Book Review: Crude World

As a direct consequence of the previous book I wrote about, the world of those involved with various transactions with raw materials is crude, at least immoral and violent: A crude world. Among all the resources, oil benefited of a triple attention and was introduced as actor in various evaluations of political and geopolitical moves. The war in Iraq? Of course, the cause is the oil, many answered automatically with a self-sufficient air. But what about Afghanistan? Wait and see, something have to be there excepting poppy...

What we don't talk too much is the fact that the natural resources, in wrong hands, prove to be lethal weapons turned against the population and democracy. In Iraq, not the American soldiers sold the oil for getting money for building expensive presidential palaces, but Saddam's clique. This is only an example. 

Peter Maass started the documentation  for the book started long before 9/11 and the author visited several countries as Nigeria, Russia, Kuwait, Equatorial Guinea, Saudi Arabia, Azerbaijan, Venezuela, Iraq or Kuwait. The author is following the idea of the "resources curse": natural resources, specifically oil, creates many troubles and it is not the automatic condition for improving the economic status. South Korea and Japan might be good examples in this direction. Among the cases analized - in the Middle East, Africa, Latin America - all the countries are fighting with institutionalized corruption, democratic deficit and economic unbalances. The notable exception: Norway enjoying lots of resources and equally a vibrand economy and a democratic system. In many situations, as it is the case in Russia or Saudi Arabia (who possesses 21% of the world's conventional reserves, p. 17), information about the volume of resources are classified under the category of "state secret", allowing abuses and various infringements of the international legislation.

But, oil also brought know-how, created the need for highly educated specialists becoming part of the local elites and international investments. In the latter case, the big companies adapted very rapidly to the local customs and are eager to pay as many bribes as possible to get their fields or investments. All you need is to ask "What's your number?"

The situation is not deadlocked, even it will be very difficult to challenge the deep culture of abuse and manipulation, lasting for centuries: the creation of monitoring bodies in terms of business ethics, implementation of transparent legislation, the push for democracy and rule of law all over the world. The interest for alternative energies might switch progressively the interest to other kind of energy resources, with a less appetite for arbitrary. By then, I completely agree with this affirmation (p.118):  “Like a nation or nationality, the industry has its particular belief system, its financial and political interests, its social layers and pecking orders. In some ways, it has the hallmarks of a political party and a religious movement”.

The case of the Falklands

I always have been very skeptical to use the geopolitical theories when trying to explain foreign affairs. Under a sophisticated wrapping of words you try to excuse basic abuses and "raisons d'etat" of various kinds.

It is easier to explain situations on a case-by-case basis, using more or less recent historical situations, changes of mentalities, economic reasons, irational decisions took by decision-makers laking any kind of rationality.

Islands always played a big role in our human builded imagination, proof being the utopian and SF stories. Beyond literature and fantasies, islands were important as strategical avanposts and ways to exert certain influences. Or, at least, projecting such intentions. Cyprus could be a good example from this point of view, as a possible gate of Europe to the Middle East as well as a junction point of various cultures and influences.

On the other side, our need for resources, directly proportional with the sophistication of our needs and the increase of population is a reality of the last decade. We need more and the resources identified by far are limited. Thus, loooking for new potential energy hubs is a counter time long ride. Is not geopolitics or desire to impose a certain power, but a need of survival. Up to the position on the evolution scale, the survival is, of course, perceived differently.

Different as well are also the pressure and, not least, political resources the countries could use in order to defend and protect their economical interest. From this point of view, the recent tensions between Argentina and the UK around the issue of Falklands are showing the need to go beyond the old Cold War confrontational paradigm and think at a very practical level.

The increasing dependence of natural resources is changing on short, medium and long term habits and communities. And, more or less it is a change of perception among the representatives of the young generation, less focus on recent painful historical episodes and more interested about a better future. These perceptions could maintain a permanent pressure against over reacting outside pressure. If the drilling will start or not, or if meanwhile behind the mediatic buzz, negotiations are on the way, the final solution of the current conflict - but not the whole conflict - cannot neglect the high pressure of including both the concern for sharing more resources, but taking into account as well the needs of the local communities. Because, sooner or later, policies - including in foreign policy - will have to be understood more than confrontations of powers - in geopolitical terms - but as providing content and including pertinent solutions - as the environmental aspects together with answers to social and economic aspects.

For the moment, it looks like nother utopia of the island.

