Newsweek International

Latin America’s Deafening Silence

Cecille Isidro — Mon, 08 Dec 2008 17:21:00 -0500

To the myriad foreign challenges Barack Obama will have to confront upon taking office we may have to add a complex conundrum next door in Latin America. On three fronts that have posed serious problems for the United States before, there is a growing and worrisome democratic challenge in the hemisphere--and no one knows quite how to handle it.

Benazir Bhutto Negotiates a Return to Pakistan's Politics

Cecille Isidro — Mon, 06 Aug 2007 14:19:00 -0400

Pervez Musharraf, Pakistan’s president and strongman, met his nemesis, the opposition leader Benazir Bhutto, in Abu Dhabi on July 27. Only extraordinary political circumstances could have thrown these two together. Musharraf sees Bhutto -- a former prime minister who’s lived in exile since the general brought corruption charges against her -- as emblematic of all that’s wrong with Pakistan’s inept and graft-ridden political parties. Bhutto, for her part, sees him as yet another military usurper, like the one who had her father -- then Prime Minister Zulfiqar Ali Bhutto -- hanged in 1979.

The sad fact is they’re both right. So what explains the possible union of these antagonists? The answer is simple: power. Musharraf wants to retain his; Bhutto wants to get hers back. But their underlying differences remain profound, and the dangers great. While Western leaders hope a deal between them will help calm Pakistan, the truth is it probably won’t.

The Bhutto and Musharraf camps have been holding backroom talks for some time. What probably pushed the leaders to finally meet face to face was the growing threat posed by Islamic extremists. The danger became acute several weeks ago, when Musharraf ordered the Army to storm Islamabad’s Red Mosque, which had been occupied by Taliban-style militants. The operation succeeded, but it was followed by suicide bombings and the extremist takeover last week of another mosque (this time in the Mohmand tribal district).

Suddenly Musharraf was under siege both by the radical Islamists (who have tried twice to kill him) and the civilian democrats, led by Bhutto’s Pakistan’s People’s Party and the Muslim League of Nawaz Sharif, another exiled ex-prime minister. The democrats had been leading massive protests ever since Musharraf suspended Supreme Court Chief Justice Ifthikar Muhammad Chaudry, who had challenged the president’s plan to run for re-election without resigning his Army post (as the constitution requires). Following the protests, the Supreme Court reinstated Chaudry, further embarrassing the president at a time when his most powerful ally -- Washington -- was complaining pointedly about his failure to root out Al Qaeda and Taliban fighters in Pakistan’s northwest. The beleaguered general needed a lifejacket. And that’s where Bhutto came in.

A deal with her, however, will hardly cure Pakistan’s ills. While her own followers would be elated, Sharif’s Muslim League has already condemned the negotiations, as have most Islamist parties. The extremists would continue their fight. And a pact with Bhutto would require Musharraf to make several painful concessions. He would have to finesse away the corruption charges against her, which would make him look weak on the one issue where he’s seemed strong until now. Bhutto has also demanded that Musharraf agree to have the next president chosen by a newly elected parliament rather than the current one, which he dominates. A proposed constitutional amendment barring prime ministers from serving a third term would also have to be set aside (since Bhutto has already held the job twice and wants another shot at it). And even if Bhutto won the elections, her government could prove as crooked and incompetent as its predecessors. Power sharing between Bhutto as prime minister and Musharraf as president, moreover, might only increase the country’s chaos.

The West wants a stable Pakistan as a bulwark against terror -- specifically, the Taliban and Al Qaeda forces that have been infiltrating Pakistan from Afghanistan. The confrontation at the Red Mosque and its violent aftermath have shown how powerful these forces have grown, shaking Musharaff to the core. However much he despises Bhutto and her ilk, they are far less dangerous to him than the jihadists. Bhutto has as much reason as Musharraf to fear further terrorism, which could tear Pakistan apart and end its economic boom. But as a relatively secular woman leader she would only be another target, not someone who could calm the radicals’ rage.

All this means that while the Musharraf-Bhutto deal could well pave the way for elections and the return of civilian rule, that would be a very limited blessing. For one thing, a free and fair vote could swing in any direction; the Islamist parties could make significant gains in the national and provincial legislatures, as they did in 2002. For another, Pakistan’s military and its intelligence services -- the country’s true power brokers -- would watch any change in leadership skeptically. The generals will be keen to protect their power and their economic empire, and they won’t hesitate to dislodge an elected government if either is threatened. Even if she could placate them, meanwhile, Bhutto would still have to act against Al Qaeda, the Taliban and Pakistan’s own extremists, without going too far -- since many Pakistanis worry that an offensive will only bring more bloodshed and turmoil.

If this sounds grim, it is. Pakistan faces a choice, it’s true -- but not one between good and bad options. It’s now a contest between bad and worse outcomes. Let’s hope the country picks carefully.

The CEO Sheik

Cecille Isidro — Mon, 06 Aug 2007 13:34:00 -0400

He wears a long, flowing thobe and a white headscarf and smells faintly of oud, an ancient Arabian perfume. With his trim beard and loose sandals, he looks much as his ancestors might have nearly two centuries ago when they took over this tiny fishing village on the shores of the Persian Gulf. But Sheik Mohammed bin Rashid al-Maktum, the ruler of Dubai and the prime minister of the United Arab Emirates, is a thoroughly modern prince. From his offices on the 44th floor of a sleek steel-and-glass skyscraper, he juggles nonstop cell-phone calls and dashes off salvos of quick-fingered text messages. "Sorry," he says with a wan smile to a visiting reporter. "It’s a very busy time."

Indeed. Dubai is one of the fastest-growing cities on the planet -- a bustling trade, services, tourism and financial hub for the Middle East and Asia, and increasingly even Europe. Its economy is expanding at about 16 percent a year, roughly double that of sizzling China. Business people and multinational companies from Microsoft to Goldman Sachs are flocking in, along with some 6 million tourists a year. With more shopping malls per capita than anywhere else in the world -- not to mention the Dubai World Cup, the glitziest horse race around -- Dubai is fast developing into a destination that weirdly couples Vegas with Hong Kong. "Sheik Mo," as often admiring expats call him, presides over all as part modern CEO, part traditional Arab ruler, part merchant prince and part showman.

