Russian election clues? A couple of weeks ago, I ventured a bet that, contrary to the conventional wisdom, Russian President Dmitry Medvedev will run and win re-election in next year's elections; his mentor, Prime Minister Vladimir Putin, will opt to keep his protégé in place, I wrote. While for a variety of reasons I still think that is the case, it's understandable why many think otherwise: Putin is throwing up a lot of conflicting signals. Take his decision to eradicate much-hated and bribe-laden car inspections for the remainder of the year, worth up to $300, writes Will Englund at the Washington Post. And what about Putin's announcement of a $285 billion program to rebuild Russia's ramshackle roads, another bane of the country (that's Moscow traffic pictured above)? Is Putin announcing such programs from a simple sense of good governance? According to Robert Coalson of RFE-RL, the way Russia's strongman is presiding over the affairs of the ruling United Russia party, he is sending "the strongest signals yet that he intends to return to the presidency in 2012."
This is entertaining -- and convincing -- to be sure. But that's the point. Putin doesn't need to convince anyone -- all of Russia and the rest of the world know that the job of president is his for the taking. So why the show? Because he wants the accolades, the hero-worship, the pleading crowds and so on, but while pushing matters to the brink, in the end he will, for the good of the nation of course, step aside (technically, that is) and maintain the status quo. The system works the way it is. Ask yourself this question: why in the last month (as the Moscow Times rounds up in an editorial) have the killers of Stanislav Markelov been imprisoned; has imprisoned oligarch Mikhail Khodorkovsky, while not released, been permitted a fair hearing on state-run NTV television while announcing a decision to appeal; and has the alleged triggerman of murdered journalist Anna Politkovskaya been captured and charged? Is it because Medvedev is acting against Putin's wishes?
This is where it's possible to lose one's way. What seems dissonant in the tandem in fact isn't. It happens because Putin wants the balance that Medvedev provides. Not incidentally, Medvedev is content with this state of affairs as well. One way to understand Medvedev is as simply another expression of Putin -- that is, even if Putin stepped completely out of the picture, Medvedev would not turn Russia into bastion of liberalness. Rather, when Medvedev's Russia undoes some of the injustices in the country, "what might appear to be the dismantling of Putin's legacy is not a dismantling at all," the Moscow Times editorial board writes. It said:
Khodorkovsky, even if given parole for good behavior, will not be acquitted. Investigators might have found Politkovskaya's killer, but we are unlikely to ever know who ordered the murder. Ultra-nationalism is still not being fought outside the courtroom. And thousands of other murky cases -- such as the death of lawyer Sergei Magnitsky or the beating of Kommersant reporter Oleg Kashin -- have not been properly investigated. Most important, the power vertical, along with its creator, is as strong as ever. Medvedev may stay in the Kremlin without tackling these issues. But if a handful of high-profile cases is all that he has to offer in terms of political reforms, his second term in office will differ little from Putin's policy of status quo. A second Medvedev term might then be best described as 'modernized stagnation.'
Viktor Drachev AFP/Getty Images
To keep power, give it away: The autocrats of the petro-driven Middle East are discovering that ushering in democracy is not an altruistic act, but desperation politics -- if they want to stay in office, there is a good chance they must dispense with the strongman act and accept truly elected representation. For Ali Abdullah Saleh, the president of Yemen, that realization came far too late; he has at most days to go in office, and possibly just hours. What about Syrian President Bashar al-Assad? Possibly next to Saudi Arabia and Iran, Syria is the unlikeliest place in the Middle East for regime change. Today, his troops fired on protesters after Assad attempted to assuage public unhappiness by promising to end 48 years of martial law. Yet more unrest there seems probable as thousands poured into the streets regardless, and reports are of some protesters grabbing away guns from authorities. Libya is the conspicuous outlier -- short of a palace coup, Col. Moammar Qaddafi looks likely to hang on.
