teisipäev, oktoober 28, 2008

ace of disgrace

A couple of years ago there was a discussion track that would go something like this: Estonians would rejoice in their invention of the ubiquitous Skype, only to be rebuffed by non-Estonians who would remind them of the Scandinavian capital and management behind the successful IT start-up.

It didn't seem fair. The Finns could claim Nokia, the Swedes could sell their Volvos and Ikea furniture, but the lowly Estonians would have nothing of their own, because their expertise was exploited in a time of globalisation.

Due to size and capital constraints, Estonians would most likely be stuck under the yoke of "foreign" capital for all time. The minute somebody thought up something good, there would be Per or Lars with his bankcard, ready to bring it to the rest of the world.

The inequality of Nordic and Baltic relations were thus laid bare. The Nordics were the big people; the Baltics little. Sure, tiny Estonia could take part in the Nordic Investment Bank, but the Baltic brigands could not join the Nordic Council proper, lest they dilute its purity with their tainted, post-Soviet blood.

And so the nordic world remained somewhat fractured along national lines. Nordic banks might be the only banks in Estonia, but Estonia was outside their "home" market, even if said banks were managed by Estonians. Nordic companies might own most of the Estonian media, and yet that media was peripheral. Despite EU comradery and paeans to integration, a sense of otherness, nurtured during the Cold War, was maintained.

This way of looking at Northern Europe, though, is archaic and wrong. The reality has manifested itself in recent weeks as the Icelandic government goes from door to door in northern Europe, begging for alms to keep its bankrupt financial sector on life support until the IMF or the Russian Federation comes through with the big money.

Iceland, a quiet country known for its fishing industry, glaciers, and electronic music, is now a paragon of recklessness and instability. What do the two words "Iceland" and "bank" bring to mind? Exactly. If President Ilves had once hoped to follow the parliamentarians of Reykjavik into dull, nordic normalcy, he was sorely mistaken.

Meanwhile in Stockholm, the imperial financial capital of the nordic world, where my money and yours is likely counted and managed, rumors prevail about a bailout plan for Swedish banks with Baltic holdings, like SEB and Swedbank, formerly Hansapank. No one can predict the financial future in this autumn of 08, but I would be unsurprised if my Estonian bank goes the way of my American bank, which went bankrupt, was seized by the government, and sold/bequeathed to another bank in one night.

We up north, though, presume competence on the part of the Swedes. We presume that even if the Icelanders go bankrupt and the Estonians are forced to live out of their leased BMWs, there is a mountain of gold generated by sales of ABBA LPs and Volvo station wagons that is kept beneath Gamla Stan for rainy financial days in the nordic countries. And yet, while that sense of interconnectedness is so deep that the first country Iceland or Estonia might hit up for extra cash is Sweden, there are few institutions that can help to regulate that relationship.

And that is the real question the big people with power might wish to mull over a few times over a warm cup of glögi this coming holiday season. The interconnectedness of the nordic region has materialized in the form of a banking crisis that affects not just Reykjavik and not just Tallinn, but involves Stockholm and Copenhagen and Riga.

Still, the instruments of policy have yet to be refined. There are Nordic-Baltic 8 summits, which can serve as a powerful regional engine within the EU. There's even an EU Nordic Battle Group. But are nordic regional institutions really up to the tasks at hand? Do the requisite forums exist to help these interconnected countries face their challenges?

I feel so often that the thinking on these issues is mired in the past. As the Skype example illustrates, it's quite hard these days to locate a point of origin for a northern European company. And it's quite hard, such as in the cases of Estonia and Sweden, to know who is really in control of monetary policy. These new obstacles beg for new policies and institutional adjustment. While I am not advocating any specific changes at the moment, I wouldn't be surprised if the way we think about northern europe and the way it functions will change in response to this crisis.

teisipäev, oktoober 21, 2008

whither liberalism?

Flipping between the 24-hour cable news networks on my JetBlue flight out to San Diego on Sunday was interesting.