In a region where everything is political, Dubai’s greatest distinction -- and the secret of its prosperity -- is that it is almost utterly apolitical. Here, globalization’s triumph has been almost complete. Economically, it is inspiring imitators throughout the Arab world. Everyone, it seems, is setting up free-trade zones, cutting taxes, creating industrial "cluster cities" and undertaking gargantuan feats of real estate and infrastructure in an attempt to lure tourists, trade and investment along the lines of the "Dubai model." Even Muammar Kaddafi of Libya -- he of the green book of "Islamic socialism" -- has reportedly been toying with the idea of establishing a Dubai-style "open city" to help bring his long-closed country into the international mainstream.

What remains to be seen, however, is whether Dubai will inspire political imitation as well, especially in a region plagued by failure and stagnation. To be sure, Dubai is no democracy. Sheik Mohammed has almost limitless power to mold his city as he chooses. Yet neither is Dubai a traditional Arab dictatorship, where the Mukhabarat (secret police) breathes down your neck.

It’s also unlike Egypt or Iran or Syria or other troubled states in another sense. The populations of those countries may be poorer and less satisfied with life, yet Egypt and Iran, at least, have vibrant civil societies -- bloggers and intellectuals and activists who challenge the state (and often serve jail time as a result). In Dubai, there is no real opposition to the ruling Maktum family. That’s partly because "locals" make up only one eighth of the population -- and benefit from an elaborate welfare system -- and partly because the historic Dubai social contract between ruler and ruled is mostly a mercantile one (and the merchants are mostly happy).

But it’s also because Dubai is well run and honest, in stark contrast to almost every other government in the region. The World Economic Forum ranks the United Arab Emirates as the most competitive economy in the Arab world. When Dubai is isolated from the rest of the U.A.E., it gets even better, ranking ahead of Japan, Britain, even Germany in terms of government efficiency and economic competitiveness, according to a report by the prestigious Swiss IMD International Business School. "The story of Dubai is the story of good governance," says Fadi Ghandour, a Jordanian businessman who spends half his time in Dubai. "Good governance does not require democracy or free elections. What is required is a good leader with a vision and accountability, and Dubai has one in Sheik Mohammed."

It would be wrong to call Dubai undemocratic, in this sense. It is more ademocratic, says the journalist Othman al-Omeir, the well-known publisher of the online liberal Arab newspaper Elaph.com. "Sheik Mohammed has shown us that efficient management of the state, a lightly regulated private sector and social freedoms might be more important at this moment in Arab history than free elections." Of course, Sheik Mohammed does not rule alone. Like other Arab rulers of the Persian Gulf, he consults with local notables through the age-old system of majlises, gatherings of citizens to discuss public issues -- though some grumble that these "consultations" generally amount to statements of what he plans to do. Other U.A.E. nationals complain that development is moving too fast, that their local traditions are being subsumed in a world of 21st-century shopping, frolicking tourists (some of whom can be seen topless on beaches) and the incessant sound of construction cranes.

Of course, any society that experiences such dizzying development will feel growing pains. The sheik himself often likens economic development to war. "Let our victims be poverty, backwardness and ignorance," he says. In a region where some 100 million jobs need to be created by the year 2020 just to keep up with the overwhelmingly young population, and where one in two young Arabs have said they’d prefer to leave their home country, this "war for development" could be exactly what’s needed.

This kind of talk might impress the technocratic and business elite of the Arab world’s "Davos crowd," but it doesn’t win as much applause from the broader Arab street beyond Dubai. Yet while most Arab opinion polls give high marks to the region’s revolutionaries, not its modernizers, Arabs and Iranians regularly vote with their feet by leaving places like Beirut, Gaza and Tehran for Dubai.

The city-state remains oddly apolitical in another sense. How does Sheik Moham-med compare with other Arab rulers, one might logically ask -- the Hosni Mubaraks and King Abdullahs? The answer is that he doesn’t. Sheik Mohammed is not a head of state. His little city is part of a larger federation, the United Arab Emirates, albeit with significant autonomy. Though he is also prime minister and Defense minister of the U.A.E., he generally leaves the foreign-policy portfolio to the capital, Abu Dhabi. As a result, he doesn’t get too deeply involved in the high politics of Israeli-Arab peace, of the Iraq War, the Shia-Sunni rift. Thus when the Saudi King Abdullah -- who has emerged as a regional elder statesman, a sort of "wise man" of Arab politics -- hosted Arab and international leaders in Riyadh at the Arab League summit in March, Sheik Mohammed was nowhere to be found. He was preparing to visit India, where he signed some $20 billion of deals and joint ventures.

With his mercantile instincts, some compare Sheik Mohammed to Lee Kuan Yew, who guided the rise of Singapore as a global financial and trade center. The sheik himself brushes aside comparisons. But recently he inaugurated the new Dubai School of Government, in partnership with the Lee Kuan Yew School of Public Policy and Harvard’s Kennedy School. And he has little time for politics. He once told a Brit-ish ambassador, "Whenever Tony Blair or Gordon Brown wants to see me, I’m happy to do so, but please don’t bring me a stream of ministers. I don’t have the time. But bring me any British CEO," he added. "I have time for that."

Sheik Mohammed strategically holds democracy at bay with economic development. Indeed, he has said as much on several occasions. "If the cart is politics and the horse is the economy, then we have to put the horse before the cart and not the other way around," he once famously declared. He also lives by the dictum of his father, the late Sheik Rashid, who was known for the statement "What’s good for the merchants is good for Dubai." Dubai rulers have lived by that motto since they took over the city-state in 1831. A local ruler who decided to flout these rules would not only be bucking more than 170 years of tradition -- he would also most likely be writing his own obituary, as the small but tightly grouped system of leading families and Maktum princes would find a way to push him out.

For the past 150 years, resource-poor Dubai’s challenge has been how to escape the shadow of its wealthier, more powerful neighbors. The answer was to promote openness -- little regulation, no taxes, low customs fees and minimal government intrusion into business affairs. It worked then, as it does today. Dubai’s strategy remains the same variant on "build it and they will come": build the infrastructure for business to flourish, create a pie big enough for everyone, leave the merchants alone and let rising prosperity solve your political problems. The merchants continue to stream in; the latest wave have been Chinese.

