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13/04/2007 | Second Quarter Forecast 2007: The Maneuvering Before the Storm - Part I

Stratfor Staff

The second quarter of 2007 will brim with fury and froth as two states attempt to challenge the geopolitical order imposed by others to stem their expansion, in hopes of regaining their long-lost position as major powers. Throughout the quarter, these two states will seek a louder voice and a stronger hand. The real conflicts, however, will come later.

 

For the first country -- Iran -- the more aggressive tone is part and parcel of the diplomatic dance with the United States. Both countries realize that their ideal for Iraq -- unified and pro-American for Washington, unified and pro-Iranian for Tehran -- has slipped from the realm of possibility. The two will now negotiate furiously to keep their respective worst-case scenarios -- for the United States, a shattered Iraq in which Iran controls the south; for Iran, a Sunni-run and American-armed Baghdad -- from becoming reality.

In these negotiations, neither side has a particularly strong hand. The Bush administration suffers from a lack of mandate and an overstretched military that is flat-out incapable of imposing security on Iraq. Iranian goals are utterly dependent upon the Iraqi Shia -- who, were they able to unify for any purpose, would have at least at some point in Iraq's history been in charge of their own region (they have never been). Tehran and Washington both can wreck Iraq to ruin each other's plans, but neither wants to live with the consequences. Both can work toward a compromise but are afraid of the domestic backlash of being seen publicly talking to one another. And of course there is that niggling detail that their national interests on this issue really are very close to incompatible.

The result is that each side is trapped at the negotiating table, threatening the other and hoping that something will change on the ground to give them a decisive advantage. Of course, when something appears to be that key event, the other feels obliged to change the equation. Thus the United States seizes an Iranian Consulate in Iraqi Kurdistan, or Iran detains 15 British marines and sailors. Such events will proliferate throughout the quarter as the two powers position and reposition for best effect versus each other. Expect other powers to attempt to leverage Washington's preoccupations to their own advantage -- with the Russians, by dint of influence in Iran and opportunities in Ukraine, likely to achieve the most.

This struggle will not resolve itself in the coming quarter. However, it not only will dominate the news, but also regularly will put Washington and Tehran on an equal footing in the public mind. This will not be a permanent feature (indeed, it is not even remotely accurate once one looks past the headlines) but it undeniably entrenches Iran's return as a major regional power that must be reckoned with.

Yet while Iran's rise is not guaranteed -- the negotiations with the United States could yet take a disastrously wrong turn -- the second state returning to the status of great power will be far more successful than Iran. That country is Germany.

For the past 60 years, French ideology has demanded that Paris play the pre-eminent role in European events and use that control to project power globally. Yet in late April and early May, the French will choose from among a battery of candidates one who will be their next president. For the first time since the 1940s, there is not a single candidate on the list who subscribes to the principles of former President Charles de Gaulle.

For those same 60 years, Germany has been locked in to the structures of the European Union and NATO, and has been flatly disallowed from holding nationalist ambitions independent from Europe (which in Paris' mind translates as "independent of France"). That time has passed and Germany has re-awakened. For now, its interests do continue to parallel broadly those of its neighbors, but there are clearly changes in tone and objective that identify Germany as a European yes-man no longer. With elections in France, the period of French exceptionalism will end -- this is not simply the changing of a president, this is a change of regime -- and Germany will formally take over as the leading political and economic power in Europe.

This German rise is independent of Germany's continuing terms as president of the European Union and chair of the Group of Eight -- positions that enable Berlin to set the agenda both on a regional and global level. Such institutions, which have rotating leadership, are not the true source of Germany's return to the limelight. But the government of German Chancellor Angela Merkel is using them to pole-vault Germany to prominence. Yet, even should Germany fail disastrously in these leadership positions and squander the opportunity, the fact that Germany is back is undeniable. And should Merkel and her team succeed, Germany will have its cake and eat it too.

