Global Politics in 2017

Welcome to 2017. If you thought 2016 was an interesting year just wait for what will unfold this year. We can look forward to fresh developments in the MIddle East, Russia, China, USA and Europe. Global politics is changing and under the surface so are economic developments. I’m sure some things will be quite a surprise. Saying that, I’m going to attempt to present what can happen based on current situations.

Syria: While Assad has broken the back of the opposition, with the determined backing of Russia and Iran, resistance is bound to continue in different areas of the country. It is safe to say that Assad has held onto power, for now. The fact that he was prepared to see the destruction of his country and displacement of millions of the population are of no consequence to him. He has sworn to take control of all Syrian territory, including Daesh and Kurdish held areas. This operation could continue for some time yet and may never come to a total conclusion. Winning the war is one thing, winning the peace and rebuilding the country is quite another. The only way to control ex rebel held areas is through an iron fist of military rule. As part of this, Russia has sent hundreds of military police to Aleppo. Then there is the economic situation, the country is in ruins, large parts of the infrastructure destroyed, roads, bridges, water and electricity supplies are out of action. It is going to cost billions to rebuild. Syria does not have the money to rebuild, Russia can’t afford to help rebuild the country and neither can Iran, their economies are not strong enough. Many wealthy Syrian business people moved to Gulf states such as Dubai, also Canada and the USA, it has been suggested to me that they will move back to Syria when things calm down and re-open their factories. Whether this happens by choice or through the threat of having their factories taken over by the government remains to be seen. Assuming factories can be brought back on line, the surrounding infrastructure they need, such as water and electricity is less than reliable. I can also see a strong possibility that a lot of forced labour will be used, mainly of the remaining Sunni population, to begin the enormous task of cleaning up the country. Assad now has a mandate from the global community to mistreat his people as he sees fit and you can be sure he will not disappoint. For the future, Syria will remain a broken country, violence will continue and oppression will increase. Assad himself could not have held onto Syria without the help of Russia and Iran, as a result he will be obliged to do as he is told when it suits his saviours. The only way therefore for Syria to rebuild is if Arab states take out their cheque books and that is not going to happen as long as Assad is in power. There will have to be a transition to a Syrian leader more acceptable to the Arab states before they consider handing over any money. Who the new leader will be is not clear yet but it will be someone from inside the existing power structure of Syria and most probably a Sunni, not an Alawhite, not from the first tier of government but most likely from the second tier of power. If relative calm can be brought back to Syria there would be massive investment potential. Before the war, Syria had the most diverse economy of any Arab state and it has natural resources for producing phosphates and cement, as well as agriculture and textiles. To bring its economy back can only happen if the country is rebuilt and that is not going to happen as long as Assad is in power, financial interests will see to that. How any power transition plays out will be watched very carefully by Iran, they do not want to lose their influence in Syria as part of the Shia crescent they have constructed which stretches all the way to the Mediterranean sea. Russia in its new role as power broker in the region will be looking to maintain its influence in Sunni Turkey and Shia Iran as it negotiates a new power structure in Syria. Failing this, Syria will never be rebuilt. Where this will leave the Kurds in their semi-autonomous region of Syria remains to be seen, particularly as the USA has been stepping away from the region for some time now. Its only real remaining interest in the region being Israel and Saudi Arabia.

Turkey: Turkey has had a terrible year with many bombings and shootings. Since the failed coup attempt last summer President Erdogan has clamped down hard. Not just clearing out the military and police but also lawyers, judges and teachers. The so called ‘parallel structure’ full of Gulanist supporters as he asserts. He has gone well beyond those who had anything to do with the coup attempt. As a result, the fractures in Turkey between those who support Erdogan and those who don’t have become a chasm. Erdogan has to now keep the pressure at a high level to stop any dissent. Personally I see the potential for civil war in Turkey and I am going to stick my neck out and say the foundations for civil war are being laid now. Also of note is the fact that it was Russia, Turkey and Iran that laid the framework for a ceasefire in Syria. The USA was nowhere to be seen and not invited. This is a clear demonstration that Turkey is no longer looking west as it had done in the past. At the same time, don’t imagine that all is rosy between Turkey and Russia, their’s is a business relationship only and there are still areas of conflicting interest between them. Erdogan will not tolerate any Kurdish semi-autonomous state inside Syria and it will act unilaterally if Assad and Russia don’t end it. But I want to keep the focus on Turkey’s internal stability, or lack of it. The number of attacks by Kurds and Daesh increase, Erdogan’s policies are alienating a large part of the population who were used to having power and influence in the country. I believe the fuse has been lit in Turkey.

