Wednesday, 29 December 2010

A Very Tangled Web

No country better illustrates the tangled web of political and economic relations in the Middle East than the Republic of Cyprus. This divided island about 40 miles off the southern coast of Turkey has managed to maintain useful relationships with the Arabs and Israel while simultaneously poking a finger in the eye of its large, implacable foe – Turkey.

The current issue involves the large deposits of natural gas and oil that have been discovered in the waters of the eastern Mediterranean. Rather than create a deadly free-for-all about who owns what Cyprus has negotiated what it calls Exclusive Economic Zones carefully delineating areas of economic interest with Israel, Lebanon, and Egypt. No agreement with Syria has been reached yet, but Syrian president Bashar al-Assad recently paid a two-day visit to Cyprus to discuss areas of economic cooperation. Given Syria’s close ties to Turkey, this visit has to be counted a major success for Cyprus.

The latest economic zone agreement with Israel annoyed the Turks who went so far as to call in the Israeli ambassador to express their displeasure and note that this agreement interferes with efforts to re-unite the island. As Turkish journalist Burak Bekdil notes, the Israeli ambassador could well have asked why similar concerns were not expressed with Lebanese or Egyptian agreements. Semih Idiz noted in another column that the waters of eastern Mediterranean are heating up with the hydro-carbon discoveries.

Turkey also maintains that these agreements infringe upon the rights of the self-proclaimed statelet of the Turkish Republic of Northern Cyprus and make any reunification of the island more difficult. The only problem is that no country other than Turkey recognizes the TRNC. For the rest of the world the Republic of Cyprus is the only legitimate government of the island.

The island of Cyprus has been divided since 1974 when Turkey landed troops and occupied about 30% of the island. In the Turkish version the landing was necessary to protect the Turkish minority from ethnic cleansing by gangs of Greek thugs. In the Greek Cypriot version the Turkish military landing was an invasion pure and simple. The Turks established something called the Turkish Republic of Northern Cyprus that is officially recognized only by its patron Turkey. The Republic of Cyprus, meanwhile, is the internationally recognized government of the island and is a member of the European Union.

There have been half-hearted attempts to re-unite the island, but, given their strong international position and thriving economy, it is hard to see why the Greek Cypriots would be interested in a deal. Turkey, on the other hand, would love to see a settlement for at least two reasons. Its refusal to recognize the Republic of Cyprus as the legitimate government of the island is a major block to its EU pretensions. Second, maintaining the Turkish Republic of Northern Cyprus, costs the Turkish treasury $400 million a year – money that could be better spent in Turkey itself. In addition, Turkey continues to station about 30,000 troops in the northern part of the island. The economic gulf separating the two sides of the island is only widening as the 800,000 Greek Cypriots enjoy a per capita income of $28,000 while the per capita income of the 256,000 Turkish Cypriots is less than half that amount.

The Republic of Cyprus also benefits from its 10% corporate tax rate for onshore and offshore companies. It is interesting to note that the European Union is demanding that Ireland increase its similarly low tax rate, but no one says anything about Cyprus. Banks in the Republic of Cyprus have also made themselves useful to Russians looking for somewhere to keep their piles of cash. The TRNC meanwhile has no international trade (other than with Turkey) to speak of, and relies heavily on casinos that attract the high rollers from Turkey where casinos have been banned for several years because of their connection to organized crime.

Despite Turkey’s push to improve ties with the Arab world, no Arab country has reciprocated by daring to recognize the Turkish part of the island. Even Turkey’s cousins in Azerbaijan and close Moslem brothers in Pakistan have refused recognition. Their ties with the Republic of Cyprus, and by extension Greece and the entire European Union, are too valuable. One small example is that when visiting many Arab countries I often recall commenting on the quality of various products imported from Cyprus. This comment would be greeted with hoots of laughter, and I would be told that the product was actually manufactured in Israel. It would be sent to Cyprus, have the labels switched and then sent to countries that officially boycott goods from Israel.

Among other things these agreements clarify Israel’s right to explore and produce gas and oil from offshore fields. The stakes for Israel are very high as the latest discovery indicates reserves of 16 trillion cubic feet of gas at the Leviathan structure, about twice the amount discovered at the nearby Tamar site. These major discoveries could turn Israel into a gas exporter, and could finally contradict the old joke that Moses led the Jews around the Middle East for 40 years and finally put them on the only piece of land that didn’t have oil. Moses said nothing about offshore riches.

The oil and gas discoveries in the eastern Mediterranean are a potential economic ‘game changer’ for the region, and one can only hope that these new economic zone agreements can avoid turning this positive development into yet another reason for conflict.

Wednesday, 22 December 2010

A City to Experience in December

There are cities best experienced in the warm spring and summer months, and there are cities that shine brightest when snow starts to fall. Paris and Rome are famous for their sidewalk cafes filled with people watching other people – most of whom are scantily clad wearing very expensive thin bits of leather on their feet. Very nice in May; very cold, wet and miserable in December. Parisians and Romans don't do puffy down parkas and sensible shoes. The trouble is you can not even warm up by going inside, where you are often greeted with the incredulous attitude ‘This is Paris. You want central heating too?’

Then there is Vienna. This old imperial city is pleasant in the summer but doesn’t really display all its finery until December. The Christmas markets, the concerts, the decorations down Karntner Strasse, and, perhaps most of all, the welcoming, warm coffee houses where you can fill the long hours between breakfast and lunch by indulging in rich coffee topped with thick cream and a few of the ever-so-delicate pastries. You are welcome to stay as long as you want, and most coffee houses provide newspapers to pass the time while you sample the Sachertorte or perhaps the Esterhazy Torte.

Unlike Londoners, the Viennese do not go wobbly in the knees at the first hint of snow. Streets and sidewalks are cleared faster than ladies can get their fur coats out. One of the best views of the ornate, imperial architecture decorating Vienna like an operatic stage set is from the inside of a warm tram as it rattles gently around the elegant Ring in a light snow fall.

But most of all, December in Vienna is a peak of the music season. Vienna is a city that takes music very seriously, indeed, and it’s best to book tickets at least two months in advance. One December we forgot which venue had our particular concert. When we asked at the main concert hall, the Muzikverein, the clerk put on a sympathetic smile and reminded us that there were concerts in 40 different locations that evening.

One wants to be very careful in Viennese Advent concerts where there is the possibility of audience participation. We were at such a concert looking forward to joining in a rousing rendition of Silent Night when the father of the family of four next to us pulled out a pitch pipe and made sure everyone was in tune and prepared to sing in harmony. Right. We decided it might be best if we just listened.

Vienna is one of the few cities we have visited where the churches are packed on Sunday morning. The ancient Gothic masterpieces may lack any heating, but this does not stop the well wrapped crowds from getting there at least half an hour early. While the Catholic liturgy undoubtedly draws a good many parishioners another attraction is the full orchestra and chorus and enormous organ performing any one of the great masses of Mozart, Bach, Haydn, Handel, Beethoven – just to name a few. These churches are wise enough to put the schedule of masses on their web sites.

It is easy to forget that not that long ago Vienna was the intellectual and musical capital of Europe. The musical legacy of Vienna speaks for itself, and a brief walk around the courtyard of the university filled with busts of famous scientists reminds us of the intellectual power of a city where Sigmund Freud attended concerts directed by Gustav Mahler. The 20th century was not kind to Vienna. The tottering Hapsburg Empire collapsed after World War I leaving Vienna with the architectural accoutrements of an empire and the political power of New Jersey. The rise of the Austrian Nazis revealed the darker underside of the society, and haunting walks through the Jewish district of the city bring home the horror of those atrocities. While there are some who would like to pretend those events never happened (Beethoven, of course was Austrian while Hitler was German), modern Vienna has become a vibrant melange of cultures that were once a grudging part of the political empire.

Even the Turks, who twice besieged the city, have become an integral part of the city in many different ways. Those people who miss the lazy lunches alongside the Bosphorus need go no further than the Kervanseray restaurant in the middle of the city to get the same quality seafood and service. After a few days of Central European meat and potatoes – however disguised – it’s nice to taste the fresh vegetables and green salad more common to the Mediterranean than the Danube.

Vienna might be a member in good standing of the European Union, but at least one part of the city is a very reluctant member of the 21st century. Enjoying good cigars is as much of the city’s life today as it was in Freud’s time. Bars that in the rest of Europe would ban smokers to frigid gardens offer a welcome haven to cigar smokers.

Somehow, in Vienna this fits. It is not California with its brash, thrusting modernity and cadres of self -righteous politically correct zealots roaming the streets stamping out any deviations like red meat and cigars. This is Vienna, a city that has seen it all, lived through it all and has found a way to combine the best of the past with the reality of the present.

Sunday, 19 December 2010

A Dangerous Waste of Time

The wisdom of the Founding Fathers in making sure that the House of Representatives has nothing serious to do with foreign relations is being demonstrated once again. It’s doubtful that most members can remember the capital of any neighbouring state let alone determine genuine national interest beyond the boundaries of their own district.