Elsewhere, the world -- while not sleeping -- might seem strangely quiet (except Afghanistan, of course, which is always noisy in the second quarter of the year). For most of the world, the second quarter will be one of introspection and consolidation. The long internal transition struggles in Nigeria, France and the United Kingdom will finally conclude with new leadership even as South Africa, Russia and China begin wrestling with similar changes. Thailand, Mexico, Bolivia, Venezuela and Ecuador will all seek major constitutional changes, while governments of both Pakistan and India will attempt to shore up support after last quarter's setbacks. The renegade Serbian province of Kosovo -- after eight long years in the political wilderness -- seems set to achieve a final status that will look more or less like independence. Even the global economy is in transition as the United States struggles -- we predict, successfully -- to throw off a looming recession.

The second quarter will not be the window in which the major conflicts erupt. It will be a time for preparing, positioning, maneuvering. The real fights will come after all concerned emerge from their cocoons.

Middle East: Negotiations and Power-Sharing

The U.S.-Iranian dealings over Iraq will remain the key event in the Middle East in the second quarter. Though the issue has been driving events for some time, the next three months are critical. The first direct and public talks -- albeit in a multilateral setting -- between the Bush administration and Iran's clerical administration on how to stabilize Iraq took place in early March; the main event in the second quarter will be a regional foreign ministerial-level meeting in April, where U.S. Secretary of State Condoleezza Rice likely will meet with a senior Iranian official.

The Iranians will be busy trying to regain the initiative on the nuclear issue, in light of the second round of sanctions imposed on them and Tehran's declining relations with Russia. Through a mix of provocative moves and negotiations, Tehran will try to secure its nuclear program as its main bargaining chip in talks over Iraq -- seeking to counter moves by Washington in the first quarter to disconnect the two issues. The United States will continue trying to contain Iran by supporting the operations of various Iranian rebel forces.

Essentially, while the United States and Iran continue back-channel negotiations, each country will try to use public provocations to weaken the other's resolve. Neither can allow the other to have the upper hand in Iraq. This means Baghdad cannot be run by a pro-U.S. regime that threatens Iran's security and regional objectives, nor can it be dominated by pro-Iranian Shia who would allow Tehran to become a threat to U.S. interests in the Middle East. Washington and Tehran each face a set of bad choices, and the key is to arrive at a compromise that can somehow satisfy both countries' minimal expectations.

Because there are no good options, if one side makes an offer, the other side refuses it. Such dissatisfaction manifests in provocative moves, such as the U.S. arrests of Iranian officials in Arbil, Iraq, and the abduction of an Iranian diplomat from Baghdad, as well as Iran's capture and detention of 15 British naval personnel from the Shatt al-Arab waterway between Iran and Iraq. Therefore, U.S.-Iranian back-channel dealings will intensify during the second quarter, as will public manifestations of frustration. Provocative actions will be punctuated by attempts to bring the secret discussions slowly into the public domain.

Next door in Iraq, negotiations involving Sunni insurgents, the Shiite-dominated Iraqi government and the United States will intensify in order to create an anti-jihadist front. Along with the growing multitude of transnational jihadist groups, this will lead to more fighting between mainstream Sunnis and transnational jihadists as the militants try to counter changes in the Sunni political landscape. Accelerated efforts to reach out to Sunni insurgents could lead to a revisitation of constitutional issues.

The Shia will try to strengthen their position in light of their loss of support from the Fadhila party and ongoing problems with Shiite leader Muqtada al-Sadr's political bloc -- especially as the Mehdi Army tries to revive itself in the wake of the U.S.-Iraqi Baghdad security plan. The need to get Fadhila back on board and maintain the uneasy relationship with the al-Sadrites will hamper Prime Minister Nouri al-Maliki's efforts to contain Shiite militia activity and reach out to the Sunnis. Some government elements are moving to replace al-Maliki and/or engage in a Cabinet reshuffle, which could further complicate matters.

