Missing stories of 2009

Posted: Friday, December 04, 2009

Sometimes it's those news stories that don't feel the love from cable talk shows or the blogosphere that reveal the most about what really happened in a given year. 2009 had plenty of them. From a naval alliance that could shift the balance of power on two continents to the risk of another housing bubble, these are the stories that got less attention they deserved this year - but could dominate the conversation in 2010.

Northeast Passage opens for business

The mythic Northwest Passage still captures the imagination, but in September, two German vessels made history by becoming the first commercial ships to travel from East Asia to Western Europe via the Northeast Passage from Russia through the Arctic. Ice previously made the route impassable, but thanks to rising global temperatures, it's now a cakewalk. "There was virtually no ice on most of the route," Captain Valeriy Durov told the BBC. "Twenty years ago, when I worked in the eastern part of the Arctic, I couldn't even imagine something like this."

The significance depends on your perspective. The passage could be a gold mine for the commercial shipping industry, as a shorter and cheaper route from Asia to Europe. But the news is also a sign that climate change may be reaching a dangerous tipping point.

In addition, the thaw opens possibilities for geopolitical competition. Russia has literally planted its flag beneath the Arctic ice, staking a claim to newly accessible natural resources, much to the consternation of the other northern states. The route will also benefit Russia by bringing new business to its eastern ports. With the scramble for the Arctic's riches heating up, even peaceful Canada has been holding military training exercises in the area.

Iraq's new flash point

With attention riveted on President Obama's review of Afghanistan strategy, almost any news from Baghdad got short shrift this year. But the Iraq war is far from over. From a persistent insurgency to a distressing lack of political reconciliation in Baghdad, Iraq has any number of potential flash points. Most troubling may be the growing fears of a new conflict between Iraq's Arab and Kurdish populations.

The attention this subject has gotten has focused on the Kurdish claims to oil-rich Kirkuk, but analysts say developments in nearby Nineveh province might be more dangerous. The area is south of the Kurdish border but contains a large Kurdish population eager to incorporate the territory into Kurdistan. After the U.S. invasion, the Kurds became politically dominant in Nineveh and stationed pesh merga militia troops there.

That changed in January, when Sunnis rallied around the hard-line Arab nationalist party al-Hadba-a - which campaigned on a platform of countering Kurdish influence - and handed it a narrow majority in Nineveh's provincial elections. The Kurdish Fraternal List, the region's main Kurdish party, walked out of the provincial council, vowing not to return unless it was given several senior leadership positions.

With both sides threatening violence to resolve the dispute and insurgent attacks continuing, Iraqi and U.S. authorities increasingly view Nineveh's conflict as a key threat to Iraq's stability. "Without a compromise deal, (Nineveh) risks dragging the country as a whole on a downward slope," Loulouwa al-Rachid, the International Crisis Group's senior Iraq analyst, said in September.

A Hot Line for China and India

"Hot lines" between world leaders, such as the legendary Moscow-Washington "red telephone," are designed to prevent misunderstandings from escalating into nuclear confrontations. China and the United States have one. So do India and Pakistan. This year, the leaders of India and China agreed to set one up, highlighting concerns that a worsening border dispute could deteriorate into a major confrontation.

Asia's emerging superpowers are at odds over the Himalayan region of Tawang, a district of India's Arunachal Pradesh state that China claims is historically part of Tibet and therefore within China's borders. The countries fought a war over the territory in 1962 that killed more than 2,000 soldiers. The area has been increasingly militarized, and the Indian military documented 270 border violations and almost 2,300 cases of "aggressive border patrolling" by the Chinese in 2008. Indian Prime Minister Manmohan Singh visited the area in October, drawing official protests from Beijing.

In June, the Times of India reported that Chinese President Hu Jintao suggested to Singh that the hot line be established so that the border dispute didn't lead to military - or even nuclear - confrontation.

A new housing bubble?

Ill-advised speculation on U.S. real estate helped set off the global financial crisis. But even after millions of foreclosures and their secondary effects rippled through economies around the world, U.S. homeowners might be making the same mistakes again.

After suffering their largest month-to-month drop in history, U.S. home prices began to increase again in May. The S&P/Case-Shiller index, a top measure of housing prices in the United States, rose 3.4 percent between May and July, with gains in 18 of the 20 cities the index measures. Prices were still 13.3 percent lower than last year, but that figure was less than expected. The release of this data coincided with other positive indicators, including an increase in existing home sales and home construction. "We've found the bottom," one economist told The New York Times.

But economist Robert Shiller, one of the index's creators, sees the numbers as alarming. Pointing to survey data showing that most homeowners think their house will increase dramatically in value over the next decade, he worries that "bubble thinking" might be returning.

The government's solution to the housing crisis might even be encouraging homebuying by people who can't afford it. The Federal Housing Administration, which backed nearly 2 million mortgages in 2009, saw the share of its loans that are delinquent or in foreclosure rise to nearly 8 percent in June, and the agency is quickly burning through its reserves for loan losses. A congressional committee has been formed to investigate the losses.



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