MSNBC showed Colin Powell's endorsement of Barack Obama over and over again, and why wouldn't they? He explained much of it on their own program, Meet the Press.

CNN's approach was dominated by their newfound appreciation for the celebrity journalist. Four years ago, Anderson Cooper seemed like the only interesting person on the network -- to the point that they extended his program, Anderson Cooper 360, from one to two hours every night. But now they have Campbell Brown and Soledad O'Brien and Lou Dobbs and Jack Cafferty. It's a news celebrity love-in. You tell 'em, Anderson/Campbell/Soledad!

FOX, unsurprisingly, did not cover the Powell endorsement, except to trot out a few loyal analysts to explain how Colin Powell isn't that important. What's really important is that Barack Obama once sat on the board of the Woods Fund of Chicago with former "Weatherman" Bill Ayers. And McCain has taken to calling Obama a "socialist" or purveyor of "tax and spend liberalism," which was Alan Keyes' line of attack during the Illinois senate campaign four years ago.

As a person who first became aware of the political world at a time when Reagan and Gorbachev were sitting down in Geneva to discuss a ban on ballistic missiles, this deep spring of knee-jerk anti-liberalism that McCain is hoping to tap into is foreign to me. The first political reality I ever knew was one where "greed was good." I learned about Lyndon Johnson's Great Society initiatives in school; the idea that you are going to stir me into voting Republican by linking Obama to a philosophy of government that hasn't really been in vogue since 1966 isn't going to sway me.

FOX, though, relies not on first-hand experience, but conditioning. Their newsmasters believe that you may not remember Lyndon Johnson or the Weather Underground or even a time when liberal politicians won districts in the American South handily. But if we link Obama to domestic terrorism and Kennedy-Johnson liberalism, nay, socialism enough, it will stick. McCain stands for "real American" values like free trade and cutting taxes and preemptive war. Lyndon Johnson? Socialist. Harry Truman? Appeaser. Jack Kennedy? Elitist. Barack Obama? Terrorist.

Estonian politics aren't too far removed from American politics. I recently sat down with an Estonian journalist who referred to Finance Minister Ivari Padar as a "socialist" throughout the conversation. Now, if you are like me and you have traveled the dark backalleys of the Left, you know the difference between your socialists and your communists and your anarcho-syndicalists. To them, social democrats are right wing. To a lot of Estonians, though, they're all the same.

Still, a recent poll though found that 50 percent of Estonians said that Padar was performing well, compared to a third who said the same of Prime Minister Ansip. On Hannes Rumm's blog though, a commenter pointed out that unlike their counterparts in Finland, Sweden, and the other nordic countries, Estonian Social Democrats only can garner 10 percent of the electorate's support.

That seems like a tiny sliver, but when you realize that most voters have no party affiliation, it's a reliable slice of the Riigikogu and one that has served their interests well enough to boast of Padar's public approval. At the same time, there is a disconnect. Pre-war Estonian Social Democrats went the way of the Estonian state in 1940. The heydey of social democracy was in the 1960s. Now as we near the end of this decade, some Estonian voters are looking for a viable alternative to the economic liberals and conservatives, but it doesn't seem to exist.

There is an unmet market need for something new, the only question is in which ways it will materialize. In America, some voters might see a false choice between Reagan and Johnson, when Obama and McCain perhaps represent neither. In Estonia, voters may see a choice between liberalism and socialism or conservatism and populism, but is that really the case?

In presidential and parliamentary democracies alike, there is an idea that there are two polarities each tugging the electorate one way or the other given the time and circumstances. In the US, we've had a quarter century of the Washington consensus. In Estonia, you've had nearly 20 years of a similar consensus. But as we prepare to consider the other side of the coin, voters like me in either country are confused about just what that other side will be.

kolmapäev, oktoober 15, 2008


I am an ardent follower of international relations, but quite often some basic, bread and butter concepts pass me by. It's not that I don't grasp their meaning, it's that I question their underlying logic and I find overwhelming evidence that challenge their primacy in the way we think about the world.