Now the House members are being asked to consider a resolution regarding events that happened almost 100 years ago in a part of the world they can find only with a satellite navigation system. Usually such resolutions are nothing but comic relief. However, this one poses a major problem for the United States. The resolution being considered includes very bad history and even worse foreign policy. If the House really wants to make even more trouble for the United States in an already troubled part of the world this resolution is the way to go.

Groups that say they represent the Armenian diaspora are trying, as they do every year, to get the House to pass a resolution labelling Ottoman Turkish actions in 1915 against the local Armenian population as genocide. They are trying to get the Democrat-controlled House to pass this resolution before the Republicans, traditionally less sympathetic to their cause, take over next year. Why is this seemingly innocuous, arcane, powerless resolution so potentially damaging?

A little history is helpful. As some House members might recall there was another war going on in 1915, and Turkey was allied with Germany against England, France and Tsarist Russia. The United States had not yet entered the war. Russian armies were moving into Eastern Turkey, and already the Ottoman armies had lost 90,000 men in one major engagement. Many Armenians living in that area sided with their co-religionist Russians against the Moslem Turks, an act the Turks consider treachery.

The Ottoman government of the time, a bunch of thugs mistakenly labelled as Young Turks, decided to deal with this threat of collaboration by removing the Armenian population from the area. This act in itself, however cruel, was not the first time in history that belligerent nations had taken such a step, nor will it be the last. What made this one different was the wholesale cruelty of the forced marches, murderous attacks by marauding gangs of Kurds, and the callous indifference of the government in far away Constantinople to the fate of hundreds of thousands of innocent people. The mountainous region of Northeastern Turkey that once was home to a vibrant Armenian community now contains the haunting ruins of ancient Armenian churches and crumbling, vacant villages.

Scroll forward a few years. Germany and Turkey lose the war. Victorious allies decide to carve up Turkey and give pieces to Greece, Armenia, France and Italy. Russia suffers a revolution and Lenin takes over. The old Ottoman regime crumbles and a vigorous new Turkish republic is formed. The new Turkish nation refuses to roll over, and repudiates this 1920 treaty. Eventually they push out the invading Greeks. France and Italy quickly lose heart and give up their claims on Turkey. Lenin, in dire need of friends, signs a deal with the new Turkey that sets the eastern border of Turkey – effectively ending the dreams of the resurrection of Greater Armenia. Armenians exact some measure of revenge for the deportations by assassinating two members of the exiled former Ottoman ruling triumvirate. The Russians dispatched the third one. No tears are shed. Case closed? Unfortunately, not.

The Armenian community in Europe and the United States continues to clamour loudly to have the 1915 deportations declared genocide, similar to what the Jews suffered under the Nazis. It is important to note here that there is no unanimity among historians on this point. Several noted specialists like Bernard Lewis and Norman Stone will acknowledge the bloody massacres but stop well short of calling them genocide. No credible evidence has been produced so far that the Ottoman government of the time, unlike the Nazis, ordered the systematic destruction of the entire Armenian community. It is undeniable that the massacres occurred, and it is shameful that the Turkish government has not done more to acknowledge this. But does this by itself constitute genocide? That genocide occurred is an article of faith with the Armenian diaspora, one they proclaim loudly and vociferously. But, unfortunately, that alone doesn't make it true. There is another side to the story. The one thing for sure is that the last place to determine the rights and wrongs of this issue is the United States House of Representatives.

Leaving aside the fog of history, why is the Armenian diaspora pushing so hard for the United States to declare these events genocide? What do they really want to gain? Do they simply want to be remembered as history’s victims? Are they seeking monetary or territorial reparations from modern Turkey? Over the years the vicious extremists of this diaspora have assassinated innocent Turkish diplomats and threatened historians that disagree with their claims. Is more of this what the House wants to encourage?

And more to the point, do they really expect the United States to jeopardize its relations with a key NATO ally to satisfy the claims of one single ethnic group? The very well-informed, thoughtful Turkish journalist Semih Idiz points out in a recent column in the English language Daily News that such a resolution would be God’s gift to all the anti-Americans throughout the region. Current relations with the Turkish government may be difficult, but they would be far worse if such a resolution passes. He paints in crystal clear terms what such a resolution would cost the United States.

The Armenian lobby is politically strong and has traditionally supported the Democrats. Nancy Pelosi and Senator Barbara Boxer are just two of the politicians that have benefitted from Armenian support. They should not be deluded into thinking that American-Turkish relations would remain the same if this non-binding resolution passes. If the House really wants to help resolve this issue it would pass a resolution calling on the parties directly involved to do so. Invoking American national interest in this bit of ancient history is a dangerous waste of time and effort.

Friday, 17 December 2010

A Country of Contradictions

People in Europe and the United States can be forgiven for being confused about Turkey. Many Turks themselves are confused. The country defies simple classification and labels. Friend? Foe? Autocratic? Democratic? East? West? Sticking any single label on Turkey distorts reality. This large, dynamic country is filled with contradictions, and those contradictions and tensions are distilled to a fine essence in the megalopolis of Istanbul.

Claire Berlinski mentions some of these tensions simmering just beneath the surface of Istanbul in her perceptive article Weimar Istanbul. She describes the uneasy shift of power from the old social and economic elite of the city to the newly arrived masses from the countryside. The government is exacerbating this tension, according to Berlinski, by its heavy-handed response to any criticism and the mass trials of its opponents that bear an unfortunate resemblance to the Soviet purge trials of the 1930s.

The contradictions of Istanbul begin with the very name. In seeking to do away with any association with the ancient Greek city of Constantinople the founders of the Turkish Republic decided the name should be changed to Istanbul. Fine, but the word Istanbul is merely a short version of the Greek phrase that means ‘to the city.’ The Turkish nationalists would become apoplectic if they realized that the word for the heartland of Turkey, Anatolia, derives from the Greek word for East, Anatoli.

Beyond semantics, the enormous demographic shift from the country to the cities has transformed the city far beyond what I remember from when I first arrived in 1964. Then, the population was less than two million, there were no bridges across the Bosphorus, and you could go for walks in the green hills on either side of the strait. I remember swimming across the Bosphorus in 1964. Now, there’s so much ship traffic I wouldn’t put my toe in the water.

Less than 50 years later the population has exploded to 13 million, there are two bridges spanning the Bosphorus, and ugly new housing developments have ripped up the once lovely green hills. Unlovely, brutal, high rise apartment complexes stomp across the western and eastern edges of the city. It now takes well over an hour, on a good day, to drive on the motorway from one side of the city to the other. The graceful old city that had withstood so many armies and so much political turmoil was finally overwhelmed by another Eastern invasion. An Anatolian monoculture has replaced the multicultural, international character of old Istanbul where several languages could be heard in the space of a few city blocks.

Old Istanbulus (natives of the city) lament this change. In their selective memories they recall the pleasures of a polyglot city where they felt proud to be part of Ataturk’s brave experiment to build a modern nation on the ashes of the Ottoman Empire. They were the vanguard of this experiment and devoted their lives to making it work. The occasional intrusions of atavistic, nationalist frenzy that drove out most of the remaining Greek population are remembered more with sorrow than with any sense of triumph. One frequently heard complaint is that the villagers who have descended upon Istanbul ‘simply do not understand what this city means. They have no appreciation for what was here.’

Beyond the yawning cultural gulf between the natives of Istanbul and the new arrivals is the shift in political power. The ruling Justice and Development Party (AKP) has very cleverly capitalized on the resentment felt by people in Anatolia toward the traditional Kemalist (Ataturk) elite. There are maybe 10 to 15 million very well educated, middle class and wealthy (some extremely wealthy) people in Turkey. There are also 60 to 65 million undereducated people who sit on the bottom of the economic ladder. Unemployment and underemployment among this group are major problems. In Istanbul alone, according to one estimate, the unemployment rate among the young new arrivals is more than 15%. The AKP has successfully appealed to the deep resentments of perceived injustice and has promised to re-align the social and political order of Turkey. Where the Kemalist elite were stridently secularist, AKP has made a point to stress Turkey’s Islamic heritage. Conservative and religious symbols like the headscarf are much more prominent now than 1964. I have often heard well dressed Istanbul women confront a headscarved villager who ventured into an upmarket neighbourhood. “What are you doing here? Go back to your village.” There is also a shift in economic power where entrepreneurs from Anatolia who just happen to support AKP are rapidly becoming extremely wealthy.

The AKP says it is simply expanding the concept of democracy in Turkey as it hounds the Kemalist judiciary and the once-proud military. An increasing number are sceptical of this claim, and recall that the prime minister famously described democracy as a train that you leave once you reach your destination. They wonder just where the destination is, and what awaits them once the train gets there.

