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FRED
02-23-09, 10:29 AM
We have created a new forum to track the impact of the global economic crisis on governments around the world. The objective is to explore the impact of political instability on currency values and asset prices.

I'll start things off.
120,000 people pack streets of Dublin in angry protest against government's handling of economic crisis (http://www.dailymail.co.uk/news/worldnews/article-1151843/120-000-people-pack-streets-Dublin-angry-protest-governments-handling-economic-crisis.html)

Up to 120,000 people marched through Dublin today in an emotional and angry national demonstration over the Irish Government's handling of the economic crisis.

The sheer size of the turnout meant it had to set off earlier than was organised, with the parade stretching the entire length of its two kilometre route at one stage.


Chaos after crowds swarm Fort Lauderdale street for housing help (http://www.sun-sentinel.com/community/news/fort_lauderdale/sfl-flbhousing0222sbfeb22,0,4560185.story)

FORT LAUDERDALE - Thousands of people seeking government-subsidized housing packed the street Saturday morning in front of the Robert P. Kelly Housing Authority building until police shut down the line because the crowd had grown unmanageable.

Officials estimated that 4,500 people were waiting in line at 8 a.m. when the Housing Authority of Fort Lauderdale (http://www.sun-sentinel.com/topic/us/florida/broward-county/fort-lauderdale-PLGEO100100403070000.topic)<!-- no block elements are allowed here (P, DIV, TABLE, UL, LI, DT, DD, PRE, FORM, and H1-H6 html tags should all be avoided. Also BR should be avoided, even though it is technically an inline element, because it screws up our paragraph divisions). Spaces / newlines between the outer span tags also seem to have a negative effect in IE, eliminating the space after the link... --><!-- no ad -->http://sun-sentinel.design.tii.trb/media/thumbnails/blurb/2008-11/31011780-11143408.jpg (http://www.sun-sentinel.com/business/custom/consumer/sfl-restaurantinspections-database,0,5864281.framedurl?track=intext) began distributing the 3,000 available applications for Section 8 housing, a federal program that provides rent subsidies to landlords to help low-income people find affordable housing.

BiscayneSunrise
02-23-09, 10:44 AM
The Kuwait Times recently printed this article. Sorry, I scoured the KT website and couldn't find a link.

ISLAMIC SYSTEM WAY TO RESOLVE UNEMPLOYMENT

Dr. Ahmad Aziz al-Muzaini, the Secretary of the Shura and Salam Group, said that following Islamic doctrine would be one solution to the problem of unemployment and the excessive numbers of expatriate workers.

Calling on women to take care of their own homes and families rather than employing domestic staff, Dr. Al Muzaini said that by doing so millions of Kuwaiti Dinars transfered outside the country annually would be saved and invested instead in the local economy. If domestic workers proved to be essential, he said, local and other Arab people could do these jobs rather than bringing in expatriates from thousands of miles away.

Dr. Al-Muzaini said that his group has also recommended a temporary suspension of the import of cars to Kuwait, saying that each household in the country currently owns several cars, which is causing numerous accidents and traffic congestion. He also recommended that more women be employed as taxi drivers catering to an all female clientele, which would be in the female passengers interests and ensure their safety.


Takeaways:

The gravy train offered to Kuwaiti citizens over the years is beginning to get too expensive so this is a first effort softening the locals to prepare for the day when they may actually have to work for a living.

Also, the unskilled expats are being put on notice that they are no longer wanted and to start thinking about returning home before the deportations become mandatory.

krakknisse
02-23-09, 11:49 AM
The hot spots are:
UK:


Ireland
Great Britain

Europe:

Former Soviet block states of Eastern Europe
Greece
Spain
Italy



I gather that Fred doesn't mind stepping on some geographic toes.

Great Britain is:
1. the ninth largest island in the world, located in in the archipelago of the British Isles (http://en.wikipedia.org/wiki/British_Isles_%28terminology%29). Ireland would then be "Little Britain" except that they wouldn't like to be called that. I gather that they would be even more opposed to be considered as a part of the UK.
OR
2. the kingdom formed from the union of England and Scotland, in existence from 1707 to 1801, when Ireland was merged in to form the Kingdom of Great Britain and Ireland, lasting 1801-1927).

