Bill Clinton on the Caspian

Jo Becker and Dale Van Natta at The New York Times weigh in today with a first-rate investigative piece on how deals are really done on the Caspian. It's on a no-name (at least on the Caspian) Canadian entrepreneur called Frank Giustra who bagged a huge uranium deal in Kazakhstan in 2005, then two years later sold his previously miniscule mining company for $3 billion. How? It helped that Giustra walked into Kazakhstan President Nursultan Nazarbayev's door with former President Bill Clinton. It's a troubling account, made more so since both Clinton and Giustra make what could be innocent meetings and deals appear like something more by denying the details until confronted with evidence otherwise.

Lord Zalmay

It seemed that the British had the most nerve of any nation on Earth when it came to Afghan politics. Even after the debacle of losing their entire Kabul garrison of 16,000 men, woman and children in 1842 when they attempted to keep their man, Shah Shuja, on the Afghan throne, they returned for yet more bloody noses.

I know that this must be a joke, but just in case it isn’t, we Americans seem prepared to upstage British chutzpah. According to John Barry and Michael Hirsh at Newsweek, Zalmay Khalilzad, the former American ambassador to Afghanistan and Iraq and the current U.S. ambassador to the United Nations, is seriously considering running for Afghan president.

Hamid Karzai is already regarded in many quarters as a stooge of the Americans. I happen to like Hamid as a person, but as with Shah Shuja he’s able to stay on the throne only because of the support of foreign troops.

Now the Afghan-born Khalilzad – a former Rand analyst known in the 1980s for his stubborn intellectual support for the bloodthirsty mujahedin leader Gulbedin Hekmatyar – at least according to this report seems to think he’ll step in and show the Afghans how a country should really be run.

If true, Khalilzad has forgotten the first rule of a westerner going abroad as a reporter or a journalist, which is to avoid the delusions of Lord Jim.

Think 1842. Think overthrow. Think Taliban restoration.

Horelma and the Six-Foot Beauty

The British press says it has resolved the mystery of the Kazakhstan buyer of a 50-million-pound ($97 million) London mansion about two weeks ago. As readers of this blog recall, the British newspapers reported that a Kazakhstani named Horelma Peramam had made the largest new property purchase in British history. The trouble was that I and no other O and G reader had ever heard of such a Kazakh name, nor any other similar Central Asian name.

Here is the answer, say the British newspapers. Her name is Hourieh Peramaa, and she is a 75-year-old, diminutive woman who fled from Kazakhstan at the age of 17, and ended up in an Iranian refugee camp. There she met a medical student named Horelma, whom she married, and ended up a billionaire by investing quietly in real estate across Iran and Europe.

Call me a skeptic. This would mean that Hourieh crossed into Iran in 1950 or 1951, when Stalin was still alive. If she reached Iran, she crossed either from Turkmenistan, or sailed over the Caspian and fled across from Azerbaijan, among the most policed borders in the world.

Now, I actually have spoken with Uzbeks in the northern Afghan city of Kunduz whose families fled Tajikistan and Uzbekistan during the Basmachi rebellion in the late 1920s and early 1930s. They hired "dog men," as they called these gentlemen who hung out in the Amu Darya River wearing dog skin, and for a price smuggled people into Afghanistan.

Did these dogmen still exist two decades later? Or their equivalent? I'm sure that I'm missing something here and am ready to stand corrected.

This said, Hourieh did a wonderful job of public relations by trotting out her striking, 6-foot-tall daughter, Yasmin (pictured above), to tell the tale.

The Trouble With Being a Mobster

The Semyon Mogilevich story is becoming more intriguing. Over the weekend, Cathy Scott-Clark and Adrian Levy at the Guardian in London weighed in with a long piece linking the notorious alleged mobster to the assassination of former Russian intelligence officer Alexander Litvinenko.

Mogilevich, who has been on the FBI most-wanted list for years, was arrested last Thursday on tax charges in Moscow. Russian authorities said they had long been looking for Mogilevich, who has lived for years in plain sight in the Russian capital. There is much conjecture on why he was arrested just now. Some of it involves supposed efforts to unwind the shadowy natural gas trade between Russia and Ukraine, in which Mogilevich appeared to have a role.

The Guardian story is quite an involved piece of journalism. The top half is background, but it then picks up with a tale of Litvinenko investigating Mogilevich, who according to the piece griped about it to his FSB pals, who got angry at Litvinenko … well, you get the picture. It all ends with Litvinenko having polonium 210 dropped into his tea in November 2006.

