Author Archives: Doug Merrill

About Doug Merrill

Freelance journalist based in Tbilisi, following stints in Atlanta, Budapest, Munich, Warsaw and Washington. Worked for a German think tank, discovered it was incompatible with repaying US student loans. Spent two years in financial markets. Bicycled from Vilnius to Tallinn. Climbed highest mountains in two Alpine countries (the easy ones, though). American center-left, with strong yellow dog tendencies. Arrived in the Caucasus two weeks before its latest war.

Russia, Iran, Obama and Some Missiles

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Because it’s not like the rest of politics stops so that Europe can reach a consensus on the economic crisis.

President Obama sent a secret letter to Russia’s president last month suggesting that he would back off deploying a new missile defense system in Eastern Europe if Moscow would help stop Iran from developing long-range weapons, American officials said Monday [March 2] . …

The Obama letter was hand-delivered in Moscow by top administration officials three weeks ago. It said the United States would not need to proceed with the interceptor system, which has been vehemently opposed by Russia since it was proposed by the Bush administration, if Iran halted any efforts to build nuclear warheads and ballistic missiles.

The officials who described the contents of the message requested anonymity because it has not been made public. While they said it did not offer a direct quid pro quo, the letter was intended to give Moscow an incentive to join the United States in a common front against Iran. Russia’s military, diplomatic and commercial ties to Tehran give it some influence there, but it has often resisted Washington’s hard line against Iran.

Medvedev isn’t playing.

Russia’s president Dmitry Medvedev on Tuesday [March 3] rejected any suggestion that Moscow would “trade or exchange” in policies in order to dissuade the US from installing an anti-ballistic missile system near its borders in Eastern Europe.

Pulling Strobe Talbott’s book off the shelf, I recall that Russia-Iran consumed a surprising amount of presidential attention back in the day. Add in that Iran could be useful in Afghanistan, and the puzzle gets an extra layer of moving parts.

Sentence of the Day (2)

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For a small break from Brussels and the economic crisis:

Nothing fades so quickly or so tackily as a Soviet resort.

One of the lighter observations (on p. 139) from The Spirit-Wrestlers by Philip Marsden, a journey across southern Russia and the Caucasus in search of various religious non-conformists who fell afoul of both Russian and Soviet states.

Not Really Good News for Anybody

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Hot off the wires, the US contraction is larger than expected.

Gross domestic product contracted at a 6.2 percent annual pace from October through December, more than economists anticipated and the most since 1982, according to revised figures from the Commerce Department today in Washington. Consumer spending, which comprises about 70 percent of the economy, declined at the fastest pace in almost three decades.

The annual decline in the previous quarter was much smaller (0.5 percent), so here’s hoping that this is data on the worst quarter. It may not be, though.

Michael O’Hare on Executives

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And what to do with them.

But what about the talent part? On the whole, this indispensable leadership and insight has made a smoking ruin of every company they were allowed to play with! Let’s take Bob Lutz, the vice-Chairman of General Motors. In the Jan. 31 Economist, we find him saying GM held on to SAAB for nineteen unprofitable years out of twenty, for a $5 billion loss, selling car after car at a loss of $5K each because … wait for it … “it loved the marque and the cars.”

I had to read it again: they flushed five billion dollars of their shareholders’ money down the toilet for the personal amusement of the executives, and went on doing it for two decades. More amazing still, Lutz is dumb enough, or arrogant enough, or both to tell exactly that story to a reporter. Most amazing, he seems to still be vice-Chairman!

Read the rest, it’s pitchfork-ready.

Aid Worker Shashlik

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From Geert Mak’s visit to Sarajevo in 1999:

Batinic leans over and looks me straight in the eye. ‘Tell me, Geert, honestly: what kind of people are you sending us anyway? The ones at the top are usually fine. But otherwise, with only a few exceptions, the people I have to deal with are third-class adventurers who would probably have trouble finding a job in their own country.’ It makes him furious. ‘To them, we’re some kind of aboriginals. They think they have to explain what a toilet it, what a television is, and how we should organise a school. The arrogance! They say Bosnians are lazy people, but it takes them a week to do a day’s work. And you should hear them chattering away about it! At the same time, everyone sees how much money they spend on themselves and their position. They put three quarters of all their energy into that.’

Not a new complaint, but pungently put. The classic retort, of course, is that if the local people hadn’t made such a terrible mess of their own country, they wouldn’t need the international aid. Mak’s companion does not spare his fellow Bosnians either.

