Dispute with Deep Implications

31 december 2005

I’m not certain that the decision-makers in the Kremlin have fully taken into account all of the consequences of their handling of the gas dispute with Ukraine.

In 2006, Russia takes over the chairmanship of the G8, and President Putin has already announced that energy security will be one of the key issues at the June summit in St Petersburg.

This is part of presenting Russia as a reliable supplier of energy to Europe, the US and Japan inte the decades ahead, and of attracting foreign investment into these state-controlled sectors of the Russian economy.

But if Gazprom really cuts supplies to Ukraine tomorrow, they will also cut part of the credibility of these efforts. There will not be a chancellery in the West that would not think twice before making their country overly and only dependent on energy supplies from Russia in the years ahead.

Many analysts already fear that the dispute provides a foretaste of how Russia will use its massive oil and gas reserves as a foreign policy tool in future disputes with the West.

Energy co-operation has replaced military might as the mainstay of Russia’s international credibility,” Chris Weafer, chief strategist at Alfa Bank in Moscow, said. “It is using its importance as an energy partner to pursue its geopolitical and foreign policy agenda.

Gas politics has suddenly become the new geopolitics.

The conflict with the Ukraine has deep implications for the future of Europe.

The Kremlin certainly knows that it has strong cards in its immediate dispute with Kiev. But the stronger it plays these cards, the more it weakens its more long-term cards versus the entire West.

Kiev Ukraine News Blog

First On Podcasting

30 december 2005

There has to be a first with everything in life, and now it seems as if it is Nicolas Sarkozy in France who is the first senior politician to enter the podcasting world.

Well, if we should be correct it isn’t really he who has done it, but there mere fact that he is interviewed by a blogger who then is podcasting the entire thing seems to have created a stir at the least in France.

But there is no doubt that he will not be the last.

The new technologies are busy transforming the media landscape, and accordingly they will affect the political landscape as well.

Sweden was long seen as in the forefront of most of these developments, but I’m far less certain that this is still the case. There is a distinct lack of interest in what the new technologies can offer on the political scene at the moment.

We’ll see when it changes.

I’ll certainly take note when we have the first more senior politician in the Nordic world entering the world of podcasting as well.

Loic Le Meur Blog

Critical Debate in Turkey

30 december 2005

It’s encouraging to note that the debate is intensifying in Turkey itself over Article 301 in its penal code and the use that reactionary elements in Turkish society are now making of it.

To change the law is unlikely to be an easy process, but it is obvious that provisions like these have no place in a modern European democracy.

Once upon a time I guess the paragraphs was written in the belief that it would protect and strengthen Turkey.

But that was in old times. In our times, it should be obvious to each and everyone that it is exposing, weakening and damaging the country.

And that is not good either for Turkey or for Europe.

BBC NEWS | World | Europe | Turkish press attacks insult law

Coming Crisis with Turkey

29 december 2005

One of the safest predictions for the coming year is that we are heading towards a crisis in the accession negotiations between Turkey and the European Union.

For this there are a number of reasons.

One is the shift in the European Union itself, where more Turkey-sceptical forces will be more in control of the process during the period ahead. It’s difficult to see the Austrian presidency make much to help move the process forward, and the German presidency in the beginning of 2007 will not be too helpful either.

There will, accordingly, hardly be the helpling hand needed to smooth out the different difficulties ahead, thus increasing the risk that they develop into crisis.

But then there are the issues of substance.

One concerns the wave of legal proceedings using the infamous Article 301 of the Turkish penal code that has been launched by conservative and anti-European forces in Turkey recently, the most prominent of which is the one against author Orhan Pamuk.

These are deliberate efforts to throw sand in the machinery, and there is no doubt that it is making Turkey great damage at the moment.

Not everyone understands that these are actions by rather extreme groups, with the government of Turkey as appalled as most others. But in any system with a separation of powers, the judiciary operates independently.