I have to note the remarkable coincidence of two huge Mogilevich stories breaking at precisely the same time. First his arrest, and now the accusation of involvement in one of the biggest murder cases of recent years.

One can be certain that the FSB is scouring its voluminous unsolved case file for items to hang on the unsympathetic Mogilevich.

Inscription Note for O and G Readers

Some readers have requested inscribed stickers for their book(s). I wanted to open that up and say that I'm happy to do this. Just shoot over whatever inscription you'd like and your mailing address to info@oilandglory.com, and I'll sign and send. Best Steve

Wall Street Grasps Big Oil's Lumbering Future

Wall Street is narrating the story of the decline of Big Oil. Bloomberg’s Fred Pals and Eduard Gismatullin report today that fewer than half the analysts they track are recommending Exxon and Chevron. But almost all are championing Gazprom and Brazil’s Petrobas.

It means that investors are getting the big picture – the long-term future is with state-owned companies with access to huge, home-grown reserves, and the technology-laden oil service companies that can help them get at it efficiently.

There are few scenarios in which Big Oil has a bright future. One is for companies that merge with state-owned oil enterprises. Another is the doomsday global warming option – the Arctic cap melts, the world panics, and suddenly they have free access to the huge polar oil and natural gas reserves now roped off because of technological and environmental obstacles.

Guy Chazan at The Wall Street Journal has a piece today on Gazprom’s steady retail inroads into the European gas market. Some prominent analysts have recently argued that Europe has actually got Russia over a barrel when it comes to energy and economic leverage. This reminds me of the boxer who emerges from the ring to say, “I’ve got that guy just where I want him. Did you see? I hit him five times in the glove with my face.”

Here is what Bloomberg says about Wall Street’s current view of the industry: “Twelve of 13 Wall Street analysts tracked by Bloomberg tell investors to buy Gazprom and 15 of 15 recommend Petrobras, the biggest oil company in Brazil. For Exxon Mobil, 10 of 21 endorse the stock, while for Chevron Corp., the second-largest U.S. oil producer after Exxon, it's eight of 21. Shell's A shares in London have a ``buy'' rating from 20 of 37 analysts.”

Photo: Pankration Research Institute
Rights: Creative Commons

Winged Printed Word on the Caspian

By Sasha Meyer

The confluence of two technologies promises a boon and a challenge to governments of the Caspian Sea region.

The first is Wimax and its competitors, which deliver broadband Internet wirelessly over the distance of dozens of miles.

The other is e-paper. It’s an electronic display that resembles paper – thin, flexible and even rollable. In fact, it can be plain old paper, coated with a thin film of flexible electronics. Compared with other types of displays, it consumes almost no electricity.

Combine the two – as Amazon did with Kindle - and you have a product with profound implications for Central Asia and the Caucasus.

Providing education becomes much cheaper once textbooks are published and delivered electronically. (The Dutch are already trying to do just that.) Kindle, which still has some of the crudeness of a first-generation device, is the size of a paperback, weighs just 10 ounces, and holds up to 200 titles. That means students would need just one e-book throughout their time at school. With Samsung promising 128 GB flash memory cards by next year, the library as we know it is set to disappear: E-book users would have an entire library at their fingertips 24/7.

Similarly, newspapers' finances will be in a much better shape: Printing and distribution in the U.S. accounts for 70% of their total cost. That figure is probably higher in the Caspian region, where printing is more expensive and wages are lower.

News media is already testing the waters with this new product. Two newspapers – Les Echos in France and De Tijd in Belgium – have been experimenting with e-paper editions. Hearst, a big American media conglomerate, plans to introduce an e-reader with a flexible screen device the size of a tabloid paper. And a Kindle edition of The New York Times is already available.

But therein lies the challenge to governments such as those in the former Soviet Union that wish to exercise editorial control: What to do when anyone can start a publication and easily distribute it everywhere?

The task becomes truly daunting once e-paper is coupled with yet another wireless technology.

Digital Radio Mondiale (profiled earlier) can be used for datacasting, that is sending text and images as files alongside or in place of a radio broadcast. DRM datacasting is slow (bandwidth is 24 kbps, about half of dialup's) so sending a newspaper to an e-reader might take a whole day. But DRM's global reach puts it beyond any control, a virtue that might outweigh its limitations for fans of independent news.

