Croatia Joins the EU

Image via Hurriyet

At a time when Greece seems on the way out of the European Union, Croatia has just secured its way in. On Sunday, January 22nd, the Croatian public voted overwhelmingly in a national referendum in favor of joining the European Union, with 67% voting yes despite a low turnout. This referendum comes one month after Croatians voted in a new centre-left pro-EU party for the first time in decades.

Croatia’s application to the EU, submitted in 2003 with negotiations started in 2005 alongside Turkey, has not been without its difficulties. Croatia first had to resolve border disputes with EU-member Slovenia and fulfill satisfactorily 35 chapters of the acquis communitaire which outline the political and economic criteria of joining the EU.

Yet, for many Croatians, these were simple obstacles to overcome compared to the transition from a communist to a free-market economy and their bloody involvement in the Yugoslav Wars of the early 1990s. Croatian nationalists have always maintained a westward orientation through strong ties with the Roman Catholic church, latin script, and the access its Adriatic coast has given it to Western Europe.

Despite a brief surge in euroskepticism following the sentencing of a former Croatian general for war crimes at The Hague in 2011, Croatian political and public opinion has always been strongly in favor of EU integration.

Croatia must now wait for the remaining 27 EU member states to approve its entry into the EU, with July 1, 2013 as the expected date of entry. The influx of foreign funds and investment as a result of accession to the EU is expected to help rebuild Croatia’s still ravaged tourism, agriculture, and industrial sectors.

Croatia’s GDP per capita, at 56% of the EU average as of 2010, is also expected to increase with greater mobility of goods and labor. Many Croatians are optimistic that entry into the EU will bring more transparency into their notoriously inefficient and corrupt government bureaucracy.

With the EU and the eurozone’s recent economic and debt problems, some Croatians are more pessimistic. Croatia is now far more exposed to Europe’s problems of debt, immigration, and a recessionary economy.

As Europeans look to Croatia for an assessment of Europe, Croatia does not see the referendum as an appraisal of the current state of the EU but a deliberate turn away from its Yugoslavian past and toward a rosier, more peaceful future.

The Russian Electoral Ballet

It is difficult to imagine what circumstances would compel thousands of protesters in Novosibirsk, Russia’s third-largest city, to rally outdoors while enduring minus 20C temperature for over two hours. Despite the harsh winter climate, protesters from all around Russia took to the streets of cities from Moscow to Khabarovsk to protest the results of parliamentary elections to the Duma that took place on December 4th.

Prime Minister, former President, and Presidential candidate Vladimir Putin’s party, United Russia, was expected to lose its parliamentary majority. Instead, United Russia managed to just barely hang onto a majority in the parliament with 238 MPs and 49.3% of the vote. These results are tainted by widespread allegations of ballot stuffing, vote purchasing, and forged electoral counts. Several liberal opposition parties also failed to clear the 7% vote threshold necessary to enter parliament.

The day after elections, December 5th, protesters in Moscow marched to the Lubyanka, the former headquarters of the KGB and current headquarters of the Federal Security Service, to protest perceived electoral fraud and vote tampering. Protests ramped up throughout the country culminating in large opposition rallies with over fifty-thousand attendees on December 10th and December 24th.

Outgoing President Dmitri Medvedev (who is seen as a subordinate to Putin) responded by offering token proposals to loosen election laws such as a return to the direct election of governors and mayors of Moscow and St. Petersburg (elections which were originally rescinded by Putin). Putin, on the other hand, first mocked the protesters, then claimed the protests to be indicative of a healthy democracy under United Russia. So far Putin has sacked Vladislav Surkov (believed to have been the architect of Putin’s “managed democracy”) but has refused to abandon his bid for President. Meanwhile, protesters demand a redo of Duma elections (which Putin has outright rejected) and the freeing of political prisoners.

