Increased security risk ahead for Golan Heights’ economy

The Syrian Civil War is intensifying along the border with Israel. This will upset the political balance of the region and will impact the economy of the Golan Heights with new short and long-term political risk.

For decades, the Israeli-controlled Golan Heights have been relatively calm. Internationally recognized as part of Syria, the strategic and resource rich region was captured by Israel from Syria during the Six Day War in 1967. A recent spike in violence indicates that the local political economy may be facing its greatest upheaval in decades.

Ο Πούτιν και το απομονωμένο βασίλειο: Γιατί οι κυρώσεις φέρνουν την Μόσχα και την Πιονγκγιάνγκ πιο κοντά

Ο ηγέτης της Βόρειας Κορέας, Κιμ Γιονγκ-Ουν, χαιρετά τον κόσμο στην διάρκεια παρέλασης για την 60ή επέτειο από την ανακωχή του Πολέμου της Κορέας, στην Πιονγκγιάνγκ, στις 27 Ιουλίου 2013. (Jason Lee/Reuters)

Αν οι φήμες αληθεύουν, ο ηγέτης της Βόρειας Κορέας, Κιμ Γιονγκ-Ουν, θα επισκεφθεί την Ρωσία [1] τον Μάιο κατά την διάρκεια μιας τελετής για τον Β’ Παγκόσμιο Πόλεμο στην Μόσχα. Ο Ρώσος πρεσβευτής στην Βόρεια Κορέα, Alexander Matsegora, επιβεβαίωσε επίσης πρόσφατα [2] ότι «ο Κιμ Γιονγκ -Ουν και ο Βλαντιμίρ Πούτιν ανταλλάσσουν μηνύματα τακτικά». Επιφανειακά φαίνεται ότι μια αναζωογονημένη συμμαχία μεταξύ Ρωσίας και Βόρειας Κορέας θα ήταν πιθανή. Παρατηρώντας αυτήν την τάση, πολλοί στρατηγικοί αναλυτές έχουν υποστηρίξει ότι τα συμφέροντα της Ρωσίας στην Βόρεια Κορέα είναι κατά κύριο λόγο οικονομικά [3], συμπεριλαμβανομένου ενός διηπειρωτικού σιδηροδρόμου και του αγωγού φυσικού αερίου που θα περνάει από την χώρα. Αλλά αυτός ο χαριεντισμός της Ρωσίας με την Βόρεια Κορέα ταιριάζει επίσης σ’ ένα γεωπολιτικό σχήμα που θυμίζει τις πρώτες ημέρες του Ψυχρού Πολέμου: Ο μεγάλος ανταγωνισμός ισχύος με τις Ηνωμένες Πολιτείες είναι εκείνος που κατευθύνει την στρατηγική της Ρωσίας για την Βόρεια Κορέα, ενώ η διπλωματική αβρότητα μεταξύ αυτών των πρώην κομμουνιστικών συμμάχων μεταμφιέζει τα αληθινά κίνητρα της Ρωσίας.

Turkey’s Tomb Raiders

 

It was a story that mystified many non-Turks. On the night of Feb. 21, Turkey sent a military convoy into Syria to rescue 38 of its soldiers who had been surrounded by forces of the Islamic State. So what were those Turkish soldiers doing inside Syria? They were guarding the tomb ofSuleyman Shah, the grandfather of the founder of the Ottoman Empire and, correspondingly, a figure of considerable emotional significance to modern-day Turkish nationalists. In 1921, Turkey negotiated a treaty with France (the colonial power that then controlled Syria) that gave Ankara sovereignty over the tomb.

The Intersection of Three Crises

Within the past two weeks, a temporary deal to keep Greece in the eurozone was reached in Brussels, a cease-fire roadmap was agreed to in Minsk and Iranian negotiators advanced a potential nuclear deal in Geneva. Squadrons of diplomats have forestalled one geopolitical crisis after another. Yet it would be premature, even reckless, to assume that the fault lines defining these issues are effectively stable. Understanding how these crises are inextricably linked is the first step toward assessing when and where the next flare-up is likely to occur.

Could Iranian Gas Be The Solution For Europe?

Russia, beware, Iran is trying to get into the European gas market.

In recent months, Iranian officials have been signaling to potential customers in Europe, potential suppliers in the Caspian Basin, and transit country Turkey that Iran is not only ready to get into the game but that without Iranian participation the European Union's Southern Gas Corridor will take many years to realize, or might never be realized.

Reduced to rouble? An update on the Russian economy

Recent events in Ukraine have shown that Russia is determined to change the balance of power in Europe. Whether Vladimir Putin can be stopped by diplomacy or sanctions remains an open question (and is the subject of a forthcoming CER policy brief). Russia’s economy, however, is in deep trouble. Although the oil price and the rouble have stabilised, the Russian economy will go through a long, deep and painful recession as high interest rates and poor access to finance hits investment, inflation erodes customers’ disposable incomes and the government tightens fiscal policy. A renewed fall in the oil price and the rouble would be likely to lead to a severe crisis, as Russia’s foreign reserves are dwindling, and renewed capital flight could lead to the imposition of capital controls. The problem is that a collapse and subsequent bailout of Russia is not in the interest of the West.

Putin’s first decade in power was underpinned by rising oil prices, which allowed a rent-seeking elite to earn fortunes from Russia’s mineral wealth. As a result of the resource boom, the rouble’s real effective exchange rate (which takes Russia’s high inflation into account) rose strongly from 1999 to 2008. This made non-resource export industries uncompetitive – a common phenomenon of resource-rich countries called ‘Dutch disease’ (see chart 1).