Academic


Medvedev or Putin - Road ahead uncertain

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D. Medvedev & V. Putin © www.medvedev2008.ru
By Calvin Garner

Russian President Dmitry Medvedev is acting like he wants to run for reelection. All eyes now turn to Prime Minister Vladimir Putin to see how he will react, whether he will return for another presidential run. His decision and how the political process unfolds over the next eleven months will greatly influence how the business of politics is done in Russia.

Three years ago, then-President Putin handpicked Medvedev, who many analysts viewed as an amenable supporter, as his successor and transferred much political authority to his new office as Prime MinistEver since, the Putin- Medvedev ruling tandem has governed Russia as senior and junior partners, respectively, part bad-cop/good-cop routine, part political bromance. The two have often repeated that they will decide together which one will run in 2012.Despite these statements, most analysis of Medvedev, especially early in his term, assumed he would merely be a placeholder until 2012, when Putin was once more constitutionally eligible to serve as president.

But Medvedev has taken an increasingly independent tone in recent months, publicly rebuking Putin for comments he made on Libya, asserting his unique role as president in ruling the country and forming the government, and making vague comments about the need to change or be left in the past. While these statements may seem fairly innocuous, they represent a stark contrast from the deferential tone that marked the beginning of the Medvedev presidency.

Even more surprising was the recent presidential decree that senior government ministers – including many Putin allies – would have to step down from their lucrative and influential positions on the boards of state-run companies. This decision is ostensibly part of a Medvedev move intended to improve the business climate by lessening government influence in the private sector. The removal of his political supporters is likely no more than mildly aggravating to Putin. The broader implication, however, is that Putin’s state capitalism economic model is inappropriate for Russia today.

While Medvedev’s board purge has worked so far, it is premature to claim that Medvedev has gained any meaningful advantage for a possible presidential
race. The election next March is a long ways off, and much can happen in the interim. Moreover, there is reason to believe that Putin could defeat any Medvedev campaign.

Putin has an advantage against Medvedev in terms of raw power in the government and would win in any real contest among the political elite. This edge is due to the fact that Putin has had far longer than Medvedev to build relationships within the ruling party, United Russia. Additionally, Putin, a former KGB colonel, has had eleven years to bring into government many former security services personnel who may be likely to share his world views.

A 2007 study by Olga Kryshtanovskaya of the Russian Academy of Sciences found that nearly one quarter of senior government officials come from this cohort of siloviki, former military and security service officers. Putin most likely has the political means to marginalize Medvedev now or nearly at any point up to the election.

But any decision to marginalize Medvedev through the political process could also have negative side effects. With political disillusionment recently as high as two-thirds of the population according to a government polling agency, there is a risk that disillusionment could grow further in the case of an acrimonious political process. Moreover, a Putin return to power that reflects a closed struggle within the United Russia party could further isolate the political elite from the people.

Few analysts expect Russia to have a hotly-contested multiparty presidential election next March. Yet, it is important to note that at one point few analysts expected Medvedev to be able or willing to challenge Putin to the extent that he has recently. As of today, neither Medvedev nor Putin can safely assume he has a lock on the presidency, and pitfalls exist for both as the process of choosing Russia’s next president continues to unfold.


The Egyptian Sphynx - Where are the revolts in the Middle East and North Africa heading?

By Farzan Sabet

What lasting changes will the recent popular revolutions of the Middle East and North Africa bring and how will posterity remember this year in human history? Given the euphoria of one dictatorship after another falling to internal revolt (the list of uprisings has now grown to nine including Tunisia, Egypt, Iran, Libya, Yemen, Algeria, Bahrain, Jordan and now Oman) and the almost second-by-second media coverage, one can be forgiven for thinking that the region has transformed overnight into the standard-bearer of human progress. Yet, the reality on the ground is much different. Despite some
overriding similarities – all are police states characterized by high youth unemployment and have seen the use of social networking for organizing – the political economy of each revolt is unique. Furthermore, despite the bravery and resolve of the people fighting on the streets for change, one should also question the actual ‘revolutionary’ nature of what has happened so far. Will this winter of discontent truly herald a new era in the Middle East and North Africa?

