The problems at Northern Rock, and other financial institutions, did not appear overnight. The crisis in the USA subprime loans market was well documented, as was the fact that this dodgy debt had been repackaged and sold on to UK and EU banks. Major banks in Germany as well as Barclays Bank in the UK are rumoured to have significant exposure to these dubious assets.

Northern Rock is a proactive UK mortgage lender who attracts some 73% of its funds from the wholesale market, and only 27% from private depositors. The subprime banking crisis effectively dried up the source of these funds from other mainstream UK banks and financial institutions.

What differentiated the UK from the USA and the EU, was the response of the respective governments and central banks. The Federal Reserve and the EU central bank were significantly easing liquidity pressures in financial markets during the summer of 2007. The Bank of England adopted a laissez faire posture and made statements to the effect that financial institutions should not expect to be protected by the Bank of England if they make imprudent decisions.

When the Northern Rock crisis became public and the Bank of England announced support, its position was endorsed by the UK government and the Chancellor of the Exchequer, Alistair Darling. However, ordinary investors were not persuaded by the Chancellor’s bland assurance that Northern Rock was solvent, and there was a run on the bank.

The Financial Services Compensation Scheme means that savings up to GBP2,000 are protected in full, and the next GBP33,000 at 95%. Beyond GBP35,000, there is no protection. Savers who were in a line outside Northern Rock branches often had deposits in excess of GBP50,000 invested in the bank.

The media coverage of panicking depositors who took no notice of the assurances of the Chancellor of the Exchequer evidently riled Gordon Brown, the Prime Minister. On 17 September 2007, the government announced that all savings in Northern Rock would be protected. This had the desired effect, and the run on the bank was contained.

On 19 September, the Governor of the Bank of England made a major U-turn. Only the week before, he was stating that central banks should only intervene when there are ’economic costs on a scale sufficient to ignore the moral hazard of the future’.

In plain language, what this means is that intervention by the Bank of England is a last resort. It should only take place in dire circumstances. If the Bank bales out any financial institution which experiences problems, due to its own stupidity or imprudent policies, the Bank’s support could be construed as endorsing or even rewarding bad practice and could encourage other institutions to take excessive risks in the pursuit of profits.

The Bank of England has now announced a package of measures which will effectively enable all UK banks to weather the current crisis, regardless of whether they have operated imprudently or not.

This has now moved the focus of attention away from the troubles of Northern Rock and has led to questions concerning the Bank of England’s handling of the crisis.

This U-turn raises a series of intriguing questions. Firstly, if these measures had been put in place two weeks ago, would the crisis at Northern Rock have been averted?

Although this is a hypothetical question, the answer is probably in the affirmative. Whether such a move would be good for the UK economy is probably to be answered in the negative.

Secondly, could the problems at Northern Rock have been handled better? The answer is undoubtedly yes. Northern Rock would have been an attractive target for takeover activity. However, the damage to the brand name is now irredeemable and there is little likelihood of a takeover at an early date. In any event, the brand name is likely to be a liability rather than an asset.

Thirdly, is the Bank of England to blame? While the Governor of the Bank was forced to make an embarrassing U-turn, the hidden hand of the government is easy to detect. There are few precedents for UK banks going bankrupt in recent history. While London and County Securities and other secondary banks went bankrupt in 1973, none of these companies was a major player on the scale of Northern Rock. However, in 1973, the Bank of England did launch a lifeboat scheme in order to avert a domino effect. It was rumoured at the time that Nat West Plc was at risk.

The 1973 lifeboat scheme is obviously well known to current Bank of England staff. One can infer that the Governor and his colleagues were initially prepared to let Northern Rock go into receivership and for its mortgage loans to be taken over by a stronger organisation. The depositors’ funds would be safeguarded, but there would have been many sleepless nights.

It would seem that the Bank of England is independent of the UK government when it is pursuing government policy. However, if it pursues policies which it deems in the interests of the UK economy, yet are contrary to short term political expediency, then this independence is an illusion.

By sending out a lifeboat, the Bank of England has become shipwrecked on Northern Rock.

