The Great and The Good of Brussels

So it was the great and the good of Europe and Brussels getting together for the annual EV50 dinner.

Black tie in Palace d'Egmont as tradition dictates. Candidates and hopefulls mingled with the general crowd in anticipation of the results of the vote.

Some years ago I remember that a substantial number of the awards were collected by different Irish representatives. The fact that the entire thing is presided over by former European Parliament president Pat Cox of course then added to the Celtic dominance of the evening.

This year was different. If there was a tendency here, then it was in the Eastern direction. An awareness of a new Europe is slowly coming to Brussels, even if there were tendencies in the other direction as well.

There were Polish, Ukrainian, Lithuanian and Finnish names all over the place this evening. With Poland emerging as the star performer.

The Statesmen of the Year award went to outgoing President of Poland Alexandr Kwasniewski. During his last week of his ten year presidency, he was undoubtedly in a good mood this evening, thankning everyone for what had been achieved, and noting that these were the years when his country had been able to enter both NATO and the European Union.

But he didn't stop with this, but delivered political pointers for the future as well.

Most importantly, he made a passionate appeal for a membership perspective for Ukraine in the years to come. "Ukraine needs Europe and Europe needs Ukraine."

And he went on speaking about the need to see Europe as much more than the sum of the national self-interest of the member countries. "Europe is not only a combination of nations - Europe is a value in itself, and our common great opportunity for the future."

Needless to say, words like these are distinct crowd-pleasers at a gathering like the one yesterday evening.

But Poland was also honoured with Journalist of the Year with Anna Marszalek.

Non-European of the Year become President of the Ukraine Viktor Yushenko, which of course added to the impact of the Kwasniewski appeal.

And the Baltic touch was certainly there with former President of Finland Martti Ahtisaari becoming Diplomat of the Year for the peace agreement on Aceh, and Dalia Grybarskaite from Lithuania becoming Commissioner of the Year for her struggle with the budget of the Union. Among the nominated commissioners was also Finland's Olli Rehn.

If there was another tendency it was one that might not have been entirely to the liking of Microsoft in spite of the company belong to the sponsors of the evening. Michael Richard become Member of the European Parliament for his opposition to too stringent software patents, and Florian Mueller Campaigner of the Year for his campaign on the very same issue.

The intellectual property issues are obviously as keenly felt as the Eastern enlargement issues.

As European of the Year emerged non other than Prime Minister Jean-Claude Junker of Luxembourg¨. Fresh from a battle earlier in the day with the European Central Bank he conceded that it has been "a very difficult year", but he at the least was grateful to the voters of Luxembourg that they had said Yes to the constitutional treaty when everyone else had voted no, and dedicated his price to them all. That they also preserved him in office went unmentioned.

And after all these words of wisdom we headed for the drinks, the gossip and the much too late beer with further gossip in the delightful athmosphere of the Place Sablon.

Another year. Another dinner. Another bunch of European contributions.

Nuclear Come-Back in Europe?

In all sorts of different ways, energy policy will be high up on the agenda of Europe in the years to come.

In a sure sign of this, UK Prime Minister Tony Blair has now announced that he would look at the possibility of building new nuclear plants in order to replace those that are beginning to age, and that accordingly will have to be replaced with something.

In fact there are few good alternatives to using nuclear power. To replace nuclear power with some version of fossil power would clearly endanger the Kyoto objectives that not the least the Blair government has attacked such importance to.

So what Blair is doing now is sending up a trial ballon. If it flies OK, then I guess he will forge ahead with what would then be the most significant new program of nuclear energy in Europe for decades. And this is bound to influence other countries.

Finland is already building a fifth nuclear plant. Sweden is upgrading its existing ten units as much as it can. And throughout Central and Eastern Europe there will be a need to look anew at the nuclear option in the years ahead.

Europe needs to face reality also in terms of its energy policies.

We can not increase our dependence on non-renewable and fossil fuels beyond present levels.

And that makes nuclear power an almost unavoidable option for the future.

äSpeech to the CBI Conference 29 November

Best Tax System in the World?

Is the Estonian flat tax system "the best tax system in the world", as claimed by Prime Minister Andrus Ansip when he hosted the visiting Prime Minister of Finland Matti Vanhanen a couple of days ago.

Ansip even thought that it would be a good idea to have the system introduced in Finland, and although Vanhanen did not reject the idea outright, it's obviously not imminent.

But whether it is the best system in the world or not, there is no doubt that the model once introduced by Mart Laar in Estonia is gaining ground very fast.

The impressive growth record of Estonia, and its attractiveness for investments, is certainly a contributing factor to this. Success invites imitation.

The idea was somewhat prematurely injected in the German election campaign. Although it did electrify the CDU campaign for a while, it eventually backfired as one wasn't really prepared for the debate. It did not score that well in the Polish election campaign either, although it was not a major issue.

Nevertheless, there is no mistaking the idea gathering ground around Europe.

It will be one of the hottest topic of debate, primarily in Northwestern Europe, in the next few years. And it might well be one of the most significant chances of major success of these countries in the decades ahead.
Helsingin Sanomat - International Edition - Foreign

Euromediterranean Future

There are evidently problems at the Euromediterranean Summit still under way in Barcelona in Spain. The Israeli-Palestinian conflict has a tendency to make itself known more or less everywhere.

Whether the Barcelona meeting now will go down in history as an important one or not remains to be seen, but the relationwship that it discusses is certainly one of the most important.

Once upon a time the Mediterranean united what was then the civilized European world. You could argue that it had the Eastern rather than the Western Mediterranean as its core, and it was certainly as present on its southern as on its northern shores.

But that was a long time ago.

Today, across the Mediterranean runs one of the greatest gaps in wealth to be found in the present world. And while its northern shores are in demographic decline, population along its southern shore is more or less exploding. Add to that the difference between the stable democracies on the one shore and the unstable and more or less authoritarian regimes on the other.

It's a relationship not without its challenges.

It was a decade ago that the European Union launched its so called Barcelona process. The aim was to further the economic and political development in the wider area. Later, it has to some extent been included in the new Neighbourhood Policy of the Union.

And the summit these days is supposed to take stock of the relationship.

Euromediterranean summit of Barcelona- THE MEDITERRANEAN, A POINT OF ENCOUNTER

Europeans Of The Year

Among the things on my agenda this week is the dinner in Brussels at which the Europeans of the year will be announced.

It's an annual thing organized under the auspicies of the newspaper European Voice. And I happen to be one of the members of the advisory panel since a couple of years back.

We put up the names, and then its a system of online voting that decides which persons get the different awards in the different categories.

And all comes together in a dinner that brings together the great and the good of the Brussels-centered European political system for a nice evening.

:: EV50 - The Europeans Of The Year ::

Anniversary in Kiev

Last week saw the one year anniversary of the Orange Revolution in Ukraine. A mass meeting in Kiev evidently turned into a rather bittersweet affair, if the account in Kyiv Post is to be believed.

Now all eyes are on the upcoming March elections. They will decide whether the politics of the Ukraine will get stuck in a populism more interested in the past or whether it will truly enter a path of reform aiming for a European future.

The coming week will see important meetings in Kiev. It includes a summit meeting between Ukraine and the European Union.

Over the coming weekend I will be heading both to Kiev - rather briefly - and to Donets in Eastern Ukraine in order to get a better feel for the mood in the country.

It was the East that voted against the Orange Revolution a year ago, but Ukraine can hardly go forward decisively if not also the political forces dominating there become part of the process in the one way or the other.

It will be an interesting week in Kiev - and for me an interesting weekend in Donets.
Kyiv Post. Orange Revolution anniversary protests turns bittersweet

Lessons of War and Peace in Bosnia

On Friday, we had a most interesting and well-attended discussion at the European Policy Center in Brussels on the lessons of war and peace of the war in Bosnia.

A more detailed account of the rich discussion will follow, but in the meantime this newswire from AFP gives at the least a summary of the discussion.