One thing is for sure: the popular revolt in Egypt is not your typical revolution. Two other revolutionary models of the post-Cold War era have preceded it – the Islamic Revolution of 1979 and the ongoing Green Movement uprising in Iran. However, what makes the popular revolt in Egypt so interesting is that it does not yet fall in a pre-existing ‘revolutionary mould’, but has the potential to forge its own path.

On February 11th, the 31st anniversary of the victory of Iran’s Islamic Revolution, Hosni Mubarak stepped down as president of Egypt and millions triumphantly rejoiced the victory of the Egyptian Revolution. Yet, astute observers noted the merely symbolic nature of what had taken place. Then Prime Minister Omar Suleiman declared that the president would be replaced by the Supreme Military Council (SMC), in effect a military junta. While the work of the junta is ongoing and may indeed result in substantial changes, one cannot help but note that what we have in Egypt today is Mubarak’s regime without Mubarak. The junta’s role may, in fact, be to insure maximum continuity between the pre- and post- February 11th regimes.

Labour’s revolt

Perhaps the greatest threat presented to the junta is by Egyptian workers who have been on strike since at least February 10th, slowly bringing the economy to its knees. While the junta has threatened to crack down to end strikes, it has shown restraint likely out of fear of radicalizing revolutionary forces. The demands of the workers have thus far focused mainly on civil rights and economic reforms, including the establishment of a new minimum wage, abolishment of the old government-controlled trade union and the removal of corrupt owners, managers and government officials. However, the failure of the military regime to meet these demands or enact a violent crack-down could either trigger a second, more radical phase of the revolution or result in the collapse of revolutionary forces and retrenchment of the ancien regime.

This is not an Islamic revolution

Still, Egypt 2011 represents a unique opportunity in Middle Eastern history. While the government of the Islamic Republic of Iran (IRI) has attempted to portray this revolt as being about Islam, American Imperialism and Israeli Zionism (with many on the right in North America, Europe and Israel concurring), this does not appear to be the case. This is not primarily about foreign policy, although it will have critical foreign policy implications. This is about people’s demands, which have thus far centered on three concrete and undeniably domestic themes: democracy, human rights and economic justice. While the first two can be achieved in quick succession (at least de jure), the third entails significant redistribution of wealth in a country with high income inequality. Contrary to fears of increased Islamic fundamentalism, the achievement of any or all of these goals could go a long way in undermining the root causes of religious extremism and conflict in the region. The incorporation of religious forces willing to adhere to democracy and human rights has precedence, as set by the US and Israel. For example, in Israel the ultra-Orthodox political party Shas plays a very prominent role in the current ruling coalition, despite the extremist language sometimes espoused by leading figures such as its spiritual leader Ovidia Yosef. Likewise, in the US religious forces play a meaningful role in politics atevery level. Although the Muslim Brotherhood is often demonized, thereby imposing often racist assumptions about Arabs and Muslims, it is characterized by complexity, internal divisions and long-standing enmity with terrorist organizations such as al-Qaeda. As highlighted earlier, this revolt goes beyond any one group and encompasses a wide host of social, political and economic demands.

Nor a ‘colour revolution’

Thus, to be sure, what we are seeing in Egypt today is not the Islamic Revolution of yesteryears. Countering the Islamic Republic’s claim of ownership of the Egyptian revolt has been Iran’s opposition Green Movement, which sees in it a reflection of itself and the uprising which has limped along since 2009. Yet, while Egypt today may not be Iran of 1979, neither is it the current Iranian opposition. As my co-author and I argue in the McGill Journal of Middle East Studies this spring, the Green Movement is a ‘colour revolution’, an attempt by one faction in the regime to oust a rival faction by mobilizing frustrated social forces to gain power outside the electoral system, usually after allegations of fraudulent elections.* What distinguishes a colour revolution, such as what happened in Georgia in 2003 or Ukraine in 2005, is that it is reformist in nature, not revolutionary, has Western-backing and falls along the lines of liberal-democracy. In Iran, the Reformist faction (represented by Mir-Hossein Mousavi and Mehdi Karroubi) which has thus far led the Green Movement has, unlike Egypt, systematically excluded voices calling for fundamental change and ignored workers and people’s economic demands, limiting its social base. Excluded from the regime’s inner-circle (and thus unable to exert its power through the state) and unable to mobilize social forces on a wide-scale, the Green Movement has been paralyzed by its own contradictions and failed as a colour revolution. Yet as with the Orange Revolution in the Ukraine or the Rose Revolution in Georgia, there is an argument to be made that the colour revolution model, even when successful, has failed to bring fundamental change.