One of the most questionable concepts is that of great powers having spheres of influence [mõjupiirkonnad]. Russia has a right to intervene in the domestic political affairs of Georgian life because it falls within its centuries-old "sphere of influence."

The concept of "spheres of influence" seems to be embraced by President Dmitri Medvedev who claims that Russia has regions of "privileged interest" that others are presumably not permitted to engage on a bilateral basis without Moscow's approval. Moscow should speak on behalf of Tbilisi before Tbilisi does, according to this way of thinking. Russian national interest trumps the interests of all its smaller neighbors.

The Americans are credited with the foundation for this manner of carving of the world. Experts cite the Monroe Doctrine of 1823 as forming some kind of precedent for Russian intervention in its "near abroad." But has the Monroe Doctrine ever really been respected? And how can one really argue that the United States has cultural or political domination over countries such as Cuba, Venezuela, Nicaragua, or Bolivia? Have European powers ever really stopped meddling in the Western Hemisphere? No.

The very concept of spheres of influence seems to be dead on arrival. It may serve as a convenient excuse for military action in an adjacent country, but it doesn't pass muster upon inspection. And yet, in the year 2008 it seems to have been reanimated to defend Russian interests in its region of privileged interest, the former Soviet Union.

The concept of the the former USSR also baffles me. Huge meaning is ascribed to membership in this Communist superstate that was formed at the end of World War I and fell apart in the summer of 1991. Could you imagine, some analysts state, that NATO has expanded not only to include Warsaw Pact countries but countries that were once constituent parts of the USSR itself!

Why do we ascribe such tremendous significance to this factor when we make decisions about our future? People are intoxicated by the idea of cycles and are convinced that just as Russian influence has contracted it will once again expand. And yet, the Grand Duchy of Lithuania once held land to the Black Sea. Does anyone really envision the gold, green, and red flying over Odessa anytime soon?

From an Estonian perspective, I would actually think the Germans to have the greatest "sphere of influence" claim to Estonian soil. From the 13th century through the 20th century, Estonia was under Teutonic cultural influence. And look how little Soviet Russian claims to primacy in the country have manifested themselves. Estonia is part of the European Union and NATO. So much for the importance of former USSR status.

At the same time, I am at a loss at when membership in the North Atlantic Treaty Organization became such a contentious issue. Russia's greatest issue with Ukraine and Georgia, as it has been argued, is those countries' aspirations to join the alliance.

So what? So the Ukrainians can modernize their army and go hunt the Taliban in Afghanistan? Oh wait, they're already there. Too late, Putin!

The Ukraine-in-NATO lobby though has a one-track mind. Kiev will have a seat at future NATO summits. There can be no alternative. Ukraine will join NATO because ... Ukraine should be in NATO. Even if most Ukrainians don't want to join NATO. Even if the domestic political situation is a mess. The NATO expansion express will continue heading in that direction because the driver said so.

That's what is truly worrying: that we have now gotten to a point that a Ukraine sans NATO membership is viewed as a state without a future by some in the West. How did this come to be? How is it that membership in a security alliance founded in 1949 is seen as the only way a state bordering the Russian Federation can survive? Except Ukraine has existed for 17 years and not been a member of NATO. What happens if NATO ceases to exist at some point in the future as an organization? Does that mean that every state tied to NATO goes down the drain with the command? That's not a very comforting thought.

Meantime, NATO is seen as the archenemy in Russian discourse. And yet, most of Russia's most reliable partners in Europe -- all of them actually -- come from states that are members of NATO. Germany is in NATO, in fact the Baltic countries joined NATO while the one and only Gerhard Schröder held the chancellorship. NATO membership has not stopped the Germans from pursuing the Nord Stream project. NATO members France and Germany did not support the US-led action in Iraq. And this is an "alliance"? Oh really?

Baltic positions on NATO are driven by principles of universality. Any country that speaks the language of democracy, even if it is not yet fluent in that language, should be welcomed, eventually, into the NATO family, say its leaders. But based on this principle, shouldn't Tunisia or Turkmenistan have a "European perspective"? Do the Estonians only really support the Georgians because they are fond of their Christianity, fine wines, and friendly disposition?