BRUSSELS, Nov 25 (AFP) - Europe must learn the tough lessons from the war in Bosnia or be doomed to repeat them elsewhere, senior diplomats involved in the Balkan conflict 10 years ago warned on Friday.
A decade after a war that claimed some 200,000 lives and left more than two million homeless, the diplomats emphasised the need for focused diplomacy backed by force, then robust peacekeeping and concerted rebuilding efforts.
"There are new challenges around the corner of the same nature waiting for us," Carl Bildt, EU special representative to the region in 1995, told experts, reporters and other participants at a conference in Brussels on Bosnia's 1992-1995 war.
"From Bihac (Bosnia) in the northwest down to Basra (Iraq) in the southeast, the struggle between the forces of integration and the forces of disintegration goes on, that might be Kosovo or it might be Kurdistan," he said.
Bildt, talking at the invitation of the European Policy Centre, with EU foreign policy chief Javier Solana and former EU peace negotiator Lord Owen, said politicians had badly under-estimated the horror the war would bring.
"This was a fundamental, a tragic mistake of historic proportions," he said. "Always do everything that can be done to avoid war breaking out, because when it breaks out you are out of control."
"We need to learn the lessons from Bosnia: be very assertive in preventing the conflicts from breaking out, looking at the underlying currents, trying to settle with reasonable political deals, and the possibility to deploy military force to support diplomacy," he went on.
"Then have the resources, the commitment, the patience and the time that is going to be needed for the state-building projects ... all through this period."
Owen, speaking as Bosnia marks the 10th anniversary of the Dayton Peace Accords, agreed on November 21, 1995 and signed that December 14, said Europe must not allow itself to be insulted by people like former Bosnian Serb military chief Ratko Mladic.
"If you are serious ... you can't allow a warlord to cock a snook at you. We didn't learn that in Somalia, and now we are seeing it in Darfur," he said.
Mladic and former Bosnian Serb political leader Radovan Karadzic have been indicted for war crimes and still remain at large, 10 years on, which Owen described as "a disgrace".
The former British foreign secretary said that "hard peacekeeping" -- in which a robust military presence enforces peace and exits quickly to be replaced by traditional peacekeepeers -- was also vital in dealing with conflicts.
"Hard peacekeeping must be done when you're really serious and I doubt that it's something for the EU or for the UN. I believe that is really going to be done by NATO or other regional military alliances," he said.
Solana, who was Spanish foreign minister at the time and later led NATO, said that politicians need to act together closely with the military as soon as a potential conflict is identified.
"A clear lesson from the Balkan dramas is that when the European Union, the United States and NATO are united and work together, they can achieve great things," he said.
He said the fact that this was done so late in Bosnia resulted in tens of thousands of needless deaths.
"The price of nationalism and our collective failure to end the fighting was very high," he said. "We got peace, yes, and ended the nightmare, yes, but a peace that came late and was full of painful compromises."
And on the day that Bosnia begins talks on a stabilisation accord with the EU, a first step on the long road to joining the bloc, he said hopes for membership had been a decisive factor.
"The prospect of eventual European Union membership has been no doubt the overwhelming transformational force in Bosnia," he said.
In the end though, Bildt said, prevention is far better than a cure.
"In retrospect the number one lesson of the Bosnian war is that we should have done more in order to prevent it from starting at all," he said.

Shimon Peres and Ariel Sharon

The drama now played out in Israel is perhaps the beginning of the last great effort of those from the founding generation of the state of Israel.

Ariel Sharon and Shimon Peres share a common background in the underground organisation Haganah during the years prior to the founding of the state. They evidently forged a friendship that has lasted to this day.

For a long time Israeli politics was dominated by the Labour party and its different leaders. In the one way or the other, they all had their background in the ghettos of Eastern Europe.

It was David Ben-Gurion that picked up young Shimon Peres, who become very important in shaping the Israeli Defence Forces, and who should be credited with lots of the efforts to give it also a secret nuclear capability.

It was in 1973 that Likud was set up, and in 1977 it come to power under Menachem Begin, establishing a "counter-establishment" that started to integrate not the least the Jews with more of a background in the Middle East into the political system.

Although the warrior Sharon was key in Likud, there was always an element of distrust between him and the even more hard-line core of the party. It had its origins in the more militant Stern and Irgun armed groups, and relations between them and Haganah in the underground were not always the best.

Now Sharon is breaking away from Likud, and Peres is breaking away from Labour, with a new political group seeing the light of the day and intending to complete the work of creating a secure and free Israel.

They do this in a situation in which it is other groups that are taking over in Israel. No longer are the leading persons having their background in old Eastern Europe. Now, it's more often than not the Middle East, and further down the road will come the million or so recent immigrants from Russia.

It's still old Israel that is now regrouping and perhaps preparing for a true peace. But behind them comes a new Israel with sometimes different perspectives and values.

Death to Civil Society in Russia

It is highly disturbing to see the speed with which the Duma in the first reading decided on the new law putting serious restrictions on non-governmental organisations in Russia, and in practical terms forcing all foreign such to close down operations in the country.

Independent Duma member Vladimir Ryzjkov is clear in his view about the law:

"This bill will put an end to civil society in Russia".

In Moscow over last weekend, different representatives of the presidential administration brushed aside criticism of the draft law by saying that it would be very substantially modified.

Well, there is still room for this to be done. But we have learnt over the past few years that the nationalist and the security factions more often than not get the last word on issues like these.

I understand that the issue was raised by President Bush when hne saw President Putin in Busan last week. That's excellent. One wonder if Europe has done anything. I haven't heard anything.

Silence from Europe would be highly disturbing.

We should not silently accept the silencing of Russia.

Duma Gives Nod to Tough NGO Bill

Dayton Drama Produces Very Little

I missed the Dayton anniversary celebrationens in Washington yesterday. Previous commitments in Athens - where weather is as bad as you get - had to be honoured.

It was all built up as a very major thing to get the Bosnian parties to agree to major constitutional revisions and reforms. Not a bad thing in itself, although I'm always somewhat hesitant against anything that takes focus away from the necessary economic and social reforms.

At the end of the day, very little was achieved. There was plenty of smoke and sound, but precious little of fire and substance.

The Bosnian party leaders assembled in Washington agreed in the most general terms possible to undertake constitutional reforms to strengthen the government and to streamline the presidency and parliament.

They could evidently not be brought to agree on what that actually would entail, but undertook to have some answer ready by March 2006.

We'll see what that means. Some will undoubtedly interpret it in a maximalist way, and others in a minimalist. That was the critical gap that Washington obviously failed to bridge.

It's high time for the European Union to take charge of the process. After all, it should be related to the process of European integration, even if that is likely to be a rather slow one.

The Dayton anniversary drama of Washington achieved very little. Europe has a somewhat more long-term view.

That is likely to achieve more.

Bosnia Towards Europe

On the day of the tenth anniversary of the deal in Dayton the EU Council of Ministers decided on the opening of negotiations for a Stabilisation and Association Agreement with Bosnia.

Good. But there is a risk that one would believe in Bosnia that this will solve everything. It will not.

At the end of the day the problems of Bosnia will have to be tackled by the politicians of Bosnia - although the European Union will provide a framework and a model of great importance.

The Commissioner for Enlargement and the Western Balkans Olli Rehn was very clear in his statement:

"Bosnia and Herzegovina has a clear European perspective. This perspective will be even more tangible when negotiations start on a Stabilisation and Association Agreement with the European Union. This agreement provides new opportunities for all citizens of the country. In terms of trade and economic developments but also in more cooperation in various policy areas, such as, tackling organised crime and trafficking across borders, as well as to improve environmental standards."

"The reforms in the country must continue, to further improve the citizen rights and economic opportunities of the people of Bosnia-Herzegovina. They also help to meet the conditions of approaching the EU. Clear conditionality is the basis of the EU’s soft power of transformation that turns potential candidates to ripe member states over the years."

Conditionality remains the name of the game. For Turkey. For Serbia. For Bosnia.

Ultimately for the benfit of the citizens of those countries.

EUROPA - Rapid - Press Releases

Angela Takes Power

Today is the Big Day in Berlin. More than two months after the federal election, a new government will formally be formed.

At 10:00 the Bundestag will vote on the proposal to make Angela Merkel the new Chancellor of Germany. Outgoing Chancellor Gerhard Schröder will cast his vote for the woman he did his utmost to block, and is then scheduled to give up his seat un the Bundestag tomorrow. But a critical question is how many SPD members will not give Angela their votes.

Then, at 14:00, she will be sworn into office, after which the entire new cabinet will be sworn into office at 16:00.

Then starts to business of reforming Germany and changing Europa.

Nothing more and nothing less...

href="http://www.bundestag.de/">Deutscher Bundestag - German Parliament - Bundestag Allemand

National Responsibility in Israel

Today Prime Minister Ariel Sharon left the Likud party in Israel that he himself to a large extent had created back in 1973. Instead, he decided to set up a new "National Responsibility" party with a profoundly different core agenda.

While Likud was the party that was formed around the idea of Greater Israel, National Responsibility will be the party that de facto abandons this idea and instead continues the policies for a realistic peace started with the unilateral disengagement from Gaza.

It is a move of historic significance for Israel - and possible for the entire Middle East.

The country is heading for new elections by March at the latest. March 8 looks like a possibility.

