http://www.chathamhouse.org.uk/rss/4 This feed contains all new publications added to the Chatham House website including research papers, books, The World Today articles and International Affairs articles. http://www.chathamhouse.org.uk/publications/papers/view/-/id/845/ http://www.chathamhouse.org.uk/publications/papers/view/-/id/845/ Download Paper in Chinese This report is the result of two years of analysis of energy pathways, policy indicators, technology trends and investment requirements. It provides the building blocks for Jilin City to take a decisive step towards achieving low carbon development and become a national leader in China. The report argues that low carbon development is highly consistent with the city's existing objectives, including reducing energy intensity by shifting its manufacturing base to higher-added-value, advanced technology products; achieving excellent resource efficiency (the circular economy); realizing balanced urban-rural growth; and, critically, fulfilling China's scientific development concept. Project Developing the Methodology and Piloting Low Carbon Zones in China >> Thu, 18 Mar 2010 15:22:07 +0000 http://www.chathamhouse.org.uk/publications/papers/view/-/id/844/ http://www.chathamhouse.org.uk/publications/papers/view/-/id/844/ Download Executive Summary This report maps out proposals for a new international monetary order and looks at ways in which monetary authorities and political leaders can help prepare the ground for a new system and facilitate the transition. Key recommendations include: A multicurrency reserve system for a multipolar world economy Promote dialogue and policy coordination to provide stability, confidence and balanced adjustment Strengthen the role and legitimacy of international institutions, including how the surveillance role of the International Monetary Fund (IMF) can be reinforced to address more effectively the problem of exchange rates and payments disequilibrium. Consideration of how the shape of the international monetary system in the 21st century will be significantly influenced by the interests and the requirements of the emerging powers, including how the dollar-based monetary system is no longer adequate for a larger and more integrated world economy. Project The Crisis and the Reform of the International Financial Architecture >> Further resources Beyond the Dollar: Rethinking the International Monetary System Expert Comment and Video After the Dollar: The World Needs a New Monetary ArchitectureThe Wall Street Journal DeAnne Julius and Paola Subacchi, March 2010 Thu, 18 Mar 2010 14:54:17 +0000 http://www.chathamhouse.org.uk/publications/papers/view/-/id/843/ http://www.chathamhouse.org.uk/publications/papers/view/-/id/843/ This is a summary of an International Law Discussion Group meeting held on 4 February 2010 at Chatham House. Event details >> Mon, 15 Mar 2010 16:35:19 +0000 http://www.chathamhouse.org.uk/publications/papers/view/-/id/842/ http://www.chathamhouse.org.uk/publications/papers/view/-/id/842/ This is a summary of a meeting held at Chatham House on 5 March 2010. Mon, 15 Mar 2010 16:12:25 +0000 http://www.chathamhouse.org.uk/publications/papers/view/-/id/841/ http://www.chathamhouse.org.uk/publications/papers/view/-/id/841/ This is a summary of a meeting held at Chatham House on 16 February 2010. Fri, 12 Mar 2010 16:41:33 +0000 http://www.chathamhouse.org.uk/publications/ia/archive/view/-/id/2472/ http://www.chathamhouse.org.uk/publications/ia/archive/view/-/id/2472/ Through an analysis of the British forces' three-year Helmand mission (Operation Herrick), this article explores whether, for all the improvements in the campaign in terms of resources and numbers of troops, the basic structure of the campaign established in 2006 has endured. Instead of focusing on an 'ink-spot' from which to expand, British forces have tended to operate from dispersed forward operating bases from which they have insufficient combat power to dominate terrain and secure the population. They are consequently engaged in a seemingly endless round of high-intensity tactical battles which are normally successful in themselves but do not contribute to the overarching security of the province. The analysis explores the way in which this distinctive campaign lay-down - the preference for dispersal and high-intensity fighting - may be a reflection of British military culture and its military doctrine. By highlighting potential unacknowledged aspects of the British military profession, the article aims to contribute to debates about the development of the armed forces. Thu, 11 Mar 2010 16:35:59 +0000 http://www.chathamhouse.org.uk/publications/ia/archive/view/-/id/2471/ http://www.chathamhouse.org.uk/publications/ia/archive/view/-/id/2471/ One of the underlying assumptions of the contemporary debate over Afghanistan is that counterterrorism objectives can be achieved through counterinsurgency methods. In fact, counterterrorism and counterinsurgency are very different - often contradictory - models of warfare, each with its own associated assumptions regarding the role of force, the importance of winning support among the local population, and the necessity of building strong and representative government. Rather than being mutually reinforcing, they may impose tradeoffs on each other, as counterterrorism activities may blunt the effectiveness of counterinsurgency approaches and vice versa. The last four years in Afghanistan provide evidence that when employed in the same theatre counterterrorism and counterinsurgency strategies can offset one another. To be in a position to begin the withdrawal of US troops before July 2011, the Obama administration will need to find a way to manage the tradeoffs between its counterterrorism and counterinsurgency strategies in Afghanistan. Thu, 11 Mar 2010 16:32:05 +0000 http://www.chathamhouse.org.uk/publications/ia/archive/view/-/id/2470/ http://www.chathamhouse.org.uk/publications/ia/archive/view/-/id/2470/ Britain does derive benefits from the Anglo-American alliance and has made momentous contributions to the wars in Afghanistan and Iraq. Yet British solidarity and sacrifices have not purchased special influence in Washington. While there may be good arguments in favour of the UK continuing its efforts in Afghanistan, the notion that the war fortifies Britain's vicarious world status is a dangerous illusion that leads to repeated overstretch and disappointment. Now that Britain is in the foothills of a strategic defence review, it is important that the British abandon this false consciousness. Thu, 11 Mar 2010 16:27:52 +0000 http://www.chathamhouse.org.uk/publications/ia/archive/view/-/id/2469/ http://www.chathamhouse.org.uk/publications/ia/archive/view/-/id/2469/ The UK faces a pressing defence dilemma. The declaratory goals of defence policy are struggling to match the demands made by operational commitments and the financial and organizational capacities. The article examines how and why this situation has come about. While recognizing that existing calls for higher defence spending, reform of the Ministry of Defence, efficiency gains or a renewal of the so-called military covenant between the military and society may address discrete elements of the defence dilemma in Britain, it argues that current problems derive from a series of deeper tensions in the nexus of British defence more widely defined. Thu, 11 Mar 2010 16:23:34 +0000 http://www.chathamhouse.org.uk/publications/ia/archive/view/-/id/2468/ http://www.chathamhouse.org.uk/publications/ia/archive/view/-/id/2468/ The authors argue that for decades successive defence reviews have followed a process in which policy development moves through four phases: failure, inertia, formulation and misimplementation. This has resulted in a cycle of defence reviews that have proved to be incomplete and unsustainable. The article suggests that the strategic defence (and security) review promised for the next parliament is in danger of continuing this pattern of policy deficiency. The authors contest that this need not be the case. With a close understanding of the pattern of past reviews it should be possible for the 2010 review finally to break the mould and produce a coherent and above all sustainable defence policy and strategy. Related resources can be found within the project Defence Policy and Economics >> Thu, 11 Mar 2010 16:21:06 +0000 http://www.chathamhouse.org.uk/publications/ia/archive/view/-/id/2467/ http://www.chathamhouse.org.uk/publications/ia/archive/view/-/id/2467/ The contemporary portrayal of British civil-military relations is bleak, with academics, politicians, the media and military charities arguing that military-societal relations are in urgent need of repair. Through assessing the extent to which the reciprocal expectations of the armed forces and the British public are realized, this article