Iraq's proposed hydrocarbons law, which the legislature is expected to approve in late May, will be another key issue in Sunni-Shiite-Kurdish communal negotiations. For their own reasons, the Shia and Sunnis oppose the Kurds' demand that Kurdish regional autonomous status translate into Arbil having considerable control over energy contracts and revenues. Therefore, negotiations among the principals from Iraq's three main ethno-sectarian groups will be intense in the second quarter. Parliament could approve a watered-down version of the law as a placeholder to show progress, but it will not lead to a resolution on sharing control of the oil.

In the Israeli-Palestinian theater, the newly formed Palestinian coalition government will seek to enhance its international recognition while trying to deal with Israel through the Saudi-led Arab League initiative. Tensions -- manifesting as occasional gunbattles -- will remain between the Hamas and Fatah factions over sharing control of the Palestinian security departments.

Within Israel, Prime Minister Ehud Olmert's government will try to ward off threats to its hold on power by continuing to reject the Palestinian government while using the Saudis to work toward a regional engagement with the Arab states. The Olmert government has not only softened its position on the 2002 Arab-Israeli peace initiative, but also welcomed the Arab League's renewed peace offer, which came during the recent summit in Riyadh.

Olmert's position is extremely weak, but regional and domestic circumstances are preventing his government from falling. His government has enough of a left-center-right mix that he can maintain a parliamentary majority and keep his opponents in the Likud party from exploiting his low public approval ratings.

The one-year anniversary of the Israeli-Hezbollah conflict is approaching. There has been some talk of the Israel Defense Forces trying to reverse the outcome of the conflict, but it does not appear either side is interested in a rematch.

Saudi Arabia will push ahead in its newly acquired role as the leader of the Arab states working with Israel, Iran and the United States for progress on the Arab-Israeli peace initiative. Given that both the Saudis and Israelis have demonstrated their willingness to compromise, this quarter could see the beginning of public multilateral talks, but these would be very preliminary in nature. Riyadh also will assert its leadership role on the Iran-Iraq front.

Saudi behavior at the recent Arab League summit also indicates Riyadh is not just seeking a leadership role for itself in the region; it is also interested in enhancing the collective Arab position in the region and beyond. While the Israelis appear to be warming to Saudi moves, King Abdullah's remarks calling the U.S. military presence in Iraq an illegal occupation already have created concerns in Washington. As a result, the coming quarter will see complications in terms of how the Saudis deal with various issues and actors.

Syria could spoil a broad Arab-Israeli peace initiative, given its interests in Lebanon, despite the Iranian-Saudi understanding on the makeup of the Lebanese government. Some evidence suggests the Lebanese factions are moving toward a new power-sharing agreement, but a deal is unlikely in the coming quarter. Even though the Saudis and the Syrians have tried to work out their differences, Syrian-Iranian relations will continue to create hurdles in Lebanon this quarter.

Political and social upheaval could come to Egypt in the second quarter as a result of the government's move to maintain its hold on power through constitutional amendments. The regime will face problems from both political forces and civil society groups, given the momentum created by workers' strikes and political opposition to amendments to the country's charter.

Another key development in the North African corridor will be the Algerian parliamentary elections. As the government tries to contain the Islamist insurgency on the military front, it also will try to block Islamists from emerging as a major political force. Given that two main Islamist groups have been banned from participating in the elections, the Islamists likely intend to run as independent candidates in order to gain a share of the legislature. In foreign policy, there are indications that Algiers is trying to assert itself as a regional leader in North Africa. In this regard, it has been trying to secure a major arms deal with Russia, which means Moscow also is interested in gaining influence on the southern banks of the Mediterranean Sea.

Finally, on the northern periphery of the Middle East, Turkey will hold its presidential election in early May. Prime Minister Recep Tayyip Erdogan or one of his trusted allies in the ruling Justice and Development Party (AKP) likely will become president; the president is elected by the parliament, in which the AKP has a two-thirds majority. Meanwhile, there could be increased tensions between Ankara and the Iraqi Kurds as the Turkish military conducts operations in northern Iraq against Turkish Kurdish separatist facilities.

