The treaty also explicitly gives the countries a free hand with violators of the NPT (Iran and North Korea).  The most controversial part of the treaty is a commitment not to threaten non-nuclear states in compliance with the NPT with with nuclear strikes even in response to chemical and biological attacks.  However, there remains sufficient wiggle room as the treaty does not specify who defines compliance with the NPT and provides the United States the ability to modify its commitment as the chemical and biological threat evolves.  See link.   The biggest importance in the treaty is likely a reduction in the chill in United States and Russian relations over the last couple of years.  See here.

The bellicose John Bolton has not surprisingly already starting barking disapproval on the odd grounds of sovereignty (See here) but one hopes that the party of no (whose support will be needed for ratification) understands the limited scope of the deal.  See here.

It does not help that Fox “News” in its inimitable fashion started characterizing the treaty (and some legitimate concerns) like this:

Former half-term governor Sarah Palin and Mr. 9/11 have started singing praises of Ronald Reagan in marking their opposition to the treaty (ignoring the fact that Reagan signed a similar treaty for a 30% reduction of the nuclear stockpile during the Cold War and (like Obama) set a Utopian goal of a nuclear weapons free world…but why let facts interfere with the random invocation of the GOP’s Reagan mythos).  It brought on the unusually sharp slap down below by the President on the “policy wonk” Palin:

This does raise the question whether the fairly pragmatic Reagan who was not averse to raising taxes if needed or was willing to (gasp) negotiate with the Evil Empire and thru back channels with Iran would have any place in today’s Republican party.  The mythology of the man grew in comparison with George Herbert Walker Bush and when the Republicans lost the White House to Bill Clinton and is now quoted as gospel by empty suits like Giuliani or Palin with little regard for whether their invocation comports to reality.  In today’s radicalized GOP rump, it is not impossible to think that Reagan would run the risk of being labeled a RINO (Republican in Name Only).  It is hard to see how Nixon with his far more moderate social stances and much greater willingness to have the government interfere in the economy would not earn the derisive label.

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Others have noted that Karzai seems to be banking on the fact of his supposed indispensability and perhaps Washington has long memories of the South Vietnam quagmire after it acquiesed in the removal of President Ngo Dinh Diem.  See link.  If so, I think it is a mistake.  It is a mystery of why this venal incompetent with no political base to speak of became indispensable.  Part of the Karzai appeal stems from his being one of the few Pashtun leaders acceptable to other Afghan ethnicities.  But the election fraud last year has dimmed that appeal in the non-Pashtun regions.  His government’s corruption has similarly sapped reservoirs of goodwill in the Pashtun heartland (not helped by the nefarious dealings of his brother Ahmad Wali Karzai).  The supposed indispensability largely stems from a fear of the unknown, something previous Pakistani dictator Pervez Musharraf exploited to the hilt.

Yet after Musharraf’s departure Pakistan has finally moved against its Taliban proxies and its feeble civil institutions are showing signs of life.  And yet for years Washington and its allies and neighboring India put up with Musharraf’s double dealing because of the fear of what would happen if the urbane English speaking dictator left.  Pakistan may yet fall apart but fears of its imminent cataclysmic collapse appear overstated.  The same appears true in Afghanistan.  The west needs a competent reliable ally in Kabul and it is increasingly clear that the urbane English speaking Karzai is simply not that man.  His presence in power is likely to result in the waste of American blood spilled during the ongoing surge.

Karzai’s departure obviously will not be a panacea to Afghanistan’s ills.  Yet at this point it is increasingly hard to see how it will be worse.  I will close with a couple of clips from yesterday night’s Jon Stewart.

The first is a tongue in cheek look at Karzai’s latest blathering and the consequence of Karzai’s departure.

The second is a more serious discussion with Reza Aslan on why and whether America should remain in Afghanistan.  While I understand Aslan’s point about the moral commitment made by the United States and the squandered opportunity, the reality is that the presence of foreign troops is increasingly unpopular and it is not clear that America will ever be able to put Humpty Dumpty together again.

