Contributing Member of the Legal, Economic & Regulatory Affairs Councils

All News Analyses by this Author

Understanding the New Ostpolitik

October 27, 2009

Analysis of:The new Ostpolitik | www.ft.com

Germany's Ostpolitik with Russia is rooted in economics as much as in politics. German business sees Russia as a vast field for new exports while it also depends on Russian gas. Politically Germany sees no Russian threat in the East and believes that it promotes Russia's integration into Europe. German leaders believe that Russia depends as much on Germany and Europe as Europe depends on Russia.

Russian motives regarding WTO

June 15, 2009

Analysis of:Russia Changes Its WTO Strategy | online.wsj.com

Russia's WTO announcement is important for four reasons beyond international trade.  Russia, like the Nazis in the 1930s is desperqate to shore up its currency by forging a trade bloc based around the ruble and by undermining the sovereignty of its neighbors by compelling them to join it.  Since it is unlikely this announcment was coordinated with Belarus and Kazakhstan it shows Moscow's contempt for their sovereignty.  Finally, this announcement illustrates Moscow's perennial demand for a special status in all internatioinal fora and thus special rights and privileges in them.

Global Crisis has Global Repercussions

October 13, 2008

Analysis of:The Geo-Politics of the Credit Crisis | globalstrategyproject.org

Thje current global crisis will ineivtably have global ocnsequences.  Chief among them will be a severe diminution of the U.S.'; financial leadership as global markets are clearly registering a vote of no confidence in the Administration.  And due to the  massive sell off of values the domestic energies of governments will be concentrated on internal economic recovery rather than on following Washingotn's agenda.  None of this will change even after he new administration takes office in January.  The ensuing  situation thus betokens a fall in U.S. global leadership capacity and sets the stage for  more and  more widespread internaitonal challenges to American policies across the world

Foreign Investment in Russia Will Continue to Decline, Stephen Blank, US Army War College

July 3, 2008

Analysis of:Foreign investment in Russia shrinks by almost 30% | www.rbcnews.com

Foreign investment in Russia will probably continue to decline.  Russia has adopted a stringent new law on foreign investment reserving the really important sectors to the state and there is no sign that the state will  either move to a true rule of law, despite Medvedev's statements on the subject, or that key state actors will voluntarily relinquish their ownership of key firms and sectors.  Indeed, they apparently are moving to expand their holdings, particularly in energy, defense, and high-tech sectors.  Foreign investors will be able to move into the services sector as long as those firms are not espeically important to Russia and need foreign capital.  But their legal position and opportunity to repatriate profits will remain as insecure as before and their property rights will be largely conditional and subject to political raids  either by police or tax inspectors or some other officials.  As Russia embraces autarchy, it will suffer the consequences of that suboptimal policy.

Israel NOt Bluffing and Iran likely has nuclear program

June 23, 2008

Analysis of:Israeli official says attack on Iran 'unavoidable' | www.msnbc.msn.com

Israeli warnings about attacking Iran are not bluffs.  Israel sees Iran as willing to execute its threats to attack Israel or to extend deterrence to terrorists and provide ithem with other material support with which to attack israel.  Moreover, talk that Iran does not have a nuclear weapons program is simply fallacious.  Such talk misreads the 2007 national intelligence estimate (readers should see Admiral McConnell's testimony of February 2008 which clarifies those misconceptions).  Not only does iran have a nuclear weapons project it also has a robust missile and space program that is intrended to generate  both conventional missiles power and a lunch vehicle for a future nuclear weapon.  To date Iran's diploimacy has been brilliant in stonewalling the West which is plagued by irresoltuion.  But as these statements indicate, Iranian calls ofr a seocnd holocaust are taken very seriously in Jerusalem and the recently described israel military exercises show that Israel means business

Sharing Nuclear Designs

June 23, 2008

Analysis of:(Pakistani) Smuggling Ring May Have Shared Nuke Design With Iran???!!! | www.usatoday.com

Recent revelations about the existence of a black-market design for a nuclear warhead originating with A.Q. Khan's organization that Iran might have obtained are disturbing.  Khan sold Iran and others technology with which to obtain the fissile material needed for a bomb.  This includes technology for centrifuge enrichment.  But besides that technolgoy, you then need to have a warhead nthat can safely carry this material until detonation and a launch vehicle to  bring the warhead close enough to the target (e.g. a B-17 in 1945).  People may be confused about this but having centrifuge enrichment technology does not equate to having a bomb or a usable warhead or a lunch vehicle.  A proliferator needs all three to have a usable atomic weapon.  The danger is that Iran may have obtained this warhead design which would greatly shorten the time needed for it to develop a bomb, its warhead and then place them atop a missile of which it has many.  Iran could then target anything within 1300KM

Skepticism about Gazprom

November 6, 2007

Analysis of:GAZPROM AND STATOILHYDRO SIGN AGREEMENT ON MAIN CONDITIONS FOR COOPERATION IN PHASE 1 SHTOKMAN FIELD DEVELOPMENT, International Herald Tribune | www.gazprom.com