The contradictions that define modern Turkey – Islamic/secular, autocratic/democratic, rural/urban, old/modern, liberal/conservative, nationalist/internationalist – make the American culture wars seem quite mild. One can only hope that foreign politicians, Americans in particular, can avoid stale stereotypes when dealing with Turkey, and realize that the dynamic and volatile mixture of that country does not fit easily into one narrow container.

Wednesday, 15 December 2010

Where's The Beef?

The real blow for Wikileaks founder Julian Assange is not the pending Swedish legal action, but that his so-called revelations have had so little impact. In short, other than showing American diplomats doing their jobs skilfully and often with a great deal of insight, the Wikileaks cables are feeble stuff. Certainly some of them are embarrassing, although I doubt that foreign leaders entertain any doubts about the opinions held by other countries. But the big break through, the global game changer simply isn’t there. The big players are still the big players, and the bit players are still the bit players. It won’t be long before Assange suffers the greatest ignominy of all and the sheer boredom of these cables drives them from the lead story to somewhere just after the Nebraska corn reports.

What these leaks really demonstrate is that Assange, like many of the hackers who flock to his call, has only the most superficial knowledge and understanding of the material he is supplying. Take him away from bits and bytes and he wanders about helplessly like a blind man without his cane in a strange world populated with real people. He is the ultimate self-important conspiracy buff who could care less about actual facts. The facts only get in the way of a good conspiracy complete with black helicopters, financial maneuvering, and devious Americans plotting to control the world.

He and his mates merely used the key that someone gave them to peer into a box of other people’s mail. This act alone, the opening of someone else’s box, is their goal. What the cables actually say is irrelevant to the inhabitants of conspiracy world. The mere fact the cables were labelled secret is enough to get their juices going. Like all good conspiracy buffs the Wikileakers don’t, or rather can not, offer any analysis or context for these cables. The label ‘secret’ is supposed to be proof enough of the evil intentions of the United States. They miss the point that even an order for a tuna fish sandwich can be labelled secret these days. Unless, of course, you believe that a sandwich order with ‘mayo’ or to ‘hold the mayo’ is code for an attack on Iran. God knows what they would make of an order for a Philly Cheese Steak?

When inhabitants of this world emerge blinking into the bright light of reality we often find them totally inarticulate in any human language. I defy anyone to get through Assange’s rambling, incoherent justification for the leaks. These leaks are somehow supposed to make the world more secure and peaceful? Somehow they are supposed to ‘humble’ the United States? What is he talking about?

His failure to understand any context is a little like a master chef presenting customers only with little bits of dried fruit and claiming they were the entire Christmas pudding. Fanatics thinking this particular chef is infallible will dig right in with great gusto and proclaim that this is the best Christmas pudding they have ever tasted. Slightly more discerning customers just might question the absence of any other ingredients.

These cables, in themselves, reveal very little about the formation of American foreign policy. Yes, they are titillating, but they are just one of the thousands of ingredients that ultimately determine what course of action the United States follows. The fact that an employee of some American embassy reports that a local newspaper says Prime Minister X is a crook isn’t going to change much. He or she wouldn’t be the first crook the U.S. has been forced to deal with. He may buy a great many very expensive American toys, so for the time being he is ‘our’ crook. The views of the State Department have to compete with dozens of other sources competing for the ear of the President. Creation of foreign policy is not a neat, clear-cut, simplistic process. Sometimes countries are allowed the luxury of planning. Most times they are forced to react to events beyond their control and scramble to come up with a policy.

The one possible positive development from these leaks is that the State Department may reduce the number of items it labels secret. Remove the thrill of opening someone else’s mail, and the hackers could lose interest very quickly.

It’s counter productive to over-react to these leaks. Legal assaults on Assange will merely inflate his already huge self-esteem and make him more of a hero to the chattering classes of the world who enjoy the entertainment value of a good conspiracy. Hackers will eat more junk food and go into sugar induced hyper-drive in an effort to defeat the ‘foes’ of transparency. Good luck to them when the hack into the Kremlin files. They might need more than a good PR agent and a lawyer.

Wednesday, 8 December 2010

Keep The Patient Alive

The European Union’s remedies for the economic problems of Greece and Ireland remind me of the American military approach to Vietnam. Destroy entire villages in order to ‘save them from communism.’ The EU and IMF efforts to rescue the Greek economy from its well-noted self inflicted wounds seem to be destroying any chance the country has to achieve any growth at all, let alone the growth required even to begin to repay its debts.

The indictment of the Greek economy is very long, and every one the charges is valid. Irresponsible borrowing, bloated government sector, ridiculous bureaucracy, interesting national accounting, failure of tax collection, protection of several industries, over-generous pension system, corruption, etc., etc. In short, Greece had preserved in aspic the last Soviet economy of Europe. It was a colourful museum display, but sadly ill-suited to the real world. The announcement late in 2009 that the country would have trouble repaying its debts was merely the rude awakening from the decades-long nightmare suffered by anyone who had tried to do business in Greece.

However, the self-righteous anger of the Germans and others at having to bail out this fiscally-challenged distant relative is overdone. Their mutually exclusive insistence that Greece do a root-canal on its entire economic structure by becoming, well, more German and simultaneously repay its debts on time is ensuring that Greece slides ever deeper into a hole from which it will emerge only with great difficulty.

Anyone who can count to 10 without using his fingers knows that Greece will have to, at the very least, reschedule some of its debt and get an extension on repayment of the €110 billion European bailout. The economy has ground to halt. Consumers aren’t spending what little cash they have. Banks are hoarding their funds and not lending very much. Even the almost daily demonstrations have lost their zip.

Sales of electronic consumer goods were down 30% in October. Car sales in September were down 44% in September. These figures, bad as they are, don’t tell the whole story. One leading retailer told me the damage extends beyond declining sales. Suppliers, once happy with long payment terms, are now demanding faster payment. Insurance cover for the goods is getting more expensive. Terms of whatever bank loans he gets are becoming more difficult. All of these issues cause a company’s cash to drain rapidly.

The only items that seem, based on observation, to have resisted sales decline are cigarettes and coffee. Coffee bars are filled with people – and smoke. Greece did at one time enact a non-smoking law. But the public outcry about having to cope with the unbearable stress of changing their economic lives without the comfort of a smoke was too much for any government. Besides, in a country where no one can collect income tax, how zealous are they going to be about stopping someone from lighting up in a restaurant?

The long term prescription for the Greek economy is correct. All the deeply ingrained imbalances absolutely must be corrected, but right now the patient needs food and water if it is not to become a permanent ward of the European Union. Exactly how this is accomplished is a problem for the European leaders, but the reform process must be accompanied by a serious amount of cash if the Greek economy is to reach sustainable recovery.

The trouble is that the leaders of the European Union appear as confused as the man on the street. The prime minister of Luxembourg and the Italian minister for the economy and finance recently wrote an essay in the Financial Times that called for issuing Euro-wide bonds. In the very same newspaper the German finance minister poured cold water on that idea. The next day German Chancellor Angela Merkel officially drowned the idea at birth. EU president Herman Van Rompuy says ‘something’ must be done. He says the fate of the European project is at stake. With so many people hyper-ventilating it is difficult to plot a smooth course.

Austerity alone is not going to solve the problem. Trying to force austerity on people like the Greeks who associate it something cold and northern is a little like forcing Ann Widdecombe into one of Carla Bruni’s bikinis. There will be slippages. Sooner rather than later the people of Ireland, Greece, Portugal and Spain simply will no longer accept the degradation of their life styles for what they believe is only the salvation of the banking system. This could open the door to large-scale social upheaval and the emergence of people with dangerously simplistic answers. Then, instead of carefully planned re-scheduling we could wind up with immediate in-your-face defaults as a popular policy tool. Argentina provides a clear example of the attractions of this course for unscrupulous politicians. The results for the financial stability of Europe would be much more severe than voluntary, carefully planned action.

But the first goal should be to keep the patient alive. In contrast to the Europeans the Americans seem to be focusing on immediate health issues as the Federal Reserve continues to pump money into the economy. Long-term therapy is a luxury usually reserved for patients who at least have a pulse, and right now the economic pulse of Greece and others barely registers.

Thursday, 25 November 2010

Time to Change the Play

Just how long does it take the leaders of the European Union to accept the obvious? They remind me of the old football coach who kept running the fullback into the line over and over again despite never gaining more than a couple of yards. Time to change the play, coach.

The by-now clear-to-all-outside-Brussels reality is that the grand single currency program was launched with fatal flaws, flaws ignored by all except a few curmudgeons whose warnings were drowned out in the euphoria of the moment. To point out the obvious absurdity of linking the German economy with the likes of Greece and Ireland with the single strand of a thin, very thin monetary union was to stand against the holy grail of a unified Europe, a Europe that could stand up to the United States and other large powers, a Europe that could play a major role on the world stage. The price of that conceit is that the European Union now can not even get a ticket to the cheap seats in the balcony let alone play on the stage.

