Tag: Venezuela
Geopolitics of lower energy prices
Oil prices are down by about 20% from their recent peak (or 15% from their three-year plateau around $100 per barrel) and likely to stay low for months if not years. Downward pressure will continue unless the Saudis are prepared to rein in their production (no sign of that yet) or prices decline enough (to $70 or less) to turn off the flow of tight oil and gas in the US, which has become a major factor on world markets.
There is a lot of benefit to be seen from lower oil prices. From the US perspective, cutting revenue flow to the governments of Russia, Iran and Venezuela is a big plus. Putin, who is already feeling substantial pressure from European Union and US sanctions, faces serious financial difficulties. Iran, likewise hurt by sanctions, will find it difficult to generate anything like the revenue it needs to fund economic recovery, even if sanctions are lifted. Venezuela was already headed towards a financial crisis. Its budget is almost entirely dependent on oil revenue.
Major oil and gas producers in the Gulf will be hit as well. Saudi Arabia, the United Arab Emirates , Kuwait and Qatar as well as Iraq will feel the pinch. They are far more likely to cut their spending on various international causes than risk austerity at home. That could mean scarcer resources for the restored military autocracy in Egypt, Yemen’s besieged government and Syria’s opposition. It could also mean less revenue for Islamist extremists of various stripes, including the Islamic State in Iraq and Syria, for which oil sales are a significant portion of revenue.
Lower oil prices will also give a boost to global economic growth, particularly in the US and Europe but also in China and India. The Economist worries that the lower prices may be due to slack economic growth and that lower prices will do little for consumers, but then it gives ample evidence that the lower prices are in fact due to higher production. If past patterns hold, global economic growth could gain by a significant 1% over current 3.3% predictions for 2015.
What has happened in the past couple of weeks is part of a broader secular trend that will have profound impacts on geopolitics and economics for a long time to come. Production of oil and gas is rising sharply in the Western Hemisphere, especially in the US, Canada and Brazil. Demand is rising principally in the East, where economic growth is strong, the economies are still heavily dependent on energy, and energy resources are scarce. This trend has implications for future security risks and burden sharing: it will not make much sense for the US to carry most of the burden of ensuring the security of the strait of Hormuz when 90% or more of the oil shipped through this classic “choke point” is going to India, China and other Asian consumers.
Asian consumers should be stocking 90 days of imports, as members of the International Energy Agency are required to do. They should also be providing some of the naval assets to protect the strait of Hormuz. That will require a major rethink on the part of the US, as well as creation of a multinational force that the Asians can feel comfortable joining.
There are calls in Congress to curtail the Strategic Petroleum Reserve, which is slated for use in an oil supply disruption. That would be an unwise move, as a major disruption of oil markets anywhere means a hike in prices everywhere. The US may be much less dependent on the Middle East in the future, but it will still be vulnerable to the economic damage of an oil supply interruption.
We have tended to view the rise of Asia as a challenge. But of course it is also an opportunity. The US will soon be the world’s largest oil and gas producer. If the Washington can continue to moderate American demand and in addition decides to allow oil and gas exports, the assumption of its declining influence could soon be proven, once again, a mirage.
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Peace picks July 14-18
1. Ending Wars to Build Peace: Conflict Termination Workshop Monday, July 14 | 8:30 am – 1:00 pm United States Institute of Peace; 2301 Constitution Ave NW, Washington, D.C. REGISTER TO ATTEND Designing a conflict termination strategy is an essential but often overlooked component of warfighting. Improperly planned or incorrectly implemented, a failure to effectively terminate a conflict will leave open the original issues that brought on the war and likely create the conditions for future conflict. The U.S. Institute of Peace, U.S. Military Academy’s Center for the Study of Civil-Military Operations and RAND Corporation invite you to an event featuring notable experts sharing their observations and concerns about the issue of war termination, its planning, transition and challenges. SPEAKERS: Gideon Rose, Author, How Wars End, Amb. Jim Jeffery, Former U.S. Ambassador to Iraq, Hon. James Kunder, Former Deputy Administrator, USAID, Lt General Mark Milley, Commander, U.S. Army III Corps, and Dr. Rick Brennan Senior Political Scientist, RAND.