It will be a bitter struggle not the least between the old and the new party of Ariel Sharon. Israeli politics is being redefined in a way that will have consequences for years to come.

There has also been the upheaval in the Labour party and the emergence of its new and very different leader The new leader Amir Peretz is from a very different mould than the old ones, and seems destined to strike a cord with the electorate. It looks as if the old leader Shimon Peres is about to abandon Labour and join the new party that Sharon is setting up.

It will be turmoil on all fronts. But the end result is likely to be a Knesset majority for a continuation of the present policies of realism and peace.

You never really know, but at the moment it seems to be good news coming out of the Middle East.

Haaretz - Israel News - Sharon officially quits Likud to set up new party

Bosnia 10 Years After Dayton

Today it's a decade since we managed to get final agreement on a peace agreement that ended the brutal and more than three years long war in Bosnia.

We spent three weeks at Wright-Patterson Air Force Base in Dayton in Ohio in the US trying to get all the details right. But in the early morning of November 21 it still looked as if it was all going to fail. Only last-minute concessions made the deal possible.

When looking back at the decade that has passed it's obvious that Dayton was a success in ending the war and setting Bosnia on the path to a sustainable peace.

But as the country today is on the verge of a transition from international semi-protectorate to European integration, it is a more open question whether Bosnia has been a success.

The greatest challenge that Bosnia faces is the economic and social one. Official figures speak about an unemployment over 40 %, but this applies only to the app. third of the adukt population that is to be found in the labour force. In spite of the the revival of Sarajevo, poverty remains widespread.

The politicians of Bosnia have been far to tempted to blame all their problems on the international community, or to descend into different constitutional squabbles, and far too little ready to tackle the hard realities of profound economic reform.

It's by giving its people a better prospect of the future that Bosnia can really make itself a success in the years to come. The road towards European integration will be a powerful help, but will not in itself solve the challenges that are there.

Today the European Union in Brussels will give ahead for the start of talks on a Stabilisation and Association Agreement with Bosnia. That's significant, but doesn't automatically solve anything. There is even a risk that it lulls the leaders of Bosnia into a sense of complacency.

In parallel, talks in Washington are likely to result in a limited agreement on limited constitutional changes. That's also a good step, although one that in itself does not address the core challenge of the country at this time. And there is always the risk that continued squabbles over its implementation will deflect them from the key tasks.

We do see important progress in the region. Croatia is negotiating for membership in the European Union. Serbia is making progress in economic reforms. Macedonia has been recommended for candidate status for EU membership by the European Commission.

There is a risk of Bosnia falling behind.

A decade after Dayton, it is high time that the leaders of Bosnia concentrated on the real challenges of peace.

y10 years after Dayton I: Bosnia still has a way to go - Editorials & Commentary - International Herald Tribune

Coming Week

Just back from a week in Beijing and Moscow, it's not bad to spend a day and a half in the beginning of this week in Stockholm.

But then I'm off to Athens to deliver a speech on innovation and change in the European economy. For some reason people often ask me to come and deliver a somewhat more upbeat message on the prospects for the European economy.

I'll do my best. Certainly there is a pick-up in the economy at the moment. The eurozone might well grow by more than 2 % next year. But in terms of R & D spending there is no going around the fact that trends are not going in the right direction.

Then I'm back in Stockholm Thursday for a regular meeting of the Nordic Venture Forum. That's the thirteen or so leading venture capitals firms in the high-tech area in the Nordic region coming together to exchange experiences and to discuss where the markets are heading.

It's normally highly enjoyable meetings. And useful.

On Friday it's off early to Brussels for a series of Bosna- and Balkans-related meetings.

First there is a conference at the European Policy Center where we will discuss the lessons to be drawn from the war in Bosnia and how it was ended in 1995. I think it will be highly interesting.

First Javier Solana will speak. In the critical autumn of 1995 he was Foreign Minister of Spain and in that capacity the Presidency of the European Union. He was highly involved in the events of those important months.

Then there is David Owen, Rupert Smith and myself.

David Owen was of course the EU Balkan negotiator from the summer of 1992 until he was replaced by me in the late spring of 1995. His is the story of the constantly undermined efforts to end the war in Bosnia. He is a man worth listening to.

Rupert Smith was the commander of the UN forces in Bosnia during 1995 and later went on to become, among others things, Deputy Supreme Allied Commander Europe in NATO, i e the highest European military position in NATO. He's a superb military man with a most interesting story to tell.

And then myself.

There will also be - on a somewhat separate track - the present Prime Minister of Bosnia Terzic to discuss the future of the country.

From there I go directly to speak to an internal meeting with the European Commission on its future policies versus the Balkan countries.

And on Saturday it is back to Stockholm again.

Moscow Snow and Succession Speculation

Snow is falling heavily over Moscow this Sunday morning. There are white caps on the golden cupolas of the Kremlin churches and palaces.

Within the ringways it's still last weeks personel changes in the government and the Kremlin that is the subject of conversation number one. Everything is judged as part of the preparations for the 2008 presidential elections and the transition then from the present Putin period to some other period.

It is now taken for granted that Vladimir Putin will in fact respect the provisions of the constitution and step down after two periods and ten years in the office. But it is equally taken for granted not only that he will control the succession but that he would also seek to be in some sort of control thereafter.

To remain in control can be done in different ways. Present speculation seems to be centered on him building up the existing United Russia political party into a more coherent group that establishes a virtual monopoly and then de facto rules the state institutions in a way reminiscent of the old Communist Party of the Soviet Union.

Putin would then exercise power as head of this political force. And he could well combine that with occupying a lucrative and powerful position as, for example, chairman of the board of the gas and energy giant Gazprom. He would then be in control of the source of money and the source of political power in the country.

Who would then move into the position of power in the Kremlin?

It's probably too early to tell. But it certainly looks as if the field of candidates now consists of Dmitry Medvedev, Sergey Ivanov and Sergej Sobjanin.

The big move of last week was the move of Medvedev from his past position as Chief of Staff of the Kremlin to the new one as First Deputy Prime Minister. At the same time, Defence Minister Sergey Ivanov was accorded the additional function of Deputy Prime Minister, thus elevating him, and the regional givernor from Tuymen province Sergej Sobjanin was made Kremlin Chief of Staff.

People who know says that Medvedev is now convinced that everything is pointing to him as the man who at some time will be appointed Prime Minister and from that position, very much as once happened with Vladimir Putin, will be put forward as the candidate of power at the 2008 election. Presently Chairman of the Gazprom board, he will then hand over that position to Vladimir Putin.

But it's too early to be certain of that. The one who's in the lead too early only seldom makes it all the way to the finish of the race. And it's obvious that Sergey Ivanov is still very much in the race with his impeccable security credentials, as well as that Sobjanin might well emerge as a skilled political contender.

He's the only one of the three ever having been elected to anything - to the extent that such things still matter in Russia - and has evidently proven to be a rather popular and competent governor of the oil-rich and important Tuymen region.

It's in all probability still an open race - but it is a race, although within a very confined circle.

Kremlinology is back in business - it's succession within the heavily restricted political system of Russia of today.

Is The US Home Front Collapsing?

Will this be remembered as the week when President Bush started to lose control over the Iraq war debate in the United States?

The signs are certainly there. It's not only that the Democrats are stepping up the attack, but the vote in the Senate last Tuesday clearly showed an increasing amount of nervousness in the Republican ranks.

Looking at how the US domestic scene is developing, the Bush administration has perhaps six months to get things right in Iraq. If the situation there fails to improve significantly, making some orderly troop withdrawals possible, political pressure for a more disorderly and larger withdrawal might well become irresistible.

Next year there are mid-terms elections in the fall, and then starts the run-up to the 2008 presidential elections.

There are clearly parallels to what happen in Vietnam some decades ago when it was the home front that collapsed first. In the latest issue of Foreign Affairs, Melvin Laird has written an essay on that situation which has rapidly become mandatory reading for anyone wanting to be serious in this debate.

Laird was President Nixon's Secretary of Defence 1969 - 1973 and had the task of getting the United States out of the mess in Southeast Asia. In the article, he claims that the policy of handing over to the South Vietnamese was an overall success. Had only the US beeen able to back up the South Vietnamese army when the large North Vietnamese army assualt came in April 1975 things would have been different.

Perhaps. But the problem in Vietnam wasn't purely a military one. At the end of the day it was the failure to build up a sufficiently broad-based and credible regime in South Vietnam that doomed the war to failure. When the large North Vietnamese attack came, it wasn't only the absence of US support, but also the weakness in Saigon, that caused the morale and the fighting strength of the South Vietnamese forces to disappear.