We order another drink, and Batinic starts complaining about the corruption in Bosnia, the rise of religious leaders in the city, the enthusiastic discussions at the university about ‘the Iranian model’. ‘Sarajevo isn’t Sarajevo any more. The city has filled with runaway farmers…’
Batinic’s pessimism has had the upper hand again for some time now.

In Europe: Travels Through the Twentieth Century by Geert Mak, p. 806

More bits from the book here and here.

Sentence of the Day

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Describing some events in the last months of 1989:

Meanwhile, an unknown KGB agent in Dresden, Vladimir Putin, had tried to pile so many documents into a burning stove that the thing exploded

In Europe, by Geert Mak, p.718

I’m nearing the end of the book, and it’s living up to my initial impression. More, perhaps, when I’m all the way through.

Hit and Run

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North and south of the Caucasus mountains:

Azerbaijan’s air force commander was shot and killed as he left his home on the morning of February 11 … Lt-Gen. Rail Rzayev, the head of Azerbaijan’s Air Force and Anti-Aircraft Defense Force, was shot in the head as he was sitting in a Mercedes in front of his Baku apartment building. Doctors at a military hospital could not save 64-year-old Rzayev’s life, the Interior Ministry announced. … Rzayev had served as Azerbaijan’s air force commander since 1992, after previously heading Baku’s anti-aircraft defenses. …

Most recently, in December 2008, Rzayev attracted media attention after reports surfaced that Azerbaijani military planes had forced a helicopter carrying Minister of Emergency Situations Kamaladdin Heydarov to land. No official explanations were issued for the incident. Azerbaijani mainstream media outlets, however, reported that Heydarov, arguably the government’s most influential minister, had failed to inform the Anti-Aircraft Defense Forces about his flight, allegedly to his villa in the central Gabala region. …

Lt. Gen. Rzayev was among those Azerbaijani generals who strongly opposed any compromise resolution of the Nagorno-Karabakh conflict with Armenia, noted Rauf Mirgadirov, political columnist for the Russian-language daily Zerkalo (The Mirror).

Azerbaijani military politics are murky, to say the least, but this bears watching.

Speaking of murky, the murder of a Chechen in Austria may have some interesting fingerprints on it:

A Chechen refugee killed in Vienna last month was the key witness in an Austrian criminal investigation into Chechen President Ramzan Kadyrov that could have led to Kadyrov’s arrest last year, prosecutors and lawyers said Wednesday.

The revelation fuels speculation that the killing of Umar Israilov, a former bodyguard of Kadyrov, was aimed at silencing a vocal critic of the Chechen leadership. Israilov was gunned down on Jan. 13, just four days after The New York Times informed the Russian government that it was planning to publish a report based on interviews with him implicating Kadyrov of murder and torture. …
Israilov last year offered information implicating Kadyrov of torture and murder to a team of lawyers in Austria and Germany, who in turn asked Vienna prosecutors to arrest Kadyrov during an expected visit to Austria for the European football championship, the Berlin-based European Center for Constitutional and Human Rights said Wednesday. …
Around the same time as the request for the arrest, Austrian police arrested a Chechen man who claimed that he had been sent by Kadyrov to kill Israilov, Der Falter reported Wednesday, citing police records.
Jarosch said the case of the Chechen man was not pursued because Austrian prosecutors believed and still believe that they lack jurisdiction.

Oops. Now that Israilov is dead, Austria may have jurisdiction. At least for one crime.

Prosecutors have arrested seven suspects in Israilov’s death, all ethnic Chechens, and five remain in prison, Jarosch said. He said it was not clear whether the killer was among them.

Not a Fountain of Optimism

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Dieter Wermuth, over at one of Die Zeit’s blogs:

Judging from December’s [2008] industrial production numbers, Germany’s social product will have shrunk by 1 percent to 2 percent, real and seasonally adjusted, in the fourth quarter compared with the third. That means that it retreated between 0.6 percent and 1.6 percent compared with the previous year.

To put it more dramatically, or as dramatically as it actually is: Industrial production including construction was in December 12 percent lower than it was a year previous. The crash has been ongoing since September. Extrapolating the fall from August to December to a year’s duration yields a trend of -33.6 percent (104.6/119.9 cubed, as four months are a third of a year) That is a considerably stronger contraction than in the USA (-16 percent) or the UK (-17.6 percent). In a year-on-year comparison, the German contraction is also larger. (My translation, original beneath the fold.)

Much more at the link, but the bottom line is that the crash will hit industry harder than services, and countries oriented toward export more than those oriented toward domestic demand. Germany is a world champion in both.

A decade ago when I worked in financial markets, I knew Dieter as a solid macroeconomist for WestLB. Glad to see he’s been writing for Zeit.

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