October 1 - 14
Hello, and welcome to the Dispatch for October 1 - October 14!
An announcement on the 23rd that the Iranian central bank would supply US dollars to importers of certain goods prompted panic selling of the Iranian Rial. By October 1st, the Rial had shed 40% of its value on unofficial exchanges (the government exchanges are tightly controlled). The drop, which the Iranian president attributed in part to the US-led sanctions, prompted demonstrations in Tehran, including a strike by merchants in the Grand Bazaar.
Iran’s economic woes are only partially due to the sanctions, and Iranian anger now is mostly over economic mismanagement, not the nuclear program - many Iranians consider the nuclear program their national right, even if they’re not particularly fond of the regime or interested in nuclear weapons. The question is whether the sanctions will cause Iranians to rally to the regime - Ahmadinejad is not particularly popular, but there are elections in the spring, and while the Ayatollah remains the sole decision-maker on the nuclear program, the outcome of the elections could have some impact on how the public perceives both the economy and the nuclear program. One thing I have heard repeatedly, though, is that a genuine revolution in Iran is vanishingly unlikely right now.
Greek Prime Minister Antonis Samaras warned October 5th that without urgent financial aid, the country could collapse, pointing to the rise of the neo-fascist Golden Dawn party as a sign of the danger facing the nation and comparing the situation to Germany before WWII. Recent reports from Greece indicate the Greek police are increasingly siding with Golden Dawn, underlining the danger to the country. The Guardian reported allegations by several anti-fascist protestors of police brutality and torture, Vice attended the opening of a play in Greece and found the police more interested in protecting Golden Dawn than the attendees, and the New York Times reports that the group’s popularity is rising in much of Greece as it begins to replace services the state no longer can afford to provide.
There’s sharp historic irony here: The main opponent of aid to the Greeks is the German central bank, an institution formed after World War II with an explicit mandate to prevent the economic conditions that led to the rise of the Nazi party from recurring in Germany. The rise of Golden Dawn is the most concerning development in the Eurozone now - the ECB needs to get in gear and start actually working with the Greek government to get money flowing back into public coffers as soon as possible to avoid that government falling to a bunch of fascist thugs. Whatever the cost of bailing out the Greek government, it will be an absolute bargain compared to dealing with what happens should that country collapse.
On October 9th, Heriberto Lazcano, the leader of the Zetas cartel, was killed by Mexican marines. The marines, responding to a report of armed men at a baseball game, stopped a suspicious SUV, resulting in a brief firefight that killed both the driver and passenger. The bodies were sent to a local morgue, and it wasn’t until after a group of armed men broke in and took the body that the Mexican government realized who the man was. Mexican authorities claim there are already signs that the Zetas are uniting behind the group’s second in command Miguel Trevino, which may help avoid the bloody secession fight some have feared.
There’s a saying among counter-narco officials about traffickers: “We’ve got to be lucky every time - they only have to get lucky once.” Apparently that goes both ways. The leader of the Zetas cartel, one of the most ruthless, effective, and feared criminal organization in modern history, met his end not as the result of a full military assault on his stronghold but after a traffic stop outside a baseball game. Lazcano was one of the most dangerous men in the world, and he died under circumstances so mundane that the Mexican government didn’t even realize what had just happened until hours later.
The Mexican Navy’s assertion that the Zetas are already uniting under Trevino is over-optimistic; it was announced barely a day after Lazcano’s death. If true, it could spare Mexico another bloody intra-narco conflict, but it’s entirely too early to tell how the situation will break - the Zetas have had several internal conflicts already, and Trevino is known as a trafficker, not a military man like Lazcano was, so he may well face challengers within the organization.
On October 3rd, a mortar landed in a Turkish town, killing 5 civilians. The Turkish military responded with more than 5 days of artillery fire into Syria and a parliamentary resolution authorizing Turkish military action in response to the cross-border fire. In the wake of the shelling, Turkish media reports the Syrian government agreed to keep military forces at least 6 miles from the Turkish border. Rebels in Syria warned that continued inaction from the west was leading to severe shortfalls in weapons and ammunition and increasing extremism among fighters.
Turkey has been looking to establish a buffer zone inside Syria for some time due to concerns over both the influx of refugees and the increasing violence on the border. A single mortar was apparently all it took for the Turks to get their wish.
I’ve been extremely hesitant to endorse any sort of action in Syria. The situation has been a mess from the beginning: the rebels have been disorganized and largely ineffective, it’s not at all clear they’re supported by the majority of the populace, and, unlike Libya, there’s been no corresponding political entity that could hope to take over after the Assad regime fell. Frankly, most of that is still true, but our calculus may need to shift due to two trends: first, the increasing role and effectiveness of the Islamist fighters, who are receiving plenty of support from abroad; second, as the fighting drags on, even the moderates in Syria are starting to turn against the west - and who can blame them, after nine months of dithering? Ultimately, Assad is going to fall, and the question then will be who has built up enough support to shape the future of Syria. The prospects for anything approaching a secular, democratic Syria are rapidly diminishing as we continue to debate whether or not we’re going to support the rebels in any material way. If we want any real hope of a Syrian outcome that isn’t either a bloodbath or a hostile Islamist state, we need to start actually providing real weapons - including desperately-needed anti-air and anti-tank weapons - to the moderate and secular groups in the country while they still exist. Inaction is a choice too, and we’re in real danger of losing even the possibility of a friendly outcome in Syria.
Ghana seized an Argentinean Naval Frigate on October 3rd on behalf of a US hedge fund which had filed suite in the country. The hedge fund has been awarded claims against the Argentine government by US courts of between $1Bn and $1.6Bn over losses stemming from Argentina’s 2001 sovereign debt default, and has been tracking the vessel for some time, waiting for it to dock at a friendly port. The Argentinean government is working to have the court order rescinded, but on the 11th, Ghanian courts ruled the seizure legal, and the tall ship remains docked in Ghana.
Lawsuits against governments are fairly normal, but an actual asset seizure, especially of something like a naval ship, is highly unusual. It’s hard to imagine this happening even to the most destitute of Eurozone countries - it’s no wonder Argentina feels put upon by the international community.
After a heated campaign, Hugo Chavez won his fourth re- election, extending his rule to 2019. The perennial western bête noire faced his stiffest opposition yet, but still won 54% to 45%, with more than 80% of Venezuelans voting.
Thanks for joining me, and my best for the weeks ahead!