Where Mr Laird is undoubtedly correct is in pointing out the consequences of a cut-and-run strategy, reminding us of what happened in Vietnam:

"In Vietnam, the voices of the 'cut-and-run' crowd ultimately prevailed, and our allies were betrayed after all of our work to set them on their feet. Those same voices would now have us cut and run from Iraq, assuring the failure of the fledgling democracy there and damning the rest of the Islamic world to chaos fomented by extremists."

"Those who look only at the rosy side of what defeat did to help South Vietnam get to where it is today see a growing economy there and a warming of relations with the West. They forget the immediate costs of the United States' betrayal. Two million refugees were driven out of the country, 65,000 more were executed, and 250,000 were sent to 'reeducation camps'."

"Given the nature of the insurgents in Iraq and the catastrophic goals of militant Islam, we can expect no better there."

In all probability it would be worse. If Iraq were to descend into a civil war the consequences would not be limited to Iraq itself, but would affect this entire volatile region.

Much is at stake in the US domestic debate over Iraq. Even Europeans who were critical of the US invasion of the country are now apprehensive as to the consequences of a collapse of US will to carry through what it has set out to do.

Then we might end up in the worst of all possible worlds. And Europe is far closer to the consequences than is the United States.

Foreign Affairs - Iraq: Learning the Lessons of Vietnam - Melvin R. Laird

Busan versus Europe

The 21 leaders of the Asian-Pacific Economic Community have just concluded their meeting in Busan in South Korea.

Most things seems to have been on the agenda, with APEC going through the same process of deterioation through expansion that we have previously seen with the G7/G8 meetings. If you try with much, you normally succeed with little.

Apart from the obvious discussion on avian flu, the meeting was dominated by the upcoming WTO Ministerial Meeting in Hong Kong December 13 - 18.

The APEC countries together represent nearly 50 % of global trade and close to 60 % of global GDP. The great missing economic and trade power is of course the European Union, which is in fact the world's largest single entity in both these respects.

In its declaration on the trade issues, it was fairly obvious that the leaders in Busan set their sights on the European Union and its agricultural policies:

"We call for breaking the current impasse in agricultural negotiations, in particular in market access, which will unblock other key areas, including non-agricultural products and services. Unless progress is made in this area, we cannot make progress in the Round as a whole. Avoiding or compromising our ambition on this issue would mean that we would lower expectations for the Round as a whole."

To achieve agreements in Busan on this was of course as easy as it gets. But it was also to take the easy route in more general terms.

Trying just to corner the European Union while not making much of an effort to sort out the other complex issues is not necessarily the most constructive approach at this period of time.

The EU has made a substantial offer on agricultural trade, and in fact the developing countries are already exporting more of agricultural products to the Union than to anywhere else. Barriers to agricultural trade with the EU are lower than barriers to trade between the developing countries themselves.

This being said, every negotiation has to be a process in which all of the parties demonstrate flexibility.

It's already unlikely that Hong Kong will bring a break-through in the further trade liberalisation process. But neither is there likely to be a complete break-down. The risks are simply to great.

But it's far more than just agriculture that's on the table. To concentrate on that issue and that issue alone does not seem to be the most constructive thing right now.

Busan versus Europe is not a good signal.
The official website of APEC 2005 KOREA.

Internet Victory in Tunis

The World Information Society Summit in Tunis ended up with a compromise on the controversial issue of Internet governance that wasn't too bad.

Attempts to diminish the authority of the existing system of global self-regulation of the Internet centered on ICANN seems to have failed, and that was really the good thing. The ill-advised earlier attempts also by the European Commission at the end of the day come to very little indeed.

A new international forum to discuss Internet issues will be set up. That could well be useful. It will meet for the first time in Athens in mid-2006.

In the meantime, the work of ICANN goes on, and it remains to be seen if there will be increased interest in its work or the work of its Governmental Advisory Committee. The next meeting of the ICANN Board will be in Vancouver in Canada.

The Tunis meeting was a victory for common sense. The Internet works. There was no reason to mess things up.

At the end of the day that was the Tunis conclusion.

Freedom of the net is safe - for the time being

Soft and Hard European Powers

There is no doubt that a key asset of the European Union is its so called soft powers, notably through the process of enlargement, but also wider through the magnetism of its model of cooperation and integration.

But now and then there is also the need for harder intervention powers, perhaps in particular in order to support efforts by the United Nations in different parts of the world.

That's the background to the efforts underway to build up the so called battle groups.

And during the week to come the European Union will conduct its first military exercise to train some of the operational headquarters that would be involved in an operation with one of these so called battle groups.

It's a small step for mankind, but a fairly significant one for the European Union.

Slowly but surely, the Union evolves into a more credible force for stability, freedom and democracy not only in its most immediate vicinity.

87034.pdf (application/pdf objekt)

Hu Yaobang Commemoration

As I wrote previously, I expected the Hu Yaobang commemoration to be a rather low-key affair for obvious reasons.

That was indeed the case, as far as can be judged from the media available on the Web.
'
Linked below is the Xinhua official news agency account of the entire event. It's worth noting that it mentions neither that he was deposed for refusing a hard crack-down on protests nor the role his death played in triggering the events leading up to Tiananmen 1989.

But I guess that people in China have already learnt to read what´s not on the line in a story.

Nevertheless, it was an event of great political significance in today's China.

China commemorates late CPC senior leader

Skype Tallinn

At the big CEO Forum in Beijing the two Swedes part of the program was Niklas Zennström of Skype and myself.

He was in China in order to pave the way for broader use of Skype in the rapidly increasing Internet community of the country. And I noticed in the media that eBay CEO Meg Whitman at the same time was in South Korea announcing the setting up of their Asia headquarters in Seoul.

There is no denying that Skype is an interesting company that is part of the new wave of Internet development that we are now seeing.

And it is certainly interesting to see where Skype intends to locate those of its different activities that require a more physical address than just cyberspace.

Its research and development unit is not being set up in Stockholm, San Jose or Bangalore but instead in Tallinn in Estonia. The plan is to grow to no less than 400 people there. This entails recruiting locally, but I guess it also has to entail people moving from other parts of the world to Tallinn.

This was bound to happen. The success of the Baltic tiger economies is obvious, and Estonia has been in the lead in developing different aspects of information technologies. It is rapidly catching up with the most advanced nations.

The combination of Skype and Tallinn is a combination that says a lot about the trends shaping our tomorrow.


Share Skype

Putin Moving Backwards

A foggy morning on the northern Chinese plain as I'm preparing to fly to Moscow.

In a move that has been given far too little attention, the Duma in Moscow is busy deciding on a new legislation that seems to be designed to drive all foreign NGO's out of the country as well as to radically curb the activities of domestic NGO's.

If enacted, it means that the Carnegie Moscow Center, where I am on the Advisory Board and which today is the only foreign think-thank established in Moscow, will have to close down.

It has been a most valuable meeting-point between Russia and the outside world, as well as contributing substantially to the understanding of developments in the country.

But that's only one of the many consequences. The New Eurasia Foundation might well meet the same fate.

Today's Washington Post has an editorial on the issue. It is high time for Europe to speak up as well.

Mr. Putin's Counterrevolution

One World One Dream?

Around Beijing you see the ongoing preparations for the 2008 Olympics. The sense of national pride surrounding the project is difficult to miss.

On the streets you see the posters with the slogan "One World One Dream" of the 2008 Olympics in Chinese as well as in English.

But is there really one dream in one world? The question is of the highest relevance in this period of accelerating globalisation in virtually every field.

In a speech in Kyoto at the outset of his Asian trip, President Bush has spoken about freedom and democracy in China, and pointed at the success of Taiwan in opening its political system and creating "a free and democratic Chinese society."

Although widely reported in the global and regional media, I certainly found no reference whatsoever in today's China Daily or any of the other publications I could survey either myself or with the help of Chinese friends.

You can interpret this in two different ways.

Either there isn't really one dream in this world, and speeches about freedom and democracy are utterly irrelevant in the Chinese context, or there is really one dream in this one world, and words about freedom and democracy are then truly subversive and needs to treated accordingly.

The subject is certainly difficult to avoid in different conversations around town. As impressive as the economic development of China is, as necessary is it to ask whether the rather old-fashinioned political infrastructure can hold for long.

The slogan of the day from the Communist Party leadership speaks about the need to create "a harmonious society", and to this is linked the doctrine of "the peaceful rise of China."

These theses are certainly linked to the objective needs of this country that is changing at such breathtaking speed. If this development is not harmonious, there is a risk of an acute overdose of disharmonious tendencies, and there is no doubt that this is feared by broad sectors in society.