The Estonian perspective differs from the Finnish position, which stresses Nordic exceptionalism -- independence from the goings-on in the former tsarist empire. Yet Finnish statesmen, like Martti Ahtisaari, are too glad to lead international conflict resolution missions, so long as they are far from home.

Nordic exceptionalism is another concept that continues to resurface these days. Why should Georgia and Ukraine join NATO when they can just adopt the Finnish model vis a vis Russia? Why should those pesky Estonians continue to poke the Russians in the eye, when they can just be good boys like Pekka up north? "I cannot understand why Estonian politicians believe they are smarter than Finnish politicians who have for decades maintained good relations with Russia," thundered former Estonian PM Tiit Vähi in a recent interview.

Yet, according to Estonian foreign policy thinkers, Finland is not to be emulated. Nordic exceptionalism is just that -- exceptional in the case of Finland, unable to be copied or arranged for Ukraine or Georgia. Is that really the case? Is any of this really the case?

While some in Ukraine and Georgia look west to the "lighthouse" of NATO, I fumble for my own lighthouses when it comes to current international affairs. And so I will continue to read books written by men named Kissinger and McNamara and wind up even more confused at the end than I was at the beginning.

esmaspäev, oktoober 13, 2008

union square

While standing in Union Square in New York City the other day, a Velvet Underground lyric from "Run, Run, Run" popped into my head: "Gonna take a walk down to Union Square/You never know who you're gonna find there."

No, you certainly never know who you are going to find in Union Square. We were among the throngs buying up organic fruits and vegetables at a weekend market. Union Square abuts the campuses of New York University, New School University, and Urban Poseur University, and its leafy ambiance makes it a favorite place for modern-day yuppies and yippies to sip Chai Lattes and buy macho Che Guevara posters from street vendors.

Over there stood a group of folk musicians, over here was a guy with a sign proclaiming -- believe it or not --"Islam is evil" surrounded by a group of fellow street-corner philosophers fishing out juicy, antisocial quotations from the Koran. And everywhere -- everywhere -- were the Obama supporters, selling t-shirts displaying slogans like "Baby Seals for Obama." There was even a small bust of John McCain with a post-it note in his mouth that read, "my friends." According to one count, McCain uttered the phrase "my friends" 24 times during the last presidential debate.

In just a few weeks, Americans will elect a new president to replace George W. Bush, whose approval rating has been mired in the high 20s for the past two years. As little as four years ago, pundits were pronouncing the Republican Party invincible, writing the Democratic Party into the history books. According to polls, though, John McCain is set to replace George McGovern as the candidate who rode his party's platform into the sunset.The presidential race is now tight in states like North Dakota and Indiana. It's only a matter of time before Fargo becomes the new, hip place for trendy IT guys looking to get out of the big city.

It's easy to characterize both of the candidates as empty suits. Everyone is waiting for a political messiah to appear that will tell them everything they want to hear in such a convincing way that they'll actually believe him. But our candidates are Barack Obama and John McCain, and I have personally found the presidential debates to be dull. McCain trots out the same tired rhetoric about tax cuts and how Obama wants to shoot hoops with Ahmadinejad. Obama name drops Main Street and promises health coverage for all.

As a voter, the Republicans wrote me off years ago. A young, college-educated professional from New York who has a preference for Swedish automobiles? In American street vernacular, I'm a communist. In reality, I try to keep American political discourse at arms length for the sake of my own mental health. Topical issues -- gun rights, gay marriage, hockey moms -- swirl around my head on a daily basis, but I have built up some kind of internal self-defense mechanism that filters most of it out. It's just noise.