Dubai is also blessed with geography. It’s a shorter flight to Mumbai than to Cairo. It has benefited as much from Iranian capital, Indian merchants and South Asian labor as from its Arab neighbors. Today it stands at the confluence of the New Silk Road -- the growing trade and business corridor between the Middle East and Asia -- and benefits from the rising fortunes of India, the economic incompetence of Tehran (which would be a more natural Silk Road hub) and the excess liquidity in search of investment available in the oil-rich Gulf states.

Meanwhile, Dubai has avoided getting sucked into regional conflicts. "I don’t know who’s a Sunni and who is a Shia," says Sheik Mohammed. "And I don’t care. If you are good to your neighbor and work hard, then Dubai has a place for you."

A city-state with some 150 nationalities, Dubai is remarkably free of ethnic and religious conflict. As Sheik Mohammed sees it, religious and ethnic strife are almost prehistoric so long as globalization holds sway and growth continues. "Why not?" he asks when criticized for building the world’s tallest office tower, or plotting to make Dubai a financial center on the scale of Geneva or even London. The questions, of course, become harder to answer when the subject turns to the exploitation of laborers that goes into Dubai’s building boom -- a situation Human Rights Watch referred to as modern-day slavery. The organization has described "wage exploitation, indebtedness to unscrupulous recruiters, and working conditions that are hazardous to the point of being deadly" and complained that local laws offer "a number of protections, but for migrant construction workers these are largely unenforced." The negative publicity has helped improve the treatment of laborers somewhat; bad press is not good for a rising emirate fed by international commerce with almost limitless ambition.

"It’s staggering," says Ali Al-Shihabi, a Princeton-educated investment banker. "There are seemingly no limits to what Sheik Mohammed sees for Dubai." Economic growth of 11 percent annually? A tripling of GDP by 2015, or $44,000 per capita -- making Dubai one of the richest places on earth? Plans for Emirates Airlines to grow into the single biggest airline in the world, larger than Lufthansa or British Airways? It sounds like megalo-maniacal fantasy, yet not to Sheik Mohammed. Trained as a fighter pilot, he once famously said of his plans: "I have only one speed. Full throttle."

He regularly criticizes his fellow Arab rulers for falling behind the rest of the world, particularly in developing their economies. "There is a wide knowledge gap between us and the developed world in the West and in Asia," he recently said. "Our only choice is to bridge this gap as quickly as possible, because our age is defined by knowledge." With that, he made a bold announcement: he would endow a $10 billion fund for regional education "to build a knowledge-based society."

It’s interesting to speculate what might happen in other Arab nations if only their rulers were as focused on development and economic opportunity as Sheik Mohammed. Ali Al-Mosawi, a Baghdad-based businessman and frequent Dubai visitor, once marveled: "If Saddam Hussein had only a small amount of Sheik Mohammed’s instincts, he would still be in power today, he would be loved and Iraq would be one of the richest countries on earth. Instead, he looted and raped the country and he is now dead." Amr Hamzawy, the noted political scientist at the Carnegie Endowment for International Peace in Washington, says: "Dubai can’t really be compared to Egypt or Iran or Saudi Arabia. Their histories are far too different, but all of the states can learn from Dubai’s efficiency."

Sheik Mohammed, however, has little time to reflect on history or indulge in comparisons. "What you see today is only 10 percent of my vision," he says as he sits in his office, juggling those phone calls. "I’m sorry," he says again. "I must go now. This one is urgent." And in an instant he is gone, trailing a scent of oud and a sense of possibility as Dubai’s dream hurtles forward.

Rising Gulf

Cecille Isidro — Mon, 06 Aug 2007 12:39:00 -0400

We all know the headlines by now: the Middle East is burning, right? So it seems, as Palestinians and Iraqis wage civil war, Lebanon seethes, Syria and Israel trade barbs and Iran spits defiance. Yet beyond the smoke a very different story is emerging nearby. In the Arab states of the Persian Gulf, times have never been better. Business is booming. And political conflict has become a foreign phenomenon, watched on flat-screen TVs in the air-conditioned living rooms of Doha, Dubai, Kuwait City, Muscat and Riyadh.

It’s no exaggeration to say that the oil-rich states of the Gulf Cooperation Council (GCC) -- Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates -- are enjoying a transformational moment, one that could deeply affect the region if not the world. Buoyed by unprecedented oil prices, these states are awash with cash. In the past five years, they have earned a staggering $1.5 trillion for their petroleum, according to the Institute of International Finance (IIF). And there’s no end in sight: by the close of 2007, the IIF says, the GCC will have picked up an additional $540 billion, more than the combined exports of Brazil, India, Poland and Turkey

All that green has turned the once backward region into the world’s 16th largest economy, according to IIF. And if present trends continue, the GCC zone could become the world’s sixth largest by 2030. What’s most remarkable, however, is how the new money is being spent. The gulf has experienced oil booms before, but rarely managed to capitalize on them; three decades ago an oil windfall helped states modernize infrastructure and health services, but many leaders blew much of the money on defense or vanity projects, or simply hid profits in Western banks.

Today, by contrast, the gulf’s farsighted, business-minded political leaders are joining with their more mature and innovative private sectors to ensure the money is wisely spent. Led by Dubai, which is fast becoming a modern banking and financial-services hub, cities in the region are embracing reform and charting an ambitious agenda for the future. "A new gulf is dawning," says Edmund O’Sullivan, the Dubai-based editorial director of the Middle East Economic Digest (MEED). "And it’s moving much faster and smarter than it did in the 1970s."

The revival, says Fareed Mohammed of PFC Energy in Washington, D.C., is due to "excellent macroeconomic policies, strong technocratic capacity, a vastly improved regulatory environment, a private sector willing to both invest and innovate, and strong global links in services." As he notes, "All of these ingredients have come together to support sustainable growth."

Consider: the IIF estimates that $1 trillion of the $1.5 trillion windfall has stayed in GCC states, being spent on imports or development. That’s a big improvement on the past, when much money was stashed in Swiss banks or squandered on weapons. True, some of today’s spending, especially on the red-hot real-estate market and extravagant tourist projects, has raised concerns. But industrial investments, which are critical to helping the region diversify its economy beyond oil, are rising.

This is especially so in Saudi Arabia, which, according to Georgetown’s Jean-François Seznec, is on target to become the world’s top petrochemicals producer by 2015. New steel, aluminum and plastics plants are also on the way.