Although Mr Gul, in his accession speech, pledged allegiance to the secular constitution and the legacy of Kemal Ataturk, the founder of modern Turkey, there are many who view such commitments as cosmetic.

Mr Gull entered parliament in 1991 as a member of the Welfare Party. This was a pro Islamic party which ruled in 1996, until it was forced out of power by the military. The reason for the intervention of the army was that the party was failing to respect the secular values enshrined in the constitution. Leaders of the party were banned from political office for several years.

Mr Gul reappeared in 1999 as a member of the Virtue Party. This party was also closed down in 2001, for the same reason. However, there was not a disqualification order and Mr Gul was instrumental in founding the Justice and Development Party (AKP). This party won a significant electoral victory in 2002, and has remained in power since then.

The fact that Mrs Gul wears a headscarf in public may seem a barely relevant point to many international observers, but it is deeply significant in Turkey. This is because Turkish women are forbidden to wear headscarves at school, university and in government. Women lawyers are also forbidden to wear headscarves in Court.

This is the legacy of Ataturk who considered Islam part of the Ottoman tradition which he and his followers were dedicated to eradicating from Turkish society. The secular nature of the Turkish state is safeguarded by the Constitution of 1982.

The Turkish establishment, including the military, are deeply committed to the secular ethos. However, they are perceived by many ordinary Turks as out of step with contemporary trends such as economic liberalism and social mobility within Turkish society.

The AKP party reflects the growing aspirations of many Turks for improved standards of living and a pro EU stance, and they compare Turkey’s economic performance in recent years with the periods of stagnation and inflation of the post war period.

Mr Gul became president at his second attempt, the first being blocked by the military in May which forced a general election. The AKP were returned to power with an increased majority and the military have not, as yet, intervened.

The newly appointed president’s wife, Mrs Gul, was notable by her absence at the Victory Day festivities which celebrate the victory of Dumlupinar, the final battle in the Turkish War of Independence of 1922, as she was not invited by the military. The military have a longstanding practice of not inviting the wives of AKP politicians who wear headscarves to civic events.

It is important to recognise the fragility of democracy in Turkey. The military have ousted four governments since 1960, and their complaints should not be taken lightly.

Mr Gul and the AKP need to tread very carefully during the early months of his presidency, due to the risk of military intervention. One way he could defuse the tension between the government and the army would be to accede to the military’s desire to take a harder line against the Kurdish Peoples Party (PKK) insurgents in eastern Turkey and to allow the military to strike at their bases in Northern Iraq.

Kurds have been flocking into Kirkuk in anticipation of a referendum which could grant a measure of devolved power to a relatively autonomous Kurdistan. In addition to the dimension of terrorism, the area is rich in oil and therefore has major strategic importance.

Mr Gul’s avowal of secular values is considered a sham by many commentators who point to his Islamic political past. However, it should be noted that many politicians modify their views during the course of their careers.

In the UK, the transformation of the Labour party from an organisation committed to state ownership of major industries and pacifism to a liberal, market oriented economy party is astounding. The fact that the party leaders embraced a bellicose foreign policy with respect to Afghanistan and Iraq provides an example of how politicians can radically change their policies.

Although opportunist politicians change their policies in response to public opinion, and the UK Labour Party is a prime example of this, one can question whether such an analysis holds in respect of religious beliefs. Contemporary events in the middle east indicate that Islam is a matter of deep conviction and not simply political convenience.

On this view, one could argue that it is only a matter of time before the AKP and President Gul adopt a more Islamic tone. This would have significant implications for NATO, of which Turkey is a member, and for Turkey’s relations with Israel, which are currently cordial. It would not bode well for Turkey’s accession into the EU.

While stress is both inevitable and endemic in our lives, it is important to ensure that excessive stress does not make us ill. Many people ignore the problem and unfortunately then face the possibility of medical conditions such as high blood pressure, or worse. So it is important to make an effort to monitor stress levels.

Here are several questions that can help to make an assessment of stress levels -

1 Do I feel that there are not enough hours in the day to do all the things which are expected of me?

Time management is of central importance in combating stress. As an aid to planning the best use of one’s time, people often use lists of tasks and sort them by priorities. This may be useful for organising one’s time and dealing with significant long term problems, but stress levels can be significantly reduced by the simple discipline of having a routine, or daily timetable.

