Archive for July, 2014

Oil revenues and ISIS


Keith Johnson writes that ISIS still need to sell oil and indeed are still doing it albeit to less than scrupulous people.

Johnson opens, “The homicidal maniacs of the Islamic State, like many shady and not-so-shady groups before it, are apparently getting into the oil business. And it seems to suit them as they reportedly are making millions of dollars per day off of it. The militants who have conquered broad swaths of Iraq and Syria are turning to good old-fashioned crime — oil smuggling, in this case — to underwrite its main line of work. The money it can earn from illicit oil sales further bolsters the group’s status as one of the richest self-funded terrorist outfits in the world, dependent not on foreign governments for financial support but on the money its reaped from kidnappings and bank robberies. The group has also managed to steal expensive weaponry that the United States had left for the Iraqi military, freeing it from the need to spend its own money to buy such armaments.But even the millions of dollars a day that the Islamic State seems to be raking in by trucking stolen oil across porous borders is not enough to meet the hefty obligations created by the group’s own headlong expansion. Taking over big chunks of territory, as in eastern Syria and in northern Iraq, could also leave it forced to take on the sorts of expensive obligations — such as paying salaries, collecting the trash, and keeping the lights on — usually reserved for governments”.

Johnson goes on to write that “‘They’ve gone from being the world’s richest terrorist organization to the world’s poorest state,'” said Michael Knights, a Middle East expert at the Washington Institute for Near East Policy. As with much of what the Islamic State purportedly does, the group’s actual role in trading illicit Syrian and Iraqi oil is hard to pin down. The Islamic State seemingly controls the majority of Syria’s oil fields, especially in the country’s east; human rights observers say 60 percent of Syrian oil fields are in the hands of militants or tribes. The Islamic State also seems to have control of several small oil fields in Iraq as well, though reports differ on whether most of those wells are capped or whether the Islamists are producing and shipping serious volumes of stolen Iraqi oil across the border”.

Johnson continues, “In all, energy experts estimate that illicit production in Iraq and Syria — largely by the Islamic State — is north of 80,000 barrels a day. That’s a tiny amount compared with stable oil-producing countries’ output, but it is a lot of potentially valuable oil in the hands of a group that even al Qaeda considers beyond the pale. If that oil fetched global market prices, it would be worth a small fortune: $8 million a day. But as the Sunni militant group’s new neighbours in Iraqi Kurdistan have discovered, it’s not easy to get top dollar for what many consider black-market oil. The Islamic State allegedly sells much of its production to middlemen in Syria, who then bring it to refineries in Turkey, Iran, or Kurdistan. That oil is essentially fenced and likely fetches only about $10 to $22 a barrel, said Valérie Marcel, an oil expert at Chatham House in London. Crude trades just above $100 a barrel in New York and London”.

Interestingly he projects that “In Iraq, the Islamic State apparently cut out middlemen and uses its own fleet of tankers, which means it can reap between $50 and $60 a barrel, Marcel said. Other reports put the terrorist group’s Iraqi oil proceeds as low as $25 a barrel. ‘They’re taking a massive discount, and they’re only achieving a small fraction of the value’ of the oil, the Washington Institute’s Knights said. Altogether, the group’s oil smuggling could be generating on the order of $1 million to $2 million a day. Other analysts say the Islamic State’s oil income could be as much as $3 million a day. The United Nations is taking notice. On Monday, July 28, itwarned countries against buying oil from militants in Iraq or Syria, saying that such purchases would violate U.N. sanctions on the terrorist group”.

In the long term, Johnson writes that “With the Islamic State at the helm, that oil boom certainly won’t last forever. The old oil fields in Syria and Iraq need lots of care, such as injections to keep the pressure up and output reliable; the lack of trained technicians and the frequent turnover have been a nightmare for proper reservoir management and will ultimately lower future output at those fields, Marcel said. Still, all else being equal, that kind of control over oil fields, oil revenues, and petroleum products would be a financial shot in the arm for any terrorist outfit. Control of oil products, from gas canisters needed for cooking to fuel needed for transport, gives the group additional local leverage. And the revenue bolsters the Islamic State’s ability to recruit and pay fighters and to buy weapons”.

He makes the point, “Here’s the thing about the Islamic State’s newfound oil wealth: Big money is not unique among terrorist groups, and in this case, it’s probably not enough.  Oil money is just one slice of an illicit pie funding the group. In Syria and Iraq, protection rackets, extortion, local taxes, and other forms of smuggling all pour millions of dollars into the Islamic State’s coffers. Brett McGurk, the State Department’s point man on Iraq, told Congress last week that even before the militants captured Mosul, Iraq’s second-biggest city, the group was raking in $12 million a month from illicit activities there”.

He ends the piece, “More importantly, the Islamic State’s access to some oil revenues pales in comparison with its obligations and points to the group’s longer-term vulnerabilities. Part of its illicit empire, such as extortion and shakedowns in towns across northern Iraq, is crumbling after Baghdad froze public salaries for those areas. That’s a double blow to the group: No local incomes to extort, and now the Islamic State has to pay the payroll tab itself. At the same time, the group’s barbarity, lack of outreach to even like-minded Salafi groups, and territorial overreach may have sown the seeds of its own downfall. ‘They’re overplaying their hand everywhere they have a hand, and that’s going to come back and hurt them,’ Gartenstein-Ross said. Moreover, control of a few small oil fields that translates into heavily discounted smuggling revenues won’t be enough to give the Islamic State staying power”.


“Only power plant”


More than 100 Palestinians are said to have been killed after Israel intensified its bombardment of Gaza and warned of a long conflict ahead. Gaza’s only power plant caught fire as Israel carried out 60 air strikes, targeting sites associated with Hamas, the Islamist group which controls Gaza. UN staff members are said to be among those killed. An Israeli military spokesman said the strikes signalled a “gradual increase in the pressure” on Hamas. Gazans get power from just one local plant, as well as some supplies from Israel and Egypt. On Tuesday morning a huge plume of smoke rose over the strip’s only power plant after one of its fuel tanks was reportedly set alight by Israeli tank shells, and the facility was forced to shut down”.

Defeating ISIS regionally?


An article argues that there is a regional approach to defeat ISIS. It begins, “The Islamic State in Iraq and the Levant (ISIL), now calling itself the ‘Islamic State,’ has burst onto the world scene in an impressive way in the past month, with its Blitzkrieg-like seizure of Mosul, Tikrit, Bayji, and Tal Afar. While experts in the region had been monitoring ISIL’s progress for some time, its emergence shocked the general public. Abu Bakr al-Baghdadi, the leader of ISIL, then furthered that shock by declaring ISIL as the core of a caliphate (with himself, of course, as its Caliph), the sole legitimate Islamic State on earth”.

The authors make the valid point that “For the United States, crafting a policy to neutralize ISIL and its ever-expanding ambitions is a difficult proposition with no easy answers. Solutions require recognition that ISIL has been transformed by its successes from a localized terrorist group into an organized and effective political and military powerhouse that poses serious threats to the region and beyond. Fortunately, while ISIL may achieve some temporary tactical gains from declaring the caliphate, it made the strategic error of declaring all other Sunni political actors illegitimate”.

They argue that is could create an opening to gain allies in the region to help defeat ISIS, “A good way to think about ISIL is as a political entity superimposed over the formal boundaries of the failed state of Syria and the failing state of Iraq. It operates in total disregard of the formal borders of these two states. Its membership is international, and therefore ISIL is now a regional problem, and its new self-identification as the Islamic State, or caliphate, indicates its broader ambitions. Because of its trans-national aspirations, ISIL exercises a particular draw on the international jihadist community. The media has shown pictures of Tunisians, Bosnians, and Chechens involved in the recent attacks in Iraq, and a variety of sources suggest that there are hundreds of EU citizens and scores of Americans within ISIL’s ranks. It is important not to overstate ISIL’s connection with the current dysfunction in Iraqi politics. It is not ‘an al-Qaeda army marching across Iraq’ as some news commentators have claimed. It has succeeded in Iraq through a partnership with local Sunni forces. While it is true that current sectarian tensions have led Iraqi Sunnis to support ISIL to oust the Shi’a dominated government, this has happened before during the Iraqi resistance in 2004-2007. Moreover, this alliance need not be permanent; Iraq’s Sunnis, with U.S. help, decimated ISIL’s predecessor, al Qaeda in Iraq, in 2007 and 2008 because of the threat it posed to local Iraqi leaders and their way of life through their imposition of a strict version of Sharia law and other social changes they sought to impose on the local communities (e.g., forced marriages into important tribal families). Further, it will be interesting to see how Iraq’s more nationalist Sunnis, including the outlawed Ba’ath Party, react to the Caliphate announcement and similar threats to local leaders, which will no doubt occur. It is likely that these groups will turn on ISIL again once they have realized their true goal of getting Iraqi Prime Minister Maliki out of power”.

They go on to argue that America is not thinking correctly with thoughts of allying with Iran while others have go so far as to call Iran the problem to the current crisis.

Crucially they argue that “Crafting a regional policy against ISIL would have been more difficult prior to the declaration of a caliphate. However, ISIL may have made the construction of a regional approach easier by making its designs on its neighboring Sunni states abundantly clear. While defeating Damascus and Baghdad remains ISIL’s first priority, Riyadh, Irbil and especially Amman have also been put on notice. Furthermore, whereas ISIL likely is still seen as supporting many Sunni nations’ goal of seeing Iranian interest and power in the region rolled back, they now need to balance that with the real threat that ISIL poses to them. They cannot permit it to get too strong without strategic risk. One hopes that this imminent threat has put the cold war between Saudi Arabia and Iran on the back burner for the time being. This may make forming a regional approach that includes the major Sunni nations easier than it would have been before the announcement of the Caliphate”.

The problem with this view is that the Saudi’s are actually backing ISIS and are hoping for a weakened Iraq but more importantly a weakened Iran. This is an incredibly short sighted position to take and in a sign of their own nervousness with their own policy the Saudi’s have dispatched troops to the border with Iraq just in case.

The authors go on to write “An obvious untapped vein of support might be moderate religious leaders—Sunni, Shi’a, Alawite, Christian and others. Civil society institutions are weak in the region, but should be engaged and allowed to exercise as much influence as they can muster. The Arab League could provide a forum in which the threat presented by ISIL could be addressed comprehensively”.

This is a valid proposal but again the region is mired in division and there is no guarantee that anything constructive would come from what the authors are proposing. This is not to say the policy should be rejected out of hand but realistically the talks would become a shouting match over who was to blame with meddling in the affairs of each other.