The United Kingdom (http://en.wikipedia.org/wiki/United_Kingdom) is conventionally the name of what is formally known as United Kingdom of Great Britain and Northern Ireland, lasting from 1927 until the present.

Europe (http://en.wikipedia.org/wiki/Europe) is the westernmost part of the landmass of Eurasia, including the British Isles. All of Greece, Spain, Italy are part of the European Union (http://en.wikipedia.org/wiki/European_union), and most of the former Soviet block states of Eastern Europe (http://en.wikipedia.org/wiki/Eastern_Bloc) are also EU members, apart from Belarus and Ukraine.

You also left out my Icelandic brothers, thus depriving them of their rightful and honorable place as first out of the gates in the "FUBAR Country Olympics". Iceland is a part of Europe, as the Americas lost any claim on that mid-Atlantic island when their military forces left Keflavik abruptly in 2006. People interested in a closer look at what's going on in Iceland can head over to http://newsfrettir.com/ (which is a weird Anglicism meaning "newsnews").

You left Portugal out of the PIGS stew (http://en.wikipedia.org/wiki/PIGS_%28economics%29) with which it is usually rightfully grouped. Portugal also has a high debt to GDP ratio, a large public sector and some corruption.

While I'm at it: Scandiavia is a peninsula comprising Norway and Sweden, but Scandinavian usually includes Norway, Sweden and Denmark, while the Nordic countries and Nordic region are used officially and unambiguously to identify the nations of Norway, Finland, Sweden, Iceland, Denmark and the Faroe Islands. I really hope Fred doesn't need these particulars, but fear that "Government Implode" will also reach my home region.

Apart from that, kudos for an interesting topic!

I'd suggest that people brush up on their history skills. For example, take the following:

Which European country went through the following in the 20th century (within recent memory):
A. Civil War
B. A long period of military rule
C. Revolution
D. Being invaded or involved in a major war
E. Chronic fiscal mismanagement under a civilian regime

The answer is of course Italy, Greece, Portugal, Spain. Many other European countries were only so lucky as to suffer from a few elements of this potpourri: UK (D, E), France (E), Germany (A, B, C, D, E), Norway (D, E), Sweden (E), Benelux countries (B, D, E), Poland (A, B, C, D, E) etc. etc. etc.

You Americans have no idea how good you have it :D

*T*
02-23-09, 02:53 PM
UK:

Ireland
Great Britain


The format of this list makes it look like Ireland is part of the UK which as you know it is not.

Edit: Sorry Kraknisse, just read your post, you did a much more comprehensive job!

edit 2: Actually Kraknisse, Great Britain is called that with comparison to Brittany, now part of France, and not Ireland.

don
02-23-09, 07:26 PM
The national chain restaurant where my granddaughter works has gone to paper plates. Pitched under "green" cover.

I'm waiting for that diner moment when a waitress snaps from one too many "plates" bending in half in her hands and she being billed for the spill.

A Potemkin moment....:)

cjppjc
02-23-09, 11:12 PM
I believe the Brits are really sunk.

Btw: Isn't it about that time for MEGA to start pounding us with bad news from that corner of the world?

cobben
03-01-09, 03:02 AM
Well, being Swedish-American & domiciled in Latvia, with some experience from odd parts of the CIS countries, I would say focus on the Ukraine as the canary for Eastern Europe (and the Swedish banks).

My soviet bred Russian speaking wife derided the Ukrainians as having a "bazaar mentality" (sorry to offend any Ukrainians listening, just telling it like it is), meaning to not expect any reasonable semblance of political order there anytime soon.

The Baltics have come a long way in a short time towards resurrecting their pre-soviet western European way of life, for example here in Latvia they have done a remarkable job in creating a western style police force with relatively little corruption out of the soviet style militia which had an entirely different function in society.