In fact, a new breed of company is now emerging in the region, one that is highly efficient, ambitious and globalized. These new gulf firms are creating jobs, feeding the growth cycle and helping economies diversify. And they are starting to affect other economies around the world. Leading the pack is Emirates Airline, an award- winning company that in the next decade is expected to become the planet’s largest air-travel operator. (At a Paris air show in June, Airbus booked an astounding $32 billion in orders from gulf-based businesses.) Meanwhile, the Dubai-based Emaar real-estate firm is now building projects from Casablanca to Karachi, and the U.A.E.’s Etisalat is winning telecom contracts from West Africa to Pakistan.

Some of these businesses may be government-owned or -controlled, but they are a far cry from the inefficient state-sponsored enterprises of the past. These are not sinecures for tea-sipping bureaucrats; they attract top talent, compete globally and win international awards. They’re also supporting the growth of related but truly independent gulf-based companies, such as Aramex, a regional transport company based in Dubai. Fadi Ghandour, the company’s founder, directly credits his success to the "astonishing growth of Dubai as a business hub," saying that his company simply could never have grown so rapidly in his native Jordan.

On the government level, a lot of money is still being invested in safe havens like the United States (about $300 billion this time) and Europe (about $100 billion). But in the past five years, Gulf states have also invested $60 billion in the needy regions of the Middle East and North Africa and have put another $60 billion in Asia. This has led to the creation of gulf-driven boom pockets in Egypt, Morocco and Jordan. It has also led to the creation of a New Silk Road, as trade between the GCC and Asia has quadrupled in the past decade. Gulf investors are now lining up to buy Asian assets; when the Industrial and Commercial Bank of China held an IPO last year, for example, the biggest buyers hailed from Kuwait, Qatar, the United Arab Emirates, and Saudi Arabia.

Taken together, these trends have given the gulf a higher global profile than it has ever enjoyed. For example, the vast debts of countries like the United States are now being financed with cash from three areas of the world: China, Japan and the gulf. This means that the GCC states have become a major force in growing concern over global imbalances. It also means that they have a clear stake in stoking global growth led by the United States, lest their own fortunes fall.

Of course, for the trend to continue, the Gulf states must keep pushing reform. By enacting business-friendly laws, Dubai has already become the Hong Kong of the Middle East: a free trade hub that fuels the larger economies. The regional heavyweight, Saudi Arabia, has also taken positive steps, dramatically trimming its debt, enacting pro-business laws and joining the World Trade Organization last year. The Saudi private sector has started pulling its weight; in the 1970s it accounted for less than 10 percent of the country’s GDP, whereas today the figure is more like 60 percent. And King Abdullah has launched a $600 billion infrastructure development plan, aiming to create several new multi-billion-dollar industrial, financial and manufacturing "cluster" cities. These include the $27 billion King Abdullah Economic City that could, on its completion, house 2 million people and create 1 million jobs in an area the size of Paris.

But laggards remain. Saudi Arabia’s education system needs to start producing more high-tech graduates and fewer experts in Islamic studies. Kuwait seems content to follow its old model, growing fat off oil profits and investing in blue-chip companies. And Oman, though ruled by a modernizing sultan, has been slow to embrace the new turbocharged business climate. Throughout the region, says Alex Theocarides, a Geneva-based private banker, "the rule of law and transparency remain weak" and crony capitalism still holds sway: business is dominated by a closed circle of princes and merchants who prevent the development of a truly independent entrepreneurial culture.

Still, what’s impressive is how even the quality of those cronies has improved, says O’Sullivan of MEED. "The majority of [the gulf’s] ruling princes are modernizers with their eyes on business," he notes. Unlike the military-minded autocrats of other Arab states, these merchant princes are adding "shareholder value" even as they grow fat off insider deals. Thus, according to the World Bank and World Economic Forum, the GCC now offers a far better business climate than the rest of the Arab world.

Of course, the other Middle East could still interfere with the gulf’s progress. Conflict in Lebanon or the Palestinian territories would be unlikely to have much effect, but Iraq’s unraveling has probably already limited foreign investment. And a U.S. conflict with Iran, which sits right across the Persian Gulf from the GCC, would slow business and threaten tanker traffic in the vital Strait of Hormuz, through which 90 percent of gulf oil passes. That said, even conflict could have its upside: Iranian capital is already fleeing to Dubai (at last count, Dubai had 9,000 Iranian-owned businesses), and the exodus could increase in the event of war.

Absent these gloomy scenarios, the gulf boom seems likely to continue. As Sheik Mohammed, the ruler of Dubai, likes to say about his ambitious city-state, what we see today is just a slice of his master plan. It’s exciting to ponder what the rest of it will bring, and the effect it will have on the gulf -- and the world.

World View: A Darkening In the North

Cecille Isidro — Mon, 18 Jun 2007 13:21:00 -0400

Iraq’s Kurdish north has offered a heartening contrast to an otherwise blood-soaked country. Its polity works; its economy thrives. But the reports last week of a Turkish military incursion, in pursuit of Kurdish rebels, is an eruption of only one of three steadily deepening problems that could combine to worsen the Bush administration’s predicament in Iraq.

The first is the dispute over Kirkuk, capital of At-Tamim province. The city and its environs contain some 10 billion of Iraq’s 112 billion barrels in proven oil reserves. Saddam Hussein expelled thousands of Kurds as well as Turkomans and Christians from the Kirkuk region in the 1980s and 1990s, replacing them with Arabs, mainly Shia from the south, themselves victims of his repression. With Saddam gone, roughly 350,000 Kurds moved back (some original residents, others not) with active support from the Kurdistan Regional Government (KRG). Thousands of Arabs fled, alleging threats and attacks by Kurdish groups. The influx also displaced Turkomans, but they continue to stake their own claim to Kirkuk, supported by Turkey.

Iraq’s Constitution requires a referendum on Kirkuk’s future status by the end of this year, and as the deadline nears, the carnage increases. Car bombs, sectarian murders (fanned by Al Qaeda in Mesopotamia), and expulsions abound. The vote will make matters worse. The run-up will almost certainly be marred by violence, and Arabs and Turkomans will reject a Kurdish victory. But the Kurds threaten to leave Iraq’s government if it is postponed, as the Iraq Study Group recommended. Kirkuk looks like the Gordian knot that can’t be cut.