They make the sensible propsal, “The first step towards defeating ISIL in the region is to isolate it internationally, which would require regional agreement and concerted action. Cutting off its funding, its stream of recruits, and the ability of its operatives to move throughout the region are all critical. Unfortunately, cutting off ISIL’s funding, while important in the long run, will not have an immediate impact given the millions, or perhaps billions, of dollars in assets it has seized from banks in Mosul. It may be self-financing with respect to its jihadist operations through a variety of black market activities and organized criminal behavior, but even this huge amount of cash will likely not be enough to support the population it now claims to govern in the way it is accustomed to being supported. Funds for social programs, health, education and many other needs will no longer flow from Iraqi’s oil proceeds, and those who will be out of work and without the benefits they are accustomed to seeing will likely get restive. Attacking ISIL’s illicit funding mechanisms is possible, though difficult. It would require steps such as encouraging Kuwait, in particular, to clamp down on its lax money transfer laws and exercising influence over non-standard financial institutions such as hawallahs”.

They also argue that “there is much that could be done about the movement of people across international borders (save the Iraq/Syria one, which is no longer functional). A focused effort on intelligence sharing that, at a minimum, attempted to identify ISIL members and deny them freedom of movement within and outside the Middle East region will not be a panacea, but might be a good place to start. In the near term, we suspect that those working the ISIL problem will find themselves with few good answers and perhaps even fewer effective tools. However, this is yet another symptom of approaching this problem piecemeal. If ISIL is engaged as a regional actor that has now moved beyond being a simple counter-terrorism problem, other approaches may emerge in the diplomatic-military-intelligence nexus”.

They conclude, “There will be a long process of both education and diplomatic pressure involved in any regional solution. But we see no alternative. The Administration should immediately begin a comprehensive regional approach to deal with this novel—and increasingly dangerous—political entity”.

Ready to sanction Russia?


Western leaders say they’ve cobbled together a united front against Russia, a week and a half after the downing of Malaysia Airlines Flight 17 killed nearly 300 people. U.S. President Barack Obama on Monday afternoon spoke to the leaders of Britain, Germany, France, and Italy in a joint call, during which they agreed on tougher sanctions against Moscow. The United States says Russia provided the training and weaponry to the militants in eastern Ukraine who shot down the passenger plane on July 17. “They agreed on the importance of coordinated sanctions measures on Russia for its continued transfer of arms, equipment, and fighters into eastern Ukraine, including since the crash,” a statement from the White House stated after the call. Although the United States has long pushed for broader sanctions against whole sectors of the Russian economy, European leaders were reluctant until now. British Prime Minister David Cameron said in a statement that the leaders agreed that “ambassadors from across the EU should agree [to] a strong package of sectoral sanctions as swiftly as possible.” EU leaders could announce new sanctions as early as Tuesday, July 29, when they meet. The United States often follows EU moves with measures of its own. Although the European Union agreed last week to consider sanctions against Russia’s energy, defense, and financial industries, it was unclear how far they would go”.


Unfocused Democrats


An interesting article has been published in the Economist, it argues that Democrats have not noticed the midterms taking place this year. It opens “Election fever grips the American Left. A mood of scrappy, let-us-at-’em impatience unites such gatherings as Netroots Nation, an annual shindig which this year drew thousands of activists, organisers, bloggers and candidates to Detroit from July 17th-19th. Unfortunately for the broader Democratic Party, the election that inspires the grassroots is the 2016 presidential race. The mid-term congressional elections, which will happen much sooner (in November this year), provoke a more muted response, even though there is a good chance that Republicans will seize the Senate and cripple the rest of Barack Obama’s presidency”.

The writer continues, “The kind of people who attend Netroots Nation are passionately and uncompromisingly left wing. Their champion is Senator Elizabeth Warren of Massachusetts, a former professor who crusades against “big banks”, “powerful corporations” and their enablers on the Right. “The game is rigged,” thundered Ms Warren, whose demands include more generous Social Security benefits (pensions) for the old (paid for with steep tax hikes), cheaper student loans, a higher minimum wage and other forms of redistribution. Not for her the business-friendly centrism of the Clinton clan. Hillary Clinton did not attend Netroots Nation, instead giving a TV interview in which she suggested that a bit of economic growth might make it easier to curb inequality. Ms Warren’s warm-up act was Gary Peters, a local congressman who, unlike Ms Warren, is running for election this year. Mr Peters, a moderate ex-banker, is trying to win a Senate seat that Democrats desperately need to win but might not. He could use some grassroots support, but the crowd barely noticed him. They were too happy chanting “Run Liz, Run!” or waving “Elizabeth Warren for President” boater-style hats (“they’re fun, they’re old-timey,” said a hipster handing them out). Ms Warren says she is not running for the White House. No matter. Some 100 days from an election that could condemn Mr Obama to near-impotence, some progressives prefer to daydream about President Warren”.

He makes the crucial point that “The Democrats’ footsoldiers can ill afford to daydream in 2014. Even as digital technology transforms elections, recent research shows that flesh-and-blood volunteers tend to trump paid advertising. Candidates need supporters to sway their friends and neighbours. This “ground war” is most crucial, for both sides, in the half-dozen swing states where Senate races could go either way. The trouble is, these states are quite conservative. So the Democrats running for office there often have views on guns, coal or fracking that appal progressives, who are therefore reluctant to knock on doors for them”.

The author adds importantly that “Like the Republicans with their Tea Party zealots, the Left must choose between purity and pragmatism. MoveOn, a lefty campaign behemoth which claims 8m members, has endorsed only nine Senate candidates so far in this election cycle, conspicuously excluding centrists in tight races in Georgia, Kentucky and Louisiana”.

He makes the valid point that “Yet Tea Party parallels are imperfect. Flinty conservatives often scoff that moderate Republicans are no better than Democrats. Progressives are different: many think that Republicans are wicked. That pushes their leaders, at least, towards pragmatism. “We may have to compromise on some things [to beat the Republicans],” says a boss at Democracy For America (DFA), a group founded by Howard Dean, a former Vermont governor and presidential hopeful who claimed to represent “the Democratic wing of the Democratic Party”. Take Alaska’s embattled senator. To DFA, Mr Begich has been “terrible” on oil and gas and “not good” on guns. But he is “fantastic” on inequality. In Louisiana local DFA members are holding their noses and helping a pro-oil Democrat, Senator Mary Landrieu. Ultimately, DFA vows to be “all over” any race that might decide the fate of the Senate”.

He concludes, “Despair with Mr Obama and this Congress may be part of the explanation. Progressive footsoldiers are waiting for the scrap that really interests them: a fight to drag the Democratic Party leftwards to victory in 2016. Republicans, who have plenty of problems of their own, cannot believe their luck”.

Yatsenyuk resigns


Prime Minister Arseniy P. Yatsenyuk resigned abruptly on Thursday after the governing coalition of Parliament collapsed, creating uncertainty about the makeup of the government in Kiev as it continues its fight against pro-Russian separatists in the country’s restive east. “I declare my resignation in connection with the collapse of the coalition and blocking of government initiatives,” Mr. Yatsenyuk said after two major parties announced they were pulling their support, a step that allows President Petro O. Poroshenko to dissolve Parliament and call elections for the fall. The move to dissolve the coalition was not supported by Mr. Yatsenyuk’s Fatherland Party, and in his speech to Parliament, Mr. Yatsenyuk warned that the political maneuvering risked paralyzing the government”.

Time to re-examine


An article in the Daily Telegraph notes the steadily declining relationship between Israel and America. Could this mean that the relationship between Israel and America is no longer special?

It begins “It is a relationship that one senior Western diplomat in Washington called “properly poisonous”, but in the past few days the antipathy between Barack Obama and Benjamin Netanyahu appears to have plumbed new depths. The unanimous rejection of John Kerry’s ceasefire proposal by Israel’s security cabinet and the torrent of personally abusive briefing by Israeli officials against America’s secretary of state has visibly stung an Obama administration that now spars almost openly with Mr Netanyahu. Still constrained by the long-standing conventions of unshakeable US-Israeli relations, the administration resorted to sending out anonymous officials yesterday to brief that the White House was “fuming” over the way Israel had treated Mr Kerry. They warned, a little half-heartedly, that a relationship that has already frayed over Mr Obama’s decision to negotiate with Iran over its nuclear weapons and US demands to rein in settlement building on the West Bank could now be put “in jeopardy” if the criticism against Mr Kerry did not stop”.

It is clear however that the relationship between Israel and America is uneven, Israel gets far more than America does on a simply cost benefit analysis. Not only that but Israel due to its protector means that its world view is becoming increasingly distorted which gives it licence to do things, like what it is now doing in Gaza without have to feel the real consequences of its choices. If it were any other state, which of course it should be, it would be stopped from taking these actions or it would be forced from even beginning them at all.