The EU is not going to let their new members slide back down into anarchy, that is simply not an option - unless the EU as a whole goes down.

So I'd watch the left-over states stuck in between the EU and the RF, that is Ukraine & Belarus, but also Modova, Turkey, etc.

BiscayneSunrise
03-01-09, 06:48 AM
Ukraine is also the canary for the new cold war. Russia had its borders (and influence) pushed back to medieval levels after the cold war. Putin is pushing the envelope outward again.

The invasion of Georgia and the natural gas wars were just wake up calls for the west but the real prize is Ukraine. Russia wants, more than anything, for Ukraine to return securely into it's sphere of influence.

Turkey is safely independent from Russian influence and Belarus is still firmly in the Russian orbit.

Poland and the Baltic states are nice to haves for Russia but it is Ukraine that is crucial to Russia.

raja
03-01-09, 12:51 PM
Well, being Swedish-American & domiciled in Latvia, with some experience from odd parts of the CIS countries, I would say focus on the Ukraine as the canary for Eastern Europe (and the Swedish banks).

My soviet bred Russian speaking wife derided the Ukrainians as having a "bazaar mentality" (sorry to offend any Ukrainians listening, just telling it like it is), meaning to not expect any reasonable semblance of political order there anytime soon.

I was explaining to my Ukrainian wife that some countries in Europe were in trouble because they had lent money to Ukraine, and she said, "What? Are they crazy? Lend money to Ukraine? Talk to any person on the street in Ukraine and they would tell you that is a foolish idea."

raja
03-01-09, 12:52 PM
Ukraine is also the canary for the new cold war. Russia had its borders (and influence) pushed back to medieval levels after the cold war. Putin is pushing the envelope outward again.

The invasion of Georgia and the natural gas wars were just wake up calls for the west but the real prize is Ukraine. Russia wants, more than anything, for Ukraine to return securely into it's sphere of influence.

Turkey is safely independent from Russian influence and Belarus is still firmly in the Russian orbit.

Poland and the Baltic states are nice to haves for Russia but it is Ukraine that is crucial to Russia.
Why is Ukraine crucial to Russia? Agriculture?

cobben
03-01-09, 03:37 PM
Kiev was the capital of the original Rus empire (look up St. Anna of Novgorod if you want to read some interesting history), the Ukrainian language is very closely related to Russian, and is called "little Russian" by the Russians. Ukraine together with "the south" was the breadbasket area of the USSR. The RF still has it's main fleet based in the Krim.

Belarus by the way means White Russia, and is similarly closely related to Russia, but of much less strategic & economic importance, and has never been given a chance to make closer ties with western Europe. Which did not stop the IMF from bailing Belarus out also recently. Everything I've ever heard about Belarus makes me completely uninterested in going there for some reason. The Black Sea area of Ukraine on the other hand could be a new Riviera if things straightened out there. Odessa was once a major European cultural center I believe.

BiscayneSunrise
03-01-09, 04:08 PM
Take a look at a map of the region. Russia occupies the northern portion of the continent with one finger of territory extending down to the Caucasus.

With Ukraine and Kazhakstan independent or friendly to the west, that corridor to the Caucasus is narrowed to a 600 mile pinchpoint. For Russia to lose influence over the Caucasus is unthinkable. The key to keeping influence there is maintaining control over Ukraine, at least the eastern half of Ukraine

c1ue
03-01-09, 09:16 PM
The Ukraine is vital for many reasons, but the primary reason is Sevastopol.

Russia fought numerous wars with Turkey, the UK, and others in order to get and keep a warm water port.

Sevastopol is where the Russian fleet is based. Furthermore the Ukraine sits astraddle almost all of the major rail and pipeline routes going between Russia and Europe.

This is why the Ukraine turning away from the Russian sphere is seen as an act of war.

BiscayneSunrise
03-02-09, 07:29 PM
All true.

The eastern half of Ukraine is mostly populated by ethnic Russians who, of course, sympathize with Russia. The western half of Ukraine is predominantly ethnic Ukranian.