Countries like England, who wisely stayed out of the common currency, and Norway, who stayed out of the entire European Union project, are quietly congratulating themselves on dodging this particular bullet. Despite not being on a member of the common currency England has offered to lend £7 billion that it doesn’t really have to the Irish. This has nothing to do with saving the Euro and everything to do with preserving England’s lucrative trade with Ireland. Tough to sell anything when the customer is flat broke.

A logical person might think that when confronted with a series of overwhelming problems it is time to stop making them worse. In other words, stop digging. But no, the leaders of the EU continue to wield shovels at a faster rate even as they slip out of sight beneath the surface. The Greek economic myth imploded last spring and is now just barely surviving on a €110 billion life support system. Much more will be needed if the patient is going to make it even as far as intensive care. The only visitors allowed right now are family and friends from the IMF. The once-proud Irish banking system turned out to be a massive IED, much more lethal than anything the amateurs in the Taliban can come up with. We now have the odd situation where the EU is trying to force a loan on Ireland, but only if the enterprising Irish raise their tax levels to the outlandish French and German levels. Ireland is, naturally, baulking at this.

We still hear the EU leaders talking about ‘European’ rescue plans when everyone this side of Mars knows that in this instance ‘Europe’ means Germany. Tough to see Bulgaria or Romania coming up with much in the way of aid unless, of course, they turn to the best entrepreneurs in Europe, their home-grown Mafia. Just think of the vigorish the Mafia loan-sharks could get lending the odd billion Euros to Ireland, Greece or Portugal. At least the Mafia would have a chance of getting its money back.

It might come to this because the last I heard Hans in Stuttgart was not overly thrilled about handing out good money after bad to what he considers shiftless bums on the periphery of Europe. German Chancellor Angela Merkel is clearly feeling the heat from voters and might, just might, force the wooly thinkers in Brussels to face some cold, cruel realities.

Instead of devising ever more expensive temporary aid packages why don’t the geniuses who got Europe into this mess spend their time redesigning the project? Such an effort would require first of all throwing out some worn-out old taboos warning that any redesign would ‘wreck’ Europe and cause chaos. Rubbish. It would very probably save the European project by demonstrating common sense that is sorely lacking. The markets are vibrant enough to absorb a redesign, and some techie deep in the bowels of Goldman Sachs would soon figure out a way to make money on the deal.

There is absolutely no way that small countries like Portugal, Greece or Ireland should be in the same currency union with countries like France and Germany. Either there has to be complete political as well as economic union in Europe or the peripheral countries have to be allowed to go back to their local currencies – or at the very least a subordinated Euro. Such a move would give them much more flexibility to deal with economic problems. Of course this would be difficult and challenging, but hardly impossible. It’s time for the people in Brussels to start earning their salaries.

The alternative of muddling though is simply neither socially equitable nor politically feasible. The economic and social changes being forced on these countries just to keep them in the Euro will condemn them to several years of very low to no growth and continued social upheaval. Essentially the people are being asked to devalue their living standards just so the Euro project can continue as originally designed. Any politician backing such a program will assure himself of an early retirement.

It’s time for the EU to swallow some pride and face reality. Have the courage either to go forward openly (a word the Eurocrats hate) into an honest and full federal union or re-design the currency union. The time for the usual Euro-fudge is long over.

Wednesday, 27 October 2010

An Awkward Moment for Turkey

Turkey is right now in a spot it had hoped to avoid. It has to make a decision, a decision between its new best friend Iran with all its despotic client states and organizations and its traditional allies in the West. The much vaunted ‘Zero Problem’ initiative of Foreign Minister Ahmet Davutoglu has now generated Turkey’s biggest headache since the ruling Justice and Development Party (AKP) came to power in 2002.

Turkey has been a member of NATO for more than 50 years and has the second largest army in the organization. Now NATO wants to install a missile shield against potential threats from certain countries, namely nuclear wanna-be Iran. One leg of this shield is scheduled to be placed in Turkey. Ouch!

Davutoglu and his boss, Prime Minister Tayyip Erdogan, are frantically trying to reconcile the irreconcilable. Placing the missile shield in Turkey could jeopardize their burgeoning trade and energy relations with Iran. Refusing to place the shield in Turkey would just about kiss good-bye to whatever pretensions they had about joining the European Union as well as calling into question their very presence in NATO. Who needs a partner that bails out when the going gets tough?

One factor in the equation is economic; fast growing energy-starved Turkey needs Iran’s natural gas and Turkish companies need a place to expand their exports. But an equally important factor is that the balance of public sentiment has shifted dramatically away from the West. Turkey was founded in1923 by a military caste that equated modernization with Europe. Everything associated with the collapsed Ottoman Empire; its religion, its imperial status, and its ties to the Arabs, were regarded as anchors that held the country back and consequently suppressed.

Several developments in the last decade have shifted this orientation, and encouraged Turkey to seek a more independent role. If this means closer relations with pariah states like Iran, so be it. This policy plays very well with the Turkish masses who resent the condescension from Europe, the ambivalence over Turkey’s EU membership bid, and the blundering American policy in the Middle East.

AKP has its roots deep in Turkey’s long-neglected Islamic and socially conservative traditions. It has openly championed a resurgence of religious observance in a country whose founding principle is secularism. This move has created a deep fracture with the ruling secular elite that had run the country for 80 years. Suddenly, slavishly following European fashions and culture has been replaced by more conservative social and religious trends. Turkey is re-discovering its deep religious and historical ties to the Arab world. Damascus, Cairo and Dubai are now challenging Paris, London and Rome. Not all the Arabs are thrilled about Turkey’s renewed interest in the Islamic world. To them it comes too close to the Ottoman Empire that ruled much of the Arab world for more than 400 years.

Nonetheless, this shift in Turkey’s domestic priorities has opened the door to a more assertive, independent foreign policy. Turkish leaders no longer feel compelled to check with Washington and Europe before starting a new venture. They have trumpeted the new policy of ‘strategic depth’ and avoiding problems with one’s neighbours. This plays very well with the Turkish masses whose pride has been dented by constant barrage of criticism and unsolicited advice from EU bureaucrats. With the economy growing much faster than Europe’s the Turks don’t think they have to take advice or orders from anyone.

This is all well and good. But this new policy is much better on paper than in reality. It is a worthy goal to have zero problems with one’s neighbours, but what happens when your neighbours are problem areas like Syria, Iraq, Iran or Armenia? What do you do when they have problems with each other? How do you reconcile your policy objectives to Iranian support for Armenian genocide claims?

You can generate favourable headlines and demonstrations by asserting your distance from the West. But are better relations with places like Iran and Sudan going to replace NATO or the EU? More than 50% of Turkey’s exports go to the European Union. There is simply no way that the Middle East can replace the purchasing power of Europe that is so important to Turkish exports.

Turkey wants to be more independent. Fine. How to accomplish this without becoming isolated? If the West tires of Turkish equivocation where is Turkey going to turn? Turkey is big, but not big enough to forge a completely independent foreign policy like India, Brazil or China. Do the Turkish leaders believe that alliances with Iran, Syria, Hamas and Sudan will help them play a larger role in world affairs?

Turkey constantly says it opposes a nuclear-armed Iran. Yet it has done very little to hinder this development. It says sanctions won’t work and negotiations are the only way. What negotiations? With whom? The Iranians have consistently rejected any Turkish overtures to negotiate with the United States. Turkey’s stance on sanctions is just a bit disingenuous. Several of its companies are doing a booming business with Iran, and the government is loathe to see that stopped. The still-born effort with Brazil to shift some of Iran’s uranium to a third country came to nothing when the United Nations Security Council ignored it and passed the sanctions resolution despite a Turkish veto. Brazil later regretted its role and said it was dropping out of any future talks with Iran.

The Turkish foreign policy team is clever, and it is going to take every ounce of its skill and cunning to satisfy the seemingly mutually exclusive objectives of pleasing its NATO allies and Iran.

Monday, 18 October 2010

Istanbul a Financial Centre? Not Quite Yet.

After decades of a low to non-existent profile in the region, Turkey is now aggressively asserting its political and economic strength throughout the Middle East. As the country with the largest economy and conventional military force between the European Union and India, Turkey is staking a claim to a leadership role throughout the Islamic world. How many other Islamic countries agree to this claim is another matter altogether.

This claim has now extended to the finance sector. No less than the deputy prime minister for the economy now says Istanbul will become an international financial centre to rival Dubai or eventually even London. For those with memories longer than Twitter such a claim is empty rhetoric, merely an exercise in ‘box ticking’ where the box is, unfortunately, empty. They remember all too well the perilous decades of the 1980s and 1990s when inflation was in the high double digits, currency devaluation was measured by the hour, and banks were no more than hedge funds investing in high yielding government securities. With some regularity the system, such as it was, would crash with the currency devaluing at least 50% overnight and interest rates soaring into triple digits.

