April 07, 2007

Rumours of 'imminent' political change grip Pakistan

Islamabad, April 7 (IANS) Pakistan is agog with rumours of "imminent" top-level political changes in the backdrop of a flurry of high-profile meetings, especially between President Pervez Musharraf and Prime Minister Shaukat Aziz - with the two meeting thrice in a span of 12 hours this week.

There is media speculation for and against Shaukat Aziz being changed, for allegedly "mishandling" the crisis over the suspension of Chief Justice Iftikhar Mohammed Chaudhry last month and the nationwide protests it had caused.

Though ministers have denied such a move, but Dawn, The News and The Nation newspapers among others said the denials had not stopped the gossip.

The crisis is also being attributed to a "deal" between Musharraf and former prime minister Benazir Bhutto. Off the record, officials and politicians confirm that "negotiations" between representatives of Musharraf and Bhutto were continuing. National Security Council Secretary Tariq Aziz, a Musharraf confidant, met Bhutto in Dubai two days ago.

This has led to much speculation among political analysts at home and abroad. Strategic Foresight (Stratfor), a US think tank, in its analysis said that such a "deal" was in the offing since Musharraf needed Bhutto's support for his political survival.

Railway Minister Sheikh Rashid added fuel to the political fire by first denying having said that a "deal" had been concluded, but later saying that it had crossed the "quarter-finals" and had "entered semi-finals", The Nation newspaper said.

Dawn reported a spate of high-profile meetings on Thursday and Friday, which caused "quite a stir" in the federal capital, fuelling rumours about "some drastic changes either in the government's composition or its policies".

It noted that Aziz, just back from 14th SAARC Summit in New Delhi, held three meetings with Musharraf and one lengthy sitting with Chaudhry Shujaat Hussain, chief of pro-Musharraf Pakistan Muslim League (Qaid), "lending credence to speculation that some important decisions are underway".

Information Minister Muhammad Ali Durrani however said: "Rest assured that nothing is going to change as the government is strong from within. The rumours are mere disinformation."

Considerable significance is being attached to the government's move to disband the National Accountability Bureau's special wing dealing with corruption cases against political leaders, particularly Benazir Bhutto and her husband Asif Ali Zardari.

"The observers were in no doubt that the government and the Pakistan People's Party were about to clinch a deal that could help re-elect President
Musharraf for another five years," said Dawn.

It noted as an indication of "the gravity of the situation" a statement issued after the Musharaf-Aziz meeting, which read: "The two leaders also exchanged views on the political environment in the country and issues of national importance."

Rukhsana Aziz, wife of the prime minister, hosted a dinner for Musharraf and family at the Prime Minister's House Thursday evening.

The prime minister called on the president again Friday morning at the President's House in Islamabad.

Speculation prompted denials by the presidency, a top military commander and the new information secretary that the prime minister was on his way out, Daily Times said.

"We have not even imagined any such thing," a presidential spokesman was reported as saying. But sources insist that the change is in the offing. They even quote unnamed "well-connected" sources that it's time for a change.

The News said the prime minister has curtailed his engagements and is engaged in consultations with his close friends.

"Sources close to him insist that the ongoing activities are normal political exercise, as the country is heading towards elections, and such 'gimmicks' are popular political tricks for catching the attention of the people and the quarters calling the shots," it said.

A Potential Musharraf-Bhutto Deal

http://www.stratfor.com/

April 05, 2007 02 18 GMT


As many as 60 foreign jihadists, mostly Uzbeks, were killed on Wednesday in the South Waziristan agency of Pakistan's Federally Administered Tribal Areas (FATA), top agency administrator Hussainzada Khan said. The total number of transnational Islamist militants killed there since March 19, when fighting broke out between Pashtun tribesmen and al Qaeda-linked militants, has reached 200. Pakistani officials have hailed the fighting as a major success, and evidence that their deals with tribal maliks to de-Talibanize the area are working.

Given that this fighting is taking place within, at most, one of the seven agencies that constitute FATA, it is way too early for Islamabad to claim success. So far, al Qaeda does not seem affected by the fighting; its presence in FATA is toward the northern end of the tribal belt, while the battles are taking place in the south. However, the drive to expel foreign Islamist fighters could spread, especially to North Waziristan and Bajaur, the other two FATA agencies where the government has inked agreements with tribal leaders in order to purge foreign militants.

When and how fast that will happen remains to be seen. But the jihadists already are countering the government's moves by holding their own negotiations involving Pakistani Taliban elements, as well as by staging attacks against intelligence agencies and military facilities. These countermoves will only intensify as the government pushes ahead with attempts to drive a wedge between the Pashtun tribesmen and the jihadists.

This government-jihadist struggle takes place in the context of domestic political instability due to the country's ongoing legal crisis, which has forced President Gen. Pervez Musharraf to accelerate back-channel dealings with the main opposition group, the Pakistan Peoples' Party Parliamentarians (PPP-P), led by former Prime Minister Benazir Bhutto. Musharraf's dire need to gain control of the jihadists could bring the president and Bhutto closer to an agreement, especially given that they are more or less on the same ideological page regarding Islamism and jihadism.

The two have been holding behind-the-scenes talks for almost three years. One of the reasons these discussions have produced no results is that accepting a president in uniform would be a deadly political blow for the PPP-P, which stands to lose its support should it go against its historic role as the anti-establishment political party. The party also does not want a deal under which it merely replaces Musharraf's main civilian ally, the ruling Pakistan Muslim League (PML).