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What use is a composite dialog of the sort Pakistan wants when there is no trust on the ground and when Pakistan’s civilian government does not have the ability to rein in its military.  In the meantime Pakistan continues to ratchet up its complaints.  The latest concerns alleged violations of the long standing Indus Waters Treaty.  See link.  So the dance between the nuclear emerging power and the nuclear failed state continues.  The result will be headaches for the persons in charge of Washington’s Afghan policy.

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What he needs more than ever is to midwife a resolution of the Afghan civil war before the Americans leave and then pray that Pakistan’s usual games in Afghanistan do not cause his regime to crumble.  It will require diplomatic tact and statesmanship that has not yet been on display.  But instead Karzai fiddles in the Afghan ruins, watches Pakistan force itself into the Afghan negotiating table and irritates the only people who can keep him in power.  Joe Biden once proposed partitioning Iraq.  That may be in Iraq’s future.  It is a pity he did not propose something similar for the basket case buffer that is the legacy of the Great Game.

Political cartoon depicting the Afghan Emir Sher Ali with his "friends" the Russian Bear & British Lion (1878).

The cartoon from 1878 above seems oddly prescient.  Just the participants have changed.

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But all is not well.  Al-Maliki has yet to accept the results and worse is considering post election moves supposedly based on the constitution to modify the outcome.  See link.  Al-Maliki enjoyed the benefits of incumbency and spent many of the last few months trying to weed out potential Sunni rivals by using (or abusing) the de-Baathification process.   It is one thing to weed out avid supporters of Saddam.  But a blanket ban on anybody with any affiliation with the Baath Party, which as in the Communist world was the only game in town, reeks of an attempt to pick on the already disaffected Sunni minority.  It also insults the popular vote plurality that Allawi’s coalition assembled.

Even if al-Maliki was not sulking, an Allawi government would take some time to assemble.  While he edged out al-Maliki’s coalition for a plurality, he is well short of the 163 seats needed to get a majority.  He will have to cut a deal with the Kurds who are uncomfortable with some of his Sunni allies and the coalition partly led by the thuggish and volatile Moqtada al-Sadr (who has a bone to pick with al-Maliki for sending the Iraqi army against his militia a couple of years ago).

In the norms of most parliamentary democracies Allawi as the leader of the largest pre-election alliance would get the first shot at forming a government.  But if he fails to do so al-Maliki could yet return to power.  The result will be a period of uncertainty as the political horse trading begins and al-Maliki’s attempts to pull an Ahmadinejad or a Karzai on the election results is singularly unhelpful.  By picking on the Sunni majority he weakens the strongest rationale for a parliamentary system in a multi-ethnic country – the ability to get all sections of society a voice at the table.  This is something that is sorely absent in the winner take all Presidential system that exists in Afghanistan where the whims of the President and the executive have far fewer checks.

Of course the coming months will also highlight the primary flaw in a parliamentary system- the lack of stability when elections produce such a fractured and muddled mandate.  Coalition politics are not easy for mature democracies.  Iraq’s leaders need to pick up this skill fast and act in a good faith to avoid their nation, which was an artificial construct cobbled together after World War I to begin with, falling apart.

From the American perspective the elections likely ensure the withdrawal of American troops on schedule.  With the anti-American al-Sadr playing king-maker neither an Allawi or al-Maliki government (which normally would both be relatively pro-American) is likely to have the political support to keep American troops around even if they wanted to.  Ready or not Iraq will soon be taking its first steps on its own in its nasty neighborhood.  It is yet another example of how clueless and steeped in fantasy the Chenyites and neo-cons were when they assumed that toppling Saddam would enable the establishment of permanent American bases in Iraq.

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However, apart from some more money Pakistan is unlikely to get much of its wish list.   See link.  Since independence Pakistan has aggressively sought diplomatic parity with India.  However, the economic, military and geopolitical gulf between the two countries has widened in the last 20 years.  It is a bitter pill that the Pakistani establishment has not come to terms with.

There was a lot of Congressional resistance for the nuclear deal with India.  A similar deal for a country whose nuclear scientists sold nuclear technology to Libya and North Korea will be dead on arrival.  The thin-skinned Indian response to the prospect does not seem needed.  See link.