Yes, the country’s economy and financial sector have improved dramatically since those dark days in 2001 when the financial system imploded. After years of being looted by politicians the state banks had to be recapitalized by $20 billion. Big money in those days. Several banks failed, and the IMF stepped in with what was one of its largest bailouts at that time. Turkey’s current economic and financial strength are the direct result of rigidly following the IMF program. Greece take notice.

So Istanbul now wants to parlay that improvement into becoming an international financial centre. Ali Babacan, deputy prime minister for the economy certainly believes that Istanbul is well placed to replace Dubai as the region’s financial hub. Clearly the city is large with about 13 million, is increasingly popular with tourists, and is the heart of the country’s booming economy. But does all this make Istanbul ready to replace Dubai? Doubtful. Making the claim is easy. Turning it into reality is much more difficult.

For one thing Dubai, even with its current financial troubles, has already established the required legal, accounting and financial infrastructure and, more important, is surrounded by the enormous wealth of the Gulf region and much of the subcontinent. Reforming Turkey’s antiquated, creaking, and conflicting infrastructure is not yet even a work in progress. In addition, many of Turkey’s immediate neighbours like Bulgaria, Greece and Syria couldn’t afford a good lunch let alone support a regional financial centre.

At least one Turkish market player says that, in addition, no one has yet defined exactly what is meant by ‘financial centre.’ “No official here has a clue exactly what this term means. No one is going to come to Istanbul unless there is something to trade. Right now there is very, very little that you can trade on Turkish markets. What would they do, for example, if someone comes to Istanbul and wants to trade Japanese warrants? The bureaucrats would tie this one up for years. There really has to be much more sophisticated financial regulation and a more benign view of financial products before you can even think about becoming a regional financial centre.”

A senior international banker in Istanbul says the government’s claims for Istanbul as an international financial are ‘AKP (the ruling party) hype’.

“This is a pipe dream. Insufficient language skills, basic infrastructure, and legal system are major detriments to this claim. Moving the national financial institutions to Istanbul makes sense. But using them as the nucleus for a wider regional – or global – centre is a politician’s reach.”

Another former senior government official says the claims for an international financial centre ‘a nice dream, but total exaggeration.’

“Moving the central bank to Istanbul does not make the city a financial centre. Why don’t they (the government) first improve the education, language skills, and infrastructure before embarrassing themselves with these exaggerated claims? This is a real estate gimmick. Guess who owns all the land in the area they’re trying to develop as a financial centre? My strong suspicion is that it is loyal AKP supporters. The idea of Istanbul as an international financial hub has been a dream since (former president) Turgut Ozal’s time back in the 1980s. And we’re no closer to achieving this now then we were back then.”

Turkish officials are in danger of overplaying their hand as the country seeks its larger role on the world stage. It is very easy to confuse rhetoric with reality. It is one thing to claim regional financial leadership. But it is something altogether more difficult to create the reality on the ground that makes such a claim credible. Mr. Babacan might be better advised to restrain his oft-repeated claims of leadership until some

Wednesday, 29 September 2010

Just Who Represents The Entire Country?

A very experienced and highly qualified U.S. State Department officer recently had his appointment as ambassador to Azerbaijan blocked by a couple of senators that are locked into close re-election campaigns. Why? Because the lobby for the Armenian Diaspora in the United States felt that the officer, Mat Bryza, was insufficiently anti-Turkish or pro-Armenian.

You can be forgiven for wondering just what Armenia, Turkey, or Azerbaijan have to do with elections in the United States, or why any group representing any particular nationality should have the right to set American foreign policy. The answer in this vitriolic political season is all about votes. The Armenian Diaspora lobby is particularly loud in California. And, just by pure coincidence, Democratic Senator Barbara Boxer is locked into a close election fight with the Republican challenger Carly Fiorina – the former CEO of Hewlett Packard who was bounced out of that job after a short, controversial reign. Senator Boxer needs every vote she can get and agreed to block Bryza’s appointment in hopes of gaining the California Armenians’ support at the ballot box. It’s doubtful that Senator Boxer could find any of these countries on a map or has more than a hazy notion of what the obscure issues are. But she has a very good grasp of California’s complex electoral mathematics.

The Armenian Diaspora has been trying desperately for years to get the United States to agree that massacres of Armenians during deportations in the Ottoman Empire almost 100 years ago amounted to genocide. In addition, the small land-locked, impoverished nation of Armenia in the middle of the volatile Caucasus region has been arguing and fighting with Azerbaijan since the early 1980s over a barren piece of land called Nagorno-Karabakh. With me so far? In the narrow world of the Diaspora, anyone who is not actively supporting its pet causes, however right or wrong, is deemed an enemy. This is the camp into which the unfortunate Mr. Bryza seems to have fallen

The question is not so much the rights or wrongs of these particular issues, about which people have been arguing and will continue to argue for years to come, but over the impact of these arguments on overall American foreign policy. The United States has critically important relations with both Turkey and Azerbaijan, relations that transcend the concerns of any one, narrow group. The United States needs superior diplomatic representatives in both countries. And yet the narrow self-interest of a single group appears to have hijacked overall American policy and put that representation at risk.

The efforts of smaller groups like the American-Armenians or the Greek-Americans are often dwarfed by the major Israeli-American interest groups like AIPAC, but they are no less distracting to formation of a genuine, national American foreign policy.

Some of these actions, however, are not without humour, however unintentional. Recently a group of Greek-Americans took it upon themselves to attempt to stage an Orthodox religious service at the Haghia Sophia cathedral in Istanbul. Forget that the last Christian service was held in this church in early May 1453. That’s 1453, not even 1953, more than 500 years ago. It became a Moslem place of worship after the Ottoman conquest in 1453. The government of the young Turkish Republic was aggressively secular and determined in the 1930s that this monument should become a museum with no religious services of any kind. And then along come our Greek-Americans trying to turn the clock back a few hundred years. Does one weep or laugh?

The Greek government in Athens and the Ecumenical Patriarch in Istanbul were horrified at this attempt, and hastened to assure the Turks that they had nothing whatsoever to do with it. Fortunately for all concerned this hapless group finally abandoned its efforts just before touching off yet another major controversy in one of the most sensitive parts of the world.

But the effort highlights just how out of touch many of the Diaspora groups are with current conditions in the home country and region. Most of these groups are completely unaware of the subtle, yet meaningful changes in the foreign policy of the country their parents or grandparents left decades ago. Turkey and Greece, for example, have been working hard to overcome ancient hostilities and develop a more rational relationship. Many Greek businessmen are working hard to expand into Turkey and capitalize on that country’s large market. Something like the Haghia Sophia fiasco could have had serious negative consequences for these positive developments. On a more personal scale many locals are bemused and often offended by the patronizing attitude of returning Americans who seem to think that the country remains the impoverished wreck it was when their grandparents left 60 years ago.

Similarly Turkey and Armenia have been trying to find ways to normalize their relationship – to the horror of the Diaspora. The struggling Armenian people need all the help they can get, and a normal relationship with their much larger neighbour would be a good place to start. The economic situation in Armenia is so dire that, even though the border is officially closed, several thousand Armenians have found jobs in Turkey. Instead of helping the positive development of this relationship, elements in the Diaspora are doing all they can to derail it.

The United States is a large country with a complex, dynamic web of relationships around the world -- relationships that extend far beyond the constricted boundaries of single interest groups. Pride in one’s historical homeland and a desire to maintain cultural links are admirable traits, but it would be useful if members of the more vocal interest groups remember that, ultimately, they are just a single part of a very large American mosaic, and do not represent the entire nation.

Saturday, 25 September 2010

A One-Word Warning

Throughout the Middle East where small, subtle gestures like a slightly a raised eyebrow or tilt of the chin are often enough to set armies in motion, a one-word change in school textbooks is like a loud warning shot.

Such a change recently in Egyptian school books was interpreted by many in Turkey as a direct challenge to Turkey’s plans to play a larger role in the region and the Moslem world in general, an attempt to ‘put Turkey in its place.’ It was a not-so-subtle reminder to the Egyptian masses as well as other Arabs that they should be very cautious about accepting Turkey’s new regional pretensions

Like so many issues in the region, this spat has its origins about 500 years ago. The Ottoman Turkish army under Yavuz Sultan Selim conquered Egypt in 1517. The Ottomans stayed nominally in control of Egypt until the 20th century, even if the Ottoman influence had faded to a very tenuous ‘control’ by the late 19th century.

Previously, the Egyptian school books referred to this period of Ottoman influence as a ‘conquest’. Now, a Turkish news agency reports with great alarm that the Egyptian school books now refer to this period as an ‘occupation’ as if to remind people that the Ottoman Empire was, in fact, a non-Arab empire that dominated the Arab world

This change was greeted with glaring headlines as ‘Shameful’. The tone of the story was how ungrateful the Egyptians were being for referring to the Ottomans as occupiers when, really, all they were doing was protecting the Egyptians and improving their living standards.