The second problem involves Mosul, Iraq’s third largest city and capital of Nineveh province, which lies just west of Iraqi Kurdistan. Sunni militias and Al Qaeda have been targeting Mosul’s Kurds, who are fleeing to Kurdistan or areas near its border. Kurdish militias have retaliated, but have not been drawn into a full-blown civil war. That could change, which is what Al Qaeda wants; a new front would further stretch American forces.

Nineveh’s tensions also stem from the underrepresentation of Sunnis, who boycotted the 2005 provincial elections. Some observers recommend fresh elections to redress the imbalance, but absent a minimum of trust, the elixir of elections won’t work and could make things worse. The Kurds constitute a third of Mosul province’s population but now hold three quarters of the seats in its council and also control most key administration positions; they won’t part with political power to placate the Sunnis.

The third problem is the redoubts established in Iraqi Kurdistan by the Kurdistan Workers’ Party (PKK), the militant separatist organization from Turkey’s Kurdish southeast. Turkey has periodically launched artillery and air strikes, covert operations and cross-border incursions against suspected PKK positions in northern Iraq. In recent weeks top Turkish generals and politicians have taken a hard line, warning of new incursions if the KRG does not take steps to expel the PKK. Ankara upped the ante this month by massing troops and armor on its border with Iraq, and though it denied the reports of a cross-border move by thousands of its troops on June 6, the tensions are clearly rising.

But the KRG won’t cave and evict the PKK. The Iraqi Kurds and their leaders are generally sympathetic to Turkish Kurds. In response to Turkish threats, the two top Iraq Kurdish leaders (Iraq’s President Jalal Talabani and KRG president Massoud Barzani) have countered that the KRG could retaliate by supporting Turkey’s restive Kurds.

U.S. Defense Secretary Robert Gates recently urged Turkey to stay out of northern Iraq, but can Washington stay Ankara’s hand? Only if the Kirkuk dispute is settled in a manner that does not hand the territory to the Kurds, the KRG checks the PKK, and Iraq holds together. One would be foolish to bet a large sum on any of these scenarios.

Moreover, the Iraq War has spawned strong anti-American nationalism in Turkey. Opinion polls show that a majority of Turks believe that Washington, a longtime ally, now seeks to truncate Turkey, presumably by allowing an independent Iraqi Kurdish state to emerge on its southern flank. This animosity has reduced any leverage Washington has on Turkish leaders.

With the surge having mixed results at best and Americans’ patience with the war eroding, the one place in Iraq where the Bush administration could show evidence of success seems headed for trouble. If northern Iraq descends into chaos, President Bush’s vow to stay the course will become even less credible -- not just to Americans, but also to Iraqi insurgents and Al Qaeda.

War in the Caucasus?

Cecille Isidro — Mon, 16 Oct 2006 23:50:00 -0400

Bad relations between Washington and Moscow are nothing new. But this time America may be lurching toward something it carefully avoided throughout the cold war: an armed confrontation between a U.S. client state and Moscow on Russia’s own border.

The crisis erupted on Sept. 27, when Georgian President Mikhail Saakashvili arrested four Russian officers, accusing them of helping plan a coup against him. The men were soon released, partly under pressure from the United States, but Moscow promptly imposed heavy trade and financial sanctions and recalled its diplomats from Tbilisi. Russian officials have denounced Georgia’s government as "fascistic," and the Russian Parliament decried its "state-sponsored terrorism." For his part, Saakashvili accuses Russia of "planning to ruin Georgia."

This comes amid other developments pushing the region toward potential conflict. A key one is unfolding many hundreds of kilometers away, in the Balkans, where the West is likely to soon grant independence to the breakaway Serbian province of Kosovo. What’s the link? During the breakup of the Soviet Union, indigenous groups in the Georgian regions of Abkhazia and South Ossetia fought separatist wars in which they received barely veiled help from the Soviet military. These territories have since enjoyed de facto independence, though they aren’t formally recognized by any state, including Russia. Moscow has granted Russian citizenship to most of their people, while Russian "peacekeepers" continue to "separate" local forces from their Georgian antagonists. This uneasy truce has prevailed since 1993, broken by periodic violent flare-ups.

But on Sept. 9, when Vladimir Putin invited a group of Western experts to dinner, including me, he issued a stern warning. If the West recognizes Kosovo’s independence, Russia may do the same for the former Georgian republics. "It is inadmissible to apply one rule to Kosovo and another to Abkhazia and South Ossetia," he told us. "Such a policy cannot be ethical and has no future." Probably encouraged by Moscow, South Ossetia has scheduled a referendum on independence for November. Meanwhile, Saakashvili warns that any attempt to wrest these regions away would force Georgia to "go to war."

As Russians see it, the West’s differing approach to the Balkans and the Caucasus reeks of double standards. Moscow considers itself duty-bound to support Abkhazia and South Ossetia, if only because of fraternal ties. Hundreds of thousands of ethnic Russians live in the republics of the North Caucasus, and the last thing Russia needs is more ethnic unrest in that volatile region. Moscow is also extremely hostile to Georgia’s westward tilt. Washington has sent military advisers and equipped the Georgian Army. With the encouragement of many in Washington, Tbilisi is loudly pushing its desire to join NATO. Seen from Moscow, this looks like a U.S. strategy to encircle Russia, destroying its influence in the region.

The Bush administration has repeatedly assured the Kremlin that it is putting heavy pressure on Saakashvili’s government not to attack the breakaway regions. Yet Moscow can’t help but see a contradiction. Exhibit A is the fact that the United States continues to arm and train Georgian forces. Moreover, Russians see Georgian adventurism as encouraged by less restrained U.S. politicians, such as John McCain and other senators who visited Georgia in recent months and expressed strong support for Georgian aspirations. McCain’s helicopter allegedly came under fire as it flew over South Ossetia.

On other fronts, the Russian government was infuriated by the Bush administration’s earlier moves to bring Ukraine into NATO. Publicly, it muted its criticism. In private, Russian officials threatened severe retaliation, including the possibility of ending Russian participation in the Iran nuclear talks and lifting Moscow’s freeze on weaponry sold to Tehran. The issue is currently moot -- Ukraine itself has decided not to seek NATO membership -- but a legacy of bitterness remains.