will argue that the moral contract, although under stress, is not breaking. Thu, 11 Mar 2010 16:16:52 +0000 http://www.chathamhouse.org.uk/publications/ia/archive/view/-/id/2466/ http://www.chathamhouse.org.uk/publications/ia/archive/view/-/id/2466/ As the states parties to the nuclear Non-Proliferation Treaty (NPT) plan for the May 2010 review conference, they are faced with recurring political challenges that call into question the long-term sustainability of the presently constituted non-proliferation regime. The article discusses the challenges and options for the non-proliferation regime and concludes that efforts to halt future proliferation will increasingly focus on reshaping the norms and rules to pave the way for negotiating a new nuclear security compact, based on a verified process to prohibit and eliminate the possession as well as the use of nuclear weapons. Thu, 11 Mar 2010 16:13:22 +0000 http://www.chathamhouse.org.uk/publications/ia/archive/view/-/id/2465/ http://www.chathamhouse.org.uk/publications/ia/archive/view/-/id/2465/ The example of the UK is used to explore two linked ideas relevant to the current international politics of nuclear weapons: that of the threshold state, whereby a state moves from possession to non-possession of weapons rather than in the opposite direction; and that of responsible nuclear sovereignty, adapting the notion of responsible sovereignty to the nuclear context. Thu, 11 Mar 2010 16:10:10 +0000 http://www.chathamhouse.org.uk/publications/ia/archive/view/-/id/2464/ http://www.chathamhouse.org.uk/publications/ia/archive/view/-/id/2464/ Nuclear disarmament processes are likely to involve a complex mix of actors, issues and interests. The article examines this complexity through a sociological lens using Britain as a case-study, where relinquishing a nuclear capability has become a realistic option for a variety of strategic, political and economic reasons. Thu, 11 Mar 2010 16:06:53 +0000 http://www.chathamhouse.org.uk/publications/ia/archive/view/-/id/2463/ http://www.chathamhouse.org.uk/publications/ia/archive/view/-/id/2463/ Is there a conflict between NATO's original and enduring purpose of collective defence and its post-Cold War crisis management functions? This article suggests that despite disagreements on how to pursue shared goals, NATO allies may yet demonstrate that they have the vision and political will to meet the new challenges. Thu, 11 Mar 2010 16:03:38 +0000 http://www.chathamhouse.org.uk/publications/ia/archive/view/-/id/2462/ http://www.chathamhouse.org.uk/publications/ia/archive/view/-/id/2462/ As cyberspace evolves from a technology enthusiast's domain into a global economic and military 'battlespace', the likelihood of a major interstate cyber conflict increases significantly. The article discusses why now may be the time for international society to begin working towards ratification of a global cyber treaty. Thu, 11 Mar 2010 15:55:00 +0000 http://www.chathamhouse.org.uk/publications/ia/archive/view/-/id/2461/ http://www.chathamhouse.org.uk/publications/ia/archive/view/-/id/2461/ Thu, 11 Mar 2010 15:51:52 +0000 http://www.chathamhouse.org.uk/publications/ia/archive/view/-/id/2460/ http://www.chathamhouse.org.uk/publications/ia/archive/view/-/id/2460/ Thu, 11 Mar 2010 15:49:53 +0000 http://www.chathamhouse.org.uk/publications/ia/archive/view/-/id/2459/ http://www.chathamhouse.org.uk/publications/ia/archive/view/-/id/2459/ Thu, 11 Mar 2010 15:49:05 +0000 http://www.chathamhouse.org.uk/publications/ia/archive/view/-/id/2458/ http://www.chathamhouse.org.uk/publications/ia/archive/view/-/id/2458/ Thu, 11 Mar 2010 15:44:08 +0000 http://www.chathamhouse.org.uk/publications/papers/view/-/id/840/ http://www.chathamhouse.org.uk/publications/papers/view/-/id/840/ This is a summary of a meeting held at Chatham House on 18 February 2010. Thu, 04 Mar 2010 17:19:05 +0000 http://www.chathamhouse.org.uk/publications/papers/view/-/id/839/ http://www.chathamhouse.org.uk/publications/papers/view/-/id/839/ This is a summary of the European Security and Defence Forum workshop held at Chatham House on 11 November 2009. Mon, 01 Mar 2010 15:59:09 +0000 http://www.chathamhouse.org.uk/publications/papers/view/-/id/838/ http://www.chathamhouse.org.uk/publications/papers/view/-/id/838/ This paper investigates the motivations driving Chinese outward direct investment in Italy. The analysis is based on secondary sources and in-depth interviews with key informants and senior managers of Chinese affiliates in Italy. The empirical analysis shows that the evolution of the Chinese pattern of entry to Italy is in line with the model followed by Chinese firms for direct investment in other European countries: starting with small-scale operations in trade-related activities, and evolving towards the acquisition of tangible and intangible resources deemed necessary to increase the Chinese presence in international markets and, more generally, to upgrade its technological and production capacities. Chinese investments in Italy are increasingly targeting the acquisition of design and brands in key Italian sectors of specialization, and technological capabilities in sectors such as metalworking. Chinese multinational enterprises also are investing in Italy to get access to local competitive advantages in sectors such as automotive and home appliances. This location choice is clearly linked to the intention to tap local competences available at the cluster level. Fri, 26 Feb 2010 11:14:59 +0000 http://www.chathamhouse.org.uk/publications/twt/archive/view/-/id/2007/ http://www.chathamhouse.org.uk/publications/twt/archive/view/-/id/2007/ Bombs continue to plague Baghdad, there are cynical moves in a political game, and anti-Shi'a attacks during the mourning season of Muharram and Safar seem unchecked in the shrine cities of Najaf and Karbala. The path of Iraqi politics towards 'normalisation' remains fraught and fragile. Delayed elections and a new government will not mark the end of the Iraq debacle. Democratisation and normalisation are still to come. There is little doubt that the elections scheduled for March 7 will see the formation of a new government made up of a fresh alliance of political forces. Iraq seems to be on the brink of many more months of uncertainty: concerns remain over the fairness and legitimacy of the electoral process; there is exasperation over the horsetrading to form a government that will follow; and worries abound about the continuing economic recovery and regeneration, tied to the new oil contracts signed in recent weeks. About a year ago, following the successful negotiation of the Status of Forces Agreement that signalled the plan to draw down United States troops, a strong showing in the provincial elections in January 2009 and a firm hand in re-asserting central control over the crucial cities of Baghdad and Basra, it seemed that Iraqis had found a capable government. Run by Prime Minister Nouri al-Maliki, it is committed to providing security and sovereignty. However, what appeared to be certainties then, and expectations that the Maliki bloc would sweep the forthcoming national elections, are now more open to doubt. Fractured The political scene is far more fractured than before the provincial elections. The emergence of Goran, a new party of change drawing support from intellectuals and those disaffected with the corruption of the major Kurdish parties in power in Kurdistan, might indicate that all is not rosy there. The splintering of the United Iraqi Alliance, exemplified by the new divided lists announced for the elections, coupled with the intra-Shi'a violence in the south, punctuated with bombs in the shrines cities and even in the capital, suggests a break-up of old sectarian blocs. Before the 2005 elections, The United Iraqi Alliance had been the symbol of revived Shi'a political power with the blessing of the Shi'a religious authority of Ayatollah Sistani in Najaf. But with a safe majority in Baghdad and the south, the fight for a greater share of the pie has led it to fracture. Violence may be down - and Afghanistan and Pakistan may have overtaken Iraq in the public imagination - but it remains a significant obstacle to the emergence of a stable new government, not least because of the continuing intervention and influence exerted on Iraqi politics by the governments of Saudi Arabia and Iran. Not surprisingly, both anti-Saudi sentiments - most recently illustrated in the government response to Shaykh al-Arifi's verbal attack on Ayatollah Sistani in a Friday sermon in Riyadh - and anti-Iranian feelings - especially following the incident before the New Year when a contingent of Iranian forces took the Fakka oil well at the border and raised the Iranian flag - are strong in the Shi'a alliance that dominates the government, and beyond. Baath not coming back Legitimacy and the new order are central