2. Ukraine: The Maidan and Beyond Monday, July 14 | 12:00 pm – 2:00 pm National Endowment for Democracy;1025 F Street NW, Suite 800, Washington, D.C. REGISTER TO ATTEND The forthcoming July 2014 issue of the Journal of Democracy will feature a cluster of eight articles on Ukraine. Please join NDI as four of the contributors elaborate on the subjects discussed in their articles. Serhiy Kudelia analyzes the evolution of Ukraine’s political system during the past four years and why it led to the downfall of President Viktor Yanukovych. Lucan Way assesses the role that civil society played in bringing down Yanukovych and the challenges that it will now face. Anders Aslund examines the “endemic corruption” that has long plagued Ukraine and goes on to suggest how the new government can rebuild the country’s economy. Finally, Nadia Diuk considers the longer-term significance of the Maidan Revolution.
3. Doing Business in Burma: Human Rights Risks and Reporting Requirements Tuesday, July 15 | 8:15 am – 10:00 am Center for Human Rights & Humanitarian Law; 500 8th St. NW, Washington D.C. REGISTER TO ATTEND In 2012, the U.S. lifted economic sanctions on resource-rich Burma, sanctions that had been in place for over a decade. American businesses are required to publicly report to the State Department on the potential human rights, environmental, and political impacts of their investments if they exceed $500,000. Some of the questions that will be addressed: How can the Reporting Requirements guide companies and their attorneys in assessing and managing the risks that accompany new investment in Burma? Why is the information contained in the reports valuable to the State Department and other organizations? SPEAKERS: Amy Lehr, Attorney, Foley Hoag LLP, Jason Pielemeier, Esq., U.S. Department of State/DRL, Genevieve Taft, Global Manager of Workplace Rights, Coca-Cola, and Jennifer Quigley, Executive Director, U.S. Campaign for Burma.
4. New Story Leadership for the Middle East Congressional Forum Tuesday, July 15 | 10:00 am – 2:00 pm New Story Leadership; Cannon House Office Building, 200-299 New Jersey Ave SE, Washington D.C. REGISTER TO ATTEND New Story Leadership for the Middle East is presents their class of 2014, featuring presentations from young Israeli and Palestinian leaders who are living, working, and learning together this summer in Washington, DC. Young voices throughout the world have decisively spoken up for change, demanding new leadership, greater freedom, and the right to choose their own futures. Now a new generation of Israelis and Palestinians wants to engage you in an emerging conversation by sharing their stories and their hopes for peace.
5. For the Least of These: A Biblical Answer to Poverty Tuesday, June 15 | 2:00 pm – 3:30 pm Heritage Foundation;214 Massachusetts Ave NE, Washington, D.C. REGISTER TO ATTEND While much progress has been made toward poverty alleviation, many well-intentioned efforts have led Christians to actions that are not only ineffective, but leave the most vulnerable in a worse situation than before. Is there a better answer? Combining biblical exegesis with proven economic principles, For the Least of These: A Biblical Answer to Poverty equips Christians with both a solid biblical and economic understanding of how best to care for the poor and foster sustainable economic development. With contributions from fourteen leading Christian economists, theologians, historians, and practitioners, For the Least of These presents the case for why markets and trade are the world’s best hope for alleviating poverty. SPEAKERS: Dr. Anne Bradley, Dr. Art Lindsley, Michael Craven, and Derrick Morgan.
6. The Madrid 3/11 Bombings, Jihadist Networks in Spain, and the Evolution of Terrorism in Western Europe Tuesday, June 15 | 2:00 pm – 3:50 pm Brooking Institute; 4801 Massachusetts Avenue, NW, Washington, D.C. REGISTER TO ATTEND Ten years after the terror attacks in Madrid, Professor Fernando Reinares, a senior analyst within Elcano Royal Institute, has published a definitive account of the attacks. Reinares provides evidence showing that the decision to attack Spain was made in December 2001 in Pakistan by Moroccan Amer Azizim and that the Madrid bombing network began its formation more than one year before the start of the Iraq war. Spain battles the challenge of jihadist radicalization and recruitment networks that are sending fighters to join the wars in Syria and elsewhere. On July 15, the Intelligence Project at Brookings will host Professor Reinares for a discussion on his book’s revelations, the empirical data on the evolution of jihadism in Spain and the future of terrorism in Western Europe.
7. Forgotten, but Not Gone: The Continuing Threat of Boko Haram Tuesday, June 15 | 2:00 pm – 3:00 pm International Institute for Strategic Studies; 2121 K Street NW, Suite 801, Washington, D.C. REGISTER TO ATTEND The furor of the #BringBackOurGirls movement has faded rapidly and Boko Haram’s insurgency, now in its fourth year, has again been largely forgotten by the international media, despite the fact that violence has continued in the form of mass killings, attacks in the capital, Abuja, and new abductions. Virginia Comolli will be discussing the implications of Boko Haram’s insurgency for Nigeria, repercussions for other West African countries and the role of non-African partners in dealing with the security challenges the group presents. Comolli is the Research Fellow running the newly established IISS Security and Development Programme.
