Year In Pictures

In keeping with our year-end extravaganza:
Maclean's, a Canadian newsweekly, has compiled an excellent gallery of photographs from the past year. Some of the most powerful:

• Beijing Olympics opening ceremony
• Close call in Afghanistan
• Volcano erupts in Chile
• The true cost in Georgia

That Was The Year That Was: Politique

IPE Journal looks back at the political events, people and trends that defined our world in 2008.

- The worst financial crisis since the Great Depression sets in motion a paradigm shift in global power and authority. The state reoccupied the commanding heights of the global economy through stimulus packages, banking nationalizations and automotive bailouts. The IMF regained relevance, and political fortunes were turned in response to the crisis. The G20 replaced the G8 (but for how long?), and the WTO sadly threw in the towel for 2008.

- Barack Obama was elected the 44th President of the United States in one of the largest electoral landslides in decades. He is the first African-American elected to the highest office. He quickly established a "team of rivals" cabinet, bringing together the best, brightest and (slightly) bipartisan to implement his foreign policy and economic agenda. This agenda will likely be defined by what has been called a "21st century New Deal".

- Russia invaded and briefly occupied much of Georgia. The conflict reasserted Russian influence in its "near abroad", exposed EU divisions over Russian relations and raised tensions over NATO expansion and US missile defense in Eastern Europe. It also exposed the real power dynamics in Russia, with Putin effectively orchestrating, commanding and negotiating throughout the conflict. However, by the end of 2008, the financial crisis would for the first time raise questions over Putin's rule as the country was forced to devalue the rouble and ripples of unrest began to sprout up.

- Parts of Africa continue their descent into hell. Kenya erupts, Somalia struggles, and Darfur is a humanitarian disaster. Fighting has resumed in the DRC with Rwandan support, and Mugabe has maintained his iron grip on power, squeezing Zimbabwe dry in the process. Mbeki left office in South Africa, paving the way for Zuma in 2009. The world now looks to Ghana in the final days of 2008, and hopes for a victory for African democracy.

- The Treaty of Lisbon, an attempt to streamline and bolster the EU, is rejected by Irish voters, temporarily killing the process. While certainly a setback for further European integration, Europhiles promise to continue holding referendums until the voters get it "right." A December summit laid out the blueprint/compromise for Lisbon's revival in 2009, and, for possibly the first time in EU history, ended with universal praise of a French president.

- Attacks in Mumbai: as of yet, not a defining geopolitical event since Pakistan and India worked hard to prevent the situation from escalating. Nevertheless, this is a potential touching-off point for the nuclear rivals in 2009. It also might (by design??) divert Pakistani attention away from fighting terrorism in the northwest tribal areas, and reignite violence in Kashmir. The implications of Mumbai are vast, and potentially destabilizing for the entire world.

- Israel, in response to repeated rocket attacks, and in advance of national elections, pounds Hamas and infrastructure in Gaza. The year's final week produced one its most explosive events, as the fighting in Gaza risks wider political instability and a humanitarian crisis in the territory. Many analysts believe that Israel's overwhelming aerial assault is an attempt to dictate a new truce with Hamas, but its military establishment is signalling that the shock and awe may be only the first phase in a wider operation aimed at removing Hamas from power.

***Co-written by Dave Hart

Putin confirms plans for Saakashvili

He'll settle for any number of body parts.

(for original Putin threat, see here)

That Was The Week That Was

Politique
-G20 leaders arrived in Washington for a summit that had been hailed Bretton Woods II. With President-elect Obama avoiding the summit, and sharp differences between world leaders on the reforms needed to repair the international financial and economic systems, the summit ends like so many before it- with a consensus on principles, little coordinated action, and an agreement to meet again. Declaration text here.

-A regional war looms as the situation in the DRC deteriorates. African peacekeepers are impotent and declared targets by Nkunda, the number of foreign troops/mercenaries in the country grows by the day, and southern African leaders are threatening full-scale military involvement. The NYT looks at the role of minerals in the DRC's history of conflict.

-The EU agreed to restart talks on a strategic partnership agreement with Russia following an EU/Russian summit at Nice. Russia hasn't met the EU conditions set out as a prerequisite to talks following the conflict in Georgia, and it seems only Lithuania has the spine to say so.

-Iraq's cabinet approves new security pact with the US. The agreement extends US troop mandate through 2011.

Economia
-Paulson shocks congress with plan to spend remaining TARP money on capital injections into troubled institutions and companies and consumer spending. The Treasury will no longer purchase illiquid assets, and congressmen/women of both parties are screaming "bait and switch". Paulson deputy Kashkari testified before an angry House, with Rep. Elijah Cummings asking him, "Is Kashkari a Chump?"

-Treasury v. FDIC. FDIC's Bair wants to directly assist 1.5 million homeowners in the US, while Paulson resists a (*cough-cough*) "government spending program"- Paulson believes that his actions are "investments".

-Is a sterling run imminent? That's what George Osborne, Tory shadow chancellor, implied this week in criticizing Gordon Brown's fiscal plans. Osborne's political career is likely done. Sterling has hit a 6-year low against the dollar at $1.49, and Simon Derrick at BoNY Mellon believes sterling's position is now worse than Sept. 1992.