The report goes on to note, “‘Israel has no better friend than John Kerry,’ was the platitudinous public avowal from the spokesman’s podium in the White House, but after his clumsy efforts last weekend to bring Qatar and Turkey into the ceasefire negotiations that – to put it mildly – is not how Israel is choosing to see it. The involvement of Qatar, a well-known funder of Hamas, and Turkey – whose prime minister last week said Israel’s operation in Gaza ‘surpasses what Hitler did to them’ – was too much for Israel, whose officials in Washington were infuriated by the lack of condemnation of Turkey’s words”.
Indeed as the report goes onto write Israel is biting off the very hand that feeeds it, “Ari Shavit, writing in Haaretz, Israel’s leading liberal newspaper, said that Mr Kerry had ‘ruined everything’ before citing senior officials in Jerusalem describing the secretary of state’s proposal as ‘strategic terrorist attack’.’These very public differences point to the yawning gap in demands of Israel and Hamas that Mr Kerry’s failed diplomacy was trying to bridge – while Israel wants to demilitarise Gaza, in effect to bring about regime change, where Hamas wants access to sea and airports.Whatever the motivations of Israel’s blistering briefings against Mr Kerry – who was back in Washington yesterday – his failures raised questions about whether he still retains credibility when it comes to brokering a deal in Gaza”.
He ends the piece, “As tiffs go, this latest spat, is a bad one, but like a rocky marriage, for a number of profound reasons the relationship must endure.It was a reality summed up by Mr Kerry’s spokesman, Jen Psaki, who lamented ‘it’s simply not the way that partners and allies treat each other’, just a breath before promising that Mr Kerry and Mr Netanyahu remained friends – presumably in much the same way as Israel and the US remain good friends. Through gritted teeth”.
In a related article John Hudson reports that both the White House and Israel are attempting to downplay divisons, “White House National Security Advisor Susan Rice and Israeli Ambassador Ron Dermer sought to downplay tensions between their respective governments on Monday after the Israeli press reported that senior aides to Israeli Prime Minister Benjamin Netanyahu were sharply dismissive of American efforts to quell the rising violence in Gaza. At issue were Secretary of State John Kerry’s efforts to secure an unconditional cease-fire agreement between Jerusalem and Hamas, which was widely seen in Israel as deeply unfavourable to the Jewish state”.
Again the sense of isolation from reality is seen by the Israeli comments as if they were the victims of actions being done to them. If America had a normal relationship with Israel the entire calculation of Israel would be forced to change overnight.
Hudson goes on to report “Dermer, who began his term in Washington in September, said those officials didn’t speak for Netanyahu.’I speak directly for my prime minister here. The criticism of Secretary Kerry for his good-faith efforts to advance a sustainable cease-fire is unwarranted,’ Dermer said at an event hosted by the National Leadership Assembly for Israel. ‘There is broad understanding between Israel and the United States about the principles for a sustainable cease-fire.’ Speaking at the same event, Rice sought to underscore the Obama administration’s commitment to Israeli security and its right to defend itself against rocket fire from Hamas”.
Yet there seems to have been reports that it was people in the office of the Prime Minister that was the source of these reports against Kerry and his efforts. Hudson adds “In recent days, President Barack Obama and Kerry have been pushing Israel to accept an unconditional humanitarian cease-fire in Gaza as the administration grows increasingly alarmed by the rising number of Palestinian civilian casualties. Efforts to secure a lasting cease-fire have faltered, however, as Israel seeks to retain the right to destroy tunnels connecting Gaza to Israel used by Hamas to mount attacks — a concession Hamas opposes. ‘We will continue to act with force and discretion until our mission is accomplished,’ Netanyahu said in a televised speech to the nation on Monday. ‘We need to be prepared for a protracted campaign.’ At the daily briefing on Monday, State Department spokeswoman Jen Psaki said she was ‘surprised’ and ‘obviously disappointed’ that confidential details of Kerry’s desired cease-fire agreement were leaked to the press. ‘It’s simply not the way that partners and allies treat each other,’ Psaki said”.
In a seperate though related article, it seems that President Obama has removed one of the many diplomatic shields of Israel at the UN, “Despite a history of rocky relations between U.S. President Barack Obama and Israeli Prime Minister Benjamin Netanyahu, the Obama administration could largely be counted on to watch Israel’s back in the U.N. Security Council, where it succeeded for more than five years in blocking successive efforts by the Palestinians to gain more of the trappings of an independent state and to get the world body to formally censure Israeli settlement policies. That changed after the stroke of midnight Sunday when, in the early minutes of Monday, July 28, the U.N. Security Council, with the backing of the United States, issued a formal ‘presidential statement’ demanding that Israel and Hamas implement an ‘immediate and unconditional’ cease-fire to end fighting that has left more than 1,000 Palestinians and 43 Israelis dead. The Palestinians say they will continue to seek Security Council support for a legally enforceable resolution demanding that Israel halt its military offensive in Gaza”.
The piece addsm “Richard Gowan, a U.N. expert at New York University’s Center on International Cooperation, said the United States is trying to walk a diplomatic tightrope by telegraphing displeasure with Israel while heading off a fiercer battle in the council with the Arabs, who favour the passage of a much tougher Security Council resolution on the conflict. ‘In backing the council’s statements, the United States is signaling its frustration with Israel,’ he said. ‘But it is also warding off a fight over a tougher resolution on the crisis it would probably have to veto.’ The U.S. action also reflected mounting frustration in the State Department over Israel’s rejection on Friday of Kerry’s plan for a seven-day cease-fire. The Israeli cabinet unanimously voted against Kerry’s initiative while political figures across Israel’s political spectrum accused America’s top diplomat of crafting a deal that unfairly rewarded Hamas. Many Israeli officials noted that the militants also rejected Kerry’s call for a seven-day cease-fire, as well as a subsequent call for extending a humanitarian pause that Israeli accepted”.

He goes on to make the point “In February 2011, Susan Rice, then the U.S. ambassador to the United Nations, cast the administration’s first veto in the Security Council to block the adoption of a Palestinian resolution denouncing Israel’s expansion of Jewish settlements. Later that year, the United States killed off a Palestinian bid for recognition as a state before the Security Council by wielding the threat of another American veto. Indeed, since the Obama administration came into power in 2009, the United States had a perfect record of blocking Arab initiatives on the Israeli-Palestinian crisis in the U.N. Security Council. The Security Council did previously issue a so-called “press statement” urging the parties to abide by a 2012 cease-fire agreement. But according the peculiar parliamentary rules of the Security Council, such statements are not considered formal actions and carry no legal bearing on the parties. Today, Palestine’s U.N. envoy and other Arab diplomats expressed frustration with the council’s slow response to the crisis in Gaza. Riyad Mansour, the Palestinians’ U.N. envoy, told reporters that he was “disappointed” over the council’s decision to merely support a simple statement rather than a tougher, legally binding resolution proposed several weeks ago by the Palestinians and their Arab allies to ensure the safety of Palestinian civilians”.

The measure is small and largely insignificant in the scale of US-Israel relations. The otherwise warped worldview of the Russian state media, Russian Today, in a headline writes “US resupplying Israel with ammunition even after condemning shelling of Gaza school”. It is clear that whatever Israel does it is still more or less above condemnation in the eyes of the US despite all that it has done and indeed continues to do.
Unless America fundamentally reevalutes its relationship with Israel and injects some reality into Israel thinking then these events are destined to repeat themselves.

The problem of EU foreign policy


The Germans don’t want to jeopardize their energy interests, the French don’t want to risk their military sales, and the British don’t want to go too hard on Russian financial interests”

War over water?


An article from Foreign Affairs argues that China is killing itself with its quest for water to such an extent that it is leading to drought. He opens “the grasslands of the Tibetan plateau, one sometimes hears a strange chattering — an excited buzz that seems to emanate from the earth itself. Anyone who stops to look for the source will quickly realize that the ground is marked by a series of holes, from which small, shy creatures are likely to be watching. The labyrinthine burrows made by these mammals, called pikas, provide them security. But they provide China and much of Asia security as well. By digging holes in the ground, pikas allow rainwater to percolate into the earth and replenish the water table. Without the humble pika, the water simply runs along the surface, triggering floods and soil erosion. So it is no coincidence that, when the pikas became the target of a state-led poisoning campaign beginning in the mid-twentieth century, waters began, slowly, to dry up across the country. The pika was accused of being a pest that destroyed grasslands. Scientists have pointed out that the pika prefers long grass and that its visibility is a symptom, not a cause, of grassland degradation. But policy is slow to catch up with science; pika killings continue today”.

He goes on to writes “The pikas’ plight illustrates China’s difficulties in confronting its water crisis. The economic development on which Beijing depends to keep the population in check poses a dire threat to the fragile ecosystems that the country and the continent depend on for water. It might thus seem politically impossible for China to enact any of the far-reaching environmental reforms that it needs. In the long term, though, absent any policy changes, China is likely on the path to serious civil strife, and perhaps even civil war”.

He presents context noting, “Most of China’s most important rivers originate in the plateaus of Tibet and the surrounding mountain ranges, an area known by scholars as the Third Pole because of its plentiful ice. The rivers flowing from the Third Pole — among them, the Mekong, the Yangtze, and the Yellow River — traditionally satisfied the majority of China’s water needs. But those waters, along with China’s other supplies, have been steadily disappearing. Since the 1950s, 27,000 rivers have vanished from China. China has only seven percent of the world’s freshwater to meet the needs of about one-fifth of the world’s population. Of that water, only 23 percent is located in northern China, which, as home to most of the country’s major industries, uses much more water than China’s south. Meanwhile, much of the country’s available water supply has been rendered unusable by pollution. The rapid economic development of western China in the last decade and a half has put even more pressure on China’s water supply. Beijing has supported this economic development in spite of its pernicious ecological consequences, though, because it believes that economic growth is the key to calming the restive minorities in the west”.

He makes the valid point, “Out of work even in the larger cities such as Beijing, Shanghai, and Guangzhou, many young Chinese moved to existing cities in western China, such as Lanzhou, Xining, and Urumqi. When those cities grew too crowded, they ventured into what had once been virtually untouched land. Some of them went in search of caterpillar fungus, which serves as an aphrodisiac in Chinese medicine; those who were adept at finding the fungus in the wilds of western China could afford to live in small towns by working only a few weeks a year. Others believed that they would be part of a new tourism industry; wealthy tour groups from eastern China pay considerable money to see the snowy peaks of Tibet, even if the tourism infrastructure that has been built to accommodate them considerably diminishes their beauty. With these new residents has come haphazard new infrastructure. In Qinghai province, the government is building a barrage of new roadways from the capital of Xining to the southern city of Yushu”.

He continues “The problem is that this development is taking place in ecosystems that hold the headwaters for China’s water supply. And the pressures that urbanization puts on the headwaters — through overuse, grassland degradation, pollution, and threats to species that have a role to play in maintaining the health of the river ecosystem — is already having consequences downstream. On the Tibetan plateau, streambeds are dry and glaciers have melted into dead rock. Similar threats confront China’s other water sources. The Pearl River in Southern China is drying. In China’s northeast, burgeoning construction projects are swallowing the wetlands that replenish the region’s groundwater. As a result, water shortages have plagued the country in recent years, and experts predict that water demand will exceed supply by 2030. Given the unreliability of Chinese statistics and how swiftly ecosystems can shift course, that crunch could arrive even sooner than anticipated”.

He makes the prediction that “A historian looking back in 2040 might well tell a story in which Beijing, unable to curb the state’s relentless water use, condemned it to growing water shortages. As the south grew parched, political grievances flared into violent opposition, which became increasingly difficult to put down as angered military commanders joined in and residents of the desiccated third pole — Tibetans, Uighurs, Kazakhs — went into revolt. Like the Ming dynasty before it, the historian would conclude, China had collapsed because thirst spawns violence”.

For a solution he urges China to “curtail its economic goals. Fortunately, Beijing’s recent climate change policies suggest that it may be prepared to make such a compromise. Ahead of the United Nations climate change talks to be held in Paris in 2015, the Chinese government has talked of initiating a ‘war on pollution’ and reducing its carbon emissions. There are plenty of signs, from the investment in renewable energy to discussing emissions with the US in the Strategic Economic Dialogue, that at least some in the Chinese government are serious. But cutting carbon emissions without a plan to address water issues — and other problems like soil contaminated with toxins — is futile. Beijing needs to develop a plan that addresses the entirety of its environmental woes. For one, it has to mandate sustainable development, which will require strengthening the central government against the local governments. Cities can no longer be allowed to spring up in western China without Beijing’s knowledge — the effects on water supply are simply too great. The government will also have to bring locally administered industries, which emit more pollutants and use more water than they report, under control. To aid these efforts, the Chinese government should also try to rally popular support around sustainable development. The Chinese public is tired of the water shortages, unsafe drinking water, and soil contamination caused by haphazard urban development. Xi Jinping could present environmental reform as the next chapter of China’s glorious history and as part of the new model of great power relations that he has touted”.

