Up or down? Oil spent much of last year climbing, climbing until the irrationally exuberant among us began to rub their hands together with glee (that would be the traders). This week, the market placed a speed bump in the road to $100-a-barrel and beyond. Today, oil closed with its biggest one-week fall in five months, plunging to $88.03, Bloomberg reports. As we discussed earlier this week, prudence is called for in the oil markets. Traders might want to look at some arbitrage between crude varieties, however -- that $88.03 price refers to West Texas Intermediate. Brent crude is selling at a $5 premium, closing at $93.44 a barrel, notes Gregory Meyer at the Financial Times.
The trouble with subsidies: In response to a demand from the International Monetary Fund, Pakistan raised the price of gasoline by about 9 percent on New Year's Day. Eight days later, the government reversed the increase. In between those two moves, Punjabi Gov. Salman Taseer was assassinated, a key government ally pulled out of the government, and there was general mayhem in the street. I discuss this in an interview at CNN. A lot of the turmoil stemmed from a poisonous debate over the country's so-called blasphemy law, which prohibits insults against the Prophet Mohammed. But the gasoline subsidy was also a primary player in the turbulence, which may yet return. The IMF wants the subsidy lifted as a condition of providing $11 billion to Pakistan. But a subsidy, once given, is hard to take away.
Price of the spill: President Obama's Gulf oil spill commission returned an early verdict on last year's massive blowout in the Gulf of Mexico, with a stinging rebuke of BP and its partners in the Macondo well. As is usually the case with such reports, one could read into it almost whatever one wished to. That might explain how Wall Street treated the report. The shares of both BP and Transocean ended the week just about where they were before the report was issued, as though investors in the aggregate couldn't decide whether the results were good or bad for the companies.
Electric spying: The world's electric-car combatants take their war seriously, the French no less than the Chinese, the Americans, and the Japanese. So it is that Renault suspended three senior managers for allegedly passing on secrets about the company's electric car plans to China. Renault is partners with Nissan, whose Leaf was launched last month. The probe has been ordered all the way up the chain of command, by President Nicolas Sarkozy himself, the Guardian's Kim Willsher reports.
As the debate in the United States' foreign-policy community rages over how long the war in Afghanistan should last, one inescapable question baffles both sides of the argument: What to do about Pakistan? Long derided as the "true epicenter" of global terror, Pakistan is discussed mostly in the realm of rumor and stereotype, and very little fact, history, or knowledge.
Understanding how Pakistan became the incubator for so many terror groups -- an exciting alphabet soup of acronyms like the QST, the TNSM, LeT, JeM, HN, TTP, and many others -- requires understanding Pakistan's evolution not just as an Islamic society, but as a fractured state determined to use Islam to secure and protect its own legitimacy. This is a phenomenon that seems to emerge regardless of who runs the government -- military or civilian, male or female, liberal or conservative, all the leaders of Pakistan have felt they could only rule through differing interpretations of Islam.
In The Scorpion's Tail: The Relentless Rise of Islamic Militants in Pakistan-And How It Threatens America, the Wall Street Journal correspondent Zahid Hussain charts a sobering history of the Pakistani state's relationship to Islam, Islamism, and Islamic radicalism. While the radicalist form of Islam -- the kind America really cares about -- didn't take root in Pakistan until the 1980s during the war between Afghanistan and the Soviet Union, it was, Hussain argues, the result of decades of Pakistan's elites politicizing Islam to shore up their rule of the country. Starting with the partition of India and Pakistan in 1947, and moving through the tumultuous history of coups, countercoups, and new constitutions, Hussain walks the reader through Pakistan's steady Islamization.
Six months after a U.S. fuel contract contributed to the ouster of Kyrgyz President Kurmanbek Bakiyev, we appear no closer to knowing whether his opponents are correct in assuming corruption and other criminality in the deal. At issue is a $3 billion U.S. military contract with two companies registered at mail drops and in offshore tax havens, and run by a cloak-and-dagger California native who makes Julian Assange look as open as Oprah, the Washington Post's Andy Higgins suggests in a weekend piece. The current Kyrgyz government says the contract enriched the Bakiyev family, and that the U.S. tolerated the situation to guarantee the longevity of Manas Air Base, which services the war in Afghanistan. Incidentally, Bakiyev alleged the same thing when he helped overthrow the Askar Akayev regime in 2005.