themes of the election season. De- Baathification was started by the Coalition Provisional Authority, headed by Paul Bremer, after the 2003 invasion to purge government institutions of sympathisers of Saddam Hussein and his Baath party. It reared its head again recently when the Justice and Accountability Commission, headed by Ahmad Chalabi, disqualified 511 elections candidates on the basis of their past Baathist affiliations. Since the list included Saleh al-Mutlaq and members of his new, and potentially quite effective, alliance with Iyad Allawi in the new Iraqi List, there were renewed cries of sectarian manipulation and warnings about the hidden hand of Iran. However, it is worth pointing out that around 280 of those disqualified are in fact Shi'a candidates, including the high-profile government spokesman Ali al-Dabbagh. While earlier, finalising the election law and squabbles about the role of refugees voting abroad led to the polling date slipping, the disqualifications may now have slowed the process again and led to a further postponement. A court revoked the disqualification decision, following criticism by President Jalal Talabani and other politicians. The anti-Baathist card is important for many of Muqtada al-Sadr's supporters; however, their refusal to concede to the Baath will probably dissipate with practical concessions; not least because of the Baathist links of many in their group. It is not surprising that the government consistently blames ex-Baathists for the bombings that destabilise Baghdad. For at least two years it has claimed to have uncovered Baathist coup plots, funded by the Saudis. People also seem to have conveniently forgotten that the Status of Forces Agreement was supposed to be subject to approval by a referendum - which should really have taken place by now, or at least before the election. But the issue of the return to power of the Baath is not over: the disqualified candidates, now reinstated, are due to be investigated further after the elections. Of course, their deferred cases may be quietly forgotten, like the Status of Forces referendum. New alliances The elections do seem to be forcing the lists to look beyond their immediate sectarian neighbourhoods, at least to provide the facade of national blocs. The fracture of the United Iraqi Alliance means that there will be a change in government and the Maliki-led Da'wa alliance - significantly named the State of Law list - may not have a sufficiently wide remit, even if it can bring in independents. A number of significant Shi'a independents may have a role to play: Yusuf al-Habbubi, who performed spectacularly on his own name in Karbala during the provincial elections, and who would suffer under any de-Baathification process; Sayyid Iyad Jamal al-Din, a cleric but an avowed secularist; the remnants of the Shi'a Fadila party associated with Nadim al-Jabiri who were once major players in Basra; and even the tribal Justice and Unity list, representing the Shaykhi Shi'a religious minority, that won four seats in the Basra provincial elections. Any of these, or a combination, could swing the votes in the formation of a new government in alliance with one of the major lists. The new Iraqi National Alliance draws together the Islamic Supreme Council of Iraq (ISCI), significantly including its Badr Brigade militia, with its strong clerical ties in the shrine cities, but with a dwindling political constituency re-oriented from the towns to the tribes, with the political strength of the Sadr tendency which remains strong in the market towns and tribal hinterlands of the south as well as in Basra and Baghdad. Muqtada al-Sadr remains the leader of this powerful bloc and may yet return from his self-imposed exile in Iran to play a new role. The Iraqi National Alliance is potentially the largest bloc that could sweep the Shi'a sectarian vote. The revived influence of Chalabi, seen in the disqualifications, will be a factor in its power. However, it is also rather volatile as an alliance; it may be difficult to forgive and forget the level of intra-Shi'a violence in the south since 2007, primarily fought between these two groups. The increasing withdrawal of the religious Shi'a from political endorsement may well hinder their progress, despite the fact that the politicians continue to court Sistani, and may allow for the emergence of a new disaffected Shi'a bloc, akin to Goran in Kurdistan. More interesting may well be the new Iraqi List of Shi'a secularist Iyad Allawi and the ex-Baathist Saleh al-Mutlaq which may have a good chance of support in Baghdad and in Sunni Arab areas in Anbar and Nineveh. Would a good showing by this list suggest that Iraqi politics is moving beyond the sectarian realities that have dominated elections since 2004? Or would it be seen as just an anti-Iranian alliance with strong class based urban appeal? Oil realities and royalties Arguably the issue over the sovereignty of Kirkuk and its oil fields, and the revenue dispute between Baghdad and Kurdistan, will not be the main challenges for the new government, even with the rise in ethnic tensions in Nineveh and the disputed territories. Rather, the implementation of the oil contracts and the deals for the fair and constitutional distribution of revenues will be a potential flashpoint. Will those defeated at the polls attempt to obstruct the recovery and development of the oil industry and the necessary infrastructural changes? A new government will need to address relations with Saudi Arabia and Iran; but neither will be terribly keen on Iraq pumping oil at full capacity. And there is always a possibility of a major incident, or a natural occurrence, such as the potential problem of the demise of two major players on the Iraqi scene, neither of whom is exactly sprightly: President Talabani and Ayatollah Sistani. There are still many factors that will ensure the uneasy status quo - which cannot be great news for US President Barack Obama's administration, which had assumed that the Iraq debacle was over. The real steps towards democratisation and normalisation are yet to come. Sajjad Rivzi, Director, Centre of Islamic Philosophy, University of Exeter Tue, 23 Feb 2010 15:14:59 +0000 http://www.chathamhouse.org.uk/publications/twt/archive/view/-/id/2006/ http://www.chathamhouse.org.uk/publications/twt/archive/view/-/id/2006/ This is the crisis that could never happen. European leaders gathered in Brussels in mid-February for talks on the Greek debt problem probably expected to wake up suddenly and find it was all a bad dream. This may also explain the seemingly erratic outpourings from these meetings, lurching from promises of support - club members stand shoulder-to-shoulder - to rather harsh demands for Athens to make tougher budget deficit cuts, with no sign of any money being put on the table in support. Greece may be wondering why it was there, like an unwelcome ghost at the feast. The truth was the Eurozone had no plan. The Euro currency entry rules, membership rules, and the Maastricht Treaty - the blueprint for the single currency which came into being in 1999 - were all designed with one critical purpose in mind: to guarantee that prudence governed member government's budgets and that public sector debt would never reach a level that could possibly pose a risk to the stability of a member state. There is very little else required or said about economic policy and other important balances and targets. Indeed in 2002, Romano Prodi, then President of the European Commission, famously caused a furore for calling the Maastricht rules stupid, to the annoyance of some, but the delight of others. In the tradition of a gentlemen's agreement, it was assumed that members would never cheat or make a mistake. And global crises that could damage the whole monetary union 'club' in such a way that deficit and debt targets would be smashed could never happen. No need to plan for something that was impossible. Prudent to profligate There are some clauses in the Treaty about bail outs. Absolutely, there can be none; no concept of bail outs, collective or individual. Indeed, they are deemed illegal except in circumstances of, say, natural catastrophe. Perhaps this is what has happened to Greece? Lack of tax collection and deficit spending were just natural? There are also sanctions - moderate penalties, like a swear box - if members breach the fiscal limits. But these were seldom invoked - just the occasional reprimand to Portugal and Greece - while letting the bigger players like Germany and France, which at some point have also breached the criteria, off the hook. No concept of a debt crisis, even though there were signs in both Greece and Portugal that these countries were having persistent problems getting to grips with economic adjustment, and thus public sector finances, while debt built up. The Maastricht obsession with