Putin’s Iran visit

PRESIDENT Mahmoud Ahmadinejad of Iran may not have got everything he wanted from the visit of his Russian counterpart Vladimir Putin to Tehran on Tuesday but he certainly got the most important thing he was after: A boost for him personally and for his country at a time of increasing Western pressure. This was the first visit to Tehran by a Kremlin chief since World War II. There is much more than symbolism here. Soviet leader Josef Stalin visited Tehran after the Allies defeated Hitler’s forces in World War II. Ahmadinejad is the new “Hitler” to the West. The German leader plunged the world into a catastrophic world war. But according to the new lexicon, you don’t need to have designs on your neighbors or visions of grandeur for you to become a Hitler. All you have to do is to refuse to go along with the Western notions of what an ideal world order should be. To many observers in Iran and outside, this is what infuriates Israel and its Western supporters about Iran, not any secret plans by Tehran to produce nuclear weapons. Of course the UN Security Council has imposed two rounds of limited sanctions on Iran over its nuclear program. This was backed by Russia and five other world powers - the United States, France, Germany, Britain and China. Washington and Paris are pushing for tougher steps. The message from Putin on Tuesday was: This far and no further. Moscow says it sees no evidence of a military program. It has also been alarmed by the strident talk of war to stop Iran from producing nuclear weapons, though Iran denies it has any such plans or ambitions.
But then such denials did not prevent Iraq going under Anglo-American boots. Four years after the war, Iraq is still in turmoil and threatening the stability of the region and beyond, not to say anything of the rising spiral of killing and violence. Do we need a replay of this bloodbath in the Middle East? Putin does not think so and he said it plainly and unambiguously during his visit to Tehran. More than any world power, Russia is interested in keeping stability on its southern border. So Putin made it clear to Washington that Russia would not accept military action against Iran. “We need to agree that using the territory of one Caspian Sea (state) in the event of aggression against another is impossible,” he told the presidents of Iran, Azerbaijan, Kazakhstan and Turkmenistan at a summit of Caspian Sea states earlier. This was a message to ex-Soviet Azerbaijan, Iran’s neighbor, where the US military has inspected airfields. Russia is separated from Iran by Azerbaijan. Some say Putin’s visit to Iran was about boosting Russia’s economic and security interests more than helping Tehran. That may be true. But there is no denying that he has “sent a minimum positive signal to the Iranian side on its nuclear program but a maximum negative message to the West,” as Alexander Shumilin, a Middle East expert at the USA-Canada Institute in Moscow said. This may not stop another war in the region, but it required courage and a genuine commitment to the norms of international conduct for the Russian leader to say it openly.
 

Premonitions of stagflation

WORLD leaders’, leading economists’ and stock indices’ somewhat cold take on record-breaking rise in international oil prices betrays striking ignorance of painful stagflation experiences of the 70’s, when similarly high (inflation adjusted) oil shocks prompted the deadly low-growth high-inflation mix that devoured world economies. Perhaps the robust growth in international output over the last half-decade, when the international economy grew at a good five per cent annually despite tripling of crude prices, is what calm nerves are banking on. But the present economic scenario is distinctly different. Owing to the recent US subprime crisis, the world’s leading economy is suddenly the most vulnerable. And since it is still too soon to know of the full international extent of the credit crunch, sharp oil rises might not be too far from helping materialise recession fears that doomsayers are crying hoarse about. Already unrelenting energy demand from furiously growing economies like China’s, supply constraints in face of a higher than expected upcoming winter demand, and still unresolved refining bottlenecks are taking a heavy toll on the battered international oil equilibrium.
Disturbingly, these developments are in no way helped by political blunders that indirectly fiddle with the commodity’s demand-supply environment. The political/military chaos in Iraq, the West’s lingering uranium-enrichment standoff with Iran, Israel’s threats and military (mis)adventures with neighbouring countries all serve to disrupt the market mechanism that is already struggling to preserve a delicate balance in very trying times. Add to that Turkey’s giving into rebels’ provocations and riding into northern Kurdish Iraq and get a deadly cocktail – a lot of needless political initiatives, with lasting spillovers, which risk pushing the entire world economy into painful recession. There is still some time before oil ceases to be the life-blood of the modern economy. It is unfortunate that most prominent modern-day political helmsmen are contributing to virtual destruction of this lifeline. Therefore, economic pundits and politicians alike would do well not to brush off very serious implications of present day happenings. If the blood-spilling, chiefly in the Middle East, is not taken as reason enough to introduce an element of sanity in the equation, the subsequent economic choke will be a consistent reminder of today’s follies. Keynes’ words no longer carry the same weight. The long-run does matter, even if we are all dead.

—Khaleej Times