Patriarch Diplomacy

31 maj 2006

It was probably a bigger step than many thought when the Patriarch of the Orthodox Church of Russia visted Latvia during the last few days.

It wasn’t really like one church person visiting some other church persons.

He come on an official invitation by the President and the Prime Minister of Latvia. And on Riga airport was parked his very large official Russian government aircraft. His visit was treated as an official state visit.

According to the news media, it was the first visit of a Patriarch of Russia to Latvia in 900 years.

Who was there, and under which circumstances, in the 12th century was not made clear. If correct, then this was before the founding of either Riga or Moscow. An orthodox priest lost in the pagan woods on the Eastern shores of the Baltic Sea…

It’s probably lost in the fog of history.

Anyhow, Alexey II has of course been to Riga before. He is in fact born in Tallinn in Estonia, and while bishop there his responsibility included the Orthodox in Latvia as well. But that was before he ascended to the heights of Moscow.

Nevertheless, he said that he hoped his visit could “set a good start for this relationship” between Latvia and Russia, and that the two countries would increase their cooperation in different fields.

It’s not ping-pong diplomacy between Latvia and Russia.

It’s patriarch diplomacy.

Challenges of Success

30 maj 2006

There is little doubt that Latvia at the moment is doing very well.

But with elections coming up in October, there are discussions on where the country is heading in the future.

Prime Minister Aigars Kalvitis is at the moment heading a minority government, but will remain in office until the elections.

What happens thereafter is anyone’s guess. But fears that money-rich groups around the interests running the profitable oil transit in Ventspils were to launch themselves on the political scene seems to be receding. Their man is too bogged down in legal problems due to his past.

The probability is then high that we will see continued centre-right stability in terms of the policies of Latvia. And that should be good news to everyone concerned.

But Prime Minister Kalvitis is setting his sights on the future.

With costs rising as the country moves on, he speaks about the need to develop the scientific and educational base of the country, and sees this as key to safeguarding and improving the competitiveness of the country in the coming years.

There is of course a certain disappointment here over the attitude taken by certain of the old EU members against the new ones. While the markets of the new countries are completely open to the products of the older, the markets of the older are not completely open to the services of the new.

There is an imbalance that is seen as unfair in these arrangements. And the new EU service directive is of course the concrete expression of this.

But Latvia is also looking towards its Eastern opportunities. Riga has always been a city at the centre of the trading relationship between the East and the West.

Now Riga is coming back as an important service center for important parts of the CIS markets. There are developing links with the countries of Central Asia, and there is talk of developing a new Silk Road using the rail transport possibilities between China and the Baltic Sea, thus cutting transport times from East Asia to Western Europe substantially.

And when one listens to the politicians of Latvia, there is certainly no intention to abandon the successful flat tax model. Today, the income tax in Latvia is 23 %, which is even lower than the 25 % in Estonia and 24 % in Lithuania.

Some politicians are even taking about taking it down further. It is important to attract back all those Latvians who during the last two years have gone abroad to work in other countries, very many of them heading for Ireland. Latvia will benefit from their talent as they are coming back.

So, things are not that bad.

That the economy shows signs of overheating is obvious. The Riga property market looks crazy. The next government will have to firm up the macroeconomic policies by increasing the budget surplus.

But these are the problems of success.

Once upon a time Riga airport was a hub of the Soviet Air Force. Now it’s a key destination for Ryanair.

Things have changed.

Across the Baltic Sea

29 maj 2006

An early flight this morning – but only to Riga in Latvia across the Baltic.

I will be there today and tomorrow, primarily but not only in connection with a conference there by East Capital.

But it’s also a good way to keep up with what is happening in the country as it is heading to its elections to the Seima – parliament – just after the Swedish elections this autumn.

The economy is booming. Last year Latvia registred a growth of slightly over 10 %. This year will be slightly less, but all estimates speak about continued high growth in the years ahead.

I will be meeting Scandinavian businessmen to listen to their assessments. And I hope to be able to see at the least some Latvian ones as well.

