One year after a deal to remove over one ton of nuclear fuel from Iran was rejected by the U.S., experts assessed why the deal was scuttled and what have been the resulting implications.

Erdogan-Lula

Washington, DC – In May 2010, through intensive diplomatic efforts in Tehran, Turkey and Brazil brokered an agreement for Iran to give up over one ton of its nuclear fuel in exchange for fuel to produce medical isotopes. But the deal, known as the “Tehran Declaration,” was ultimately rejected by the U.S. One year later, the Foundation for Political, Economic, and Social Research (SETA) convened a panel discussion assessing why the deal was ultimately scuttled and what have been the resulting implications.

Barbara Slavin, non-resident scholar at the Atlantic Council, said the deal was doomed before it was even finalized.

In October 2009, the U.S., along with England, France, China, Russia and Germany (the P5+1), had pursued a “confidence building” deal similar to the Tehran Declaration. But that deal, which came during the first high level direct talks between the U.S. and Iran in recent history, was eventally rejected by Tehran.

By the time Turkey and Brazil managed to revisit and secure a similar agreement in May, Slavin said, the U.S. had shifted to the sanctions track. There was little interest within the Obama Administration to return to the engagement track in the midst of a nearly completed push to build consensus at the United Nations Security Council for new sanctions.

“There had been enormous pressure to show progress on the nuclear front by the end of 2009. If that didn’t happen, Obama made it quite clear he would pivot toward sanctions. And that was exactly what he did,” Slavin said.

But for Turkey, according to SETA Research Director Kadir Ustun, there was genuine surprise that the U.S. rejected the agreement. Ustun said that, while Ankara had never considered the agreement to be comprehensive, it believed it was a means to overcome an impasse and prevent “regional tension and eventual war.” Ankara, he said, believed that “sanctions were counter-productive and counter to regional economic integration.” He said that Turkey continues to believe it can play a critical role in providing much needed mediation between Iran and the West.

For Brazil, according to Matias Spektor of Brazil’s Center for International Relations, President Lula da Silva was led to believe he was pursuing diplomacy on behalf of the United States. President Obama had sent Lula a letter discussing the upcoming negotiations in Tehran, and Lula thought the letter was direct encouragement for him to pursue the Tehran Declaration.

Spektor argued that Brazil also believed it could provide much needed trust for efforts to engage Iran to be succesful. “They felt that they could talk to Iran,” he said, “because they had willingly given up its weapons program.”

As a result of not communicating and pursuing the opportunity presented by the Brazil-Turkey deal, but instead going forward with UN sanctions, Trita Parsi of the National Iranian American Council observed that the U.S. is in a much more difficult situation than it was last year. By falling back on sanctions and turning down a chance to secure some of Iran’s low-enriched uranium (LEU) through Brazilian and Turkish interlocutors, Parsi said, an important opportunity was lost. And during the time that has passed, Iran has amassed even more LEU, albeit at a slower pace.

Parsi said that a peaceful resolution with Iran will take a far greater investment in diplomacy than has been pursued to date. “Between the end of October and the beginning of May, Brazil and Turkey engaged in more direct diplomacy (with Iran) than all of the P5+1 combined,” he stated.

“Talking for just three weeks isn’t enough to bridge the divide.”

via National Iranian American Council (NIAC): The Turkey-Brazil-Iran Deal, One Year Later.

By announcing the outbreak of a “currency war,” Mantega wanted to draw attention to the problems caused by the ongoing exchange-rate manipulations that governments put in place in order to gain economic advantages. In this sense, “currency war” denotes the conflict among nations that arises from the deliberate manipulation of the exchange rate in order to gain international competitiveness by way of currency devaluation.

Competitive Devaluation

Calling competitive devaluation a “war” may seem like a gross exaggeration. Yet in terms of its potential of destruction, the current global financial conflict may well rank at a level similar to that of a real war.

In a wider historical perspective, the current currency war is the latest conflict in a series of acute crises of the modern international monetary system. In a world of national monetary regimes based on fiat money without physical anchors, domestic monetary instability automatically transforms into exchange-rate instability. As before, the current crisis of the international economic order is mainly the result of monetary fragilities coming from the unsound national monetary systems and reckless domestic monetary and fiscal policies.

The immediate cause of the currency war entering an acute stage is the policy of massive quantitative easing practiced by the US central bank. Whatever the original intention of this policy may have been, the consequences of the Fed’s measures include monetary expansion, low interest rates, and a weaker US dollar. With dollar interest rates approaching the “zero bound,” the United States is joining Japan in the effort to stimulate a sluggish economy with massive monetary impulses.

Until recently, the currency war was contained as a kind of financial cold war. The conflict entered its hot phase as a result of the expansive monetary policies that were put in place in the wake of the financial-market crisis that began in 2007. In defiance of the fact that the financial crisis itself was the result of the extremely expansive monetary policies in the years before, many central banks have now accelerated monetary expansion in the vain attempt to cure the disease with the same measures that had caused it in the first place.

Easy Money and International Financial Flows

What has emerged in the global financial arena over the past couple of years is the interplay among easy money, low interest rates, international trade imbalances, financial flows, and exchange-rate manipulations. The failure of attempts to cure overindebtedness with more debt, and to stimulate weak economies by giving them interest rates as low as possible, provokes a repetitive pattern of bubble and crash where each phase ends in a higher level of government debt.

A global search for higher yields has been going on not unlike what happened in the late 1960s and 1970s, when the United States inflated and the countries that had linked their exchange rates to the US dollar suffered from imported inflation. Nowadays, the formal dollar-based fixed-exchange-rate system no longer exists. It has been replaced by a system that sometimes is called “Bretton Woods II”: a series of countries, particularly in Asia this time, have pegged their exchange rates (albeit without a formal agreement) to the US dollar.

If a country wants to slow down the appreciation of its exchange rate that comes as a consequence of the financial inflows from abroad, it must intervene in the foreign-exchange markets and monetize at least a part of the foreign exchange. This way, the monetary authorities will automatically increase the domestic money stock. Additionally, under this system relatively poor countries feel forced not only to buy the debt issued by the relatively wealthy countries like the United States but also to buy these bonds at their current extremely low yields.

Under current conditions, the monetary expansion gets globalized and invades even those countries that wish to practice restrictive monetary policy. Relatively high levels of the interest rate improve the restrictive currency’s attractiveness. Thus, more and more monetary expansion happens on a global scale, which in turn provides the fuel for the next great wave of international financial flows.

The weaker countries, which compete with each other on the basis of low prices, are getting pushed to the side; it was just a matter of time until more and more governments would begin to intervene in the foreign-exchange markets by buying up foreign currencies in order to try to prevent their exchange rates from appreciating too much, too fast.

Yet using the exchange rate as a tool in order to gain economic advantage or avert damage for the domestic economy is inherently at variance with a sound global monetary order, because one country’s devaluation automatically implies the revaluation of another country’s currency and thus the advantage that one tries to obtain will be achieved by putting a burden on other countries.

Escalation

By recycling the monetary equivalent of the trade surplus into the financial markets around the globe, monetary authorities in surplus countries form a symbiosis with trade-deficit countries in fabricating a worldwide monetary expansion of extreme proportions.

The paradoxical, or rather perverse, features of the current state of affairs were highlighted a short time ago when in January 2011 the monetary authorities of Turkey decided to lower the policy interest rates so as to make the inflow of foreign funds less attractive, despite a booming Turkish economy that shows plenty characteristics of a bubble.

Exchange-rate policies produce the usual spiral of interventionism: the de facto consequences tend to diverge from the original intentions, prompting further rounds of doomed interventions. This interventionist escalation is not only limited to an incessant repetition of the same failed policies, but the errors committed in one policy area also affect other parts of the economy. Thus, it is only a matter of time until errors of monetary policy lead to fiscal fiascos, and exchange-rate interventions lead to trade conflicts.

At first sight, exchange-rate intervention may appear tolerable as the legitimate pursuit of national self-interest. But exchange-rate policies are intrinsically matters that tend to stir transnational controversies. When a country’s exchange rate policy collides with the interests of the trading partners, the tit-for-tat of mutual retaliation automatically tends to lead to an escalation of the conflict. Once the process of competitive devaluation has started, a devaluation by one country invites other countries to devaluate their exchange rates as well. As a consequence, the international monetary order will eventually disintegrate, and sooner or later the conflict will go beyond currency issues and affect a wide spectrum of economic and political relations.