The possibility that is there – and that Foreign Minister Gul has now alluded to – is of course to change the relevant paragraphs in the law.

That would be a wise steps by the democrats of Turkey. It wouldn’t hurt if this leads to a review of whether there are similar pieces of old legalislation still existing among the present members of the European Union. That is by no means excluded.

The more serious and direct crisis ahead relates to the unresolved issue of Cyprus. Here, the efforts to reach a solution under the auspicies of the UN were sabotaged by the present Greek Cypriot leadership, and they have since continued their essentialloy obstructionist course.

One consequence of this is that the plans of the EU to help also the people in northern Cyprus, and open it up somewhat to the outside world, have been completely blocked. This has been the policy of both the European Commission and successive Presidencies, but has been vetoed by the Greek Cypriots.

It’s hardly surprusing that this in Turkey has been seen in less than positive light. In fact, they see it as the European Union has broken a promise.

And this in its turn has lead to rather strong opposition to Turkey allowing Greek Cypriot ships to enter its harbours. Under the existing customs union protocol, there is no doubt that they have a duty to allow them, but now there is a risk of the blockage of the Cypriot question leading to a blockage of this issue and this leading to a crisis in the overall relationship.

Well, risk is too vague a word. Certainty is more appropriate.

And that will come as the Union has to address also the difficult enlargement issues in the Western Balkans.

The post-Ottoman area will make itself known on the European political agenda in the year ahead.

Turkish FM criticises legal action against European lawmaker

Galileo and China

29 december 2005

The launch of the Galileo test satellite was evidently a big news item across the world.

One reason – which I did not mention in my blog entry on the subject – is the fact that a network of global collaboration now surrounds the project.

China is one of the nation that has deceided to join Galileo, and it was then hardly surprising that the launch is big in much of the Chinese media as well, as illustrated by this link to China Daily.

Galileo transforms the world – well, eventually, since it is by 2008 at the very earliest that we will see the real thing starting to work up in space.

Galileo shows peaceful technology pursuit

Small Step for Europe

28 december 2005

I was happy to note that yesterday the first test satellite for Europe´s coming space navigation system Galileo was placed in orbit from the Russian launch site at Baikonur in Kazakstan.

It’s a small first step in the deployment of a system that will have major importance in the decades ahead.

There is of course already the US GPS system in operation. Funded and operated primarily by the US Navy, it was optimized from the beginning for military applications, although it has now also been opened up for civilian use.

The Galileo system is different in that it represents a later generation and is optimized for a large number of different primarily civilian applications. It will be Europe’s own global navigation satellite system, providing a highly accurate, guaranteed global positioning service under civilian control.

To add to the global advantage, it will be inter-operable both with the GPS system and with Russia’s Global Navigation Satellite System (Glonass). Galileo will deliver real-time positioning accuracy down to the metric range with unrivaled integrity.

An enormous number of applications are planned for Galileo, including positioning and derived value-added services for transport by road, rail, air and sea, fisheries and agriculture, oil prospecting, civil protection activities, building, public works and telecommunications.

Some years ago, I headed a so called wise men’s group reporting to the European Space Agency on the future direction of Europe´s space activities.

Then, the idea of Galileo was still in its infancy and by no means uncontroversial. But our group was strong in our recommendation to go ahead with the project, and thus made our contribution to what we are now seeing starting to shape up.

In the meantime, most of the opposition to the project has been overcome. For a fairly long period, the US Departement of Defense was very keen on trying to kill the entire thing since they saw it as a threat to their dominance of these issues, and were not certain that they could either control or neutralize the system in a conflict situation or in a conflict zone. It was – in the political sense – a rather brutal battle that was played out.

But that issue has been sorted out to mutual satisfaction, and the DoD has now accepted the new realities. Everything in the world isn’t warfighting – and this system is primarily for the civilian sector.

The launch yesterday was a small step for Europe – but potentially a most important one.