In other words, PPP-P is looking for a certain degree of power. However, Musharraf is only working with the party in order to secure his own political position. Hence, a deal that undercuts his authority is a nonstarter -- something Bhutto knows well.

The former prime minister also understands that, just as Musharraf needs her to help sustain his hold on power, she must work out a deal with him in order to stage a political comeback. This means each will have to compromise. While the idea of Musharraf remaining military chief is unthinkable for the PPP-P, a deal under which Musharraf retains a considerable degree of power as the civilian president and Bhutto serves as prime minister -- with more authority than the current prime minister enjoys -- might be acceptable.

While Musharraf will not want to give up his position as military chief -- the source of his strength -- the political crisis in the country has made it clear that clinging to this title could weaken his hold on power.

Given what is at stake for both sides, a deal under which Musharraf -- as a civilian president -- acts as a balancing force between parliament and the military is not out of the question. In the past, Bhutto and her PPP-P have headed governments in which the military had oversight over the civilian administration and the civilian president had the power to dismiss the Cabinet and parliament. A slightly altered version of this, wherein a PPP-P-led government exercises more power than it has during its last two stints in office, is possible.

There obviously are many details that still need to be worked out; most important is what will happen to the ruling PML if Musharraf and the PPP-P strike a deal -- an issue Stratfor first discussed some two years ago. While the country's growing political and security instability has forced Musharraf and the PPP-P to become more pragmatic, it has done the same for the PML.

The party, which has opposed a Musharraf-Bhutto deal for fear of losing its political position, now is entertaining the idea of forming a coalition government with the PPP-P and other like-minded groups -- along the lines of the left-center-right governments in Germany and Israel. It is too early to say whether such a deal can be worked out, especially given the number of moving parts on Pakistan's domestic political scene.

But it is certain that -- regardless of such a coalition's configuration -- Washington would certainly favor an option that unites the establishment and the mainstream opposition. From the U.S. point of view, such a setup would balance the need for change with the need to maintain continuity, and hopefully allow the country to move past the current crisis and focus on fighting the jihadists.

Reality check : Enlightened moderation or Talibanisation

Enlightened Moderation??

Enlightened moderation or Talibanisation
Reality check
By Shafqat Mahmood
The News, April 6, 2007

The writer is a former member of parliament and a freelance columnist based in Lahore

In a country where mobile phone subscribers number over fifty million and growing, instant messaging has become an important means of keeping in touch, or exchanging jokes and sharing information. In times of national crisis, the messages that circulate widely also become reflective of public mood.

One such message has truly captured the ironic dilemma we face. It said: "In Pakistan the chief justice of the Supreme Court seeks justice and the army chief seeks security." While no comment is necessary on the chief justice, those of us who have seen streets barricaded, traffic halted and police and intelligence throw their weight around when the army chief is near, know the second part quiet well.

This of course is not the only irony. In a week when the political elite, the lawyers' community and civil society were out in force fighting for justice and rule of law, students of Jamia Hafsa were breaking every law in the book to launch vigilante actions. As the 'strong' government of a military dictator stood idly by, they kidnapped women, branded them prostitutes, and made them publicly repent. The alleged ring leader of the alleged prostitutes later told newsmen, that if this is Islam she'd rather be a Christian.

The vigilante brigade has now expanded their area of operation. They are going around telling video-shop owners to change their businesses or face direct action. Qari Abdul Rashid, the Jamia Hafsa leader has also helpfully offered Rs250,000 to make the transition easier. This is not happening in Tank or Bajaur but in the capital, Islamabad.

General Musharraf is now reported to have taken direct charge of all tactical decisions regarding the lawyer's movement. Who is in charge of the tactics regarding Jamia Hafsa? Not the police because it does not need a great deal of provocation to break a head or two. The weakness is obviously at the top. The much vaunted writ of the state lies in tatters but nobody is bothered.

Some have described it as creeping Talibanisation of the country. If after seven years of enlightened moderation we have reached this sorry pass, what lies ahead? Perhaps, as someone said, a few more years of Musharraf and all the women will be in shuttlecock burkas and the men with a lot more hair on their face. (Where are the barbers associations? It's about time they start pounding the streets).

Quiet seriously, we are in a terrible mess. The impact on the ground is quite the opposite of what Musharraf has been proclaiming since his time in office. The mullahs, who were never more than a marginal force in politics earlier, now dominate it. Any political equation without factoring in their role is meaningless.

With 'secular' leaders like Benazir Bhutto and Nawaz Sharif forced out, the field has been left open for the likes of Fazlur Rehman and Qazi Hussain Ahmed and a myriad of other second-line MMA leaders. Since this happened when the electronic media was coming into its own, it has given a visibility to the mullahs that would never have been possible before. They now stalk the land as the face of politics while the secular leaders languish in virtual obscurity.

At the societal level, the story is uniformly bleak for those who profess to be liberals. On the surface there seems to be much openness with fun and frolic continuing without the fear of police smelling breaths or asking for marriage certificates. The Women's Protection Bill has also given greater legal rights to raped women and people accused of consensual sex.

But, this is as far as liberalisation of the society goes. The radical elements have an aggressive intent and do not let any opportunity pass to enforce their will. The impact is visible all over the country. The tribal areas are virtually lost to the hardliners but as events of the last few weeks have shown, their influence is now rapidly expanding to the so-called settled areas of the frontier.