public sector finances also showed a blissful lack of awareness of just how quickly a country with seemingly good public finances could hit a debt crisis. It is important to look at other indicators, especially the build up of debt in the banks and private sector, which can quickly become public sector debt in a crisis. Examples of this were obvious from the 1997 Asian crisis, when 'model' states rapidly became financial markets pariahs. So the sudden transformation of Ireland and Spain from prudent to profligate must have been quite a shock to naïve Europeans; never thought that would happen, did you? No plan B So Plan A is clear, isn't it? The Euro club did not need umbrellas because it never rained in Europe, right? But what if a crisis does occur because: A member state cheats: there is no Plan B A member state finds itself suddenly financially embarrassed, even if its previous record on debt is healthy: there is no Plan B A global crisis and recession cause unexpected and severe storm damage to deficits and debt all over the Euro area: there is no Plan B? In fact, it looks as if all these impossible events have been happening in the Euro area, so what should the club do about it? Clearly there was no Plan B before the crisis started, but no Plan B was created when the banking crisis first broke in August 2007. No Plan B was devised in 2008-2009, and there is still no Plan B today. Or if there is, then it is remarkably discrete. There have been talks and statements of solidarity from club members - shoulder to shoulder and all that - so presumably, that is settled. This is like not insuring your home because you decide that a fire can never happen, simply because your family agrees it is impossible. Try this out with your insurance company and see what its view is. The Euro club certainly needed an insurance policy, but it does not have one. Members have been warned about this from time to time, but they either found it inappropriate, or never got around to it; all very complicated no doubt and why bother as the probability of a nasty event was so low? Find the money This cannot continue. Firstly the immediate crisis must be resolved; no time now for lengthy discussion of grandiose plans. It is essential to agree where the money will come from, and quickly, to avoid the risk of a debt default in a member state. This is far better than disorderly refinancing or chaotic bail outs post default. Without putting members' own money on the table, there could be talks with leading banks to assess the feasibility of some kind of guaranteed loans to provide early refinancing of this year's upcoming Greek debt. This would buy Greece and the Euro time for further work on the fundamentals and statistics and also test an option for any other countries that might need assistance. If private finance proves impossible, then there has to be an International Monetary Fund (IMF) deal, quickly too. The refinancing problem simply cannot be ignored or postponed. But emerging from crisis management, the Euro club also needs a better process for dealing with this situation; certainly it can no longer pretend debt crises do not happen to member states. What might Plan B look like? Firstly there has to be much tougher monitoring and what is fashionably being called macro prudential oversight; perhaps drawing on a pool of independent experts to appoint the equivalent of non-executives in each country, with a wide mission to advise, observe and report back Then there has to be an agreed plan to obtain funding in an emergency. There could be two stages, for example, the first to convene a bankers' club to discuss market based solutions and, if the first fails, a second stage process for calling in the IMF Members would be obliged to take-up the financial plan proposed before any risk of a default or funding shortfall could arise Member states caught cheating in any way would be reprimanded and the responsible ministers would go into the equivalent of rugby football's 'sin bin', with the club having the right to appoint external experts to supervise offenders Accepting the possibility of a large-scale debt crisis amongst member states, even if it has low probability, means that some form of insurance option should be explored for future protection. But this will take time to arrange and may even prove impossible, for example a contingency fund is simply not affordable today. So there must also be a mechanism for moving swiftly to bargaining for a collective solution with bankers and the IMF. If these plans had already been in place, and competently executed, then perhaps much of the current furore and uncertainty could have been avoided. Orderly works out better than disorderly for all concerned. Some may still argue that the global recession was a once in a century event, and it may never happen again, but it would be foolish to ignore the risks now they are so transparent. And international credibility is on the line; there has to be a plan B. Vanessa Rossi, Senior Research Fellow, International Economics, Chatham House Tue, 23 Feb 2010 15:02:29 +0000 http://www.chathamhouse.org.uk/publications/papers/view/-/id/837/ http://www.chathamhouse.org.uk/publications/papers/view/-/id/837/ Despite some difference in tone and rumours of mutual irritation, no substantive change in the Medvedev-Putin tandem is in prospect. The decision as to who will run for President next will, absent radical change in the meantime, depend on who will by late 2011 seem best placed to defend the present elite. It is not axiomatic that the next President will be Putin, let alone Medvedev. The authorities would like economic dynamism and innovation without political renovation. This is impossible, however, because the power structures and the economy are too interwoven. There are no credible signs of manageable or steady change within the elite. However, the economic crisis has shaken the ruling class. Public discussion of Russia's long-term prospects is more open and more honest than it has been for many years. This matters, because it casts doubt not just on the ability of the current elite to manage affairs, but also their right to do so. It is likely that the tension between economic renewal and the frozen political structure will continue to mount in 2010. Pressure is building within the system, and it will become increasingly difficult for outsiders, whether business or political, to manage their interests. Western companies as well as governments need to be careful to speak to more than just those currently in power and to calibrate their messages to the reality of different Russian audiences. Failure to do so will be seen as acknowledgement that they are in hock to the present regime. Tue, 23 Feb 2010 14:59:56 +0000 http://www.chathamhouse.org.uk/publications/twt/archive/view/-/id/2005/ http://www.chathamhouse.org.uk/publications/twt/archive/view/-/id/2005/ Turkey was once a forgotten country: on the periphery of Europe, fixated with joining the European Union, a reliable NATO ally during the Cold War, and unfriendly to Iran and the Arab countries. No longer. Warmer relations with the Middle East and cooler ones with the west are now the norm, not the exception. Unsurprisingly the country's foreign policy is at the centre of debates raging on the future trajectory of this geo-strategic nation. So, in which direction is it heading? Conventional wisdom increasingly sees Turkey as drifting towards the Iran-Syria axis at the expense of Israel, Europe and the United States. Turkish Prime Minister Recep Tayyip Erdogan has, after all, engaged - to quote the Israeli Foreign Ministry - in a continuous verbal 'tongue-lashing' against Israel since last year's Gaza conflict, questioned western motives towards Iran, embraced Sudanese President Omar Al-Bashir and deployed rhetorical assaults against French President Nicolas Sarkozy for opposing Turkey's accession to the European Union (EU). Turkey, in other words, is reflecting the ballad by Rudyard Kipling, 'Oh East is Eastand West is West, and never the twain shall meet!' And the situation is about to get even more disconcerting: the Turkey-Armenia reconciliation process, which last year seemed to promise a new beginning to resolve a century of animosity, is now on tenterhooks; the Cyprus peace negotiations, where there is a window of opportunity before the possible election in April of a hard-line president in northern Cyprus, are faltering; EU accession is on life-support; and tensions with Israel are growing. In addition, disagreements between Ankara and Washington are widening on Iran's nuclear plans, the Middle East peace process, and the possibility of recognising the events of 1915 as an Armenian genocide. Domestically, more discomforting events are on the horizon, from the near-standstill of the government's 'Kurdish initiative,' a democratic package to settle the