ESA Portal – First Galileo satellite on orbit to demonstrate key technologies

A Poorer Kremlin – and Russia

27 december 2005

Andrei Illarionov has been Economic Advisor to President Putin during his entire period, and has been a sign that there has after all been room for some internal policy debates also in the Kremlin.

Andrei has been and remains an outspoken man. He fought – wrongly, in my opinion – against the present scheme for transforming, modernizing and privatizing the entire electric power system of Russia. He was equally adamant in his opposition to Russia signing the Kyoto protocol – in his opinion the country simply wasn’t ready for it.

But these were points on what in the great scheme of things were more more marginal issues. It was when he publicly started to take issue with the arrest of Khodorkovsky, the dismantling of Yukos and the trends towards de-democratization that he got into hotter water.

Now, it is obvious that he has reached the end of his career in the Kremlin. In Moscow today, he has announced that he has stepped down since he can no longer freely express his views on the policies that he increasingly disagrees with. In reality it is obvious that he has been dismissed.

But his voice on the future of Russia is an important one and should be heard. He is deeply concerned with the need to make his Russia truly a part of the modern world – and sharply critical of the now dominant trend of economic policy thinking in the Kremlin.

Earlier this year he wrote that ”it dreams of imposing state control over money flows in the fuel sector, nationalizing it,putting under control its infrastructure, keeping up infrastructure monopolies, and managing energy resource flows inside and outside the country.

This is not the Russia he wants – since such a Russia will fail to modernize sufficiently, and risks being dragged down by the magnitude of the challengess it faces in the decades ahead.

Neither is it the Russia that is in the interest of the rest of Europe. We want a modern, open and successful Russia – not a stumbling, closing and failing one.

The Kremlin will be a poorer place without the honest voice of Andrei Illiaronov.

I hope voice will be more heard in the open and public debate on the future of Russia.


Weblogistan versus Ahmadinejad

26 december 2005

Iran’s hardline new President Mahmoud Ahmadinejad continues to make headlines with his increasingly outrageous statement, most recently that the Holocaust was no more than ”a myth”.

At the same time, the issue of the nuclear ambitions of Iran is high on the international agenda. There has recently been a resumption of low-level contacts between Teheran and the European Union to see if there is any possibility of resuming negotiations over the issue.

In Iran itself, the fast expansion of ”Weblogistan” is an increasingly important development. It is estimated that there are already mjore than 100 000 weblogs in the country. As Western music is banned, the Internet and Weblogistan is expanding veryt fast.

Farsi is the 28th most spoken language in the world, but according to the linked report might be well on its way towards replacing French as the 2nd most common language in the blogosphere.

Sooner or later, there is change coming to Persia.

Opinion – Ben Macintyre Times Online

Russian Gas War Against Ukraine?

26 december 2005

The new year could well beging with an open and dramatic gas war between Russia and the Ukraine. If Gazprom turns off the gas supplies to Ukraine – as it is now threatening to do – the effects for the country will be very serious indeed.

On the surface it’s all a dispute about prices.

At the present, Ukraine pays the state-controlled Russian energy giant a price of 50 dollars per 1.000 cubic meters of natural gas coming through the big pipeline systems.

This is undoubtedly a low price that is more a reflection of old Soviet practices than realistic prices. There is little doubt that Gazprom over time has the right to ask for a high price.

But the way the entire thing is handled invites speculation that other interests are more driving in the dispute. What Gazprom suddenly asks for is an increase with more than 400 % to 220-230 dollars from January 1st. This would be an immediate transition to the price level of Western Europe.

There is no doubt that this would have a very severe effect on the energy-thirsty Ukraine economy – and it can hardly be a cdoincidence that this will happen just before the crucial March election.

Russia says that Ukraine is now an independent country and would have to pay accordingly. But beneath the headlines Gazprom has signed a new contract with formally equally but more Kremlin-loyal Belarus at a price level roughly equal to what Ukraine is paying today.