Europe: France Fades as Germany Grows

For Europe, the second quarter will be action-packed; everything of consequence that will happen in 2007 will happen in these three months.

Late April and early May will mark the changing of the guard in France; a presidential election will determine President Jacques Chirac's successor. The election will be a real nail-biter. Despite all their differing rhetoric, Nicolas Sarkozy, Segolene Royal and Francois Bayrou -- while all campaigning for change -- will support a France that remains in NATO and the European Union. Sarkozy will likely seek a more modernized France and Royal a more socialist one, while Bayrou would shake up the ruling elite. Only Jean-Marie Le Pen seeks a very different France, and he has no chance of winning in the second round, even if he does well in the first.

But this hardly means France will remain the same. In fact, France will change more now than at any time since World War II -- with the election serving as the inflection point -- because of the four candidates' one similarity: None are Gaullists. Since the beginning of World War II, France's dominant ideology has been the idea that it is a global power. That ideology led Paris to seek a unified Europe that it could use to wield power on a global scale. Chirac is only the most recent heir to Gaullism, and with his retirement, an era comes to an end -- and not just in France.

Gaullist France's desire to be an international superpower shaped every facet of European policy -- particularly efforts to craft a common foreign, political and security policy. As the European Union has expanded, these policies have changed from unworkable to impossible, but they still remain, on paper, the union's core. When Chirac steps down, the country with the reputation for putting the most force behind these policies will shift, and the dream of a European superpower will fade.

The end of that dream will happen in concert with Europe's other major development: Germany's rise. The French and British stars will be falling this quarter -- British Prime Minister Tony Blair is expected to step down in favor of Chancellor of the Exchequer Gordon Brown in June or July -- which leaves no one but the confident Germany to fill the leadership void. Specifically, German Chancellor Angela Merkel will discover whether she can solidify her leadership of all of Europe this quarter.

Germany holds the EU presidency until the end of the second quarter, and if the first quarter is any indication, Merkel will not spare the horses. Her agenda runs the gamut from internal judicial cooperation to the Middle East peace process. To date, she has only achieved a small fraction of her policy goals, but one -- hammering out the next 13 years of European energy policy -- is the greatest achievement at the Continental level since the launch of the euro. Moreover, Germany will hold an energy summit for the European Union in May, in which Merkel will extend her energy plans outside Europe to potential non-Russian partners, like Kazakhstan and Azerbaijan.

In the second quarter, Merkel's other major effort will be tested: breathing fresh life into the EU constitution. Pushing for the document's ratification in its current form is pointless (it requires unanimity and already has been defeated in France and the Netherlands), so Merkel is seeking an agreement on the components to include in a new text to be settled by the end of her term.

If she succeeds, she will have seized Europe's pre-eminent leadership position and established Germany as the Continent's arbiter. But even if she fails, Germany remains Europe's most significant power -- and the only one geographically positioned to reach all parts of the Continent with its influence. Any success Merkel has in entrenching Germany's ascendance in this quarter is simply icing on the cake.

The one potentially volatile event looming just at the end of Germany's EU presidency is a decision by the U.N. Security Council (UNSC) on Kosovo's final status. The United States and European Union have set an unofficial deadline of late April or early May for the council to pass a resolution. This is not saying the decision cannot be postponed, since it was put off countless times before it even reached the UNSC. However, Merkel is looking for at least a blueprint to be settled on before the end of her term.

Following a UNSC decision, consultations with the Kosovar Albanians and Serbian government will take place for approximately six weeks as all sides try to format the best resolution. Kosovo will most likely end up with supervised independence for the time being, meaning it would be allowed to join international institutions and write a constitution, but would be governed by an EU representative and patrolled by a NATO-led force.