long-standing Kurdish issue, to the deteriorating political atmosphere. Is Turkey condemned to a breakdown with the west? Although on the surface, it looks like the country is abandoning western leanings; the reality is far more complicated. Following the end of the Cold War twenty years ago, some sort of re-alignment was inevitable. Turkey was bound to re-integrate economically and politically into the Middle East and Eurasia, including with neighbouring Iran and Syria. This is most visible in the altering foreign trade picture. In 2008 Turkey's trade with the EU dropped below fifty percent for the first time, while that same year Middle Eastern countries accounted for 8.7 percent of its imports and 19.3 percent of its exports - both record figures. Another critical driver of the foreign policy re-orientation is Turkey's acute energy dependency. It is reliant on Russia and Iran for 63 percent and twenty percent respectively of its gas consumption; this impacts directly on foreign policymaking. Islamic nationalism or secular citizenship Much of the discussion on foreign policy is taking place in a vacuum, disconnected from the internal environment. This is a crucial mistake, as history and the domestic situation lie at the heart of the emerging foreign policy. Specifically, the assumption is that the ruling Islamist-rooted Justice and Development Party (AKP), supported by public opinion, is pursuing an ideological anti-western foreign policy contrary to the country's traditional secular, pro-western outlook. That assumption belies a proper structural assessment of which way Turkey is actually proceeding. Starting from basics, Turkey is not a predominantly secular state. Republican Turkey was founded on two conflicting ideologies: Turkish Sunni Islamic nationalism and secular citizenship. Its constitution declares that Islam is not a source of law and public policy yet the state subsidises eighty thousand Sunni mosques, pays the salaries of ninety thousand imams and Islamic officials, and mandates religion classes focussed on Sunni Islam in schools. These two conflicting components of state tradition condition foreign policy. Furthermore, public opinion seems to prefer warmer relations with Europe rather than the Middle East or Russia: 22 percent of Turks favoured 'closer cooperation' with the countries of the European Union on 'international matters' compared to only ten percent and three percent choosing countries of the Middle East and Russia respectively, according to last year's Transatlantic Survey by the German Marshall Fund. Forty-three percent in the same survey preferred Turkey to 'act alone', an isolationist streak fostered by the country's republican founders. Most revealing of all, almost half of respondents still consider EU membership a 'good thing', a figure that has been increasing in recent years despite the open hostility expressed by France and Germany. Given the legacy of the Republic's founders, it comes as no surprise that Ankara cooperated with the US to defeat 'godless' communism, built low-key relations with Israel - except for unusually close ties in the latter half of the 1990s - and applied for EU membership in 1987. At home, it was preoccupied with challenging the perceived left-wing threat to the nation's Sunni Islamic heritage. Foreign policy is an uneasy coexistence between ideology and pragmatism, a reflection of the domestic imbalance between religious nationalism and secular citizenship. Since the early 1990s, the confluence of domestic and international events, ranging from the gradual consolidation of civilian rule, to the 2003 Iraq war, the rapid adoption of modern communication technologies, and the vagaries of EU accession, are forcing people to confront the contradictions of balancing between the twin perspectives. Similarly, the outcome of the Turkey- Armenia reconciliation and Cyprus, whether positive or negative, are encouraging a rethink. Muddling through these two mutually exclusive ideologies is no longer sustainable. A choice needs to be made between a state and society based on secular citizenship or one anchored in religious nationalism. That rethink is going on with minimal intervention from outsiders such as the EU. Possible outcomes Predicting the future course of these internal discussions is fraught with imponderables and uncertainty. Nevertheless, the early indications are that the nation is moving closer to secular citizenship: the precipitous decline in popularity of the AKP and the military, public displeasure with the existing political class, the appearance of non-ideological, centrist political movements and a maturing debate on the Kurdish issue, Armenia and the role of religion in state and society. Naturally, the process would have been greatly eased by a smoother EU accessionprocedure; the flip side is that Turkey is taking full ownership of the change. Whatever the signs, the outcome is not a foregone conclusion. It is possible - just possible - that Turkey will come to embody the often-forgotten continuation of Kipling's ballad: 'But there is neither East nor West, Border, nor Breed, nor Birth, When two strong men stand face to face, tho' they come from the ends of the earth!' Fadi Hakura, Associate Fellow, Europe, Chatham House Tue, 23 Feb 2010 14:53:10 +0000 http://www.chathamhouse.org.uk/publications/twt/archive/view/-/id/2004/ http://www.chathamhouse.org.uk/publications/twt/archive/view/-/id/2004/ There is relief that human cases of Swine Flu have so far turned out to be less lethal than expected for many people. Understanding of the need to be prepared is beginning to replace annoyance over expensive unused vaccine stockpiles. But pandemic alerts might be avoided altogether with a new approach aiming to deal with diseases before they spread from animals. 'When you hear hoof beats in the barnyard, think of horses, not zebras'. This age-old adage is often used when teaching medical students not to overlook common causes of disease in patients. But based on our current understanding of new or emerging infectious diseases, we might have to rethink this advice. Emerging infectious diseases are often associated with animals; some common, some not. Their names indicate their origin: Bovine Spongiform Encephalopathy (BSE) or Mad Cow Disease; Human Monkeypox; and Avian Influenza. Thinking of zebras in addition to horses is essential to ensure early detection of these infections that are usually caused when microbes cross the species barrier from animals to humans. The recent pandemic of Swine Flu (H1N1) is a good example. It was first detected in humans in north America in April last year; is thought to have come from pigs, in which the mutant virus has been found, and has infected millions of humans. The death rate is similar to that of seasonal influenza, though the deaths from this virus predominately occur in younger age groups. However, as long as the virus continues to circulate, there is a risk it could mutate into a more virulent form. To prevent a potential epidemic or pandemic, the detection and response to outbreaks of emerging infections must be rapid. Detection most often occurs in infected humans, and the response is frequently aimed at culling the animals from which the infectious agent has come. A change in approach is required if human sickness and death from emerging infections, and negative impact on economies, are to be minimised. The shift must ensure that microbes with the potential to cross the species barrier are first identified and controlled in animals, to prevent human infection. It is also important to bear in mind that domestic livestock are not the only animals involved in the emergence of infectious diseases in humans. Wild animals can also play a role. The outbreak of Severe Acute Respiratory Syndrome (SARS) in 2003 is thought to have been caused by a mutant virus from wild animals sold in markets in the Guangdong Province of China. Infected urine from wild rodents in Malaysia was implicated in an outbreak of Leptospirosis among athletes participating in a jungle triathlon in 2000. A number of factors are thought to be involved in the increased risk of new infections emerging from livestock and wild animals, and of their spread to humans. Habitat loss to accommodate cities and agricultural land has brought wild animals and humans into closer proximity. Rising demand for meat and dairy products - driven in particular by income growth and urbanisation in the major developing economies - has led to more intensive livestock production, while human population growth and urbanisation have resulted in higher population densities. These trends are thought to ease breeches in the species barrier between animals and humans. Increased trade, travel and human migration in turn allow infectious diseases to spread quickly around the world. Economic states The need for a new approach is