My colleague David Rothkopf took President Obama to task this week for a supposedly fuzzy approach toward Libya, but I don't grasp his mystification. The best U.S. course is to allow Middle East events to take their course and not put an American imprint on them, even when they reach nail-biting stage. In the case of Libya, the U.S. rightly held back as long as possible with the idea that perhaps, perhaps the rebels might yet turn back the Qaddafi tide, but when Benghazi was about to be overrun, stepped in to create a level playing field (there is a preference for another Libyan leader, but the policy is not to explicitly overthrow Qaddafi, but to make it as much a fair fight as possible.). The U.S. rightly is not going to install the opposition, but take away the regime's air, armor and artillery advantage. Equally incomprehensible, also here on the pages of Foreign Policy, Bruce Ackerman has declared Obama an imperial president. On the other side, the chest-beaters would like Obama to be more "decisive." Guys -- take a little course in the exercise of influence and power; better yet, take a look at the nature of what's going on in the Middle East. This era is not the time to kick down the door, guns blazing.
The rare earth blues: The Chinese are clamping down ever harder with market hindrances against exports of rare earth elements from the country, this time by raising tariffs on the 17 types of minerals. This has been an issue since last September, when Japan's arrest of a Chinese trawler captain revealed Beijing's ultimate soft spot (which we had thought was Tibet, followed closely by Taiwan) by triggering China's rare earths embargo on the entire global market. But is there a crisis for the high-tech industries and armaments manufacturers who rely on them? This week, I participated in a panel discussion at the Heritage Foundation on the subject. The consensus was that, while there is a current squeeze and prices have almost doubled since last year, a combination of recycling and the fast development of new supplies will resolve it within three or so years. Australia, India, Kazakhstan, Mongolia, not to mention Alaska and California, are all acting in concert to develop new supplies.
Read on for more on this week's news.
The oil balance is back on precarious footing. The shift of events in Yemen -- President Ali Abdullah Saleh seems to be spending his final hours or days in office (see defectors above) -- returns instability to Saudi Arabia's doorstep, and with it may push oil prices higher.
It's not that Yemen itself produces much oil or natural gas - its production volumes are modest. But its northern border with Saudi is porous, and as we've discussed previously, any flow of Yemeni refugees, including armed ones, could destabilize Saudi Arabia. To the east of the kingdom, Saudi forces are helping to tamp down unrest in neighboring Bahrain, but meanwhile face new protests from sympathetic fellow Shias in the city of Qatif, in Saudi's oil-rich Eastern Province. All of this will tempt the trigger fingers of intrepid traders in London and New York.
Oil prices have been relatively calm considering the upheavals in Tunisia, Egypt, Libya, Bahrain and Yemen, not to mention the nuclear crisis in Japan, moving up and down just a few dollars when traders decide they'd like to earn a little money. When prices have moved the most, it has been with an eye on Saudi Arabia, whose massive oil reserves and production underpin global price stability.
With his own eye on the same matter of potential unrest at home, Saudi King Abdullah has added another $93 billion to the previous $36 billion in largesse he laid on his people in order to keep them off the streets. My colleague Jim Traub thinks this is all for nought -- that such regimes are inherently unstable and that, in terms of U.S. policy, it's always a mistake to back them because, for one thing, it puts Americans on the wrong side of history. What Jim omits is that, even if he is right, the self-correction that he is suggesting predictably happens -- if history is any teacher -- would almost always come after many, many decades. Does he suggest the United States having antagonistic relations for the time being and waiting patiently for that day of reckoning before attending to U.S. commercial and other interests? Of course Washington can't. Which is what argues for the current course of dealing with who is in power, making it clear in subtle and explicit ways where Washington stands, and -- short of sending in the cavalry itself -- embracing a population's empowerment when and if it comes.
Ahmad Gharabli AFP/Getty Images
There's a presumption out there that things look tough in the Middle East, but that soon enough -- maybe by summer -- they will sort themselves out, and becalm the volatile prices of oil and gasoline. Not so, says veteran oil analyst Edward Morse, a student of history who correctly called the 2008 oil bubble while everyone else was still throwing money into the pot. "This is not a one-off disruption," Morse says. Instead, we're in a new age of geopolitical risk that threatens to disrupt the region for a decade or even longer.