Such a timetable allows just enough time for Serbia to decide how it wants to handle Kosovo's impending statehood. The Serbian government has still not formed after the Jan. 21 elections in which no party won majority, but the two more moderate parties together won enough support to keep the Radicals out of the government. The West is giving Serbia a chance to organize its government before the UNSC's Kosovo decision. However, Serbia will be institutionally unable to resist a U.N.-forced settlement, regardless of whether it has a government.

For Serbia's prize -- should it accept and also allow a somewhat easy turnover of Kosovo -- the European Union has promised to put Serbia on the fast track to membership and investment in the country. This does not mean there will not be some volatility in the region, but in the end, this settlement could close the chapter of Yugoslavia's breakup and could be the remembered legacy of Merkel's EU presidency.

Latin America: Visions for Constitutional Change

As outlined in Stratfor's annual forecast, domestic concerns have dominated the region; however, the United States showed more interest in Latin America than expected, as demonstrated by U.S. President George W. Bush's weeklong visit in the first quarter. As expected, Brazil renegotiated favorable natural gas prices with Bolivia. Bolivia and Argentina made more progress than anticipated on their proposed joint pipeline project. Colombia's border tensions with Ecuador and Venezuela have continued. Unexpectedly, relations between Brazil and Paraguay are freshly strained as Brazil builds a border fence on each side of the Friendship Bridge, a busy border crossing and smuggling transit point.

The driver for Latin America's second quarter will be constitutional reform. Mexico, Bolivia, Venezuela and Ecuador all seek major constitutional changes, and upcoming steps in the reform process are polarizing the domestic scenes in those countries.

The possibility of escalating domestic scandals creates a wild card for Latin America this quarter. Chile's botched Transantiago transportation plan, Brazil's egregious air traffic control problems and links between politicians and right-wing paramilitaries in Colombia caused those countries' governments problems in the first quarter. These scandals appear to be getting under control, but any one of them could escalate if new evidence appears, or if opposition factions organize.

Mexican President Felipe Calderon is emerging as a strong leader. The passage of a public-sector social security reform bill at the end of the first quarter showed that Calderon can hold together a coalition comprising his National Action Party and the Institutional Revolutionary Party in order to pass difficult legislative initiatives. His next legislative initiative will add to this momentum; the president aims to legalize paid and unpaid internships, a move likely to create jobs and please young constituents. He will need this political strength as he takes the first steps toward reforming the constitution to allow foreign oil companies to participate in offshore exploration. Calderon will probably have some harsh words for U.S. immigration policies on Labor Day, May 1, but strikes and demonstrations on both sides of the border likely will be smaller than those in 2006.

The constitutional changes under way in Ecuador, Bolivia and Venezuela will not be completed during the second quarter. Among other things, the changes are likely to give some functions of traditional political bodies, including national legislatures, to community councils. This move probably will spook investors who already are extremely skittish about the Bolivarian-oriented countries. The implementation of strong state controls over Ecuador's private banking sector in the second quarter will further contrast this group of countries with Brazil, Chile and Peru, which are operating with sound economic fundamentals and are thereby attracting renewed interest from investment majors, including Lehman Brothers and Goldman Sachs. These differences will be apparent at the World Economic Forum on Latin America, which will be held in Chile at the end of April.

Ecuadorian President Rafael Correa emerged from the first quarter strengthened after a provisionally successful bid to purge his opponents in Congress. Although the Supreme Electoral Council's dismissal of 57 of the 100 members of Ecuador's unicameral legislature nearly tore the government apart, Correa's popularity and quiet support from the military gave him the upper hand. Competing court rulings threaten to reverse the decision, but the Constitutional Tribunal likely will take Correa's side in the final ruling on the matter -- or risk being overridden.

Ecuador will hold a popular referendum April 15 authorizing the formation of a constitutional assembly with powers to redraft the constitution and dismiss any members of government it chooses, in a "refounding" of the country's political institutions. The referendum likely will pass. As Correa's reform plans progress, he will issue more concrete proposals to renegotiate the national debt. He has indicated that he has changed his mind about pursuing a mass default on the debt, but the relief that decision gives investors will be clouded by the new regulations imposed on the country's banking sector.

