Zombie Meme Watch: Transatlantic Politics and Afghanistan

Hey, it’s the Americans are from Mars, Europeans are from Venus meme again. This is what programmers call an anti-pattern – a classical, typical example of how to do something wrong. You might have thought that, with the Bush years finally behind us, this would have been retired at long last; but no. Now, the UK is being accused of becoming “Europeanised”, supposedly because it doesn’t want to put more troops in Afghanistan.

First, the UK cannot do this because, having spent the last 8 years chasing various US-inspired missions, it doesn’t have the troops, and more to the point, it doesn’t have the air transport fleet to support them in the interior of Asia. Simple. But more importantly, there are two huge unexamined assumptions here. The first is that the Europeans have to come when the US calls them. What is in it for us? After all, NATO declared that the alliance had been invoked back in September 2001, and was told that its assistance was not required, at the same time as hordes of rightwing publicists accused it of not helping. Then, later, the US accepted the need for an international peacekeeping force, which was led by European NATO members for most of its existence.

And then, the US withdrew much of its own forces in Afghanistan for use in Iraq. Specifically, the special forces whose mission in counter-insurgency and as military advisors was crucial in the vast majority of Afghanistan away from Kabul were drawn on, as were the satellite and other reconnaissance assets. This was a loss in awareness of what was happening out there that ISAF never really recovered; it is no coincidence that, as Antonio Giustozzi writes in Koran, Kalashnikov and Laptop, the Taliban resurgence began in 2003.

Now, after several EU states have been prevailed on for troops and have sent many more, things seem to be worse. If, as they do, the Americans whine about having had to contribute to IFOR/SFOR in Bosnia (which consisted of two European divisions and a partly-US one), why should EU member states happily fork out for a much more dangerous, violent, expensive and uncertain commitment which is not much more remote from their real interests than Bosnia was to the US? If they don’t want NATO to be seen as a club for the furtherance of US interests out-of-area, this is not the right way to go about it.

Secondly, there is the question of whether more troops – anyone’s troops – will do any good. Even US Secretary of Defence Robert Gates is doubtful of that. After all, even with many more troops, they will still be spread very thinly, but they will create more of the perception of a blundering occupation with fortified bases and car-bashing road convoys and edgy privateer guards. More and more money will be spent in expanding the sector of the economy devoted to supplying “the internationals”. The strained and politically dodgy supply route through Pakistan will get even more strained and dodgy.

Further, the planned US “surge” is a surge; a temporary increase in forces. Surely, what is required is a sustainable solution – one that might serve our supposed goals after the captains and the kings depart as the US military’s arms-plot requires. And that is only going to be achieved through political and economic means. If EU states should contribute more of anything, it should be more advisors, more reconstruction aid, more doctors and engineers – not more wedding-party strikes-in-error, and the kind of combination of well-meaning NGOs, PRTs and other TLAs with chaos and sinister spookery Robert Young Pelton brilliantly evokes here.

Friends don’t let friends drink and drive; neither do they help friends get into open-ended two-front wars. Europeans are entirely right to behave as if Iraq and Afghanistan had erased US credibility, and to expect it to be earned back rather than freely given. They are also right to look to their wooden walls, or their reconnaissance satellites.

The Ruble Fall Continues As Unemployment Soars

Russia’s current woes can be readily summed up in just one single variable – the value of the ruble – and this value, as we all know, is falling. Almost uncontrollably so.

The bank’s target will be “very quickly” breached without more intervention, said Gaelle Blanchard of Societe Generale SA in London. “Right now the market is convinced it wants to see the ruble lower,” Blanchard said. “As long as the central bank gives these targets, then speculators are going to have something to aim for.”

“The market is testing whether the authorities see this band as something permanent or something that will move,” said Lars Rassmussen, an emerging markets analyst at Danske Bank A/S. “Our view is that they’ll move it because it’s not worth wasting the reserves for a band that is obviously not wide enough.”

First Deputy Prime Minister Igor Shuvalov expressed regret that the general population failed to fully understand the Central Bank’s policy on the ruble’s exchange rate against the dollar/euro basket. The government did let the ruble depreciate, but it did so gradually, providing plenty of time for people to decide which currency to keep their savings in.

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Russia’s Reserves No Longer Cover Foreign Debt

The Economist Intelligence Unit warns:

State handouts cannot continue indefinitely, not least because reserves no longer cover total foreign liabilities: on the basis total debt was US$540bn at the end of September 2008, and that US$73bn was repaid in the fourth quarter, total debt is now US$467bn and private-sector debt US$425bn. Russia entered the crisis with the world’s third largest cache of central bank reserves, but it has been dwindling at an accelerating pace. By mid-January, reserves had declined to just below US$400bn, meaning that more than a third of the total was spent over the past five months.

Longer post coming over the weekend.

Unemployment Surges As The Noose Tightens On The Global Recession

The International Labour Organization forecast this week that as many as 51 million jobs could be lost worldwide in 2009 due to the global economic crisis. But if I look at some of the numbers hitting my desk this week, even this estimate cound prove to be a conservative one.

Here in the EU, the most striking case is of course Spain, where unemployment hit 14.4% of the labour force in December. But perhaps the more significant developments are taking place at the moment in Germany, where the massive jobs machine evidently changed course in November, and where the seasonally unadjusted number of unemployed rose by 387,000 in December. Perhaps the chart which makes what is now happening in Germany clearest is the one below for employment creation, where we can see that the rate of new employment generation started to decline in the summer, and the line downwards is more or less constant, so while employment was still up year on year in November, it will soon turn negative, and will remain so for some considerable time to come.