It’s very evident that some more equal than others.

Ukraine has some cards of its own to play. Close to 90 % of the Russian gas exports to Western Europe passes through the Ukrainian-owned pipeline system running through the country. And Ukraine is now seeking to increase transit fees for Russian natural gas transported via its territory to $3.50 per 1,000 cubic meters per 100 kilometers, up from the current $1.09. With the volumes in question, this already makes for a lot of transit money in the Ukrainian economy.

The pipeline system is the key Ukrainian asset in this drama. And in a move that clearly illustrates this, Moscow appears willing to accommodate Kiev on the gas price if Kiev accepts a loose agreement signed in 2002-2003 on turning Ukraine’s transit system into a Russian-Ukrainian consortium, possibly with token German participation.

For Ukraine, that would mean losing control of its key strategic asset in this drama.

As the conflict escalates, there are all sorts of sub-dramas within the big drama.

Gazprom is saying that even if it shuts down supplies to Ukraine on January 1st it will continue deliveries to Western Europe. One does not want a dispute with primarily Germant at this time and over this issue.

But for Ukraine there is always the option of just taking the gas passing its territory and disregard what Moscow is saying.

The potential for a very major mess is certainly there. It might affect everything from the politics of Ukraine and the reputation of Moscow to the heating in Germany.

And it might well have major ramifications for how Europe looks at its future energy supply and security situation.

Gas politics has entered the European scene in earnest.

:: Write to Vladimir Putin: Tell Him What You Think About Blackmail With Gas :: Ukrayinska Pravda

Coming Battle for Jerusalem

23 december 2005

In a sunny Rome, everyone is preparing to celebrate another Christmas. Here, it will be the big-time premier of the new pope. Not a small thing around here – and elsewhere.

But it’s not only in religious terms there is reason to look towards Jerusalem and the Holy Land these days.

The twin elections to the Palestine and the Israeli Parliament in January and March will shape the political environment that may or may not make it possible to move forward with a peace process.

First is the Palestine elections on January 25th.

As expected, they are hitting problems over the issue of East Jerusalem.

Formally but illegally incorporated into Israel and the rest of Jerusalem, its inhabitants don’t enjoy the rights of Israel and are now increasingly being dened the right to be part of Palestine. The Israeli authorities have announced that for the first time no sort of voting will be allowed in East Jerusalem.

This was a tricky issue in the Palestine presidential election last year, and now I guess that the Israeli attitude to some extent is influenced by the fact that there will be the Knesset elections in March.

While President Abbas has indicated that he might even postpone the entire election because of the dispute, the opposition in Hamas seems to want it to go ahead.

In a way it probably suits them just fine. They can agitate even stronger against the Israelis, and they can claim that President Abbas has achieved very little with his more moderate policies. It all plays into their hands – and increases the possibility that they will be the big winners in the election.

If that were to be the case, it would greatly complicate a number of issues. Officially, Hamas is considered a terrorist organisation, and we are not supposed to have anything whatsoever to do with such.

Some in Israel and the US are even saying that Hamas should not be allowed to run in the elections. But in the Iraq elections, even those that had both urged and practized violence against the US and others were allowed to take part. That they did so was even considered as some sort of success – they were drawn into the political process.

So we’ll have to see what happens.

Key will be if the White House and the European Union can get Israel to modify its hard line on voting in East Jerusalem. As a bare minimum, they should allow in 2006 what they allowed in 2005.

We have no reason to play into the hands of the extremists.

Jerusalem should be a city of peace.

Haaretz – Israel News – Hamas pushes for immediate elections

Global Europe

21 december 2005

Those interested in my reflections on the state of Europe in this period of accelerating globalisation can read the speech I gave to a reception at Kreab in London recently.

It’s taken some time to get it all down on paper, but since there was a big demand for the text I guess it was worth doing.

There is no doubt that we have been slipping behind in certain respects during the last decade. But we have every reason to point out that our overall achievements during that period have been remarkable in a number of truly important ways.