particularly apparent where major economic and trade interests are at stake. And with global meat exports valued at around $92 billion dollars in 2007, the potential risks are high. Avian Influenza (H5N1) among chickens has been most acute in east and Southeast Asia, where the majority of human infections and confirmed deaths have also been recorded. Infection has spread to Europe through the poultry trade, and is thought by some to have also resulted from the migration of infected wild birds. The economic impacts of the disease have been significant. In Indonesia, for instance, poultry exports dropped by 97 percent at the height of the outbreak. An estimated 240 million poultry died or had been culled worldwide by the end of 2006. The World Bank estimates that a highly fatal pandemic of Avian Influenza among humans could cost the global economy as much as $800 billion a year. Trade restrictions imposed on beef when BSE was first recognised in United States cattle were estimated to have cost the American economy $11 billion, while British beef exports virtually collapsed when it was understood in the mid-1990s that humans were at risk from infected cattle. The Mexican government estimates that the Swine Flu outbreak has cost the economy at least $2.2 billion. A small portion of this loss has come from direct costs because of human illness and death, but the largest amount is a result of lost revenue as tourism and trade have decreased. Sometimes the economic impacts can arise from somewhat irrational, if understandable, reactions. Swine Flu is again a good example. Once the disease had made that initial jump across the species barrier from pigs, the virus spread by transmitting itself directly from human to human. Although the virus did not spread among people by repeated human infection from pigs or pork, pork prices in the US fell significantly in response to consumer concerns. Egypt culled hundreds of thousands of pigs, ostensibly to protect against Swine Flu. These reactions led some to suggest renaming the disease to reduce connotations with pigs and pork. Engaging livestock producers will require an appreciation of the economic challenges that the sector faces. The risk of trade restrictions is often seen as a disincentive for livestock producers to report outbreaks. Cutting that risk by appropriate animal infection control may be the most cost-effective means of preventing such restrictions in today's globalised world, and would contribute to the new approach. Similarly, where vaccines are available to prevent animal infections, producers may prefer to run the risk of infection rather than face the expense of vaccinating their animals, in particular when they are also dealing with other diseases that have more immediate consequences for livestock production. It is also important to recognise that in the absence of compensation, farmers have little incentive to report outbreaks if it results in the culling of their animals. International action The Avian Influenza experience has demonstrated that effective disease surveillance and response in one country may require action in others. International collaboration in controlling global outbreaks included financial and technical support from the United Nations system and multilateral donors, with a focus on Southeast Asia where the disease was most prevalent. Efforts are also needed to gather political support, given that countries may be dealing with other policy priorities that are of greater domestic concern. International organisations such as the Food and Agriculture Organization (FAO), the World Health Organization (WHO), the World Organisation for Animal Health (OIE), the World Bank, the United Nations Environment Programme (UNEP) and others can play a key role, especially in finding answers to questions such as who should lead and who should pay. A number of mechanisms are being implemented by these organisations to reduce the risks. These include the appointment of a United Nations System Influenza Coordinator (UNSIC) who ensures that the UN agencies, especially those dealing with human and animal health, work together on pandemic influenza preparedness and response; and the establishment of the Global Early Warning and Response System for Major Animal Diseases, including Zoonoses (GLEWS). Reducing risk Diseases at the human/animal interface pose particular challenges, requiring collaboration not only between countries but also between wildlife, agricultural and human health sectors to avert potentially devastating impacts on ecosystems, livestock production and human health. International cooperation is needed for global alert and response, at times including trade and agricultural measures to minimise risks. Assistance to developing countries is also necessary to help them combat the emergence of diseases before they can spread around the globe. Global partnerships are starting to address some of these challenges by adding a new and coordinated dimension to health at the human/animal interface. The goal of these partnerships is to move towards preventing the emergence and establishment of animal-derived human infections, rather than responding to them when they are already spreading. More effective engagement of the wildlife and livestock sectors in international and national strategies is fundamental to achieving this goal. So now, when you hear hoof beats in the farmyard, think of zebras as well. Heike Baumüller, Senior Research Fellow, Energy, Environment and Resource Governance, Chatham House David L Heymann, Head and Senior Fellow, Centre on Global Health Security, Chatham House Tue, 23 Feb 2010 14:19:20 +0000 http://www.chathamhouse.org.uk/publications/twt/archive/view/-/id/2003/ http://www.chathamhouse.org.uk/publications/twt/archive/view/-/id/2003/ Almost exactly thirty years ago, on March 4 1980, Robert Gabriel Mugabe was elected Prime Minister of Zimbabwe. As Bob Marley performed before assembled international dignitaries, Mugabe took up office on April 18, the day of formal independence from Britain. Hopes were running high, and he was the man of the moment. But today Zimbabwe is virtually a failed state, mired in political and economic crisis. A year into a unity government which has pressed the pause button on bitter divisions, the country's future is uncertain. President Robert Mugabe's bitter struggle against white rule, and his long imprisonment, invite comparisons with Nelson Mandela. Indeed, his stature on the African continent - both for his success in Zimbabwe and for his staunch support of the anti-apartheid struggle in South Africa - is hard to overstate. After thirty years at the helm, and having just turned 86, one might think that the time was ripe for him to do what Mandela did at the same age - retire from public life and spend his time in 'quiet reflection'. But there is no sign of that. Hanging on His reluctance to step down is in some ways understandable. Another freedom-fighter-turned-despot, the late Ne Win of Burma, described holding power as like grasping a tiger's tail: once you have caught it, he said, 'there's nothing else to do but hang on.' This is something like the predicament Mugabe finds himself in. Throughout his political life, maintaining his position has required spotting potential rivals early, and taking steps to neutralise them. His political longevity attests to his considerable skill in doing that. However, this has created a major obstacle to transition in his ZANU-PF party. In the past, any talk of party succession was tantamount to a challenge to Mugabe's leadership, and anyone who raised the issue was dealt with harshly. But now it is in Mugabe's own interests - and certainly those of ZANU-PF and Zimbabwe as a whole - that some preparations are made. Mugabe has a considerable personal stake in order to protect himself and his family - and secure their significant business interests - under any new leader. And for the party and the country, it is vital to avoid a potentially dangerous power vacuum if Mugabe suddenly exits the stage. There are two leading contenders for the ZANU-PF leadership. One is Vice-President Joyce Mujuru, with the support of her husband Solomon, the powerful former army chief. The other is Emmerson Mnangagwa, the Minister of Defence and former state security chief. The lack of a clear successor has raised concerns thatZANU-PF could splinter after Mugabe's leadership ends, and with the army's top brass having a big stake in the outcome, that could trigger serious instability and violence. This means that succession within ZANU-PF is probably the most important political issue facing Zimbabwe. Even if the party has lost much of its popular support, it retains some sort of base, and will continue to have strong regional backing, even without Mugabe. It will thus remain a potent political force for some time. Some in the international