8. Petrocaribe, Central America, and the Caribbean: Who Will Subsidize the Future? Wednesday, July 16 | 8:30 am – 10:30 am Atlantic Council of the United States; 1030 15th St. NW, 12th Floor, Washington, D.C. REGISTER TO ATTEND US Vice President Joe Biden used his recent trip to Latin America to announce a new initiative to promote energy security in the Caribbean. Is it enough? Join the Atlantic Council’s Adrienne Arsht Latin America Center for a timely discussion on the future of Petrocaribe. The huge Venezuelan oil subsidy enters its tenth year, and continues to provide Caracas with political support from its closest neighbors – but at what cost to the region? Given Venezuela’s economic demise, will Petrocaribe continue delivering into the future? Now is the moment to examine energy alternatives for the Caribbean and Central America. This event will launch the Atlantic Council’s new report, Uncertain Energy: The Caribbean’s Gamble with Venezuela, authored by Arsht Center Senior Nonresident Energy Fellow David L. Goldwyn and his associate, Cory R. Gill.
9. The Resurgence of the Taliban Wednesday, June 16 | 10:30 am – 12:00 pm Carnegie Endowment for International Peace; 1779 Massachusetts Ave. NW, Washington, D.C. REGISTER TO ATTEND In autumn 2001, U.S. and NATO troops were deployed to Afghanistan to unseat Afghanistan’s Taliban rulers. Yet, despite a more than decade-long attempt to eradicate them, the Taliban has endured—regrouping and reestablishing themselves as a significant insurgent movement. Hassan Abbas, author of The Taliban Revival: Violence and Extremism on the Pakistan-Afghanistan Frontier, will examine how the Taliban not only survived but adapted to regain power and political advantage. Carnegie’s Frederic Grare will moderate.
10. Citizens, Subjects, and Slackers: Polish, Russian, and Ukrainian Attitudes Toward Paying Taxes Wednesday, June 16 | 3:30 pm – 5:00 pm Woodrow Wilson Center; 1300 Pennsylvania Ave., NW, Washington, D.C. REGISTER TO ATTEND Marc Berenson’s unique surveys of Poles, Russians, and Ukrainians, conducted from 2004 to 2012 regarding their attitudes towards paying taxes, illustrate that Polish citizens express a far greater willingness and support for paying taxes than Russian citizens, who, in turn, are more willing taxpayers than Ukrainian citizens. Unlike Poles, whose compliance is related to their trust in the state, and Russians, whose compliance is related to their fear of the state, Ukrainians, showing the lowest support for tax obedience, have reacted to state efforts to increase compliance with less fear and little trust. This suggests that post-transition governments must find ways to create and build up levels of trust on the part of citizens in their state, but that bridging the exceptionally high and long-held levels of distrust in the Ukrainian state will remain an extreme challenge for those seeking a new rule-of-law Ukraine. Kennan Institute Global Fellow, Amb. Kenneth Yalowitz, will provide discussion.
11. Fixing the US Department of Veterans Affairs: Prospects for Reform Thursday, June 17 | 10:00 am – 11:30 am American Enterprise Institute; 1150 17th Street, NW, Washington D.C. REGISTER TO ATTEND Recent scandals at medical centers for veterans have trained a spotlight on longstanding inefficiencies within the US Department of Veterans Affairs (VA). In the case of the VA’s disability system, a nearly century-old approach to wounded veterans still prevails. The widespread consensus is that the problem goes much deeper than falsified waiting lists and delayed access to care, and necessitates a global overhaul. What would a renewed vision of veteran care look like, and how should we clarify the objectives of the VA’s disability system? In the interim, what short-term reforms are practical? Join AEI as House Committee on Veterans’ Affairs Chairman Jeff Miller presents a blueprint for reform, followed by a discussion with experts in health care, disability, and public administration. Other speakers include Michael H. McLendon, Joseph Antos, Richard V. Burkhauser, Peter Schuck, and Sally Satel.
