Foreign Policy, Your Love Life, and a Walk through the Grand Bazaar
So yesterday I'm walking through the bazaar with Ilan Berman, who was looking for a good bargain on a yatağan, and no, that's not a metaphor, that's really what I was doing, and he says, of Turkey's fallout with the Israelis, "Yeah, well, you have to publicly break up with your girlfriend before anyone else will date you, right?"
Reminded me of the time a while ago when an Israeli official said to me, sadly, "We were always Turkey's mistress, but we wanted to be the lawful, wedded wife." (Moral for Israel: Don't fall in love with someone too weak to admit he loves you in public. Moral for Turkey: Your mistress is having a good time with someone else, no one else wants to date you, you're married to Gazprom, and Iran's already cheating on you. How's that working out for you?)
By the way, am I the only one who notices something a little weird about this Gazprom contract renegotiation? I'm all for denationalization and the passing of this responsibility to the private sector, but since the key private sector actors you have in mind are Gazprom and Gazprom, well--I guess if you've convinced yourself it's seduction, not rape, you won't suffer any lasting damage to your pride.
Moral for everyone: Foreign policy isn't your love life. Ilan Berman actually has many sensible things to say about the subject, though. It was a great morning, although one more conversation with an American who agrees with me that yes, it's as bad as it looks, and no, we don't have a foreign policy at all, no less a coherent one, and I may just crawl under the bed and stay there until Henry Kissinger returns to public life. I keep hoping someone will reveal to me that actually, there is a plan, but it's just so diabolically subtle that no one can perceive it. But so far no one's been able to give me any hope.
Anyway, it's always a pleasure to go for a walk in the bazaar on a sunny day in Istanbul with someone who knows how to drive a hard bargain.
- Comment (8)
- · Quote
- · UnfollowFollow (1)
Comments :
Jul '10
Re: Foreign Policy, Your Love Life, and a Walk through the Grand Bazaar
Whatchya mean no foreign policy? We started another war didn't we? How much foreign policy ya want from the guy? And we made nice with that charming Muslim Brotherhood! You weren't gonna see a Bush do anything that brilliant! Just maybe the best foreign policy since Jimmy Carter.
Dec '10
Re: Foreign Policy, Your Love Life, and a Walk through the Grand Bazaar
It's a lovely and fitting analogy. I would cautiously warn you about hiding under the bed, if your Wifi isn't good under there, the rest of us might be deprived of the gossip about latest group of unsavory bearded men or disreputable western academics Iran has been spotted courting.
Matrimony as metaphor for international relations does have me thinking. Relations between US Israel as of late have truly been the picture of a chauvinist husband giving backhanded compliments to a beleaguered wife in person and openly hostile to those new friends he'd like to impress. I only worry that at some point the break will come and seeing how poor our prospects on the open market really are, we will be the ones wishing it could all go back to the way it once was
Feb '11
Re: Foreign Policy, Your Love Life, and a Walk through the Grand Bazaar
Turkey is locked into a long-term take-or-pay contract with Gazprom. Turkish energy companies, faced with weakening demand and plentiful lower-cost fuel supplies (from the US and the Leviathan-1 prospect off the Israeli coast), have bought far less LNG from Gazprom this year than they are obliged to under long-term contracts. Naturally, Gazprom will insist that its customers pay for it.
Take-or-pay contracts are a vestige of the early days of the gas industry when liquid spot markets didn’t exist and producers needed long-term deals with stable prices to underpin vast investments in new gas fields.
They were once common in the US too. In earlier days, gas was purchased by pipelines that both bought the gas at the wellhead and sold it to transportation. This bundling of merchant and transport functions created a potential for holdup. Once a well was in the ground, the pipeline capable of shipping the gas could opportunistically demand a lower price, particularly when demand is law. Take-or-pay was like a pre-packaged expectations damages clause that gave the parties an incentive to perform when the buyer would otherwise have an incentive to breach.
Feb '11
Re: Foreign Policy, Your Love Life, and a Walk through the Grand Bazaar
Many pipelines entered into huge take-or-pays in the 1970s during widespread fears of gas shortages and energy prices skyrocketed. When prices plummeted the buyers sought any way to escape their obligations. Moreover, the disparity between contract prices and market prices provided incentives for end users to try to buy gas directly from producers, and somehow secure the ability to transport the gas.
In the end, the entire structure of natural gas regulation collapsed. Starting in 1986, [FERC] “unbundled” the merchant and transportation functions of pipelines. Pipelines became regulated common carriers. Soon a vibrant gas market developed. In place of negotiated contracts between big buyers and big sellers, a whole array of daily markets, monthly markets, longer-term markets, futures markets, and swap markets appeared. Long term, take-or-pay contracts went the way of the dodo because every seller could contract directly with many buyers (who could get access to transportation), reducing the potential for holdup and opportunistic breach.
Feb '11
Re: Foreign Policy, Your Love Life, and a Walk through the Grand Bazaar
Perhaps a dramatic reshaping of Eurasian gas trade is in the offing. But this seems doubtful because Gazprom is the mother of all bundled gas companies and wants to extend its integrated activities into downstream marketing.The market will likely continue to be burdened by high transactions costs and inefficient contracting practices. Contractual breaches and supply cutoffs will be chronic, especially when gas values move a lot one way or another.
Re: Foreign Policy, Your Love Life, and a Walk through the Grand Bazaar
Claire, we have no foreign policy. What we have is a pose on the part of The One -- and that pose, taken up in January 2009, cannot be sustained. So we now have a shambles; and since The One gave up being President in January 2011 in order to run for the Presidency, there is no possibility that we will once again articulate a policy -- until, at least, January 2013.
Re: Foreign Policy, Your Love Life, and a Walk through the Grand Bazaar
Even a bad foreign policy would be so much less dangerous than none at all.
Sep '11
Re: Foreign Policy, Your Love Life, and a Walk through the Grand Bazaar
Pah...
We absolutely do have a foreign policy--one that is sophisticated, clever, cogent, carefully-developed, and in the midst of being executed brilliantly by the best--the very best--minds our nations have to offer.
(I could tell you more, but I'd run afoul of the CofC restrictions on wacko conspiracy theories.)