In this view of the world it’s really only those nasty English and French – and now the Americans – who have empires complete with colonies and puppets. Somehow, to many people in Turkey, the Ottoman Empire that stretched from the gates of Vienna to the Persian Gulf and on to the shores of Tripoli was more like a social welfare organization. Any of the subject nations or peoples that resisted the beneficence of Ottoman control was seen as a ‘traitor’ and ‘ingrate’.

Many in Turkey are still furious that during World War I, when the Ottoman Empire sided with Germany, much of the Arab world resisted the sultan’s call for jihad and sided with the infidel English to end once and for all the 400 year Ottoman control of their region. These Turks consider that the Arabs ‘stabbed us in the back.’

Until very recently the Turks and the Arabs had what could best be described as a frosty relationship. Every time I travelled from Istanbul to Cairo to visit our office there the Egyptians lost no opportunity to disparage the Ottoman Empire and stress the superiority of modern Egypt over Turkey. In their eyes the Arabs had a culture and civilization going back hundreds of years compared to the ‘Johnny-come-lately’ Turks. More than once I heard even educated Arabs refer to the Turks as ‘jumped-up nomads.’ Even if the centuries of Ottoman control had never happened, Turkey’s former close ties to the United States, Europe, and Israel always made the country somewhat suspect in the eyes of the Arabs. Its secular political system and Western-oriented society even made its Moslem credentials somewhat dubious.

During the past few years Turkey has been trying to mend fences with the Arabs, partly out of spite for what is perceived as Western rejection of Turkish membership in its club, and partly as a genuine effort to build on its growing economic and military power by expanding its regional influence. Turkey has the largest economy south of Vienna, and its businessmen and entrepreneurs are active throughout the Middle East. Many Turks are extremely proud to see that their country has emerged from its junior, very junior, partner status with the West and is now forging new alliances with its Arab and eastern neighbours.

So far its most visible efforts have been with countries like Syria and Iran that many others see as despotic or sponsors of international terrorism. Turkey ignores these complaints and says, disingenuously, that its efforts will help build bridges to bring peace to the region. So far its efforts, particularly its Israel-bashing, seem to have been a great success with the Arab ‘street’, but many governments of the traditional Arab powers are far less enthusiastic about the Turkish efforts.

Egypt, for one, has its own problems with Hamas, and could well resent what it sees as Turkish meddling in intra-Arab issues, challenging the pre-eminent position of Egypt in the Arab world. Thus the school book issue could be seen as an indirect warning to Turkey to keep its nose out of Arab affairs. Many of the Arab regimes don’t like the idea of outsiders stirring up their own populations and becoming more popular than the local governments in the process. It’s hard enough to control their own masses without some other country trying to become the defender, spokesman for the oppressed of Gaza.

Turkish leaders are discovering, however, that the country’s higher profile generates mixed reactions at best. Inevitably some other countries will resent this sudden assumption of leadership. And conflicts will arise even with their new best friends the Iranians. Turkish leaders were given an unpleasant surprise when a senior Iranian official recently referred to the Armenian deportations in 1915 as genocide. Definitely a ‘no, no’ as far as the Turks are concerned. Despite furious back-pedalling by the Iranians the suspicion began growing in some Turkish quarters that the Iranians were playing them for fools – using Turkey to blunt the impact of the U.N. sanctions while ignoring every bit of unsolicited advice the Turks give them.

The real measure of Turkey’s success as a key regional player will be in how it manages these inevitable intra-regional conflicts. The policy of ‘zero conflicts’ is nice, but extremely difficult to practice where religious and political passions run high, and where memories are long enough to remember the previous subjugation to Turkish rule. Turkey will be fortunate if the conflict is limited to words in a school book.

Thursday, 16 September 2010

Papandreou For The United Nations?

The hot gossip in Athens this summer is that Prime Minister George Papandreou’s long term goal is to parachute out of that job and become the next secretary general of the United Nations. Although born into one of the great political dynasties of Greece (his grandfather and father both served as prime minister) he has always seemed more comfortable on the international stage than dealing with the hand-to-hand combat of domestic Greek politics.

Multi-lingual, good speaker, long experience on the diplomatic circuit, skilled in the spongy language of international organizations, he would be a natural for the job. On top of it he comes with an elegant wife who would shine in New York.

People close to the scene say Papandreou would leave the morass of Greek politics for the rarefied atmosphere of UN Plaza in New York with a huge sigh of relief. Elected last year, his Socialist party soon discovered that the country was bankrupt. After decades of living on borrowed time and borrowed money the music stopped. Greece now faced the real possibility of defaulting on its sovereign debt. Bailed out at the last minute with a multi-billion Euro life-line from the European Union and the International Monetary Fund the government now must implement a massive program of tax increases and budget cuts to stem the tide of red ink. In his spare time Papandreou is supposed to reform the cronyism and featherbedding that has plagued Greek political life since the republic was founded. Needless to say the outraged cries of anguish from his own party, forget the opposition, aren’t making his job any easier. This is how big, bad conservatives are supposed to act, not the people-friendly Socialists.

Faced with an unpopular, almost impossible job at home it is no wonder that the poor man is looking fondly across the ocean and doing a bit of light lobbying. After years of strident anti-Israel, pro-Arab sentiments Greece suddenly invited the Israeli prime minister to Athens. Having a friendly Israeli onside might also possibly help with the US vote.

Another thing in his favour is that it would be a European’s turn to serve as Secretary General. The current Secretary General, Ban Ki-Moon, is Korean. The previous Secretary General, Kofi Annan, is from Africa. He followed an Egyptian, Boutros Boutros-Ghali, who in turn came after a Peruvian, Javier Perez de Cuellar. The last European was the Austrian Kurt Waldheim, later disgraced when his World War II record came to light.

Assuming candidates from large countries like the United States and Russia are automatically ruled out there are not that many available prospects. The prime minister of Luxembourg Jean Claude Junker is skilled in self-promotion and has demonstrated his love for the endless summits, conferences, symposia that go with any high level international job. If you ran a country the size of Rochester, New York you, too, would take every opportunity to prance about on a larger stage just to reaffirm your self-importance. Moreover he has never demonstrated any desire actually to accomplish anything. No threat there. But, he is deeply unloved in Britain, and that would effectively block his candidacy.

A German? Perhaps. Former Chancellor Gerhard Schroeder comes to mind, but he is making so much money on the board of the giant Russian energy company Gazprom that he may think of the job as a demotion. Besides, too many people now regard him merely as a mouthpiece for all things Russian. Very difficult for him to say anything negative about what’s going on in Chechnya.

An Italian? Former head of the European Union Romano Prodi? If he truly believes his days as a major player in Italian politics are over, he might consider the UN job a nice pre-retirement position.

A Scandinavian? The only problem there is that they take their views on things like human rights a little too far for many in the United States, Russia, and China. They might start asking awkward questions about things like Guantanamo , Uighurs in Western China, or dissidents in Russia. Besides, they’re serious people who do things like set goals and strive to attain them. Serious danger of upsetting the gravy train. Very nice people, but best leave them aside for the moment.

One possible drawback for Papandreou is that Greece is a member of NATO, and that could blemish his claim to neutrality. But now that the Cold War is over and NATO is busy looking for reason to continue in existence that may not be such a problem.

The only real question is whether he can last until Ban Ki-Moon’s term is up in a few years. Greece’s economic problems are not getting any better, and it remains to be seen how successful Papandreou’s reforms will be. How long will the Greek people put up with a degradation of the life-style that they had come to take as their sovereign right?

Pure fantasy? Perhaps. But on paper he really looks like a prime candidate from every point

Monday, 13 September 2010

Organization Wins Every Time

Besides giving the ruling Justice and Development Party (AKP) a huge boost the referendum results in Turkey prove once again that organization beats ideology every time. In a referendum that became a vote of confidence in the government, the nationwide political organization of AKP simply overwhelmed the opposition.

Many outsiders like the European Union were quick to call this result a ‘victory’ for further democracy in Turkey. Others, like the leader of one of the opposition parties, see the outcome as the beginning of ‘dark days’ for Turkey. Whether or not this referendum actually improves democracy in Turkey or leads to a single part autocracy is a question that will take time to answer. What is clear right now is that AKP is the only political party in Turkey that has demonstrated the ability to create a wide base of support that delivers winning votes time after time. AKP has benefited enormously by portraying itself as the ‘outsider’ to the traditional Turkish political and economic elite and as the standard-bearer for the underclass. It has backed the opposition parties into the uncomfortable position of defending the discredited elite that had dominated Turkish politics for several decades.