Now that Russia is working hard to undermine the current pro western government in Ukraine it is becoming increasingly difficult to hold that divided country together. Either Ukraine falls completely into the Russian orbit again or it splits in half. (my guess is that it will be the former.)

So, the next big question is: does eastern europe follow the same path as Ukraine?

GRG55
03-03-09, 01:43 AM
The Ukraine is vital for many reasons, but the primary reason is Sevastopol.

Russia fought numerous wars with Turkey, the UK, and others in order to get and keep a warm water port.

Sevastopol is where the Russian fleet is based. Furthermore the Ukraine sits astraddle almost all of the major rail and pipeline routes going between Russia and Europe.

This is why the Ukraine turning away from the Russian sphere is seen as an act of war.

Isn't the Crimea an ongoing source of dispute between Russia and Ukraine? I gather it was taken from the Turks by the Russians, and only appended to Ukraine [by the Russians] in the mid-20th century. I remember listening to a Russian-born colleague at work in the early '90's telling me how Crimea was really part of Russia and how "it tore his heart out" when Yeltsin "gave it away" in the post-USSR aftermath.

c1ue
03-03-09, 11:05 AM
GRG,

Yes, the Crimea is a major part of Soviet and Russian nationalistic base.

The original taking of the Crimea was for the warm water port - Sevastopol; since then it has morphed into something approaching the Alamo.

But ultimately it goes to Russia's internal view as being the bridge between Europe and Asia.

In modern times - Sevastopol exists to balance out Turkey and serve as the southernmost lynchpin to Russian dominance of trade routes from Central Asia.

Just as a note: Ukraine occupies the Lexington iconic equivalence :)

Contemptuous
03-18-09, 04:19 AM
Interesting analysis of Turkey and Russia by STRATFOR maybe can adds a little more perspective to this thread's mentions of their interaction in the Caucasus, Black Sea region. It is a fascinating part of the world and the interaction of these two powers has a long history.

_____________________


<DIV class="" id=node-133943><!--STRATFOR Today &raquo; (http://www.stratfor.com/analysis)-->TURKEY AND RUSSIA ON THE RISE

March 17, 2009


(http://www.stratfor.com/?utm_source=GWeekly&utm_campaign=none&utm_medium=email)By Reva Bhalla, Lauren Goodrich and Peter Zeihan
Russian President Dmitri Medvedev reportedly will travel to Turkey in the near future to follow up a recent four-day visit by his Turkish counterpart, Abdullah Gul, to Moscow. The Turks and the Russians certainly have much to discuss.

Russia is moving aggressively to extend its influence throughout the former Soviet empire, while Turkey is rousing itself from 90 years of post-Ottoman isolation. Both are clearly ascendant powers, and it would seem logical that the more the two bump up against one other, the more likely they will gird for yet another round in their centuries-old conflict. But while that may be true down the line, the two Eurasian powers have sufficient strategic incentives to work together for now.
Russia’s World

Russia is among the world’s most strategically vulnerable states. Its core, the Moscow region, boasts no geographic barriers to invasion. Russia must thus expand its borders to create the largest possible buffer for its core, which requires forcibly incorporating legions of minorities who do not see themselves as Russian. The Russian government estimates that about 80 percent of Russia’s approximately 140 million people are actually ethnically Russian, but this number is somewhat suspect, as many minorities define themselves based on their use of the Russian language, just as many Hispanics in the United States define themselves by their use of English as their primary language. Thus, ironically, attaining security by creating a strategic buffer creates a new chronic security problem in the form of new populations hostile t o Moscow’s rule. The need to deal with the latter problem explains the development of Russia’s elite intelligence services, which are primarily designed for and tasked with monitoring the country’s multiethnic population.



http://www.stratfor.com/mmf/133880
(click image to enlarge)




