Image uploaded by Flicker user Summersso CC BY-ND 2.0
Georgia is your typical small state: it has a tiny population, a developing economy, and territorial disputes with its largest neighbor Russia. In August 2008 when, Russia briefly invaded the tiny country, no one was particularly surprised that Georgia was unable to counter this show of force.
A small state by definition cannot project sufficient military or economic power to meet a security threat. Since such “hard power” options are unavailable to them, small states are often left with “soft power” as an only means of influencing their adversaries. Soft power comes in many flavors, including public diplomacy and propaganda, traditionally costly endeavors. Fortunately for Georgia, soft power is easier to exercise in an age of global communications. » More
Ulan Bator - Bejing. Photo: Dave Gray/flickr.
Given Mongolia’s potential to become a future commodity powerhouse, it does not seem strange that recent legislation that aims to cap foreign investment and ownership was a cause for concern among the domestic and global business community. The Strategic Foreign Investment Law aims to confront two major challenges to Mongolia’s social and economic development. Firstly, the regime has to respond to domestic demands that resource wealth is used to benefit the wider population. Moreover, Mongolia also seeks to reduce its dependence on its two powerful neighbors and in particular to limit Chinese influence over its economy. Neither of these dilemmas will be easily resolved.
After intense domestic lobbying, the Mongolian Parliament approved a watered-down version of the Strategic Foreign Investment Law on 17 May. Initially, the law stipulated that foreign investors seeking to buy a stake of more than 49% in Mongolian companies required the approval of Mongolia’s Foreign Investment and Foreign Trade Agency (Fifta) and Parliament. However, following amendments aimed at appeasing foreign investors, the conditions only apply to companies involved in Mongolia’s ‘strategically important’ mining, financial, and media and telecommunications sectors and when deals are valued at above $76 million. Yet deals in which the buyer company is even partially in state ownership will require approval regardless of the sector of the business. » More
Artwork by Surian Soosay on Flickr (CC BY 2.0)
The past few decades have seen a troubling increase in the use of private military and security companies (PMSCs) as a substitute for government forces. Sometimes this “privatization” happens with the express consent of the state and is concentrated in “low-intensity armed conflict and post-conflict situations”, for example the United States’ decision to use Blackwater for security operations in Iraq. In other cases consent is tacit or even irrelevant.
When the state is incapable of protecting its own citizens, it loses its monopoly on violence. The resulting power vacuum is filled by organizations willing to provide the service. Traditionally, organized crime is one such entity, but private security agencies now rise to the occasion just as often. After the collapse of the Soviet Union, for example, the Russian mafia and PMSCs stepped in to supplement substandard domestic law enforcement. A report from a UN Working Group on the Use of Mercenaries singles out Russian PMSCs precisely for their intertwined relationships with both criminal and law-enforcement structures. » More