Bolivia remains in gridlock as its Constitutional Assembly's thematic commissions wrestle with the fact that a two-thirds majority of the assembly will have to approve every article individually. In the first quarter of 2007, Bolivian President Evo Morales discussed the possibility of holding early elections as soon as the new constitution is complete in 2008, adding to the sense of uncertainty surrounding Bolivian political developments.

Venezuela continues to be fully under President Hugo Chavez's control, and although there have been some calls for a more public process, his constitutional reform agenda is not likely to face significant opposition. Venezuela also continues to aggressively pursue its agenda to nationalize energy projects, banks and other businesses, and gain even more control over national media.

Secondary drivers in the region for the second quarter include relations between Brazil and Venezuela, Brazil's ethanol ambitions and responses to urban crime.

The Banco del Sur constitution, set to be drafted this quarter, will reflect regional developments. Venezuela, the chief supporter, intends the bank to supplant the role of the Washington-dominated Inter-American Development Bank in the region. Brazil will participate in the bank's creation, even though Bush's recent visit to the region accentuated tensions between Chavez's Bolivarian goals for Latin America and Brazil's moderate approach. This common project, along with the opening of the Mercosur Parliament (though the parliament is powerless), could superficially soothe regional friction in the second quarter -- friction that Brazil's attempt to compete for influence in Central America and the Caribbean through the expansion of ethanol production and technology-sharing agreements would otherwise exacerbate.

Brazil's new emphasis on ethanol in its foreign relations challenges Venezuela's regional ambitions. As evidenced by Cuban leader Fidel Castro's public letter at the end of the first quarter, the ethanol issue is likely to provoke a new discussion in the region on the costs and benefits of industrial agriculture and biofuels. This discussion will put environmental concerns -- and the effects biofuels expansion could have on food prices -- in the spotlight.

It is unlikely these concerns will spill into hostile rhetoric at the South American Energy Summit, which Venezuela will host April 15-16. This will be the third such summit since Bolivia's 2006 energy nationalization. The presidents of Chile, Brazil and other countries are expected to attend, and likely will discuss pipeline infrastructure projects and maintaining a common understanding on Bolivia's natural gas policies.

In the realm of urban crime, Mexico and Brazil will continue significant crackdowns on violent organized crime related to the drug trade in urban areas, while Venezuela could launch an anti-crime campaign, although such a campaign is unlikely to significantly address that country's severe crime problems this quarter. In Mexico, offensives against drug cartels are boosting the government's popularity, although other cartels are finding room to move in as existing cartels are diminished. In Brazil, Rio de Janeiro authorities will attempt to strike a significant blow in their ongoing battle against favela-based gangs before the city hosts the Pan American games in July.

Former Soviet Union: Russia's Introspection, Putin's Consolidation

As the first quarter of 2007 ends, Stratfor's annual forecast for the former Soviet Union (FSU) is holding true. The main thrust of the annual forecast is that Russia will spend the year internally consolidating, both politically and economically. This began escalating at the end of the first quarter and will continue through the second, with some of the consolidation finishing up this quarter. Russia's domestic focus will keep it busy and give the other FSU states time away from Mother Russia's apron strings.

The one deviation from Stratfor's annual forecast is the degree of Russia's internal focus and the effects on Russia's periphery. For the first part of the year, Russia nearly ignored its periphery. This is not to say that much of the rhetoric has died down; rather, no actual political, economic or military advances into Russia's near abroad have been seen. This could change once Russian President Vladimir Putin feels he has consolidated enough political and economic power to confidently hand the country over in 2008. However, all of the planned consolidation is not likely to be finished in the second quarter. Thus, states in Russia's near abroad can take advantage of Russia's preoccupation to explore relationships with countries other than their large and domineering neighbor.