(http://web.stratfor.com/images/fsu/map/Russia_Balkans_Caucasus_800.jpg)
Russia’s primary challenge, however, is time. In the aftermath of the Soviet collapse, the bottom fell out of the Russian birthrate, with fewer than half the number of babies born in the 1990s than were born in the 1980s. These post-Cold War children are now coming of age; in a few years, their small numbers are going to have a catastrophic impact on the size of the Russian population. By contrast, most non-Russian minorities — in particular those such as Chechens and Dagestanis, who are of Muslim faith — did not suffer from the 1990s birthrate plunge, so their numbers are rapidly increasing even as the number of ethnic Russians is rapidly decreasing. Add in deep-rooted, demographic-impacting problems such as HIV, tuberculosis and heroin abuse — concentrated not just among ethnic Russians but a lso among those of childbearing age — and Russia faces a hard-wired demographic time bomb. Put simply, Russia is an ascending power in the short run, but it is a declining power in the long run.

The Russian leadership is well aware of this coming crisis, and knows it is going to need every scrap of strength it can muster just to continue the struggle to keep Russia in one piece. To this end, Moscow must do everything it can now to secure buffers against external intrusion in the not-so-distant future. For the most part, this means rolling back Western influence wherever and whenever possible, and impressing upon states that would prefer integration into the West that their fates lie with Russia instead. Moscow’s natural gas crisis with Ukraine, August 2008 war with Georgia, efforts to eject American forces from Central Asia and constant pressure on the Baltic states all represent efforts to buy Russia more space — and with that space, more time for survival.

Expanding its buffer against such a diverse and potentially hostile collection of states is no small order, but Russia does have one major advantage: The security guarantor for nearly all of these countries is the United States, and the United States is currently very busy elsewhere. So long as U.S. ground forces are occupied with the Iraqi and Afghan wars, the Americans will not be riding to the rescue of the states on Russia’s periphery. Given this window of opportunity the Russians have a fair chance to regain the relative security they seek. In light of the impending demographic catastrophe and the present window of opportunity, the Russians are in quite a hurry to act.
Turkey’s World

Turkey is in many ways the polar opposite of Russia. After the dissolution of the Ottoman Empire following World War I, Turkey was pared down to its core, Asia Minor. Within this refuge, Turkey is nearly unassailable. It is surrounded by water on three sides, commands the only maritime connection between the Black and Mediterranean seas and sits astride a plateau surrounded by mountains. This is a very difficult chunk of territory to conquer. Indeed, beginning in the Seljuk Age in the 11th century, the ancestors of the modern Turks took the better part of three centuries to seize this territory from its previous occupant, the Byzantine Empire.

The Turks have used much of the time since then to consolidate their position such that, as an ethnicity, they reign supreme in their realm. The Persians and Arabs have long since lost their footholds in Anatolia, while the Armenians were finally expelled in the dying days of World War I. Only the Kurds remain, and they do not pose a demographic challenge to the Turks. While Turkey exhibits many of the same demographic tendencies as other advanced developing states — namely, slowing birthrates and a steadily aging population — there is no major discrepancy between Turk and Kurdish birthrates, so the Turks should continue to comprise more than 80 percent of the country’s population for some time to come. Thus, while the Kurds will continue to be a source of nationalistic friction, they do not constitute a fundamental challenge to the power or operations of the Turkish state, like minorities in Russia are destined to do in the years ahead.

Turkey’s security is not limited to its core lands. Once one moves beyond the borders of modern Turkey, the existential threats the state faced in years past have largely melted away. During the Cold War, Turkey was locked into the NATO structure to protect itself from Soviet power. But now the Soviet Union is gone, and the Balkans and Caucasus — both former Ottoman provinces — are again available for manipulation. The Arabs have not posed a threat to Anatolia in nearly a millennium, and any contest between Turkey and Iran is clearly a battle of unequals in which the Turks hold most of the cards. If anything, the Arabs — who view Iran as a hostile power with not only a heretical religion but also with a revolutionary foreign policy calling for the overthrow of most of the Arab regimes — are practically welcoming the Turks back (http://www.stratfor.com/analysis/200). Despite both its imperial past and its close security association with the Americans, the Arabs see Turkey as a trusted mediator, and even an exemplar.

