Young people in the streets. The government forced into an early election and saying that it can’t control the country. Years of simmering discontent apparently coalescing into serious civil unrest.  Perhaps things look worse than they are because of the police tactic of avoiding direct confrontations with rioters where possible: sacrifice property to safe life. But is there any other European country this close to boiling point?
Power and
Last week, some US-based bloggers were talking about their dissatisfaction with the term, “soft power.”
[C]an we retire the term “soft power†already? I always feel that it’s been popularized not so much by Professor Nye as by deranged warmongers who like the idea of terming every alternative to militarism as somehow “soft,†fluffy, and weak. Soft Power is a good book, but it’s a bad coinage for an era in which national security issues have returned as a partisan political topic, and I don’t think it’s an especially great label for what Nye’s talking about.
Here’s a suggestion cribbed from an adaptation of an old tabletop game: power and influence. Roughly speaking, power is the ability to make people do things (or suffer the consequences); influence is the ability to get people to do things on their own (to gain the benefits). NATO has lots of power (and a good bit of influence), while the EU has an enormous amount of influence, but less power. Pointy-haired bosses use their power; good businesspeople use their influence.
Influence is not a second-rate type of power (soft rather than hard); it’s a separate, if related, capacity. So: power and influence.
I wrote to some of the folks whose blogs I cited. Everyone who has replied has been positive about the suggestion. Now to see if they will actually use it, and whether we can change the usage ourselves or whether we need Joe Nye to write an article.
A Fistful of Diamonds
More like a bag, or indeed several.
Armed robbers pulled off one of the world’s biggest jewellery heists at a famed Paris store, making off with 85 million euros (107 million dollars) in diamonds and valuables, officials said Friday.
A gang of four thieves — two of them disguised as women — on Thursday stole nearly all the jewels on display at the Harry Winston boutique just off the Champs-Elysees avenue, which attracts a wealthy international clientele. …
Or maybe it’s an economic stimulus package?
The Lisbon wildcard
As pressure mounts on Irish PM Brian Cowen to announce the seemingly inevitable 2nd referendum to ratify the EU Treaty of Lisbon, the Czech ratification is still not resolved and looks set to shake up Czech politics no matter what happens.  ODS (Civic Democratic Party) is having their congress this weekend, which includes a leadership election pitting PM Mirek Topolanek as heavy favourite to be reelected despite poor regional election results. His opponent is Prague Mayor Pavel Bem — a Eurosceptic. And Czech President Vaclav Klaus, the Eurosceptic-in-chief, has resigned his honourary chairmanship of ODS. Thus the seeds of a split are being sown. This follows what apparently was a circus of a meeting between Klaus and a group of MEPs yesterday, in which Klaus’s de facto alliance with Irish anti-Lisbon group Libertas was a major issue.
Too flexible
The global financial crisis has had a continual capacity to surprise policymakers and the latest unpleasantness would appear to be the failure of the IMF-backed stabilization program in Ukraine barely a month after it was announced. As we noted at the time, the program emphasized a flexible exchange rate, to avoid blowing reserves on a futile defence of a peg (something on which the Fund’s reputation took a hammering during past crises in Russia and Argentina). But the effect seems to have been a worst of both worlds situation where the failure to establish a credible range for the hryvnia led to a severe loss of confidence in it, with the result that the IMF loan is essentially covering a dollarization of the economy. Ukraine had the bad luck to have a dollar benchmark for the exchange rate just as the dollar was sharply appreciating. If they had been coming into the stabilization plan with a history of pegging against the euro (or sterling!) things wouldn’t look so bad. One lesson would appear to be that planting an economic stabilization plan into unresolved political instability doesn’t work so well. The Fund may look at Romania with a more jaundiced eye as a result.
Mumbai
Some bloggers’ thoughts and impressions concerning the horrible events in Mumbai that have me both horrified and puzzled. From Death Ends Fun:
Everyone around me is talking of the terrorism, but there’s an air of bonhomie about. Plenty of backslapping as friends catch sight of each other, good cheer and chuckling. Are we used to terror now, and is that a good thing or a bad thing?
From India Uncut:
Suddenly, what is familiar seems macabre.
From Known Turf:
This isn’t about the spirit of the people. It isn’t about people feeling secure either. I see all this terror and am just exhausted. I am not feeling spirited, not at all. Yet, the only desire I have right now is to be able to get all dressed up, step out of my house, catch a train, walk into a café, chat with friends, make plans, talk about books, watch a good play. And I will. We all will. Like we did after the last blast, and the blast before that one, and the one before.
If the frequency of the blasts is going up, and if there are annoying security checks even at hotels and cinemas and shopping complexes, well, we’ll go through the checks and go on living. There will be music and travel and art and blasphemy and new religions and old philosophies. There will also be territorial wars and faith-based conflict and bias and sycophancy and illegal immigration.
What kind of brainless twit cannot see that people do not change so easily? That no number of blasts can cure people of the desire for normalcy and fun. For beauty and passion and laughter. For money. And also for justice and truth.
From Random Thoughts of a Demented Mind:
In this light, the taking of American Jewish hostages may be of great importance. It may represent the changing alignment in the Pakistani terror movement as its leadership passes from a more South-Asia-focused leadership to a more Arab-focused one. This could be the unfortunate concomitant of the failed US war in Afghanistan as the old Al-Qaeda leadership, driven away from Afghanistan but made more powerful, has now taken over operations in Pakistan. Hence the attacks of November 26 are extremely similar to attacks on foreigners in Cairo and in Beirut, with the focus being to attack the US and Israel while humiliating India.