And even if you look at economic figures, the European share of global exports is holding up well in a situation where Asia increases and the United States decreases its shares.

But it’s in and under the impact of its new East that we now see the transformation of the European economy. That’s so far a rather underreported story.

The speech is available at my webpage.

As Christmas approaches, a somewhat uplifting message never really hurts.


The Missing Link – Sectarian Divisions Confirmed

20 december 2005

It’s not entirely surprising that the preliminary and partial figures from the Iraqi elections show that the vote went heavily along sectarian and national lines.

This is almost always the case in situations like these.

To build up political parties based on ideas rather than on identity – which are the foundations of most Western democracies – not only takes time, but also requires circumstances somewhat different from those often found in immediate post-crisis or post-conflict societies.

In Bosnia, many had hoped that there would be the emergence of so called non-nationalist groupings after the war. But not only had the politics of the country been split almost totally along so called national lines in the only free election prior to the war, it split more or less along the same lines after the war, and has remained essentially so ever since.

The experience of both Bosnia and Iraq shows that the building of political parties based on ideas rather than identity is the missing link in almost all efforts at state- and democracy-building in fractured societies and regions. And we do not as yet have a good answer.

In Iraq, it now looks as if the Shia United Islamic Alliance will get a support over the critical third of the seats. And it looks as if the more broadly based groups went virtually nowhere. That the alliance between the two Kurdish groups consolidated their hold over the Kurdish provinces was hardly surprising.

Now the Sunnis are talking about election irregularities. But few such were reported at the time. It seems as if we are dealing with a genuine election result.

Genuine – but nevertheless problematic.
Aljazeera.Net – Iraq announces initial election results

Sweden In Charge?

19 december 2005

A key part of the EU budget compromise on the financial framework 2007 – 2013 was the agreement to do a review of the entire budget in 2008/09:

Europeans are living through an era of accelerating change and upheaval. The increasing pace of globalisation and rapid technological change continues to offer new opportunities and present new challenges. Against this background, the European Council agrees that the EU should carry out a comprehensive reassessment of the financial framework, covering both revenue and expenditure, to sustain modernisation and to enhance it, on an ongoing basis.

The European Council therefore invites the Commission to undertake a full, wide ranging review covering all aspects of EU spending, including the CAP, and of resources, including the UK rebate, to report in 2008/09. On the basis of such a review, the European Council can take decisions on all subjects covered by the review. he review will also be taken into account in the preparatory work on the following Financial Perspective.

There is thus the possibility to do also major changes taking into account enlargement needs, impact of world trade talks or any other factor considered relevant.

The fact that farm spending is likely to take a bigger share of the EU budget in the years ahead than in the past few years is among the factors that should give pause for thought. This was of course the result of lower overall levels of spending while preserving farm support spending.

The agreement says hardly anything about how the review should be done.

But it does mention 2008/09. One possible – I would say even likely – scenario is that the Commission presents its proposal under the review during the later part of 2008, that this is widely debated during the run-up to the European Parliament election in June 2009, and that a decision is taken by the European Council in December 2009.

That’s when Sweden has responsibility for the EU Presidency.

The last – and first – time Sweden had the presidency was a period when no particularly challenging decisons had to be made.

This time could be very different indeed. It might in fact be among the most challenging presidencies overall during the rest of this decade.

Whichever government comes out of the elections in September 2006 – it has better start to get itself prepared!


Christmas Coming!

18 december 2005

Behind us lies a week in which things, after all, moved forward somewhat.

There was a budget deal for the European Union in Brussels, as well as an agreement on candidate status for Macedonia. There was an orderly election in Iraq, although the major issues are still in front of the country. And there a limited deal at the World Trade Organisation ministerial meeting in Hong Kong, allowing the global trade talks to move forward.

Forward movement on all of these fronts.