Unlike in colour revolutions the people of Egypt have demanded the complete abolition of the Western-backed police state ruling over them. At the same time, their movement is not about anti-imperialism nor Islamic fundamentalism. The special quality of this movement, a theme that has pervaded it, has been the emphasis on economic justice or more precisely ‘economic democracy’. What this will mean in practice remains to be seen, although it could resemble social democracy in Canada or Scandinavia. The establishment and spread of such a model in Egypt, the Middle East and North Africa would go a long way in quenching the fires that always seem to lurk just beneath surface of this troubled region. Nonetheless, it is far too soon to declare victory in Egypt or therest of the Middle East and North Africa.

The international political implications of Wikileaks
Whether Assange stands trial in Sweden or ultimately faces charges in the US remains uncertain. The larger implications for his work, however, are already beginning to be seen.

By Lidia Tutarinova

On February 24th, a British judge granted an extradition order to Sweden for Julian Assange to face accusations of sexual molestation, unlawful coercion, and rape. Assange has made it clear that he will appeal the extradition, and argues that he will not be presented with a fair trial in Sweden. A larger question has been whether the Swedish authorities are capable of extraditing him to the United States to face further charges in relation to his organization, Wikileaks.

Many faces

Julian Assange is a man of many faces, the most recent being that of an alleged rapist. The exact circumstances resulting in extradition are unclear and the Swedish government has refused to make any evidence public. The main accusation seems to stem from an invitation extended to Assange to speak at a Social Democratic Party event in Stockholm. Upon arrival, Assange was met by Anna Ardin, a striking 31-year old blonde who was a press secretary for the Brotherhood Movement. She reportedly offered her flat to Assange on the assumption that she would be out of town during his stay. Upon her early return, she and Assange engaged in consensual protected sex. The condom, however, broke and on August 20th, Ardin reported to the police that she believed Assange deliberately damaged it, according to reporting from the Times of India. A second accuser is believed to be a prominent photographer who had unprotected sex with Assange, and has since claimed that he refused to wear a condom. No evidence other than personal reportsfrom the two accused women has been made public. Further complicating the situation is the fact that rape cases in Sweden are usually tried in private court rooms, leading some to question whether it will be possible for Assange to get a truly fair trial. 

The majority of apprehensions have stemmed from the severe condemnation of his organization- and the large publicity surrounding his criminal case in Sweden. There are concerns over whether Sweden would allow an extradition to the United States where Assange is currently under investigation. The Justice Department has sought identifying information on four Twitter accounts, arguably violating rights of privacy and free association. A possible second extradition could occur if the United States and Sweden agreed upon it but would also have to be approved by the United Kingdom. Thus, the final chapter of prosecution against Assange may end up being politically motivated.

Information revolution

Wikileaks has changed the information paradigm, or at the very least extended its dimensions. Tunisia has been dubbed ‘The Wikileaks Revolution’ as leaked cables regarding the presidency of Zine al-Abidine Ben Ali enflamed an already existing opposition. As reported in the Guardian newspaper, the US cables confessed that “corruption in the inner circle is growing [in Tunisia]. Even average Tunisians are keenly aware of it, and the chorus of complaintsis rising…Meanwhile, anger is growing at Tunisia’s high unemployment and regional inequities. As a consequence, the risks to the regime’s long-term stability are increasing.” Shortly after Mohammed Bouzazi, 26, set himself on fire in protest to the regime and triggered a response of protests throughout the country. The cable acted as a source of unification, and provided Tunisians with a very credible set of allegations that was difficult to rebuke without discrediting or belittling the United States. Interestingly, there seems to be solidarity (at least in the public eye) amongst countries in ignoring or underplaying the cables, regardless of the contents within them. This could be due to the fact that the leaks do not present radically new information into diplomatic circles, yet it is likely that the consequences of their contents are being hammered out behind embassy doors.