Iraq Endgame

George Friedman

Stratfor

August 18

Though the Iraq war is certainly not over, it has reached a crossroads. During the course of the war, about 40 countries sent troops to fight in what was called “Multi-National Force-Iraq.” As of this summer, only one foreign country’s fighting forces remain in Iraq — those of the United States. A name change in January 2010 will reflect the new reality, when the term “Multi-National Force-Iraq” will be changed to “United States Forces-Iraq.” If there is an endgame in Iraq, we are now in it.
The plan that U.S. President Barack Obama inherited from former President George W. Bush called for coalition forces to help create a viable Iraqi national military and security force that would maintain the Baghdad government’s authority and Iraq’s territorial cohesion and integrity. In the meantime, the major factions in Iraq would devise a regime in which all factions would participate and be satisfied that their factional interests were protected. While this was going on, the United States would systematically reduce its presence in Iraq until around the summer of 2010, when the last U.S. forces would leave.
Two provisos qualified this plan. The first was that the plan depended on the reality on the ground for its timeline. The second was the possibility that some residual force would remain in Iraq to guarantee the agreements made between factions, until they matured and solidified into a self-sustaining regime. Aside from minor tinkering with the timeline, the Obama administration — guided by Defense Secretary Robert Gates, whom Bush appointed and Obama retained — has followed the Bush plan faithfully.
The moment of truth for the U.S. plan is now approaching. The United States still has substantial forces in Iraq. There is a coalition government in Baghdad dominated by Shia (a reasonable situation, since the Shia comprise the largest segment of the population of Iraq). Iraqi security forces are far from world-class, and will continue to struggle in asserting themselves in Iraq. As we move into the endgame, internal and external forces are re-examining power-sharing deals, with some trying to disrupt the entire process.
There are two foci for this disruption. The first concerns the Arab-Kurdish struggle over Kirkuk. The second concerns threats to Iran’s national security.