The litany of complaints against India is not likely to go too far either.  For the last 30 years Pakistan has agressively sought to internationalize its dispute with India and India has stubbornly pointed to the 1972 Simla Accord as the bench mark for bilateral negotiations.  Foreign diplomats like Robin Raphael or David Miliband who hinted at third party facilitation of negotiations drew a sharp Indian response.  See here.  That is unlikely to change in the near future, particularly with Indian sensibilities sore after the plea bargain by (and the promise not to extradite) David Headley.  See here.

Pakistan’s security establishment seems still stuck in the 1980s when its allies in Congress would issue annual anti-India resolutions and India would have to go all out to stop them.  By the mid 1990s, Pakistan’s staunchest ally Dan Burton could not even get a sufficient number of co-signers for his resolutions to proceed.  The best Pakistan can hope for on the subject are bland statements calling for dialogue.  See link.

As noted in a previous blog the talks are meaningless so long as Pakistan’s terror support infrastructure remains in place.  See link.  From India’s perspective there is no point coming to the table to discuss disputes while Pakistan treats terrorism as a bargaining chip.  For all of Pakistan’s bluster of similar Indian activities in Baluchistan, precious little evidence has been made public.  Unlike Kashmir, Baluchistan does not lie along the India-Pakistan border making it hard logistically for India to provide much meaningful support to Baluch separatists.

On the flip side it is time for India (and its media) to recognize India’s rising maturity as a global player not hyperventilate on perceived slights every time the Obama administration dangles Pakistan a carrot.  American policy makers in both parties are only too aware of the greater desirability of India as a strategic ally.  However, the realities on the ground in Afghanistan force the United States to make some concessions to Pakistan.  It is the only strategic card Pakistan has at present and it is hardly surprising that it will be played as often as possible.  With low global tolerance of terrorism as a tool of foreign policy, Pakistan’s diplomatic options are limited.

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Also, unclear is the extent the lack of leadership affects the Taliban’s military operations.  It should make it harder to coordinate joint attacks, but there are enough lower level commanders with guns and experience to continue fighting.  Similar decapitations of the leadership among the Pakistani branch of the Taliban appear to have lead to militants training their guns at each other as they jockey for power.  Whether and to what extent the pattern repeats itself here remains to be seen.

For now, this should be a boost to the American surge.  But good news in Aghanistan seems to be accompanied by bad.  As usual it comes from the man supposed to provide the good governance essential for a lasting peace.  In recent days Hamid Karzai has tried to pack Afghanistan’s impartial election commission with his cronies, deepened his ties to the corrupt warlords and once again pandered to the fundamentalist fringe by weakening constitutional protections for female representation in parliament. See here, here and here.  Some things never change.

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Then came the news of the arrest of Mullah Abdul Ghani Baradar in Karachi.  See link. Mullah Baradar is second in influence to Mullah Omar and coordinates the old Afghan Taliban’s military operations.  See link.  The arrest complicates the Taliban’s military response to the surge and is an opportunity to be exploited.  The administration is also drawing kudos for keeping quiet about the arrest while intelligence leads against the Taliban in Karachi were pursued.

The fact that this arrest occurred in Karachi shows how the drone campaign is affecting Taliban operations.  Pakistan’s commercial capital has seen an influx of Pashtuns of late and an uptick in violence (beyond the usual round of blood letting between the native Sindhis and the Muhajirs – Muslims who emigrated from India after partition).

The arrest has raised hopes that Pakistan is finally co-operating fully in the fight against the Taliban.  But not everyone is convinced.  Juan Cole in the link above speculates that the violence triggered by the Taliban starting to relocate to Karachi forced the Pakistanis to act.  Others have speculated that it is a cynical attempt to insert Pakistan into the talks with the Taliban.  See link.  I have been harsh in my evaluation of Pakistan’s Janus-faced cooperation in the past, but for now I will defer comments until events play themselves out.

I will also allow my sliver of hope for Afghanistan to widen, slightly.

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The brouhaha started with the collapse of a subsidiary of an Iceland bank Landsbanki called Icesave that offered deposits in the Netherlands and the United Kingdom.  The key question is whether the government of Iceland was supposed to back all depositor funds beyond the amounts covered by the Icelandic Depositors’ and Investors’ Guarantee Fund set up under European Economic Area rules.  The legal case on whether Iceland’s tax payers are required to back up the deposit fund is shaky as well and not expressly required by the EU.  Even the Dutch have acknowledged that the deposit fund was not intended to cover a systemic collapse as happened with Iceland’s financial system.  Even in the United States where the FDIC covers only up to $100,000 of deposits, the deposit insurance fund simply does not have the wherewithal to bail out an entire banking system.