This means that you organise each day around tasks which need to be done at a certain time. These routine tasks are regularly repeated and should not present problems. This leaves time for us to focus on more challenging activities. For example, food shopping and the washing and ironing of clothes are both routine and repetitive tasks. Some people will engage in these tasks every day, some will perform them every other day, while others may limit food shopping to two trips per week.

The task frequency is a matter for personal decisions, what is important is that these relatively simple tasks should become matters of routine. To further assist this routine, it is helpful to visit the same supermarket and become familiar with the store layout.

2 Am I constantly rushing from one task to another?

Many women structure their day at home around certain key events. These include raising the family out of bed, making them breakfast and getting them to work or school. During late afternoon, she will collect children from school, listen to their report of the day, make an evening meal and encourage the children to do their school homework.

These tasks, together with laundry and family shopping, become regular diary items during each day or on alternate days etc. Outside of these times, there are opportunities for relaxation, socialisation with friends, and time to ponder on decisions such as the choice of children’s schools, holidays or a new car.

What is important is to have a structured approach to one’s time, a daily routine, and a realistic appreciation of how long it takes to perform customary tasks. If we become proficient in organising our time, so that the daily tasks are covered with time to spare, we are then in a better position to deal with the unexpected and unwelcome difficulties which often confront us on a daily basis.

3 Is my self confidence or self esteem low ?

If this seems a rather silly question, then you are likely to be a fortunate person who has never had to deal with this. Many adults suffer from low self esteem.

In addition to their own inability to cope with the demands of life, this is often made worse by negative comments from their partner and even their children. Many women suffer from this condition, and some almost consider it as a fact of life. Such a philosophy is both wrong and dangerous. Low personal esteem can lead to clinical depression and other more serious medical conditions.

There are several ways to combat this. Firstly, one should try to manage one’s time in a more efficient and productive way. Secondly, if one’s partner is constantly negative, then the content of the criticism should be explored. If the partner is unwilling or unable to discuss this rationally, then there is likely to be a problem with the relationship.

A simple technique to increase self esteem, is to take a moment to ponder on one’s achievements in life. Each of us can find something of which we can be rightly proud. This framework assists us to place the current problems within a framework, and renews our determination to cope and overcome challenges.

4 Am I regularly experiencing headaches, aches and pains, or if a woman, are menstrual cycles erratic ?

Stress literally wears us down and makes us ill. Before we rush off to the medical practitioner, it is advisable to see if we can modify our life style. In addition to time management, the two main things which can make a significant difference are exercise and relaxation.

Exercise can take many forms and does not need to include subscriptions to gymnasiums. Brisk walking rather than taking the car is beneficial, as is pushing a lawn mower around the garden. Performing household chores all day, although strenuous, does not count as exercise.

Relaxation, although quite different from exercise, is equally beneficial. Some people who have the opportunity for a short afternoon sleep, find this extremely refreshing. Relaxation can take the form of yoga, breathing disciplines, or simply finding a quiet hour to read a favourite book or magazine. Needless to say, if the physical symptoms worsen or persist, then it is advisable to seek medical help.

Stress in the workplace can have a disastrous effect on peoples’ health and lead to sickness and absence. It can also seriously disrupt the business and reduce profits. Yet many organisations consider stress to be a personal problem of individual workers, and something which an organisation can do little to address.

The amount of stress in the workplace is generally considered to be increasing. The concept of a job for life has been consigned to history and most workers will need to learn new skills during the course of their career. Male manual workers in traditional heavy industries such as mining, steel and manufacturing may need to adapt to the very different work situation of an office environment. Advances in Information Technology mean that staff will need to become computer literate and this can be a major challenge for anyone over 40 years of age.

The cost of labour is invariably the biggest cost of any organisation in a western economy and dwarfs the costs of machinery and business premises. Most large firms have an opportunity to relocate part of their operations in a low wage location such as India, and this increases the pressure on management to increase the productivity of staff in the mature economies of the west. All companies are searching for ways to reduce their staff and to make their existing staff work harder and to greater effect.