The Kurdish Question

Fighting continues in the Kirkuk region, where the Arabs and Kurds have a major issue to battle over: oil. The Kirkuk region is one of two major oil-producing regions in Iraq (the other is in the Shiite-dominated south). Whoever controls Kirkuk is in a position to extract a substantial amount of wealth from the surrounding region’s oil development. There are historical ethnic issues in play here, but the real issue is money. Iraqi central government laws on energy development remain unclear, precisely because there is no practical agreement on the degree to which the central government will control — and benefit — from oil development as opposed to the Kurdish Regional Government. Both Kurdish and Arab factions thus continue to jockey for control of the key city of Kirkuk.
Arab, particularly Sunni Arab, retention of control over Kirkuk opens the door for an expansion of Sunni Arab power into Iraqi Kurdistan. By contrast, Kurdish control of Kirkuk shuts down the Sunni threat to Iraqi Kurdish autonomy and cuts Sunni access to oil revenues from any route other than the Shiite-controlled central government. If the Sunnis get shut out of Kirkuk, they are on the road to marginalization by their bitter enemies — the Kurds and the Shia. Thus, from the Sunni point of view, the battle for Kirkuk is the battle for the Sunni place at the Iraqi table.
Turkey further complicates the situation in Iraq. Currently embedded in constitutional and political thinking in Iraq is the idea that the Kurds would not be independent, but could enjoy a high degree of autonomy. Couple autonomy with the financial benefits of heavy oil development, and the Kurdish autonomous region of Iraq becomes a powerful entity. Add to that the peshmerga, the Kurdish independent military forces that have had U.S. patronage since the 1990s, and an autonomous Kurdistan becomes a substantial regional force. And this is not something Turkey wants to see.
The broader Kurdish region is divided among four countries, Turkey, Iraq, Iran and Syria. The Kurds have a substantial presence in southeastern Turkey, where Ankara is engaged in a low-intensity war with the Kurdistan Workers’ Party (PKK), members of which have taken refuge in northern Iraq. Turkey’s current government has adopted a much more nuanced approach in dealing with the Kurdish question. This has involved coupling the traditional military threats with guarantees of political and economic security to the Iraqi Kurds as long as the Iraqi Kurdish leadership abides by Turkish demands not to press the Kirkuk issue.
Still, whatever the constitutional and political arrangements between Iraqi Kurds and Iraq’s central government, or between Iraqi Kurds and the Turkish government, the Iraqi Kurds have a nationalist imperative. The Turkish expectation is that over the long haul, a wealthy and powerful Iraqi Kurdish autonomous region could slip out of Baghdad’s control and become a center of Kurdish nationalism. Put another way, no matter what the Iraqi Kurds say now about cooperating with Turkey regarding the PKK, over the long run, they still have an interest in underwriting a broader Kurdish nationalism that will strike directly at Turkish national interests.
The degree to which Sunni activity in northern Iraq is coordinated with Turkish intelligence is unknown to us. The Sunnis are quite capable of waging this battle on their own. But the Turks are not disinterested bystanders, and already support local Turkmen in the Kirkuk region to counter the Iraqi Kurds. The Turks want to see Kurdish economic power and military power limited, and as such they are inherently in favor of the Shiite-dominated Baghdad government. The stronger Baghdad is, the weaker the Kurds will be.
Baghdad understands something critical: While the Kurds may be a significant fighting force in Iraq, they can’t possibly stand up to the Turkish army. More broadly, Iraq as a whole can’t stand up to the Turkish army. We are entering a period in which a significant strategic threat to Turkey from Iraq could potentially mean Turkish countermeasures. Iraqi memories of Turkish domination during the Ottoman Empire are not pleasant. Therefore, Iraq will be very careful not to cross any redline with the Turks.
This places the United States in a difficult position. Washington has supported the Kurds in Iraq ever since Operation Desert Storm. Through the last decade of the Saddam regime, U.S. special operations forces helped create a de facto autonomous region in Kurdistan. Washington and the Kurds have a long and bumpy history, now complicated by substantial private U.S. investment in Iraqi Kurdistan for the development of oil resources. Iraqi Kurdish and U.S. interests are strongly intertwined, and Washington would rather not see Iraqi Kurdistan swallowed up by arrangements in Baghdad that undermine current U.S. interests and past U.S. promises.
On the other hand, the U.S. relationship with Turkey is one of Washington’s most important. Whether the question at hand is Iran, the Caucasus, the Balkans, Central Asia, the Arab-Israeli conflict, Afghanistan, Russia or Iraq, the Turks have a role. Given the status of U.S. power in the region, alienating Turkey is not an option. And the United States must remember that for Turkey, Kurdish power in Iraq and Turkey’s desired role in developing Iraqi oil are issues of fundamental national importance.
Now left alone to play out this endgame, the United States must figure out a way to finesse the Kurdish issue. In one sense, it doesn’t matter. Turkey has the power ultimately to redefine whatever institutional relationships the United States leaves behind in Iraq. But for Turkey, the sooner Washington hands over this responsibility, the better. The longer the Turks wait, the stronger the Kurds might become and the more destabilizing their actions could be to Turkey. Best of all, if Turkey can assert its influence now, which it has already begun to do, it doesn’t have to be branded as the villain.
All Turkey needs to do is make sure that the United States doesn’t intervene decisively against the Iraqi Sunnis in the battle over Kirkuk in honor of Washington’s commitment to the Kurds.
In any case, the United States doesn’t want to intervene against Iraq’s Sunnis again. In protecting Sunni Arab interests, the Americans have already been sidestepping any measures to organize a census and follow through with a constitutional mandate to hold a referendum in Kirkuk. For the United States, a strong Sunni community is the necessary counterweight to the Iraqi Shia since, over the long haul, it is not clear how a Shiite-dominated government will relate to Iran.