Using a radio station to deliver a newspaper might seem an odd idea, but it has been done. On December 19, 1938, a St. Louis station, using technology called radio fax, began a daily broadcast of the St. Louis Post Dispatch. On May 12, 1946, the Chicago Tribune distributed its Radio Tribune edition using WBGN, a local FM broadcaster. Others followed suit: the Philadelphia Inquirer and the Miami Herald in 1947, and The New York Times a year later. Those were pilot projects that didn't lead to mainstream adoption, due to the high cost and cumbersomeness of analogue electronics, the kind of obstacles that are easily overcome in the digital era.

Andrew Odlyzko, a scientist and well-known technology expert, writes that it takes a new technology (DVD, for example) about a decade to replace the existing one (VHS tape). Both e-paper and Wimax have been commercially available since 2004-2005, and the pace of innovation and product offerings has quickened in the last two years.

If Dr. Odlyzko is right, then the media campaign surrounding the next cycle of presidential elections in the former Soviet republics might turn out to be unique. But it cuts both ways: Russian newspapers might send themselves to homes in Peoria in a bid to influence the 2012 U.S. presidential race.

Cold War 2.0 promises to be very high tech and very unusual.

Why Has Russia Arrested Semyon Mogilevich?

Semyon Mogilevich has been the former Soviet Union's most notorious gangster for a decade and a half. He's on the FBI most-wanted list for his activities in the United States. He's persona non grata in the U.K. But he's traveled without interference in Ukraine and Russia -- until yesterday, when he was arrested in Moscow.

The Russians announced today that a 50-man police squad detained the 61-year-old Mogilevich along with a cosmetics company owner named Vladimir Nekrasov on tax evasion charges. Mogilevich was using the pseudonym Sergei Shnaider.

Mogilevich is deserving of a Hollywood script. In a hilarious 1999 interview with BBC's Panorama, here's how he responded when asked why he registered one of his companies in the Channel Islands: "The problem was that I didn't know any other islands. When they taught us geography at school, I was sick that day."

Come on Semyon. We've seen gangster movies, too.

The question remains: Why now? Who did Mogilevich cross to end up detained? Is this a warning? Is Vladimir Putin trying to recover some of his image after his catastrophic handling of the Alexander Litvinenko affair?

Worried About the Wave; Refinery Remorse

Tidal Wave: We’re hearing that one of the most popular topics at this year’s meeting of uber-egotists in Davos, Switzerland, is sovereign wealth funds – the hundreds of billions of dollars in oil profits abroad awaiting investment in assets around the world.

Many of the world's petro-states, such as Russia, Kuwait, Abu Dhabi and most recently Saudi Arabia, have formed such investment funds to hold their oil profits and turn them into diversified assets. According to Morgan Stanley, these funds, now totaling some $2.5 trillion in assets, stand to skyrocket in size over the next dozen or so years until they are at $28 trillion in 2022, or twice the size of the current U.S. economy.

All this cash in the hands of countries that perhaps have different agendas from the West's is behind a call from some quarters for an unspecified "code of conduct" among such funds. The implication is that, short of unspecified "transparency," recently even inserted as an issue into the presidential campaign by Hillary Clinton, Washington would put its foot down.

How is Washington going to put its foot down when it's not the funds, but the likes of Morgan Stanley and CitiGroup that are pleading to be saved by these funds because good, solid Americans like Warren Buffett don't see the upside?

The truth is that control over global finance is shifting East, largely to these petro-states but also to other countries such as Singapore that manage their wealth better than the U.S. has. And the U.S. isn't going to have much control over it.

Refining backsliding: It's a sign of how far matters have deteriorated that $87 oil is regarded as a blessing. Could oil fall as low as $70 a barrel if there's a severe, prolonged recession such as Larry Summers has predicted for months over at the Financial Times? And would prices at the pump drop commensurately? Sure. But that's still a historically high number.

And one of the biggest reasons for expensive oil is a shortage of the right kind of refineries around the world. Meaning that there's plenty of really bad quality oil -- so-called heavy oil, laden with sulfur that must be removed. But there aren't enough refineries capable of rapidly processing it. So you get a backup of this surplus crude, and a runup in prices of the light, low-sulfur crude that the refineries can process.

In short, $87 oil is really the price of that much-demanded light, low-sulfur crude, not the heavier stuff. If there was a way to process the heavier stuff, the price of all crudes would drop.

The Saudis themselves have been among the chief gripers about this state of affairs.