I remain skeptical about  GAzprom using this model to make deals wiht Europe. the Shtokman deal seems like a one-off event and has always been manipualted for political purposes, in this case to  give opportunities for influencing Russo-French relations.  There are no other signs of Russian interest in inviting equity investment in its oil or gas fields in any form where the foreign investor would have any real influence.  Indeed, the current political trens and pending legislation on subsoil and mineral rights point in the other direction.  We must remember that the notion of sanctity of contract and of property rights does not in fact exist in Rusia, formal legislation to the contrary notwithstanding.  The two experiences of BP and of ocmpnies like MItsui and Shell in Rusian oil fields should  be a strong barrier to any hope of equitable tratment of foreign energy companies by the Kremlin.

Kazakhstan in a global context

October 1, 2007

Analysis of:Could Kazakhstan suffer a credit crisis? | www.financeasia.com

If we look at the Kazakh economy in a global context, it becomes clear that there is a danger of  overheating, a credit crunch, and  simultaneous inflation. the strength of that economy has led to a tremendous surge which shows no sign of abating.  But the ripples from the US subprime mortgage affair, as in Great Britain, the underlying forces of inflation in the global economy summarized by Alan Greenspan suggests that we cannot discount the possiblity that  economies that have shown strength recently will  become too overheated and face a credit crunch due to global worries about the availability of credit.  the fall of hte dollar vis-a-vis the EU will also reinforce inflation pressures and may lead to a shift from dolars to EUROs with potentially significant consequences for states like Kazakhstan who have significant dolalr revenues due to their energy trade.  While none of this means a crisis is inevitable or imminent, greater caution and less irrational exuberance are warranted.

Kazakhstan's Energy Future and Global Energy Issues

October 1, 2007

Analysis of:A new Kazakh law is a threat to contracts with foreign oil companies | www.iht.com

The new Kazakh law will essentiually allow the state to expropriate foreign investors in energy much as Russia has done.  Like Russia's policies, this could lead to a slowdown in foreing energy investment and in energy output.  Both those outcomes would seriously affect global energy supplies in a negative way not least in Asia but also very much in Europe.  Both Europe and Asia depend, for both economic and geostrategic regions on the free flow of Central Asian energy and the maximizaiton of its production.  Central Asian states likewise depend on being able to sell to every potential customer without interference by Moscow.  This law potentially goes against those strategic interests since it will induce much greater caution among foreeign investors who alone can help  former Soviet states, inclduing Russia, maximize their output.  Thus it will retard investment and production, probably leading to higher energy prices and tighter markets than are now the case. 

The Paradoxes of Sino-American Energy Relations

September 7, 2007

Analysis of:Europe and China Energy: A Light-Hearted Energy Relationship | www.energytribune.com

While much of Warren's anlaysis is correct; it is incomplete and ignores the ways in which in effect Sino-American partnership or cooperation has taken place.  China benefits immensely from America's policy of freedom of the seas so that its energy shipments from the Gulf and elsewhere have never been interdicted.  Second, China is the main, if unintended beneficiary of the American sanctions directed against Iran.  Third Washington actually supports every pipeline initiative involving Central Asia and China to encourage diverisfication of Central Asian energy resources.

Invesxting in Rusisan electricity

September 7, 2007

Analysis of:E.ON forms JV for Russian electricity market | www.speroforum.com

This article is important because it points to a possible field of immense growth, i.e.  Russian demand for  grater and more efficient electric power and the possiblity of large contracts for foreign investment in the technologies needed to ensure that efficiency and bring more power to Rusisan consumers.  On the other hnad talk about the upcoming liberalization of the overall power industry msut be regarded with greater caution and skepticism as there has  been talk of such liberalization for several years but it has not happened.  Given the amount of capital involved, the inherent greed and corruption of the Russian elite and the ensuing ineficincies throughout the system, more skepticism about such liberalization anytme soon is clearly warranted more than the authors of this article assume

The Dysfunctional Russo-Belarussian Marriage and European Energy Supplies

July 26, 2007

Analysis of:Belarus purges its gas and oil chiefs | www.msnbc.msn.com

This article demonstrates what happens to weak states and economies who become too dependent on Russian gas.  Central and East European states who depend on Russian gas should be especially alarmed about that dependence.  These points also underscore the urgency for the EU to devise a viable energy policy.  While this row will not directly affect Europe for now, it shows what happens if a government falls into Moscow's trap and then cannot pay its bills.  Their government  falls apart and their economy becomes vulnerable to Russian takeovers that ultimately imperil their actual independence.  Thus dependence on Russian gas and oil translates into enduring economic and political leverage.  Minsk's shrinking  control over its own domestic economy could well become the harbinger of future outcomes in Central and Eastern Europe if those states and the EU cannot devise a response to Russian pressure.  And even in the West, as in Germany, Russia exercises a significant leverage over policy.

Page : 11 to 12 of 12