-Eurozone enters its first official recession.

The Rest
-India celebrates first lunar landing.

-This week in Japanese innovation: a robot that feeds you, and bionic legs.

-Arsenal's Prem title run is dead in the water.

-Gordon Brown: control freak.

Vladimir Putin wanted to hang Saakashvili by the b*lls

The Times of London has published the leaked details of a conversation between French President Nicolas Sarkozy and Russian Prime Minister Vladimir Putin in Moscow on August 12th. Sarkozy had flown to Moscow to broker a ceasefire between Russia and Georgia, and Putin made his ultimate goal clear. The following is an excerpt from the Times article:

Mr Sarkozy was aware from intelligence reports that the Russian army was aiming to overthrow Mr Saakashvili and install a puppet government. He told Mr Putin that the world would not accept this, according to Mr Levitte, Mr Sarkozy's foreign policy chief, who was in the Kremlin for the talks.

"I am going to hang Saakashvili by the balls," Mr Putin replied.

Mr Sarkozy responded: "Hang him?"

"Why not? The Americans hanged Saddam Hussein," said Mr Putin.

Mr Sarkozy replied, using the familiar "tu": "Yes but do you want to end up like (President) Bush?" Mr Putin was briefly lost for words, then replied: "Ah, you have scored a point there."

Wow. It is rare that the private conversations of heads of state are leaked to the public, and really suprising that the French would do so just days before Sarkozy chairs an EU-Russian summit in Nice (ironically, the scene of one of France's biggest diplomatic blunders of the past decade- see EC Nice Summit of 2000). There is little utility in angering/embarassing the Russians ahead of a vital strategic meeting, and the leak can probably be chalked up to Sarko's super ego.

Back in August, I argued that Saakashvili would not survive the conflict. I thought that Russia's intentions were clear, and was both wrong and surprised when the Georgian President survived. The credit for this may very well go to Sarko. But if this conversation highlights anything, it is that the situation in Georgia is fragile. I seriously doubt that Putin's feelings have changed, and given the evidence that Georgia may have been more of an agressor in the conflict than it claimed, it will take very little for the Russian Prime Minister to finish the job.

On Russia, Part III: US-Russian relations

US-Russian relations are at their lowest point in decades, arguably since the 1960's. While the threat of direct military/nuclear confrontation is remote, the two countries have stopped talking to one another. This is troubling when US-Russian cooperation is critical to solving many of the world's most pressing challenges. Some background:

Vladimir Putin spent his presidency's first term consolidating political power, stabilizing the Russian economy, and seizing control of the country's energy sector. The US took little note. 9/11 and the "war on terror" occupied America domestically and abroad, and Russia was by all accounts a helpful ally. Putin was the first foreign leader to speak with George W. Bush after the terrorist attacks, Russia quietly helped the US prepare for Afghanistan, and it seemed as if the two countries would be natural allies in the post-9/11 world (Russia, after all, has its own terrorism problem).

But a funny little quagmire happened on the way to the party: Iraq. Russia was decidedly against US military expansion in the middle east, and aligned itself with European powers France and Germany against US hegemony. Iraq was the opening Putin needed to shift Russia's foreign policy in contrast to the US, which in retrospect appears to have been his intention all along. In 2005, Putin told the Federal Assembly that the collapse of the Soviet Union was "the greatest geopolitical catastrophe of the twentieth century". Russian rhetoric had turned sharply against the US, and Putin began to present the world an alternative vision to US hegemony.

Iraq, Syria, Iran. On each of these issues, Russia used its voice, influence, and Security Council veto in opposition to US interests. Russia re-asserted its influence over Eastern Europe and the Caucasus through energy leverage and the undermining of democratic movements. This fundamentally clashed with US (and European) policy in the region. Putin's 2007 "Munich speech", in which he lashed out at the US and its "unipolar" project, was years in the making, sharpened by US missile defense plans and prospective NATO expansion, and fed by a punch-drunk confidence derived from petro-dollars and energy leverage in Europe. It marked a new, more hostile, era in US-Russian relations.

Russia's incursion into Georgia was a watershed, with both sides lashing out at the other over those circumstances and, opportunistically, more. The war also convinced the White House that Russia was now a direct threat to US interests. This has resulted in a suspension of almost all communication between the two sides, and a decidedly icy outlook on future relations.

Three angles are important to understanding why this relationship deteriorated, and how it will develop over the coming years:

-one must look at the domestic landscape to understand Russia's foreign policy. Putin's project (political consolidation, economic nationalization, etc.) has relied on/fostered a strong nationalist sentiment within Russia. The creation of external threats is often necessary to build public support in favor of authoritarian consolidation. This works particularly well in Russia, feeding anti-immigrant sentiment, conjuring the emotion over Chechnya, and speaking to a general sense of having been "humiliated" following the collapse of the Soviet Union. Nashi, Kremlin sponsored youth summer camps, and anti-immigrant violence are all expressions of this nationalism. The Kremlin and its surrogates have fostered an image of the US as a country bent on humiliating (post-Soviet collapse), surrounding (NATO), and infiltrating Russian society (opposition groups, critical press, etc.). The perception of an imperial US is shared by Putin, the silvoki, and extreme (well connected) elements of the Russian population. The nationalism the Kremlin has fostered is dangerous, it will prove difficult to put the genie back in the bottle.