Other grievances have also festered. Moscow strongly resents the fact that America is the last major country blocking Russian membership in the WTO. Moscow’s response has been to threaten to exclude U.S. energy companies from the development of the immense Shtokman gas field in the Barents Sea. In Europe, Russia watches Chinese companies invest with minimal trouble. Yet when Russian entities seek to buy stakes in Airbus, Arcelor or other European corporations, there has been a panicky and hostile reaction. Putin put it bluntly: "If the Europeans want us to let them into the very heart of our economy today, energy production and transport infrastructure, then we want to know what we would get in return." The Russian president clearly remains committed to cooperation with the West and to Russia’s integration into world markets. (His harsh warning on Georgia stood out precisely because his other remarks were so studiedly mild.) But a senior aide pointedly warned that whoever replaces him in 2008 may be less well disposed to the West.

The special danger with Georgia is that it’s so laden with emotion. Since the fall of the Soviet Union, Russians have been infuriated by the way Georgia has swallowed billions of dollars in Russian gas subsidies and remittances from Georgian workers in Russia, yet allies itself with a West that has provided only a fraction of this help. The way Georgian leaders paint Russia -- accusing it of past repression and human-rights abuses, among other things -- angers many Russians, especially considering that the greatest tyrant in their own history, Joseph Stalin, came from Georgia. Putin is immensely disciplined, not given to speaking loosely or acting rashly. His foreign and domestic policies reflect his essential pragmatism and caution. Yet I worry that when he looks at Georgia, anger may take over. Add in Georgia’s determination to regain its lost provinces and Russia’s determination to resist this, coupled with U.S. support and the specter of Georgia’s joining NATO, and we have all the elements of a tragic conflict.

Why Russia Is Really Weak

Cecille Isidro — Mon, 25 Sep 2006 15:12:00 -0400

News stories about Russia these days follow a predictable theme. The country is resurgent and strong, and the West must adjust to this new reality. But that story line is wrong. Russia is weak and getting weaker.

Take the conventional index of power -- military might. Yes, Moscow is testing advanced missiles systems and talks buoyantly about countering a U.S. antiballistic-missile system with a new generation of warheads that can evade interceptors. Yet note the failure earlier this month of the highly touted Bulava submarine-launched missile. The United States experiences such mishaps, too, of course. But in Russia they are signs of something deeper. It’s no secret that, for all Russia’s new oil wealth, its Army remains poorly trained, malnourished and demoralized. Alcoholism, suicide and corruption are rife. Weaponry is aging and newer models arrive at a trickle: India has bought more Russian tanks since 2001 than the Russian Army.

Russia gets credit for economic growth -- nearly 7 percent this year, according to the IMF. But the boom has been propelled mainly by rising energy prices. What happens when -- not if -- oil and gas prices begin to retreat? New investment in production capacity is insufficient to sustain current levels of exports. Meanwhile, economic reform has stalled, state control over strategic economic industries has increased and foreign investment remains low. Of the $648.1 billion in foreign investment worldwide in 2004, only $11.6 billion went to Russia. Not surprisingly, Russia rates poorly in globalization rankings. The 2005 Foreign Policy/A.T. Kearney survey placed it 52nd in a list of 62 countries -- a drop of five places from 2004.

Russia’s human capital is being ravaged. The population is declining by some 750,000 annually because of low birthrates and unusually high death rates among males; it’s also aging rapidly and will therefore become increasingly less productive. Alcoholism remains pervasive, as does drug use. Russia has the highest rate of tuberculosis in Europe. AIDS has yet to crest. Suicide is one the rise. According to WHO data on 46 countries between 1998 and 2003, Russia, with 71 cases per 100,000 of the male population, topped the list.

A nation’s power also rests on the strength of its institutions. Here, too, Russia is growing weaker. Putin’s authoritarianism has brought order to a once chaotic political scene. But Parliament has been neutered. So have independent civic organizations, political parties and media. The secret police, military and security services -- no friends of the rule of law -- occupy prominent political positions. Official corruption flourishes.

Abroad, Russia’s influence continues to ebb. Its closest allies -- Kyrgyzstan, Tajikistan and Uzbekistan -- are poor and politically unstable. Energy-rich Kazakhstan and Turkmenistan resent Russia’s grip on their exports. Armenia, loyal but penurious, remains embroiled in the Nagorno-Karabakh conflict with increasingly prosperous Azerbaijan. The Kremlin’s meddling in Georgia has deepened Tblisi’s determination to join NATO and strengthened anti-Russian sentiment. Belarus’s dictatorial president envisions union with Russia, but his Soviet-style political order repels many ordinary Russians.

On the wider global stage, Putin displays seeming strength and new confidence. Russian support is key to the negotiations over Iran’s nuclear program. Its Security Council veto gives it an important say on various international issues, from Kosovo’s independence to the United Nations peacekeeping force in Lebanon. Yet Putin’s rhetoric increasingly strikes themes of Great Russia -- imperial, nostalgic, nationalistic. However much it resonates with a particular Russian political class, that rhetoric can itself breed weakness.

You see this in the sharp rise of race-related hate crimes in Russia, most recently the clash between Russian xenophobes and Chechens in the north- western town of Kondopga, when a bar brawl triggered huge rallies of ultranationalists demanding the expulsion of ethnic minorities. Right-wing racism and Russia-for-Russians chauvinism augur ill for a multiethnic, multiconfessional Russia, which has near 25 million Muslims.

So, the received wisdom is wrong. What the West must live with is a weak Russia. And history shows that states that talk loudly while carrying a small stick often overreach, creating problems for themselves and others.

A Plan for Afghanistan

Cecille Isidro — Sun, 23 Jul 2006 14:21:53 -0400

On his recent trip to Kabul, U.S. Secretary of Defense Donald Rumsfeld pledged that America was not disengaging from Afghanistan, where the Taliban have staged a bloody resurgence in several southern provinces. But the more telling comment may have come from the man standing beside him at the time, Afghan President Hamid Karzai. When asked whether he would request more U.S. troops to quell the insurgency, he replied, "Yes, much more, and we’ll keep asking for more, and we will never stop asking."

The danger is not that revived Taliban forces will defeat NATO or U.S. forces on the battlefield; there is no chance of that. But if the Taliban’s resurgence and Afghans’ economic misery are not ended, a government capable of surviving if Western troops withdraw will never emerge in Afghanistan. And that means that the West will have to fight in Afghanistan indefinitely. Is that something the U.S. electorate will tolerate? The Taliban and Al Qaeda are betting not.