In the United States the number of people staying on state jobless benefit rolls after drawing an initial week of aid jumped 159,000 to 4.78 million in the week ended January 17.

In Russia 800,000 people lost their jobs in December, and the total number of unemployed hit 5.8 million people, as compared with 5 million in November. But all of this pales in comparison with the number which has just come out of India, where it is now estimated that one million people lost their jobs in December alone.

So, while I have no exact idea of what the total job loss in December was globally, I am sure it was a large number, and I am also sure that if things continue at this pace, 51 million losses over the whole of 2009 will turn out to have been an optimistic estimate. The point is, of course, that these job losses are simply a noose which serves to further tighten the grip of the global recession, as less workers means less spending, and less spending means even less workers, and down and down we go in circular fashion, for the time being at least.

Update

Indeed the 51 million estimate for the whole of 2009 is already looking on the low side. Chen Xiwen, director of the Office of Central Rural Work Leading Group estimated this week that more than 20m rural migrant workers in China have already lost their jobs and returned to their home villages or towns as a result of the global economic crisis, and by the start of the Chinese new year festival on January 25, 15.3 per cent of China’s 130m migrant workers had lost their jobs and left coastal manufacturing centres to return home, according to data from the agriculture ministry survey.

Spain’s Recession Deepens

Spain’s economy is now most evidently, and totally and completely officially, in its first recession since 1993. The final confirmation of this came yesterday when the Bank of Spain released its quarterly report on the Spanish economy. According to the bank, gross domestic product fell by 1.1% in the final quarter of 2008 (over the previous quarter), following a 0.2% decline in the third quarter. GDP fell year on year by 0.8%.

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Why Latvia Needs To Devalue Soon – A Reply To Christoph Rosenberg

IMF Senior Regional Representative For Central Europe and the Baltics, Christoph Rosenberg, recently took me to task on RGE Monitor about my Latvian devaluation proposal (as did RGE’s own Mary Stokes), and I would like now to take a closer look at some of the points they raise. Beware, this is not for the faint of heart. It is evidently long, at times turgid, but very definitely, I would hope, to the point. Continue reading

Russia Plans Fleet Base in Georgia

Going to be an interesting year again here in the Caucasus.

Russia will start building a naval base this year in Georgia’s Black Sea separatist region of Abkhazia, Russian media reported on Monday, a step Tbilisi said would violate its sovereignty. …

Russia’s Itar-Tass news agency quoted an unnamed official at Russian naval headquarters as saying commanders planned to station vessels at the Abkhaz port of Ochamchire. Russia’s navy could not immediately be reached for comment.

“The fundamental decision on creating a Black Sea Fleet base in Ochamchire has been taken,” Tass quoted the official as saying. “This year we will begin practical work, including dredging, along Abkhazia’s coast.”

Good memory from the (alas, unnamed) CNN correspondent:

This latest development comes despite comments made last year by Abkhazia’s leader that his territory would not be hosting Russian military bases.

“There will be no new bases,” Sergei Bagapsh told Russia’s Novosti news agency, adding that Russia’s Black Sea Fleet will not be based in the republic either.

“Only units of Russia’s ground forces that have always been based here will continue to be stationed in Abkhazia,” he said.

Picturing the Siege of Leningrad

Over at English Russia, Sergei Larenkov has merged historic photos form the siege of Leningrad with contemporary pictures taken from the same vantage point. Flak balloons, protective scaffolding, ruins and dead bodies juxtaposed with SUVs, modern busses, restored facades. Fascinating work.

Don’t miss his links to other photo projects down at the bottom of the post. Russian North Truckers. Ain’t No Russian City. Another Abandoned Theater.

The Czech Government Confirms the Afoe Recession Call!

Wow everyone, I presume it is just a coincidence that my Czech Post went live yesterday, but gee, there’s nothing like being ahead of the curve, is there? Bloomberg is running this story this morning:

The Czech economy may fall into a recession this year as export demand weakens, Prime Minister Mirek Topolanek said, iHned reported. The expectation that the economy may shrink is one of two scenarios with which the government is working, the news Web site cited Topolanek as saying. The premier made the comments after yesterday’s first meeting of the government’s National Economic Board, a panel of economic advisers. The Cabinet is preparing measures, including loan guarantees for selected industries and a reduction in payroll taxes, to boost investment, iDnes said.

I think I’m right in saying I was the first analyst out of the box on this one (although admittedly, the recession scenario is only one of two they have under consideration – but I do think it is the most realistic one, for the reasons I argue in the post). So last week I was leading the pack on China, this week on the CR, who knows where all this will now end…… (oh, and don’t forget Poland – and again Bloomberg this morning).

Experiment in Decoupling

We’re about to find out whether the rest of the world is still dependent on demand in the US. If it is, better set those expectations down a bit further.

The U.S. economy contracted violently in the fourth quarter, with gross domestic product falling at its fastest pace in more than 25 years, economists said ahead of what promises to be a grim week of economic news. …

GDP is expected to have fallen at a 5.5% annualized rate in the final three months of last year, according to the median forecast of economists surveyed by MarketWatch. That would be the biggest decline since the 6.4% drop in early 1982 and one of the worst quarters in the post-World War II era.

h/t Atrios