The case of Julian Assange has raised questions about the ambiguity of international extraditions, especially to the United States. Wikileaks has solidified itself as an apparatus of opposition movements around the world at the supposed expense of diplomacy. The accusations against Assange have been unsupported by evidence, and little has been made public. Assange has vowed that Wikileaks will go on without him, yet there has been a prolonged lull. With a twist of irony, the man who purposes to expose governments awaits his future behind their closed court doors.


The Kosovo Case: New Ground Broken or False Dawn?
by Jason Rudall

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The Robes, ICJ 2006
The recent advisory opinion handed down by the International Court of Justice (ICJ) in the Kosovo Case has provoked a mixed reaction among States, academic circles and those individuals affected by it. The dichotomous response may, in part, be attributed to a lack of clarity as to what the Court actually said. Indeed, despite the ICJ’s decision, a cloud of uncertainty remains, not just over Kosovo, but also for other independence movements the world over. Meanwhile, commentators have been left scrambling to bring the opinion into sharper focus.

A Dichotomous Response

The ICJ was asked by the General Assembly to analyse the accordance with international law of a unilateral declaration of independence made in respect of Kosovo. In response, the ICJ held that international law contains no applicable prohibition on declarations of independence. For the Court, arriving at this conclusion was the end of the matter and all that mattered. However, the reasoning employed by the majority judges appears to have raised more questions than it served to answer.

 New Questions Raised

Given the scenes of jubilation which accompanied its publication, one would be forgiven for thinking that the opinion signals a new dawn of statehood
for Kosovo. In fact, the Court said nothing on whether Kosovo has achieved statehood and failed to address what was, for all intents and purposes, the elephant in the room. The ICJ read the question it was asked narrowly, opting for a lowest common denominator approach, and thus avoided opining on the major legal issues raised by the case. Accordingly, as regards the principle of territorial integrity, the Court took the view that this was confined to the sphere of relations between States and, since this case concerned an internal secessionist movement, was inapposite. In addition, it reasoned that a consideration of the rights to self-determination and remedial secession, although raised by the parties, was beyond the scope of the question posed by the General Assembly.

Disappointed Serbia

Not only will Serbia have been disappointed by the outcome but the opinion also fell short of what the authors of the declaration must have hoped to
achieve. Many lawyers were shocked but not surprised by the manner in which the majority traversed the obstacles thrown up by general international law and the lex specialis Resolution 1244. This is evident not least by its constructing an artificial distinction between declaring and effecting independence. As for the former, there would be no legal implication, whereas on the latter—arguably more fundamental--
element, the Court declined to comment. Moreover, the ICJ assumed that the authors of the declaration acted outside the constitutional framework in Kosovo and therefore did not contravene the provisional regime established by the Security Council resolution. In short, as a result of these determinations, the ICJ has diluted the value of the opinion for independence movements in Kosovo and elsewhere.

A Delicate Situation

It is likely that the ICJ did not wish to meddle in the political sensitivities of this delicate situation. Justifiable as this may seem at face value, the ICJ surely had a responsibility to at least answer the pertinent legal questions raised, especially in light of its function as the UN’s primary judicial organ. Rather than carving out a prominent role for itself in the contemporary international order, the majority has instead adopted a binary approach that does not resonate with the complexities of modern international law. Consequently, a Pandora’s box of important legal questions remains to be decided by a later political settlement. That is a new dawn which seems far off and wecan only hope that it breaks with rays of light that bend towards justice.