Russia: Flush with a sense of victory, Russia is back on the world stage and projecting its geo-political influence and military strength. With the USA stepping away from involvement in the Middle East, Russia has stepped forward to fill the vacuum. From the outside, Russia looks strong but the projection of power masks internal weakness. Its economy is in bad shape, the middle class is shrinking rapidly and the price of oil and gas is nowhere near high enough to help the Russian economy recover, its economy is now about the size of Italy’s according to World Bank data. Despite military success in Syria, war is very expensive and has been sucking up money from other parts of the economy. There is also the question of what Russia will do next. Emboldened by victory, inaction of the West and a soon to be new President of the USA, will Russia be tempted to strike out elsewhere? Russia can’t afford two wars and now that its operation in Syria is being scaled back, maybe soon will be the time when it increases activity in Ukraine. Just because Ukraine is not in the news much these days does not mean the situation in the east of the country is quiet, there are daily shootings and bombings, but not on a level high enough to get on the news. Will Russia now look to expand operations again in Ukraine and capture more territory? It is a possibility and it can do so in the knowledge that nobody can stop it. The big question is if Russia will try and capture territory from Estonia and Latvia, which have a significant Russian speaking population, the same as in eastern Ukraine. Will Russia gamble on NATO/OTAN backing down in the face of an invasion of those two Baltic countries? With incoming President Donald Trump showing a lack of enthusiasm for Nato, as well as seeming to be more isolationist, could Russia get away with it? Certainly European members of NATO would not be able to stop Russia in its tracks and Turkey would refuse to get involved in any way, despite also being a member of NATO. I think Russia will wait a while to see what Donald Trump actually does as President, and if he shows no interest in the region, Russia will take it as signal and go ahead. Maybe not in direct invasion but will use tactics similar to those used in Ukraine.

Regarding the internal situation in Russia, it should be pointed out the increasing power of the Orthodox church. Working with the Kremlin, its role seems to be that of getting the message to the people, telling them to endure economic hardship as a part of their faith and that Vladimir Putin is something like a living saint, sent to save the country from the rest of the corrupt world. In so doing, the Orthodox church is coordinating a campaign against all who do not uphold ‘traditional values’, including those who do. For example, Jehovah’s Witnesses, who were persecuted and sent to gulags during Soviet times for their political neutrality and talking about their faith, are once again under attack, labelled as an ‘extremist’ organization and their website is now banned in Russia, the only other place it is banned is in North Korea. The Orthodox church is the main perpetrator of this attack on basic rights of freedom of worship. It wants to control the message and the message is that Putin is some sort of saviour on a religious level. In the meantime, the Orthodox church is increasing its wealth while the people suffer increasing financial hardship. The country is returning to how it was during the time of the czars, A small rich elite, almost no middle class and the uneducated peasants who are constantly being fed news of how great their country has once again become.

What should be understood about Russia, is that it always tries to put the blame for difficulties on external situations but in the end it always tears itself apart from the inside. The Orthodox church with its growing power and influence over the masses, could, when the time comes, be the factor to cause upheaval in the country, give it time as it consolidates its power and influence in the ruling structure and education system of Russia. Very similar in a way to the ‘parallel structure’ that was developed in Turkey and led to the coup attempt last year.