This is not because there is an MMA government in the province but despite it. It passed Hasba bill but is only for political mileage. Incumbency usually makes the ruling party unpopular. While the MMA as a unit may have lost votes, radical elements are certainly gaining in the province. The targeting of cable operators, video shop owners and even barber shops is now routine in Kohat, Nowshera, Mardan and even in Peshawar.

Islamabad itself cannot be seen as an aberration. There are a large number of seminaries in the city, often on encroached land, that are breeding grounds for vigilante action. In almost eight years, Musharraf has done nothing to check their growing number or bring them within the folds of mainstream education.

There are reports of madressah students visiting girls' schools and NGO offices telling the women to dress modestly. Even on the street, young girls wearing jeans or pants have been accosted and threatened. The time is not far off when vigilante groups will start targeting parties and diplomatic receptions on the pretext that alcohol and obscenity is thriving there. If we fear a clash of cultures, the place where it has the greatest potential of becoming overtly visible is Islamabad.

The smaller towns of Punjab and Sindh are spared the worst aspects of this culture clash because conservatism is already the norm there. But, it is only the size of the larger cities of Lahore and Karachi that has prevented open cultural warfare. The elite are ensconced in their enclaves and going about their liberal lifestyle because the vigilantes are physically removed from the action.

But, this is not likely to last. Religious conservatism or even vigilante radicalism is not an economic divide. It is by definition a cultural divide and equally visible among the rich and the poor. The success of many proselytising groups, such as Al Huda, among the well-off is an indication of that the liberal lifestyle is on the wane.

Many a former party animal is now for want of another term a 'born again' Muslim and the number of socialite women now turning to hijab is no longer an oddity. The country is poised to lurch towards conservatism as the governing societal norm. The fact this is happening under the rule of someone who openly claims to be liberal and enlightened should make us pause. There are many complex reasons for it but one important factor is the marginalisation of the mainstream and culturally moderate political forces.

It may still not be too late to arrest this trend towards radicalism if genuine democracy is given a chance. The exiled political leaders must be allowed to come back and play an active role in politics. This will by default counter the extremist religious forces. But as long as Musharraf sees them as a threat to his hold in power it will not happen. Herein lies the central dilemma behind the preaching of enlightened moderation.

Email: shafqatmd@gmail.com

April 05, 2007

French Nuclear Energy firm Areva Push in US

Areva Push in United States

Nearly a dozen lobbying concerns defend the interests of France’s Areva, a world leader in nuclear energy, in Washington. Indeed, the U.S. represents the group’s biggest market.


According to the Nuclear Energy Institute, the leading nuclear industry trade association in the U.S., there is a potential market for 18 new reactors in the U.S. between now and 2009. To gain traction on that highly strategic market, France’s Areva, which is promoting its third generation EPR reactor and employs 5,000 people in 40 places in the U.S., is relying on a raft of lobbying concerns (see graph below) while also adopting a strategy of forging partnerships with top local players. In anticipating a strong market for EPR reactors in the U.S., Areva teamed up with Constellation Energy (future operator) in 2005 through a joint venture, Unistar Nuclear, and with Bechtel (future constructor).

To bid for a contract to process spent nuclear fuel that was put out to tender early this year by the Energy Department, Areva joined forces with Washington Group International, a leading supplier of the energy department; with BWX Technologies, already under contract with the energy department for reconditioning fuel; and, since March, with Japan Nuclear Fuel Ltd., which specializes in recycling uranium in Japan. The French group already processes U.S. military plutonium at its plant in La Hague in France, transforming it into MOX. No American group currently masters the manufacture of that fuel made out of depleted uranium.

French BI Czar Alain Juillet unveiled 3 year plan


French Government has unveiled a New 3-Year Business Intelligence Plan which is headed by BI czar Mr.Alain Juillet , on April 3rd . Last year it is reported in (Times 04/03/06 )that French leader 'asked secret service for list of firms at risk of takeover'


"THE French secret service is reported to have drawn up a confidential list of French companies that could be vulnerable to hostile bids by foreign investors..."

"...M de Villepin is believed to have ordered French intelligence agencies to provide him with information to sustain his campaign for “economic patriotism”, which has been criticised as covert protectionism. He is seeking to defend France’s biggest and most emblematic companies against foreign takeover..."

"...Alain Juillet, the former French spy chief appointed as head of the Government’s Economic Intelligence unit, denied any knowledge of the list..." OVER the past three years, the French authorities have given the country’s intelligence agencies a new mission — to protect Gallic firms.

The so-called economic war is now a central theme for French spies, who have been told to combine financial intelligence with their traditional battle against terrorism, rogue states and revolutionaries.The man overseeing these moves is Alain Juillet, a former member of the Direction Générale de la Securité Extérieure (DGSE), the French equivalent of MI6.In 2003, he was appointed to the newly created post of Head of Economic Intelligence in France..."

"...The French Government’s aim is to cast the economic intelligence net beyond its old limit in the struggle against industrial espionage.

The Direction de la Surveillance du Territoire (DST), the equivalent of MI5, for example, has trained agents to detect early signs of a hostile takeover bid for a French company. The third French spy agency, les Renseignements Généraux (RG), whose main task is to keep an eye on subversive movements, has also begun to tackle economic intelligence. About 100 of its spies are dedicated to providing help for small and medium-sized companies..."


http://management.journaldunet.com/

September 2004

Which is the definition of the concept of intelligence economic?