In one sense, stress can be productive. Giving people targets and deadlines invariably generates mild levels of stress and this state of agitation can help to focus attention on the tasks to hand.

However, many workers report symptoms of stress which are decidedly unhealthy and lead to sickness and prolonged periods of absence from work. It has always been the case that high flying, young male executives experience high levels of stress and this often leads to burn out at an early age. These high flyers were often difficult to work with and received little sympathy from colleagues whom they had mistreated over the years, in the event of a physical or mental collapse.

In recent times, stress has permeated the entire workplace and there are many people who genuinely feel that they are unable to cope with the demands of work. Responses vary. Some staff will seek to avoid responsibility and try to get others to make difficult decisions. Others will turn down opportunities for promotion. Some will simply start looking for a job elsewhere, and eventually leave the organisation. Worse still, some may embark on regular and prolonged periods of sickness, while still drawing their salaries and other benefits of employment.

Most articles on the subject of stress focus on ways an individual can try to reduce stress in work and learn how to cope. While these are undoubtedly useful, it should also be remembered that the management of the organisation is ultimately responsible for the welfare of staff. A stress ridden workplace, with high staff turnover and excessive sick leave is neither beneficial for employees nor the organisation itself.

A progressive company should always be looking for new ways of working more efficiently and effectively in order to reduce costs and increases revenues or profits. The management of human resources is probably the most crucial element in this quest.

There are several things an organisation can do -

1. The organisation of work in a company should be a top management function, and should be the subject of company wide, regular reviews. This does not mean that emphasis should be place on rewriting job functions every few months. In fact many argue that excessively detailed job specifications are the source of inertia and atrophy. What is required is an appreciation of the human implications of corporate strategy. In other words, as the activities of the organisation change or expand, then careful thought should be given as to how the workforce should adapt to these changes in order to make the strategy a success.

2. Recruitment of skilled and capable staff is essential to the achievement of corporate objectives. In all organisations, there will be leaders and followers, and poor selection of leaders will inevitably lead to corporate collapse. Therefore great care should be given to the selection process for the recruitment of key staff. In addition to personal qualities such as vision, intelligence, energy and dynamism, it is also important that key staff can inspire and motivate their junior colleagues.

3. Management styles have, or should have, moved away from the traditional hierarchical and authoritarian based military model. In other words, staff perform tasks, not because they are simply told to by management, but because they appreciate the value of their role in the organisation as a whole. On this approach, the remit of a manager is to assist staff to perform their roles and to inspire commitment based on his or her personal example.

4. There should be a culture in the workplace whereby staff who are experiencing difficulty in discharging their tasks have an informal forum in which to discuss these matters. It is simply incorrect to think that the reason why a person is not performing well must always be due to a personal failure on their behalf. Staff are often given targets which are impossible and deadlines which are unrealistic. In this case, the failure lies with the manager who allocated this task, rather than the unfortunate person who was given the job.

5. All workers should have a personal development plan. The plan should identify the skills they need to develop and discharge their responsibilities more effectively, and provide training or supervised learning experiences which will assist in skill building. If a member of staff is content with his or her current responsibilities and is not seeking a pay rise or promotion, then one should be able to articulate this preference without fear of ridicule or discrimination.

If these steps are implemented then the staff of an organisation will learn how to work imaginatively and proactively. This will invariably lead to a reduction in stress.

Relations between the sexes have a biological basis and although patterns of life have changed over the last 2,000 years, human biology is relatively slow to develop and adapt. For most women this means they are driven by their genes to seek out a male who will be a loving companion and a suitable father for their children.

The following list may help males of all ages to understand women -

1. Sex Appeal
Women are undoubtedly attracted to men they consider sexy. If that means men should be over 6 foot tall, have blue eyes, wavy fair hair and a slim waist, then most men are doomed to failure. Fortunately, the concept of sexiness is not so simple. There are many short, bald, fat men who are regularly seen with attractive women. What these men have in common is an ability to charm and flatter women and make them feel feminine.

2. Make her feel like a Woman
A cursory glance at adverts aimed at women confirms that women wish to look beautiful, young, and have an interesting life style. All a man needs to do is tell a woman what she wants to hear. If in addition, he means it, that is a bonus. This technique will work with women of all ages and persuasions.