The danger is that the writer is taking the words of the CCP too literally. China has had wars on corruption before and has often promised that it would move huge sectors into the free market. It has done neither of these things to any great degree so he should not assume the war on pollution will be any different. This is especially true as the Chinese economic slows and the need for growth grows even larger.

He concludes, “Beijing should also consult the platoon of conservation biologists, both Chinese and foreign, who have long been warning of looming ecological catastrophe. China’s water security depends on a complex and subtle balance — the forests that enrich the watersheds, the alpine grasslands that limit soil erosion, the relationships between myriad organisms which maintain healthy waterways — that is extremely difficult to understand. The Chinese state may need to swallow its pride in reaching out to foreign experts, but that shouldn’t be an impediment. China desperately needs to comprehend its environment in all its intricacy, and the country’s officials should be open to reaching out to anyone who might be able to help. Even the diminutive pika, after all, has a critical role to play”.

“Firing artillery across its border”


The United States said on Thursday that Russia was firing artillery across its border with Ukraine to target Ukrainian military positions in the conflict with pro-Russian separatists. State Department spokeswoman Marie Harf also said there was evidence that the Russians intended to deliver heavier and more powerful multiple rocket launchers to the separatist forces. Harf, speaking at a regular media briefing, cited intelligence reports but said she could give no more information of what the reports were based on. A U.S. official, who spoke on condition of anonymity, said the artillery fire began on or after this Tuesday. The official declined to say what targets had been hit but said the United States had no evidence of civilian casualties”.

Success in November, defeat thereafter?


An article from the Economist discusses the potential successes and disasters that befall the GOP. It begins, “This should be a good year for America’s Republicans. The GOP already holds a majority of the state legislatures that divide by party (27 to the Democrats’ 17, with five split between the two parties); a majority of state governorships (29 red to 21 blue); and a majority in the House of Representatives (233 to 199). It could increase all those numbers in elections this autumn, and polls suggest that it is more likely than not to take control of the Senate, too. If that happens, Republicans will control everything apart from the house at 1600 Pennsylvania Avenue”.

 The author makes the point, “rather than planning for power, Republicans have been spending the primary season attacking each other with vim and vituperation. The June 10th defeat of Eric Cantor, the majority leader in the House of Representatives, by a previously unknown economics professor, David Brat, is far and away the most striking upset; but though Mr Cantor is the only big name to have fallen, he is not the only one to have been attacked. Mitch McConnell, the top Republican in the Senate, shelled out $11m to keep opponents from his own side at bay in Kentucky”.
This was seen many times before, although not in such spectacular fashion as Cantor. The obessession with democracy at every level has left both parties having to spend money on crackpots and fruitcakes simply because the most ardent turned out to vote in the primaries.

Instead of blaming the excess of democracy the writer argues that “The clearest cause of the fractiousness is the trauma wrought by George W. Bush’s presidency. The Republican Party thought it was in favour of smaller government, sound public finances and a muscular military. It found itself presiding over an increase in government spending, a near doubling of the national debt, a financial crisis and the return of thousands of body bags from wars that signally failed to deliver what the president had promised. The consequent sense of betrayal goes some way to explaining why the anger Republican activists direct at Barack Obama is accompanied by an equally deep suspicion of their own candidates”.

He goes on to note that “This distrust turns almost every primary into something like a lie-detector test. The candidates all say broadly the same things, calculated to please the base; the voters try to work out which one really means it”.

Yet the primary electorate obviously fail to realise the electioneering and governing are different things. Even in the British parliamentary system that is the most unified and has clear and strong executive power there are obvious differences within the governing party. This is in addition to a system that forces Dems and GOP to work together to accomplish anything. The result is gridlock, and the solution is, as has been mentioned before, either change the system or revert to the previous system of co-operation.

He writes that “In 2012 this approach led to the party fielding a number of Senate candidates who, though acceptably sincere in their commitment to the line the base wanted to hear, proved unelectable. This year that seems to have happened less. But if the process is promoting candidates with some prospect of success, it is doing little to prepare the party for a position of legislative power. And it cannot disguise the fact that the GOP has yet to come to terms with demographic and political changes that have left it in a much weaker state than its position in statehouses, governors’ mansions and Congress would seem to imply”.

The author brings in Kevin Phillips’ seminal work “The Emerging Republican Majority” about the rise of the GOP as a result of of white southerners who had previously voted Democratic, he adds that Reagan “showed the party how to turn the demographic advantage Mr Phillips spoke of into practical politics. His strategy depended on what he called the ‘three-legged stool’ of defence hawks, social conservatives and pro-business types. But George W. Bush’s election in 2004 looks like the last time that the stool was stable enough to sit on; today its legs are either wobbly or liable to snap off altogether”.

The writer, exxagerating somewhat argues that this stool is no longer stable, he cites the GOP’s opposition to US action in Ukraine and Syria but at the same time this should be seen in the context of the GOP’s hatred of President Obama and thus merely trying to frustate the executive rather than being against military action and the supposed ending of a leg of the stool, he adds “Just as the use of military force is more open to question, so is the appetite for spending money on it. In 2011, when the White House was trying to find an escape from a damaging debt-ceiling crisis engineered by House Republicans, its negotiators thought that threatening cuts to the Department of Defence’s budget that added up to $55 billion a year from 2013 until 2021 would force the Republicans into negotiating a deal. It didn’t. Most House Republicans no longer automatically exempt the military from their conviction that government is a problem to be cut away. The stool’s social-conservative leg is wobbling as well. Religious organisations like the Moral Majority, Focus on the Family and the Southern Baptist Convention were once among the most reliable allies of the Republican Party, helping to strengthen a bond between it and working-class Americans that Democrats found hard to break. Evangelical Christians still lean right, but their churches have become more wary of political entanglements”.

Interestingly he gives the example of “Russell Moore, who speaks for the Southern Baptists, says evangelicals should not become ‘mascots for any political faction;. After the Supreme Court struck down the federal Defence of Marriage Act, which required marriage to be between a man and a woman, in June 2013, Mr Moore sent leaflets to the 45,000 churches affiliated with the Convention suggesting that Christians should ‘love your gay and lesbian neighbours’, noting that ‘they are not part of an evil conspiracy’. Focus on the Family says it has probably lost the argument on gay marriage. Opinion polls suggest it is right: public support for the idea has increased from 27% in 1996 to 54% today. Hostility to abortion still motivates evangelicals to get involved in politics, as do, to a much lesser extent, such causes as the need to fight the teaching of evolution in schools. But the culture wars have taken their toll on their churches, which are finding that young Americans are put off by too much emphasis on these issues. Evangelical Protestants are not about to move towards the Democrats en masse. But diminished numbers and a diminished appetite for party politics have drawn energy from a movement that once drove the GOP”.

He points to the third leg, the pro-business leg, as if the Democrats are anti-business, “Leg number three—that of the pro-business types—is also coming adrift. Immigration is the dominant issue. Tom Donohue, president of the Chamber of Commerce, a business lobby, recently said that unless the party can get its act together on immigration reform it ‘shouldn’t bother to run a candidate in 2016’. But parts of the base are implacable on the subject; immigration was a big factor in Mr Cantor’s downfall, backed up by a feeling that he was too close to Wall Street. It is not the only issue on which big companies do not see eye to eye with a substantial fraction of the GOP. Many Republicans would like to shrink the government by any means necessary, even if that means shutting it down, and rail against corporate welfare for big companies”.

He argues that “In addition to opposing any new taxes and trying to shrink the government, the dehydrated form of conservatism espoused by the primary-swinging part of the base is characterised by a fervent opposition to immigration, a staunch defence of the rights of gun owners, a desire to restrict the reproductive rights of women, a remarkable refusal to countenance the need for any sort of climate policy, a suspicion of the Federal Reserve and an atavistic veneration of the constitution. Tea Party meetings often involve invitations to read the constitution together; Republican lawmakers are fond of flourishing pocket-sized copies when making speeches”.

As has been mentioned by others he notes the solid support of the Dems by women and hispanics, “The positions the party takes in state legislatures look unlikely to succeed in reaching out to these groups. In North Carolina, where the party won the statehouse in 2010 for the first time in more than a century, it has moved to restrict abortion and passed a law restricting the types of identification accepted at polling stations, a measure which will probably depress turnout among the poor and black. It has also passed a ban on sharia law—a brave remedy to a non-existent problem that has recently exercised a number of state legislatures. Thom Tillis, who presided over the legislative agenda, won the Republican primary to stand for the Senate in November. He spent much of the campaign defending himself against accusations that he was an establishment sell-out. This combination of often frivolous lawmaking and fractious lawmakers might not seem a winning recipe. But the GOP is riding high. Expectations of success in November depend in part on a turnout even lower than that of the 2010 mid-terms which gave Republicans control of the House. At the same time, being a vessel for discontent is not a bad strategy in a country still feeling the effects of a financial crisis”, one where median wages are stuck, workers are tumbling out of the labour market and the president’s greatest legislative achievement is an unpopular reform to health care. Pollsters once set great store by the question of whether the country is on the right or the wrong track, but this has lately lost some of its predictive power: Gallup has been finding a majority of Americans dissatisfied with the direction of travel all through the past decade”.

He ends the article, “If the party channels this dissatisfaction into a senate victory in November it will put on a triumphant face, no matter what the disarray backstage. But it will also be faced by a serious problem: what to do with the government it will be much closer to controlling? It is not that Republican government cannot provide success. Texas has had a Republican governor and a Republican legislature for more than a decade, and the party has made a success of its low tax, small government model. The shale-gas boom has helped, but so too has a friendliness to companies”.
He concludes, “the need to placate the base will not go away. And Mr Cantor’s defeat makes it more likely than ever that his colleagues will adopt a defensive crouch. This would be a mistake. It may be hard to govern while pleasing a movement that looks down on government. But the cost of not governing is high, too”.