Therefore, because of the unsound monetary system, a peaceful international political system also is constantly at risk. Monetary conflicts provoke political confrontations. Besides the immediate costs of exchange-rate conflicts that come from the damage to international trade and investment, and thereby to the international division of labor, harm will also be done to confidence and trust in the international political arena.

The dispute about exchange rates is the consequence of contradictory tensions that are innate to the modern monetary system. In this respect the currency war is an expression of the defects that characterize an unsound and destructive financial system. The outbreak of the currency war is a symptom of a deeply flawed international monetary order.

Brazil

When Brazil’s finance minister repeated his warnings in January 2011 and said that “the currency war is turning into a trade war,” Mantega sent a signal to the world that the escalation of the trade war had started. Because of the massive inflow of money from abroad, the Brazilian currency had sharply appreciated and the Brazilian economy was losing competitiveness.

In order to reduce the impact on is domestic economy, Brazil had been intervening in the foreign-exchange markets, diminishing the degree of currency appreciation. In doing so, the monetary authorities had to buy foreign currencies, mainly US dollars, in exchange for its domestic money.

By pursuing such a policy over the past couple of years, Brazil has increased its foreign-exchange reserves from around 50 billion to 300 billion US dollars.[1] Yet even despite these foreign-exchange interventions, the Brazilian currency appreciated drastically against the US dollar and other currencies.

By various estimates, Brazilian foreign trade suffers from an exchange-rate overvaluation of around 40 percent. As a consequence, Brazil’s current account balance, which was still at surplus in 2007, has plunged into a deficit of 47.5 billion US dollars in 2010.[2] At the same time when an artificial boom is taking place as the result of massive monetary expansion, the Brazilian economy suffers from creeping deindustrialization.[3]

Part of the explosion of Brazil’s current-account deficit can be explained by weak demand from its trading partners, which have plunged into a prolonged recession. Yet beyond this circumstance, there has been another causal chain at work: the inflow of funds from abroad that boosts the exchange rate provides the grounds for an exorbitant increase of the country’s monetary base.[4]

The combination of ample liquidity at home, weak demand from some trading partners abroad, and a strong exchange-rate appreciation provides the basis for an extreme import expansion that vastly exceeds exports. Unlike a country such as Germany, for example, whose industry is pretty resilient against currency appreciation, Brazil resembles in this respect the countries of the Southern periphery of the eurozone in its incapacity to cope effectively with an overvalued currency.

When, in January 2011, a new government took power in Brazil, the newly-elected president, Dilma Rousseff, declaredin her inauguration speech that she will protect Brazil “from unfair competition and from the indiscriminate flow of speculative capital.” Guido Mantega, the former and new Brazilian finance minister, did not hesitate to join in when he asserted that the government has an “infinite” number of interventionist tools at its disposal with which to protect national interests. Mantega said that the government is ready to use taxation and trade measures in order to stop the deterioration of Brazil’s trade balance.

China

The countries that form the favored group that gets targeted by international financial flows in search of higher yields compete among themselves in order to prevent their currencies from appreciating too much, and as a group these countries compete against China in their efforts to maintain a competitive exchange rate.

China’s position forms part of a long causal chain, which includes low interest rates and monetary expansion in the United States, that fuels higher import demand. Given that China drastically devalued its exchange rate as early as in the 1980s, this country was at the forefront of gaining advantage of America’s import surge; China grabbed the golden opportunity to turn itself into the major exporter to the United States.

In order to maintain its currency at its undervalued level, the Chinese monetary authorities must buy up the excess of foreign exchange that accumulates from its trade surplus, preferably by buying US treasury notes and bonds. In this way, China became America’s main creditor. Over the past decade, China increased its foreign exchange position from a meager $165 billion in 2000 to an amount that was approaching $3 trillion at the end of 2010.

From the 1980s up to the early 1990s, China devalued its currency from less than 2 yuan to the US dollar to an exchange rate of 9 yuan against the US dollar. And despite its huge trade surpluses, China has only slightly revalued the yuan ever since, establishing the current exchange rate at 6.56 yuan per US dollar.

Over the past decade, China has become the major financier of the US budget deficit. Together with other monies flowing in from abroad, the US government was relieved from the need to cut spending. The inflow of foreign capital also allowed the US government to pay lower interest rates for its debt than it would have if only domestic supply of savings were available. Foreign imports put pressure on the price level, and the US central bank could continue monetary expansion without an immediate effect on the price-inflation rate.

If China wants to hold its competitive position through an undervalued currency, the Chinese monetary authorities must continue their policy of intervention in the foreign-exchange markets. As a consequence of buying dollars from its exporters, the domestic money supply in China continues to rise, throwing additional fuel on a domestic boom that is already in full swing.

Even more so than their Brazilian counterparts, China’s political-decision makers have failed to exert moderation or restraint when it comes to interventionist measures. As long as China’s leadership presumes that it gains from exchange-rate manipulation, its currency interventions will go on.

Global Financial Fragilities

Since the abandonment of the gold standard, the global financial system has been in disarray. All the international monetary arrangements that have been established since then have ended in crisis and finally collapsed. For almost a hundred years now, one interventionist scheme has been established and then soon fallen to pieces.

When the monetary and fiscal decision makers in the United States and Europe discarded all restraints against intervention in the wake of the financial market crisis, socialist and interventionist governments around the globe felt vindicated. They had long been convinced that only through state control could financial stability be obtained. Due to the policies adopted by Western countries in their futile attempt to overcome the financial-market crisis, the leaders of the so-called emerging economies have become even more unscrupulous interventionists.

Political leaders around the globe have shed the little that was left of support for free markets and set the controls for a way back on the road to serfdom.

It is mainly due to ignorance that the modern monetary system gets labeled as a laissez-faire or free market system. In fact not only the basic “commodity” of this scheme, i.e., fiat money, but also its price and quantity are largely determined by political institutions such as central banks.

It is more than absurd when, in the face of crises and conflicts, more government intervention gets called upon: it was state intervention in the first place that laid the groundwork for the trouble to appear.

So-called “speculative” international capital flows already happened decades ago. What has changed since then is the amount of hot money and the speed with which it floats around the world. It would be wrong to describe these financial movements as an expression of free markets. The fact, for instance, that in 2010 daily transactions on the international currency market have reached a volume of four trillion US dollars is the result of unhampered fiat-money expansion and massive state intervention in the foreign-exchange markets.

The increase in the global money supply that has been going on for many years finds its complement in a global asset boom. The inflation of money drives up the price of precious metals, natural resources, and food. Once more, the world experiences a period of fake prosperity not much different from the real-estate bubble, and many other episodes, that led to previous financial crises.

Conclusion

The political endeavors to gain competitive advantages through exchange-rate devaluation sows mistrust among nations; and the ensuing regime uncertainties frustrate the business community. Over time the conflict over exchange rates tends to destroy the global division of labor.

Once again, the international monetary system is on the brink of a breakdown. As in the past, the main reason behind the current conflict is extreme monetary expansion. Unsound monetary systems produce turmoil not just at home but also in the international arena. Excessive monetary expansion, which is the cause of domestic malinvestment, is also the root of economic distortions at a global level.

Without a fundamental change of the monetary system itself, without a return to sound money, the international monetary system will remain in a state of permanent fragility — ever oscillating between the abyss of deflationary depression and the fake escape of hyperinflation. This is the fate of the world when nations implement fiat monetary systems and put them under political authority.

Antony Mueller is a German-born economist who lives in Aracaju in Northeastern Brazil where he teaches at the Federal University of Sergipe (UFS). He is an adjunct scholar of the Mises Institute USA and academic director of theInstituto Ludwig von Mises Brasil. See his website and blog. Send him mail. See Antony P. Mueller’s article archives.

www.marketoracle.co.uk, Feb 23, 2011

Head of the Parliament (Majlis) National Security and Foreign Policy Commission Alaeddin Boroujerdi

On October 14, EU Foreign Policy Chief Catherine Ashton expressed the West’s readiness to return to negotiations and proposed three-day talks with Iran in mid-November in the Austrian capital of Vienna.