It is of the control and the protection of useful strategic information for all the economic actors.

Chronology of the IE in France
1994: Matre report/ratio
1995: Committee for competitiveness and economic safety June
2003: Carayon report/ratio Dec. 2003: appointment of Alain Juillet


when this concept does go back?

The economic intelligence was practised already in the Middle Ages. But they are the English who first developed it, five hundred years ago. The Japanese systematized it in the Fifties and the Americans conceptualized it in 1986. In France, the Marten report/ratio, starting point of the movement, go back to 1994. A committee for the economic intelligence then worked with Bernard Esambert in 1996. Then, in 2003, Bernard Carayon submitted a report on the subject to the Prime Minister.

Where France is located compared to the other countries as regards to economic intelligence?

A certain number of companies, administrations and ministries are leaning on the topic of the economic intelligence these last years. Researchers of universities or large schools have also advanced on this subject. But we are all the same ten years old of delay compared to the Americans! In France, we did not see the interest of the concept of intelligence economic until the Prime Minister is not interested in it in 2002. The large companies, in contact with great American groups, used already techniques of economic intelligence. But this mechanics had not passed in the spirit of French general public. We wish that the medium-sized companies use this tool and that the small companies understand that it is also interesting for them.


Why the economic intelligence is increasingly strategic?

Today, in the whole world, all the commercial schools and all the universities of management teach the same theories, the same authors. The young graduates received all the same formation. Once in the company, they approach their trade with the same technical and theoretical approaches. Then, the culture of each one, which influences the decision and operating mode, makes the difference. The economic intelligence brings a new element: capacity of anticipation. That which practises the economic intelligence knows before everyone the points on which it must act. It thus has a competing advantage compared to the others. The day when everyone will control the techniques of the economic intelligence on the best level, like one practises today marketing or total quality, that will become simply one of the elementary concepts to be able well to manage a company. But, for the twenty years to come, it is a means of making the race at the head. More especially as the use of the techniques of economic intelligence requires experts and technological tools of point that cannot offer all the countries of the world. It is thus a means of creating a competing advantage for countries which have an important capacity of investment. That makes it possible to remain at the head, in particular compared to less developed countries. Our companies are combative and able

Why the State have does a role to play as regards economic intelligence?

The economic intelligence answers the will of the State to be sure that our companies fight with equal weapons with their competitors. In baited international competition, the State must take care to limit the distortions of competition to the profit of the French companies. From the moment when the rules are complied with, the best gains. We consider that our companies are combative and able. When the combat occurs to equal weapons, they very often gain. Jean-Pierre Raffarin named you high person in charge in charge of the economic intelligence at the end of 2003.

Which is your mission?

My role, such as it was defined by the Prime Minister, consists in coordinating the actions of the State and its administrations in order to help the companies vis-a-vis their international competitors. With us to define each time how touch: either directly, or by the Chamber of Commerce, the regional organizations or the various administrations. We seek, by all the possible means, to bring information to the companies and to sensitize them as for the interest of the economic intelligence. Once the companies included/understood the interest of the step, they can only manage. Concretely, the administrations will provide they more information? Many administrations already developed data banks. But it is necessary to inform the companies which these data banks exist. In France, as in much of large countries, we have information. But it is necessary to seek it, it coordinate, Trier and to organize it to be able to give it to the companies which need some.

Will you create a great data base?

No, especially not. We seek to federate through one or more gates all that is done on the level of the State. The ministry or Finances has its gate, the economic missions and research too. We seek to interface all that so that each one keeps its specificity. We want to create a space which makes it possible to have access to all levels of information of an area. The State must help SME.


Within the companies, how economic intelligence is practised ?

Some attach the economic intelligence to the strategy, others with marketing, the direction of the information systems or with safety. More and more, this tool is affirmed with the service of the Management committee of the great groups. It indeed relates to all the functions of the company. The great groups created posts of director of the economic intelligence. Within SME, they are the leaders who ensure it. But they do not have much time, and seldom the formation necessary. The State must thus help SME, via the Chambers of Commerce and Industry, of the federations and associations.

Which are your means to fulfill your mission near the Prime Minister?

I work with three collaborators and two secretaries. We identify existing it and let us coordinate it. When we note faults, we propose solutions. But is with the various ministries to set up them. We thus do not need to be numerous, nor to profit from an important budget, on the contrary. It is necessary that each service of the State can mobilize its means and its personnel to develop what interests it. For example, a data base specialized must be managed by the ministry concerned. But is with us to fix a framework at the various projects.

Which is your calendar?

To go as quickly as possible so that the French adapt the concept of intelligence economic. I estimate that it will take us three years to achieve this goal. At the end of September, we will have the first concrete results. The definition of the concept such as I stated it results from a consensus. But, to justify this definition, many explanations should be brought. We will publish them in September. It will be true doctrines of the economic intelligence to the Frenchwoman. In addition, we work in this moment on the supports which one can give to the French companies in the advanced technologies, in particular SME. 95% of information are on the Web "

Wouldn't one have to privilege a policy on a European scale?