“Resume in early September”


Iran said on Wednesday nuclear talks with six world powers would resume in early September, according to state television, after both sides agreed to continue talking for four more months to try to reach a final agreement on Tehran’s nuclear program. The preliminary accord had been due to expire on Sunday but was extended with some adjustments, after the two sides failed during negotiations in Vienna to meet a self-imposed July 20 deadline for a long-term deal to end the decade-old nuclear standoff. “The extension of talks shows this is a positive atmosphere,” Iranian foreign ministry spokeswoman Marzieh Afkham said during a weekly press conference. She said the biggest difference between both was in enrichment capacity.  Iran says it is only refining uranium to fuel nuclear power plants or research reactors, not to develop a nuclear weapons capability as the West suspects. The six powers – the United States, France, China, Russia, Germany and Britain – want Iran to reduce its uranium enrichment program significantly to make sure it cannot produce nuclear bombs. Some other issues that have yet to be agreed upon include the heavy water Arak reactor, sanctions relief and the Fordow enrichment site, said Afkham. Iran wants sanctions on the oil-dependent economy to be lifted as soon as possible”.


The power of deterrence


Jennifer Lind writes in Foreign Affairs about the the pivot and what should be left to the Chinese, “The United States’ promises to protect its allies in East Asia underwrite the region’s security. Yet whispers about the credibility of those promises are growing louder. China, meanwhile, continues to assert its claims to disputed islands in the East China and South China Seas through so-called salami tactics: making one provocative move after another, as if taking a salami slice by slice. Each provocation slightly enhances China’s position but is too small to merit a forceful response. Many commentators argue that the United States must enhance deterrence by making clearer and stronger commitments to its allies. But the United States will not solve its problems in East Asia by declaring itself in lockstep with its allies. For guidance, U.S. policymakers should instead look to a previous case that the United States managed successfully: West Berlin during the Cold War. In that case, a major power — the Soviet Union — was also pushing, pressuring, and trying to divide the United States from its allies. Washington solved the problem by standing firm in the face of both sides. The Kennedy administration clarified the vital interests that it would fight to protect, while explaining to its West German ally that the United States would not fight to achieve every German goal in the standoff”.

The argument Lind makes sounds too good to be true. Reappraise what US interests are and leave the rest to the Chinese. One of the most obvious dangers is in the analogy with the USSR and China and the Cold War. America and the USSR balanced each other out and created broad stability, if America were to do what Lind suggests it would be read in China as America believing its own “decline” and even worse would then feed into China’s obviously mistaken belief that it is “rising“.

She goes on to write, “In the coming years, territorial disputes between China and its neighbours will create tension, crisis, and possible conflict in East Asia. In the South China Sea, Beijing asserts sovereignty over an area (enclosed by the so-called nine-dashed line) in which six nearby countries — Brunei, Malaysia, Philippines, Taiwan, and Vietnam — maintain competing territorial claims of their own. In the East China Sea, China has claimed sovereignty over the Japan-controlled Senkaku Islands (which the Chinese call the Diaoyu Islands). It will prove difficult to settle these disputes through negotiations; the countries involved have issued a bewildering tangle of competing legal and historical claims, and the contested islets have become a rallying cry for nationalist politicians. Moreover, many of the territories in question come with rich fishing grounds and are thought to lie near substantial oil and natural gas deposits. These disputes have intensified in recent years”.

Her prediction of increased tension in Asia has already come true, almost entirely due to Chinese aggression which is producing predictable results.  Some states have taken a more legal approach but will ultimately have to strengthen its defences.

Lind returns to the Cold War anology, “it’s the Americans who fear entanglement, in an unwanted and potentially devastating war with China. Given this profound change, it is unsurprising that U.S. allies question Washington’s commitment to their security. In March, for example, the Japanese newspaper Asahi Shimbun discussed how increasing tensions over the Senkaku/Diaoyu were leading many Japanese observers to cite “the unreliability of Japan’s main ally.” Responding to such doubts, Washington has reiterated its commitment to Japan’s security in broad terms. U.S. President Barack Obama and other U.S. officials have announced that although Washington does not take a position on the sovereignty of the Senkaku/Diaoyu Islands, its security guarantee for Japan would apply to attacks against the islands because they are “administered by Japan.” In the South China Sea, Washington has similarly declared its neutrality on territorial claims, but it has not stated that the United States would support the Philippines militarily in the event of conflict. This approach only invites more challenges. Simply declaring that the United States will defend areas administered by Japan does not address the core strategic problem that Washington and Tokyo face — China can still use salami tactics to harass and provoke. In Washington, such acts will simply be seen as annoyances; but in Tokyo, they will be perceived as infringements on Japanese sovereignty, and will continue to raise doubts among Japanese that the Americans may not protect them. As a result, the alliance will weaken”.

The liklihood of a Sino-US war are slim. Even if the two countries do go to war, which despite what the theory says, is not likely America will have little to fear and perhaps even much to gain. China’s military is weak, disorganised, corrupt and there is no certainty that it could beat Japan, let alone America in a war. As to her claim that America is an unrealiable ally firstly it should be said that Japan has no where else to go, but more importantly America is treaty bound to defend Japan should it come under an attack.

Lind goes on to argue that “In East Asia today, the challenge for Washington is to distinguish vital U.S. interests from the rubber stamps — and to convey those distinctions to U.S. allies and partners. Here’s one way that might be done. In the East China Sea, the United States has committed itself to defending the territory that Japan administers, including the Senkaku/Diaoyu Islands. Chinese provocations — such as flying aircraft over the islands or sending ships through disputed waters — are annoyances. They do not seize for Beijing the finite benefits of ownership. But if China were to build civilian or military structures on those islands, encamp troops or establish settlements, or extract finite resources from the islands, Beijing would be taking assets that Japan believes it owns. If China were to build a pier on one of the Senkaku/Diaoyu Islands, for instance, the United States should help Japan disassemble it — just as they would if China built a pier on Okinawa”.

She writes “The situation is different in the South China Sea, as Washington has not promised to defend the Philippines’ territorial claims there. Whether the U.S.-Philippine alliance is sufficiently important to justify a U.S. guarantee for Manila’s claims remains an open question. But one can still distinguish symbolic issues from important American interests when it comes to Philippine claims in the South China Sea. When Beijing harasses Philippine ships, it’s regrettable. But when China seeks to reap the benefits of ownership — by establishing settlements and extracting resources, for example — it crosses a meaningful threshold. The key insight here is not what constitutes core interests versus rubber stamps — but simply that Washington must distinguish between them. Today, it has become commonplace for pundits to argue that everything matters, everything is interconnected, and slippery slopes abound.”

What she fails to understand however is the importance of deterrence. Secondly she again uses the Cold War analogy incorrectly. The world of the Cold War is long gone and thus it has little relevance to modern thinking in a world dominated by the United States.

She ends “The brilliance of the Kennedy administration’s approach to Berlin was that it simultaneously neutralized Soviet salami tactics and strengthened the U.S. alliance with West Germany. Honest talk between the United States and its partners in East Asia could similarly strengthen their relationships — while thwarting China’s efforts to divide them”.

“Agreed to unfreeze”


The world powers agreed to unfreeze 2.8 billion U.S. dollars of Iran’s frozen assets over the next four months, Press TV reported on Saturday. “Over the next four months, 2.8 billion dollars will be deposited into Iran’s account in six installments,” senior nuclear negotiator Dr Abbas Araqchi said on Saturday after the end of the nuclear talks in the Austrian capital Vienna between Iran and the P5+1 group, namely Britain, China, France, Russia and the United States plus Germany. “Four 500-million-dollar and two 400-million-dollar tranches will be paid to Iran at three-week intervals beginning on August 1, ” said Araqchi. In exchange, Iran will convert its 20-percent-enriched uranium, already oxidized under the Geneva interim deal, to fuel for Tehran nuclear reactor, Araqchi was quoted as saying”.

How to punish Putin


An excellent article argues how to “kneecap” Vladimir Putin after the disaster in Ukraine with mounting evidence against Putin.

It begins, “Since the downing of Malaysia Airlines Flight MH17 by Russian-backed and Russian intelligence-led separatists in Ukraine, Westerners have learned a great deal about Vladimir Putin and the regime he has built and overseen, uninterrupted, for 15 years. They’ve learned that an international tragedy involving the murder of hundreds of innocents weighs not at all upon the mind of the KGB czar. Russians had long grown accustomed to this fact, thanks to Putin’s handling of the Kursk submarine disaster and the Beslan and Nord-Ost (aka Moscow theater) hostage crises, all episodes in which the president’s mendacity, incompetence, and cold indifference to human life necessarily meant that more of it had to be squandered. But now Americans and Europeans have definitive proof of what motivates a Soviet-style post-Soviet dictator when it comes to the well-being of their citizens, too. An important lesson should be learned from this affair”.

He goes on to make the claim that “according to U.S. intelligence, the Kremlin was evidently so pleased with this performance that it has dispatched more materiel to the culprits in eastern Ukraine. This new hardware includes rocket launchers, light arms, and tanks — only adding to the sophisticated weapons already sent in to aid the rebel cause”.

The writer goes on to add correctly, “‘Without a doubt, the state over whose territory this happened bears the responsibility for this frightful tragedy,’ Putin said, neglecting to mention that he considers the relevant territory part of Novorossiya, his revanchist concept of Russia’s ‘near abroad’ brought even nearer”.

Weiss then goes through the evidence against Putin and his henchmen which has been discussed elsewhere.

He goes on to mention, “Michael McFaul, who was until recently the U.S. ambassador to Russia, tweeted two very noteworthy observations. The first was this: ‘If Putin can arm rebels, why can’t we arm Ukraine?’ The second was this: ‘West has to stop trying to change Putin’s mind, and focus more on helping Ukraine succeed, including on the battlefield.’ Before assuming the ambassadorship, McFaul was a member of Obama’s National Security Council (NSC) and also the architect of the so-called U.S.-Russian ‘reset’ in bilateral relations, a major premise of which had been trying to change Putin’s mind about many things. McFaul’s volte-face in particular should be registered with Obama’s remaining NSC members. They should also realize that now is the time to convey an entirely different message to Vladimir. Let’s give Putin a clear choice: Either he can continue subventing and enabling the bloodletting in eastern Ukraine, or we can expose the enormous global network of offshore bank accounts, dummy companies, and real estate holdings that belong to him and his criminal elite. A mafia state should be treated as such. And information should once again be weaponized as it was during the Cold War”.

The point Weiss makes here is valid, and even tempting. Russia has done wrong and needs to pay harshly for it. America can do much to destroy the Russian economy but to be truly effective it needs support of the European countries, though not necessarily the EU. Ideally if the UK, France and Germany were to impose hard sanctions Putin would crumble. This is not likely to happen for a number of reasons.  The other point to bear in mind is the Iran talks, of which Russia is a participant. Russia probably doesn’t care if Iran gets a bomb and is merely there to look like a big power on the world stage. Russia could walk out of the talks or worse could remain in and become an irritant.