Almost 58% of the voters, far above all published polls, approved complicated changes to the constitution that are supposed to improve democracy in the country. Sixty-two of Turkey’s 81 provinces gave a resounding YES to the changes. The NO votes were restricted largely to the West and South coasts of the country while AKP cleaned up in the interior. Istanbul, the largest province with 6.6 million people who voted, approved the changes by almost 55%. As journalist Cengiz Candar noted in a column in the newspaper Radikal on September 8, many of those votes were going to come from the extensive lower income areas of the city. It is in these areas where AKP has been particularly successful in recruiting voters.

These results are almost a repeat of the 2009 local elections and demonstrate clearly that AKP has mastered the arts of domestic politics. Use of computers, updating voter lists, local offices, training sessions for local party leaders, refining the message to appeal to the broad base of Turkish voters rather than focusing on the traditional elite all play key roles in maintaining AKP’s electoral strangle-hold.

The opposition parties simply have not done the nation-wide groundwork required to change anyone's mind. Their main campaign strategy is entirely negative, warning voters of all the alleged bad things that will happen if AKP continues in power. Whatever positive message there may be is buried in the torrent of threats and warnings. What is their plan for the future? Where do they want to take Turkey? How are they going to solve the ticking time-bomb of unemployment? In short, they have failed to create any positive reason to vote for them. Until they come up with a positive message and a nation-wide organization they will continue to be a minority party limited to the coastal regions.

While grandiose claims will be made about the importance of this referendum let us remember that, more than anything, it demonstrates clearly the power of a strong political machine over a fractured and intellectually bankrupt opposition.

Wednesday, 8 September 2010

Turkish Communications Failures

Turkish Communications Failures

It’s tough enough trying to run a foreign policy that sustains a delicate balancing act between your traditional Western alliances and the perceived need to play a larger regional role in the Middle East. It is doubly hard when you repeatedly shoot yourself in both feet with an inadequate, amateur communications policy.

The positions of the Turkish government on key issues like Iran, Sudan, Hamas, and Israel have created understandable concern in Europe and the United States. Is this member of NATO forsaking its traditional Western alliances in favour of radical Islamic movements?

The government’s response was to send a high-level delegation to Washington in an attempt to convince a sceptical Congress and Administration that nothing has changed and that Turkey is still firmly in the Western camp. This short visit was supposed to alleviate all the concerns that had been mounting for months as Turkey continued to act as Iran’s defence attorney, slam Israel repeatedly and loudly, and ignore calls to ostracize Sudan’s leader for the genocide in Darfur.

Whatever the merits or demerits of Turkey’s political positions, the last minute decision to send the delegation demonstrates clearly the country has no idea how to communicate its policies in open, fairly sophisticated, democratic societies. The country spends millions on Washington lobbyists, and yet it still violates just about every communications rule in the book.

1. Don’t Make Friends In The Morning You Need That Afternoon

In other words, effective communications is a long term effort. Responding only at times of crisis is ineffective if no ground work has been laid. Audiences grow tired very quickly of strident sales pitches. Where is the on-going information program and dialogue when there is no particular issue on the table?

2. Get Out In Front

Don’t wait until you get repeatedly slapped in the face before responding. You know what the issues are. Start making your case now. Make your opponents respond; put them on the defensive for once. Don’t let others constantly set the agenda.

3. Leave The Rhetoric Home

Self-righteous rhetoric may play well at party rallies, but it does nothing to convince an educated, sceptical audience. Artful give-and-take plays much, much better.

4. Get Out of Washington

The United States is a big country, and most people have never seen any Turks, let alone an official one. Take your message to the smaller cities and towns. Most schools are cutting programs because of budget problems. Help them out with apolitical information about Turkey and the Near East. Congressmen usually vote the way they think people back home want them to vote. Good relations at the local level could pay off in crucial votes in Washington.

5. Appreciate the Complexity

Successive Turkish governments have failed to appreciate the complexity of setting foreign policy in open democracies. I remember being approached by a Turkish cabinet official asking me if I knew someone in the White House who might help Turkey. He scuttled away when I said I had no contacts at all. He, like so many in the Middle East, still believes that the head of any one country can set any policy he sees fit. They simply do not understand that in mature democracies there are multiple influences on foreign policy: the Administration, Congress, the military, NGOs, think tanks, media, business, and, unfortunately, Diaspora politics of every ethnic group in the country. Each of these groups has to be approached.

6. Use Your Friends

There are many people throughout Europe and the United States that actually like Turkey and would like to help it deliver a coherent, intelligent message. Yet, time and again, these groups are completely ignored. They fall victim to the internal games of senior officials reluctant to use any outside source they do not directly control. The major criterion for accepting any form of help seems to be “Onlar bizden mi?” Are they with us? There is paranoia about using anyone not from the inner circles. Thus, valuable help is turned away, and the amateurs at home continue to determine communications policy.

7. Lighten Up

In an age where international consensus and cooperation is slowly gaining strength the message from Turkey always seems to rely on the same outmoded, defensive, chip-on-the-shoulder virulent nationalism. “We’re Turks. We are always right. Everyone else is wrong and/or anti-Turkish.” I once sat through a diatribe delivered by the Prime Minister to foreign businessmen telling them to convince their governments to support Turkey. The message was simple. “Turkey is correct. Any criticism is unfair or prejudiced.” The reality of the particular issue was less simple, but the Prime Minister did not want to hear any questions or dialogue. He treated the whole evening like a party rally in some small town in the middle of Anatolia. Needless to say the message did not go down well, and there was much laughter later at the bar.

8. Be Credible

Like every country on the earth Turkey has unpleasant issues it must deal with: human rights, the Kurdish policy, the 1915 Armenian deportations, continued aggression against minorities. Most people appreciate that these are complex, fractious issues not given to simple solutions. Simple denial or accusations that all these claims are part of an anti-Turkish are not credible. It is much more credible to admit what can be admitted and move on. Turkey will never get beyond these issues if it continues to cover its ears and pretend none of them happened. Turkey has much to be proud of, and it is a shame to see the government allow these positive developments become overshadowed by issues that it refuses to discuss in a credible fashion.

9. Take Communication Seriously

Don’t put inexperienced party faithful with a marginal grasp of any foreign language on the job. International communications is far more complex than it was 50 years ago. Use talented, experienced people who know how to work the system if you expect decent results.

Sunday, 8 August 2010

Revenge of Anatolia

There has been much written recently about the allegedly ‘eastern, Islamic’ drift of Turkey. Will this country of 75 million, a member of NATO, forsake its traditional Western orientation to get closer to its Islamic neighbours like Iran and Syria?

Is the country turning eastward and more overtly Islamic out of spite because its long-standing attempt to join the European Union is being met with so much scorn and resistance while smaller countries like Bulgaria and Romania are welcomed with open arms? Does this feeling of injured dignity explain why the Turkish government is befriending such notorious regimes as Hamas or the international pariahs in Sudan? Or, as the government claims, is it merely expanding its sphere of influence to include its ‘natural’ Islamic neighbours long overlooked in the 87-year history of the Turkish Republic?

As interesting as the debate may be, it misses the point of what is going on Turkey. The Turkish story is primarily a domestic cultural and social story with international relations important only as it impacts domestic developments. What’s going on now is nothing less than what could be called the ‘Revenge of Anatolia.’

The struggle right now in Turkey is about who will run the country – an elite that has been in control since the Republic was founded in 1923 or the huge mass of the population that feels its needs and wishes have been overlooked for 87 years. This struggle goes far beyond the narrow confines of competing political parties, and goes to the heart of the social and political structure of this complex country.

The immediate issue is a critical referendum on major changes in the constitution. These changes include giving the ruling political party more control over the judiciary and further weakening the traditional key role the military has played in Turkish political life. The vote on September 12 will go a long way to determine the direction of Turkey in the near future. Turkey’s foreign policy moves up to referendum should been seen in the context of the prime minister securing his base of support for this vote. The government chose the date carefully, hoping the symbolism will not be lost on the electorate. It is the anniversary of the major military coup in 1980.

Why should anyone outside Turkey care? Very simple. Turkey is a large country occupying a critical piece of geography with long borders on the European Union as well as Iran, Iraq and Syria. Turkey has the second largest army in NATO and the fastest growing economy in the Mediterranean region. The direction of Turkey has major implications for the United States, Europe, Russia, and the entire Islamic world.

The current fight-to-the-finish with absolutely no quarter reflects the social and economic divisions that have simmered just beneath the surface for a long time. Kemal Ataturk, the founder of the Republic, instituted sweeping changes during the 1920s in all aspects of Turkish life aimed at wrenching the country out of the perceived torpor of the Ottoman Empire into the modern world. Turkey officially became a secular country, the dominant Islamic religion faced new constraints, age old social customs were overturned, new legal codes were introduced, education was improved, and Turkey’s march toward the West was reinforced.
These changes were implemented and defended by a military, administrative, judicial, and economic elite. Any popular resistance or criticism of the country’s direction were harshly suppressed and condemned as efforts to drag Turkey backwards. This view was supported by the military who saw itself as the true defender of Ataturk’s reforms and the secular nature of the country. The military felt free to intervene in Turkish politics every time it believed the country’s elected leaders were deviating too far from the General Staff’s definition of Turkey’s proper course.