Dialogue between Iran and the P5+1 — Britain, China, France, Russia, and the US plus Germany — has been stalled since October 1, 2009, when the two sides met in Geneva.

Iran on Tuesday announced that its multifaceted talks with the P5+1 would restart on December 6 in Switzerland.

“We will have two rounds of talks with the West; one is talks with the P5+1 and the other is negotiations with the Vienna Group — France, Russia, the US, and the International Atomic Energy Agency (IAEA) — about fuel for the Tehran reactor,” head of the Majlis National Security and Foreign Policy Commission told Khabar Online on Sunday.

Tehran has stressed that it would negotiate the issue of a nuclear fuel swap with the Vienna group within the framework of the Tehran declaration, and its talks with the P5+1 would not include nuclear issue.

“Regarding negotiations with the Vienna Group based on the Tehran declaration, the three countries (Iran, Turkey and Brazil) wrote a letter to IAEA chief [Yukiya Amano] and stressed that all three countries would be present in talks,” Boroujerdi said.

Iran signed a declaration with Turkey and Brazil on May 17 based on which it agreed to exchange 1,200 kg of its low-enriched uranium on Turkish soil with nuclear fuel.

Boroujerdi refrained from giving his opinion about the result of negotiations and said the US has lost the political struggle.

“When the foreign ministers of the European countries were in Tehran they explicitly said that we (Iran) are not allowed to use two centrifuge machines but today we have crossed all these borders,” he added.

The US and its allies used their influence on the UN Security Council to press for fresh sanctions against Iran over the country’s nuclear program which they claim is aimed at developing nuclear weapons.

Iranian officials have repeatedly refuted the accusations, arguing that as a signatory to the Nuclear Non-Proliferation Treaty and a member of the IAEA, Tehran has the right to use peaceful nuclear technology.

MYA/HGH/MMN

“After selling CCR, Brisa’s portfolio is very unbalanced,” Chief Executive Officer Vasco de Mello said at a presentation to investors, according to a regulatory filing posted on the website of the country’s securities markets watchdog. “Too much concentrated in Portugal.”

The company, based near Lisbon, plans to bid for a contract to operate and manage a highway in Mumbai, and sees opportunities in the privatization of motorways and Bosphorus bridges in Turkey. Brisa has already sold 9.4 percent of CCR and plans to sell the remaining 7 percent by the end of the year.

Brisa is facing sluggish growth in Portugal as the country’s austerity measures to curb the budget deficit choke consumer demand. The company predicts higher toll revenue next year as drivers must now pay to use some competing highways that were formerly toll-free, and Brisa’s own tolls rising 0.6 percent.

The company expects to invest between 200 million euros ($273 million) and 300 million euros in new business opportunities, according to the filing. Average annual capital spending on Portuguese highway projects for 2011 through 2015 will be 95 million euros, dropping to 65 million euros from 2016, it said.

Toll Machines

Brisa predicts operating costs will be unchanged in 2011, after dropping 4 percent this year, more than the 3 percent initially forecast. The company expects additional costs from the opening of new highways to be offset by savings from the introduction of cash and card toll machines on Portuguese highways, forecast to total 3.5 million euros from 2011.

The company will complete its corporate reorganization by the end of the year, creating a holding company that will control its three business areas. Brisa said it will finish this year with net debt of 2.3 billion euros and has “no major short-term” refinancing needs.

Brisa plans to pay a 31 euro-cent dividend to shareholders for the next five years and is considering a share buyback to bring its holding up to 10 percent, including 4 percent the company already owns.

To contact the reporter on this story: Anabela Reis in Lisbon at areis1@bloomberg.net.

To contact the editor responsible for this story: Angela Cullen at acullen8@bloomberg.net

via Brisa Looks for India, Turkey Highway Chances After Brazil Exit – Bloomberg.

Gül, in an interview with the Financial Times, said the international order was shifting towards the East. “It wouldn’t be surprising if we start talking about BRIC plus T,” he said. The BRIC countries are considered to be at a similar stage of newly advanced economic development, and their growing influence in the global scene is seen as an indication of the shift in economic power from the developed West towards the developing world.

Turkey, which has built closer ties with its Middle East neighbors under the Justice and Development Party (AK Party) government, has been accused in the West of turning away from the Western club and cozying up to countries such as Iran.

Gül, who was on a visit to Britain to receive the prestigious Chatham House Prize, said in the interview that Turkey still saw membership in the EU as a “strategic vision” and wanted to be part of the principles that Europe defends, promising that Ankara would make sure it met all standards required for membership even though large parts of its entry negotiations are frozen.

But Gül, speaking a day before the European Commission criticized Turkey for restrictions on freedom of expression and over Cyprus in an annual progress report released on Tuesday, also complained of political obstacles raised by some EU member countries. “We see certain political issues being included in the process, which have the effect of slowing down and, to a certain extent, hijacking these negotiations. We are not happy about this,” Gül told the Financial Times on Monday.

Speaking in Oxford also on Monday, Gül said some EU member states were creating “artificial problems” in Turkey’s EU membership negotiations but said Turkey would stick to the task. “The injection of some political issues of certain member countries in the negotiating process leads to certain artificial problems that in our point of view are not fair and not acceptable,” he said at an event hosted by the Oxford Centre for Islamic Studies. “But Turkey is determined to move forward in the direction of working on the negotiations,” he said.

Gül declined to name any country when he complained that certain, unnamed, “short-sighted” EU countries had hidden behind the Greek Cypriots to pursue their own objective of delaying Turkey’s membership bid in interviews with the British media. But Turkish officials say some EU countries, such as France, are using the impasse over Cyprus to stall Turkey’s accession bid.

He also said one cannot say for sure that Turkey will eventually join the EU because there will be public votes in several EU countries on Turkish membership after conclusion of accession talks with Turkey. “When the time comes, those countries will decide whether or not Turkey would be a burden on them. Maybe Turkish people would say, ‘although we concluded the negotiation process successfully, let us not be a member’,” Gül told the BBC’s “HARDtalk.”

Responding to a question on Turkey’s position regarding a planned NATO-wide missile defense system, Gül was hopeful that the alliance’s upcoming summit in Lisbon will produce a consensus on the issue. “The NATO Summit will convene in Lisbon next week. I think everybody will reach a consensus in the end,” he said.

Turkey insists that no country should be named as a potential threat in relevant NATO documents, a reference to Turkey’s neighbor, Iran.

When it was pointed out that US President Barack Obama addressed Muslim countries and relayed messages about peace and dialogue when he first came to power and he was asked whether Obama has caused disappointment since then, Gül said: “No, I think he is kindhearted. He does good things sincerely. However, maybe he could not succeed. Not only Muslims but others should listen to Obama. He should also persuade others, not just one party, to achieve peace in the region.”

via Today’s Zaman, your gateway to Turkish daily news.

Luiz Inácio Lula da Silva, known as Lula in Brazil, steps down after eight years in power. His presence in Brazilian politics is as old as Brazil’s democracy itself: The former union leader has participated in every direct presidential election since democratization in the late 1980s. Lula became president on his fourth attempt, in 2002, and shaped Brazilian politics like no other in recent decades.

Under Lula’s watch, Brazil-Turkey political and economic ties have flourished, and cooperation has strengthened. Petrobras, Brazil’s oil giant, has begun collaborating with the Turkish Petroleum Corporation (TPAO) in the Black Sea, and Turkish companies are increasingly eyeing the Brazilian market. In addition, Lula and Turkish Prime Minister Recep Tayyip Erdoğan have both agreed on the necessity to challenge existing geopolitical paradigms and involve new players to address global challenges more effectively. Last year, Lula was the first Brazilian president to visit Turkey, and a year later, Erdoğan accepted Lula’s invitation to visit Brazil.

Yet Lula’s successor, Dilma Rousseff, an uninspiring technocrat, is unlikely to focus on foreign affairs as much and may neglect it altogether as she faces formidable domestic challenges, such as urgent tax and pension reform. Brazil and Turkey are important allies in their quest to redesign global governance structures and assume more responsibility, and Erdoğan must be more proactive and reach out to Brazil’s future president if he wants to prevent relations falling back to the low level of the early ‘90s.

