It continues to sanction extra-judicial murder of any citizen of any country that it deems to be hostile to its interests. It willfully breaks all treaties that it undertakes, including the international law of the sea.

Russia is a rogue state. Although I fear, as Edward Lucas does in today's Times that the West will fail in this challenge, the fact is that Russia is a threat to global peace and stability. If we do fail now, the consequences later could be even more serious- and bring us to the brink of a global war.

Russia v Georgia "The First Casualty"

As far as wars are concerned, it usually pays to be pretty sceptical, as American Senator Hiram Johnson said in 1917 : "The first casualty when war comes is truth".

However, with regard to the Russian-Georgian conflict that has turned hot over the past few days, the truth is actually quite clear. Russian troops are fighting inside territory that Russia, along with the international community, recognises as Georgia. The attack by Russian planes, now confirmed, against the Georgian city of Poti, is an attack by the Russian Air Force against Georgia directly.

Russia has attacked Georgia- not the other way round.

This is simply the latest act from the Kremlin that defies international law.

I have noted in the past the massive strategic significance of Georgia to the energy pipelines from Central Asia to the West, and while the West may be unclear about how important such a small country is, Russia has never forgotten and finds the Euro-Atlantic stance of the Tbilisi government intensely annoying.

However the fact is that Russia has simply gone too far.

Moscow must be told that they have crossed the limits of international patience. The international community must now act to contain the Kremlin and stop the belief that it may continue to choose to act beyond Russia's borders with impunity

Incidentally, Mary Dejevsky has certainly crossed the limits of my patience this morning in the The Independent- the idea of Russian military weakness looks pretty stupid to the people of Poti who witnessed this mornings attack, and the civil servants in Tbilisi who have been asked to evacuate their ministry buildings. Dejevsky's latest parroting of the Kremlin line is frankly contemptible.

Thursday, August 07, 2008

Black Swans, Open Systems and Fractal Geometry

Nassim Nicholas Taleb's book "Black Swan" is an expansion of the ideas that he put forward in his book "Fooled by Randomness- The Scandal of Prediction" . As regular readers will know, I think that the philosophical ideas that Taleb puts forward have profound political implications. In particular ideology as a Grand Theory- that is a systematised explanation of everything- falls to pieces in the face of the uncertainty that is the basis of empiricism.


Intuitively I have always distrusted grand theories, and as an undergrad and as a research student I proceeded from the basis of a partial theorist- in other words that most human activities, especially socially interactive disciplines like politics, are not closed systems, isolated from their context, but open ones. Marxists, by making a statement such as "All history is the history of class struggle" show that they believe that history proceeds from the basis of an ideological driver and thus is, by definition, fundamentally a closed system.


Liberal philosophers, such as Mill, Hayek and Popper, are far more interested in the problems of uncertainty. Their empiricism implies limits to human theorising and therefore Liberalism is by definition a partial theory, and by the implied acceptance of human activities being within an open system also accept that their ideas incorporate structurally the idea of uncertainty.


Taleb by describing the fundamental uncertainties of how humans perceive and interact, has mirrored the work of his friend and collaborator Benoit Mandelbrot, whose work on fractal geometry has pointed out mathematically the fundamental uncertainties at the very root of maths. The "fuzziness" of fractals is mirrored across the entire structure of the Universe- including the Big Bang, where it becomes clear that that the precise beginning of the Universe breaks down into the fractal fuzziness of quantum mechanics.


Even more critically, Taleb talks about the high impact of what the US military inelegantly call "unknown unknowns". These "Black Swan events", are often so transformational that they require a complete alteration to are pre-existing world view, which again carries a lightly inelegant moniker: "the paradigm shift". In fact, humans shift their perceptions to try to rationalise the random.


So what, you may say, has this piece of esoterica got to do with political ideology?


The fact is that our politicians do not understand why they are being dishonest with their electorates. They do not understand that any given policy has little direct effect that can be predicted, but may have a large number of unpredicted effects- not all positive. Of course when politicians talk about unpopular or nasty things they call it "making hard choices", little understanding that the effects were, from their point of view, more or less random- no choice involved.


Even more fundamentally, the question of closed political ideology forces political leaders to respond to events in inflexible, pre-determined and usually wrong ways.

The only intellectually honest response is to focus not on political policies and planning, but on the political mechanism itself. The question then becomes not one of desired policy outcomes, but rather the high themes of political process. Simple goals, based on the knowledge that politics is indeed an open system. It is only by working on establishing open societies that we can establish a political structure that is robust enough to maintain the Liberal idea of freedom.

That requires political leaders to admit what they do not know.


It probably requires the reversal of the increasing separation of politicians into a separate, and increasingly professional cadre, as lamented by Peter Oborne in his book "The Triumph of the Political Class". It will also require the deconstruction and simplification of what he state chooses to do. In order to be robust enough to face the periodic crises of the unexpected, if it is to retain the values of freedom and openness, democratic society will need to focus on the uncertain reality, rather than the comforting myths.


This is a challenge that few understand- but our government and society will need to get a whole lot smarter, if it is to survive at all.