Symbolising the otherwise divided opposition bloc, political activist and rising personality Alexei Navalny has used his blog and social networks to expose corruption, but has decided not to oppose Putin as a presidential candidate. In his place on the ticket are several opposition candidates who barely stand a chance of beating Putin. The most highly-polled candidate against Putin is the Communist Party candidate at 11%. United Russia has also been caught forging signatures in order to place a Putin ally on the ballot as an insurance candidate should all the opposition candidates withdraw in protest. The most outspoken opposition candidate is metals tycoon Mikhail Prokhorov who favors a gradual moderate “evolution, not revolution” for Russia’s problematic problematic managed democracy.

Russians are dissatisfied with widespread corruption and the absence of rule of law. Unfortunately, the opposition is not unified enough to challenge United Russia. So Russia, unlike Mubarak’s Egypt or even Gorbachev’s USSR, is not a dictatorship but not quite a full-fledged democracy. Unless Russians shed the illusion of democracy and their political apathy, the planned rally on February 4th will likely not avert Putin’s coronation following the March 4th elections.

Iranian Nuclear Fallout

The International Atomic Energy Agency (IAEA) released a report today detailing the progress Iran has made in its nuclear weapons program. Key findings include the development and testing of an implosion device, a build-up in the previously investigated Parchin base, and significant evidence of weapons-grade uranium enrichment.

Why are these new revelations relevant to regional interests, and the interests of the US and UK? For the region, Iran’s possession of nuclear weapons increases the possibility of nuclear proliferation, especially to volatile countries such as Syria and Lebanon. Acquiring nuclear weapons also makes Iran the clear hegemonic regional power with the capacity to clear other countries quite explicitly off the map. Most importantly, a nuclear Iran would draw neighbors like Saudi Arabia, Iraq, Turkey, etc. into a de-stabilizing arms race.

For the US, the UK, and the international community, a nuclear Iran would frustrate the desire for stability and a balance of power in the region. This instability naturally means dramatic fluctuations in oil and gas prices that are detrimental to consumers as well as producers. Nuclear weapons give Iran a significant leverage in talks aimed at lifting sanctions. Finally, Iran has had long-standing ties to various anti-American groups who would appreciate getting their hands on radiological material for dirty bombs.

But is there anything the international community can do about Iran’s nuclear program? In a process increasingly familiar to the Obama administration, the US supplemented the IAEA with intelligence, then waited until the report was released before pushing today for further sanctions. However, because Iran is supported by Russia and China, it has not yet been stymied by Western sanctions. There always exists the possibility of cyber-warfare, a là STUXNET, but the Iranian program has developed to a stage where simply shutting down computer systems is not enough to stop it.

A military strike, much like the Israeli bombing of Osirak in Iraq in 1981, may temporarily weaken the nuclear weapons program, but a strike could also convince the Iranian political elite and Iranian citizens that they should pursue a more secretive, resilient nuclear program to protect themselves from the West.

That leaves us with the most realistic outcome of this report: nothing will happeniran. Nuclear weapons technology is over sixty years old, and ballistic missile technology is fairly accessible. We now live in a world where it is impossible to stop any sufficiently committed country from developing a weapons program. Therefore the best response would be to engage in dialogue along the lines of theTurkey-Brazil-Iran nuclear fuel swap deal agreed upon in the Spring of 2010. But for such a solution to work would require a rejection of a sanctions-only hardline approach to Iran and a development of trust in Iran that, after today’s report, it no longer has.

Nationalist Greek Rebellion

Yesterday, Greek Finance Minister Evangelos Venizelos expressed the core decision about the future of Greece now facing Greek citizens: “Do Greeks want to remain in Europe, in the eurozone with the euro in a country that belongs to the developed world, or do they want to return to the 1960s? Do they think it is good to owe €100bn to the banks, or do they not think it’s good to live with such debt? Each citizen will make their own decision, with responsibility, in a process that’ll give a national sense of relief and recovery.”

Following reports Monday that many Greeks planned to not pay their electricity bills following the imposition of a property tax collected via electric companies, and the cratering approval ratings of the ruling PASOK party in Greece, Prime Minister Papandreou decided yesterday to hold a national referendum on a plan that was recently forged by European leaders to save the eurozone (although the fate of the referendum has become much more uncertain since this morning).