But the tendencies that are here points towards changes and challenges in different respects in the years ahead, and there is a clear risk that one overinterprets the need for harmony into blocking any tendency towards the opening up of the political system. This, in its turn, is likely to lead to pressures building up until they can no longer be contained.

There is no shortage of difficult issues that need to be tackled. Not least how to treat the modern history of China.

Tomorrow will see a most significant small ceremony here in Beijing. It has been decided to hold a meeting to commemorate what would have been the 90th birthday of former Communist Party Secretary-General Hu Yuabang.

Hu is widely credited with handling the painful legacy of the 1966-76 cultural revolution - a truly massive tragedy for this country - while also being part of initiating the policies that paved the way for the quarter of a century of growth and change since then.

He was appointed General Secretary of the CP in 1980, oversaw the rehabilitation of thousands who had been persecuted and killed during previous political campaigns.

But his plans - as well as those of Prime Minister Zhao Ziyang - unravelled in early 1987, when Deng Xiaoping removed Hu due to his unwillingness to crack down on student protests in the winter 1986-87.

Hu died of a heart attack in April 1989, and it was the students will to honour him that set in chain the series of events that led to the erection of a Statue of Liberty on Tiananman square and eventually to the brutal supression by the army of the mass demonstrations in Beijing.

And this remains one of the forbidden topics in the China of today. Many things can be talked about - this one distinctly not.

That's why the decision to hold the ceremony tomorrow is potentially of such importance. One can be certain that it is the result if serious deliberations in the highest party leadership. It will in all probability be small, heavily controlled and very sparsely reported in the media.

And the reason is simple: their nightmare is that the dream that was there among the students erecting their Statue of Liberty in the hearth of Beijing will come alive again.

But the step is significant in spite of this.

Meanwhile, the opening up of China towards the rest of the world continues.

The years to come will show whether there is really one dream in this one world of our age.
CNN.com - Bush pushes China over freedoms - Nov 15, 2005

Tunis Internet Battle

I was intending to take a look at some of the blogs following the debates leading up to the beginning of the World Information Society Summit in Tunis later this week and perhaps link to them from here.

But that was not possible. I'm sitting in Beijing, and from here there are sections of the internet that are simply not accessible. The debates concerning Internet governance evidently belongs to the category that the Chinese should be shielded from.

This is an illustration as good as anyone of the importance of keeping the governance of the Internet free from government interference by those whose agenda is a different one from freedom and openness.

Icann. Can you? - Editorials & Commentary - International Herald Tribune

In the Middle Kingdom

Landed in a somewhat chilly Beijing - the old Northern Capital of China - with the distinct smell of burnt coal over the plains stretching from the mountains down towards the sea.

It was a flight of 6315 km from Helsinki over Russia, the Urals, Siberia and the Gobi Desert.

The economic expansion is visible to each and everyone. So far this year the economy seems to have grown by more than 9 percent. There are hardly any bikes left on the streets of Beijing.

And the world is streaming by.

I left California a couple of days ago, but here in Beijing you today find its Governer Schwarzeneffer heading a big Californian trade delegation. Most of the Chinese exports to the US arrive at the Los Angeles and Long Beach ports of Southern California.

And on Saturday US President Georg Bush arrives here on the continuation of his Asian trip. He is in Japan for talks with Prime Minister Koizumi today, and heads from there to the 21-natiom APEC summit meeting in Busan in South Korea.

His father - President Georg Bush 41 - is already here, in fact at the same event where I will take part in the debates.

This afternoon, I will share a panel at the big CEO Forum with the Chinese Minister of Finance Jin Renqing and the South Korean Minister of Information and Technology Chin Daeje to discuss trends in the global economy.

The Middle Kingdom seems to be in the middle of most things these days.

Are Tax Cuts Dangereous?

Few things tend to cause as emotive reactions as proposals to cut taxes. Critics are quick to offer predictions of the likely effect ranging from just bad to truly cataclysmic in their negative consequences.

A quick look at the famous Bush tax cuts and the US economy does however pay a somewhat different picture.

It’s often forgotten that when Bush come to power in early 2001 the US economy was in recession.

Since then there has been three waves of tax cuts – the last in 2003 – and a remarkable improvement in the performance of the US economy.

The country has now had 10 consecutive quarters of growth above 3 %, which is the longest period of expansion since the mid-1980’s and clearly better than the Internet- and Clinton-boom years of the 1990’s.

More than 4 million new jobs have been created, and unemployment has dropped below 5 %. It is clearly significantly lower than in countries like France or Sweden.

Productivity has been increasing very fast. During the last quarter reported it increased by more than 4 %. This is happening in spite of no fewer than 12 increases in interest rates, taking them to a level twice the one in the Euro area.

And the federal budget deficit has started to shrink as a result of the rapid growth in tax income.

Last year federal revenues increased by no less than 14 % as a result of the higher growth. Even with the very high rates of increase in federal spending, on present trends the federal budget might well be in balance by 2008.

Could there be a lesson for others in all of this?

The Coming Web 2.0 Tsunami

H Y P E R C A M P :

It looks increasingly as if we are heading for a new burst of the new economy. There could well be a new tsunami of the Internet that will transform increasingly large parts of our economies.

Last week there was a rather significant leak from Microsoft of an email written by Bill Gates to the company’s key staff. His message was loud and clear: fasten your seat belts, since we are heading for very major change.

Microsoft has a reputation for often missing the initial trends, then recognizing the mistake and catching up with a vengeance. A decade ago, it effectively missed the importance of the Internet, but in another famous e-mail Bill Gates went to Canossa, ordered a major U-turn and quickly recovered lost ground.

His message then was: “The Internet is a tidal wave. It changes the future.” He was right – although somewhat slow in coming to the conclusion.

The new tsunami is an effect of the rapid spreading of broadband connectivity paving the way for completely new categories of services to be delivered over the net. While the Web 1.0 was about text and imaging, Web 2.0 is all about broadband connectivity, wireless links and online services.

And Bill gates now says that “the coming wave will be very disruptive.” The old Microsoft will no longer work. It needs to be reinvented if it does not see the new opportunities at the least as fast as all the users out there on the net does.

During this year it has been companies like Google, Skype, eBay and Apple that have been making both the headlines and the profits. And they represent entirely new business models when it comes to using the net.

And there are new phenomena spreading very fast.

Blogging is clearly a key part of Web 2.0. So are technologies like RSS or the wikis. It’s happening so fast that I note that the words Skype, blogging and wikis aren’t even recognized by the spell-checker that is embedded in the latest version of Microsoft Word…

We are heading for times that will be interesting, inspiring and important.

Disruptive for those not seeing what’s coming. Truly constructive for those that does.

The Week to Come

It's late Saturday afternoon in Southern California. A beutiful day of clear skies and mild winds sweeping in from the Pacific. The occasional windsurfer is still trying his or her luck in the gentle waves.

But soon I'm taking off from LAX in the direction of Europe and Sweden nine timezones towards the East.

As usual, there will be the possibility of spending the beginning of the week at home in Stockholm. Monday will be the taping of two further episodes of "Dinner with Bildt" broadcast on TV8, while Tuesday will be dominated by a seminar looking back on a decade of Swedish membership in the European Union, and hopefully somewhat into the future as well.

But then it's off to Beijing in China for a couple of days. I'm taking part in a panel in a major conference for business leaders there organized by Business Week, but will also give a breakfast talk to the Swedish Chamber of Commerce in the Chinese capital.

And from there I will head West over Siberia back to Europe and to Moscow.

There, over the coming weekend, will be the RAND-sponsored Russia Business Dialogue with brings together the new leaders of the economy of Russia with business leaders and others from the United States as well as Europe.

It's normally discussions as intense as they are interesting.

And from there I'll be back in Stockholm little more than a week from now.

I guess it's all what we call globalisation.

All Politics is Local

And the winners are ... - Los Angeles Times

The airwaves over here are filled with different attempts to read wider political significance into the different local elections and ballots in the United States last week.

They were certainly not universal successes for the Bush administrations and the Republicans, although Michael Bloomberg sailed in comfortably for a second term as mayor in New York. Here in California, Governor Schwarzenegger certainly took a beating.

But one should probably be careful not to read too much into these elections.

Los Angeles Times is certainly not a conservative newspaper, but one of its editorials today warns against drawing hasty conclusions from these elections.

It reminds us of the simple fact that "all politics is local. Especially when the elections themselves are."

That seems like a perfectly sensible conclusion

Enough? Berlin Questions

FT.com / Europe / German election - Germany’s new policy agenda

It certainly wasn't a message to please that the Merkel government presented as it disclosed the results of the long weeks of coalition negotiations.