The bad news is stated in an analysis in the venerable Middle East Economic Survey. There are huge delays in a planned near doubling of refinery capacity in the Saudi kingdom. The report was posted by Engineerlive.com.

The Saudis currently can refine about 2.1 million barrels of oil a day. And they have another 1.8 million barrels a day of new capacity on the drawing boards. Their partners in these refineries are ConocoPhillips and France's Total, both of which according to this report are getting cold feet about cost overruns. Will they come on line by late 2012 -- almost five years from now? -- perhaps.

Which brings me to India. Why is it that Mukesh Ambani's Reliance Petroleum can put up a completely new, world-class refinery capable of processing the worst crudes on the planet in just 18 months, and ConocoPhillips, Total and Aramco cannot?

Ambani is set to complete a near doubling of his 660,000 barrel-a-day refinery in Jamnagar, in southern India, by the end of December. That's a turbo-charged pace.

It's also more proof of why Big Oil is on the decline. It has trouble competing with the aspirations of people like Ambani.

Photo: thelastminute
Rights: Creative Commons

Serbia, Bulgaria and the World

Vladimir Putin today racked up another in a string of unbroken victories in the European Pipeline War. Serbia has sold Gazprom a majority stake in the state oil company, NIS, and joined Russia's South Stream Pipeline consortium. Last week, Bulgaria signed onto South Stream as well.

The pipeline is part of Putin's strategy to cement Russia's domination of Europe's energy market, which receives around a third of its oil and natural gas from Russia. Ultimately at stake is political influence in Europe, as Andrew Ross Sorkin discussed today in The New York Times.

The United States and the European Union oppose Russia gaining more of a foothold in Europe, but Putin has far eclipsed their rival Nabucco pipeline project, which would feed natural gas from Turkmenistan to Europe.

Putin's triumphs stem from his personal role in the energy strategy. He himself has flown to Central Asia, to eastern Europe and elsewhere numerous times to court the presidents of the transit countries personally. He even got former German Chancellor Gerhard Schroeder to chair a companion pipeline, called Nord Stream.

Europe and the United States meanwhile have barely gotten started. In recent days, the State Department has discussed a new name to lead the Western effort -- Bush family friend Donald Evans -- but there is legitimate doubt that he has sufficient star power to upstage Putin. The U.S. presidential election may push the issue even further back on the Western agenda.

For a contrarian view of the issue, read this piece by Stratfor, which argues that the Bulgaria deal shows that Russia is actually losing the pipeline war. I personally think this analysis is upside down, but afficionados of pipeline politics should hear all sides.

Photo: pingnews.com
Rights: Creative Commons

Horelma! Horelma Peramam! Stand Up and Be Counted

The Kazakhstan billionaire Horelma Peramam has just spent 50 million pounds ($97 million) in the largest new residential property sale in U.K. history. Good ol' Horelma bought the Toprak Mansion on London's The Bishops Avenue, with its seven bedrooms and four kitchens.

Only, who is Horelma? I'm no slouch on Kazakhstan wealth, and I've never heard that name. Neither have any of a multitude of friends who have emailed asking about this fellow. A Google search pulls up 2,800 listings. All of them about this land sale.

What nationality is Peramam? It's definitely not Kazakh, or any other Turkic nationality that I've heard of. Not Slavic. Not Korean. Not German.

How about pseudonyms? Is it someone from Kazakhstan's first family?

Guesses are welcomed.

Guest Column: Radio Liberty Coming to a PDA Near You

By Sasha Meyer

International broadcasters like the BBC and VOA have always suffered from physics. They broadcast in AM format on short and medium wave. While AM signals can reach listeners on the other side of the globe, they are highly susceptible to interference. The result is discouragingly noisy and at times inaudible reception.

FM format on ultra-short wave is well known for its high fidelity, but it lacks range. An FM signal goes only as far as the horizon, which is not very: A station with a 100-meter-tall antenna can reach listeners only within 20 miles.

During the Cold War, U.S. government-run VOA and others tried to overcome the obstacles by increasing the power of the transmitters and moving them closer to the Eastern Bloc's borders. (Radio Moscow did likewise, using facilities in Cuba and Eastern Europe.)

After the Soviet collapse, the VOA tried to fix the problem by arranging to broadcast its programs on local CIS stations. This solution has proved both cumbersome (requiring negotiation with a multitude of partners), limited (some countries haven't agreed) and temporary (many partnerships have been suspended, both in Russia and Central Asia).