Ties between Turkey and Brazil have traditionally been insignificant, largely due to geographical remoteness. Turkey’s and Brazil’s respective challenges were simply too different for a serious dialogue to emerge. After the end of the Cold War, as globalization picked up, both countries sought to diversify their economic and political relations and began to identify each other as potential partners. Turkey’s Süleyman Demirel came to Brazil in 1995, which was the first official visit to Brazil by a Turkish president in history.

Since then, bilateral ties have grown steadily, and trade between the two more than quadrupled since the turn of the century. One of the most promising possibilities for collaboration presents itself in the energy sector. Turkey hopes that the hydrocarbon reserves beneath the Black Sea might meet its growing energy requirements and reduce its dependence on imports, and Brazil’s Petrobras offers one of the world’s most sophisticated offshore drilling technologies. In 2006, Turkey and Brazil signed an agreement for the exploration of oil in the Black Sea, and Petrobras has invested several hundred million dollars since then in Turkey. In the same year, the Turkish-Brazilian Business Council was established on the occasion of the visit to Brazil of the then-minister of foreign affairs, Abdullah Gül.

In addition to economics, both countries’ geostrategic position is similar in that both Turkey and Brazil are emerging but not yet well integrated into international structures. Brazil’s and Turkey’s collaboration on dealing with Iran’s nuclear ambitions may have been lambasted by the international community, but the situation showed that current structures are not conducive toward positively influencing Iran, and that there is a dearth of actors willing to assume international leadership.

In its project to pursue an independent foreign policy, Brazil can be one of Turkey’s long-term partners, and it is necessary to find ways to institutionalize ties so that they can be sustained even if one of the countries’ leaders is tied down in domestic political projects, as may be the case with Brazil’s new president, Rousseff.

While the Brazilian-Turkish friendship has blossomed in the past eight years, there is still upward potential to strengthen it further. One possible way to do so could be to integrate Turkey into IBSA, a trilateral alliance of India, Brazil and South Africa, which serves as a platform to exchange knowledge on a vast array of topics ranging from HIV treatment and poverty reduction to agricultural technology. Turkey is certainly the most advanced of the four, but it has a lot in common with the other three. They are all stable liberal democracies in the midst of regions that are politically unstable at times. They are all “rising stars” in the global economy.

Finally, they are all willing to assume much-needed regional leadership and thus play a crucial role in the promotion of peace, economic development and human rights. In a world where an increasing number of national leaders look to China as an economic and political model to copy, Turkey and Brazil provide powerful counterexamples that political freedom is no obstacle to economic growth. Both countries must make use of their legitimacy more frequently by, for example, jointly calling on Zimbabwe’s dictator Robert Mugabe to respect the unity government with Morgan Tsvangirai.

Brazil-Turkey ties are likely to provide significant mutual benefits in the economic realm. In addition, they share a common vision about how to democratize the existing structures of global governance. Collaboration in these projects seems indispensable to assure success. With Mr. Lula gone, Turkey needs to assume leadership and continue to strengthen the Brazilian-Turkish friendship.

*Oliver Stuenkel is a visiting professor of International Relations at the University of São Paulo and a fellow at the Global Public Policy Institute in Berlin.

11 November 2010, Thursday

OLIVER STUENKEL TODAY’S ZAMAN

Posted By Geneive Abdo

Iran’s Foreign Minister Manouchehr Mottaki in recent days met with dignitaries at the United Nations to generate international support for Iran to engage in talks with the United States and other permanent members of the UN Security Council over Iran’s nuclear program. But when Mottaki and other Iranian officials in Tehran have talked recently about restarting talks, they are not referring to the nuclear negotiations the Europeans and the United States are hoping for; rather, they are trying to gain traction on negotiations about the Tehran Declaration, the agreement brokered between Iran, Brazil and Turkey in May, which is limited to a swap deal over a portion of Iran’s enriched uranium. This is the deal the United States, Britain, and France dismissed in May as a sideshow and a manipulative tactic by Iran to get out of tough sanctions, shortly before crippling sanctions were passed in the United Nations, the European Union, and the U.S. Congress. At the time, this action prompted a hostile reaction from Iran.

Now that Mottaki is placing the deal squarely on the table again, the Obama administration should seize the moment. Rather than purse talks over Iran’s broader nuclear program and risk failure — during a period when there appears to be little time to waste before either a military attack is launched against Iran or Iran develops the technology to produce a nuclear weapon — a wiser move would be to talk with Iran first over the Tehran Declaration as a way of building trust.

This is certainly the view of the Turks. A delegation of Turkish parliamentarians was in Washington last week for meetings with the Obama administration over Ankara’s relations with Iran, Israel and other issues. The delegation likely advised the United States to take Iran up on its offer to begin talks immediately over the Tehran Declaration. At least one other Turkish delegation visited Washington this past summer, delivering this same message. But their efforts produced little more than hostility from members of Congress and less than enthusiastic responses from officials in the administration.

In interviews I had in Turkey during a recent trip there, Turkish diplomats who spent months shuttling between Ankara and Tehran last spring to broker the Tehran Declaration told me that the United States should accept Iran’s offer to make the Tehran Declaration the framework of any negotiations with the five-plus-one because there is no support in Tehran now to negotiate over Iran’s broader nuclear program. This might be what the United States wants, but there is no backing for it among a cross-section of Iran’s political elites. “The inner circle around [Supreme Leader Ali] Khamenei views this Tehran agreement as a first step to establish good faith with Western governments,” said one Turkish official with first-hand knowledge of the talks with Iran.

Iran’s new campaign to revive the Tehran Declaration extends from New York to Tehran. On Sept. 28, Iranian Foreign Ministry Spokesman Ramin Mehmanparast reiterated Iran’s position: “We have repeatedly said that we are ready for talks with Vienna Group based on [the] Tehran Declaration and we are continuing consultation to specify details of the negotiation as well as its place and time.”

Turkish officials have stated repeatedly — both last week during their Washington visit and in the summer — that Turkey wants to facilitate the negotiations with Iran and the five-plus-one. Indeed, as the arbiter Turkey would likely ensure success. By now, Turkish negotiators understand the internal politics inside the Iranian regime far better than their European or American counterparts do. The many months Turkish foreign ministry officials shuttled between Tehran and Ankara were instructive: “It was a good lesson in how to build a consensus with different political actors,” one Turkish foreign ministry official told me who participated in the delegation.

The Turks believe that negotiations first over the fuel swap deal — even though it falls far short of the demands of the five-plus-one — will lead the inner circle around Khamenei and the supreme leader himself to compromise over other issues of concern to the West, such as Iran enriching uranium at 20 percent, which the Obama administration adamantly opposes because it could allow Iran to eventually produce a nuclear weapon.

The United States should listen to the Turks, simply because there are no other options to begin a dialogue with Iran. At this point, we do not need any more negotiations with Iran to understand that Western states cannot effectively talk to the Iranians alone. Talks between the five-plus-one with Iran, with Turkey as the arbiter, are a positive path out of the deadlock.

Geneive Abdo is the Director of the Iran program at The Century Foundation and creator of http://www.insdieiran.org.

http://mideast.foreignpolicy.com/posts/2010/10/06/the_road_to_tehran_runs_through_ankara,

October 6, 2010

The neocon plan to transform the Middle East and Central Asia into a pliant client of the US empire and its only-democracy-in-the-Middle-East is now facing a very different playing field. Not only are the wars against the Palestinians, Afghans and Iraqis floundering, but they have set in motion unforeseen moves by all the regional players.

The empire faces a resurgent Turkey, heir to the Ottomans, who governed a largely peaceful Middle East for half a millennium. As part of a dynamic diplomatic outreach under the Justice and Development Party (AKP), Turkey re-established the Caliphate visa-free tradition with Albania, Jordan, Lebanon, Libya and Syria last year. In February Turkish Culture and Tourism Minister Ertugrul Gunay offered to do likewise with Egypt. There is “a great new plan of creating a Middle East Union as a regional equivalent of the European Union” with Turkey, fresh from a resounding constitutional referendum win by the AKP, writes Israel Shamir.

Turkey also established a strategic partnership with Russia during the past two years, with a visa-free regime and ambitious trade and investment plans (denominated in rubles and lira), including the construction of new pipelines and nuclear energy facilities.