Greek opposition leaders believe that this recent move is a cynical ploy to stave off the ruling party’s – PASOK’s – eventual defeat in parliamentary elections. Outside observers, and debt-holders, view the move with intense anxiety and trepidation; a rejection of the European plan means further Euro instability, a sharp decline in confidence, and of course, a diminishing chance that anyone will get all their money back (as MF Global recently discovered).

It’s not often that I see a fairly direct accountability tool, the referendum, assailed by so many ostensibly pro-democratic critics.

Given the circumstances, how do Europeans hope the Greeks will vote? With a heavy heart and utmost concern for the future of Europe, Greece would vote yes, and delay the inevitable just a bit longer.
How will the Greeks likely vote? With a resounding hell no!

The Greeks seem to have realized that the people who are most hurt by economic downturns are those of lower and middle incomes, for purely structural reasons. These are the people for whom taxes are the most regressive, and cuts in social services are the most dire. This basic economic consequence of austerity is one that is only now being realized by Americans and the British. However, the Greeks have had far longer to internalize this fact.

They also likely realize that there is a mismatch between incentives and disincentives in modern society. Sure, many Greeks from all levels of income reneged on taxes. They also enjoyed a level of social services, job protection, and other labor protections beyond those in – let’s say – Germany. But are all Greeks responsible for the current situation in Greece? Not at all! The upper echelons of Greek society and Europe spent years reaping much of the benefits while socializing all of the inevitable costs. These problems are not cured by austerity at all. Rather, austerity accelerates underlying power disparities among social classes.

I also think it’s important to view Greece as a remnant of the former Ottoman Empire and a constituent nation of the Balkans, and not as a Western European nation in the same way we view France, Germany, Belgium, etc.

The romantic view of Greece as the eternal fount of western civilization is one of the myths that led Greece to unwisely join the eurozone, and other eurozone countries to cheer its entry despite clear economic indications that it wasn’t ready. On corruption (according to Transparency International in 2009), Greece ranks 71st, tied with Bulgaria, Macedonia, and Romania, and just behind Georgia, Ghana, and Montenegro. Modern Greece, founded in 1948 after resisting a post-WWII Communist take over, has fairly weak institutions, and is often prone to single-party, personality-driven dynasties. These are core Greek structural problems that Greece would better resolve with its own currency than while chained to the European Central Bank.

And it is for this reason that it is likely Greeks will seek to reassert its own sovereignty, in a way that may or may not be gently guided by PASOK and the referendum.

The best option for Greece is to default, reintroduce the drachma, and in effect, reassert its national sovereignty – provided that its government doesn’t devolve into indefinite political turmoil.

The Arbabsiar Affair – and our dearth of options

Foreign Policy piece on the bungled assassination plot on the Saudi ambassador to the US in Washington. Byman comes up with some plausible explanations of what really happened and who is responsible for the plot, in an attempt to pursue accountability on the Iranian authorities.

Whoever the culprit, and whatever the extent of complicity on the part of the Iranian government in the Arbabsiar affair is a moot point. The US and Saudi Arabia have their hands tied, and are unlikely to loosen the knots around their wrists.

For example, a military strike would be inconceivable among any one of the three parties. Iran still suffers from the trauma of the Iran-Iraq War of the early 1980s, and America has yet to extricate itself sufficiently from Iraq and Afghanistan to assuage a war-weary American public. As for Saudi Arabia, it knows full well that outright war in the Gulf would throw an already unstable succession situation into further political jeopardy.

Then there is war by proxy. For years Iran has played its hand through Syria and Hezbollah in Southern Lebanon. Meanwhile, Saudi Arabia has helped prop up Sunni minorities in Gulf states; recently sending troops across the channel that separates the Saudi mainland from Bahrain in order to support the Al-Khalifa regime against Bahrain’s Shia majority. The Arab Spring, as pointed out by Byman, has thrown the dynamics of this regional “cold war” into an uncertainty that disfavors Iran. Suddenly, the game of great power dynamics is not as executable on allied soil as it once was.