The Shiite Question

The Shiite-dominated government led by Iraqi Prime Minister Nouri al-Maliki is no puppet of Iran, but at the same time, it is not Iran’s enemy. As matters develop in Iraq, Iran remains the ultimate guarantor of Shiite interests. And Iranian support might not flow directly to the current Iraqi government, but to al-Maliki’s opponents within the Shiite community who have closer ties to Tehran. It is not clear whether Iranian militant networks in Iraq have been broken, or are simply lying low. But it is clear that Iran still has levers in place with which it could destabilize the Shiite community or rivals of the Iraqi Shia if it so desired.
Therefore, the United States has a vested interest in building up the Iraqi Sunni community before it leaves. And from an economic point of view, that means giving the Sunnis access to oil revenue as well as a guarantee of control over that revenue after the United States leaves.
With the tempo of attacks picking up as U.S. forces draw down, Iraq’s Sunni community is evidently not satisfied with the current security and political arrangements in Iraq. Attacks are on the upswing in the northern areas — where remnants of al Qaeda in Iraq continue to operate in Mosul — as well as in central Iraq in and around Baghdad. The foreign jihadists in Iraq hope such attacks will trigger a massive response from the Shiite community, thus plunging Iraq back into civil war. But the foreign jihadists would not be able to operate without some level of support from the local Sunni community. This broader community wants to make sure that the Shia and Americans don’t forget what the Sunnis are capable of should their political, economic and security interests fall by the wayside as the Americans withdraw.
Neither the Iraqi Sunnis nor the Kurds really want the Americans to leave. Neither trust that the intentions or guarantees of the Shiite-dominated government. Iraq lacks a tradition of respect for government institutions and agreements; a piece of paper is just that. Instead, the Sunnis and Kurds see the United States as the only force that can guarantee their interests. Ironically, the United States is now seen as the only real honest broker in Iraq.
But the United States is an honest broker with severe conflicts of interest. Satisfying both Sunni and Kurdish interests is possible only under three conditions. The first is that Washington exercise a substantial degree of control over the Shiite administration of the country — and particularly over energy laws — for a long period of time. The second is that the United States give significant guarantees to Turkey that the Kurds will not extend their nationalist campaign to Turkey, even if they are permitted to extend it to Iran in a bid to destabilize the Iranian regime. The third is that success in the first two conditions not force Iran into a position where it sees its own national security at risk, and so responds by destabilizing Baghdad — and with it, the entire foundation of the national settlement in Iraq negotiated by the United States.
The American strategy in this matter has been primarily tactical. Wanting to leave, it has promised everyone everything. That is not a bad strategy in the short run, but at a certain point, everyone adds up the promises and realizes that they can’t all be kept, either because they are contradictory or because there is no force to guarantee them. Boiled down, this leaves the United States with two strategic options.
First, the United States can leave a residual force of about 20,000 troops in Iraq to guarantee Sunni and Kurdish interests, to protect Turkish interests, etc. The price of pursuing this option is that it leaves Iran facing a nightmare scenario: e.g., the potential re-emergence of a powerful Iraq and the recurrence down the road of age-old conflict between Persia and Mesopotamia — with the added possibility of a division of American troops supporting their foes. This would pose an existential threat to Iran, forcing Tehran to use covert means to destabilize Iraq that would take advantage of a minimal, widely dispersed U.S. force vulnerable to local violence.
Second, the United States could withdraw and allow Iraq to become a cockpit for competition among neighboring countries: Turkey, Iran, Saudi Arabia, Syria — and ultimately major regional powers like Russia. While chaos in Iraq is not inherently inconsistent with U.S. interests, it is highly unpredictable, meaning the United States could be pulled back into Iraq at the least opportune time and place.
The first option is attractive, but its major weakness is the uncertainty created by Iran. With Iran in the picture, a residual force is as much a hostage as a guarantor of Sunni and Kurdish interests. With Iran out of the picture, the residual U.S. force could be smaller and would be more secure. Eliminate the Iran problem completely, and the picture for all players becomes safer and more secure. But eliminating Iran from the equation is not an option — Iran most assuredly gets a vote in this endgame.

OPEC to keep present output

George Jahn

AP

March 15

OPEC ministers decided Sunday not to directly cut oil output in an effort to raise prices, but to focus instead on stopping individual members from producing above their quotas.

The decision was sure to be welcomed by the U.S. and other major oil consuming countries, because setting lower output limits would have likely resulted in higher crude prices that would jolt the anemic world economy.

Cheap oil has been a rare bright spot in the otherwise gloomy global economic picture, selling in the mid- to upper $30s this week — less than a third of its summer record levels. Those prices have forced many OPEC members to revise government spending and warn that they cannot invest in further oil production.

Some OPEC members had urged direct oil output cuts by setting lower levels, as OPEC usually does when it wants to raise prices. But others, led by OPEC's main producer, Saudi Arabia, had instead favored calling on overproducing members to comply with their quotas as a way of reducing world oil supply without the risk of causing prices to rise rapidly.

Cuts agreed on since September were meant to take a daily 4.2 million barrels off the market. But the 11 members under production quotas are still overshooting their joint daily target level of just under 25 million barrels by more than 800,000 barrels a day, or 21 percent above formal set limits.

While 100 percent compliance to quotas is unlikely, even an additional 10 percent would take more than 400,000 barrels a day off markets, slicing into oversupply while reducing the price shock that an outright cut in existing quotas would have caused.

"We have urged our member countries to comply," said OPEC Secretary-General Abdalla el-Badri. "We have an overhang of 800,000 to 900,000 barrels.

"If we have more compliance, we can reduce it further."

But more drastic measures could be enacted within a few months. The ministers agreed to meet in special session on May 28 to review prices and supply — and possibly decide to reduce the oil producing club's output levels, if they think that crude is too cheap.