We work within a European framework. We collaborate with other countries and other companies, as from the moment when our interests are joined. Certain information is open, the foreign companies have there also access. If we carry out a gate, it will be for members, French or foreign companies present in France. We also take care to preserve the strategic interests of each one, in particular in the fields of sovereignty. To find the information which makes really the difference, shouldn't one go on the ground? You can obtain data without playing the James Bond or the Uncles flingueurs! 95% of information are on the Web. That is enough to be shown extremely in a negotiation. I worked in deprived during thirty years. I seldom obtained 95% of information concerning my competitor! The secrecies of company are increasingly rare. However, information can false, be distorted, deviated, be recovered by competitors, countries or of the Maffias. It is thus necessary to set up protection systems of flows and systems of stepping of the data.

How can one play equal weapons without international rules?

It is necessary to discuss with our colleagues the rules of the game. The large countries must take care that clear laws are applied by everyone. Moreover, of the international regulations exist for a long time. The law anti-corruption of OECD was voted and applied in France. But force is to note that the majority of the countries in the world did not approve it. The countries which signed it thus find underprivileged. It is necessary to be organized to find a formula which makes it possible not to be handicapped by the compliance with the rules of ethics. If one identifies a country which does not play the game, it is necessary to develop systems of reaction to prevent which it can continue. In France, the economic intelligence is practised in the Community rules and the French laws. It is not a question of twisted adventures, but of a very serious, very technical tool. The cake grows bigger less and more countries divide it "


Does the expression “war economic” seem to you suitable today?

I started to work with international in 1967. I always saw a keen competition between the great groups. If one refers to the definition of Clausewitz (*), the war is the continuation of the policy by other means. The expression “war economic” is thus suitable. As long as the production came from some large countries, one fought between us on a growth market. But today, the cake grows bigger less and more countries divide it. Competition is much harder.

Could you quote a case where you used techniques of economic intelligence during your professional experience?

When I was a president de Marks & Spencer France, I used all the legal means of acquisition of information in various fields to make the decisions as well as possible. I consulted press reviews, journalists, the trade unions, forums on the Net, the personnel, the media… The synthesis of information enabled me to control at sight. In knowing + File Takes care strategic

Could you quote some exemplary companies as regards economic intelligence?

There is much of it. For example, Gaz of France assembled a true organization of economic intelligence. Sanofi and Areva are also very famous in this field.



Profile Alain Juillet

Diploma of the Center of improvement of businesses (CPA) and Stanford Business School (the United States).

Listed at the Institute of the high studies of national defense (1987)
and at the Institute of the high interior safety studies (1990).

Principal experience:

1970: sales manager of Ricard Spain.
1981: director of the development of the Pernod-Ricard group.
1983: director general of the sales of the Ricard company.
1986: director general of Suchard-Tobler (Jacobs-Suchard Group).
1991: director general of the dairy Union Norman (ULN).
1992: director general of General the Ultra Expenses (Andros group).
1998: director general of France Mushrooms.
2001: marks & Spencer France chair.
2002: director of the information of the Directorate-General of external safety (DGSE).
December 2003: named high person in charge in load for the economic intelligence near the Prime Minister.

Iran: Balochi Insurgents and the Iraq Tango


Iran: Balochi Insurgents and the Iraq Tango
April 04, 2007 22 43 GMT

Source: Stratfor


Summary

An April 3 ABC report discussed covert Pakistani and U.S. links to a Balochi insurgent group in Iran known as Jundallah. Stratfor has noted U.S. links to Jundallah in Iran for some time. The group's activities have served as a device for the United States to poke Iran as the two dance the diplomatic tango over Iraq.

Analysis

An ABC exclusive released April 3 details covert Pakistani and U.S. links to a Balochi insurgent group in Iran known as Jundallah, citing unnamed U.S. officials and Pakistani tribal and intelligence sources. According to the report, U.S. Vice President Dick Cheney discussed the secret Jundallah campaign against Iran during his visit to Pakistan in February. The report also says the U.S. relationship with Jundallah is arranged so that Washington lacks direct financial links to group, since these would require an official presidential order and congressional oversight.

Stratfor has been examining the U.S. connection to Jundallah's activities in Iran for some time now. These activities serve as a poking device for the United States to use against Iran in the diplomatic tango over Iraq.

The group's origins are murky, but it appears to have surfaced in 2003 under the leadership of a 23-year-old Sunni ethnic Balochi who goes by the name Abdolmalek Righi. Jundallah, or "Soldiers of God," is not to be confused with the more jihadist-oriented Pakistani group by the same name that was responsible for the 2004 attack against Gen. Ahsan Saleem Hayat, Pakistani President Gen. Pervez Musharraf's deputy.

The Jundallah that is active in Iran is an ethno-nationalist insurgent group with an Islamist bent. Its campaign is directed against the Iranian clerical regime for suppressing Iran's impoverished Balochi minority, who are concentrated in the lawless Sistan-Balochistan province in southeastern Iran, where the Afghan, Pakistani and Iranian borders meet.





Jundallah's activities have picked up during the past two years. The group has claimed responsibility for a number of killings and kidnappings of Iranian security forces and officials, the most recent and prominent attack being a Feb. 14 bus bombing that killed 11 members of the elite Islamic Revolutionary Guard Corps (IRGC). The group's young leader has mounted a strong media campaign, in which he regularly condemns the Iranian regime and claims responsibility for attacks via Internet statements. In fact, Voice of America (VOA), a U.S. government agency, aired a live phone interview with Righi on its Persian-language service April 1, introducing him as the "leader of the Iranian people's resistance movement." VOA's decision to provide Righi a platform to air Balochi grievances has raised further suspicions about U.S. involvement with the group.