community see transition in Zimbabwe coming at the polling booth, through a displacement of ZANU-PF with the Movement for Democratic Change (MDC). This is unrealistic. The focus of current efforts should therefore not be to isolate and sideline ZANU-PF, as many including Britain are doing, but precisely the opposite. The unity government has many problems, but one enormous benefit has been that it brings former political enemies around the same negotiating table, day after day. This has helped moderate the polarisation, and it provides an opportunity for the international community to engage with all sides. By reaching out to more pragmatic and forward-looking elements within ZANU-PF, rather than backing them into a corner, we increase the chances of a negotiated political settlement for the post-Mugabe era. Difficult as this may be - and although distasteful to some - the alternative is that ZANU-PF, or factions within it, attempt to cling on to power at all costs. And with its recent history of political violence, those costs could be high indeed for the people of Zimbabwe. Turning sour Mugabe's first steps on taking power were reassuring. The white population had been very nervous about what would happen when this Marxist freedom fighter took control. But to their surprise, he initially charted a conciliatory and pragmatic course - reassuring the whites that there would be no retribution, and calling on all Zimbabweans to forget the past and work together for the sake of the country. He achieved much early success, turning it into one of the most educated and well-governed nations in Africa. But violent insurgent movements often make for violent governments, and it was not long before things began to turn sour. Shortly after independence, a bitter split in the liberation movement resulted in several years of violent clashes between Shona and Ndebele groups, and Mugabe's supremacy was threatened. After he conducted a vicious campaign against the Ndebele heartland in the early 1980s, which left up to twenty thousand villagers dead, the two groups agreed on a political merger to form the ZANU-PF party with Mugabe as leader. Landing an issue But having seen off this perceived threat from Ndebele rivals, Mugabe began to face challenges from within his Shona power-base. A painful structural adjustment programme in the early 1990s, combined with a devastating drought, led to increasing rural hardship. Mugabe seized on the issue of land reform to placate his rural supporters and undermine opponents. But while it may have been a shrewd political move, it was to have disastrous consequences for the country and its economy. In many ways, the land question was ideal for Mugabe's purposes. Land is an extremely emotive issue in Africa, and the highly skewed distribution - with much of the most productive land in the hands of a small number of white commercial farmers - had long been seen as an injustice that would have to be corrected. This was an issue that was guaranteed to win Mugabe political support. In the 1990s his government gave itself increasing control over who land was taken away from, and to whom it was reallocated. This meant it became a lucrative source of economic rents to reward his supporters. And it was also an effective way to punish some of his strongest opponents - that is, the commercial farmers, whom he felt had betrayed his conciliatory gestures at independence by continuing to support opposition candidates, and encouraging their farm workers - a significant proportion of the electorate - to do the same. Mugabe's handling of the land issue brought about another perceived betrayal, this time by former colonial power Britain. The root of the problem was the 1979 Lancaster House Agreement which ushered in independence the following year. The Ian Smith regime had unilaterally declared independence back in 1965, but this was never recognised by Britain. The Agreement provided that the post-independence government could requisition land only if full compensation were paid; this was seen by the liberation movement as forcing the people to buy-back something that had been stolen from them. It took a public commitment from the British government to fund land acquisitions - provided that transactions were on a 'willing buyer, willing seller' basis - for Mugabe to agree to this significant concession. But this vague commitment never translated into the level of donor support envisaged at the Lancaster House negotiations. And by the 1990s, a large-scale land-grab was in progress, and it was clear that it had become an exercise in political patronage rather than equitable redistribution. Britain was no longer ready to fund such an exercise, particularly since the 'willing seller' principle was not being adhered to. A letter from Britain's then International Development Secretary Claire Short in 1997, couched in an unfortunately tactless way, was in Mugabe's mind a confirmation of the betrayal. By the late-1990s, the economic situation was rapidly deteriorating. The country was running large deficits, its international debt was becoming an increasing burden, and its moves to requisition commercial farmland were alarming investors. In the midst of this, Mugabe faced a serious political threat from the War Veterans' Association, which was angered by the government's failure to deliver on earlier compensation pledges, even though most of the funds that had been provided were embezzled by the organisation's leaders. Mugabe's efforts to buy-off the war veterans effectively bankrupted the government, and the currency went into freefall, dragging the broader economy with it. Facing growing opposition to his rule, Mugabe embarked on a series of moves designed to placate the war veterans and rally his traditional support base. A large number of commercial farms were seized by war veterans - or people claiming to be such - as well as corrupt politicians, and there was widespread violence against political opponents, including the trade unions and the opposition MDC. A military deployment to the Democratic Republic of the Congo in support of the embattled government of President Laurent Kabila was also very costly in budgetary terms, but allowed massive profiteering from natural resource extraction by Zimbabwe's generals, ensuring their continued support. Mugabe also stepped up his rhetoric, blaming the British for historical injustices over land, and a contemporary refusal to honour their obligations, and insisting that the greed of 'white farmers of British extraction' was responsible for the hardships facing the people. Antagonistic anglophile This antagonism towards white Zimbabweans and the British government was born more of political expediency than disposition. Mugabe had always been an anglophile, admiring British tradition and relishing his close relationship with the monarchy. But he felt he was a victim of double-standards, and with some reason. His rule had always been characterised by political violence, the worst episode being the slaughter of Ndebele villagers in the early 1980s. But this had not attracted much international criticism, and he had continued to be regarded as a great African statesman - saluted for his 'gentle firmness in the face of anger', in the words of the University of Massachusetts when it awarded him an honorary doctorate in 1986. In 1994 he had been knighted by Queen Elizabeth. But he felt that it was only when he moved against white farmers that he began to be described as a despot, and his honours started to be withdrawn; his knighthood was revoked in 2008. Eventually, an 'unholy alliance' of white Zimbabweans and the British government became the primary target of his political rhetoric. Political pause Zimbabwe continued its slide into the abyss. The decimation of the commercial farming sector - which had accounted for forty per cent of export earnings - impacted heavily on the economy, and the reallocated land was mostly underutilised, prompting major domestic food shortages. By mid-2008 the country was experiencing one of the worst episodes of hyperinflation in history, officially put at 231 million per cent, with prices of basic goods doubling every day. Even with a high degree of electoral fraud and political violence, the opposition MDC won a parliamentary nmajority, but pulled out of the presidential run-off because of fears of further violence. It was this economic and political crisis that led to the current year-old power-sharing government - which should be seen more as a temporary ceasefire than as any sort of coalition. The major achievement of the unity government has been to halt the economic decline and to press the pause button on the political crisis. But what happens next in Zimbabwe depends in large part on what the future holds for Mugabe. Richard Horsey, Open Society Fellow and former United Nations official, based