USA: With a new incoming President it is not easy to say what is going to happen but 2016 was a difficult year for the country. The divisions in its society are increasing, Black Lives Matter is a case in point. Many people are struggling to earn enough, pay for medical insurance, get a decent education. It is against this backdrop that many decided to vote for Donald Trump, if only just to try something new, as the existing political establishment tends to look down its nose at the working poor. Will Trump help them? Time will tell and I wont try to second guess what will happen regarding this. What I do think will be different is foreign policy. Trump is a business man, making money is what drives him and he has a reputation for being quite ruthless. However, his skills wont necessarily translate into effective diplomatic negotiation. An example would be his comments on the ‘One China’ policy, by which Taiwan is recognized as a part of China, even though it has a democratically elected government. Trump suggested this policy should be renegotiated, with China making economic concessions in return for continued acceptance of this policy. For China the ‘One China’ policy is a red line and will never be acceptable for use in any economic negotiations, China will react and react strongly if Trump decides to go down this road. Being known for the size of his fragile ego, he takes offense very easily and has a tendency to seek revenge. When he realizes that he is being played by Russia, the consequences could be dramatic to say the least. Unless there is an economic argument, I don’t see Trump taking much of an interest in Syria or Yemen or any other humanitarian crisis. When it comes to oil, as with all administrations in the USA, Trump will take keen interest. But I keep coming back to is his total lack of experience in dealing with foreign governments, there are only common interests in global politics, never friendship and Trump is the sort of person who hates getting the less profitable side of the deal and he takes these things very personally. So I think it is safe to say, when it comes to foreign policy, things could become rather volatile. On the other hand he might take a back seat, delegating foreign policy and concentrating on the domestic interests of his business friends in the USA. With regard to the USA economy, I think he will borrow to spend on rebuilding the infrastructure (roads, bridges, power grids etc) of the country, which is in a desperate state of disrepair and if something is not done about it soon will have a direct effect on the economy.

Europe: With Brexit, Europe is losing its second largest economy, some of its biggest banks are in a fragile state and in Italy many of its smaller banks are in very bad health, if one of these small Italian banks were to fail it could start a cascade effect and potentially take the country out of the EU. Austerity has not worked as planned, wages are stagnant and populist political parties are on the rise. There will also be a massive business scandal to come out of Europe, which I’m not at liberty to talk about at the moment but the fall-out will be immense. In the Balkans, tensions simmer between Serbia and Bosnia, that war can happen again, in fact it would take very little for the region to erupt in violence. Terrorism in Europe is a continuing threat and will probably increase. The use of trucks to run down innocents is, sad to say, much more effective than someone with a AK47 and easier to get hold of for use as a weapon. I expect to see more attacks like these. I hate to say this, but I would not be surprised to see high speed trains being derailed as a means of terrorism. It is very easy to do and extremely difficult, if not impossible, to prevent.

There you have it. I think we will have an interesting 2017 for many different reasons.

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Russia, Syria and the United Nations

In quite extraordinary scenes at the United Nations security council, Britain, France and the USA directly accused Russia of committing war crimes in Syria. The accusations are based on the use of bunker-busting bombs and other heavy weapons in east Aleppo where many civilians are trapped.

Matthew Rycroft, the UK ambassador to the UN said “Incendiary munitions, indiscriminate in their reach, are being dropped on to civilian areas so that, yet again, Aleppo is burning. And to cap it all, water supplies, so vital to millions, are now being targeted, depriving water to those most in need. In short, it is difficult to deny that Russia is partnering with the Syrian regime to carry out war crimes.” Then, along with his French and American counterparts, they walked out in protest before the Syrian government representative began speaking.

What all this shows is just how powerless the UN really is. Because each permanent member of the UN security council has a veto and can block any decisions it doesn’t like, the whole thing can be brought to a standstill. It is obvious that Russia and probably China will block any resolution about taking action to bring the blood, death and misery in Syria to an end.

Maybe the UK, France and the USA will invoke the “Uniting for Peace” resolution of November 1950 (resolution 377 (V)). This states ‘the Assembly may also take action if the Security Council fails to act, owing to the negative vote of a permanent member, in a case where there appears to be a threat to the peace, breach of the peace or act of aggression. The Assembly can consider the matter immediately with a view to making recommendations to Members for collective measures to maintain or restore international peace and security.’