Just as Turkey is heir to the Ottomans, Russia is heir to the Byzantines, who ruled a largely peaceful Middle East for close to a millennium before the Turks. Together, Russia and Turkey have far more justification as Middle Eastern “hegemons” than the British-American 20th century usurpers, and they are doing something about it.

In a delicious irony, invasions by the US and Israel in the Middle East and Eurasia have not cowed the countries affected, but emboldened them to work together, creating the basis for a new alignment of forces, including Russia, Turkey, Syria and Iran.

Syria, Turkey and Iran are united not only by tradition, faith, resistance to US-Israeli plans, but by their common need to fight Kurdish separatists, who have been supported by both the US and Israel. Their economic cooperation is growing by leaps and bounds. Adding Russia to the mix constitutes a like-minded, strong regional force encompassing the full socio-political spectrum, from Sunni and Shia Muslim, Christian, even Jewish, to secular traditions.

This is the natural regional geopolitical logic, not the artificial one imposed over the past 150 years by the British and now US empires. Just as the Crusaders came to wreak havoc a millennium ago, forcing locals to unite to expel the invaders, so today’s Crusaders have set in motion the forces of their own demise.

Turkey’s bold move with Brazil to defuse the West’s stand-off with Iran caught the world’s imagination in May. Its defiance of Israel after the Israeli attack on the Peace Flotilla trying to break the siege of Gaza in June made it the darling of the Arab world.

Russia has its own, less spectacular contributions to these, the most burning issues in the Middle East today. There are problems for Russia. Its crippled economy and weakened military give it pause in anything that might provoke the world superpower. Its elites are divided on how far to pursuit accommodation with the US. The tragedies of Afghanistan and Chechnya and fears arising from the impasse in most of the “stans” continue to plague Russia’s relations with the Muslim Middle East.

Since the departure of Soviet forces from Egypt in 1972, Russia has not officially had a strong presence in the Middle East. Since the mid- 1980s, it saw a million-odd Russians emigrate to Israel, who like immigrants anywhere, are anxious to prove their devotion and are on the whole unwilling to give up land in any two-state solution for Palestine. As Anatol Sharansky quipped to Bill Clinton after he emigrated, “I come from one of the biggest countries in the world to one of the smallest. You want me to cut it in half. No, thank you.” Russia now has its very own well-funded Israel Lobby; many Russians are dual Israeli citizens, enjoying a visa-free regime with Israel.

Then there is Russia’s equivocal stance on the stand-off between the West and Iran. Russia cooperates with Iran on nuclear energy, but has concerns about Iran’s nuclear intentions, supporting Security Council sanctions and cancelling the S-300 missile deal it signed with Iran in 2005. It is also increasing its support for US efforts in Afghanistan. Many commentators conclude that these are signs that the Russian leadership under President Dmitri Medvedev is caving in to Washington, backtracking on the more anti-imperial policy of Putin. “They showed that they are not reliable,” criticised Iranian Defence Minister Ahmad Vahidi.

Russia is fence-sitting on this tricky dilemma. It is also siding, so far, with the US and the EU in refusing to include Turkey and Brazil in the negotiations over Iran’s nuclear programme. “The Non-Aligned countries in general, and Iran in particular, have interpreted the Russian vote as the will on the part of a great power to prevent emerging powers from attaining the energy independence they need for their economic development. And it will be difficult to make them forget this Russian faux pas,” argues Thierry Meyssan at voltairenet.org.

Whatever the truth is there, the cooperation with Iran and now Turkey, Syria and Egypt on developing peaceful nuclear power, and the recent agreement to sell Syria advanced P-800 cruise missiles show Russia is hardly the plaything of the US and Israel in Middle East issues. Israel is furious over the missile sale to Syria, and last week threatened to sell “strategic, tie-breaking weapons” to “areas of strategic importance” to Russia in revenge. On both Iran and Syria, Russia’s moves suggest it is trying to calm volatile situations that could explode.

There are other reasons to see Russia as a possible Middle East powerbroker. The millions of Russian Jews who moved to Israel are not necessarily a Lieberman-like Achilles Heel for Russia. A third of them are scornfully dismissed as not sufficiently kosher and could be a serious problem for a state that is founded solely on racial purity. Many have returned to Russia or managed to move on to greener pastures. Already, such prominent rightwing politicians as Moshe Arens, political patron of Israeli Prime Minister Benjamin Netanyahu, are considering a one-state solution. Perhaps these Russian immigrants will produce a Frederik de Klerk to re-enact the dismantling of South African apartheid.

Russia holds another intriguing key to peace in the Middle East. Zionism from the start was a secular socialist movement, with religious conservative Jews strongly opposed, a situation that continues even today, despite the defection of many under blandishments from the likes of Ben Gurion and Netanyahu. Like the Palestinians, True Torah Jews don’t recognise the “Jewish state”.

But wait! There is a legitimate Jewish state, a secular one set up in 1928 in Birobidjan Russia, in accordance with Soviet secular nationalities policies. There is nothing stopping the entire population of Israeli Jews, orthodox and secular alike, from decamping to this Jewish homeland, blessed with abundant raw materials, Golda Meir’s “a land without a people for a people without a land”. It has taken on a new lease on life since the collapse of the Soviet Union. Russian President Dmitri Medvedev made an unprecedented visit this summer, the first ever of a Russian (or Soviet) leader and pointed out the strong Russian state support it has as a Jewish homeland where Yiddish, the secular language of European Jews (not sacred Hebrew), is the state language.

There has been no magic hand guiding Turkey and Russia as they form the axis of a new political formation. Rather it is the resilience of Islam in the face of Western onslaught, plus — surprisingly — a page from the history of Soviet secular national self-determination. Turkey, once the “sick man of Europe”, is now “the only healthy man of Europe”, Turkish President Abdullah Gul was told at the UN Millennium Goals Summit last week, positioning it along with the Russian, and friends Iranian and Syrian to clean up the mess created by the British empire and its “democratic” offspring, the US and Israel.

While US and Israeli strategists continue to pore over mad schemes to invade Iran, Russian and Turkish leaders plan to increase trade and development in the Middle East, including nuclear power. From a Middle Eastern point of view, Russia’s eagerness to build power stations in Iran, Turkey, Syria and Egypt shows a desire to help accelerate the economic development that Westerners have long denied the Middle East — other than Israel — for so long. This includes Lebanon where Stroitransgaz and Gazprom will transit Syrian gas until Beirut can overcome Israeli-imposed obstacles to the exploitation of its large reserves offshore.

Russia in its own way, like its ally Turkey, has placed itself as a go-between in the most urgent problems facing the Middle East — Palestine and Iran. “Peace in the Middle East holds the key to a peaceful and stable future in the world,” Gul told the UN Millennium Goals Summit — in English. The world now watches to see if their efforts will bear fruit.

Eric Walberg writes for Egypt’s Al-Ahram Weekly. You can reach him at http://ericwalberg.com.

http://www.middle-east-online.com/english/opinion/?id=41641, 30.09.2010

From Beirut (Lebanon)

Caught up in a smoldering feud between its President and Prime Minister, Russia is not making the most of the historic opportunity to deploy in the Middle East. Russian elites were unable to draw up a strategy for that region when they had the chance and, now, they are no longer capable of it. In Thierry Meyssan’s view, Moscow is paralyzed, having failed both to take full advantage of the botched US “remodeling” of the Middle East and to fulfill the hopes raised by Vladimir Putin.

President Medvedev and Prime Minister Putin. The understanding between the “30-year” friends has abruptly turned into an open war. Under these conditions, how could Moscow nurture any major ambition in the Middle East?

The Israeli defeat in the Summer of 2006 against the Lebanese resistance spelled the end of US supremacy in the Middle East. In only four years, the military, economic and diplomatic situation in that region underwent a complete change.

At present, the Turkey-Syria-Iran triangle has emerged as the leading pole while Russia and China expand their influence as that of the United States is fading. However, Moscow is reluctant to seize the opportunities it has at hand. First of all, its priority is not the Middle East; secondly because no project related to this region has the consensus of the Russian elites, finally because Middle East conflicts have sensitive implications for Russia’s own domestic problems. Let’s take stock of the situation.