Obviously it is consolidation of the public finances that has been given priority. The expected 3 per cent increase in VAT will make its contribution to that goal, as will numerous different cutbacks and other changes in the taxation system.

The fear is of course that this VAT increase, which does not go into effect until 2007, will keep domestic consumption down, thus preventing growth from reecovering in the way necessary in order to create new jobs.

But no one really knows.

It might be that the combination of the rather modest structural reforms included in the backage and the certainty that the federal budget will not be sliding out of control will have a confidence boosting effect that will make consumers somewhat more optimistic for the future.

In that case, we might well see growth and employment figures starting to get better during the coming year.

But overall it's difficult to see that this package alone will be sufficient in addressing the different structural challenges of the German economy. Four years is a long time, however, and it is highly likely that we will see policies evolve during that period.

In the meantime the increase in the strength of the competitive forces coming from the East of Europe and the East of Asia will continue to drive the micro reforms of Germany as well as the other economies of Europe.

That, over time, might well be more important than yesterdays package out of Berlin.

The Fuel that Fires the Riots

The Economics Fueling the French Riots

There has been an avalanche of commentaries in the media in the US - where I happen to be at the moment - on the riots in France. Banalities have been mixed with more serious attempts at analysis.

The latest issue of Business Week can be seen as fairly representative of how these riots are viewed in the media here.

It is claimed that "the outbursts were supercharged by an economic system that not only tolerates but actually fosters sky-high youth unemployment. In September, an incredible 21.7% of 15- to 24-year-olds in France were unemployed, compared to only 11% in the U.S. and 12.6% in Britain."

And this state of affairs is seen as caused by the approach to building a welfare state that is seen as dominating the European societies.

"Such sky-high levels of idle youth are a by-product of the welfare-state mentality that's still pervasive across much of Europe. The idea is that government's main role is to provide a safety net for the population, in terms of jobless and health benefits. Generating growth and creating jobs takes a distinctly lower priority, resulting in high unemployment, especially among the young."

It's easy to say that these comments are simplifying what truly is a very complex situation.

But it's hardly possible to say that they are altogether wrong.

They aren't.

A Book Changing History

Barnes�&�Noble.com - Mao: The Unknown Story - Jung Chang - Hardcover

Now and then there arrives a book that one knows will have a profound and lasting impact on the way in which we look at the world and at our times.

Jung Chang's and Jon Halliday's biography of Mao Tsetung is undoubtedly such a book. Just out here in the US as well as in London, it is already very much the center of the debate about the rise of China.

A decade ago, Jung Chang's book "Wild Swans" thought us more than we really wished we knew about the horrors of the Cultural Revolution and what it really meant to ordinary people in the Middle Kingdom.

And now it's Mao Tsetungs turn to be exposed. He emerges out of these intense pages as one of the true tyrants of our time.

A generation ago, it was Edgar Snow's "Red Star over China" that shaped the image of the West of the rising Communist power in the East and its dominating leader. Fused with the romanticism about China that is rooted in admiration of its culture and history, this book shaped the rather naive image of the regime that lasted for decades.

Now, a new book will shape a new image, and a very different one.

There will be controversy around the book. Jonathan Spence, who's probably the most respected scholar on China at the present, in a review in The New York Review of Books essentially endorsed the overall picture of Mao, but was anyhow somewhat uneasy with such a dark picture emerging about such a central figure in modern Chinese history.

The debate will be worth following. We can take it for granted that the book will not be published or allowed in today's China.

But it will shape the image of the regime. These day's, Chinese President Hu Jintao is in Germany after having visited the United Kingdom and on his way to the ASEAN Summit in South Korea and receiving President Bush as he comes to China.

China's peaceful rise is undoubtedly one of the greatest stories of our time - and a profoundly positive one.

But it is worth noting that Mao tsetung's giant portrait still hangs over the entrance to the Forbidden City at the Tiananman square in Beijing.

Better Berlin?

Gro�e Koalition: "Es sieht gut aus"

It actually looks like it's shaping up as a stronger government in Berlin than most people - me included - thought likely just a week ago.

The SPD hasn't as of yet imploded, but instead will get a new leadership with Brandenburg Prime Minister Matthias Platzeck nominated as new Chairman. An Easterner like Angela Merkel, it's worth noting that his success comes out of leading a coalition between SPD and CDU in Potsdam.

And the coalition negotiations are moving forward in a reasonable way. They should be completed by this weekend so that the result can be endorsed by the two party congresses next week so as to allow the new government to assume office around November 22.

On economic policy there is obviously a lot of dealmaking.

Cutting the public deficit will be a priority, with cutbacks in subsidies as well as a rather drastic increase in VAT from 16 to 19 percent in 2007 the key instruments.

But then there will be a loosening up of the restrictions on the labour market - difficult to swallow for the SPD - in exchange for not doing anything to expand the use of nuclear power - and diffucult thing to swallow for CDU/CSU.

The balance is likely to be positive for business. And with the guess that the government will be there for some years to come we might well have a substantial confidence effect, which is exactly what the German economy needs.

So, it doesn't necessarily look that bad.

And both the CDU/CSU and the SPD knows that they are condemmed to success. The party that is seen as being a threat to the coalition is likely to be punished by the electorate - as least during the next few years.

It could turn out somewhat better than expected.

Reform Blockage in California

Voters Reject Schwarzenegger's Bid to Remake State Government - Los Angeles Times

Just having arrived in Los Angeles from discussions in Washington its impossible to avoid the debate about the severe setbacks to Governor Schwarzenegger in no less than four important ballots the day before yesterday.

Schwarzenegger had called for two of these these popular ballots in order to get around the resistance from the Democrat-dominated Californian legislature. But since his measures were about trimming expenditure and making changes in the public sector in order to get the finances of California in somewhat better order he got into an expensive and angry confrontation with the trade unions - and lost.

That's certainly not good news. California has its obvious attractions, but it's been a badly run place for too long, and Schwarzenegger is trying to get some order to the place.

But for the time being it failed. Now it's back to the efforts to get things moving through the legislature in Sacramento. And the risk is of course that the Democrats will now just try to block everything in terms of reforms.

That would be - as the Los Angeles Times puts it in its editorial comment - "a shame. Voters really want better schools, a balanced state budget, safe communities and better streets and highways. But they are really tired of being asked to pass all the laws themselves."

For the time being there are clouds on the horizon for the megastar of American politics.

But otherwise I can testify that the sun shines over southern California.

Macedonia Moves Forward

EUROPA - Rapid - Press Releases

In a highly important move, the European Commission has now recommended that Macedonia be given the status of a country that is a candidate for membership in the European Union.

After the referedum debacles of late spring, the entire future enlargement process has been in doubt. But since then accession negotiations have started with Croatia and Turkey, and now it's official that Macedonia is next in line to open formal talks.

That's a most important signal that will be heard loud and clear throughout the entire region.

But the Commission isn't recommending immediate accession talks. There are a number of reforms still needed in Macedonia. A new assessment of these will be made a year from now, and that means that accession talks can start in 2007 at the very earliest.

Much depends on what will happen in the meantime in Macedonia, in the region and - not the least - in the European Union itself.

But it was a good day for Europe and the Balkans

Morning in Leaktown

CNN.com - Democrats keep two governorships - Nov 9, 2005

Washington is a city that seems to live on the leaks it produces.

The leaks are important in getting important information out to the public and the political debate. You open the morning papers in order to get today's leaks that will give the political debate something to chew on.

But then nornally follows the moral outrage over these leaks and, in som cases, the extended legal proceedings to try to find out who's guilty for what, at the end of the day, most are doing.

At the moment it's all about the story last week in Washington Post about the secret prison facilities that CIA allegedly operates in Eastern Europe.

That's of course highly relevant information, and has fuelled a fire-storm of speculation and discussion. The wisdom of existing US policies on this issue has been questioned once again. The suspected countries have come under serious pressure.

And here in Washington the story rolls on. Morning TV says that more or less everything that was in a confidential briefing given by Vice President Chenedy to senators ended up in the press, obviously including this small piece of information.

Moral indignation over this will now pour over the pages for a while. But for the rest of the world it's essentially a good thing.

The world's Number One Power is a leaky and open place. It's power with transparency, and accordingly power subject to discussion and debate.

Good.

Bad in Baku

16889_en.pdf (application/pdf objekt)

The election in Azerbaijan turned out to be somewhat worse than expected.

The president's party did score an absolutely overwhelming victory. Of the 125 seats in the parliament, they managed to capture no less than 118.

That's certainly not bad. The love of the people for their rulers seems to be more overwhelming in Baku than almost anywhere else.

There were of course constituencies where they did even better. The presidents wife managed to get 97 % of the vote in her constituency, which in no way can be considered bad.