This resolution hasn’t been used very often but the feeling is that now there is genuine anger, spilling over into direct and less than diplomatic speech by certain security council members at the actions of Russia in Syria. At the end of the day, this resolution can only make recommendations. In 1980, the General Assembly convened in a “Uniting for Peace” session and passed a resolution demanding the Soviet Union’s withdrawal from Afghanistan. The Soviets merely shrugged. Russia would mostly likely do the same if such a resolution were passed today.

The biggest irony for me regarding Russia’s actions in Syria is that it claims to be a christian country, in fact the link between the Orthodox church in Russia and the Kremlin would take many by surprise. It is directly influencing the making of laws in Russia. Where is the church’s role in this? Giving guidance on morality or where are the politicians who claim to be christian asking themselves, ‘what would Jesus do in my situation?’ You would have to wait a very long time indeed for that to happen.

There we have it, the UN is basically pointless, it can’t live up to its charter, it is unable to stop wars or give all the aid needed to the refugees caused by those wars. The big powers simply ignore the UN when it suits them. The UK, France, USA and China are just as guilty as Russia, it is basically a toothless old dog that needs to be put down. In fact if there were no UN it would make it much easier for countries, acting alone or as a group to take action and intervene. Instead they are all stuck in an organization which is unable or unwilling to do anything. Innocent people continue being slaughtered. Well done UN, you are 71 years old now, maybe it is time you were retired.

Refugees as a weapon of war

Russia has been intensifying its bombing of Aleppo in Syria but the thing is this, the Syrian government even with the help of Russia is simply not strong enough to hold onto control of the city. The rebels aren’t strong enough to win and neither is the government. So what is behind the current Russian action of indiscriminately bombing the city?

This is about creating more refugees, doing so will put huge pressure on Turkey and Europe. Speaking today to my Syrian friend, Muhannad Najjar, who has been living in Turkey for the last year, he told me that in the first four days of the Russian bombing campaign of Aleppo some 25,000 Syrians decided to flee the city, and that is just the beginning. Interviewing some of the escaping families, all said their goal is to reach Europe. This is on top of the hundreds of thousands who have already made the journey to  Europe.

One of the things Muhannad told me is that the majority Sunni population feel betrayed by Europe and the USA, not because they don’t accept more refugees but because they haven’t done something about Bashar al Assad so they can live in peace and rebuild their country. I’m inclined to agree, the Assad family has also treated the lower classes of Alawite from his own tribe with similar contempt. The problem now is that a significant minority of those forced to flee their homes could be tempted to support Daesh (ISIS), not because they like them but because they feel there is no other choice.

Politicians in Europe and the USA think they can isolate themselves from the dangers by doing nothing in Syria but their inaction is actually increasing the danger. Russia is using this situation to its full advantage. Refugees have become a weapon of war as Russia uses the refugee crisis to try and break Europe. There are two reasons for this, one is because of the economic sanctions placed on Russia, the other is to try and force the USA and Europe to accept terms for any settlement of the Syrian crisis, if they don’t then Russia in its support of Bashar al Assad will make sure the flow of refugees only increases.

These pictures were taken in the last few days of Syrians who are fleeing the Russian bombing of Aleppo and trying to cross the Turkish border. All photo credit to مصطفى سلطان Mostafa Sultan

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The global system – broken beyond repair

It is a little difficult to know where to start as so much is happening and the year has only just begun. The global system can be viewed as having four different elements: Economic, Political, Military and Religious. They are all linked together but all have unique facets in how they impact the world in which we live.