Interestingly, though, it has been less of McCain's politics that automatically turn me off than his itchy demeanor. When he referred to Obama as "that one" during the most recent debate and then resumed prefacing all his statements with "my friends" I wanted to throw my dinner at the TV set and exclaim, "but John, we're not friends." At that moment of yelling at the television, I was as American as anyone else, even Joe Sixpack who can see Vladimir Putin's dacha from his hockey rink in Alaska. Ooh, I was being sarcastic there. This place is rubbing off on me.

"Next to the Guy ... On the Horse"

New York is a city that is easy to fall in love with, and once you are in love with New York, you can never really let it go. According to some investigative work, slivers of my family have been here since it was Nieuw Amsterdam. And yet, sometimes I really hate New Yorkers.

As I sat under a statue of George Washington in Union Square, I watched the young woman next to me call her friend on her mobile phone and tell him to meet her, "here, next to the guy ... on the horse."

She was genuinely perplexed. I mean, who could that guy with the prominent nose and the pony tail and the 18th century military uniform be? He looked so familiar, I mean, hadn't I seen him on a quarter at some point in time? I know, I know ... Abraham Lincoln.

My inner John Cleese boiled, and I felt like smacking the young woman with our Frommer's New York City with Kids guidebook for failing to recognize our first president, yelling out words like "twit," "dolt," and others less savory.

At a bar in Hoboken, New Jersey -- the home of Frank Sinatra, across the Hudson river -- several nights earlier, I had tried to talk European politics with the blond Hungarian bartender.

"What do you think of Ferenc Gyurcsány?" I asked. "Who?" she replied. One of our Tartu friends is half-Hungarian and half-Estonian, so I know how to say the guy's name correctly. "Ferenc Gyurcsány," I stammered. "Who's that?" she said, as if he might be another Hungarian bartender somewhere in Hoboken. "He's the prime minister of your country!" I said. She gave me a puzzled look, as if I was discussing stamp collection or cricket.

Many of my friends are apolitical. I try to explain to them that politics is the sport that I enjoy, just as they fret about other pastimes like baseball. "Oh no," they might counter. "But baseball is really important." Even my wife, who tells those that wish to hear in Estonia that she supports the Rohelised, has little to say when I wake her with the interesting news that Keskerakond has pulled ahead in the latest polls. I don't think she's particularly happy with the ruling government but ... what can you do?

Like the American media, the Estonian media currently teems with end of days-like stories about the economic crisis. Few people I know believe that much can be done to avert the worst parts of the storm. I am surrounded by fatalists and, in some ways, I have become a fatalist zombie myself. It's like ... whatever, man.

"Trust No One ... Deceive Everyone"

There is, though, a working class, populist sentiment in New York. Everywhere I go -- in coffee shops, on tour buses, on trains -- I hear people talking about how they too could have run Lehman Brothers into the ground for $45 million -- the sum its former CEO Richard Fuld reportedly earned in 2007.

People worry about the future of the economy, but the silver lining, as one acquaintance put it, is that there will be fewer [expletives] in lower Manhattan. People around me have gloated about investment bankers losing their second homes in the Hamptons at least as frequently as John McCain refers to those around him as his "friends."

There was a time, circa 2000 AD, when the Hamptons were the place to be. Jerry Seinfeld would be there, jet skiing with Puff Daddy; the Backstreet Boys would be singing their latest hit; and if you were lucky you might spy someone really important, like Paul McCartney.

Today, the mood on the New York street is foul. When I hear the guy at the bagel shop go off about the $700 billion bailout, I can imagine that, if nudged just a little bit more, he could gladly take part in some tarring and feathering. The core issue is less about the specifics of the crisis than about basic trust in institutions.

Directly following the September 11 attacks, few people openly questioned the government's response. The response to Hurricane Katrina, however, greatly reduced people's faith in the state to do its job. Up until last month, though, the financial sector was still deemed somewhat trustworthy. Now that trust is gone. Who can one trust in such circumstances? Is it just like the giant advertisement for Leonardo DiCaprio's new film, Body of Lies, proclaims above 34th street? "Trust no one; deceive everyone?"