In that particular constituency, it was noted that the turnout - measured then by the number of ballots found in the balltot box - was nearly twice as high as the national average.

Impressive. Very impressive. Where did all those votes come from?

Well, the OSCE observation delegation was obviously less impressed with the overall counting of the votes. In fact, they delivered a fairly devastating statement. It in no way sanctions the way in which these elections were conducted.

So, what will happen now?

Good question. We are still trying to find a semi-decent semi-good answer.

The Chavez Challenge

President Bush Discusses Democracy in the Western Hemisphere

The Summit of the Americas in Mar del Plata in Argentina - bringing together the 34 countries of North and Latin America - failed to bring the long-discussed America-wide free trade area forward. One of the reasons for this is the distinct rise of a new populism in large parts of Latin America.

It's a populism primarily challenging the liberal economic policies that brought so much success to much of Latin America during the past few decades, but it's a populism that could well develop into a new challenge also to the liberal political order in most of the continent.

It's President Hugo Chavez of Venezuela that is leading the charge. His populism backed by the billions of oil income that is now rolling in is slowly destroying his own country and spreading its message of illiberalism to other parts of the continent.

But in addition to being helped by the oil billions rolling in, there is no doubt that he has been helped by the political effects of the financial shocks that have hit the young democracies of Bolivia, Peru, Ecuador and Argentina in recent years and led to a certain disenchatment with the reform policies previously pursued.

And this is now leading to new concerns that Latin America might be entering a more turbulent period.

In a speech in Brasilia yesterday, President Bush outlined parts of the US agenda in terms of Latin America. It's an agenda that commands broad bipartisan support in the United States.

There is no doubt that he wanted to see it as a challenge to the Chavez message:

"Ensuring social justice for the Americas requires choosing between two competing visions."

"One offers a vision of hope -- it is founded on representative government, integration into the world community, and a faith in the transformative power of freedom in individual lives."

"The other seeks to roll back the democratic progress of the past two decades by playing to fear, pitting neighbor against neighbor -- and blaming others for their own failures to provide for their people."

The populist legacy in Latin America is strong - and represents the probably most serious of threats to its future development.

But that makes it even more important to make the countries of Latin America more and more integrated in the international community. This can contain their populist tendencies at the least to some extent.

The United States has an important role to play. So has the European Union.

And the upcoming trade talks in Hong Kong are certainly of great importance in this regard as well.

Another Week

Well, another week coming. And for me it starts exactly as last week did.

Monday in Stockholm. And then Tuesday off to Washington again.

It's another - this time somewhat larger and distinctly more public - meeting to take the temperature on the trans-Atlantic relationship. This time more German and Austrian in its orientation and attendance.

It will coincide with the European Commission in Brussels releasing its opinion on whether Macedonia is ready to start accession negotiations with the European Union or not as part of its evaluatgion of the different accession countries and candidates. Most important.

And Wednesday is also the day when the new minority government in Poland will face its vote of confidence in the Sejm. Will it be a government of conservative populism supported by the votes of leftist and nationalist populists?

From Washington I go later Wednesday to the Los Angeles area and Santa Monica by the Pacific.

It is the autumn board meeting of the RAND Corporation. In addition to attending to the business of the corporation, we review and discuss some of the recent research products of this the world's first, finest and probably still most influential think-thank.

A focus of the discussions there will be the global health issues, now very much the centre of attention due to the danger presented by the H5N1 virus. But there will also be discussions on recent research on the development of both India and China.

Simultaneously in Geneve there will the final preparatory meeting prior to the World Summit on Information Society to see if one can bridge the gap between the US and Europe on Internet governance. Geneva during the week will also be the scene of important talks preparing the Hong Kong ministerial of the WTO.

But I will be in California, returning from there to be back here in Stockholm a week from now.

Intifada on the Seine

Violences : Chirac va r�unir un Conseil de s�curit�int�rieure

There is no denying the significance of the riots that have been occuring in thr suburbs of Paris for more than a week, and which seems to be spreading rather than calming down.

It's easy to gloat somewhat over the French often having lectured others over not having a sufficient social and inclusive model of development. At the moment there seems to be something distinctly missing in the French version of the so called European Social Model.

But these tendencies should be kept to a minimum. We are witnessing an explosion which has profound ramifications for numerous European societies.

There will be much discussions on this in the months ahead. We'll certainly hear the hard-line xenophobic voices that wants to close Europe to the outside world. Anti-immigration forces are likely to be strengthened.

But in my opinion the essence of the problem in the suburbs of Paris is long-term unemployment of the worst sort.

I vividly remember - and it was years ago- when I for the first time was confronted with young unemployed boys who had never seen their parents being anything but unemployed. It was in the heavily immigrant dominated suburbs of Paris. A friend of mine was a parliamentary candidate there.

A society that tolerates second-generation unemployment is almost certain to be a society heading for serious trouble.

But France has been among those countries rejecting the policies of increased flexibility that have the greatest possibility of creating new jobs and integrating new people into the labour market. Any policy of rigidity and priviligies on the labour market is a policy that builds barriers against the underpriviligied and the new.

This is what we are seeing. And the effects are not entirely surprising. Large cohorts of unemployed young men is bad news for stability wherever in the world it occurs.

Paris is certainly no exception to the laws of social and political dynamics.

Now the large question is whether we will learn the lesson and act accordingly.

Otherwise, the Intifada on the Seine risks being just be a start

Regime Change Mood Changed

Fearing an Iraq in a Post-Assad Syria - New York Times

It's very noticeable that in Washington these days the phrase "regime change" isn't heard very often, if at all.

It used to be different. In wilder circles, there was the belief that regime change could be done fairly easily in a number of different places, and that the result would be immediately beneficial.

Those days are definitely gone.

Not only has Iraq been a rather sobering experience, but so has near-by Iran. It can be argued that we have seen an element of regime change in Iran in the last few months, and there is no doubt whatsoever that it has been for the worse. And as for Iraq, the jury is very much out on where that country will end up.

Accordingly, the approach taken to these issues is now distinctly more cautious. Toppling regimes and expecting sudden democracy is no longer the flavour of the month. Rather, it is the careful managment of situations that have the potential of getting worse as well as better.

Syria is a case to the point.

Syria is a majority Sunni Muslim country ruled brutally since decades by a minority Islamic sect of Alawites. It also has large populations of Christians and Kurds, and for decades its leadership has emphasized Arab nationalism over Syrian national identity.

Much can happen there if the minority dictatorship of the Alawites is toppled. The worst-case chain of events has Sunnis finally rising up against Alawites, while the country fractures along ethnic, religious and ideological lines.

That would - mildly speaking - not be a welcome development. There are enough of challenges in the region already.

Accordingly, we are likely to see a somewhat cautious approach to Syria, in spite of the pressure the regime theren is now under as a result of the UN investigation into the Hariri murder in Lebanon. Calls for immediate, sudden and unprepared regime change will be few and far in-between.

And the same might well apply to the situation in Azerbaijan as it comes out of the parliamentary election today.

The mood concerning regime change has changed. It's not yet a policy change, but it's definitely a mood change.

The Meaning of 1612

RADIO FREE EUROPE/ RADIO LIBERTY

Suddenly Russia has got a new national day. On Friday, it for the first day celebrated November 4th as the new national day of the country.

It used to be November 7 with its military parades passing by the gerocratic leadership stuffed up on the roof of the Lenin Masoleum on the Red Square. That was the celebration of the coup in chaotic St Petersberg that in 1917 brought the Bolsheviks to power and dictatorship and misery to Russia.

But now November 7 is officially gone - although there are certain to be those that wants to keep the tradition going. We'll see tomorrow.

There is little debate about what happened in 1612: Prince Dmitry Pozharsky and Kuzma Minin, a butcher from Nizhny Novgorod, led the Nizhny Novgorod volunteer corps in forcing the Polish-Lithuanian invaders out of Moscow. The troops took Kitai-Gorod on October 22 and drove the so called False Dmitry out of the Kremlin on October 26.

The victories helped end the so-called Smutnoye Vremya, or Time of Troubles, a period of internal strife and foreign intervention - even Sweden was there - that began in 1598 with the death of Tsar Fyodor I and lasted until 1613, when the first Romanov assumed the throne and signed an order restoring the Russian state.

And it was the beginning of the long reign of the Romanov dynasty that did not end until the abdication of Tsar Nicholas II in February 1917. His incompetence undoubtedly played its role in paving the way for the tragedies that were to come.

November 4 of 1612 has long been celebrated by the Russian Orthodox Church. For them, not unreasonably, that day was the victory of the forces of Eastern Orthodoxy over the forces of Western Catholicism. As such it was of course of profound importance.