It is difficult to think of a woman less interested in romance than the widowed Queen Victoria, yet the British Prime Minster Disraeli famously remarked that everyone likes flattery. And when it comes to royalty, you should lay it on with a trowel.

3. Men should be Masterful
Despite the financial independence of women, a man who is strong will also be attractive. This is not defined in terms of physical strength, but rather strength of character. In other words a woman seeks a man who is masterful, and not a wimp.

This is a challenging point because many women are better suited to making financial decisions than men, in addition to having impressive organisational and networking skills. Despite this, many successful career women are happily married to men whose career and earnings are but a pale reflection of their own.

Strength of character means that a man will support a decision made by a talented woman and help her to realise her goals, even though he may not be capable of realising such goals for himself.

4. Men should be Useful
As many women are no longer financially dependent on men, men need to consider their role in a relationship. Successful women need a partner who is an asset, that is, he helps her to achieve both her professional ambitions and pursue a family life.

There comes a stage in a young woman’s life when she starts thinking of settling down, getting married and having a family. This means she is looking for a long term partner who is sober, dependable, loving, faithful and who will be a suitable role model for any male children. Many men will find this a demanding specification, but for most women, this is a non negotiable list.

5. Men should have Homemaking Skills
If men find the above list daunting, then they should at least be able to develop and demonstrate practical skills around the house. Tasks like mowing the lawn, and fixing things around the house are traditional male chores. Reading bedtime stories to young children is an optional extra.

Unfortunately, many professional men, often with names like Jeremy and Nigel, never helped their own father to perform manual tasks and they therefore lack these skills. Some are encouraged by their partners to enrol on evening classes in car mechanics.

6. Men should be Witty
This has become an essential trait. It is linked to an ability to communicate effectively. Many men find this a problem as they are naturally quiet or perhaps introspective or they may have a job which emphasises manual rather than verbal skills. Some male workers in the Information Technology sector fall into this category and are dismissively classified as geeks by women.

If a man is considered boring, then he will never make it with a woman. No matter how high he may score on all other attributes, the ability to amuse a woman is essential. This is rather strange as many men pursue brain dead Barbie style women, yet even Barbie will want her Ken to have witty and stimulating conversation.

Developing a sense of humour is not easy. Learning a selection of jokes may be a useful starting point, but a male needs to develop an awareness of potentially humorous situations and an ability to articulate these in an engaging way. Definitely a long term aim.

7. Men should be Distinctive
We all need to differentiate ourselves from the herd. Individuality and achievement are always highly valued by women. A skill or interest or hobby in music, sport, literature, art, poetry or whatever is highly regarded by a woman. It matters little whether the woman shares this interest, the point is that it reinforces a man’s identity and adds to his aura of inner strength.

Many men think that they need to give up their favourite hobby or pastime when they enter a serious relationship, as their partner will not share the interest. This is a mistake. It is important for a man to continue to define himself as an independent entity from his partner. Many men also welcome an opportunity to spend time away from their partner and life at home.

8. Men should be Good Lovers
Well, this must be mentioned, although it is considered by many to be highly overrated. In any sexual relationship, it is important to note and be responsive to the other person’s desires and wishes. Most women will let their partners know what they like and modern society allows and even encourages women to take the leading role in lovemaking.

The basis of the deal is that the property developer, for a variety of legitimate reasons, does not wish to construct properties on a speculative basis and then attempt to find buyers for them. One reason may be inadequate local finance facilities, or alternatively, he may not wish to take the challenge of marketing completed properties.

This situation poses significant opportunities for the shrewd investor or property buyer. If the buyer has researched the market, he can make serious returns on his investment without taking ownership of the completed property.

The spread of stage payments over the life of a construction project varies tremendously, but is often in the form of a deposit of 15%, followed by further payments of say 25%, 27%, 25% and 8% when the property is completed. The minimum time period is unlikely to be less than 11 months, and it can be considerably in excess of that.

Once the buyer has made a deposit, then the developer is contracted to build the property. At any time during the construction process, the buyer can exercise his right to sell the contract to another person.