Economic System

While not unexpected, the speed with which the global economy has hit the brakes in the first days of the year has been surprising. China, which is trying to re-engineer its economy so as not to rely on exports for growth to one of internal consumption, has hit severe turbulence, the last days seeing huge drops in its stock markets. In China, many shares are bought by private individual investors and have been wiped out by the losses which began last year and accelerated to such a point that trading had to be suspended twice already this year. These are the people the Chinese authorities need if internal consumption is to be the new economic model, instead they are all feeling much poorer and hesitant about making new investments and spending. To be fair the problem is not only China’s, globally, the worlds economy has never recovered since the financial crash of 2007. The only thing that has propped up the economic system since then has been the vast amount of almost free money that central banks pumped into the system. While company stock valuations soared over the years since the crisis the fundamentals have not changed. Companies have not been making the profits to justify their stock market valuations, instead of improving profits through growth they were cutting costs. While improving the bottom line it was covering up the fact that businesses have not been growing. Now the time of essentially free money is coming to an end the fundamentals are coming back into view and is the reason why global stock markets are having such a turbulent time. The emperor has no clothes and the central banks and governments have very few options left open to them. With global share prices still having a way to go before they reflect the actual values of global businesses it is going to have a knock on effect. Pension funds and property are going to be the big losers. People are going to start feeling poorer. When people feel poorer they spend less and this impacts business growth. The system is so broken that there is no way out of this feedback loop unless something fundamental about the system is changed. Do the central banks and governments have a solution, I think not.

Political System

Something that should amaze people is that in all the time of human history we have tried all forms of government, apart from global government, and not one of them has been successful, in the long term, of bringing about peace and security, helping all its citizens to have a dignified life. Instead they have abdicated more and more responsibility to the banks, trusting them to create the conditions for economic stability and therefore political stability. I often wonder what use our governments serve. All around we see crumbling infrastructure, cuts to health-care, the education system being run into the ground, increase in social instability as well as far fewer opportunities for social improvement. In the past there were far more opportunities for people to improve their lives, these opportunities are rapidly disappearing. If governments can’t deal with these fundamentals then what is the point of their existence? This is without going into global politics, all of the major powers in competition with each other, wanting to be top dog, but this situation leads to proxy wars, global instability, power vacuums and international terrorism. As the global economy shrinks the pressure is on for these countries to work even harder to protect their interests, creating yet another feedback loop. We will see an increase in nationalism and growing popularity of more extreme political parties as they promise only they can protect the interests of the population. In reality all that happens is increased polarization of populations, minority groups being blamed for the ills of the country. We are seeing this happening in many countries around the world and it will only spread as global conditions deteriorate. It will also increase the risk of conflict as relationships between neighbouring countries break down.

guns_suit_planets_fire_earthMilitary System

The only area of real growth now is in military spending, as we all know instability is good for the military sector. War is good for business. Morals have nothing to do with it, all is for sale, often to reprehensible regimes. The conflicts these weapons are used to pursue create displaced people, refugees and untold suffering. As the global economy teeters, the risk of conflict grows as competition between nations for a greater slice of the shrinking economic pie increases. Add to this the growth of ideological and religious differences between certain countries and the count-down to increased and new conflicts grows rapidly. Countries who have major weapons industries will rely on this sector for a larger part of their economic stability while trying at the same time to keep the consequences of these conflicts where the weapons are used as far as possible away from home.

Religious System

I’m grouping all the main religions together here because they are all equally corrupt and are all equally responsible for the deaths of millions through the ages. Today, religion is used as an excuse to kill, to dominate and to keep the masses quiet in the face of increased hardship, all often in collaboration with various governments. The tension between Saudi Arabia and Iran is based on religion. Jews and Palestinians is religious conflict. The Russian Orthodox church telling ordinary Russians they should prepare for greater hardship while it is the greatest benefactor of grants from the Russian government. There is a link to this because it left me speechless russian-patriarch-kirill-does-not-see-tragedy-in-the-economic-crisis In India there is increasing Sikh extremism with the permission of the government. The Vatican, possibly the richest organization in the world sees itself as some sort of supranational government but instead of using its wealth and influence to help people is more concerned with getting richer, milking its followers and only offers prayers when people need real practical help. It consorts with political leaders around the world like a courtesan believing she is a queen who sits above her people. How long will it be until politicians around the world get tired of all religious meddling and trouble making. Particularly as the global economy gets worse and they see just how rich these religions have become. I am curious to see what will happen when the governments are broke and they then look at the religions and all their wealth and see the religious system acting as if it is untouchable.