Russia's State Duma elections in December and presidential election in March 2008 are causing the Kremlin anxiety over consolidation. The lead-up to the elections will see the usual electoral events: phony political opposition groups emerging, real opposition groups being squelched and dissidents ending up with poison in their bloodstreams. Though this will all grab headlines, the real driver in the elections is Putin's inner circle and the economic consolidation that has gone on in Russia for several years.

The time for Putin's consolidation over Russia's economy and politics to be complete is nearing. Economically, Putin is on track. The two state-owned energy companies -- oil giant Rosneft and natural gas giant Gazprom -- have made large moves against foreign energy companies in Russia, such as Gazprom's takeover of Sakhalin-2. The second quarter will see Rosneft and Gazprom continue taking over larger energy assets, including some of the largest assets from bankrupt oil giant Yukos. Rosneft and Gazprom also are moving against TNK-BP, LUKoil and ExxonMobil's Sakhalin-1. Moscow will make huge steps in energy consolidation in the second quarter, and will not stop until closer to the elections. The consolidation of nonpetroleum sectors -- shipbuilding, banking and uranium, to name a few -- will continue this quarter.

Putin's political consolidation will hit some snags. The reason Russia is not seeing opposition forces create any destabilization is that Putin has clamped down on such forces. Opposition parties still exist and rallies still occur, but none of those parties is violent or a threat to Putin's government. Instead, the political instability is coming from within Putin's own handpicked personal circle. It is not that the inner circle is turning against Putin's authority; rather, Putin's closest confidants are jockeying for power and placement during the lead-up to the election.

As Stratfor forecast, the two front-runners to succeed Putin -- Deputy Prime Minister Dmitri Medvedev and First Deputy Prime Minister Sergei Ivanov -- are still in place. Also as forecast, the two men have expanded their public roles, as seen when Putin named Ivanov, previously defense minister and deputy prime minister, as first deputy prime minister. Putin is still holding off on revealing which of the two will take which office come election time, though the two likely successors will continue their more public roles in the second quarter.

The inner circle conflict has been brewing for several years. The two main camps are those who support Gazprom -- led by Deputy Chief of Staff Vladislav Surkov, Putin's top aide -- and those who support Rosneft -- led by Deputy Chief of Staff Igor Sechin, Putin's longtime friend and the head of Rosneft's board. The two energy companies have escalated their tense relationship into an outright competition for assets. This conflict will continue, with usually reserved Surkov and Sechin coming into the public eye and pulling Medvedev and Ivanov into the fray. Putin cannot allow this internal conflict to continue past the second quarter, as it could affect the legislative elections.

As Stratfor forecast, Moscow has been looking to expand its influence outside its borders, but these moves have been stalled by Russia's introversion. Putin knows he has to keep his focus sharp until he is confident about Russia's political future. This does not mean Russia will not continue with its commentary on all foreign politics; it just will not make any decisive moves outside its own borders in the second quarter. This temporary lull will be seen in Russia's continued relationships with Serbia (during the Kosovo negotiations), China and countries in Africa and the Middle East (specifically Iran), but also will be felt in Russia's periphery.

Kazakhstan will likely be the country most interested in exploiting Russia's blind eye. The country has always dexterously balanced its political obligations to Russia (through which it exports most of its oil and natural gas), the West (a large player in developing Kazakh energy infrastructure) and China (a potential energy customer). Russia has continually meddled in Kazakhstan's relationships with the other two, but now the Central Asian country could turn to the West and China before Russia notices. In the second quarter, Kazakhstan's big opportunity will be at the European Union's May summit on energy, hosted by EU President and German Chancellor Angela Merkel. Europe has always been interested in Kazakhstan as an energy supplier, but has been either blocked by geography or by Russia. With the first step to a non-Russian, FSU energy supply from Azerbaijan -- the Baku-Tbilisi-Ceyhan pipeline -- complete, there is now room for growth to allow Kazakhstan to increase its exports to Europe.