He goes on to make the point, “Investigative journalism has already yielded reams of copy on where some of the Putinist wealth is hidden, and how it got there. Much of it is in EU jurisdictions, which are subject to sanctions and/or concerted American diplomatic overtures. The U.S. Treasury Department, the CIA, and the FBI all know more about Putin’s and his cronies’ billions than they say publicly. Indeed, the first suite of sanctions that the United States passed on Russia disclosed that Putin personally held assets in a Swiss commodities trader called Gunvor, in which, Treasury stated, “Putin has investments” and “may have access to … funds.” This was newsworthy, as it was encouraging of even more thorough reporting on where the rumored wealthiest man in Europe stashes his cash. Barack Obama wouldn’t have to try very hard to convince Putin that, if he so desired, he could feed the entire Western media industry enough scoops and exclusives to shake Russia’s stock market and economy for months, if not years, not to mention set the cat among the pigeons of bickering Kremlin political factions”.

He concludes, “It’s simply a myth that Russians don’t keep their money in the United States anymore. According to lame-duck Sen. Carl Levin, whom I heard give a press conference at Hotel Ukraina in Kiev last April, there are “billions” of dollars parked on American soil. So why haven’t we frozen that money yet? It’s an open secret to federal law enforcement that the Manhattan and Miami property markets now act as end points for magically transforming black or blood-soaked dollars into pristine portfolios for the kept beneficiaries of authoritarian regimes, including and especially Putin’s. No less than the former head of the Duma’s ethics committee, Vladimir Pekhtin, was shown by Russian dissident Alexey Navalny to have owned millions in real estate in Florida, including a1,530-square-foot apartment at 1500 Ocean Drive. Pekhtin was also sued by U.S. contractors in the Sunshine State. Can he really be only one this easy to find? As for Europe, which suffered the most fatalities on July 17, tough love is now indicated, as is the strong American leadership supposedly so desired from London to Paris. The continent has become so accustomed to an endless Volga of no-questions-asked rubles pouring into its commercial and financial centers as to make Brussels objectively complicit in Russian foreign policy. The reliance on Russian gas imports accounts for only some of this fetid interdependence”.

He finishes noting the links to Russian monies in the UK and David Cameron’s party, ” He can begin the sanitation by refunding the £160,000 given to his Conservative Party by Lubov Chernukhin, the wife of Putin’s former deputy minister, who actually bid the money at auction and won a chance to play a game of tennis with Cameron and Boris Johnson, the mayor of London. And if the former PR-man-turned prime minister really wants to act as Churchillian as he purports to sound, he can at least ensure that next year’s Tory summer fundraising party does not include on the guest list Putin’s judo partner and current Russian MP Vasily Shestakov, as this year’s did. (MI5 may also want to see about rooting out Russian spies in Albion, which it now believes are as numerous as they were during the Cold War.) And here’s the added benefit of threatening to expose Putin’s dirty money trail and his even dirtier influence-peddling: Doing so implicitly means pressuring our allies to stop acting as Russia’s laundromats and doormats. The Europeans may hate us for it now, but they’ll thank us for it later”.

“Into more harmless forms”


Iran has turned all of its enriched uranium closest to the level needed to make nuclear arms into more harmless forms, the UN nuclear agency says. The conversion of its stock of 20%-enriched uranium was part of a deal to curb Iran’s nuclear programme. The US said last week it would unblock $2.8bn in frozen Iranian funds in return for Iran’s compliance. A four-month extension to talks on Iran’s nuclear ambitions was agreed on Friday between Iran and world powers. The talks are aimed at persuading Iran to limit its nuclear programme in exchange for the lifting of sanctions”.

“Tempering Iran’s power”


An opinion piece in the Washington Post by Ray Takeyh discusses the points of contention in the Iran talks, which mostly relate to the number of centrifuges that Iran should have and the level of enrichment.

He opens “The Iran nuclear negotiations have reached a stalemate. The White House has asked for an extension, and Congress should give it additional time. But the latest stumble offers an occasion for some searching questions. Is the best we can hope for a series of interim agreements that curb Iran’s program but do not resolve the fundamental issues? Is our coercive strategy sufficient for dealing with a revolutionary state on the march in the Middle East? Can Iran’s nuclear ambitions even be affected by diplomatic mediation? The international community has been negotiating with Iran over its illicit nuclear program not for six months but for 11 years. Along the way a variety of justifications have been offered for the lack of progress in the talks. Initially, when Germany, France and Britain led the discussions, it was suggested that only U.S. participation could produce a resolution. When the United States joined the so-called P5+1 delegation under the Obama administration, it was claimed that only bilateral talks could break the deadlock. However, Iran’s dogmatic negotiator at that time, Saeed Jalili, usually abjured such encounters and was thus easily blamed for the impasse. If only Iran were governed by a pragmatic president and represented in the bilateral talks by a subtle diplomat who spoke the language of moderation. Then came the election of Hassan Rouhani and the appointment of Foreign Minister Mohammad Javad Zarif, which yielded a modest interim agreement — and yet another deadlock”.

He goes on, later in the piece, “It is indisputable now that in the last round of talks the United States did not possess sufficient leverage to impose a settlement. The existing sanctions regime has been effective in isolating Tehran from the global markets, but more obviously needs to be done. It is time for the White House and Congress to come together and craft a bipartisan sanctions bill that further stresses Iran’s economy. The notion that congressional action would derail an accord is no longer a suitable argument. What prevented an agreement in Vienna was not congressional initiative but Iranian truculence”.

It must be noted however that there will almost never be a time when America will have enough leverage to force Iran to change its behaviour, short of going to war. Only through talks can America, and the rest of the international community, through carrots and sticks push Iran in the direction of renouncing its nuclear programme. This can only be done if Iran wants to make concessions however.

He argues that “In considering its response, the United States would be wise to complement its sanctions policy with a determined regional strategy of pushing back against Iran and negating its considerable recent gains. This requires a reengagement with the region and its many crises. By aiding reliable rebels in Syria and helping rehabilitate an inclusive order in Iraq, the United States could go a long way toward blunting Iran’s surge. An Islamic Republic that is isolated in the region and economically exhausted at home may yet prove to be a constructive arms-control interlocutor. In the absence of such measures, the White House should be asked to explain why it perceives that the next four months will be different than the past six or, for that matter, the preceding 11 years”.

Others have suggested a regional track to the Iran talks and though sensible it is doubtful that such a strategy can convince the Saudis and others, that the deal is secure and will be stringently met. His point that a regional track that engaging with regional issues is certainly well made, but as Israel refuses to see logic and carries on bombing Palestine there is little hope for a long term peace settlement unless the entire political class of America have a 180 degree turn and threaten to ditch Israel, and do it if necessary to force them to agreeing peace with the Palestinians. His point about the rebels in Syria is well made and should be enacted but as ever there are problems with Congress getting in the way.

He ends the piece, “The Obama administration faces a fork in the road. It can reengage in the Middle East with an eye toward tempering Iran’s power, but this would require making a substantial commitment to a region whose conflicts and tribulations it would prefer to leave behind. Or it can dispense with deadlines and grandiose objectives and settle for a diplomacy of incremental steps and limited gains. Interim agreements would thus no longer be a pathway to a final accord but an end in of themselves. Such are the travails of a superpower in an age of retrenchment”.

“Islamist militants attacked an army base”


Islamist militants attacked an army base in the eastern Libyan city of Benghazi on Monday, triggering fierce clashes involving helicopters and jets that killed at least seven people and wounded 40 others after days of escalating violence. Benghazi’s clashes followed a week of fighting between rival militias for control of Tripoli International Airport in the capital that has prompted the North Africa country to appeal for international help to stop Libya becoming a failed state. Tripoli was calmer on Monday, but in Benghazi, militants linked to Islamist group Ansar al-Sharia attacked an army camp and were repelled by troops and forces loyal to renegade retired general Khalifa Haftar, who has been carrying out a self-declared war on Islamist fighters, security sources said”.


Inside the talks


A piece from Foreign Affairs gives a sense of the talks, “a distance of only 100 feet, the width of a courtyard and a narrow street, separates Vienna’s Palais Coburg hotel — where top diplomats from China, France, Germany, Russia, the United Kingdom, and the United States spent two weeks earlier this month negotiating with Iran over its nuclear program — and the Vienna Marriott hotel — where almost all of the journalists covering the talks were staying. However, for the duration of the summit, the distance between speculation and fact, rumor and reality, to say nothing of the gaps between the negotiating parties, was far greater than could be bridged with a simple stroll. Since February, the Coburg has served as ground zero for the intensive nuclear talks between Iran and the five permanent members of the United Nations Security Council plus Germany (P5+1)”.

He makes the humourous point that “Bored journalists were quick to seize on any sign of movement in the talks, however flimsy. When Hossein Fereidoun, the brother and top aide of Iranian President Hassan Rouhani, arrived at the Coburg on July 11, journalists speculated about his presence. Some said it was a signal that Tehran no longer trusted Iranian Foreign Minister Javad Zarif to lead the negotiations, others that it showed Tehran’s desperation to close a deal before the July 20 deadline. The truth, perhaps unsurprisingly, was something else entirely. Fereidoun, who is an old friend of Zarif’s dating back to the years he spent as his deputy at the Iranian Mission to the United Nations about a decade ago, was sent to Vienna as a proxy for Rouhani (and, by extension, the Supreme Leader Ali Khamenei). The idea was to spare Zarif the inconvenience of having to travel back to Tehran to brief his superiors”.

He makes the point that “During lunch on the day he arrived, Fereidoun offered a reminder that what was being left unsaid during the negotiations could prove to be just as important as the technical details being discussed. He told me that the West must recognize that it will never have a better opportunity to clinch a nuclear agreement than the present moment, with his brother in the presidency and Zarif as the foreign minister. It appears that U.S. President Barack Obama and Secretary of State Kerry agree with this view, which is why they spent considerable political capital in extending the negotiations for another four months. Another unspoken reality at the negotiations was that, although Tehran’s official interlocutor was the P5+1 group, the real conversation was between the United States and Iran”.

Unsuprisingly he points out that “The negotiations in Vienna have already revealed there is no deal that Netanyahu, at least some members of the U.S. Congress, and Iranian hardliners would not consider a bad one. And the Iranian government has insisted that, in the absence of a deal, it will remove the brakes on uranium enrichment and proceed with the development of heavy-water reactors and newer generation centrifuges. Inspections of Iran’s facilities would revert to the standard IAEA format (rather than the far more intrusive inspections under consideration, and already implemented under the interim agreement), and sanctions on Iran would be further strengthened by at least the United States and France, if not by other allies. At some point, the West will reach a breaking point — the point at which Obama (or his successor) or Netanyahu (or his successor) decide that Iran is close to having a deliverable bomb if it wants one. At that point, they may be forced to make good on their promise to use “all options” to prevent Iran from ever taking that step. For this reason — the increased likelihood of war absent a deal — negotiators in Vienna (if not the policymakers they report to) have quietly started to recognize that a so-called bad deal has to be better than the alternative. It is heartening that both the Iranian and U.S. governments have said publicly that they would like to agree on a deal. But over the next four months, both countries probably understand that reaching a comprehensive agreement will involve painful sacrifices. Obama, who has already conceded more than Congress or U.S. allies want him to, and Rouhani, who has conceded more than his Parliament or other power centers in Iran might want him to, will certainly need to yield even more in order to make a deal. Bottom lines may need to change, and red lines may have to move”.