in southern Africa Tue, 23 Feb 2010 12:31:57 +0000 http://www.chathamhouse.org.uk/publications/twt/archive/view/-/id/2002/ http://www.chathamhouse.org.uk/publications/twt/archive/view/-/id/2002/ In January, there was a rare event in Africa. Military rulers agreed voluntarily to hand over power to civilians, under pressure from donors but not under force of arms. The full transfer of power in the West African nation of Guinea has to wait until elections, set for June, although a transitional government of civilians and the military is already being formed. If things go well, Guinea could be governed by a democratic administration for the first time in its history. But there might be a spoiler: Chinese interests have sealed huge mineral deals. Guinea's path to democracy is by no means assured. There are still many in the military who wish to retain power and they will be one of the major obstacles as the country tries to break away from dictatorial rule, more than fifty years after independence from France in 1958. The competition for power will be all the fiercer as international companies jostle for control of the country's enormous reserves of bauxite - the ore from which most aluminium is produced - and iron. World prices for both these commodities are rising steeply, increasing the stakes. Guinea also has diamonds, gold and uranium. Exploration is under way to see if its coastal waters hold oil. There is a risk investors who benefited from the military regime could back their friends, or that the proceeds from multibillion dollar investments could be siphoned-off by powerful elements of the military; a particular worry in a country where the existence of ethnic militias had been raising fear of factional fighting. Guinea is situated in a troubled region. Its West African neighbours have all gone through civil war since the late 1980s, with Liberia and Sierra Leone suffering particularly grievously at the hands of drugged-up armies including many child soldiers. Côte d'Ivoire experienced a civil war in 2002-2003 after ethnic rivalry in its army, and is still divided between a rebelheld north and government-controlled south. Among Guinea's investors, China - or Chinese firms - now bears the most responsibility to ensure it in no way fuels instability. Since the current military regime took power in a 2008 coup, Chinese companies have come close to taking over Guinea's economy entirely, as other multinational investors have had property confiscated, or been paralysed by political uncertainty. Junta violence Guinea's junta took power in December 2008, after the death of Lansana Conté, its dictator of 25 years. The head of the junta, 44- year-old army Captain Moussa Dadis Camara, named himself president and followed a familiar path for African dictators. He gained popularity at first by leading a campaign against corruption, personally interrogating alleged drug traffickers on television. He promised new elections in which he would not stand, then backtracked, suggesting he would put himself forward as a candidate after all. The opposition cried foul and when it tried to demonstrate in a sports stadium, there was a massacre by the military: at least 156 killed and dozens of women raped and sexually abused, according to a United Nations report. The killings confirmed the pariah status of Guinea's new regime. The European Union, African Union and the United States all imposed sanctions. France suspended its military aid. The UN experts' report on the massacre recommended the International Criminal Court prosecute those responsible, singling out Camara and close aides. Then, last December, the head of the presidential guard, Lieutenant Aboubacar Toumba Diakité, shot Camara in the head at close range during an argument over who should take responsibility for the killings. Camara was flown to Morocco for treatment and, incredibly, survived. In the meantime, however, his deputy, Sekouba Konaté, took over. It was Konaté who arranged for the powersharing government, with opposition figure Jean-Marie Doré as interim prime minister. Riches or illusion? Under Camara, Chinese companies struck a mega-deal with Guinea. A company called China International Fund has agreed to invest at least $7 billion. Under the terms of the deal, the Fund and Guinea set-up a company based in Singapore, which would hold the rights to all of the country's oil, gas and minerals, other than those already subject to existing contracts. The joint company - the Guinea Development Corporation - is committed under the agreement to build major infrastructure projects in Guinea, including: a long-dreamt-of railway to transport the country's unexploited iron ore reserves to the coast; a new deep-water port to export this ore; and three new hydroelectric dams, which could help power new aluminium smelters. Such projects, if carried out successfully, would transform the Guinean economy, which has more than half the world's bauxite reserves and is the world's largest exporter of the commodity. Not all in Guinea are happy about the deal, however. 'How can you believe that we could inject so much money into the Guinean economy, while the gross domestic product of the country is only $3 billion?' Sidya Touré, an opposition leader and former prime minister, said after negotiations were opened. Referring to some of the infrastructure projects promised by China, he added: 'Where are the cars that will be driving on these highways? Where are the trains? We must be serious. All this is illusion.' The extent of China's involvement in the economy goes even further, as negotiations have been opened to sell the Guinean assets of other companies to Chinese interests. These include oil exploration rights covering virtually all the coastal waters. China could also benefit from a spat over the mammoth Friguia aluminium refinery and mining complex some ninety miles northeast of the capital Conakry. In April 2008, Camara publicly lambasted a 2006 deal under which Russian firm United Company RusAl gained control of Friguia, saying RusAl had bought it from the state at well under a tenth of its true value. A court has ruled the purchase invalid and the Minister of Mines, Mahmoud Thiam, is threatening to confiscate Friguia, unless RusAl pays out $860 million. The government says it has already opened talks with China on the sale of the mine. RusAl plans to fight its corner through international courts. The role of the Chinese state in all this is unclear. While the Chinese government denies having anything to do with the China International Fund, a Chatham House report published last year, Thirst for African Oil, suggests it may have links to the Chinese security services. Along with the China International Fund and its partners, others to have done well under the military regime include diamond billionaire Benny Steinmetz, the fifth richest person in Israel. Under former President Conté, Australian mining multinational Rio Tinto Zinc was stripped of half of its iron ore mine in Simandou, southern Guinea, and saw it handed to Steinmetz's BSGR. When Camara was inpower, a Guinean court upheld the decision. Rio Tinto had invested $400 million in the mine and planned to invest $10 billion more, with the aim of making it the biggest iron ore mine outside Australia and Brazil. Rio Tinto said late last year that it was trying to resolve the matter with the Guinean authorities by negotiating 'in good faith'. Other multinationals have had problems under the military, including US mining giant Alcoa which reportedly faced official opposition when it evacuated its expatriates after the coup. Australia's BHP Billiton appears to have put its plans for a 5.4-million-ton capacity aluminium refinery on hold until it becomes clearer what Guinea's long-term political future will be. The China International Fund, unlike BHP Billiton and others, does not seem to regard the instability of military rule as a brake on its ambition. Far from it, the company seized on the coup to strike deals potentially giving it overwhelming control over the economy. The resources-for-infrastructure agreement mirrors other multibillion-dollar deals by Chinese interests elsewhere in Africa, including in other pariah regimes such as Zimbabwe and Sudan. As in Guinea, China's rising demand for resources trumped any concerns over human rights violations. China's trade with Africa has multiplied more than ten times since 2001, reaching $100 billion in 2008. It has developed tight links and shared interests with a number of the continent's dictatorships and repressive regimes. It may be too much to hope that the Chinese communist dictatorship joins the west in supporting Guinea's efforts to become a democracy. The question is - will its economic interests make it a spoiler? Daniel Balint-Kurti, Associate Fellow, Africa Programme, Chatham House Tue, 23 Feb 2010 12:14:59 +0000