But the arrival of new broadcast technology – Digital Radio Mondiale or DRM – promises to solve the problem once and for all.

DRM enables the delivery of FM-quality audio over AM distances. Field tests show clear reception of a DRM broadcast from Portugal in places as far away as Finland and Cyprus. (Listen to samples here). The next step – DRM Plus – promises CD-quality sound, albeit over shorter distances.

The future for DRM seems bright for several reasons. It enjoys broad support among broadcasters. They see it as their last fighting chance against the Internet and satellite radio.

Unlike the latter two, DRM is cheap: Existing transmitters can be used with an addition of a computer that digitizes the audio. Furthermore, it significantly cuts electricity bills.

Geographically large countries - Russia, India and Brazil - are among its biggest backers. For them, DRM is a cost-effective way to deliver news across their vast distances. A Chinese company already makes DRM-capable Himalaya radios and Russia has produced one called Orlyonok.

The DRM plans got an extra boost last year when Swiss semiconductor giant ST Microelectronics announced plans for a tiny DRM decoder. The chip can be built into anything from car radios to PDAs.

DRM broadcasting is already a reality. For example, the Kremlin's Voice of Russia has been broadcasting since 2003 in DRM format to China and to Europe (in English, French and German).

Expect Radio Liberty and Deutsche Welle to start beaming their DRM programs into the CIS once Orlyonok hits store shelves in Minusinsk and Khujand.

Many Spaniards celebrated the recent demolition of Radio Liberty's huge antennas near Barcelona. But, with DRM's arrival and experts saying that Cold War 2.0 is imminent, that destruction might seem a bit rushed.

Photo: Euthman

Rights: Creative Commons

Turkmenistan Starts to De-Bizarre: Libraries Legalized

It's true that outsiders (including myself) have spent a good 15 years making Turkmenistan the butt of our Central Asian humor. But in our defense, everyone from ordinary Turkmen to Central Asia's presidential circles felt the same way. When you'd simply mention the name "Turkmenbashi," local people couldn't contain themselves.

That of course was what Saparmurat Niyazov insisted that people call him -- Turkmenbashi, or Father of all Turkmen.

Well, all good fun must come to an end. Niyazov died a year ago, and today his successor, President Gurbanguly Berdymukhamedov (a dentist by profession who my friends at Registan.net insist on calling "Stomatalogbashi, or Father of all Dentists) began to discard some of the country's weirdest laws.

Berdymukhamedov announced in a nationally broadcast news conference that Turkmenistan needs a few libraries. Some working cinemas. An opera. A ballet. A circus.

What's next -- will he trash the Ruhnama, the delusional Niyazov tract that's required reading of all Turkmen?

I for one hope that Berdymukhamedov does not melt all the Niyazov statues for scrap. Humor, after all, is the root of sanity.

Photo: Jensimon7
Rights: Creative Commons

Annals of the Rising Lilliputians

The center of gravity of power is shifting relentlessly from the West. The most successful cars are made in Japan. The power of the purse is shifting to less profligate countries like Singapore, and petro-powers like Kuwait. Manufacturing has gone to China. Energy is in the hands of Saudi Arabia, Russia and others.

Much of this shift affects the legendary Big Oil companies, which are being pummeled from all sides.

Now comes another hit. Until now, even if they couldn't control the resources, at least they could buy the oil and natural gas and earn the markup from lucrative finished products. But the world's petro-powers are no longer satisfied earning hundreds of billions of dollars from the mere sale of $100 oil. They want the entire profit chain from their oil and natural gas -- from power generation, retail sales at the pump, refining and chemical-making.

To the degree this happens, it takes away the daily bread of the oil companies, and shifts more power into the hands of the petro-powers. They have even more money to influence global finance, buy up pieces of the Western economies, and if they so desire -- as Russia does -- to sway political events.

Two pieces in today's New York Times go into this topic. One, by Peter Goodman and Louise Story, talks about the purchase of pieces of the economy. The story is decent as a survey, but makes a common mistake by evaluating these purchases in the context of the entire economy, and thus diminishing their importance.

The more relevant context is within industries and slices of industries, for instance in banking and specifically investment banking. As we've discussed on this blog previously, some investment bankers predict that so-called sovereign wealth funds -- the investment arms of these cash-rich states -- will eventually outright control the global finance sector.