By approving such contracts, does the U.S. in effect cultivate the very corruption that it aggressively abhors in governments around the world? Scott Horton, a New York lawyer who sits on the board of American University in Bishkek, is among those who think so. At the Harriman Institute last Friday, Horton said:
The latest Transparency International corruption index is out, and it shows that countries occupied by the United States, in which U.S. contract awards have decisive importance to the economy, are two of the five most corrupt on earth. These nations have, moreover, become dramatically more corrupt since the U.S. took over. What is the relationship between having a large U.S. military installation and military contracting on your territory and corruption? The TI index points to a direct relationship. The U.S. talks a good tune about democracy, transparency and the rule of law. What it delivers is just the opposite.
(Full speech transcript here.)
VYACHESLAV OSELEDKO/AFP/Getty Images
Worries about geopolitical bogeymen can overwhelm good sense. Case in point: today's melee over the discovery that Iran has been regularly handing Afghan President Hamid Karzai fistfuls of cash. Just who is Tehran endangering by keeping Karzai lubricated with pocket change? For one, the fellows U.S. troops are fighting: the Taliban. Karzai calls the payments "normal," and he is right. In the case of Afghanistan, Iran is in effect a U.S. ally.
It's useful to keep in mind that Iranian influence in Afghanistan is traditional. The two countries share a language, after all -- making it easy for the Iranians, for instance, to be particularly close to the leaders of the populous Herat and Balkh provinces, in the west and north of the country. Since the mid-1990s, the Iranians have served a useful balancing purpose to the Pashtun Taliban.
Majid Saeedi/Getty Images
In February 1989, Soviet troops withdrew from Afghanistan after a decade-long U.S.-backed rebellion in the country. But already the United States was greatly reducing spending in Afghanistan and Pakistan, the staging ground for the arming of mujahideen guerrillas. President George H.W. Bush ordered the Central Intelligence Agency to stop sending agents into Afghanistan. Even as the Taliban was born in 1994, taking power in Kabul two years later, the United States remained aloof. We know what happened next.
Today, my FP colleague Dan Drezner in effect suggests a similar U.S. path in former Soviet Central Asia and the Caucasus. Responding to an essay I wrote for the New Republic, Drezner argues that the region was perhaps once a U.S. strategic interest, but that those days are over. The United States should not fight for its place: "There are a lot of regions in the world where I think a robust U.S. presence is a good idea. Central Asia is no longer one of them," he writes.
DOUGLAS E. CURRAN/AFP/Getty Images
Today, the Taliban set 22 NATO fuel tankers ablaze in the southern Pakistani border city of Quetta. That's a day after a fuel tanker was blown up at Torkham, the border post leading into Afghanistan. On Monday, the Taliban set 20 NATO oil tankers afire in Rawalpindi, outside the Pakistani capital of Islamabad.
In all, the Taliban's oil war has gone on for a week straight. This is a page straight out of the histories of the two world wars, in which access to -- and the absence of -- oil was the deciding factor in both making and breaking enemies.
Until now, the attacks have been explained as the Taliban capitalizing on a standoff between the United States and Pakistan over Pakistani casualties in drone attacks, to which Pakistan has responded by closing the border at Torkham, and leaving the fuel trucks exposed. But that doesn't explain today's attack in Quetta.
In fact, as the U.S. military has clearly documented, long fuel convoys have been among the main sources of American casualties in both Iraq and Afghanistan. The Taliban are Exhibit No. 1 as to why the military is working to untether itself from fossil fuels.
AAMIR QURESHI/AFP/Getty Images
The U.S. military is studying a plan to solve Afghanistan's problems by turning it into a superhighway of roads, railroads, electricity lines and energy pipelines connected to the entire Eurasian landmass. According to a piece in the National Journal by Sydney Freedberg, the proposal has the ear of Gen. David Petraeus, whose confirmation hearings to be the new U.S. and NATO commander in Afghanistan start today in the Senate Armed Services Committee.
The plan is heavy on ringing optimism. I have my doubts. They are rooted in the last time this was tried, in the 1990s, when Unocal -- now part of Chevron -- sought to build an $8 billion oil-and-natural gas pipeline network from Turkmenistan to Pakistan via Afghanistan. The plan -- which Unocal saw as so potentially lucrative that it could catapult the company into the big leagues of the industry -- attracted much attention, hoopla and hopes for peace after years of war and chaos in the country.
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Steve LeVine is the author of The Oil and the Glory and a longtime foreign correspondent.