2001-2006 and the myth of the remodeling of the “Great Middle East”

The Bush administration was able to rally the oil lobby, the military industrial complex and the Zionist movement around a huge project: securing control of the oil fields running from the Caspian Sea to the Horn of Africa by redesigning the political map based on small ethnic states. The zone, demarcated not according to its population but to the riches under its soil, was first called “Crescent Crisis” by University professor Bernard Lewis and later “Greater Middle East” by George W. Bush.

Washington did not skimp on its Middle East “remodeling” project. Huge sums of money were invested in buying local elites so that their personal interests would come before national interests in the context of a globalized economy. Most important was the deployment of a strong military force to Afghanistan and Iraq to hem in Iran, the main actor in the region that stands up to the empire. Maps of the new region were drawn up and circulated by the Chiefs of Staff. All countries in the region, including Washington’s allies, would be broken up into various emirates incapable of defending themselves, while vanquished Iraq would be divided into three federate states (a Kurdish, a Sunni and a Shiite).

When it seemed that nothing could prevent that domination process from going ahead, the Pentagon handed Israel the task of destroying all secondary fronts before attacking Iran. The aim was to wipe out the Lebanese Hezbollah and to overthrow the Syrian government. However, after submitting one third of the Lebanese territory to a bombing campaign the likes of which hadn’t seen since the Vietnam War, Israel was forced to retreat without having attained any of its goals. That defeat marked a strategic shift in the balance of forces.

Over the next months, US generals rebelled against the White House. They had lost control of the situation in Iraq and anticipated with apprehension the difficulties of a war against a well-armed and organized state—Iran—potentially setting the entire region ablaze. The generals, gathered around Admiral William Fallon and senior general Brent Scowcroft, forged an alliance with several realistic politicians who opposed the danger inherent in the excessive military deployment.

They used the Baker-Hamilton Commission to influence American voters until obtaining the dismissal of Defense Secretary Donald Rumsfeld and his replacement with one of their allies: Robert Gates. Subsequently, these same individuals hoisted Obama to the White House, on condition that Robert Gates would remain the Pentagon.

In fact, the US General Staff has lacked an alternative strategy ever since the “remodeling” failed. Its only concern is to stabilize its positions. US soldiers withdrew from large Iraqi cities and retreated to their bases. They left the management of Iraq’s Kurdish areas in the hands of the Israelis while the Arab zones were left to the Iranians. The US State Department has stopped handing out sumptuous gifts to regional leaders and has become increasingly avaricious in these times of economic crisis. Yesterday’s beholden are looking for new masters to feed them.

Tel Aviv is the only one to still believe that the US withdrawal is but an eclipse and that the “remodelling” will resume once the economic crisis is over.

Formation of the Turkey-Syria-Iran Triangle

Washington thought that the dismantlement of Iraq would be contagious. The Sunni-Shiite civil war (the Fitna, in Arabic) was supposed to pit Iran against Saudi Arabia and split the whole Arab-Muslim world. The virtual independence of Iraqi Kurdistan was expected to cause a Kurdish secession in Turkey, Syria and Iran.

But the opposite happened. The easing of US pressure on Iraq sealed the alliance among the enemy brothers of Turkey, Syria and Iran. All three realized that in order to survive they had to unite and that once united they could exert regional leadership. In fact, Turkey, Syria and Iran, together, cover all crucial aspects of the regional political spectrum. As the heir to the Ottoman empire, Turkey incarnates political Sunni Islam. As the only remaining Baathist state after the destruction of Iraq, Syria embodies secularism. And, finally, since the Khomeiny Revolution, Iran represents political Shi’ism.

In just a few months, Ankara, Damascus and Teheran opened their common borders, lowered customs tariffs and paved the way for a common market. This opening provided them with a breath of fresh air and a sudden economic growth which, despite the memories of prior disputes, has also garnered genuine grassroots support.

However, each of these three states has its own Achilles’ heel which the United States and Israel, as well as some of their neighbors, will attempt to exploit.

Like Mahmoud Ahmadinejad, Vladimir Putin has become an obstacle for Washington, which must be eliminated. © Mehdi Ghasemi, Agencia ISNA

Iran’s Nuclear Program

For years, Tel Aviv and Washington have accused Iran of violating its obligations as signatory of the [nuclear] Non-Proliferation Treaty and of developing a secret military nuclear program. In the times of Shah Reza Pahlevi, both capitals – plus Paris – had set up a large program designed to provide Iran with the atomic bomb. In view of its history, it was generally accepted that Iran had no expansionit ambitions and that the great powers could safely provide it with such technology. A propaganda campaign based on deliberately fabricated information was later organized, painting current Iranian leaders as fanatic and capable of using the atomic bomb – if they had it – in an irrational manner, therefore posing a great threat to world peace.

Nevertheless, Iranian leaders affirm they have renounced to building, storing or using the atomic bomb, precisely due to ideological reasons. And their assertion to totally reliable. Let us simply recall what happened during the war led by the Iraq of Sadam Husein against the Iran of Imam Khomeiny.

When Baghdad unleashed a stream of missiles against Iranian cities, Teheran retaliated in the same way. But they were unguided missiles that were launched in any given direction and fell indicriminately. Imam Khomeiny intervened to denounce the use of such weapons by his own armed forces. Khomeiny stressed that good Muslims should refrain from shooting at the military if it entailed the risk of killing a large number of civilians. Khomeiny then prohibited the use of missiles against cities, which had an impact on the balance of forces, prolonged the war and brought new suffering to the Iranian people. At present, the successor of Khomeiny, Ali Khamenei, Supreme Leader of the Revolution, defends the same ethics in respect of nuclear weapons and it is unthinkable that any faction of the Iranian state would dare to violate the authority of the Supreme Leader and secretly build the atomic bomb.

The fact is that after the Iraqi offensive, Iran anticipated the eventual depletion of its hydrocarbon reserves and wanted to have a civil nuclear industry to guarantee its own long-term development and that of the rest of Third World nations. To this end, the Revolutionary Guards set up a special team of officials dedicated to scientific and technical research, which was organized in secret cities, according to the soviet model. These researchers are also working on other programs, such as those linked to conventional weapons. Iran has opened all its nuclear facilities for inspections by the International Atomic Energy Agency (IAEA), but it refuses to give them access to research facilities dedicated to conventional weapons. We therefore find ourselves in a déjà vu situation : IAEA inspectors assure there is nothing to accuse Iran of, while the CIA and the Mossad insist—without any evidence—that Iran hides its illegal activities within its vast scientific research sector.This situation is reminiscent of the intoxication campaign previously carried out by the Bush administration, accusing the UN inspectors of not doing their job properly and of overlooking the WMD programs supposedly developed by Sadam Husein.

No country in the world has been the object of so many IAEA inspections and it is not serious to keep accusing Iran, but it hasn’t made a dent in the bad faith displayed by Washington and Tel Aviv. The fallacy about the alleged threat is crucial for the military industrial complex, which has for years implemented the Israeli program known as “antimissile shield” with US taxperyers’ money. Without the Iranian threat, there is no budget!

Teheran has undertaken two operations to get out of the trap which was set against it. First, it organized an international conference for a nuclear-free world, during which Iran finally expounded its position to its principal partners (on April 17). Iran also accepted the mediation by Brazil, a country whose president Lula da Silva aspires to become the Secretary General of the United Nations. President Lula had asked his US counterpart Barack Obama what kind of measures would be likely to reestablish confidence. Obama replied in writing that the compromise concluded in November 2009, but never ratified, would suffice. President Lula travelled to Moscow to make sure Russian President Dimitri Medvedev had the same opinion. President Medvedev publicly confirmed his view that the November 2009 compromise would be enough to solve the crisis. The next day, May 18, President Lula co-signed with Iran’s Mahmoud Ahmadinejad a document that, from all perspectives, met the demands made by the United States and Russia. But the White House and the Kremlin did an about-face, going back on their position, and denounced the guarantees offered by the new document as insufficient.

However, there is no significant difference between the document negotiated in November 2009 and the one ratified [by Iran, Brazil and Turkey] in May 2010.