The United States has a variety of minority groups to rely on to stir up trouble in the Islamic republic, including the exiled Mujahideen e-Khalq (which largely came under U.S. control at the beginning of the 2003 Iraq war), Ahvazi Arabs in Iran's southwest and Kurds in its northwest. Jundallah's campaign in Sistan-Balochistan falls in line with U.S. efforts to ramp up support for oppressed Iranian minority groups in an attempt to push the Iranian regime toward a negotiated settlement over Iraq.

The Pakistani connection, however, is more elusive. Pakistan has its own raging Balochi insurgency to deal with, and is not interested in supporting a Balochi insurgent group across the border with the capability to kidnap and kill members of the IRGC. Moreover, the Pakistanis know they must tread carefully in their dealings with Tehran, particularly as Iran is already wary of repercussions of Washington's close relationship with Islamabad.

That said, Pakistan could have worked out an arrangement with the United States to turn a blind eye to covert U.S. forces in Pakistan working with Jundallah. The Pakistani sources cited in the ABC report also said Righi formerly worked for the Taliban, though both Pakistani and Iranian officials are prone to classify the Balochi groups as al Qaeda-linked terror organizations for their respective political purposes. The porous borders in the region are highly conducive to drug smuggling, however, so Righi's group likely has contacts with a variety of militants through these operations.

U.S. support for Jundallah fits into the larger picture of U.S.-Iranian negotiations over Iraq. Iran has made painfully clear that it has -- and can use -- a variety of militant assets throughout the region to pressure Washington to meets its demands in Iraq. At the same time, the United States has an interest in demonstrating that it has friends among Iran's minority groups to gather intelligence, stir up public unrest and distract the clerical regime from its Iraqi agenda.

This type of covert activity fits into a complex blend of negotiating tactics, including military posturing, risky maneuvers and occasional conciliatory gestures designed to get the other side to bend. For the United States to run a more effective, coordinated campaign inside Iran, however, it will need to demonstrate it can alternate action among the Iranian mix of minority groups. Only then can Washington unnerve the Iranians enough to cause serious worries about potential leaks in their system, and thus enhance the U.S. bargaining position.

April 04, 2007

Second Quarter Forecast 2007: The Maneuvering Before the Storm

Second Quarter Forecast 2007: The Maneuvering Before the Storm

April 04, 2007 19 27 GMT

http://www.stratfor.com/

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.



Second Quarter Forecast 2007: The Maneuvering Before the Storm - Part II
April 04, 2007 19 27 GMT



South Asia: Domestic Issues, the Taliban and Musharraf's Struggle

The annual forecast for 2007 emphasized that Pakistani politics would be the most significant driver in South Asia, as Pakistani President Gen. Pervez Musharraf's political standing would carry implications for the U.S.-led campaign against al Qaeda and Taliban forces in the region. This issue will remain dominant in the region in the second quarter.

Musharraf has devised a complex strategy to ensure that he remains in power as president and military chief through the January 2008 general elections. But his election gambit took a turn for the worse in March when he acted on bad advice and gave the green light to sack the country's chief justice. Though Musharraf's intent was to clear a potential obstacle to his re-election bid, he sparked a nationwide outcry against the military-dominated regime that has forced him into a compromising situation that will end up forcing him to give up a certain degree of power.

Musharraf will be in damage-control mode during the second quarter, and could attempt to temporarily defuse the crisis by restoring the chief justice. Such an outcome, however, will only further erode Musharraf's ability to rule, and would create a crisis of governance.

Meanwhile, radical Islamist forces in the country will take advantage of the political fracas to increase suicide attacks and expand their efforts to "Talibanize" Pakistan beyond the Pashtun areas. Given Musharraf's weak political standing, the Pakistani government's cautious approach will not thwart the growing radical movement. To salvage his political position and help combat religious extremism in the country, Musharraf might have no choice but to encourage his allies in the ruling Pakistan Muslim League to consider working out a power-sharing agreement with secular parties in the opposition, namely the Pakistan People's Party-Parliamentarians.

The United States will watch these developments in Pakistan closely, and will give Musharraf some breathing room while he attempts to sort out problems at home. Washington has an interest in ensuring that Musharraf maintains a hold on power and that the military remains at the helm, even if concessions need to be made to the civilian opposition parties.

Taliban activity in Afghanistan will intensify this spring, with a heavy emphasis on suicide attacks against Afghan and NATO forces. A coordinated campaign by Taliban and al Qaeda militants also appears to be under way, in which motorcades carrying high-value military or intelligence officials are singled out. NATO and Afghan forces will mount a strong counteroffensive, making this quarter a particularly bloody one.

The Afghan government of President Hamid Karzai and its NATO allies will focus on their hunt for pragmatic Taliban in an effort to undercut the jihadist insurgency. This will involve negotiating via tribal elders across the Pashtun areas in southern and eastern Afghanistan, reaching out to Hizb-i-Islami chief Gulbuddin Hekmatyar and driving a wedge between Taliban commanders in Afghanistan and the Taliban elements allied to the Mullah Omar-based leadership, which has close links to al Qaeda and the Pakistani Taliban.