More troops and more money will not solve the problem. What’s also needed is imaginative thinking. To begin with, it is facile to treat Afghanistan as a geographical and economic island. The only hope of developing the country is to spur growth in its surrounding region. One way to do this is to create new transport links through Afghanistan from Central Asia to Pakistan and India. It is shameful that we have succeeded in rebuilding only one stretch of highway since toppling the Taliban. We ought to have finished a road network and to be well into the creation of a railway linking the South Asian and former Soviet rail systems, not least because by far the greater part of the track would traverse regions secure from Taliban attack.

A regional strategy should also involve a new approach to Iran. Up to now, the Bush administration has put massive pressure on Karzai’s government not to develop economic and other ties to Tehran. Yet, like it or not, Iran has influenced (indeed, often ruled) Afghanistan for some 2,500 years. It has the capacity to act as a spoiler, and has good reason to do so as the war of words between Washington and Tehran heats up. There is a basis for cooperation in Afghanistan, however, because key Iranian interests there are congruent with those of the United States -- above all when it comes to fighting the heroin trade and preventing a return of the savagely anti-Shiite Taliban.

Within Afghanistan, we need a development program that brings tangible benefits to ordinary people. True, sustained programs to promote development are well-nigh impossible in areas -- Helmand, Kandahar, Oruzgan, Zabol and Kunar provinces -- where Taliban attacks are frequent. But we can pursue them far more robustly than we have in provinces, particularly in the north and west, where there is greater tranquility. Success there would create a "demonstration effect," showing Taliban supporters the benefits they would receive by ending the violence, proving to ordinary Afghans that the United States and its allies are serious about lifting them out of poverty. Construction projects would also create jobs for migrant laborers from the Taliban provinces, who would send remittances home.

Construction is the key -- not just for transport but for urban housing, and for basic rural infrastructure including schools, roads, medical clinics and sources of potable water. We will have to plan, and fund, this construction over decades if it is to be more than a Band-Aid solution. The role of international donors in building schools has been touted by the Bush administration and the Karzai government, and it is a worthy achievement. But generating large numbers of educated young males without prospects for decent employment is not only pointless, it is dangerous. As we have seen repeatedly, such graduates are ideal recruits for Islamist extremists.

With its budget deficits, inflated by bills from the war in Iraq, and with a substantial gap between the aid pledged by donors to Afghanistan and the funds actually received, the United States needs to do more with less -- something that the cost overruns of projects in Iraq make all too clear. To economize, we need to employ, as much as possible, companies from the region. Indian and Turkish firms, in particular, have extensive experience with construction projects in the developing world. So do companies from the Middle East, and involving them in the business of rebuilding Afghanistan can create jobs and tap local expertise, showing in the process that America’s avowed policy of reaching out to the Islamic world consists of more than rhetoric.

Like it or not, the overwhelming majority of Afghans are conservative Muslims, and it is shortsighted to view economic development as a purely technical enterprise. For this same reason, part of the funds for building the Afghan economy should be earmarked for reconstructing the mosques and religious centers destroyed during the decades of war, particularly in major cultural and religious centers such as the western city of Herat.

These proposals will take money, time and imagination to work, and there are no guarantees of success. But quite apart from what we owe the Afghan people, we owe it to ourselves not to fail; as September 11 so cruelly demonstrated, we neglect Afghanistan at our peril.

Building Up the Burbs

adminn — Mon, 10 Jul 2006 16:46:00 -0400

Sorry, city sophisticates, but the metropolis of the future may prove far less intensely urban than you hope. For all the focus on trendy downtowns and skyscrapers, the real growth in jobs and population is likely to take place on the periphery. The new urbanism, built around downtown revival and beloved by the celebrated starchitects, will cede pride of place to the "new suburbanism." And not only in the land of free-ranging suburbs, America.

In contrast to the powers that fight "sprawl," advocates of the new suburbanism focus on ways to make the periphery work better. It's about bringing business and jobs, not just bedrooms, to the outer rings, and reviving main streets in smaller towns and cities, not just in major urban centers. In some senses, the new suburbanism seeks to recover the ideals of early advocates of decentralization such as the early-20th-century British visionary Ebenezer Howard, who proposed dispersing populations into largely self-sustaining "garden cities."

Correcting the problems of suburbia is an international imperative. Almost everywhere, cities tend toward sprawl, more like much-maligned Los Angeles than like Manhattan, the urbanist's heaven. This pattern owes largely to the preference of the middle and working classes for privacy and space -- choices ridiculed as boringly bourgeois by urban theorists. "L.A. is the realization of every immigrant's dream -- the vassal's dream of his own castle," observed the Italian-born, Los Angeles-based urbanist Edgardo Contini in the 1960s. "Europeans who come here are delighted by our suburbs. Not to live in an apartment! It is a universal aspiration to own your own home." Today, surveys find that 70 to 80 percent of Americans prefer a single-family home and only 15 percent, an apartment in a dense urban area.

These preferences are increasingly universal. In Europe, Canada, Japan and Australia, growth is spilling out of urban centers, even in places that boast extensive mass-transit systems. In London, the center has been losing population since at least the 1960s. As H. G. Wells predicted a century ago, much of southern and central England is a vast suburb of the capital. In Frankfurt, the suburbs now reach out as far as 80 kilometers and in Paris, the center is losing about 1 percent of its population annually as businesses and the middle class move out past the heavily immigrant banlieues. In Japan, too, high prices and congestion have propelled an exodus: between 1970 and 1995, 10 million people settled in suburbs around the main cities of the Kanto Plain, including Tokyo, Yokohama and Kawasaki.

The impulse of many authorities is to try to stop sprawl and the problems (particularly overdependence on cars and malls) it brings. Planners in cities from Sydney to Portland, Oregon, have imposed "anti-sprawl" strategies that attempt to force people back into dense concentrations. Sydney's strict land-use regime, now under attack from both the political left and right, is helping drive up home prices -- and drive young families to less highly regulated Australian cities. In Portland, a similar campaign is pushing development beyond the reach of city planners, across the Columbia River to Washington state.

In contrast, the new suburbanism seeks not to fight market forces, but to address the problems. Many of the brightest ideas can be found in planned communities, often modeled on Howard's garden cities, such as Valencia, California; the Woodlands, outside Houston; Reston, Virginia, or Marne La Vallée outside Paris. They are not mere bedroom communities with malls but boast well-developed business parks, town centers and, in some cases, notably the Woodlands, a large amount of well-preserved, natural open space. Other successful models are being developed in older suburbs. Fullerton, California, and Naperville in Greater Chicago have revived abandoned core districts as centers for entertainment, dining and community events. Naperville has also developed a lovely riverside park that attracts strollers, hikers and bicyclists.