Then came the British overreaction that still has Iceland’s citizens seething.  When Iceland agreed to cover domestic depositors, it did not cover foreign deposits (it had not agreed to do so before the crisis in any case).  The British and Dutch stepped in to cover the deposits of their nationals.  Next Gordon Brown’s government misused anti-terrorism statutes to freeze all Iceland assets in the United Kingdom, probably the first time such action has been taken against a NATO ally, sending Iceland’s reeling economy into a tailspin and even bringing down another totally unrelated Iceland bank.  Next the IMF was used to bully Iceland to pay up.  British and Dutch grandstanding on the subject is weakened by the fact that their banks benefited from the same loose passporting rules to establish foreign subsidiaries that Icesave employed.  It is hard to imagine that they would have done what they are asking Iceland to do with respect to foreign accounts in the event of a systemic collapse.

The repayment plan forced down by the IMF is  about 5 billion dollars, chump change for Britain and the Netherlands but 40% of Iceland’s GDP and about $18,000 per citizen.  Iceland’s ability to pay is doubtful as well.  Seething from Gordon Brown’s use of terrorism statutes, the Icelandic public overwhelmingly oppose the plan and deluged the President with requests to veto it.  The President obliged and the veto now sends the plan to a public referendum where it is almost certain to fail.

As a matter of policy, it is not really clear why a government should back all deposit accounts.  It seems an invitation to moral hazard and can cripple an economy in a financial crisis like Iceland’s, particularly when (as noted in the article linked earlier) the legal arguments are shaky.  Gordon Brown’s overreaction made it harder for Iceland to pay back this debt and it is not clear why the United Kingdom should not be penalized for its disgraceful misuse of anti-terrorism statutes and the collateral harm they caused to Iceland’s economy.  Given the small size of the loan by British standards and the financial stress a long term ally was under, Gordon Brown should have resisted the temptation to flex his muscles for domestic opinion and tried to work out a deal.  Instead he made a bad situation worse and now threatens Iceland with financial isolation.

The legal principle employed by the British and the Dutch is a dangerous one too.  Evidently now the taxpayers of the country of formation have to bear the burden of the obligations of a corporation abroad.  Its time for cooler heads to prevail and pull the British and Dutch back from their overreaction and threats to financially ruin a NATO ally.

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• I liked the general tenor of Barack Obama’s speech but was amused to see some of the blinders come off on the left and the right as a result.  Liberals unhappy about the decision on Afghanistan saw the president expound a doctrine of just war which in some ways could have been delivered by George W. Bush. Conservatives who had convinced themselves that Obama was a weak anti-war liberal seem to have heard for the first time that the President does not rule out war (they seem to have forgotten his comment in the campaign that he was only against “stupid wars” (though he left may argue that the Afghan escalation IS a stupid war).  Time will tell whether the “Obama Doctrine” fares better than the “Bush Doctrine.”  With its understanding of the limitations of American power, it does have a greater chance of success.
• The Indian government dropped a bombshell with the creation of a new state.  Will discuss the virtues and pitfalls of smaller states in the Indian constitutional context later this week, but words cannot describe how badly the decision making process was bungled.  First the government gave in to emotional blackmail of a hunger strike, then nobody seems to have discussed the decision with the local government and laid the groundwork, and the critical question of who gets Hyderabad still remains unanswered.  The abrupt decision making process has also suddenly brought to the forefront demands for at least 9 new states.  Before the virtues of these demands are assessed, first the Indian government deserves brickbats for sheer incompetence.
• The Iranian regime returns Shirin Ebadi’s Nobel peace prize medal.  Previous blog here.
• One of the two Chicago men arrested for planning a terrorist attack in Denmark seems to be singing about his involvement in the 26/11 Mumbai attacks.  Not surprisingly, India wants him extradited.