In the second piece, Jad Mouawad talks about the aspirations of Saudi Arabia. The article describes a giant new petro-chemical complex under construction in the Saudi city of Rabigh, and the king's idea to build six new industrial cities. This is all reliant on $100 oil, which makes one suppose that the kingdom will do all it can to keep prices right about there.

Edward Lucas Unbound

Edward Lucas, a colleague from the Economist, lets loose today with an excerpt in London's Daily Mail from his new book, The New Cold War. Lucas, a take-no-prisoners critic of the Putin Kremlin, is one of the most articulate voices writing in English on Russia. I expect his book to do well.

Why Russia is Winning the Pipeline War

Vladimir Putin.

That's how Russia today made another advance in one of the most important battles under way anywhere in the world at the intersection of commerce and geopolitics -- for control of the natural gas market between Central Asia and Europe. This battle will decide who dominates the European energy market, and obtains commensurate political leverage in Europe and Central Asia. Russia already supplies more than 30% of Europe's natural gas and oil.

In another example of the role of personal diplomacy in the battle, Putin was in Sofia today and signed a deal nailing down Bulgaria's role as the principal transit point for the South Stream natural gas pipeline, which is meant to cement Russia's dominance of southern Europe's gas supply.

Putin had previously used the prestige of the Kremlin to push through plans for a separate pipeline serving northern Europe, called Nord Stream. And last month, he secured the natural gas supply required to feed the two lines. Turkmenistan and Kazakhstan sold a large portion of their natural gas supply for the next thirty years, and agreed to a third pipeline to take their natural gas to Europe.

One would hardly know that Russia has a competitor in this epic market battle. But it does -- the West, specifically the European Union and the U.S., which have advanced their own dual-pipeline idea. They are a proposed trans-Caspian natural gas pipeline, also starting in Turkmenistan, and hooking into a proposed Nabucco pipeline into Europe.

How is the Western effort faring? It's stalled at the starting gate. Indeed, while Putin personally jets around the world, wining, dining and flattering the presidents of other nations whose favor is required, no Western leader has invited any of them for a personal meal. The U.S. hasn't even managed to select a senior statesman to lead the effort since Thomas Pickering dropped out and decided to stay in the private sector.

If it were not for the way that post-Soviet history has been so topsy-turvy, with a winner one day ultimately losing, I'd say the battle is over. For starters, it's high time for Turkmenistan President Gurbanguly Berdymukhamedov to spend some time at Camp David.

Photo: magnetbox
Rights: Creative Commons

Brits Close Satellite Cultural Offices in Russia

Update to yesterday's post on the U.K.-Russian dispute over the Litvinenko assassination: Great Britain has closed the two British Council offices ordered shut by the Russians outside Moscow. The British say that relations have reverted to Cold War-era temperatures and tactics. What's surprising is that the British seem genuinely astonished to be treated the way many outliers -- local political critics, uncooperative foreign companies, Russian reporters -- have for the last seven years.

Photo: SimonDavo
Rights: Creative Commons

Driving and Dying in Russia

I’ve made it a practice not to drive abroad. The one time I did do so – in a rented car from Aix-en-Provence in the south of France to Paris – a truck traveling in the opposite direction clipped me on a narrow road, then took off. That wasn’t a disaster, but in Azerbaijan, Georgia or the Philippines, I have imagined unofficial fines for this, medical payments for that, and a general fleecing. The latest highway statistics out of Russia don’t give me confidence to reconsider.

According to a report on Bloomberg, 33,308 people died on Russia’s roads last year. The rate per vehicle was ten times higher than in Germany and the United Kingdom.

It’s hard to find comparable data for every country, but Bloomberg does cite a 2006 report by the European Conference of Ministers of Transport. It’s usually clearer to see statistics in a chart, and a look at page five of this fascinating report is startling.

Based on 2004 statistics, Russia had about 24 fatalities per 100,000 population. Even the road-rage-stressed United States had about 14. You want safe? Drive in Malta, where just 3 people died per 100,000 population. (It turns out that the Baltic states aren’t much safer than Russia in this regard; about 23 people died in Latvia and 22 in Lithuania).

As for Caspian-region readers, Georgia surprisingly is comparable with the U.S. (14 deaths). Even more surprisingly, Azerbaijan came in at 9 deaths per 100,000 population.