This elite is, however, a small minority of the Turkish population and lives in the rapidly growing business and administrative centers like Istanbul, Ankara, Izmir and Bursa. They are the so-called ‘White Turks’ as opposed to the ‘Black Turks’ who have their roots deep in the tired soil of Anatolia – the vast Turkish hinterland that stretches from the Bosphorus Straits to the Iranian border. The White Turks generally are wealthy, sophisticated, at home in Paris, London or New York. They would easily fit into the European Union. The Turkish economic, social, and political system has worked very well for them.

While the children of the elite went to the best schools at home and abroad many children of the so-called Black Turks were lucky to find any school at all. The White Turks received superior health care while the Black Turks had to struggle to find a technician let alone a doctor. And on, and on, and on. Years ago when I asked a crusty old villager about government services, he spat and asked ‘What government? What services?’

For a full treatment of this dichotomy in Turkish society I recommend an excellent work by a German journalist, Rainer Hermann. He was one of the very first foreign journalists to examine this development in his excellent work Wohin Geht die Turkische Gesellschaft, (Where is Turkish Society Going.) Hermann works with the FrankfurterAllgemeine Zeitung, and, unfortunately his work so far is available only in German.
Beyond the uneven distribution of services, people in the small towns and villages were bombarded with the officially approved messages that their very life style, and even their religion were out of step with modern Turkey. Turkey was now a secular country and overt demonstrations of Islam – or any religion for that matter – were discouraged. In addition, the rapid spread of mass media over the last 50 years has made it clear just how much the mass of the population is missing. Somehow the reality of his wife dressed in baggy trousers going out to pick tomatoes didn’t fit the image he now saw on television of the bikini-clad starlet riding around in a Ferrari. In short, they could not miss the not-very-subtle message of “Get with the program, you dunce. Turkey is changing and you better change with it.”

This resentment at being second class citizens in their own country was deeply felt, but, in a pattern that goes back to the Ottoman Empire, was disguised under the custom of ‘kissing the hand you can not bite.’ The masses preferred to keep quite and bide their time, wait for their opportunities.

And the ruling elite provided plenty of opportunities. For most of the last 50 years Turkey has been run by a series of inept, squabbling coalition governments that failed miserably to address many of the country’s needs. Inflation of more than 50% became an international joke, the currency depreciated daily, large cities became almost unmanageable as millions of people left the country to find jobs in the exploding metropolises, and people’s savings were wiped out in a series of bank frauds.

While the country’s rulers were playing their shallow political games things were slowing changing in Anatolia. A very successful class of entrepreneur was building up in Anatolia. Shrewd, prudent, averse to debt, and socially conservative these entrepreneurs created solid, extremely successful businesses. I once asked one of these businessmen how they decided to make an investment. “Simple,” he replied. “My brothers and I sit down and count how much money we have. If we have more than $100 million free of any obligation then we might make an investment.”

A tough, charismatic leader like Tayyip Erdogan, the former mayor of Istanbul, was able to tap into this Anatolian resentment. With the financial aid of the wealthy new business class he was able to build a nation-wide movement that understood politics from the ground up. While the existing political parties made no attempt to extend their efforts down into the mass of the electorate Erdogan seized on that vacuum and exploited it perfectly by building a strong nationwide party organization that succeeded in delivering votes.

His opportunity came in 2002 after the latest coalition government had driven the country to bankruptcy, interest rates hit 1,000%, and the currency just about disappeared. After this fiasco it is no mystery how Erdogan’s new party, Justice and Development, swept into power in the 2002 elections with enough votes to govern without a coalition partner. The economic situation was so bad that people who would normally not come near anyone with avowed Islamic leanings put their religious fears aside and voted for total change.

And total change they got. The first few years were a honeymoon for Erdogan as real economic recovery and reform of the banking system created enormous good will. People were willing to overlook disturbing signs that the Justice and Development Party displayed many characteristics of the old parties: very tight control, reluctance to use anyone outside the party no matter how skilled or experienced he or she may be, rewarding party members with lucrative deals. Despite these signs Erdogan was able to ride this wave of economic recovery and capitalize on the complete incompetence of the opposition parties with a second election victory in 2007 with an incredible 47% of the vote.

Armed with this mandate he declared open war on what he saw as the main pillars of the traditional elite who had blocked his efforts to transform Turkish society: the military and judiciary.

In a program dubbed Ergenekon several high ranking army officers were among the dozens arrested with allegations of plotting to overthrow the government. Many of the defendants have been incarcerated for more than two years, but to date no trials have been held, and none of the allegations has been proved in a court of law. But the effect of these officers being hauled off to prison has had a major impact on Turkish society. Once seen as the guardians of the secular nature of the Republic, the army is now being portrayed by the ruling party as a bunch of bungling plotters.

Erdogan’s party has also taken aim at the judiciary that, like the army, is a fierce defender of the secular republic. In addition the supreme court came very close to banning the Justice and Development Party in 2007.

In many ways the referendum can be seen as a vote of confidence in Erdogan himself. Most of his foreign policy initiatives can be also be seen as an effort to make sure the vote goes his way. The risks for him are high. If the referendum passes he will be much freer to implement whatever agenda he pleases without fear of military or judicial intervention. If the referendum fails then momentum could shift very quickly away from Erdogan, and the opposition parties will be given a huge boost for the general elections due in 2011. Win or lose, this referendum will mark a defining moment in the development of Turkish democracy.

Thursday, 29 July 2010

Greek Summer

Days pass slowly and languorously on the Greek island my wife’s family calls home. Newspapers, if they come at all, don’t show up until the afternoon. Foreign papers are a sometimes thing. TV reception is not brilliant, and not many places have WI-FI. The country of Greece may be in financial turmoil, but many of the islands have only a tenuous relationship to the mainland, and consider themselves somewhat removed from the mess in Athens.
After a few days of nervous decompression when you nervously twitch and open your Blackberry constantly to see what the rest of the world is doing, you summon the courage to leave the house without it.

A conversation with the produce dealer about the quality of this year’s watermelon crop begins to seem much more important. Or you see a friend you haven’t seen since last summer and learn what’s new in his life. You offer condolences to the family of friend who lived a good, long life and peacefully passed away recently. You’re cheered by the news that Marina has survived her cancer scare.

The timeless Orthodox rituals for birth, Christening, marriage, annual celebrations, and, ultimately, death assume an enhanced and natural role far more important than the frenetic scurrying around that passes for life on the mainland. The icons, incense, and chanting have been around for 2,000 years, and have outlived most seemingly ‘critical’ daily events from the fall of Rome to the great Russian spy scare.

One can explore the ancient footpaths laboriously crafted by hand from stone or admire the quality of the dry stone walls that criss-cross the island. You wonder who made them and how long it took to get those stones to fit so perfectly. You can stop on a high hill, gaze out on the deep blue Aegean Sea, and watch a hawk gently ride the thermals coming off the valleys as it hunts for a meal.

Oh, there’s plenty of news on the island. But you won’t see much of it on CNN. The new ferry serving the island is the subject of endless discussions. It’s half-an-hour faster, but Maria says it bounces too much. Then, of course, there’s the on-going development along the agora, main street, where the municipality is attempting to put all the power lines underground. This provides employment and opportunity for all the retirees in the coffee shops to explain how they would do it differently, and of course better, in their day. But the big news is the upcoming mayoral election in October. Who will run? What will they do about the bus station mess? Will they change the road system? And on, and on. Not a word about the IMF, sovereign debt, or even the perfidious ‘Northerners’ who want to change much of Greek life.

Quickly you realize that the absence of what passes for ‘news’ is a real blessing. We can actually survive quite well, thank you, without the noise/static of 24-hour news, political bombast, or the general frantic attempts to breathe life and manufactured melodrama into events that should never have become known outside a small circle.

Maybe we would all be better off if newspapers, television stations, bloggers, twitters, and all the other self-important commentators intruding upon our lives all took a few months off. It would probably be a good idea to include politicians and most government employees in this enforced holiday.

Think about it. Wouldn’t we all be better off if all these people took some serious time off? Perhaps they would even start to think about what they do. Maybe even read a book that doesn’t have illustrations. It’s probably too much to hope that they would re-consider the error of their ways. But at least the rest of us would be spared the daily rant. Imagine the joy of turning on the television to be greeted by a simple message: Closed until September.

I imagine the various presidents, prime ministers or dictators- for- life would benefit from some compulsory idleness. President Obama could work on his fade-away jumper, the energizer bunny of a French president could let his battery run down, and Vladimir Putin could work on learning how to smile. Hang out the ‘Gone Fishing’ sign on the White House, Kremlin and Elysee Palace and let the world get along without them for awhile. We could all do with a rest.