With the disappearance of the threats of yesteryear, many of the things that once held Turkey’s undivided attention have become less important to Ankara. With the Soviet threat gone, NATO is no longer critical. With new markets opening up in the former Soviet Union, Turkey’s obsession with seeking EU membership has faded to a mere passing interest. Turkey has become a free agent, bound by very few relationships or restrictions, but dabbling in events throughout its entire periphery. Unlike Russia, which feels it needs an empire to survive, Turkey is flirting with the idea of an empire simply because it can — and the costs of exploring the option are negl igible.

Whereas Russia is a state facing a clear series of threats in a very short time frame, Turkey is a state facing a veritable smorgasbord of strategic options under no time pressure whatsoever. Within that disconnect lies the road forward for the two states — and it is a road with surprisingly few clashes ahead in the near term.
The Field of Competition

There are four zones of overlapping interest for the Turks and Russians.
First, the end of the Soviet empire opened up a wealth of economic opportunities, but very few states have proven adept at penetrating the consumer markets of Ukraine and Russia. Somewhat surprisingly, Turkey is one of those few states. Thanks to the legacy of Soviet central planning, Russian and Ukrainian industry have found it difficult to retool away from heavy industry to produce the consumer goods much in demand in their markets. Because most Ukrainians and Russians cannot afford Western goods, Turkey has carved out a robust and lasting niche with its lower-cost exports; it is now the largest supplier of imports to the Russian market. While this is no exercise in hard power, this Turkish penetration nevertheless is cause for much concern among Russian authorities.

So far, Turkey has been scrupulous about not politicizing these useful trade links beyond some intelligence-gathering efforts (particularly in Ukraine). Considering Russia’s current financial problems, having a stable source of consumer goods — especially one that is not China — is actually seen as a positive. At least for now, the Russian government would rather see its trade relationship with Turkey stay strong. There will certainly be a clash later — either as Russia weakens or as Turkey becomes more ambitious — but for now, the Russians are content with the trade relationship.

Second, the Russian retreat in the post-Cold War era has opened up the Balkans to Turkish influence. Romania, Bulgaria and the lands of the former Yugoslavia are all former Ottoman possessions, and in their day they formed the most advanced portion of the Ottoman economy. During the Cold War, they were all part of the Communist world, with Romania and Bulgaria formally incorporated into the Soviet bloc. While most of these lands are now absorbed into the European Union, Russia’s ties to its fellow Slavs — most notably the Serbs and Bulgarians — have allowed it a degree of influence that most Europeans choose to ignore. Additionally, Russia has long held a friendly relationship with Greece and Cyprus, both to complicate American policy in Europe and to provide a flank against Turkey. Still, thanks to proximity and trading links, Turkey clearly holds the upper hand in this theater of competition.

But this particular region is unlikely to generate much Turkish-Russian animosity, simply because both countries are in the process of giving up.
Most of the Balkan states are already members of an organization that is unlikely to ever admit Russia or Turkey: the European Union. Russia simply cannot meet the membership criteria, and Cyprus’ membership in essence strikes the possibility of Turkish inclusion. (Any EU member can veto the admission of would-be members.) The EU-led splitting of Kosovo from Serbia over Russian objections was a body blow to Russian power in the region, and the subsequent EU running of Kosovo as a protectorate greatly limited Turkish influence as well. Continuing EU expansion means that Turkish influence in the Balkans will shrivel just as Russian influence already has. Trouble this way lies, but not between Turkey and Russia. If anything, their joint exclusion might provide some room for the two to agree on something.

The third area for Russian-Turkish competition is in energy, and this is where things get particularly sticky. Russia is Turkey’s No. 1 trading partner, with energy accounting for the bulk of the trade volume between the two countries. Turkey depends on Russia for 65 percent of its natural gas and 40 percent of its oil imports. Though Turkey has steadily grown its trade relationship with Russia, it does not exactly approve of Moscow’s penchant for using its energy relations with Europe as a political weapon. Russia has never gone so far as to cut supplies to Turkey directly, but Turkey has been indirectly affected more than once when Russia decided to cut supplies to Ukraine because Moscow felt the need to reassert its writ in Kiev.