Photo: Mr. Wabu
Rights: Creative Commons

Terror at the Serena: An Eye-Witness Account

I’ve received an email from a diplomat friend passing along a riveting, eye-witness account of Monday’s terrorist attack on Kabul’s ultra-popular luxury Serena Hotel, where Afghans, diplomats, journalists, NGO employees, and military tend to gather. Seven people were killed. This blog tries to keep it short, but because of its uniqueness I publish the letter in its entirety. I had omitted the writer's name but, as noted on Barney Rubin's blog, Naser Shahelemi is fine about going public.

It was 5:30 PM and I was wrapping up my day in the office. My cousin, my office manager and me decided to head off to the Serena Hotel for a classy 5-star dinner, a rare commodity in Kabul. My two drivers were out driving the employees home and so my cousin decided to drive and we left without a driver which may have saved their lives.

We arrived at Serena Hotel, on the outside gate. The same friendly faces, all 4-6 guards posted outside, one a good friendly face, Aghai Sultan, always gives me a friendly wave and waves my car in after checking the vehicle.

Everything smooth, and everything is normal. We walk to the restaurant section and they have not yet set up the final buffet. The friendly hostess tells me we need 15 minutes. I look at my cousin and I say come on let’s take a walk until things are set up. I head back walk into the lobby see a few friendly faces. I sat down in the lobby a few minutes, and my cousin said hey let’s wait here until until it's time. Then I remembered the nice teahouse on the left side of the Serena called the Chai Khana. So we went for a quick cup of tea in the Chai Khana.

We sat down, tea in hand and then it began. All of sudden BOOM! A suicide bomber dressed as police had walked into the security x-ray booth with a vest of explosives attached on his chest and blew himself up, killing half of the guards in the booth. The windows began shaking. I quickly think hey that was a bomb but the Serena glass is thick so we don’t know if it's close or far. Usually a bomb like that I would estimate was 5 blocks away then all of a sudden BOOM again and then rapid gunfire. The guards killed 1 attacker and but two more got inside the main lobby of the Serena.

Everyone gets up, and starts getting back into a slip door that connects to a 2nd lounge. I quickly move looking around thinking very quick anything could happen. I don’t hear anything. I walk back to the original spot I was in looking for some signal of what was happening. I look through the glass outside and see a Corolla turn and wrap to the front of the Serena door, and then the driver jumps outs and throws himself on the ground. The Corolla hits the wall of the front glass doors. Then I just hear hundreds of bullets shooting. I hit the ground because the bullets at this point sound extremely close to me. I start crawling through the Chai Khana on my knees and I get back to the 2nd lounge in the slip door.

The Serena worker is quickly telling me to move and get to the basement as soon as possible. Grenades are being thrown and the lobby is covered in a thick smoke that no one can see. I hear more explosions. 1 Serena employee is being carried past me covered in blood by two other Serena employees. His hand is covered in blood. His face is covered in blood. I am hearing gunshots in the lobby, the terrorists have infiltrated the lobby and are now shooting anyone.

I turn on the afterburners and start cutting up the hall following a trail of blood leading to the basement. Everyone is running as fast as possible. I lost my cousin in this mess. I get down two flights of steps in the secure basement of the Serena where I see him. We greet each other, and I check to see he isn’t injured. I asked him are you ok? He is fine. We quickly move to the deeper portion of the basement. Among us is the Norwegian foreign minister, and his security contingent. Also there is the UN Human Rights activist Sima Samar, also a former Women’s Minister of the Karzai Administration. We get in the cafeteria and more Afghan politicians are among us, with Europeans and foreigners. Karzai’s oldest brother is also trapped with us and he is pacing frantically as we are unaware of what is going on in the lobby. We can hear shots and we can hear booms, but the remaining security personnel is posted at the doors and is ready to shoot at will.

More people come to the basement, as the terrorists have infiltrated the gym and spa area. They have shot dead the spa manager, Zina, a very pleasant Filipino girl who was just doing her job working in Afghanistan to support herself and her family abroad. The terrorists move into the gym and shoot an American dead in the face on the treadmill. The president of the Olympics, Mr. Anwar Khan Jekdalek, was in the locker room getting dressed when a terrorist came face to face with him. Mr. Jekdalek asked him in Persian, "Khaireyaat kho ast? (Is everything ok?)," and then he turned his gun and took a shot at the president of the Olympics. Mr. Jekdalek made an Olympic dive and fled, and quickly found refuge in some space in the locker room where the terrorist couldn't find him. He escaped to the basement through another pass.