As if to reinforce his point, 6,400 miles away in Libya, Col. Moammar Qaddafi has again triggered the all-important Flaming Oil Port Index by having his air force bomb the country's main oil terminal at Es Sider, turning it into a ball of fire. Oil prices shot up.
Given the Libyan uprising, not to mention the trouble in Bahrain, Egypt, Oman, Tunisia and Yemen, even the region's rich petro-states understand the basic math, says Morse -- their demographics (60 percent of the region's population under 25 years old, high unemployment rates, and lopsided income distribution), awakened by the kindling of revolutionary fever, have put all of them in potential jeopardy. "A rapid contagion is spreading," he said. "Even if you think you are relatively safe, this is a new, permanent risk. It will be with us for the next decade," or even two.
Therefore, all the petro-states are going to mimic the recent largesse of Saudi King Abdullah, who distributed $36 billion to his people in the form of higher wages and forgiven loans, and do so on a regular basis. They will also try to figure out how to put all those discontented and often well-educated youth to work.
That's great, but what does that mean for the rest of us? That the break-even point for annual government expenditures in all the states -- meaning the price of oil required to cover regular state obligations like salaries, road repair and defense, plus these new expenses in order to satisfy the restive youth -- has just gone up, says Morse. If they needed $60-a-barrel oil multiplied by the number of barrels they are producing and selling each day to fund the state budget, now they will need much higher prices. Saudi Arabia, Kuwait and other petro-statesmen that previously attempted to keep oil price stamped down to some degree can no longer be counted on to do so. Instead, they will be interested in the kind of price increases we are seeing today. For more Ed Morse, including a video, read on to the jump.
Mohammad Huwais AFP/Getty Images
Libya falls squarely into the central aim of this blog, which is to identify and follow the geopolitical impact of energy events. Libya is fundamentally an energy event. After decades of ostracism because of his terrorist attacks and links, Col. Moammar Qaddafi was re-embraced by the international community in 2003, led by the United Kingdom and the United States, for one primary reason -- he said he would open his oilfields to their companies. Oh, there was the renunciation of terror, too -- no trivial matter -- but then-British Prime Minister Tony Blair reversed Britain's stand on the Libyan-ordered Lockerbie airline bombing specifically to shoehorn BP, Britain's biggest company, into some monstrous new oilfields. The same went for the rest of Europe and the U.S., where ConocoPhillips, Hess and Occidental also got oil deals.
Eight years later, we observe the geopolitical impact in the spectacle of Qaddafi provoking an unnecessary civil war, and roiling world oil markets, all so he can continue his almost 42-year rule. The energy-geopolitical takeaway -- political and financial compromise with a certain class of petro-tyrant can rebound back on you profoundly, destabilize a region, and shake up economies, all while tarnishing you with the same brush. One also doesn't know if, in the end, the deals themselves will all hold up.
Peter Macdiarmid/Getty Images
Oil prices are going through the roof today, and gasoline prices at the pump will follow, as we get the first regime-rattling news in a major oil-producing state. What's happening is that the sketchy news out of Libya makes the country look like it's on fire - Col. Muammar Qaddafi may be spending his last days in power. And even though no oil supplies have been disrupted, traders are engaging in some casino behavior and bidding up prices to new two-year highs. Here is some video:
Look for more of the same going forward if -- as seems as likely as not -- unrest strikes Saudi Arabia. That is because Saudi is the linchpin of global oil prices, satisfying a full 10 percent of total global demand, and possessing by far the majority of the capacity to produce much more in the case of an emergency -- such as if Libya's 1.6 million barrels a day of oil production abruptly is taken off the global oil market.
We keep hearing that al-Saud rule is safe (and the al-Sabahs of Kuwait, along with the al-Thanis in Qatar). But retaining power is only one metric for oil price stability. The chink in the Saudi armor is its oil-saturated, Shia-dominated Eastern Province. Here is Dharan, the headquarters of Saudi Aramco; the humongous 5-million-barrel-a-day Ghawar oilfield; the 800,000-barrel-a-day Qatif and Abu Safa oilfields; the gigantic Ras Tanura oil port; and the Abqiaq processing center. Because of all this, the king has nailed down every movable part in the province with overlapping protection -- private Aramco security, Interior Ministry forces, the National Guard, and the military, all of them manned largely by Sunni personnel and loyal to the royal family.