Pool Me Once – Fame on You;
Rule me Nice – Free We’ll Be
Or: Climate Change and Other Environmental Tech Transfer, Global Sustainable Development and Empowerment, Green Persuasiveness and Democracy Promotion, All at a Discount
by Jan Schierkolk 

Equity Traps as Main Problem, and Their Essentials of Who?, How?, and Why?
 At the heart of our current Gordian knot in climate change negotiations lies the following truth: effective common action is held back by fears of injustice. Some feel they contribute more to solutions than others, who, depending on who you ask, either free-ride or merely exercise their right to develop and consume as others had been doing for the last two centuries. Obstructive at best, irreconcilable at worst, these opposing views stand between us and common solutions, making climate change arguably humanity’s single biggest collective action problem to date. 

For at least three main reasons its solution currently looks unlikely:

Firstly, accountability, an essential for any successful agreement, is impossible. Simply put, this is because while states negotiate, mostly individuals and businesses emit greenhouse gases. However, as far as the international arena is concerned, both are rarely directly recognized as holders of the responsibilities and rights they already de-facto exercise. But if they were all to negotiate, how would they achieve what less than 200 states have already looked to cumbersome for? 

Secondly, the current process is essentially negative. Who should curb pollutions by how much? Who should pay? This, combined with the unitary state as sole negotiator, lets all persons in a given country, rich or poor, massively emitting or not, be either collectively given a blank check, or punished and even held accountable for each other’s ancestor’s actions. But while some form of compensation for the poor is utterly necessary, getting closer to individually perceived “fairness”, arguably a precondition for sufficient collective action, is extremely difficult this way.

Thirdly, consumerism is disregarded. Unfounded trust in our ability to out-invent any material constraints to unbridled indulgence seemingly allows more and more individuals, firms, and countries to engage in it in some form or another. Technically already a disaster-bound negotiation premise to begin with, this also sows the conflicts of tomorrow. However, much of current unsustainable over-consumption may well be based on something very simple: every actor’s need for social status. At least its definition thus seems part of the problem, too.

Given these characteristics, comprehensive remedies would have to include all relevant actors and let them transition from blaming and burden shifting to incentivizing, recognizing, and sustainable prosperity spreading, also creating some leeway for currently deadlocked conventional negotiations before it is too late.

Wiki- and Web 2.0-Based Patent Pooling as an Answer
At the heart of this proposal lies a public patent pool for environmentally progressive technology. Unlike with most “regular” goods and technologies, where arguably, society can afford to exclude some from their use to better reward innovation, this is certainly not the case here. Environmental degradation and climate change are matters of global public concern and thus leave no one able to exclude others from technology needed for sustainable development.  
The pool would be couched in a global online community. As members, all governments, firms, NGOs and private citizens could contribute knowledge for everyone’s use, even commercial, under one condition: either directly, or after a short negotiated period, any refinements and improvements would have to re-enter the pool, and thus the ever accelerating technology cycle.

As with established – and hugely successful - open collaborative projects like Wikipedia, or commercial “crowdsourcing”, e.g. in phone app development, every consumer could also contribute. An open forum like this could contain anything from the latest car battery designs to tips on “how to best install, use, and maintain solar panels on corrugated iron shacks”.

Ideas and technologies for simple, affordable but sustainable goods and services should be prioritized. Included in this would be concepts for possibly labor- but not capital- or energy-intensive production and maintenance, autonomous small-unit use, and uncomplicated disposal/recycling, or parts/development steps thereof. Around the globe, such a system would enable entrepreneurs to sustainably employ themselves and others and families to raise their living standards.

To get the biggest possible know-how base while avoiding duplicating work, and to speed up membership acquisition, it should be considered to link up this structure with existing knowledge pools, like Wikipedia, and social networking communities, like Facebook. Also, many of their and others’ characteristics could later form integral and interconnected parts of both the knowledge sharing and governance aspects of the pool.

Need and Incentives for Support
Obviously, this structure would have to be initiated and supported by major public and/or private players to gain both monetary and, crucially, technological starting capital. Also, at least until grassroots collaboration fully kicks in, big partners are likely to remain the principal innovative engines. 

As profitability would not be a given from the outset, governments should probably lead the way - be it in the form of committing public research institutions and their patents, staff, or monetary contributions. All could be independently (and temporarily) assessed to give donors a corresponding vote on a steering board-type structure which would decide over pool policy. This would include how to spend funds, and ways in which this could function would be to either buy existing, or pledge rewards for new, global needs technologies in use-oriented flexible tenders. For example, one could be for “something that can most cheaply, practically and sustainably clean lead-poisoned drinking water in tropical conditions”. 