In India, domestic political and social issues continue to absorb the government's attention. The ruling Congress party is struggling to maintain a populist attitude toward India's lower classes while appeasing Indian corporate interests. This balancing act has left both sides unsatisfied and has provided the main opposition Bharatiya Janata Party an opening to advance itself. Congress' hold on the central government will not be seriously threatened in the second quarter, but the party will have to rely heavily on populist measures to win back support.

A hot issue over the next few months will center on the creation of additional special economic zones (SEZs) throughout India. Impoverished farmers backed by vociferous leftist groups will intensify their resistance to the SEZs' creation. Maoist rebels, also known as Naxalites, will try to take advantage of the tensions stemming from the government's bid to acquire farmers' lands for the SEZs by intensifying their operations against security, political and economic targets in the states of Andhra Pradesh, Bihar, Chhattisgarh, Jharkhand and Orissa.

India also will pay closer attention to its southern neighbor, where the Sri Lankan army is engaged in major tit-for-tat fighting against the Liberation Tigers of Tamil Eelam. Colombo will lobby hard for increased military assistance and advanced radar equipment to combat the Tigers, but the Congress party will remain cautious about enhancing Sri Lanka's military capabilities for fear of alienating the Indian Tamil population and the party's Tamil political allies. The Tigers will attempt to resist Sri Lanka's aerial assaults in their eastern strongholds by turning to more spectacular attacks, including suicide bombings, and by demonstrating the expansion of their naval and air branches.

In Nepal, the interim government and Maoists will limp toward finalizing a peace deal that will allow the Maoists to formally enter the government and erode the royal family's political position. Though general elections are slated for mid-June, there is a strong possibility that they will not take place on time considering the deteriorating law and order situation in the southern plains of Terai, where Maoists and a group of plains people, known as Madhesis, are locked in turmoil.

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.

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.

Sub-Saharan Africa: Power Transfers and Ongoing Violence

Stratfor's 2007 annual forecast for sub-Saharan Africa is on track thus far. Outside powers, led by Russia and China, have sought deals for Africa's resources, including oil, natural gas and mineral concessions. The United States remains engaged with Africa largely in terms of terrorism and security issues, particularly in the Horn of Africa. U.S. concerns contributed to the move to create an Africa Command, a theater military command that will unite U.S. Defense Department responsibilities in Africa. Powers within Africa continued defending their core interests, despite international attention aimed at settling conflicts -- another call we correctly made. The conflict in Sudan's Darfur region remains unresolved, and the Sudanese government remains steadfast in its opposition to U.N. peacekeeping force intervention. Ethiopia continues its intervention to defeat militant Islamist holdouts in Somalia, where conflict rages among the Ethiopians, Islamists and warlords.

Violence in Nigeria's Niger Delta region intensified during the first quarter -- which we had forecast -- as militant groups, their political patrons and government forces maneuvered ahead of upcoming national elections. January and February were the most violent months in terms of numbers of kidnappings of expatriate oil workers since the militant group Movement for the Emancipation of the Niger Delta (MEND) launched its campaign in December 2005.

Competing factions within South Africa's ruling African National Congress (ANC) party ramped up their struggle over the party's -- and by extension, the country's -- future. President Thabo Mbeki sought to strengthen his alliances with ANC party structures, while rival and former Deputy President Jacob Zuma began garnering political support among the country's trade unions, the Communist Party and the impoverished majority. The first quarter saw the South African government expropriate its first privately owned farm -- the kind of populist move Mbeki must employ more in order to defeat Zuma in the ANC primary in December.

As forecast, Democratic Republic of the Congo (DRC) President Joseph Kabila devoted scant attention to the simmering conflict in the country's east, focusing instead on containing the threat posed in Kinshasa by leading political opposition figure Jean-Pierre Bemba. Kabila disarmed Bemba's private militia and effectively exiled the former warlord, removing the last impediment to his consolidation of control over DRC politics and ability to sell mining concessions.

Similarly, Zimbabwean President Robert Mugabe faced down intense pressure from his own citizens and from within his ruling party; while Zimbabwe's political opposition and civil society demanded a change in government, the graver threat to Mugabe's grip on power came from competing factions of the ruling party that challenged Mugabe's authority. In Cote d'Ivoire, President Laurent Gbagbo moved a new prime minister into office as a part of a peace deal signed with the rebel group New Forces -- a deal that effectively split his political opposition while removing the militant threat to his unpopular and exclusionary rule.

One country that completed its internal consolidation of geopolitical control is Angola, the wild card in our 2007 forecast. Luanda has become more aggressive internationally and is beginning to drive increasingly hard bargains for its oil and minerals concessions, as forecast. Angola has used access to Chinese loans -- used to rebuild war-shattered infrastructure and exploit onshore and offshore oil fields -- to offset Western and multilateral institutional financing in order to avoid the strings attached to monies from such groups. No longer facing internal threats to its control, Luanda has become more interested in asserting itself in central Africa and challenging South Africa's historic hegemony in the southern African region.

The second quarter of 2007 will see complicated power transfers begin in several prominent African countries. Nigeria's national elections will dominate the early part of the second quarter. The country's presidential election is slated for April 21, and will be Nigeria's first transition from one civilian leader to another. Violence and disruptions of political events will become more extreme and more frequent as the ruling party and the opposition groups try to stifle the competition. Vice President Atiku Abubakar will continue, though unsuccessfully, to fight his disqualification to run in the election. Opposition parties will fail to unite in order to unseat the ruling People's Democratic Party (PDP), as the parties' presidential candidates will be unwilling to concede to one another. President Olusegun Obasanjo turned down the legal chance to stay in power longer after Alliance for Democracy presidential candidate Adebayo Adefarati died March 29. Thus, Obasanjo will broker no further efforts to challenge Umaru Yaradua and Goodluck Jonathan, the respective presidential and vice presidential candidates of the PDP, in the April elections. Yaradua is the favorite to win.