Even so, if the Shia population does start protesting, we will see the oil market's version of pandemonium.
Greg Priddy, a global oil analyst at the Eurasia Group, a New York-based political risk firm, tells me that there is "a definite threat of a spillover" of trouble. "I won't be surprised if there is unrest in the Eastern Province," Priddy told me over the weekend.
Hassan Ammar AFP/Getty Images
There has been so much instant punditry over the last several weeks predicting the fall of various Middle East governments that I wondered - if Tunisia is so important, why hasn't it inspired uprisings elsewhere in the tyrannical world as well? Russell Zanca, a long-time Tashkent hand and a professor at Northeastern Illinois University, examines the question in the former Soviet space.
Given the outbreak of Middle East unrest, the Obama administration has warned the region's autocrats against continuing to ignore the popular aspirations of their constituents. Yet while it's been easy to draw a straight line from Tunisia to Egypt, Yemen and perhaps even Algeria, one wonders why the dictators of Eurasian countries such as Belarus, Turkmenistan and Uzbekistan fear no such public protests. Almost the same men have led these republics for 20 years, have brutalized their citizenry, rigged elections, imprisoned and drugged opponents, and left much of their populations in poverty while a slender elite lives lavishly. Yet there is no evidence that any stands a shred of a chance of being thrown out of power by his people.
Ousting stubborn leaders is not a function of how fed up people are, nor how well developed opposition forces are. To be sure, these factors can better the chances of a dictator's demise, but they will not necessarily push him over the edge. Rather, people must have the sense that they can rid their country of the despised one by risking their lives in the streets and staying united.
So why are those conditions not present in former Soviet Eurasia? Last month, it looked as if Belarusian masses were united, and willing to take the big risks with a worthy assortment of capable, committed opposition forces following dubious presidential elections. However, what the Belarusians on the streets obviously underestimated was President Alexander Lukashenko's security forces; they were better united and more committed than the masses, and violently put down street protests, arresting and beating up rival candidates.
In Turkmenistan, people may be dissatisfied with their lot under the Berdymukhamedov dictatorship, but we have seen almost no demonstrations or unrest since independence in 1991. Turkmen dissidents in exile have almost no impact on the folk back home, especially when local access to foreign media is severely limited.
Similarly, it is unlikely that Uzbeks will rebel against President Islam Karimov, who has ruled Uzbekistan since 1990. If Uzbeks think it could be better under a different president, they have not unified under that thought in the numbers necessary to face down the enormous risk of public protests. It is not hard to recall that just six years ago, Karimov's troops shot dead hundreds and possibly thousands of protesters in the city of Andijan. This policy of maximum bloodshed proved extremely effective. Uzbeks have been so terrorized that since then there have been no significant public expressions of discontent.
As a cultural anthropologist, I am often asked if Karimov's continued reign isn't attributable to some aspect of Uzbek culture. For example, there is the idea that Uzbeks are meek by nature, and that their "cult" of respect for elders extends to an unquestioning respect for those holding political power. Even Uzbeks themselves occasionally suggest that people are much more concerned about the need to have something good cooking on the stove, that they steer clear of openly criticizing the regime because they are just too focused on surviving till the next day. While there may be grains of truth to each suggestion, they are just that -- grains of truth.
Modern Uzbek history (from at least the mid-19th century) is replete with Uzbeks offering up their rebellious spirits, overthrowing amirs in the process as well as sacrificing themselves against tsarist and Soviet infidels into the 20th century.
They are not massing in the streets today despite mass anger toward the regime, because the risks simply are too great. Instead, Uzbeks have channeled dissatisfaction, for the time being at least, into a non-confrontational and apolitical path known as labor migration to other countries such as Kazakhstan and Russia. These physical movements entail risks as well, but people don't see them as futile in the way demonstrating would be. After all, protesting on public squares earns one less money than road-building in Moscow's suburbs.
Steve LeVine is the author of The Oil and the Glory and a longtime foreign correspondent.