Interestingly he goes on to write “Above all, both sides should encourage their negotiators not to lose sight of the bigger picture. Obsessing over technical details — breakout times and centrifuge counts — is pointless and even counterproductive if it alienates the other side. What ultimately matters isn’t how close (months or years) Iran is to a bomb, but whether there is an incentive for it to never move in that direction. The Iranians, for their part, do understand that Iran’s so-called breakout time has a firm hold in the political discourse in Washington, and they tried, unsuccessfully, to address it in Vienna by promising to reduce their production of enriched uranium, if not the total number of centrifuges. Contrary to some reports, Iran did make a sincere effort to close the gaps between its position and that of the United States, and that surely is reflected in the Obama administration’s confidence in continued diplomacy”.

Yet this is a somewhat naive comment, “obsessing” over the time it could take Iran to develop a bomb is not unimportant and shows the level of mistrust between the two sides. He is correct to say that the incentive for Iran to never move to a bomb is important but if Iran wants a bomb it will get a bomb hene the “obsessing” over supposedly trivial technical details.

He concludes, “In sending Zarif, who has lived a greater portion of his life in the United States than in Iran, Tehran does not have a haggler at the bargaining table, but rather someone accustomed to paying retail. Even so, he demands respect for his country and Iran’s humiliation, which some on Capitol Hill seem to want, is not a tactic that often works in negotiations, and especially not with a people as famously proud as the Persians. Demeaning Iran will certainly not convince the Iranian public, much less the country’s leadership, that it won’t ever need to develop the capability to produce a nuclear weapon. Only a deal, and a subsequent détente, can accomplish that goal. There is a formula hidden away, waiting to be discovered during the next marathon session at Coburg or any other location that the parties choose for further talks. Obama and Kerry and Rouhani and Zarif recognize as much, otherwise they would not be agreeing to continue negotiations. As for the precise shape of the final agreement, that will be for the negotiators, ensconced in the confines of their next hotel, to figure out”.

Worse than Genghis Khan


The head of Iraq’s largest church said on Sunday that Islamic State militants who drove Christians out of Mosul were worse than Mongol leader Genghis Khan and his grandson Hulagu who ransacked medieval Baghdad. Chaldean Catholic Patriarch Louis Raphael Sako led a wave of condemnation for the Sunni Islamists who demanded Christians either convert, submit to their radical rule and pay a religious levy or face death by the sword. At the Vatican, Pope Francis decried what he said was the persecution of Christians in the birthplace of their faith, while U.N. Secretary-General Ban Ki-moon said the Islamic State’s actions could constitute a crime against humanity. Hundreds of Christian families left Mosul ahead of Saturday’s ultimatum, many of them stripped of their possessions as they fled for safety. They formed the remnants of a community which once numbered in the tens of thousands and traced its presence in Mosul to the earliest years of Christianity. People of other faiths in the once diverse city, including Shi’ites, Yazidis and Shabaks, have also fled from the ultra-conservative militants, who have blown up mosques and shrines and seized property of fleeing minorities”.

Francis, Nicora and the IOR

The Council of Cardinals has finished another session with next meetings set for mid September and early December and early February. The report notes that “With regard to the themes considered, as well as those indicated in recent days (the Governorate, the Secretariat of State and the Institute for the Works of Religion), the Council resumed its reflections on the dicasteries of the Curia. The Laity and Family were studied in particular depth, especially in terms of the contributions and roles that should be assumed by laypeople, married couples and women. Decisions were not made, but more detailed proposals were offered that will subsequently be inserted into the overall framework of the new configuration of the Curia”.
The press release goes on to mention that the Council focused on “the dicasteries that have so far been studied less thoroughly. Other themes on which there has been an exchange of opinions during the meetings include the nunciatures and their work, and the procedures for the appointment of bishops. Aside from the contribution of the Commission of Cardinals for the Supervision of the IOR, heard on Tuesday and Wednesday, there was no further participation from entities external to the Council”.

In a related piece the restructing of the so called Vatican bank, formally known as the Institute for Religious Works,  and the internal struggles behind it are revealed, “the amount of gossips, rumors, even the leaks anticipating the data of the balance sheet of the Institute for Religious Works (the so called “Vatican bank”) show that there had been a war behind these decisions. The roots of this war are in old stories. The same old stories that brought the Vatileaks scandal. That initially supported Pope Francis’ election. Those in these old stories, now that Pope Francis is carrying forward the work started by Benedict XVI, are playing their last hand. Perhaps, this is the gang war that Pope Francis has been trying to prevent when he had warned repeatedly about the perils of gossiping, asking all to repudiate it.

He goes on to note that Cardinal Parolin is now a member of the Council of Cardinals but “no document has been issued yet to certify the Secretary of State’s membership in the group. In the meantime, Cardinal Parolin is trying to keep his position via his being present. Parolin’s activism is a reaction to the push to have reform engulf, it seems, the very Secretariat of State, that could be destined to be divided into two Secretariats: the Secretariat of State proper, i.e. for diplomacy, and the Secretariat for the Life of the Church, i.e. the general affairs. There would also be a General Secretariat of the Synod of Bishops; and there is already the Secretariat for the Economy, led by its proactive prefect, George Pell”.

The writer adds that “This ‘four secretariats’ structure is just a hypothesis, since the fifth meeting of cardinals have not produced a draft for Curia reform. Widely discussed is the streamlining of the Curia (bringing the Pontifical Council for Laity and Family together; Justice and Peace with Cor Unum and Migrants; and the Congregation for the Divine Worship with that for the Cause of Saints). Also in this case, we are dealing with hypotheses”.

The vision for the new Curia has been speculated before and the writer’s comment about amalgating Divine Worship and Saints is somewhat ironic as the old Congregation for Rites did exactly this job. On a side note the prefect of these two offices, Cardinal Amato is 76 and set to retire and at the same time Cardinal Canizares Llovera is expected to be appointed to Madrid. If both of these moves, Amato’s retirement and the transfer of Canizares Llovera,  were to occur at the same time Francis could begin the consolidations at the very heart of the Curia.

Interestingly he goes on to metion that “Pope Francis went back in part to the old draft for a Curia reform written by Cardinal Attilio Nicora shortly before John Paul II’s death. The draft proposed the establishment of a Council of Cardinals, and a brutal amalgamation of dicasteries. The Council of Cardinals was intended to consolidate positions that had crystallised under the administration of the Secretary of State, Cardinal Angelo Sodano, who had his (mostly Italian) interests to maintain. Nicora’s draft was in fact a way to protect this power. Pope Francis went beyond Nicora’s draft. Angelo Sodano had managed the pre-conclave meetings in a way that led cardinals to speak of management, more than of the substantial issues. The search for a missionary Pope, able to speak to the people, seemed to be a natural consequence. The Pope acts as a front man, while the Roman Curia manages its re-organization, dismantling piece by piece the reform of collegiality carried on by Benedict XVI. Pope Francis noted there was a wish for discussion, the same kind of discussion he was accustomed to, from the Jesuits’ General Congregations. In the end, the Superior General there makes the decision. But during the Congregations, everybody can voice concerns”.

He rightly points out the Francis is carrying on the work of Pope Benedict, “For what concerns the economy, Pope Francis has continued, with no rush, Benedict  XVI’s work. The Vatican’s Financial Intelligence Authority strengthened its internationalprofile and issued new statutes. The Vatican first amanded its first anti-money laundering law, and then – under Pope Francis – changed it with a brand new one, which positioned the Holy See among the most advanced countries in the world in this regard. This could not have happened without the enormous effort carried out by Vatican officials“.

He writes about the too close relationship between Italy and the Church,”The Curia of the old days is tied hand in glove to Italy. And Italy more than once has used the IOR as a scapegoat.  Italy views the Vatican as a subdivision that should manage every international relationship on the basis of its trusted relations with Italy. This vision contrasts with the international vision, people aiming for the Holy See to be present in the world and able to send money to missions through her own international sovereign channels provided by the IOR. Among those who support this second vision, there are some who are supporting a more speculative IOR, in order to generate more profits, and to have the IOR fully join the international banking system. On the other hand, there are people who wish the IOR to keep its characteristics of a sovereign institute, with funds at the Pope’s disposal. Hence, the story of the territorial factions. They are referred to as “The Americans,” “The Germans,” “The Maltese,” and a power struggle ensues. Reality is far more nuanced. The Council of Superintendency of the Institute backed and supported the international turnaround and upholding sovereignty. It also favoured the process of reform within the Institute, and making the IOR in some small ways a bank, even (perhaps) giving it the possibility of lending money. An approach that, it seems, was taken at the request of the Pontifical Commission for the IOR, chaired by Cardinal Raffaele Farina. The process of reform has almost come to an end. The members of the board will probably tender their resignations, in order to support and facilitate a generational change. The Secretariat for Economy should take the lead of the management of the assets, to be entrusted to another body, the Vatican Asset Management. Surely, the president will change: Ernst von Freyberg has accomplished his tasks.  He operated as a full-time president although he was not one under the statutes.  Now that the statutes foresee having one, the job will not go to him”.

He concludes discussing the new leadership of the IOR, “Who might be von Freyberg’s successor? Two names are often mentioned: that of Jean Baptiste de Franssu, and that of Francis X. Zahra. They are both members of the Council for the Economy, they were both part of the (now dissolved) Pontifical Commission of Reference on the Economic-Administrative Structure of the Holy See, and they both were – according to unconfirmed rumors – in the set of three names that the Spencer&Stuart head-hunting agency had given to the Secretariat of State when the latter was searching for someone to replace Gotti Tedeschi as president of the council of the IOR, who got a no confidence vote by his own council. These names would represent a line of renewal within continuity, but at the same time they would not act as the hawks, the latter aiming of making the IOR a speculative reality, as they would like to do with many other realities. For example, the widely gossiped commission for communications  would also be tasked with reviewing the Vatican Television Centre statutes, to make it a more commercial and profitable activity”.