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Neither option is particularly palatable to Pakistan.  Reeling from a wave of terrorist attacks, a move against the Afghan Taliban could make the situation worse.  On the other hand, its bruised national pride will find it hard to bear expanded American strikes inside its territory.  Another concern is that the civilian government already weakened by a pending court challenge to its legitimacy may not survive.  However, the real power in Pakistan belongs to the Army-ISI nexus.  While presenting them with stark choices, the administration has tried hard not to alienate them.

President Obama’s Afghanistan speech did not spend too much attention on Pakistan.  However, Pakistan is the key to resolving the military portion of the Afghanistan problem.  The Taliban’s safe havens that have existed with relative impunity over the past decade and beyond have to go if the Afghan surge is to have any success.

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Preventing the spread of nuclear weapons was a difficult task to begin with before additional complications were added into the picture.  The NPT’s arbitrary time line dividing nuclear and non-nuclear powers does not help (and was a big reason why India refused to sign the treaty in the first place).  Then you have the tacit understanding that Israel has nuclear weapons but will never be criticized for it because they are deemed essential for its survival.  Countries like Japan are widely believed to have the knowledge necessary to produce nuclear weapons on a moments notice (which is what some observers believe Iran is really after).  And then the Bush administration muddled the picture further with talk of developing tactical nuclear devices.

It is not hard to see why conspiracy theorists come to the conclusion that non-proliferation is really designed to divide the world into permanent nuclear haves and have-nots with special rules applied to countries in American favor.

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What is unclear whether this is feasible.  If the Afghan army is still a figment of imagination (previous post here) and the Karzai government remains as incompetent (both very likely scenarios) will the United States really start withdrawing to the chorus from Republicans that Obama “lost” Afghanistan?  Hopefully the answer is yes, because the prospect of an American withdrawal may be the only way to jolt the Afghan government to action.

What happens if the Taliban withdraws to its safe havens in Quetta?  Will Pakistan, which only reluctantly turned its guns on its homegrown Taliban, start another fight inside its western border in a province (Baluchistan) already brimming  on the verge of open rebellion?

What about the various NATO allies who have started withdrawing their troops?  Obama’s address noted that Al Qaeda’s attacks had targeted them as well.  Will that be sufficient to overcome the war weariness in those countries? Germany’s top general and deputy defense minister were forced to resign last week over a botched air strike and there are calls for a German withdrawal by 2011.

A successful solution is not entirely in American hands and relies a great deal on lady luck (and on wobbly Pakistan doing its bit).  Obama’s speech was a sober and realistic appraisal of the situation on the ground, but perhaps too optimistic (as such speeches always are) about success in the future (See Juan Cole’s take here).  The “success” of the Iraqi surge may have raised hopes of similar success in Afghanistan, but these are two entirely different societies with very different problems.  The future in Afghanistan remains murky.

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The Chinese visit may have also contributed to the China joining the recent censure of Iran by the IAEA.  The deliverables may not be as groundbreaking as previous presidential visits abroad but address two upcoming issues on the President’s foreign policy slate.  Success in Copenhagen could reaffirm the goodwill that exists for the administration on the ground in Europe.  Bringing India and China into any global agreement to cut emissions will blunt one of the major criticisms of the Kyoto Protocol.  Likewise any Chinese help on Iran is to be welcomed.  These are small steps at present, but they could lead to greater rewards down the road.

Dubai World also raises questions regarding “quasi-sovereign debt.”  Investors who previously relied on an “implied sovereign guarantee” for debt issues by these government owned ventures may want a stronger government guarantee in the future.  Government owned entities from South Africa to Russia may find it harder to borrow funds without a risk premium unless their governments explicitly guarantee the debts (relying on the fact that essentially insolvent countries like Iceland have also not stopped paying their debts).

In political terms this also strengthens the position of Abu Dhabi within the United Arab Emirates.  Until the real estate meltdown Dubai was positioning itself as the Hong Kong and Singapore (and with some of the ridiculous buildings coming up, Las Vegas) of the Middle East.  In the process it was upsetting the delicate power balance in the UAE.  With yet another bailout now needed, the more conservative Abu Dhabi will likely extract another pound of flesh to restrain the ambitions and presumptions of Dubai.

If it were needed, Dubai World is just another example of how intertwined the global financial system is and how problems on the other side of the world can have immediate impacts at home.