But now I would expect things to slow down. In large parts of the world we are rapidly approaching Christmas. At the least for the Protestant and Catholic Christians – the Orthodox prefer theirs to be a little later.

As for myself, I’ll be going to Rome in Italy to spend at the least part of Christmas there. No snow, but numerous other attractions.

There will be time to reflect on other things than the state of the world, the turmoils of Europe or the prospect of politics.

Yes, the First Merkel Summit

17 december 2005

My assumption yesterday evening that this would be seen as a Merkel summit – with new German Chancellor Angela Merkel playing a key role – has turned out to be correct. It’s not only in the German media that she is portrayed as having played a key role in actually getting the agreement.

After an interlude of some years we are thus returning to a situation in which Germany is a major player in its own right in Europe. Not simply an annex to Paris, but a player able to play a somewhat broader play.

In the first half of 2007 Germany will have the EU presidency, and the summit in June of that year, presided over by Angela Merkel, will be the one where the newly elected new President of France makes his or her first European appearance.

This is where we should expect the critical decision on how to move forward on the important constitutional/treaty issues. We might well see some discussions on the procedure taken during the upcoming Austrian presidency, but in all probability it will the German one that will be the truly important.

The year thereafter it will be time to do the review of the budget – the financial framework – that now has been agreed to.

By that time we might very well have a new Prime Minister in the United Kingdom, we will certainly have a new President of France and it’s far from unlikely that we will have a new Prime Minister of Italy.

In many ways it will be a new ballgame – but Angela Merkel will be there.

So it is probably right to see the meeting of the European Council in Brussels during the last few days as the first in a series of Merkel summits in the European Union.

It’s Berlin that will count in Brussels.

Congratulations, Europe and Macedonia!

17 december 2005

It was indeed high time to put an end to the soap opera of budget dispute in the European Union. Tony Blair managed to secure a deal on the 2007 – 2013 budget for the Union.

Perhaps these soap operas are unavoidable. It’s many different interests coming from 25 member states that have to come together in a unanimous decision. It’s distinctly good that there isn’t yearly major budget decisions, but instead a multi-year process that then clears the table for a considerable time.

I haven’t as of yet had time to look at the details of the budget deal. It’s expenditure on the level of 1,043% of the anticipated GDP of the Union. Minute if you compare it with the level of – often much too high – public spending in the member states.

But most important was that candidate status was given to Macedonia. The French lifted their veto.

Macedonia is to be congratulated!

Further steps – as you can see in the text of the conclusions – will be taken in the light of a more general debate in the Union on the future of enlargement. Not necessarily wrong, but very important how that debate is prepared and conducted.

But for the time being we can only note that the European Union has left one drama behind and has kept the perspective of further enlargement open.

Good work, Tony Blair. And Angela Merkel.

87642.pdf (application/pdf objekt)

The Merkel Summit?

16 december 2005

Reporting from Brussels indicate that a budget deal might be emerging after all.

There have been intense meetings between Prime Minister Blair, President Chirac and Chancellor Merkel. And obviously these have succeeded in moving some of the most difficult issues forward.

It wouldn’t surprise me if this afterwards will be described as the summit of Angela Merkel – the new broker of power in Europe.

Brussels and Balkans

16 december 2005

In Brussels it is now hard going over the future of the EU budget. From the outside there are few signs of a softening of the positions, although that was not to be expected at this time.

In the background is the debate about enlargement. The draft conclusions talks about having a more comprehensive debate, effectively on the limits of enlargement, before opening up further accession negotiations.

That might not in itself be bad – it all depens on the outcome of that particular debate.

But it all underlines the significance of the recommendations the Commission will be making on future Balkan enlargement to the informal Balkan summit the Austrian presidency is planning for early March.

My views on what should be done are no secret. The link takes you to a more recent report on them.

B92 >> News >> Archive

After the Iraq Elections

16 december 2005

It will evidently take several weeks until there is a clear result from the Iraqi National Assembly elections yesterday.