Such patterns of enlightened suburban development could be applied around the world. Many nations still get it wrong, building anonymous tracts 30 to 50 kilometers from the closest jobs or town center, mainly as bedroom communities for a big city. A leading example of enforced centralization is Seoul, where the average density of more than 14,000 people per square kilometer is three times London's, five times L.A.'s and 10 times that of growing U.S. cities like Houston or Phoenix.

Greater Seoul, in short, is almost hostile to human life, a widening ocean of high-rises with a shrinking number of traditional Korean houses. Suh Yong-bu, a Korean expert in business demographics, notes that high housing prices and cramped spaces have helped send Korea's birthrate into free-fall, down 30 percent since 1993; much the same problem is felt in other ultra dense urban societies like Japan and China. "The same patterns can be found throughout Asia," notes demographer Phil Longman, author of The Empty Cradle, a study of world population trends. "Once everyone is forced into a small city place, there's literally no room left for kids."

We now see the beginnings of a battle over the future of the suburbs. In Britain -- where suburbs are home to roughly half the population, but the bias of most planners and politicians is still toward the city -- there's a growing movement to bring arts, from galleries to symphonies, to smaller villages. The increasingly high cost of city living may help pro-suburban forces from Britain to Japan, where the government also fights sprawl with limits on mega malls and other measures.

Perhaps the ultimate test will come in the fastest-growing major economies, India and China. Mall developers like Aeon Co. Ltd. (the same people now being told to back off in Japan) are rushing to build suburban homes and shopping areas in India, outside Mumbai, and in China outside Shanghai, Guangzhou, Tianjin and Beijing. Many of them are following American, Australian or Canadian models. There's one Chinese development named "Orange County," named after the famous southern California suburb. To hip urbanites, of course, that will sound like a bad joke. To the world's aspiring majority, it sounds like a bright promise.

The Real Crisis In Putin's Russia

Cecille Isidro — Mon, 14 Mar 2005 00:00:00 -0500

What's the main problem in Russia today? Most people have a ready answer: President Vladimir Putin's strangulation of democracy. Yes, but there's a bigger one. That's whether Russia is stable enough to hold together.

Few Russia watchers would suggest the country is on the verge of disintegration. Yet it could be. Certainly, its present boundaries are likely to be altered. The epicenter for change is the predominantly Muslim North Caucasus, consisting of seven ethnic republics (Adygea, Karachayevo-Cherkessia, Kabardino-Balkaria, North Ossetia, Ingushetia, Chechnya and Dagestan) framed by the Caucasus Mountains, the Black Sea and the Caspian Sea. It's the sort of place few outside the Kremlin pay much attention to. But we should, for it's not just war-torn Chechnya that's spinning out of control. It's the entire region, where a combustible synergy of terrorism, poverty, ethnic tensions, pervasive crime, corruption and radical Islam has left Moscow reeling. Consider recent developments:

Last December, in Kabardino-Balkaria, the militant Islamic group Jamaat Yarmuk attacked the local branch of the Federal Drug Control Service. Four of the agency's officers were killed and its headquarters was torched. Jamaat, which condemns the narcotic trade as a violation of Sharia, accused the drug cops of being in cahoots with traffickers. The group claims to have militant cells across the republic. An increase in attacks by armed radical Islamic groups -- some connected to Chechen warlord, Shamil Basayev -- prompted local authorities to declare martial law last summer.

In Adygea, Russian nationalists encouraged by Moscow seek to merge with Russia's Krasnodar region to the north. If they succeed, Adygea would lose the autonomy it won in mid-1991. The backlash in the form of animosity toward Russians is evident among the Adygei, strengthening that minority's own nationalist movement and heightening the danger of civil war.

Karachayevo-Cherkessia has seen a wave of assassination attempts against local officials, the most important being the slaying last October of Deputy Prime Minister Ansar Tipuyev. The republic's mountainous zones are a stronghold for separatists from the Karachai minority and Islamic militants with links to Chechnya. Armed clashes between radical Muslims and local authorities have overwhelmed the republic's security services, forcing Moscow to beef up its military and police presence.

The war in neighboring Chechnya has already spilled over to Ingushetia. The most recent example was an attack by heavily armed Islamic militants in the capital city, Nazran, in June. Some 60 people were killed, including the acting Interior minister and two other senior officials. The attackers also ambushed Russian reinforcements sent from North Ossetia. Ingushetians were blamed for the horrific terrorist attack on the school in Beslan, in North Ossetia. Already embroiled in a bloody territorial feud with the Ingush, Ossetians vowed revenge. Renewed violence between the Ingush and the predominantly Christian and pro-Russian Ossetians would almost certainly draw Chechen fighters into the fray.

Finally, there is Dagestan, a mountainous republic and a crazy quilt of more than 30 nationalities, sandwiched between Chechnya and the Caspian. Civil peace rests on an intricate apportionment of political power and economic wealth among the major nationalities, the Avars, Dargins, Laks and Kumyks. The resulting balance is delicate and could be upset by Dagestan's instability, which takes various forms. There have been incursions from Chechnya by Chechen and Dagestani militants, numerous attempts to kill local officials (Deputy Interior Minister Maj. Gen. Magomed Omarov was slain just last month), terrorist bombings and gangland hits by rival criminal networks. Moreover, Salafi Muslims, adherents of a purist version of Islam, are ensconced in several villages, where social relations and attire conform to their reading of Sharia.

The bottom line? These deep-rooted problems could lead to the progressive crumbling of Russia's authority along its entire southern border. That would undermine Putin, or even cause his fall from power. It would also transform Russia's geostrategic position. Already, radical Islamic cells are reportedly being formed outside the North Caucasus in regions such as Krasnodar, Staropol and Rostov. Mounting upheaval throughout the North Caucasus will weaken south Caucasian states that the West supports, particularly Georgia and Azerbaijan. Given the porousness of borders, a surge in transnational crime, terrorism and political unrest will be felt all the way to Western Europe. Yes, the Kremlin's creeping authoritarianism is worrisome. But the growing turmoil on Russia's southern flank is more so.