The increasingly larger contribution incentive than board control, however, would probably be green persuasiveness (as opposed to the term soft power). Because as temperatures keep rising for all, so will popularity and influence for those who put resources and ideas behind universally beneficial solutions, especially if they directly reach many people. As a comparatively cheap addition to much needed domestic emission cuts, investing seed technology and money in the pool may especially help those who need to balance their roles as historically big polluters to convince others to also go green. Also, bypassing political limitations via the pool, even individuals or firms themselves could improve their country’s scorecard - and their own, for that matter.

As pool knowledge and membership grow, their sheer organizational complexity alone will increasingly require web 2.0-based grassroots governance by all members. This in turn would provide the possibility of assessing even the smallest contribution, and indirectly also those which it is based on, by popular vote. Dynamic shares of "recognition points" could thus be constantly and retroactively awarded for all innovators involved. In this manner, everyone would have every reason to enhance cooperation by disclosing all information they have and even actively disperse it, to maximize the likelihood of other inventions being based on theirs. Thus, they could reap shares of multiplying points over generations of inventions, which would especially incentivize early useful contributions, like those needed now from big “founding members".

Constant community reassessment would in addition ensure that contributions were democratically rated according to their actual eventual usefulness to people everywhere. Also, late starter technologies could still receive due recognition this way, even if just after additional, accordingly recognized contributions by others.
With growing pool value pervasiveness, every member’s dynamic scorecard could soon form a part of their real world social status – among nations, firms, organizations, and even families and individuals. This concept could mitigate hard power needs for national prestige, or advertisement needs for sales, stocks, or donations, possibly even doing away with classic profit- and non-profit divisions. If desirable, every actor would even be free to award formal or even material benefits to now quantifiably deserving governments, firms and individuals. 

Furthermore, recognition incentives could eventually at least partly replace monetary ones for all sorts of services the pool would need or want to honor (as democratically determined). Many of these could be rendered on a part-time basis around the world, examples including programming, cyber security, legal advice, participation education and outreach. 

A More Democratic Pool for a More Democratic World?
Eventually, especially if the pool itself becomes powerful, the membership of natural persons, gradually but surely, has to completely take over all aspects of pool governance through an integrated platform of electronic direct democracy. In it, too, influence, or even running for offices (if needed), could be greatly helped by solid recognition scores, thus providing further collaboration incentives. And while the old steering board’s formal power would simultaneously be phased out, contributors would keep their then possibly immense recognition scores.

The material progress this system would entail, as well as the need to have a say in it, would in the long run pull both the poor and even the oppressed of the world into it, to the degree that technical access (this would be another pool development priority) allows so. Just through its “internal” proceedings, the pool would therefore soon double up as a means of spreading democratic values and practice everywhere. And once in place, having it deal with additional issues, or just serve as a mouthpiece for public opinion, may come naturally.

Looking at a seemingly “lost” past decade on all those accounts, it is time to realize that combined global action on climate change, environmental degradation, sustainable development, as well as peace and democracy promotion, may now be attainable - at a bargain price. 

Jan Schierkolk attained his B.A. in Governance and Public Policy from PassauUniversity. Currently, he is a Master’s of International Affairs candidate at the Graduate Institute of International and Development Studies in Geneva, a Heinrich Böll Foundation student scholarship holder, and an intern with the Environmental Initiatives Team at the World Economic Forum. Nothing put forward here necessarily reflects either institution’s views.