What we know so far is that they were conducted orderly, that turn-out to vote seemed high and that it was a calm day throughout the country.

And all of that is certainly good news.

It was a true election. There were 7 605 candidates on the lists of the 307 parties or individual lists that were presented.

The election system was in fact very similar to the one used in Sweden. Out of the 275 seats in the Assembly, 230 are elected directly on lists from the 18 different provinces, while the remaining 45 are used to make the overall result as close to proportional as possible.

In political terms the critical issue is how the election went in the four provinces of Anbar, Salahuddin, Nineveh and Diyala which have 45 % of the population and were most of the violence occurs. It’s here that one encounters the sharp encounter between Sunni pessimism over the future and somewhat more of Shia confidence.

In itself, the election will do little to overcome this.

Overall, the best election result would be a substantial weakening of the Shiite religious coalition that received 48 percent of the vote in January’s election and has dominated the interim government.

Its leading party, the Supreme Council for the Islamic Revolution in Iraq, is closely linked to Iran; with Iranian encouragement, it is pressing to create a nine-province Shiite ”region” in the south of Iraq. With its own constitution and security forces, this ministate would be uled by clerics and would control Iraq’s largest oil fields. Meanwhile, the Supreme Council’s leadership threatens conflict to wipe out Sunni resistance in Baghdad and western Iraq. According to media reports, it is using its control of the Interior Ministry to set up torture chambers and death squads staffed by its own militia.

It is highly likely that the US and others will see to promote the setting up of a more broadly based government that includes substantial Sunni elements as well as the Kurdish parties.

And it’s then that one would be able to judge if the political process is truly moving forward. The key will be how a government is formed and how it starts to tackle the major issues.

This will not be an easy process. First there has to be an agreement encompassing thwo-thirds of the members of the assembly on a Presidential Council, and when this is in place it has to task of nominating a Prime Minister. And in the government there is certain to be a hard battle over the key positions.

And then comes all the challenges of substance. Some of them are outlined in the linked article by the US Ambassador to Iraq Zalmay Khalilzad.

It’s worth noting that he stresses not only the security challenges, but also those in the economic area. So far very little has been done to move Iraq away from the heavy subsidies and thus de facto state control that was the core of the Saddam control of the economy and thus society of Iraq.

I’m fairly certain that the Constitution will be one of the most difficult issues. It was a very quick deal that was done earlier this year, and it did not resolve some of the most critical issues on the governance of the future. This has to be sorted out.

In a last-minute deal in order to prevent the Constitution from being rejected by the referendum, a review process was promised. The Assembly will form a committee that within four months should present a report with possible changes, and if these are approved by a single majority in the Assembly, they will within a month go to a new referendum.

In this, the changes will be approved if not rejected by two thirds majority in three of the 18 provinces.

This will – no doubt – be highly controversial. And highly important. It will not be easy to get both the Shias and the Kurds to back down even marginally from the substantial gains they made with the Constitution.

But for all the very major challenges that lie ahead, what gives hope is that there now seems to be something that could be the beginning of the emergence of a somewhat more inclusive political process in which nearly everyone takes part.

The optimist could describe that as a slowly emerging democracy.

After the Elections

The Baltic Pearl

15 december 2005

In a speech I gave in London recently I illustrated my thesis on the dynamic developments in the East of Europe with some examples taken from the Gulf of Finland – the key area where the Nordic area, the Baltic countries and Russia comes together.

One of the examples I gave in passing was the impressive Chinese investment in St Petersburg.

The link below shows the details, although I understand that a more recent version of the project means that it will be even bigger.

For up towards 2 billion dollars, a new city for 35 000 people will be built, along with major commercial centers and different public services.

It’s de facto a new and very modern town that will rise up by the Gulf of Finland.

Impressive. Who would have believed this 15 years ago?

Multifunctional complex �The Baltic Pearl� – St-Petersburg.ru