Turkey’s Prime Minister Recep Tayyip Erdogan (left) is striving to restore his country’s independence in the face of US tutelage. By opening his country to Russian trade, the Turkish PM intends to balance international relations. His foreing minister Ahmet Davutoglu (right) is trying to solve, one by one, the conflicts inherited from the past, which hinder Ankara’s scope of action. © Kremlin Press Service

Turkey’s liabilities

Turkey inherited from its past a large number of problems with its minorities and neighbors; the United States has been fueling these problems for decades to keep Turkey under its thumb. Professor Ahmet Davutoglu, a theorist of neo-ottomanism and new Turkish foreign minister, has drawn up a foreign policy aimed, in the first place, at freeing Turkey from the endless conflicts bogging it down, as well as at multiplying its alliances with various intergovernmental institutions.

The dispute with Syria was the first to be solved. Damascus stopped using the Kurds and abandoned its claim over the Hatay province. In return, Ankara yielded on the division of river waters and helped Damascus to come out of its diplomatic isolation; it even organized direct negotiations with Tel Aviv, which occupies the Syrian Golan. Syrian President Bachar el-Assad was received in Turkey (in 2004) and the Turkish President Abdullah Gull was welcomed in Syria (in 2009). A Strategic Cooperation Council was set up by the two countries.

As for Iraq, Ankara had opposed an invasion of this country by the Anglo-Americans (in 2003). It banned the United States from using the NATO bases on Turkish territory to attack Bagdad, thus upsetting Washington and delaying the start of the war. When the Anglo-Americans formally transferred power to the Iraqis, Ankara favored the electoral process and encouraged the Turkmen minority to take part in the vote. Later, Turkey relaxed border controls and boosted bilateral trade. There is only one aspect marring this panorama: relations between Ankara and the Bagdad national government are excellent, but they are chaotic with the Kurdish regional government of Erbil. The Turkish army even took the liberty of persecuting the PKK separatists inside Iraqi territory—needless to say, with the support of the Pentagon and under its control. Be that as it may, an accord was signed to guarantee the export of Iraqi oil through the Turkish harbor of Ceyhan.

Ankara took a series of initiatives to put an end to the secular conflict with the Armenians. Resorting to “football diplomacy”, Ankara acknowledged the 1915 massacre (but refused the term ‘genocide’), and managed to establish diplomatic relations with Erevan, while it seeks a solution to the High Karabaj conflict. Nevertheless, Armenia suspended the ratification of the Zurich bi-party accord.

Turkey’s liability in relation to Greece and Cyprus is also very significant. The division of the Aegean Sea has not yet been clarified and the Turkish army is still occupying Northern Cyprus. Ankara has proposed different measures to reestablish confidence, particularly the mutual reopening of harbors and airports. But relations are far from being normalized and, for the time being, Ankara does not appear willing to abandon the self-proclaimed Turkish Republic of Northern Cyprus.

Russian President Medvedev travelled to Syria to negotiate the renovation and expansion of facilities offered to the Russian fleet. As a result, the Syrian port of Tartus could host, over the next three years, Russian submarines and destroyers. At the service of which strategy? © Kremlin Press Service

Syria’s diplomatic isolation

Washington has accused Syria of continuing its war against Israel through various intermediaries: Iran’s secret services, the Lebanese Hezbollah and the Palestinian Hamas. The United States thus falsely blamed Syrian President Bachar el Assad of having ordered the assassination of former Lebanese Prime Minister Rafik Hariri, and had a Special Penal Court set up to judge the Syrian President.

With astonishing ability, Bachar el-Assad, who had been depicted as a conceited and totally incompetent “daddy’s boy”, managed to wiggle out of that corner without making concessions or firing a single shot. The testimonies of his accusers wilted one after the other, and Saad Hariri, the son of the late Hariri, stopped demanding his arrest and even paid him a friendly visit in Damascus. Nobody wants to finance the Special Court any more and it is possible that the UN might decide to dismantle it even before it convenes, unless it will be used as a forum to accuse Hezbollah.

Finally, in response to US Secretary of State Hillary Clinton’s injunctions to break relations with Iran and with Hezbollah, Bachar el-Assad organized a surprise Summit meeting with Iranian President Mahmoud Ahmadinejad and with the top Hezbollah leader Hassan Nasrallah

What about Russia?

The consolidation of the Turkey-Syria-Iran triangle is a consequence of US and Israeli military power decline. The vacuum created is being filled by others.

China has become Iran’s first commercial partner and draws on the expertise of the Revolutionary Guards to overcome the hurdles set up by the CIA in Africa. It also gives military back-up, as discreet as it is effective, to Hezbollah (which it probably equipped with land-to-air missiles and guiding systems to counter interference) and to Hamas (which opened a representation office in Pekin). However, China is advancing very slowly and cautiously on the Middle East stage where it has no intention of playing a decisive role.

All expectations point in Moscow’s direction, which has been absent from the region since the fall of the Soviet Union. Russia wants to recover its former position of world power, but is reluctant to make a move before having solved the problems it currently faces in the former Warsaw Pact zone. The main drawback is that the Russian elites have no alternative policy to replace the US “remodeling” project and are stuck on precisely the same problem as the United Sates: in view of the shift in the regional power correlation, it is no longer possible to implement a balanced policy between Israel and the Arab countries. Any involvement in the region implies, sooner or later, a rupture with the Zionist regime.

Moscow’s clock stopped in 1991, at the moment when the Madrid Conference took place. Moscow has not yet registered the failure of the Oslo (signed in 1993) and the Wabi Araba (1994) accords in terms of implementing the so-called “Two-State Solution”, which is no longer viable. The only peaceful option is the one implemented by South Africa: the abandonment of Apartheid and the recognition of a single nationality for all citizens, Jews and non-Jews alike; and the reinstatement of a real democracy based on the principle of “one man, one vote.” That is already the official position adopted by Syria and Iran, which will soon be embraced also by Turkey.

The great diplomatic conference on the Middle East that the Kremlin wanted to organize in Moscow in 2009, and which was both announced at the Annapolis Summit and confirmed by several UN resolutions, never took place. Russia passed up its opportunity to act.

Those Russian elites which still enjoy great prestige in the Middle East, no longer frequent the region; they fantasize about it more than they understand it. In the 1990s, they were enthusiastic over the romantic theories of anthropologist Lev Gumilev and were in tune with Turkey, the only nation which, similar to Russia, is both European and Asian. Then, they fell for the geo-political charisma of Alexander Dugin, who detested western materialism, thought that Turkey was contaminated by western values, and was mesmerized by the asceticism of the Iranian Revolution.

However, that momentum evaporated in Chechnya before it began to materialize. Russia was brutally confronted with a form of religious extremism that received undercover support from the United States and was fueled by the Turkish and Saudi secret services. As a consequence, any alliance with a Muslim state seemed risky and dangerous. And when peace was reestablished in Grozny, Russia was unable, or did not want, to play on its colonial heritage. According to the President of the Islamic Committee of Russia, Gaidar Zhemal, Russia cannot aspire to become an euro-Asian nation and at the same time pretend that nothing happened nor can it continue to view itself as an orthodox state which is protecting its turbulent Muslim brothers. Russia had—and still has—to define itself by considering orthodox and Muslims as equals.

Rather than leaving for tomorrow the solution to the problems concerning minorities, and postponing for the day after tomorrow its involvement in the Middle East, Russia could consider interacting with Muslim partners abroad, as reliable third-party players, with a view to establishing an internal dialogue. The Syria of Bachar el-Assad constitutes a model of a post-socialist state on its way to democratization that has been able to preserve its lay institutions, has allowed the flourishing of major religions and their various ramifications, including hardcore Wahhabism, while also managing to preserve social peace.

The economic attraction

For the time being, the Russian elites are ignoring the warning issued by former Chief of Staff of the Russian armed forces, General Leonid Ivashov, about the need to establish alliances in Asia and in the Middle East, in the face of US imperialism. As noted by political analyst Gleb Pavlovski, they prefer to think that geo-political antagonism will dissipate thanks to economic globalization. They also regard the Middle East primarily as a market.

President Dimitri Medvedev has recently concluded a tour that took him to Damascus and Ankara. He lifted visa requirements and opened the doors of the burgeoning common market (Turkey, Syria, Iran + Lebanon) for Russian companies. He also favored the sale of a large arsenal to all these countries. In particular, he negotiated the ten-year construction of nuclear power plants. Finally, he took advantage of Turkey’s strategic evolution to obtain support for the transit of Russia’s hydrocarbons. A Russian land oil pipeline would connect the Black Sea to the Mediterranean Sea and Ankara might be attracted to the transnational South Stream gas pipeline project.