-The US appears to have been seriously blind to Russia's methodical build-up since 2001. The war in Georgia seemed to catch US officials completely off-guard. It took weeks for a clear, consistent message to come out of the US government. For an administration populated by so many creatures of the Cold War (not least, Secretary of State Rice, a renowned scholar on the USSR/Russia before joining the Bush administration), it is stunning the US was not better positioned for such events. Sure, missile defense plans have been developed with an eye towards Russia, and US policy in Central Asia is as much about securing Western energy supplies as it is the "war on terror". But the lack of insight into Russian motives and sensitivities demonstrated by the Bush administration is surprising. A final point: for all of the cowboy diplomacy and reckless unilateralism of the first Bush administration, the second term has been defined by genuine multilaterism and pragmatic, realist diplomacy. Whatever the impetus, the Bush administration does not get enough credit for this shift. It is this context that makes the suspension of almost all communication with on America's most important partners so stunning.

-the way forward is unclear. Without dialogue, the two countries risk a dangerous game of chicken, where each side positions itself against the other on critical issues. I strongly disagree with all the talk over a new cold war. It is in neither country's ultimate interest, and circumstances will bind them to a minimum level of cooperation (Russia's financial and economic problems in the current environment, the US need for Russian assistance on Iran). But on significant issues (energy, Afghanistan/Pakistan, financial crisis), they do fundamentally disagree, and a lack of dialogue will undoubtedly lead to confrontation. The importance of regimes in this context cannot be understated.

A working relationship between the US and Russia is critical to solving the energy, financial, political, arms control, and terrorism-related challenges of our time. They should start talking now.

Georgia Update- Occupation

Georgian President Saakashvili signed a Sarkozy-brokered cease-fire agreement late Friday, accepting (under pressure from US Secretary of State Rice, who hand delivered the agreement) a Russian occupation of large portions of Georgia proper. The agreement reportedly gives Russia the right to patrol a 10km zone around South Ossetia. An explicit Russian recognition of Georgia's territorial integrity was removed from the final text.

Russian forces now occupy at least half the country, and have utterly destroyed Georgia's defense capability. Reports continue to indicate a large Russian military presence in the vicinity of Tbilisi, the Georgian capital.

Georgia is about to be a much smaller country.

Georgia, Russia & the Golden Arches

Addendum to Rory's analysis below:
Paul Wells, over at MacLean's, single-handedly debunks the theory that no two countries with a McDonald's have ever gone to war with each other. Well, it was good while it lasted.

Never taunt a bear

The war in Georgia is fraught with strategic motives and implications. Georgian President Mikheil Saakashvili took Russia's bait by sending troops into South Ossetia, unleashing the full (although, in relative terms, still limited) might of the Russian military, and providing the Kremlin with a window of opportunity to achieve a number of objectives.

For one, President Saakashvili will not survive this conflict, either under the weight of Russian occupation, US pressure, or by popular backlash against his bungled handling of Russian relations. The Kremlin has publicly made it clear they cannot (will not) work with him after the events of the past week, and this war will likely achieve their objective of removing the Georgian president from office.

Second, Russia has reasserted itself over its traditional sphere of influence, and thrown up a huge challenge to Ukraine: seek NATO membership at your own risk. The fall of the Soviet Union was "tragic" to Prime Minister Vladimir Putin, not as much for its economic and political vision, but for the loss of its geopolitical power. US missile defense plans, and the prospective NATO membership of Ukraine and Georgia, feeds into the Kremlin's deepest anxieties of being surrounded by hostile forces. It is important to recognize the historical sensitivity of these developments: Russia has been defending itself from invaders throughout its history, and a NATO presence on its border is perceived as a direct assault on the country's survival. Conflicts are often started due to an ignorance of the ideas and sensitivities of the opposing side. US policy in the region has recently failed to appreciate this context. Georgia matters for Russia due to its strategic location (oil and gas transit, black sea ports, etc.), but Ukraine is a red line.

Third, for all of the rhetoric coming out of the office of the US vice president, the US has clearly determined Georgia is not worth a confrontation with Moscow. Russia's assistance is critical to resolving the Iranian nuclear dispute, and Washington cannot afford a further deterioration in US-Russian relations. This will be deeply resented by the Georgian people, as US support to Georgia has been substantial, perhaps providing President Saakashvili with a false sense of security (and arrogance).

Finally, if anyone doubted where the authority lie in Russia following President Dmitri Medvedev's election, the internal balance of power is now crystal clear. As an interesting article in today's New York Times describes, while Russian troops pushed into central Georgia, President Medvedev was enjoying a cruise on the Volga River. Putin, however, was huddling with President Bush on the sidelines of the Olympic opening ceremonies, leading the mission into Georgia, and meeting with Russian refugees (sleeves rolled up) on the front lines. Much like his incursion into Chechnya in 1999, Putin has used a military conflict to assert his authority over internal political divisions.