This is the year when finally it will be understood the global system, in all its parts, is beyond repair. Maybe it is time people started thinking about the New System.

Russia and USA. The pushing and shoving continues

Turkey shooting down the Russian jet today was a response to Russia increasing its influence in the Middle East through its action in Syria. Turkey, as a member of NATO would not have done this without some sort of approval from the USA. Russia and USA do not want direct conflict but they both like proxy war. The pushing and shoving between them continues. So much happening, I need a while to get all the information in order to write in depth.

Attacks on France. Losing the war on terror

How is a person supposed to live their life, when not knowing if going to a restaurant, a concert or going on holiday will end with them being yet another casualty of a deadly terrorist attack. This has become the new reality. The deadly attacks in France hammer this home in a way that can leave no doubt. We live in extremely dangerous times.

My original plan had been to write about the growing evidence that a Daesh (ISIS) bomb brought down the Russian plane as holiday-makers flew home from Sharm el Sheikh. But this week too there was a deadly suicide bombing by Daesh in Beirut with 43 dead and more than 200 wounded. Now there is Paris, drenched in blood. Where will be next?

What many don’t understand is the reasoning behind these attacks. Daesh are trying to provoke the international community into putting boots on the ground in Syria, they believe than in so doing they will bring about Judgement Day, this is part of their twisted theology. They believe that when the armies of the world gather together to fight them, God will bring about the end of times. There can be no reasoning with them. Going back to the probability it was a bomb that brought down the Russian plane highlights the point. Russia while very active in Syria has been concentrating its efforts on attacking the rebels who are against Bashar al Assad, leaving Daesh (ISIS) pretty much unscathed. The bombing of the plane is a direct message to Moscow, ‘Come and get us if you can, we want you to try and take us on’ The only way to try to defeat them is to put boots on the ground, air-strikes alone are not effective, they want to suck the world into war on their terms.This is one of the reasons for their terror attacks.

The dreadful attacks in Paris highlight the fact that the ‘war on terror’ is not being won despite the enhanced ability of governments to gather information and intelligence from pretty much all electronic communication. Hopefully it will also help people in general understand just how organized and capable Daesh are, yes they are blood thirsty but they know what they are doing and are a global organization, never under-estimate them.

A result of the attack in Paris will be the curtailing of yet more civil liberties in the name of security. Travelling by plane will become even more arduous than it already is, I would not be surprised to see travel by train also effected, security at large public gatherings will be tightened,  more of our personal communications will be monitored, the police will be viewing everybody with suspicion, finger ready on the trigger. This is one of the goals of Daesh, besides wanting to have all the major powers of the world put troops on the ground in Syria it also wants to permanently disrupt the lives of all who don’t follow its twisted philosophy. With the attack in Paris and the bringing down of the Russian plane, it has succeeded in doing exactly that. The fear of terror they are creating is maybe more effective at interrupting our lives than the acts of terror themselves. As long as Daesh are permitted to exist we can expect there to be a lot more innocent blood splattered on the streets. The question has to be, what will the USA, Russia, Iran, Turkey, Saudi Arabia and others do about it. Will they stop playing their geo-political games, which have included turning a blind eye to Daesh (ISIS) and work together for once? Time will tell.

Russia. Sanctions are biting

I received an interesting nugget of information yesterday. A good friend has a parent who is director of one of the hospitals in Moscow and has been ordered to reduce staff levels by 20%. Not only this hospital, but all hospitals across the country have been ordered to do the same

These orders originate from within the Kremlin. As sanctions bite, the pot of money becomes smaller and the infighting over it increases. As if they didn’t have enough money for themselves already, how many millions does a person need? As the situation continues, so will the cuts. This isn’t about improving efficiency but rather trying to extract as much money as possible before the rats abandon ship.

What we are seeing now is Russia eating itself from the inside. As always, it is the ordinary people who will suffer the most. Russia is a land of great culture and a beautiful language. I just wonder how much longer the situation can continue without the eyes of the majority of people finally being opened to see beyond the propaganda they so fervently believe at the moment.