Relations with Russia could obviously be better – although they are not necessarily bad. The border treaty has not been ratified, as is the case with Estonia, although in practice this doesn’t really mean anything.

I notice that the Patriarch of Russia Alexey II has been in Riga the last few days and performed services at the main Orthodox church, among other things. Whether he has also been seeing the congregation of Old Believers – those refusing the lithurgial reforms at the time of Peter the Great – having their own Orthodox churches in Riga would be interesting to know.

Since the start of the process of naturalisation, 110 000 Russian nationals have applied for and been given Latvian citizinship. Much of the business of Latvia is dominated by Russian nationals – and they seem to be enjoying to be part of the European Union.

And for all the complaints occasionally coming out of some circles in Moscow, it is clear that a Russian living in Latvia has far better protection for his och her human rights than a Russian living in Russia. Accordingly, they want to stay in Latvia and see their future there.

Later this year, Riga will be hosting the NATO summit. I guess it will be the largest international gathering in northern Europe for at the least a decade. The only meetings of similar size I can remember where the Helsinki Summits.

The decision to have the summit in Riga can be seen as a tribute not only in general to the country but particularly to President Vaira Vike-Freiberga. She has established herself as an impressive and determined political profile, not seldom mentioned in connection with speculations about the next Secretaty-General of the UN, although I would consider that unlikely.

But the NATO Summit will be a great – and important – even for Riga.

Apart from having a promising future, Riga is a lovely city with a rich history.

The Defining Issue

28 maj 2006

I don’t think it’s generally understood here in Europe how big the immigration issue is in the US at the moment.

As I left the US after a week in New York, Washington and San Fransisco, the Senate had just taken its decision on what President Bush calls a comprehensive immigration reform.

The House has already decided on a more limited policy, focusing on border and enforcement, but offering no path to citizenship for those that have been in the country for a long time.

And now the task is to get the Senate and the House to agree to something that can then be voted on – preferably before the November elections.

Fred Barnes in the Weekly Standard is very clear on the importance of the issue:

Failure to deliver on immigration reform, the single biggest domestic issue of the decade, would mark the end of the Bush presidency as an effective political force. Bush would become the lamest of lame ducks. His final two years in the White House would be painful.

But the other way around also applies.

If he can deliver on this, he will be seen as having achieved a major break-through on a very major issue, and also done it in a way that is likely to capture the centre ground of the electorate on the issue.

That could be very important.

But it will not be easy. He will have to face down some very hard-nosed and semi-xenophobic voices. And there will be elements on the Republican party that will have difficulties.

So far he seems committed to stay the course on the issue.

Whether it is the ”defining issue of the decade” or not – the defining issue at the moment it certainly is.

Success in Colombia

28 maj 2006

Good news coming out of Latin America is rare these days.

The politics of the continent seems to be going through another one of its populist – and ultimately destructive – phases.

We have unfortunately seen it before.

One of the few exceptions might well be Colombia. I’m noting it because there is presidential elections there today.

Alvaro Uribe seems likely to win. And he deserves to win.

I remember years ago when Bogota was seen as so crime-infested and dangereous that one could hardly enter the terminal in the airport from flights transferring through there.

That’s all gone. Today, charming Bogota is one of the safest and cleanest cities of Latin America.

There is little doubt that President Uribe has done more than any other leader to reduce Colombia’s once-spiraling violence and the dangerous spread of its biggest rebel group, the leftists and drug-smuggling Revolutionary Armed Forces of Colombia, or FARC.

Murders have also dropped to just above 18 000 last year from nearly 29 000 in 2002, when Uribe was elected, and kidnappings fell to 800 from nearly 3 000 earlier.

This is all associated with the efforts done to combat the drug trade that previously risked totally destroying the country. A program of spraying cocoa plantations from the air that was once rather controversial has evidently started to be succesful.

Of note is also that Colombia’s economy grew 4 percent or better the last three years. Foreign investments has tripled after President Uribe took office.

We’ll see what happens, but to me it’s obvious that he deserves to be re-elected.