Sharing the Turks’ energy anxiety, the Europeans have been more than eager to use Turkey as an energy transit hub for routes that would bypass the Russians altogether in supplying the European market. The Baku-Tbilisi-Ceyhan (BTC) pipeline is one such route, and others, like Nabucco, are still stuck in the planning stages. The Russians have every reason to pressure the Turks into staying far away from any more energy diversification schemes that could cost Russia one of its biggest energy clients — and deny Moscow much of the political leverage it currently holds over the Europeans who are dependent on the Russian energy network.

There are only two options for the Turks in diversifying away from the Russians. The first lies to Turkey’s south in Iraq and Iran. Turkey has big plans for Iraq’s oil industry, but it will still take considerable time to upgrade and restore the oil fields and pipelines that have been persistently sabotaged and ransacked by insurgents during the fighting that followed the 2003 U.S. invasion. The Iranians offer another large source of energy for the Turks to tap into, but the political complications attached to dealing with Iran are still too prickly for the Turks to move ahead with concrete energy deals at this time. Complications remain for now, but Turkey wi ll be keeping an eye on its Middle Eastern neighbors for robust energy partnerships in the future.

The second potential source of energy for the Turks lies in Central Asia, a region that Russia must keep in its grip at all costs if it hopes to survive in the long run. In many ways this theater is the reverse of the Balkans, where the Russians hold the ethnic links and the Turks the economic advantage. Here, four of the five Central Asian countries — Kazakhstan, Uzbekistan, Kyrgyzstan and Turkmenistan — are Turkic. But as a consequence of the Soviet years, the infrastructure and economies of all four are so hardwired into the Russian sphere of influence that it would take some major surgery to liberate them. But the prize is a rich one: Central Asia possesses the world's largest concentration of untapped energy reserves. And as the term “central” implies, whoever controls the region can project power into the former Soviet Union, China and South Asia. If the Russians and Turks are going to fight over something, this is it.

Here Turkey faces a problem, however — it does not directly abut the region. If the Turks are even going to attempt to shift the Central Asian balance of power, they will need a lever. This brings us to the final — and most dynamic — realm of competition: the Caucasus.

Turkey here faces the best and worst in terms of influence projection. The Azerbaijanis do not consider themselves simply Turkic, like the Central Asians, but actually Turkish. If there is a country in the former Soviet Union that would consider not only allying with but actually joining with another state to escape Russia’s orbit, it would be Azerbaijan with Turkey. Azerbaijan has its own significant energy supplies, but its real value is in serving as a willing springboard for Turkish influence into Central Asia.

However, the core of Azerbaijan does not border Turkey. Instead, it is on the other side of Armenia, a country that thrashed Azerbaijan in a war over the disputed Nagorno-Karabakh enclave and still has lingering animosities toward Ankara because of the 1915 Armenian “genocide.” Armenia has sold itself to the Russians to keep its Turkish foes at bay.

This means Turkish designs on Central Asia all boil down to the former Soviet state of Georgia. If Turkey can bring Georgia fully under its wing, Turkey can then set about to integrate with Azerbaijan and project influence into Central Asia. But without Georgia, Turkey is hamstrung before it can even begin to reach for the real prize in Central Asia.

In this, the Turks do not see the Georgians as much help. The Georgians do not have much in the way of a functional economy or military, and they have consistently overplayed their hand with the Russians in the hopes that the West would come to their aid. Such miscalculations contributed to the August 2008 Georgian-Russian war, in which Russia smashed what military capacity the Georgians did possess. So while Ankara sees the Georgians as reliably anti-Russian, it does not see them as reliably competent or capable.

This means that Turkish-Russian competition may have been short-circuited before it even began. Meanwhile, the Americans and Russians are beginning to outline the rudiments of a deal. Various items on the table include Russia allowing the Americans to ship military supplies to Afghanistan via Russia’s sphere of influence, changes to the U.S. ballistic missile defense (BMD) program, and a halt to NATO expansion. The last prong is a critical piece of Russian-Turkish competition. Should the Americans and Europeans put their weight behind NATO expansion, Georgia would be a logical candidate — meaning most of the heavy lifting in terms of Turkey projecting power eastward would already be done.