That leaves us with the secret war – sanctions and other, softer options having largely been depleted. Apparently the Arbabsiar affair was a part of this clash of ghosts (although ghosts, as Byman points out, do occasionally materialize and stumble). So are the assassinations of nuclear scientists in Iran and the STUXNET virus sabotaging of the Bushehr plant. Politically, in all three parties involved, the secret war is the only one that is truly politically feasible at this moment. And it is precisely because of the lack of options the US now faces in dealing with an assassination plot on its own soil that the US must rely on rhetoric publicly, and intelligence privately, to pursue its interests abroad.

Whither India?

Shortly after receiving a midterm election “shellacking”, President

Obama and his foreign policy team made a diplomatic tour of Asia. Many
domestic observers saw this as seeking refuge abroad as Obama still
has the ability to exercise much of his presidential prerogative in
foreign affairs regardless of the Republican rout. However, Obama’s
choice of India for his longest visit yet reflects the increasing
importance of the bilateral relationship between our two countries in
economic and security matters. Over the last decade, India’s continued
economic growth has threatened American workers through outsourcing
while providing American consumers cheaper imports and services. It’s
influence has grown in South Asia as one of the few democratic stable
nations in the region and has now a far greater role in the security
of trade in the Indian Ocean. From the American perspective we must
ask whether India’s relative power continue to increase without limit.
Despite India’s growth during the 2000s, the country’s own problems
with income inequality, corruption, and ethnic tensions has already
started to place an upper limit to India’s ability to exert economic
power and influence on its neighbors.

According to the CIA World Factbook, the top 10% of India’s
population receive 31.1% of total income and the bottom 10% only
receives 3.6%. India’s rising income inequality, especially between
urban and rural populations, makes it far more difficult for the
country to grow and maintain a stable middle class. Without a large
middle class, there is less aggregate demand in the internal domestic
market, and consequently less affordable education for most students.
This requires foreign companies to re-educate undereducated Indian
workers at great cost. A smaller middle class means less social
mobility and greater potential for social and political conflict
between classes.

Also, without a large middle class, and with an increasing
consolidation of power in an elite, there are far fewer checks on
public corruption. On Transparency International’s Corruption
Perception Index, India ranked 87th out of 178 countries after having
fallen down a few places in the past few ears. Soon after Obama’s
visit, India was rocked by protests over a scandal involving the sale
of the mobile phone spectrum by politicians. This sort of corruption
discourages foreign direct investment, weakens the country’s ability
to govern, and hampers the ability of the government to continue
developing strong nationwide manufacturing and IT infrastructures.

Finally, long simmering ethnic tensions create political and
economic instability across the country. Current ethnic/religious
conflicts include the recent Gujarat riots between Hindus and Muslims,
the conflict among Kashmiris and Indian troops in Kashmir, Maoist
rebellions centered around West Bengal, and the rise of Hindu
Nationalists across the country. Ethnic conflict, language barriers
(despite the increased use of English as a lingua franca), and even
the persistence of the caste system in many aspects of society hinder
the formation of long-term coherent domestic and foreign policy
priorities. Many ethnic groups share more with their kin across the
Pakistani, Bangladeshi, or Burmese borders than they do with Delhi. By
comparison, the relatively homogeneous Han population of China,
combined with its single-party regime, has been able to more firmly
direct the powers of state on fixed domestic and foreign policies.

To date, India has benefitted from foreign direct investment and
a large pool of cheap labor. Yet, when it comes to America’s ability
to exert its foreign policy in South Asia and the Indian Ocean, India
is not currently, nor will be soon, an overwhelming regional hegemonic
threat. There are far too many internal issues for India to resolve
first. Obama’s recent trip and his administration’s advocacy of
India’s ascension to the UN Security Council reflects our choice of
making India a regional business and security partner rather than an
adversary.

My apologies for the Foreign Affairs magazine tone of the following piece on India, but I just had to share it (as it was sitting so lonely on my hard drive).