New Yorkers are not alone. In Estonia, citizens must grapple with the choice of sticking with Andrus Ansip or trading him for Edgar Savisaar?!?! Talk about erosion of public trust. Which Estonian politician will guide the country out of its current predicament? Which American politician can show us the way? Should we even bother to listen to them let alone trust them? Or should they be as relevant to us as some guy on a horse?

Come November 4, I will be voting. I'll even stay up late to watch the election results come in. But when I wake up on November 5, I confess, I will have no great expectations. Some people around me think that things are so bad, they can only get better. I hope they are right.

kolmapäev, oktoober 08, 2008

here today, tomorrow, next week?

The global financial crisis has many victims, but over the past 24 hours the name of one small, northern victim has been on many lips, and, no, it's not "Estland"; it's Iceland.

In what has become standard practice during the past few weeks, the Icelandic state nationalized two large banks, Landsbanki and Glitnir, while it attempted to rescue a third, Kaupthing.

Kaupthing has also received Swedish support to the tune of $702 million for its arm in Sverige, which is now looking for a local buyer. Perhaps the most interesting twist is the appeal by Reykjavik for a $5.4 billion loan from Russia. While it isn't a done deal, Russian Finance Minister Alexei Kudrin has said Moscow viewed the request "positively."

In Eesti, the banking system is moaning and groaning, but much of that is coming from Stockholm, home to Swedbank and Ühispank parent SEB. It's not hard to imagine anything at this point, but a Swedish bailout to cover Baltic losses could occur sooner than any spokesperson for the banks is willing to concede.

The second option though, of seeking Russian money to keep the country solvent, would be highly controversial in Eesti, where Russia is seen as still having political goals and meddling in domestic politics. But if the Icelanders have to turn to Moscow to keep their economy afloat, to whom could the Estlanders turn in a similar, hypothetical scenario? If not Stockholm and Helsinki, then who?

esmaspäev, oktoober 06, 2008

eesti maine

Last month's exposure of Herman Simm, former head of the security department at the Estonian Ministry of Defense, as a spy has prompted Estonians to ask themselves important questions, the most primary being, of course: how will this affect our image?

Marko Mihkelson [an IRL member, blogger, and member of the Estonian Golf and Country Club], argued that the exposure of Simm showcases the ability of Estonia to catch those engaged in espionage within its ranks. Therefore, the spy scandal is good for Estonia's image, not bad.

Jaak Aaviksoo [Minister of Defense], reassured his constituents meantime that the spy scandal did not make Estonia a pariah for NATO. Estonia's image as a positive transformer was secure.

There are other questions, though. Aleks from All About Latvia asked me, "how could an Estonian betray his country" by allegedly selling secrets, including classified NATO information, to Russia?

Margus Hanson, the former Minister of Defense, who was sacked over a lost briefcase containing classified information in 2004, first asked himself, "Did Herman Simm [or his wife, Heete, also arrested] steal my briefcase?" and then perhaps asked himself, very quietly so that nobody could hear, "Could this help me get back into national politics?"

I personally wondered why Herman Simm, should he be guilty, would trade classified information that affected the security of the nation in which he and his family lived to a historically aggressive country for ... more land in Estonia.

According to media reports, Simm spent the proceeds from his espionage on buying up properties all over Estonia; properties that have now been seized by state authorities. A farm in Ida-Virumaa here, a cottage in Harjumaa there. It was prime real estate for saunaing and root vegetable cultivation, but little else.

These options, though, are available to most Estonians, poor and rich. So, why did he do it? Greed is probably one factor; but the thrill of just doing it may be another. As Bill Clinton said about the Lewinsky scandal: "I did it because I could."

But what of Estonia's reputation? Well, I think that Estonia's reputation overall is good. That's because Estonia benefits what I would call the likability factor. In spite of their national aloofness, people think the Estonians are cute and their culture is worthy of perpetuation. They visit Estonia and when they return to their homes, they tell great stories about its old city or its islands or its university town.

But in terms of the current Estonian government, I am not sure if Estonia has the greatest reputation. A deeper analysis of the reasons for that perception are for another blog post, however.