The risk associated with sanctions on Russia

First the USA imposed sanctions on Russia for its actions in Ukraine and now Europe is on the verge of agreeing a package of sanctions to match. I am no fan of Vladimir Putin but the more I think about the probable effects of sanctions against Russia’s energy, banking, defense and technology sectors the more I see problems ahead.

This article is not about the rights or wrongs of sanctions or who is guilty of what in the current conflict in Ukraine. This article is simply about looking ahead at potential consequences.

I want to start by considering the frame of mind of Vladimir Putin. This is a man who has been in power for a long time now, over time he has become increasingly isolated in the sense of having little direct contact with the Russian people, but also with the majority of politicians in Russia, he avoids going to the Duma or congress as much as possible. Instead his main contact is through a small court of those he feels he can trust. The members of this court depend on keeping the status quo in Russia as their fortunes depend on it as much as Putin’s. Finally, Putin is also very close to Patriarch Kirill of the Orthodox church who is responsible to singing the praise of Putin from the pulpit to the common Russian people and keeping their support.

It is quite interesting when you watch Putin give interviews or when he is seen in public, to study his body language, not only this but also his micro expressions. These are facial expressions that last only a small fraction of a second and we have no control over them. I make a habit of watching politicians on TV with the sound off, it is more interesting to study their body language and facial expressions. Watching Putin, it has become clear over time that while he likes to give the impression of being the the ‘big man’ there comes across a real sense that he is on his own and he feels it, not only this but he is not always secure in himself. He compensates for this by putting on the macho act. Deep down he comes across as an injured and actually very sensitive person who tries to hide this about himself and so compensates by being aloof and hard. In Russian culture, leaders must always be strong and never show any sign of human weakness. However, it takes a lot of mental and emotional energy to keep the facade in place, particularly when there is a lot of external pressure. It can lead a fundamentally insecure person to become more erratic over time and possibly snap given enough pressure.

I will come back to Vladimir Putin’s state of mind in a moment. Now it is time to look at what the direct effect of sanctions could be in the next weeks and months. Russia is financially quite fragile, huge amounts of money are being taken out of the Russian economy and placed in other countries for safe keeping. I’m not talking about dirty money but businesses that don’t trust the Russian economy. This is creating liquidity problems and at the moment the price of oil is not high enough for the Russian central bank to be able to top up its cash reserves. Russia’s main banks are also facing their own liquidity problems. Then there is the fact that many companies have to refinance their debt over the short and medium term, to the tune of some $200billion if memory serves me correctly. Add to this the fine of $50 Billion that Russia has been ordered to pay by the Hague Court for its actions over the Yukos energy company and you begin to get an idea of how potentially unstable Russia really is. Sanctions will add a lot of pressure to this situation. While the intention is for sanctions to modify Putin’s behaviour in Ukraine, there is a very real risk that they will lead to a collapse of the entire Russian economy and all the related instability which would accompany the collapse.

What keeps playing through my mind is what Putin might do if he is really pushed into a corner. He isn’t the sort of person to back down even if he knows he is wrong, that would be showing weakness, as I said before it is likely that as the pressure increases he will become more erratic and possibly more dangerous. Imagine a wounded bear that has been cornered, this is the situation we are potentially looking at.

When one man has absolute power and he only allows a small group of those he trusts to be close to him, such a person will react very aggressively if he feels his power is being threatened. Sanctions, for good or bad, could have many unintended consequences, not only for Russia but also the wider international community.

ISIS in Iraq and Syria. Who is it good for?

I know that many will disagree with what I am about to write here but I want to give you another point of view to think about. When you dig under the surface of what ISIS is doing you will see it is of huge benefit to certain countries.