An older, slightly different version of this article is currently shortlisted in a policy op-ed competition by the Atlantic Community and the U.S. Embassy in Berlin:
http://www.atlantic-community.org/index/articles/view/Sustainable_Development_Through_Climate_Change_Tech_Pool


Iran, the Rise of the Revolutionary Guards and Potential Engagement
by Farzan Sabet 

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A number of sources indicate that the latest round of multilateral United Nations and unilateral United States sanctions, implemented since June of 2010, have begun to take their toll on the Iranian economy. The UN sanctions extended the list of institutions and individuals believed to be involved with Iran’s nuclear program under travel and trade restrictions. A second wave of US sanctions have targeted Iran’s international financial dealings. In an impressive display of shuttle diplomacy, the US has brought a number of Iran’s key trading
partners, including Japan and South Korea, in line with US policies, curtailing Iran’s external trade even further. All of this comes in addition to existing sanctions which restrict Iran’s ability to import refined fuel, attract foreign investment, upgrade its ailing infrastructure and conduct general trade.

Sanctions have magnified existing structural problems in Iran’s economy. Reliant on oil and natural gas exports for 80% of government revenue, Iran has been hit particularly hard as sanctions have starved its energy industry of necessary capital and technology. Consequently, Iran’s oil production has declined from 6 million bpd to 3.8 million bdp since 1979, while its proven reserves have actually increased to 130 billion barrels. Although Iran has the second largest reserves of conventional crude oil and natural gas (10% and 15% of global total reserves, respectively), it is actually an importer of refined gasoline and has not been able to tap its huge energy potential.

While Iran has a potentially vibrant non-oil sector, its growth has been stunted by excessive government ownership and regulation as well as the existence of opaque and non-accountable para-statal entities (bonyads or religious charities), which control a large portion of the economy and an extensive black market. Sanctions cut deeply into the public and private sectors by restricting foreign ownership and investment and increasing production costs. As a result, Iranian firms must find ever more ingenious ways to get around sanctions, paying a higher price in the process. Iran also faces astronomical inflation estimated between 10-30%, chronic un- and underemployment and a long-term drain of human and financial capital.

Faced with dire economic straits, many Iranians have turned to drug abuse, prostitution and crime.

Iran’s precarious social, economic and international situation has been paralleled by strain in its domestic politics as well. Following last year’s presidential elections crisis, when allegations of electoral fraud led to large-scale street protests by the Reformist Green Movement, the Reformist faction (the ‘liberal’ left wing of the regime) has been marginalized through street violence, arrests, torture and executions. Even within the dominant Principalist faction (the ‘conservative’ right wing), a mini civil war is brewing between President Mahmoud Ahmadinejad and Majlis Speaker Ali Larijani.

Unlikely to force Regime Change

Despite the domestic and international strife, the sanctions are unlikely to force regime change, cause an economic collapse
or even stop Iran’s nuclear program. Iran continues to export oil, gas and other commodities, and while its trade relationships
have been undermined, there are still plenty of willing partners (China and Russia, for example). Furthermore, the rise of the Islamic Revolutionary Guards Corps (IRGC) portends far-reaching changes that we are only beginning to comprehend. Since 2003 the Neo-Principalists, including the Ahmadinejad administration and current senior IRGC leadership, have systematically
taken over the presidency, the regime’s entire security apparatus and the economy.

This group is unlikely to buckle under the weight of threats or sanctions, having fought an eight-year war against Iraq (Iran-Iraq War, 1980-1988) under harsh circumstances. Then, as now, they were forced to manage the economy and war effort under the strain of heavy sanctions and have become quite adept at it. Moreover, the IRGC is believed to operate an extensive black market and smuggling network, suggesting they are likely to continue their legal and illegal activities regardless of recent crack downs.

However, to raise the regime’s flagging legitimacy, the Neo-Principalists appear to be taking a new approach that breaks several regime taboos including appealing to Iranian nationalism, promising greater social freedoms, bashing the ruling clergy and potentially moving toward détente with the US (all very popular with the middle-class). Given the Obama administration’s policy of engagement with Iran, the latter is a real possibility.

Despite Ahmadinejad’s image as an anti-Western demagogue, he and the Neo-Principalists have attempted to seize an ever greater role in foreign policy (officially the Supreme Leader’s prerogative) and to make overtures to the US. For the time being, his former Principalist allies in the Supreme Leader’s Office, Majlis and Judiciary have blocked these moves (take, for example, the speedy repatriation of Sarah Shroud, which Ahmadinejad hoped to use as a PR stunt). The looming threat of an Israeli strike may also render détente impossible in the short term by causing a regional conflagration and creating a “rally-around-the-flag” that reinforces IRGC rule. Thus, it remains to be seen how this struggle plays out and if the Neo-Principalists will ultimately be successful in their project.