12. Beyond Air-Sea Battle: The Debate Over US Military Strategy in Asia with Professor Aaron Friedberg Thursday, June 17 | 2:00 pm – 3:00 pm IISS; 2121 K Street NW, Suite 801, Washington, D.C. REGISTER TO ATTEND China’s military build-up, particularly the expansion of its long-range nuclear forces and its development of ‘anti-access/area-denial’ (A2/AD) capabilities, poses a serious threat to both the American position in East Asia and the security of other regional powers. The growth of these forces challenges Washington’s ability, and perhaps its willingness, to project power into the region. This could call American security guarantees into question, eventually undermining the United States’ place as the dominant Asia-Pacific power. Left unchecked, perceived shifts in the regional military balance away from the US and its allies towards China could also raise the risks of miscalculation and deterrence failure. Professor Aaron Friedberg of Prince University will be launching his new Adelphi series book, Beyond Air-Sea Battle: The Debate Over US Military Strategy in Asia.” He will be joined by discussant Elbridge Colby, the Robert M. Gates Fellow at the Center for New American Security.
13. Putting Military Personnel Costs in Context: Analysis by AEI and BPC Friday, July 18 | 9:00 am – 10:00 am Russell Senate Office Building; Constitution Avenue and 1st Street, NE, Washington, D.C. REGISTER TO ATTEND According to a new study by the Bipartisan Policy Center (BPC) and the American Enterprise Institute (AEI), the per capita cost of military personnel on active duty increased by 42 percent over the last decade. Overall, growth in cost was much faster than growth in the number of people serving. AEI and BPC invite you to a conversation about the cost trends impacting America’s professional volunteer force and their implications for the future. SPEAKERS: Linda Bilmes, Charlie Houy, Scott Lilly, Ann Sauer, and Charles Wald.
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90 miles from you know where
Politico Magazine yesterday published my piece based on a visit to Cuba last week under the heading “The Dangers of Collapse in Cuba.” Here is the lead paragraph:
Cuba’s 1950s cars and Havana’s crumbling facades have long been its iconic symbols in the American imagination. They don’t disappoint, as I discovered on a trip to Cuba last week. But I didn’t expect zippy Hyundais with Miami FM on their radios or a private collection of contemporary Cuban art, installed floor to 20-foot ceiling in a fabulous apartment with a terrace overlooking the Gulf of Mexico. Both the apartment and the art would put many wealthy New Yorkers to shame.
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Peace Picks March 24 – 28
Very late (we usually publish by Sunday), and entirely my fault:
1. Iran Through a European Lens
Monday, March 24 | 10am
Atlantic Council, 12th Floor (West Tower); 1030 15th Street, NW
The Atlantic Council’s Iran Task Force invites you to a conversation with Marietje Schaake, member of the European Parliament and expert on Internet freedom, human rights, and Iran. Schaake recently visited Iran with a European Parliament delegation to address critical issues including the nuclear program and human rights concerns. Schaake will share insights from her visit and provide a European perspective on diplomacy with Iran.
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The global chessboard
Barack Obama may not think he is playing on “some global chessboard,” but it is pretty clear Vladimir Putin does. The contest is no longer an ideological one between the “free world” and Communism. It is a pragmatic one between democracy and authoritarianism. Which one can satisfy stakeholders sufficiently to survive the long run? There is nothing inevitable about the triumph of democracy, though associated with wise economic management it is difficult to beat on the merits.
Authoritarians tend to abuse their political power for economic benefit. There can be no clearer illustration of this phenomenon than erstwhile Ukrainian President Viktor Yanukovich, whose palatial abode and documented graft are now open for all to see, even if the man himself has disappeared. It isn’t pretty. He seems to have lost even Russia’s backing, which has now been reduced from a $15 billion loan to a few fulminations from Prime Minister Medvedev.
If Moscow is going to act against the parliamentary takeover that Ukraine has witnessed, it won’t be to put Yanukovich back on his gold-plated toilet seat but rather to seize control of Crimea and perhaps a few provinces of eastern Ukraine. The precedents are clear: Trans-Dniester in Moldova as well as South Ossetia and Abkhazia in Georgia host Russian troops, supposedly to protect them from their Russian-speaking inhabitants from the depredations of the authorities elected to serve in their capitals. Moscow could easily trump up that scenario in Crimea, where most of the population is Russian-speaking and loyal to Moscow rather than Kiev, which has been their capital only since 1954. Read more
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Next up
Caracas yesterday, via @MiguelMarSan:
Buzzfeed offers this explanatory video:
Venezuela is more evenly divided than Ukraine, and President Maduro’s abuses have been less flagrant. Many previous opposition demonstrations have failed, as the Chavez/Maduro administration retains a good deal of popularity. But even the poor are now joining the protests. Unclear how this is going to pan out.
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