So when the Lashkar e Toiba say they are innocent, perhaps they are right. While their old cadre may be involved in the project operationally and the ISI may still be a major mobilizing and training force, the old brain-trusts of the LET are perhaps no longer in control of the Pakistani Jihadi movement. In other words, the actual Jihadis may be South-Asian but the ones pulling the strings thousands of miles away may be Arabs. Which is why they go out of their way to take a Jewish American hostage and that too a Rabbi.
The train and bus bombings were the “old†way of doing things. These endeavors meet their objectives in the following manner: 1) cause panic 2) make the Indian government make heavy-handed arrests 3) portray those arrested as innocents by “friends†in the media and 4) antagonize minorities who are fed the message that they are being targeted. This I expect will continue.
But November 26 has shown that there is a new kind of terrorism which has emerged—-the kind that does not make much attempt to hide its foreign bonafides, which seeks to effect a more direct toll by breaking international confidence in a country’s economic and political institutions, and which has multiple strategic objectives one of which is to promote and provoke sectarian violence.
Twitter feeds can be followed here.
Between Asia and America
James Fallows points out an interesting perspective on Tim Geithner, Obama’s pick to be US Secretary of the Treasury: experience with Asia and at the IMF. Both will be very useful in the current crisis.
When I was with a DC finance firm about a decade ago, my colleagues had fairly regular contacts with him. His reputation back then was every bit as solid as it is today.
Noted with Interest
The US state of New Hampshire now has more female senators than male in the upper house of state government.
After [the November 4] election, thirteen of the twenty-four state Senate seats in New Hampshire are now occupied by women. Peggy Gilmore (District 12), Bette Lasky (District 13) and Amanda Merrill (District 21) beat out their Republican opponents to join the eight Democratic female incumbents (and two Republican women) in the upper chamber.
Any comparable results out there in euro-land?
Are Baltic Devaluations Now In The Works?
Now this is a very interesting question, isn’t it? The only honest answer I can give is that I don’t know, and indeed I haven’t the faintest idea. The government of Latvia (the Baltic state which is currently most rife with “rumours” about imminent devaluations) works in its own wondrous ways, and neither we (nor Latvia’s citizens) have any idea at all how they plan to lift their country out of the deepest depression they have experienced in many a long year.
What I do know is that, economically speaking,the present situation is simply unsustainable, and something is going to have to be done. Indeed the country’s government is in talks with both the IMF and the EU Commission about this very topic as I write. My own opinion is that domestic consumption is now dead (as a growth driver) for as far ahead as the eye can see (and maybe even further), that the country’s citizens now need to start to save rather than borrow more, and that the only way Latvia can turn itself around is by exporting more than it imports. But for a country which ran a 23% current account deficit in 2007 this is going to be very difficult objective to achieve, since after two years of very strong inflation Latvia’s relative prices with the rest of the world are completely uncompetitive.
Historical experience has taught us that it is not an easy thing to tell people “we are going to cut your wages by between 5 and 10% this year, next year, and then possibly the year after”. Apart from the fact that voters don’t like to hear this kind of talk, you can also enter into a deflation dynamic which then comes to be very hard to break out of. Hence, according to conventional economic wisdom, devaluation tends to be the preferred option. And it is my opinion that, despite all the attendant difficulties, devaluation is the best option among the unappetising list of unpleasant options presently available to Latvia (and the other Baltic states, and Bulgaria). Unfortunately, having reached this point there are simply no “pleasant” options available.
The curious thing is that for voicing this opinion I could go to prison in Latvia. Continue reading
Repsol, Lukoil and Sacyr Vallhermosa Also Try Their Hand At Happy Families
“Happy families are all alike; every unhappy family is unhappy in its own wayâ€
Tolstoy
Well this is an interesting little fable of modern family life, even if all the families involved may not be ones which many of my readers would normally wish to belong to.
As is now reasonably well know Russian private oil company Lukoil is currently making a bid for the shares in Spanish energy company Repsol which are owned by the deeply indebted Spanish property company Sacyr Vallhermosa.
Shares in what is Spain’s fifth biggest builder, and which currently occupies the somewhat ignominious position of being Spain’s worst-performing stock this year, jumped the most in two years last Thursday (20 November) on reports they were about to sell their 20 percent stake in Repsol YPF to the Russian oil company OAO Lukoil. Sacyr, which said last week it was in talks over the possible sale of the stake, rose as much as 14 percent after EFE newswire identified Lukoil as a possible bidder. Lukoil is also reportedly willing to buy a further 9% of Respol stock owned by Criteria Caixacorp, the investment company established by Catalan savings bank La Caixa.
In fact Sacyr spent 6.5 billion euros building up their the Repsol holding, between October and December 2006, paying an average of 26.71 euros a share for the stake. It is estimated that the proposed sale of the shares may fetch 20 percent to 30 percent more than their current market value of 4.9 billion euros. To give an idea of what this means, we might bear in mind that Repsol shares closed in Madrid on Thursday at 13.61 euros, and rose 2.3% on Friday, while the Spanish newspaper El Economista reported that Lukoil was offering Criteria and the other shareholders 28 euros a share for the combined stake which constitues just under 30 percent of Repsol. An offer at this price would value the combined stake at about 10.2 billion euros, and would mean that Sacyr would walk away covering their initial investment almost completely, which in these hard times must seem almost incredible. I mean, you might like to ask yourself just why it is that Lukoil is able and willing to pay so much. Continue reading