For example, Mr Smith contracts to purchase a property at $200,000 and pays a deposit of $30,000. The developer has not started work on the site, and the expected completion date is 2 years. After 6 months, construction work has started and Mr Smith makes a further payment of $50,000. Prior to the next payment falling due, Mr Smith sells the property for $240,000. He has taken advantage of the rising market and made a profit of $40,000. However, this profit has been made on an outlay to date of $30,000 plus $50,000, namely $80,000. This is an impressive 50% return.

However, all good deals can turn sour. There are several points which a prospective investor should bear in mind.

1. It is always best to be an early bird buyer as prices of new properties tend to rise as activity begins on the site. Once the prices have risen, the opportunity has passed.

2. In some locations, there are lots of completed properties which developers and investors are seeking to offload at significant discounts. New builds will only make matters worse. Spain and Dubai are current examples.

3. The buyer must have the right to sell prior to completion. This may seem an obvious point but many contracts issued by developers give them the right to refuse such a transfer unless they approve of the purchaser. From a developers viewpoint, this simply safeguards the developer against bad credit risks. However, from a buyers perspective this may lock him into the contract until completion.

4. As in all business deals, one should ponder on what might go wrong. In this setting, it is always possible that prices may fall rather than rise and an investor may have difficulty in finding a buyer during the course of construction. This means that an investor needs to feel confident that he can finance the full price of $200,000 if need be. An investor who only has access to say, $100,000 of funds would be ill advised to contract to purchase a $200,000 property.

5. When things go wrong they can go really wrong. An investor should examine the purchase contract carefully in order to understand fully what happens if he is late in making a stage payment. The contract will normally stipulate that a stage payment falls due when the developer has finished a specific task, for example, he has tiled the roof. The contract will give the buyer a limited period of time to make the appropriate stage payment. After this time, a penalty will be incurred.

6. Some contracts fail to spell out in simple English what will happen if the buyer simply cannot make the payment at all. Many developers offer verbal assurances that the buyer will have a refund of monies paid to date, but this is often far from the truth. Some contracts state that if a buyer fails to make a stage payment within say 60 days, then the developer may declare the contract void. What this invariably means is that the developer will sell the project to someone else at the full price and pocket all the monies paid to date by the unfortunate investor.

So, the investor must be aware of the risks of a Stage Payment deal, and be prepared, if need be, to hold onto the contract until the property is completed. If the investor selects a property with a rental potential, he could then make a decent return on any funds he has borrowed to complete the purchase, and have the flexibility to await a market upturn before he cashes in his investment.

The scandal of his execution demonstrates that the US and UK policy of handing over civil matters in Iraq to a bourgeoning domestic administration is fatally flawed and the rhetoric which talks about the green shoots of democracy and civil administration in Iraq is a sham. It also leads one to ask the question that if the US and UK cannot organise an execution, how can they claim to have the vision and will to rebuild Iraq ?

VICTORY ?
The current US policy is that Victory in Iraq remains an achievable objective. The new US policy is to split Baghdad into some 10 sectors and to cleanse each sector in turn of insurgents. After a section has been cleansed, responsibility for law and order will be handed over to the Iraqi army and civil institutions.

In the past both the US and UK forces have engaged with militias and ejected them from areas and then moved on. After the departure of US and UK forces, the militias have returned to these locations, spent some time quietly regrouping, and then re-commenced operations. This has also been the experience in Afghanistan, where the Taliban are once again an active force and a serious threat.

The prospect of operating in Baghdad was not welcomed by the Iraqi army, and forces in the South rebelled upon receipt of orders for deployment in Baghdad.

The US and UK have demonstrated their ability to destroy the infrastructure of Iraq by precision bombing, but they have singularly failed to rebuild the country. In fact the infrastructure of Iraq has suffered further major depredations since the defeat of Saddam Hussein.

The practice of awarding contracts to US companies, and without a tendering process, is unimpressive. It simply reinforces and perpetuates the nepotism and corruption which permeated Iraq during the Saddam years. Vice President Dick Cheney has received major personal benefits from contracts awarded to Halliburton Co and has, for several years, been attempting to distance himself from the company.