The limits of Russia’s involvement

Outside of the economic sphere, it is hard for Moscow to consolidate its position. Former Soviet naval bases in Syria have been reactivated and opened to the Russian fleet in the Mediterranean, all the more since naval deployment in the Black Sea is expected to be reduced. It is all happening as if Moscow were trying to gain time and postpone the Israeli issue.

The fact is that any condemnation [by Russia] of Jewish colonialism may revive internal problems. In the first place because, to express it in a caricatural and unflattering manner, Israeli apartheid is reminiscent of Russia’s treatment of the Chechnyans; and also because Russia is acting under the burden of a historical complex: that of anti-Semitism. Vladimir Putin has tried on several occasions to turn the page through symbolic gestures such as appointing a rabbi to the army, but Russia keeps feeling uncomfortable with this issue.

However, Russia ought to stop playing the waiting game; the dice have been tossed and Russia must face the consequences once and for all. Israel played a crucial role in arming and training the Georgian troops that attacked and killed Russian citizens in Southern Ossetia. In response, Georgia’s Defense Minister Davit Kezerashvili, a double Israeli-Georgian national, rented two military air bases to the Israeli Tsahal enabling it to attack Iran from a closer distance. Moscow stood stoically by without lifting a finger against Israel.

President of the Russian Federation Dimitri Medvedev discusses the possible reception of former Soviet refugees returning from Israel with the governor of the Jewish autonomous Oblast of Birodiyan, Alexander Vinnikov (2 July 2010). © Kremlin Press Service

The Middle East looked upon this lack of reaction with surprise. It is true that Tel Aviv has numerous relations with the Russian elites, networking with them by offering to some of the most influential people material privileges in Israel. But, Moscow has comparatively many more contacts in Israel, considering the presence of some one million Soviets immigrants. Conceivably, Moscow could bring to the fore some personality capable of playing in occupied Palestine the role played by Frederik de Klerk in South Africa: to abolish Apartheid and establish democracy in the heart of one single state. With this scenario in mind, Dimitri Medvedev anticipates a possible exodus of Israeli Jews who would not tolerate the new situation. Therefore, he blocked the formerly announced merger between the Krai of Jabarovsk with the autonomous Jewish Oblast of Birobidyan. The Russian president, who comes from a Jewish family and converted to the Russian Orthodox religion, plans to reactivate that administrative entity founded by Stalin in 1934 as an alternative to the creation of the State of Israel. What used to be a Jewish republic within the former Soviet Union could become the future home to refugees, who would certainly be welcomed since Russia is experiencing a plummeting demographic decline.

6. Inspired on the steps given by his ancestors, Russian president Medvedev travelled to Birobidyan to reactivate the traditions of the autonomous Jewish Oblast. Mehdi Ghasemi, ISNA Agency © Kremlin Press Service

Ultimately, it is Russia’s procrastinations with respect to Iran’s nuclear program that surprise the most. It is a fact that Iranian businessmen have constantly questioned the bills submitted for the construction of the Bushehr nuclear plant. It is also true that the Persians have become sensitive after years of Anglo-American interference. But the Kremlim hasn’t stopped blowing hot and cold. President Medvedev speaks with the West and pledges Russia’s support in favor of the UN sanctions voted by the Security Council. Meanwhile, Putin assures the Iranians that Russia will not leave them unshielded if they accept to play the game of transparency. On the ground, officials are wondering whether the two leaders have split their roles according to the interlocutors in order to jack up the bids. Or, whether Russia has been paralysed by a conflict brewing at the apex of power? In reality, this is what appears to be happening: the Medvedev-Putin duo has gradually deteriorated and their relationship has abruptly turned into a fratricidal war.

Russian diplomacy had led the Non-Aligned countries to believe that a fourth resolution adopted by the UN Security Council condemning Iran would be preferable to the adoption of unilateral measures by the United States or the European Union. It was wrong since Washington and Brussels would automatically use the UN resolution to justify their own unilateral and additional sanctions.

During a joint press Conference, held on May 14, with his Brazilian counterpart, President Medvedev indicated that he had reached a common position with President Obama during a phone conversation: If Iran accepted the proposal made [in November 2009] to enrich uranium abroad, there would be no reason to adopt sanctions at the Security Council. But when Iran unexpectedly signed the Teheran Protocol with Brazil and Turkey, Washington withdrew and Moscow hurriedly followed suit, breaching its commitment.

On 14 May 2010, Russian president Medvedev publicly vowed his support for the initiative by his Brazilian counterpart Lula da Silva to solve the Iranian crisis. Some days later, Medvedev aligned with the United States and ordered his ambassador at the UN to vote in favor of Resolution 1929, thus reneging on his previous promise. © Kremlin Press Service

It is a fact that Russia’s permanent representative at the Security Council, Vitaly Churkin, drained resolution 1929 of much of its substance by preventing a total energy embargo … but he nevertheless voted in favor. Short of being effective, the resolution is altogether an outrage for Iran, for Brazil, for Turkey as well as for all the Non-Aligned states that support Teheran’s position. The resolution is all the more shocking since it violates the terms of the Non-Proliferation Treaty which guarantee to all signatory countries the right to enrich uranium. Resolution 1929 of the UN Security Council denies Iran that right. Up to now Russia seemed to be the defender of international law. But it is not any longer. The Non-Aligned countries in general, and Iran in particular, have interpreted the Russian vote as the will on the part of a great power to prevent emerging powers from attaining the energy independence they need for their economic development. And it will be difficult to make them forget this Russian faux pas.

* Thierry Meyssan

French political analyst, founder and chairman of the Voltaire Network and the Axis for Peace conference. He publishes columns dealing with international relations in daily newspapers and weekly magazines in Arabic, Spanish and Russian. Last books published in English :9/11 the Big Lie and Pentagate

http://www.voltairenet.org/article166818.html, 24 August 2010

Turkish foreign policy

How can Mr Davutoglu help you?

IN JUNE 2006, days after a young Israeli private was captured by Hamas, Israel’s ambassador to Turkey paid a midnight visit to Recep Tayyip Erdogan, the prime minister. Gilad Shalit was feared to be gravely ill, perhaps even dead. Could Turkey help? Phone calls were made and favours called in. Mr Shalit turned out to be alive, and his captors promised the Turks they would treat him respectfully.

Turkey’s relations with Israel, once an ally, have worsened of late, and hit a fresh low in May, when Israeli commandos raided a Turkish ship carrying humanitarian supplies to Gaza, killing nine Turkish citizens. Yet Turkey continues to lobby Hamas for Mr Shalit’s release.

Turkey’s falling out with Israel has sparked a flurry of anguished commentary in the West about its supposed eastward drift under the mildly Islamist Justice and Development party, which has governed the country since 2002. Concern over its cosy relations with Iran, despite that country’s refusal to suspend suspect nuclear work, has run particularly high. Yet nobody complained in April 2007 when Turkey brokered the release of 15 British Royal Navy sailors who had been seized by Iran. Similarly, France was delighted in mid-May when a personal intervention by Turkey’s foreign minister, Ahmet Davutoglu, secured the release of Clotilde Reiss, a French teacher being held in Iran on spying charges.

Turkey is the first stop for thousands of political refugees from Iran, Iraq, Afghanistan and Central Asia. These include Mohammed Mostafei, an Iranian lawyer who took up the case of Sakineh Ashtiani, a woman facing death by stoning in Iran for alleged adultery. Mr Mostafei fled to Turkey earlier this month after receiving death threats (he has since gone to Norway). Now Turkey has discreetly taken up his client’s case (although Iran has turned down a Brazilian offer of asylum for Ms Ashtiani). It is also pressing Iran for the release of three American hikers who were arrested, on suspicion of “spying”, near the Iraq border a year ago and who have been rotting in Tehran’s notorious Evin prison ever since.

Turkey’s mediating skills have even aroused excitement in Africa. Mr Davutoglu recently revealed that Botswana had sought his help in fixing a territorial dispute with Namibia. Flattered though he was, however, Mr Davutoglu confessed that, for once, he was stumped.

http://www.economist.com/node/16847136?story_id=16847136&fsrc=rss, Aug 19th 2010