Violence in the country's Niger Delta region will increase as elections draw closer. Competing political parties and competing factions within those parties will help militants to either disrupt opposition support or push the Delta toward further chaos in order to paint the ruling PDP party and officials as weak on security. The government, which has recently launched crackdowns in the Delta, will continue increasing security operations there, leading to more skirmishes and more deaths. The ideologically motivated MEND's activities will take a backseat to other groups' politically motivated violence as the elections draw closer; but whatever the motivation, attacks and kidnapping operations against foreigners and oil infrastructure will continue unabated.

In South Africa, presidential successor infighting will dominate the ruling ANC party's activities. The ANC will hold its National General Council in June, at which it will heatedly discuss organizational and political issues facing the party as it struggles to determine who will succeed Mbeki as party and state president. Mbeki will adopt more populist economic policies during the run-up to the party's December elections in order to deflect criticism from Zuma's supporters, who say the Mbeki government has not done enough for South Africa's impoverished majority. Meanwhile, other figures such as Finance Minister Trevor Manuel will seek to position themselves for the ANC leadership position as the Mbeki faction of the ANC seeks to sideline Zuma. Externally, South Africa will attempt to be more involved in mediating the deteriorating political and economic situation in Zimbabwe, though the Mbeki government will be hard-pressed to apply anything more than quiet diplomatic efforts to the Zimbabwe crisis.

Domestic and international pressure on the Mugabe government in Zimbabwe will continue to mount during the second quarter. Mugabe and the ruling Zimbabwe African National Union-Patriotic Front (ZANU-PF) will become increasingly defiant and draconian in their methods to silence and marginalize the political and popular opposition. The ruling party will see serious internal fractures as presidential aspirants -- including former army commander Solomon Mujuru; his wife, Zimbabwean Second Vice President Joyce Mujuru; and Emmerson Mnangagwa, the former Central Intelligence Organization chief and rural housing minister -- maneuver to succeed Mugabe. Despite being 83 years old, Mugabe will announce his desire for another term in office. He will rely on presidential guard units and youth militia to enforce his hold on the opposition and handle threats from his increasingly daring rivals in the ZANU-PF. Mugabe is likely to grow more antagonistic toward foreign media and foreign diplomatic missions, which he sees as colonial influences intent on toppling his regime and reversing his liberation-struggle gains. Zimbabwe will reach out to other liberation-era states in Africa and peripheral powers such as China in an effort to avoid international isolation and mitigate international criticism.

In Cote d'Ivoire, Gbagbo will do his best to thwart the most critical reforms promised in the recently signed peace agreement between the government and the rebel group New Forces. Though he appointed rebel commander Guillaume Soro as prime minister, Gbagbo will integrate the rebel fighters into the national army in order to disperse these former combatants and keep them from posing a consolidated security threat. The plan for issuing national identification cards to northern Ivorians and registering them will be delayed, for these two controversial issues would likely spell the end of Gbagbo's rule. Meanwhile, opposition figures, including former President Henri Konan Bedie and former Prime Minister Alassane Ouattara, will struggle to find places in the government -- especially Ouattara, who was ousted as the protector of northerners' interests when Soro was named prime minister. But Gbagbo will continue to sideline them.

Violence will intensify in Mogadishu as competing factions struggle to either enforce their control or eject their enemies. Under fire, Somalian President Abdullahi Yusuf's government will reiterate calls for greater security assistance from the African Union (AU) and the international community. The remnants of the Supreme Islamic Courts Council, reconfigured into the Popular Resistance Movement for the Land of the Two Migrations, will intently fight Yusuf's government. The Islamists will find natural allies among Somalia's leading Hawiye clan, whose members believe that Yusuf, a member of the rival Darood clan, is actively discriminating against them. The AU will struggle to obtain the funding and support it needs to keep any effective peace in Mogadishu in place and will suffer increasing casualties as its troops -- much like the Ethiopian troops in Somalia -- are seen as occupiers. A national reconciliation conference will begin in April, though Yusuf's demands that the conference include religious and clan leaders acting in individual capacities and exclude moderate Islamists will ensure that any successful reconciliation is a distant possibility at best. Yusuf will fail to impose a government in Somalia that transcends clan rivalries, and inter-clan violence and tensions will continue unabated. Ethiopia will be forced to continue its intervention in Somalia, despite its desire to reduce its footprint in the country, as no other security force -- including that of the AU -- will be capable of guaranteeing Yusuf's security.

The Sudanese government will continue to face international condemnation and pressure to resolve the ongoing conflict in its Darfur region. President Omar al Bashir remains steadfastly opposed to any U.N. peacekeeping force intervention, since such a force would curtail his government's ability to strike at the Darfur rebels intent on fighting for greater autonomy. The ruling regime will tolerate a hybrid peacekeeping force under the African Union's aegis, though such a hybrid force of 7,000 troops would be hard-pressed to improve security in the 200,000-square-mile area of Darfur.

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