Center of Excellence

28 maj 2006

It took some time to get back to Sweden from San Fransisco. The flight from there to London is ten hours.

Back there I had the opportunity of spending some hours at Stanford University.

It is one of the true centers of excellence in our present world.

It has an impressive track record in many respects. In recent years it has achieved a certain fame as the birthplace of what is much of todays Silicon Valley and the role it has played in the US and global economy.

Faculty and alumni of Stanford have helped to create companies like Cisco, eBay, Google, Hewlett-Packard, Silicon Graphics, Sun and Yahoo!. Most of them are headquartered in Silicon Valley.

And in all probability there are now small start-up companies on or nearby the campus which we will hear a lot about in a couple of years. The innovative spirit is very clearly there.

But I spent my few hours there primarily listening to Professor Irving Weissman telling about the state of stem cell research and the possibilities of regenerative medicine.

It’s a controversial subject. Professor Weissman and his colleauges at the Stanford Center for Stem Cell Biology are at the very forefront of the international efforts in this area. But ethnic and religious concern have led to serious restrictions on what they can and what they can’t do.

The potential, as professor Weismann described it, is obviously enormous, even if it will take time for the results to start to be applied widely around the world. But there are obviously the possibility of dealing with some of the most difficult diseases threathening us today.

Asked why he did not move to another country with his research in order to avoid the US restrictions, he answered that he was already in another country, namely California. State policy there is clearly in favour of stem cell research. But otherwise he mentioned other scientists moving to Britain, Singapore or China in order to continue their research.

Of the top 20 universities in the world 17 are in the United States, and Stanford is clearly one of them.

Even the shortest visit gives a strong impression of how we in Europe have often underfunded and underused our universities. We see them purely as edicational institutions, which they of course are, but not as the hubs of innovation, research and change in society.

Stanford University is a 2,9 billion dollar enterprise.That’s a lot of money.

But there is little doubt that the benefits of what’s being achieved there is many times that sum.

We ought to learn from that.

Friends in Need

25 maj 2006

By now, UK Prime Minister Tony Blair should have arrived in Washington for discussions with President Bush. It’s a visit that has been arranged on rather short notice.

Bush will be interested in the personal impressions Blair got when he visited Baghdad and saw the new Iraqi government just a few days ago. But although the US media has been speculating that the two of them would announce some sort of troop withdrawal from Iraq this seems to me unlikely in the extreme.

On Iraq, their joint policy at the moment can be little more than hope that the government that is now at least partly in place in Baghdad will be able to exercise some sort of authority, and that this will make it possible to turn at the least a part of the insurgency around.

It’s a faint hope – but it’s what there is.

I suspect that the number one subject they will be discussing is Iran and what to do. And I strongly suspect that Blair will try to convince Bush that there has to be some sort of US direct involvement in some sort of talks with Teheran.

The letter written by President Ahmadinejad to President Bush is increasingly seen as an important signal. And that it is seen as important is obvious from the fact that it is the number one item on the webpage of the president of Iran.

The picture here – with Bush thinking on how to respond – is in fact taken from that webpage.

With the prospect of some sort of direct US involvement – which Teheran is very clearly seeking – it becomes more realistic to ask Iran for some sort of suspension of their enrichment activities. It might work – or it might not. But not trying does not seem to be too wise a policy.

Apart from Iran and Iraq, I would guess that Blair wants to get briefed on the discussions with Israeli Prime Minister Olmert the last few days, and that he wants to give support to the more concilatory parts of what the White House is trying to impress on the new Israel government.

He will undoubtedly stress the clear link between avoiding a deterioation in Palestine and everything else in the Middle East.

And then I would guess they will discuss how to handle the G8 Summit in St Petersburg in July. There was the EU-Russia summit in Sochi yesterday, and there will be the EU-US summit in Vienna in late June, which are also part of these preparations.

Blair stays in Washington also tomorrow. He will then deliver a speech to Georgetown University.

He will need some good publicity from the visit.

His approval ratings, according to the opinion polls, are below those of President Bush.