Daily Sources 9/9

1. In a moment that I completely missed, but which apparently folks in Chechnya heard loud and clear, presidential candidate John McCain on August 26th said that Western countries ought to think of the independence of Chechnya. Andrei Smirnov at the North Caucasus Weekly--which is a James Foundation publication--writes that this has encouraged many secessionists in Chechnya, which Smirnov believes represents the great majority of Chechens. (h/t to the Tel'nik.) I suspect he is right about that. I would point out however, that the Chechnyan liberation movement has strong ties to Al-Qaeda, ties which pre-date 9/11 and the second Gulf War. The Taliban forged strong ties with the Chechen liberation movement quite early on, and Chechnyan secession has been a cause celeb in the Islamic world for some time now.(1) Which is to say that by making this statement, McCain may have been presenting a face which refuses to "appease" Russian aggression, but that, in doing so, he also provided a morale boost to a movement with close ties to al-Qaeda. One wonders how the Democrats would have been handled in the media--and by GOP media men--had they made a similar mistake. The Caucasus is a tremendously complicated place. The lesson to be learned here, in my opinion at least, is that escalation is what is in neither America's, Europe's, nor Russia's interests, rhetorically or otherwise. Isn't it time the leadership of all three began reflecting that fact?

2. John Helmer at Mineweb reports that Moscow has reacted with calm to last week's threat of the Australian government to cancel the agreement signed last year to export uranium concentrate to Russia. Russia needs a source of uranium to power its ambitious nuclear power plans going forward. Uranium wasn't set to move until 2015. Nota bene: Sergei Kirienko, now the head of Russian Agency for Nuclear Power (Rosatom), was for a time the Prime Minister of Russia. Also puts the story on Washington removing Russian nuclear deal from the consideration of Congress into context.

3. Brahma Chellaney, professor of strategic studies at the Center for Policy Research in New Delhi, has an interesting analysis in Wall Street Journal Asia of how the Indian-US nuclear deal has been oversold by both Administrations. He argues that the hype may throw the broader issues of ongoing cooperation into jeopardy.

4. The Islamabad Daily Mail reports that China is advocating a similar deal with the nuclear suppliers group for Pakistan that the US has advocated for India.

5. Luke Pachymuthu and Alex Lawler at Reuters report that Iranian Oil Minister Gholamhossein Nozari has said that Iran is close to concluding negotiations with (China's) CNPC and (India's) ONGC to develop oil and gas reserves in the Caspian Sea. He also said that Iran was looking at various countries in Africa where they might strike an agreement to establish strategic crude storage, so that they could capture opportunities by being closer to their customer base.

6. Horand Knaup at Der Spiegel has a very interesting article on the rush to invest in Africa's biofuel potential. Neo-colonialism, it may well be. Given China's Africa Policy of 2006, the Russian push to invest in African OPEC countries, and Middle Eastern Sovereign Wealth Funds pursuing agricultural investments there, I'd say it was a fair characterization of the situation. Whether or not the western venture capitalists will be more accountable than the state backed investors will be interesting to see.

7. Max Henderson at the London Times reports that Professor Sir David King, president of the British Association for the Advancement of Science, will deliver a keynote speech tonight where he will argue that environmental organizations are responsible for preventing an agricultural revolution taking place in Africa. By extension, the argument is that they are "keeping the continent poor" and allowing starvation to continue. Very disturbing instance of unintended consequences, if true.

8. Celia W. Dugger at the New York Times reports that the incumbent party, the MPLA, in Uganda won the election--which were carried over for a day--by a landslide. EU election observers said that the election fell short of international standards. Nonetheless, UNITA has conceded, which probably means that the election's results will be accepted peacefully.

9. John Kingston at Platt's blog "the Barrel" has a good piece giving the supply numbers OPEC is considering in their meeting today. Jad Mouawad at the New York Times writes that Saudi Arabia has "dashed talks of a reduction in output."

10. Yu-chin Chen, Kenneth Rogoff, and Barbara Rossi at Vox have an interesting academic article on where commodity prices are headed next. (h/t Mark Thoma at Economist's View.) Pretty interesting given that the answer to that question will tell us where the bottom is likely to be in Asia, and other manufacturing exporter economies. They suggest that currency futures are more likely to be predictive of commodities prices than otherwise, because futures are more forward-looking, and commodities more sensitive to current conditions. I have my doubts, but it is still very interesting.

11. Jesse's Cafe Americain has a piece today which argues that the current dollar rally against the Euro is going to be short lived, and that the dollar will continue its decline. Jesse believes that there is a strong chance of a "significant stock market decline" starting in the next thirty days.

12. And, to continue the thought experiment on where commodity prices will take the export economies of Asia, the editors of Wall Street Journal Asia have a piece lauding Indonesia's President Susilo Bambang Yudhoyono for cutting taxes. They note that last week, South Korea announced it was going to corporate, income and death taxes. Last year, Hong Kong and Singapore cut corporate taxes.

13. 5 day track for Hurricane Ike, courtesy the NOAA:



(1) "Bin Laden's man in Chechnya: The Al-Qaeda Link," by Trevor Royle, The Sunday Herald, 27 Oct 2002.