But if the Americans and Europeans do not put their weight behind NATO expansion, Georgia would fall by the wayside and Turkey would have to do all the work of projecting power eastward — and facing the Russians — alone.
A Temporary Meeting of Minds?

There is clearly no shortage of friction points between the Turks and the Russians. With the two powers on a resurgent path, it was only a matter of time before they started bumping into one another. The most notable clash occurred when the Russians decided to invade Georgia last August, knowing full well that neither the Americans nor the Europeans would have the will or capability to intervene on behalf of the small Caucasian state. NATO’s strongest response was a symbolic show of force that relied on Turkey, as the gatekeeper to the Black Sea, to allow a buildup of NATO vessels near the Georgian coast and threaten the underbelly of Russia’s former Soviet peri phery.

Turkey disapproved of the idea of Russian troops bearing down in the Caucasus near the Turkish border, and Ankara was also angered by having its energy revenues cut off during the war when the BTC pipeline was taken offline.

The Russians promptly responded to Turkey’s NATO maneuvers in the Black Sea by holding up a large amount of Turkish goods at various Russian border checkpoints to put the squeeze on Turkish exports. But the standoff was short-lived; soon enough, the Turks and Russians came to the negotiating table to end the trade spat and sort out their respective spheres of influence. The Russian-Turkish negotiations have progressed over the past several months, with Russian and Turkish leaders now meeting fairly regularly to sort out the issues where both can find some mutual benefit.

The first area of cooperation is Europe, where both Russia and Turkey have an interest in applying political pressure. Despite Europe’s objections and rejections, the Turks are persistent in their ambitions to become a member of the European Union. At the same time, the Russians need to keep Europe linked into the Russian energy network and divided over any plans for BMD, NATO expansion or any other Western plan that threatens Russian national security. As long as Turkey stalls on any European energy diversification projects, the more it can demand Europe’s attention on the issue of EU membership.

In fact, the Turks already threatened as much at the start of the year, when they said outright that if Europe doesn’t need Turkey as an EU member, then Turkey doesn’t need to sign off on any more energy diversification projects that transit Turkish territory. Ankara’s threats against Europe dovetailed nicely with Russia’s natural gas cutoff to Ukraine in January, when the Europeans once again were reminded of Moscow’s energy wrath.

The Turks and the Russians also can find common ground in the Middle East. Turkey is again expanding its influence deep into its Middle Eastern backyard, and Ankara expects to take the lead in handling the thorny issues of Iran, Iraq and Syria as the United States draws down its presence in the region and shifts its focus to Afghanistan. What the Turks want right now is stability on their southern flank. That means keeping Russia out of mischief in places like Iran, where Moscow has threatened to sell strategic S-300 air defense systems and to boost the Iranian nuclear program in order to grab Washington’s attention on other issues deemed vital to Moscow’s national security interests.

The United States is already leaning on Russia to pressure Iran in return for other strategic concessions, and the Turks are just as interested as the Americans in taming Russia’s actions in the Middle East.

Armenia is another issue where Russia and Turkey may be having a temporary meeting of minds. Russia unofficially occupies Armenia and has been building up a substantial military presence in the small Caucasian state. Turkey can either sit back, continue to isolate Armenia and leave it for the Russians to dominate through and through, or it can move toward normalizing relations with Yerevan and dealing with Russia on more equal footing in the Caucasus. With rumors flying of a deal on the horizon between Yerevan and Ankara (likely with Russia’s blessing), it appears more and more that the Turks and the Russians are making progress in sorting out their respective spheres of influence.

Ultimately, both Russia and Turkey know that this relationship is likely temporary at best. The two Eurasian powers still distrust each other and have divergent long-term goals, even if in the short term there is a small window of opportunity for Turkish and Russian interests to overlap. The law of geopolitics dictates that the two ascendant powers are doomed to clash — just not today.


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