In the north of Iraq, the situation is better. Most of the investments in the north have been made by Middle East companies, especially Turkish, and these projects have conferred tangible and auditable benefits to the regional economy.

It is a tragedy that the US and UK have been unable to disseminate their infrastructure skills and entrepreneurial expertise in Iraq. The years of occupation will simply be remembered for the heavy handed military presence and the deprivations of the Iraqi people.

The Democrats in the House of Representatives do not support this policy and the House Speaker Nancy Pelosi made her feelings clear:-The passage of this legislation will signal a change in direction in Iraq that will end the fighting and bring our troops home safely and soon - she said.

The Democrats are stymied by intellectual paralysis concerning Iraq and apart from their moral outrage at deaths of US soldiers, they have no constructive policy alternatives, other than to bring US troops home.

WITHDRAWAL ?
If victory is not an achievable goal, should the US withdraw troops from Iraq ? This is a simple and understandable policy, and inevitably has some appeal.

A reduction in troop levels will probably lead to increased casualties, rather than a reduction as the remaining forces will be stretched and more open to attack by militias. So the policy option is that of a complete withdrawal, presumably over a short time scale.

If there were a credible, embryonic Iraqi government in place, with both a palpable military capability and a commitment to justice and impartiality, then withdrawal with honour could be a possibility.

However, this is far from the case. The so called Iraqi government appears more like a passive spectator than an active actor in the daily disasters which are relayed to the western media. Even the Bush administration which initially proclaimed the democratisation of Iraq has become silent on this matter.

If there was a sudden withdrawal of US and UK forces, the disaster of Iraq would not diminish. On the contrary, it would grow and engulf neighbouring states including Iran, Turkey, Syria and Saudi Arabia. The results would be both unpredictable and possibly catastrophic.

In political terms, it would be a mortal blow for US credibility throughout the Middle East and create a vacuum which could be exploited by extreme religious and terrorist groups, including Al-Qaeda.

REGIONAL DIPLOMACY ?
If withdrawal is not a practical option, then the initiation of a dialogue with regional players would appear both prudent and pragmatic. This was one of the recommendations of the Baker-Hamilton Iraq Study group and espoused by George Bush senior.

Tony Blair has been especially enthusiastic about this option. However, this opportunity has been mishandled by both Bush and Blair. Both Syria and Iran were wooed to engage in diplomatic initiatives by the US. They were understandably nervous about this as they distrusted US intentions: the US media claims that Bush has drawn up plans for military action against these states.

Instead of treading softly, Bush and Blair adopted a threatening approach and warned of adverse consequences if they failed to become involved. This had the result of further alienating Iran and Syria.

In fact both Syria and Iran have become involved in Iraq, but not in the manner requested by the US. Syria provides training and aid to Sunni militias operating in west Iraq while Iran does the same for Shi’ites in the east. Both these militias target US and UK troops.

While the north of Iraq has seen some infrastructure improvements due to Turkish involvement, the treatment of Turkey by the US has been haphazard. On the one hand, the US has supported UK efforts to assist Turkey to join the EU, but on the other hand the US has been ambivalent about the status of Kurds in north Iraq.

The US has given repeated assurances that the PKK, which is considered a terrorist organisation by Turkey, will be removed from north Iraq. This has not happened. On the contrary, the US has encouraged Kurdish aspirations for an autonomous state in north Iraq, which would place Turkey in an intolerable position due to the large number of Kurds in southern Turkey.

Tony Blair has exhibited courage by distancing himself from US policy and allied himself with Turkey. During January 2007, Turkey increased the number of troops and weapons on its southern border with Iraq.

ISRAEL
No consideration of US policy in this area is complete without mention of Israel. The US and UK support for the Israeli bombing of Lebanon in 2006 and the ongoing problems in Palestine have been a harsh reminder to the Arab world of loyalties in the region.

The fact that Tony Blair and the UK were silent and hence complicit concerning the destruction of south Lebanon is a major reverse for UK credibility in the region. Future UK governments will have to work long and hard to redress this setback.

Some cynical observers perceive the Israeli hand in the US actions which have the effect of weakening or obliterating the military capability of states hostile to Israel. Based on this interpretation, Iran could well be the next target for US/Israeli ambitions.