Russia's preoccupation also gives Belarus the chance to get out from under Moscow's thumb. Following the January oil dispute between Russia and Belarus, Minsk knows that Moscow is willing to damage the Belarusian economy in order to keep the usually Russia-loyal state under its control. Belarusian President Aleksandr Lukashenko has two options: to remain Russia's flunky, or to look for a new source of support. With Russia's head turned, Lukashenko has a small window of time to appeal to the West for help and get out from under Russia's control. However, Russia holds one card that will ensure Lukashenko does not take his decision lightly. A series of economic agreements between Russia and Belarus eliminating some trade restrictions -- on which Belarus is depending -- will take effect in the second quarter, easing Belarus' economic pinch.

In the Caucasus, everything of consequence that will happen in 2007 will happen in the second quarter. Azerbaijan's Nagorno-Karabakh and Georgia's South Ossetia and Abkhazia (as well as Moldova's Transdniestria), all simmering breakaway regions, are watching for the West's decision on the fate of Serbia's secessionist region, Kosovo. Stratfor forecast that these regions would flare up over the Kosovo decision; however, as the decision date looms, it seems the second quarter will not see renewed violence. This is not to say small conflicts will not occur, but the magnitude of any clashes will not be near that of past battles. This is because each of these breakaway regions already virtually has independence, though this is not yet internationally recognized. Russia does not have the bandwidth to back these regions' independence movements now as it has in the past, but will hold onto that card for another day.

But there is a tenuous situation in a Caucasus state that is usually quiet: Armenia. If the United States or Europe wants a chance to gain a foothold in the last of the pro-Russian Caucasus states, it will get that chance in the second quarter. First, Armenian Prime Minister Andranik Markarian died March 25, leaving his ruling party -- the Republican Party of Armenia -- open to be consolidated under the likely future president, Defense Minister Serge Sarkisian. This political party has the full support of the current and party-less President Robert Kocharian.

Second, Armenia will hold its parliamentary elections May 12, amid the rise of a powerful political party and fracturing within the ruling coalition and the opposition. Moreover, the small state is open for the first time to large economic measures with Iran; its fellow Caucasus states of Azerbaijan and Georgia are both now pro-U.S.; and there is no active conflict within the Armenian-populated Azeri region of Nagorno-Karabakh. Circumstances have aligned in such a way that Armenia could be in play. However, Kocharian retains a tight hold on public life in Armenia, running the media and the right to organize. Breaking Kocharian's political control will be difficult, but if it is going to happen, now is the time.

Turkmenistan remains an enigma, as predicted in the Stratfor annual forecast. President Gurbanguly Berdimukhammedov has yet to show his cards. The Turkmenbashi's replacement will most likely remain loyal to Russia, though there are opportunities for that to change. If Berdimukhammedov wants to end Turkmenistan's traditional pro-Russia stance and have a chance for cooperation with the West, he must act before Russia refocuses on its periphery.

The one exception in all of this is, of course, Ukraine. There, the country's internal political battles between pro-Western President Viktor Yushchenko and pro-Russian Prime Minister Viktor Yanukovich have erupted into a fight for political control. And unlike the last time this happened, during the Orange Revolution of 2004, the Russians are taking an active hand -- and the Americans are not. Washington desperately needs the Russians to stay out of its ongoing negotiations with Tehran -- and the price for Moscow's quietude is simple: Leave Ukraine for Moscow.

Such a condition makes the American decision to sit this one out not only an obvious one, but also one that Washington will endeavor to extend to its European allies -- regardless of their feelings about Russian influence increasing in Ukraine. If Yushchenko is going to survive as a power player, he will have to do so with his own resources, skills and guile.

Stratfor (Estados Unidos)

 


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18/11/2016|
17/04/2016|
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14/01/2006|
14/01/2006|
12/01/2006|
12/01/2006|
06/01/2006|
20/12/2005|
01/08/2005|
06/01/2005|

ver + notas
 
Center for the Study of the Presidency
Freedom House