The ‘Neo-Principalists’ have been identified as such by the Author. Watch out for his co-written article ‘The Ayatollah’s Praetorians’ appearing in this fall’s issue of The Middle East Journal!


Electoral Paradox Seen in the Financial Crisis
By Shane Markowitz

Since the beginning of the financial crisis, the world economy has been in a state of turmoil. In the United States, the crisis prompted massive, unpopular bailouts for large financial institution, while on this side of the Atlantic, Eurozone members have prepared potential bailout packages for entire national economies. Meanwhile, unemployment rates remain high throughout the world.

The liberalization of the financial industry, which has been supported most extensively by free market and pro-business parties, has been one of the leading factors attributed for causing the crisis. Given the monumental nature of this crisis, some analysts have expected a major progressive political upheaval or, at a minimum, the election of parties less favorable to deregulation and large financial industries. Nonetheless,
in many Western countries, candidates from free market-oriented parties have been elected to political office in stronger numbers. In the Netherlands, the free market liberal People’s Party for Freedom and Democracy (VVD) gained 9 seats and the nationalist liberal Party for Freedom led by Geert Wilders gained 15 seats, thereby increasing the strength of the right-wing parties in the 2010 general elections. The free market and privatization-favoring Free Democratic Party (FDP) in Germany was propelled to a national vote of 14.6 percent, an increase of 9.8 percent since the previous election, and gained government-coalition status in the country’s 2009 federal election. In the United States, where the Democratic Party gained control of Congress in 2006 and the Presidency in 2008, a Republican Party that has moved further to the right is expected to make significant gains in the November 2010 Congressional elections.

This paradox may be explained in part by national political circumstances. In the UK, the 2010 electorate that removed the Labour Party from power may have been inclined to blame the economic problems on the government that was currently in office, even though the opposition Conservatives supported more extensive privatization and free market policies.The hierarchy of various political issues in election campaigns can also partly explain election results. In Germany, the Netherlands and the UK, public debates and political discussion focused largely on addressing the problem of large public deficits and debt rather than the need for more regulation of financial companies or for dealing with high unemployment rates. This focus has suited right-wing parties. In the Netherlands, for example, the VVD’s electoral success has been attributed to its plan to cut public expenditures by 45 billion euros over four years.

Tax cut plans

Despite tax cut plans from right-wing parties in Germany, the UK, the Netherlands and the United States, the public has still perceived these parties as more likely to cut spending. Even with a Republican pledge to extend Bush administration tax cuts for the top two percent of income earners, adding $700 billion to the US deficit, a September 2010 CNN/Opinion Research Poll revealed that Americans trust Republicans more to reconcile the deficit. Furthermore, immigration issues have dominated political dialogue and have become associated with the economic crisis for many Europeans and Americans. Right-wing parties throughout these regions have used the issue as a wedge and distraction from the actual perceived roots of the economic crisis. In Arizona, Republican Governor Jan Brewer experienced a noticeable spike in support following her signature of a controversial new immigration law.

Due to paradoxical voting, parties with strong associations to policies that are likely to have been responsible for the economic crisis will have the opportunity to deepen liberalization and tax-cutting policies still further. Nevertheless, politics is of course a volatile arena and national attitudes
can quickly change. In Germany, a once seemingly anti-spending FDP has seen its support drop to 5 percent according to a Forsa poll following coalition squabbling and the public realization of the costs of its tax-cutting plans for the wealthy. Meanwhile, combined support for the Left Party, the Greens, and the Social Democratic Party has increased to 58 percent, marking a dramatic one-year change and revealing the important role of how perceptions may change once voters experience new leadership.

While political parties may successfully maneuver an election campaign by appealing to the emotions of voters and shifting the political agenda to their preferred issues, victories may be short-lived if proposed policies later brought to the public spotlight prove unfeasible, unsuccessful or simply contrary to the interests of the majority of voters.