Had Catholicism captured the Kremlin, and Orthodoxy lost Russia, much would probably have been different. Perhaps the developments of the subsequent centuries had made Russia more a part of the tradition of the West. Perhaps there had been less fertile ground for the totalitarianism that made Soviet communism such a horrendeous development.

We will never know.

But now it is this November 4 that will be celebrated as the national day of Russia.

It's certainly good that November 7 is gone. But it is interesting to note that as its replacement one hasn't chosen a date that could be linked to an opening of Russia to the West, but rather a day which is interpreted as "true Russia" defeating the allegedly evil forces of the West.

Things like these should not be overinterpreted - but neither should their significance be overlooked.

Facing Hong Kong and Tunis

Two days of intense discussions in Washington reinforces the impression that the contacts over the Atlantic are much better now than, say, a year ago. The poisonous athmosphere immediately after the Iraq war has been replaced with a far more cooperative approach on most issues.

It was a deliberate decision by the second Bush administration to improve the links. The February visit by the President to Brussels was the key event that turned things around, and there was of course also an eagerness on the European side to move on. We both need the partnership.

But this does not meant that there aren't issues where there is a certain amount of friction.

The issue of what will happen with the EU arms embargoe with China is still hanging out there even if it is not as acute as it was a year ago. There is the beginning of a more strategic dialogue on all the different aspects of the peaceful rise of China.

The two issues in focus at the moment are related to Hong Kong and Tunis - to the upcoming World Trade Organisation ministerial and to the World Summit on Information Society. In the first case the friction is mostly about agricultural policy issues and in the second about Internet governance.

There is no missing the importance that is attached to the later issues. A meeting with one of the true top decisionmakers in town opened immediatly with him asking what the EU is really up to. And in Congress there was as broad support as you can get for the position that the US has taken on the issue.

It is important that this issue is defused as fast as possible. The Tunis meeting is likely to split over the issue anyhow, but it is important how it splits, since that will have a determining effect on what happens thereafter. And it would be very bad if there is a profound split over the Atlantic.

The tragic thing is that much of the EU position - as explained by Commissioner Reding - is based on rather fundamental misunderstandings of how the Internet and ICANN system really works. It's embarrasing to have to admit in discussions in Washington, but it is unfortunately a fact.

On the question of agricultural subsidies the clash of interests is more substantial. It's as complicated to get political acceptance for the rapid reduction of different agricultural support schemes in the European Union as it is in the United States. Both have presented packages of cutbacks that are fairly substantial, but most want the European Union to go farther and faster.

Here the clock is now ticking very fast and one can only hope that the utmost will be done to bridge the differences. If that is done, then the task will be to press all the other - de facto more important - issues that are on the agenda in Hong Kong. But without progress on agriculture there is scant hope of progress when it comes to market access for other products.

When ministers from the 148 countries of the WTO meet in Hong Kong, no one wants to repeat the failure of their last meeting in Cancun in September 2003, not to speak of the earlier utter disaster of Seattle.

If there is failure it is more than likely that we will see a rapid rise in protectionist sentiments in the US as well as in Europe, with different countries starting to go the bilateral rather than the multilateral trade liberalisation route and the chance for a real breakthrough for global trade and development missed for years t come.

This would be a true tragedy. Since the so called Uruguay round of trade liberalisation talks was completefd in 1993 the world economy has been transformed. Partly as a result of Uruguay we have seen not only the rapid rise of China and India, but also the emergence of strong trading nations like Brazil.

But the Clinton administration failed miserable in Seattle to give the further liberalisation new momentum. Now it might well be descrtibed as a test more important than Iraq whether the Bush 43 administration and the present leadership of the European Union can secure the further progress of globalisation by carrying the Doha round to a succesful conclusion.

The mood between Washington and Brussels is undoubtedly much better. But failure and fissure in Hong Kong and Tunis can quickly change the scene again.

We do need a more open global trading system, and we do need a stable and reliable Internet.

We should simply not be allowed to mess up so important issues for us all.

Sunday in Baku

The Importance of Azerbaijan’s Parliamentary Elections - Council on Foreign Relations

On Sunday, the voters of Azerbaijan are going to the polls to elect the 125 members of their new Parliament.

It will be a very closely watched election. Not only has Azerbaijan acquired new strategic significance in the view of its oil wealth, but the election is also closely watched to see if last year's trend towards more of democracy and freedom in the ex-Soviet republics will continue.

This month it is two years since the so called Rose Revolution in nearby Georgia.

The signs are not particularly good. There are 2000 candidates for the 125 seats, but the opposition is hardly coherent, and the regime has been increasingly heavy-handed against different forms of dissent lately.

Azerbaijan is a country with important links to other parts of the region.

It is close to Turkey, with the difference between the Azeri and the Turkish language being marginal, and Turkish TV widely available in the country. It's also linked to Iran, with more Azeris living there across the border than in Azerbaijan itself.

Then there are of course the traditional strong links with Russia. Baku was the oil capital even of Tsarist Russia, then much dominated by the Nobel firm headquartered in St Petersburg.

And more recently the oil links with the outside world have been diversified, with key investments coming in from the US, Britain and Norway. And - needless to say - strong Russian oil interests as well.

So, it's worth watching Baku on Sunday.

Washington Moods

Washington is a town where things are always happening. Few places on this globe are as intensely political as this one.

This evening the main event in town is the White House dinner for Prince Charles and his Camilla from the UK just two blocks from where I'm sitting at the moment. I guess that's the place where one is supposed to be. In this celebrity-conscious small town the guest list is of course printed in the newspapers.

But simultaneously at the least the Senate is sitting later than planned, disrupting numerous dinner plans around town. It's something with support for farmers, and that is an issue as important on this side of the Atlantic as it is with us in Europe.

And then there is of course politics of different sorts.

The Contact Group is meeting on the level of Political Directors to launch the Kosovo status process. And the presence of the Political Directors from the key EU countries has also been the occasion for some informal talks on how to proceed with the complicated Iran dossier.

Earlier today, they and others where part of the informal trans-Atlantic dialogue on that and other issues where also I was present.

Of note is also that the new Prime Minister of Ukraine Yekhanurov is in town for quick meetings with the administration, meeting also the Vice President at the White House.

Tonight I've been at and spoken to the opening dinner of the Transatlantic Policy Network, and tomorrow discussions continue on a wide range of subjects up on Capitol Hill before I'm heading to the White House for some discussions and then onwards to take a flight heading back towards the Old World.

By that time the President himself will be airborne on his way to the Summit of the Americas in Mar del Plata in Argentina. One could safely expect that meeting to be dominated by disputes with Mr Chavez of Venezuela. From there the President continues to Brazil and Panama before coming back here on Monday.

The mood in town is very much dominated by the problems that the Bush administration has had and still have. Last week might well have been the low point of the Bush presidency - it was certainly the low point so far. All of this naturally causes great agitation in the media and in the chattering classes.

But more seasoned observers - and there are plenty of those around - point out that every administration during its second term goes through scandals and problems. It seems to be something of a law of politics. And compared to the 2nd term wave of scandals of practically all previous administrations those of this one so far look rather mild.

Two of the most succesful presidencies of recent times - the Reagan and the Clinton ones - went through waves of scandals in their 2nd terms far worse than this. Both recovered and left a legacy where today it's only the success that is remembered.

Whether Bush 43 can achieve this remains to be seen.

The economy is doing better than expected, although there are the familiar clouds on the horizon. Third quarter growth was no less than 3,8 %, which means that if there had not been Katrina it might well have been approaching 5 %. Stunning.

But in spite of this goods news about the economy it looks most unlikely that the President can move ahead on his social security agenda as planned. As for the anticipated tax reform, the proposal just unveiled sounds sound, but will also mobilize all those vested interest ready to fight to the last dollar for every single one of the endless deduction possibilities in the present system. The battle to get Samuel Alito confirmed as new judge at the Supreme Court might be fierce, but will at the least mobilize the core of the President's electoral support.

On the foreign policy front, Irak certainly does not look good, although it is not Vietnam, and much will depend on what comes out of the new parliamentary elections in December. There are increasing open divisions in the Republican party over Iraq - but for the Democrats the subject is so difficult that they mostly prefer not to talk about it at all.

At the present, the trends for the administration are not particularly good, but not nearly as bad as they are often presented.

Much of what will happen will depends on events of different sorts. There will be things happening that needs to be reacted to. There could be the effect we saw after September 11 - but there could also be the effect that we saw after Katrina and New Orleans.

It's much more open than it seems. It will certainly keep the Washington gossip industry going.

And the world will listen in...