The doorman was carried down to the basement by Serena staff. He had passed out from all of the events he saw, and they were opening up his vest to get him air and began sprinkling water on his face. Then all of sudden a bunch of Serena employees started running down the hall in the basement like they were being chased. This in turn caused two Russian girls to start screaming, and made everyone start to hide including President Karzai's oldest brother. What could you do, what would you do if you knew people were coming to shoot you? Turns out the terrorists had not infiltrated the basement, and the Russian girls had to be calmed down, and were given cigarettes to relax.

Hours pass, and we are all sitting and reminiscing about what the hell just happened in front of our eyes, who and what we saw. Then all of a sudden two U.S. Marines come down to the basement armed to the teeth, asking everyone if they are all right. We were kind of relieved to see the Marines. The Marines then called out for all US Citizens and they took me, and about 10 other people out including my cousin whom I told the Marines was with me. They said fine, but let’s move. We started moving with the Marines out the basement, guns drawn coming upstairs through the same hall I ran down. There was a pool a blood where I was standing before when everything began and now there was blood everywhere in the lobby, broken glass, black walls from the bomb blasts. Hundreds of Afghan Secret Service and NDS guards were standing around. The US Marines got us out and put us in armored vehicles and took us to the embassy where they treated us, took reports and gave us medical checkups.

They later released us, and my driver and guards came and picked us up in another car and we went home. Next day I came to get the Land Cruiser I left parked at the entrance of the door when the bomb went off.

The Amniyat (Afghan CIA) asked us some questions then let us go. I looked at my car, I couldn't believe what I saw. Blood, guts, black marks from the bomb blast everywhere. The Land Cruiser from behind was filled with bullet holes. The 2^nd suicide bomber had detonated himself 5 meters away from the car once he got inside and his finger ended up in the back of my Land Cruiser, and his thumb was on my dashboard. I peered inside the back of the Land Cruiser through the broken glass and saw the finger. I am not at all accustomed to seeing those types of gruesome items up-close. It was pretty damn disgusting. The lack of respect for their lives was proven in this heinous crime.

This whole thing has me really spooked. Now the Taliban are vowing more attacks on Kabul restaurants where foreigners and expatriates are gathering. I am unsure what to make of all these tragic events. However the situation in Kabul is obviously deteriorating.

Brits Go Home

The latest in the fracas between the U.K. and Russia would be amusing were its origin not so serious. Here it is in a nutshell: Russia, angry that Britain won't let bygones be bygones in the London poisoning murder of Russian defector Alexander Litvinenko, has sent a message to that effect by closing down Britain's cultural arm in cities outside Moscow. Britain, angry that Russia presumes to have control over its own territory, says these British Council offices will remain open. As one might expect, we now have a farce involving the St. Petersburg police, the son of a lord (yes this country still calls grown men "lord") and fears of "provocative games."

This all goes back to Litvinenko's assassination in November 2006 by a rare nuclear isotope called polonium-210. Britain rapidly tracked back the polonium to Moscow, and specifically to two former Russian intelligence officers who, for reasons unproven as yet in a courtroom, apparently had this alpha-emitting isotope all over their clothes, and left traces in Hamburg and London. Britain has filed murder charges against one of them, a recently elected member of the Russian Duma named Andrei Lugovoi. Vladimir Putin has chosen to treat the case similar to a traffic violation, and argue (innaccurately) that he's constitutionally barred from extraditing Lugovoi. Britain says rightly that the case is anything but run-of-the-mill, and that Putin should send Lugovoi to Britain post-haste.

Meanwhile, Britain has expelled some Russian diplomats, and Russia has ordered the British Council offices in St. Petersburg and Yekaterinburg closed. For reasons known only to God, Gordon Brown and perhaps the Queen, Britain has rejected Russia's right to close these offices, and left its staff there. So yesterday you had the spectacle of Putin upping the stakes by having the FSB (successor to the KGB) summoning some Russian employees of the British Council for questioning, and detaining the head of the St. Petersburg office, Stephen Kinnock (whose father is Lord Neil Kinnock, a British politician), for an hour on an alleged traffic violation. In the case of the FSB questioning, the intelligence agency said it was acting to prevent them being from used by Britain as an "instrument in provocative games" by Britain, according to the Bloomberg account.

I'm sympathetic with the U.K.'s case. You are right to pursue the Litvinenko murder. But you don't have a leg to stand on in this latest turn. In the world of diplomacy, you have to pack up those offices.

Photo: Laertes
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