When I talk to contacts in the middle east, all come to the conclusion that Iran is behind the incredible growth and expansion of ISIS. Kurdish media also agrees that it has Iranian backing (Kurdish News Article in English)

ISIS began their expansion in Syria, mostly in the north and east of the country. When the Free Syrian Army fought back against them in the winter, many ISIS fighters ran for cover in Syrian regime held areas before they were able to fight back and regain lost territory. Also, what is interesting is the fact that ISIS are not trying to push towards Damascus, rather they are trying to take over territory held by the FSA. They also paint their headquarters with their colours and have huge flags waving above, yet not once have they been bombarded by the Syrian airforce. So many of my contacts in Syria have told me about this. There is a lot of circumstantial evidence coming from the modus operandi of ISIS, that it is working in collaboration with the Syrian government, which itself is backed by Iran. If ISIS is collaborating with Bashar al Assad and Iran is his main supporter then there must be a connection, ISIS have to get their funding from somewhere and Saudi Arabia will not support a group which is helping Assad.

Then we come to Iraq. The Shia majority government of Nouri Maliki is known to have very close ties to Iran. The last few years have been spent buying the latest military hardware from the USA so that it could defend itself after the US army fully withdrew. On paper it has, or should I now say had, a standing army of about 900,000, yet when fewer than 10,000 ISIS fighters advanced on Mosul, the second city of Iraq, they fled, leaving behind all their equipment and bases. They didn’t even try to resist, despite the huge advantage in numbers and weapons. Then at this time of crisis the government couldn’t even get enough votes to declare an official state of emergency. Neither did they ask the Kurds to send their well armed and experienced Peshmerga forces to help. Everything about this is suspicious. Considering how close Maliki is to Iran could it be that it was all a plan, a way of being able to arm ISIS with all the latest military hardware?

But why would Iran, which is Shia, help an extremist Sunni group? The answer is simple, to create havoc and chaos in Sunni dominated areas. Over time you will see that ISIS will not concentrate on trying to capture Shia areas. Baghdad is mixed between Sunni and Shia so they may try to take it but it is unlikely. However, the south-east of Iraq is by far majority Shia, I will be very surprised if they try to push into this part of the country. It will give a further strong indication that they are working with Iran.

Of course, to keep up appearances, Iran will make a show of helping Iraq to resist ISIS but it is more likely that Iraqi Sunni militias will be created from the remains of the army and other groups. It will end up similar to Syria, where the FSA while fighting the government, is also spending a lot of time trying to fight back against ISIS. The entire region will descend into a state of perpetual conflict, with only the Shia areas of Iraq remaining quiet. This is what Iran wants. The danger of using a proxy such as ISIS is that you have to keep control of it. Has Iran got ISIS on a short enough leash? Time will tell.

The question that comes to my mind is why has this happened now? The simple answer is oil, or rather the price of oil. Over the last year, oil has spent a lot of time below $110 per barrel often closer to $105. The chaos created by ISIS has pushed the price up to $113 at the moment. Iran and Russia are very close, Russia has been using a lot of its cash reserves to prop up its banking system as capital flight increases, people and businesses are taking their money out of Russia. Oil and gas are the main sources of income for the Russian economy but it needs a price of about $117 per barrel to have enough to top up its cash reserves and keep the economy going. Could it be that Iran has arranged events in Iraq to help its closest ally Russia? Of course this helps all oil-producing countries but the main benefactor is Russia, it is desperate for cash and the events in Iraq could not have come at a better time. Iran also benefits greatly, the war in Syria has cost it a fortune as it supports Bashar al Assad, extra money is always needed. Of course Saudi Arabia also benefits but they already have a mountain of cash, the increased income while welcome will not really change anything for them.

As I said in my previous post, Saudi Arabia is attempting to improve relations with Iran. It can see the coming tsunami of chaos which is about to engulf the region, I think it finally understands that Iran has the upper hand in what is going on. As a result I think we will see a deal between Saudi Arabia and Iran with regards to Syria, they will settle on a division of the country. In return Saudi will get assurances that ISIS will not invade, this has to be one of their greatest fears. ISIS could make havoc, especially as it now has a huge amount of modern American made military hardware. This all depends on Iran maintaining control over ISIS, if it loses control then all bets are off.