Could Russia and Georgia soon be at war? After Georgian authorities arrested four Rus-sian military officers last week and charged them with spying and terrorism, both sides have been doing a very good imitation of preparing for full-scale conflict. Georgian Interior Minister Vano Merabishvili claimed that the Russian Army was mobilizing in North Ossetia, and was preparing troops for action at a Russian base in Akhalkalaki, inside Georgia. Calls for "decisive action" came from Moscow parliamentarians as hundreds of nationals were evacuated from Tbilisi.
How did relations get so bad? The two neighbors have been at loggerheads ever since the pro-U.S. Mikhail Saakashvili took power in Tbilisi in 2003. The Georgian president has moved his country rapidly toward NATO membership, and in apparent retaliation, Russia banned Georgian imports. And in recent months, Russian-backed separatists inside Georgia have stepped up operations, further heightening tensions.
Still, for all of last week's saber rattling, it's unlikely that war will break out. Instead, Russia has chosen to protest to the United Nations--where Saakashvili recently accused the Kremlin of a "gangster occupation" of two breakaway Georgian provinces, Abkhazia and South Ossetia. That could play into Georgia's hands. If the United Nations becomes involved in resolving Georgia's territorial conflicts, Moscow's jealously guarded role as chief peacekeeper in the former Soviet Union will be eroded. Also, Tbilisi reckons it stands a better chance of ultimately recovering its wayward regions with the United Nations in charge. Still, provoking Russia is a dangerous tactic. There are powerful war parties in both Moscow and Tbilisi who are spoiling for a fight. If it comes, there's little doubt that Georgia will come off worse against a Russian Army flush with oil money and confidence.
Thailand's mili-tary seems to be settling in for the long haul. The post-coup junta has reportedly selected Surayud Chulanont, a former general and adviser to Thailand's king, to become interim prime minister--passing over several civilian candidates. Pledges to restore civilian rule have also been dropped; military leaders retain the power to dismiss the interim P.M. And coup leader and Army Cmdr. Sonthi Boonyaratkalin is spearheading a new PR campaign intended to cast him as a champion of Thai democracy. The United States, for one, isn't buying it. Last Thursday the Bush administration suspended $24 million in military assistance to Thailand, calling for "a rapid return to democracy."
Argentina: Pains of the Past Argentina's brutal past has come back with a vengeance. Two weeks ago a former police commissioner was sentenced to life imprisonment after being found guilty of the murder, torture and kidnapping of six people at the height of the junta's "dirty war" against political dissidents in the 1970s. But on the eve of the sentencing a key prosecution witness named Jorge Julio López vanished, raising fears that he had been kidnapped by extremist sympathizers of the country's security forces.
President Néstor Kirchner has embraced the demands of human-rights groups to track down former military and police officials who killed and "disappeared" up to 30,000 people. But officials worry that the apparent abduction of López could deter other victims from testifying in future trials. Those concerns deepened last week when several judges and prosecutors assigned to such cases received death threats.
BY THE NUMBERS
Think Americans are the only ones obsessed with shopping? Credit-happy U.S. consumers may currently owe $2.3 trillion, but Europeans are catching up fast.
1.9: Trillions of dollars worth of consumer debt currently outstanding in Britain
$5,977: Average debt carried by a Brit
$2,933: Average amount owed by an EU resident
52: Percentage increase in Turkish consumers' unsecured debt since the 2001 economic crisis
Why aren't European telecoms privately owned? France Telecom and Deutsche Telekom are state-controlled, while Britain's BT and Spain's Telefonica are public companies. Recent troubles at Telecom Italia, Europe's fifth largest and only privately held major telecom operator, may shed some light on the difficulties of privatization.
On Sept. 15, chairman Marco Tronchetti Provera suddenly resigned over a row with the government, which claimed it was "kept in the dark" about his real intentions for the company's future after he proposed a drastic strategic change-- splitting the group's fixed-line and mobile arms after merging them only two years earlier. What went wrong? Telecoms need huge investments, often beyond the reach of private shareholders, and Telecom Italia is an example of how "many Italian privatizations were made too quickly and badly, just to make cash," says Giacomo Vaciago, an economist at Milan's Catholic University. During the '90s "Euro Rush," Italy was pressured to cut its debt (124 percent of GDP in 1994) in order to join the euro zone, and the sale of Telecom Italia for $15 billion helped slash the red ink. Unlike Britain, which deliberated for seven years before selling BT, Italy unloaded Telecom Italia in a hurry because "we were forced to do it," says Vaciago. No wonder the results are getting messy.