Fighting for Tripoli’s airport


Clashes between rival Libyan militias fighting for control of the capital’s international airport killed 47 people over the last week, Libya’s Health Ministry said, as violence in an eastern city killed five. The weeklong battle in Tripoli began when Islamist-led militias — mostly from the western city of Misrata — launched a surprise assault on the airport, under control of rival militias from the western mountain town of Zintan. The clashes resumed Sunday after cease-fire efforts failed. On Monday, the burned-out shell of an Airbus A330 sat on the tarmac, a $113 million passenger jet for Libya’s state-owned Afriqiyah Airways destroyed in the fighting. “This was the pride of the Libyan fleet,” Abdelkader Mohammed Ahmed, Libya’s transportation minister, told journalists at the airport. “This airplane used to fly to South Africa, Bangladesh and China.” Inside the airport, closed since last Monday, the fighting left holes in the ceiling and scattered bits of its roof strewn across the floor”.

“Pressure and incentives”


A report in the New York Times notes that America and the rest of the P5+1 mentions that they still offer Iran relief and at the same time threats. It opens, “Behind President Obama’s decision on Friday to extend the Iran nuclear negotiations for four more months is a calculation that the administration has the mix of pressure and incentives just about right: That by keeping the most damaging sanctions, but giving Tehran a taste of what access to its overseas cash reserves might mean, a deal is possible. Congress, and some nuclear experts pushing for a harder line, strongly disagree. It was overwhelming sanctions, and the pressure of covert action against Iran’s nuclear program, that brought the country to the table, they argue. To get a final deal, they contend, the formula is simple: More sanctions, more pressure, and behind it all the lurking threat of military action”.

The article continues, “Iran gets slightly more relief under the negotiation extension: It will have access to $2.8 billion in assets that are held outside the United States, a small fraction of what is frozen. But in the House, more than 300 members have already signed a letter opposing a lifting of American sanctions unless an agreement curtails Iran’s missile development and stops its support for Hamas and other terror groups — issues that are not even on the table in the nuclear negotiations in Vienna. ‘There’s an astonishing, visceral opposition to any kind of deal, and it’s not just among the Republicans,’ said a key administration strategist who insisted on anonymity because of the sensitivity of the negotiations.’And I’m not sure there’s a plan yet to deal with it.’ It may not be an issue. There is no guarantee that a deal will be reached in the four extra months of negotiations”.

This “visceral opposition” is borne more of fear and irrationality than any actual thoughts at what a collapse in the talks would mean.

The piece finishes, “The past week seemed like the moment. The top three American diplomats were all in Vienna simultaneously: Secretary of State John Kerry, the deputy secretary, William J. Burns, and the undersecretary of state for political affairs, Wendy Sherman, who has also been the lead negotiator. Foreign ministers from Europe flew in, briefly. So did the brother of President Hassan Rouhani of Iran, who attended sessions with Mr. Kerry, then flew back to Tehran, presumably to report directly to his brother, who was elected on a platform of getting the oil, gas and other sanctions lifted. There is no question significant progress was made, as one administration official put it in a background telephone call with reporters late Friday night, on issues that “get at fundamental pathways to a nuclear weapon.” Among them is an understanding about how Iran’s soon-to-be-finished heavy water reactor near the town of Arak would be modified to reduce its output of plutonium, one of the two fuels that Iran could use for a weapon. There is discussion about turning the giant underground facility called Fordow — built under a mountain outside the holy city of Qum — into some kind of research and development facility. To the Americans, and the Israelis, that would be an improvement over its current status as Iran’s secondary location for enriching uranium, in a place so deep that the Israelis fear they could not bomb it; even some American officials wonder if their biggest bunker-busting bomb, built for the job, could penetrate the facility”.

It ends, “that leaves unresolved the central conundrum that has hung over the talks: Can Iran’s supreme leader be persuaded to give up the country’s hopes of building an industrial-scale enrichment capacity, ostensibly to produce fuel for its one working reactor and a series of future reactors for which Iran has not even broken ground? Ayatollah Khamenei and the Iranian military have opposed any agreement that dismantles existing facilities and does not allow Iran, in the near future, to produce as much as it wants. American officials say the rationale that Iran needs to produce its own fuel is fanciful; there is plenty on the market and ways to assure Iran of continued supply. On this point, Iran’s foreign minister, Mohammad Javad Zarif, says Iran cannot budge for reasons of national security and national pride. Iran, he said, has been blocked from getting fuel for its reactors for 20 years. Russia may be its supplier now, he said, but cannot be trusted to remain so. Even raw materials are hard to come by”.

It finishes, “Zarif, in an interview, argued that the sanctions Congress is so proud of have been counterproductive. Before they began in earnest, he said, Iran had 200 centrifuges installed in its facilities; now it has 22,000. More pressure, he contended, will only drive Iran’s leadership to more defiance. Some in the Obama administration agree, saying there is a “sweet spot” in sanctions where the continuing, gnawing pressure of oil, gas and financial sanctions, which they vowed Friday night to continue, would take their toll, and the prospect of relief would create political pressure in Tehran for a deal. But Gary Samore, President Obama’s former top adviser on eliminating weapons of mass destruction, took a harder line on Friday night. Now the president of United Against Nuclear Iran, an advocacy group, Mr. Samore and the organization’s chief executive, Mark D. Wallace, argued that to get the leverage the administration needs it must “make clear that Iran remains closed for business and that the uncertainty surrounding these nuclear negotiations makes the business climate in Iran far too risky” for Western capital to re-enter”.

“Business elite is just in horror”


Russia’s richest businessmen are increasingly frantic that President Vladimir Putin’s policies in Ukraine will lead to crippling sanctions and are too scared of reprisal to say so publicly, billionaires and analysts said. If Putin doesn’t move to end the war in Ukraine in the wake of last week’s downing of a Malaysia Air (MAS) jet in rebel-held territory, he risks becoming an international outcast like Belarus’s Aleksandr Lukashenko, whom the U.S. famously labeled Europe’s last dictator, one Russian billionaire said on condition of anonymity. What’s happening is bad for business and bad for Russia, he said. “The economic and business elite is just in horror,” said Igor Bunin, who heads the Center for Political Technology in Moscow. Nobody will speak out because of the implicit threat of retribution, Bunin said by phone yesterday. “Any sign of rebellion and they’ll be brought to their knees.””

“Nowhere near the point of saying yes”


An blog post notes increasing Congressional opposition to President Obama’s welcome but belated plan to arm the Syrian rebels.  It opens, “The Obama administration’s new plan to break the stalemate in Syria is running into bipartisan opposition in Congress, raising fresh doubts about whether military aid promised to the Syrian rebels will arrive anytime soon, if at all”.

It continues, “The White House last month announced plans to provide moderate members of the Syrian opposition with $500 million worth of weapons, equipment, and training. Freeing up the money requires authorisation from Congress, but after classified meetings this week, key lawmakers speaking toForeign Policy — including many Democrats — remain deeply skeptical of the White House’s plan”.

As has been stated here before, the genius of the American system of checks and balances does, in theory work well, but when decisions need to be taken quickly and efficently the slow and cumbersome design shows its age in a world that seems to move ever faster and faster. This is particulary dangerous in the area of foreign affairs where “secrecy and dispatch” are all that is necessary for an effective foreign policy.

The piece goes on to mention “That spells trouble for Barack Obama’s administration, which is trying to build support for the program as a part of the fiscal year 2015 defense appropriations and authorisation bills under consideration in the House and Senate. At issue is the degree to which the United States should try to aid Syria’s beleaguered rebels. The CIA is currently providing training and small arms to rebels in Jordan who have been vetted for potential ties to extremists while Washington allows Persian Gulf countries to provide anti-tank missiles. The new Pentagon program would supplement or replace the CIA program, which has been criticized as too modest to make an impact on the battlefield”.

The article adds that Marcy Kaptur (D-OH), “a member of the House’s Defense Appropriations Subcommittee, received a classified briefing on the program on Tuesday, July 15, from top Pentagon officials, including Deputy Secretary of Defense Robert Work and the vice chairman of the Joint Chiefs of Staff, Adm. James Winnefeld. Other influential Democrats expressed misgivings about the administration’s request as well. ‘It’s difficult for me to see this accelerating the end of the war in Syria,’ Rep. Adam Schiff, a member of the Appropriations and Intelligence committees, told FP in an interview. ‘I think the burden is on the administration to demonstrate why this is going to help the situation and not risk just dragging us in further. I consider myself among the skeptics.’ Republicans were even more critical. ‘I am not satisfied, convinced, or even confident that arming moderates in Syria is the right course of action or a dollar well spent,’ Rep. Tom Cole (R-Okla.) told FP on Tuesday after attending the same classified briefing as Kaptur. ‘Considering that the Department of Defense couldn’t explain how the funds for fiscal years 2013 and 2014 were used, it makes me feel very uneasy to give them even more money, especially since it isn’t clear how these supposed moderates are vetted,’ said Cole”.

This neatly illustrates the problem of the American system, minor issues over where the money for the programme comes from will inevitably lead to delays and partisan bickering when the grave consequences of doing nothing have become so stark for all to see. Congress as usual is unable or unwilling to see the bigger picture.

The report goes on to mention, “the Syrian opposition’s envoy to the United States, Najib Ghadbian, wrote a letter to congressional appropriators urging them to approve the program. ‘We are asking our friends in Congress to authorize and appropriate the proposed Department of Defense train and equip program for moderate vetted Free Syrian Army units,’ wrote Ghadbian. ‘The United States has real national security interests at stake as the Free Syrian Army continue to lead the fight against international terrorist elements like the Islamic State.’ A spokesman for the Syrian National Coalition, Oubai Shahbandar, called the Pentagon plan ‘crucial’ to combatting both President Assad and Sunni extremist groups in the region”.

Worryingly it continues, “even early supporters of the Syrian rebels in Congress are beginning to back away from demands that the Obama administration ramp up military support in the conflict. ‘It would’ve been a good plan two and a half years ago. I’m not sure it’s a good plan today,’ Rep. Mike Rogers (R-Mich.), the chairman of the Intelligence Committee, said in an interview. Citing a ‘whole host of problems’ with arming the rebels, Rogers said there had been an alarming influx of Sunni extremists into Syria and faulted the White House for having no clear plan on how to manage the future course of the conflict”.

It ends “multiple GOP aides accused the administration of purposefully botching the meetings with Congress because it never wanted to further intervene in Syria in the first place. ‘It doesn’t feel like the administration even wants this,’ said a congressional aide. Whatever the case, the shifting sands in the Syria debate is frustrating longtime backers of the rebels, such as Rep. Eliot Engel, the ranking member of the House Foreign Affairs Committee”.

In a damning indictment of the American system, “Many members of Congress, including those of influence, are nowhere near the point of saying yes to more military engagement in Syria. Even worse for the White House, members of the president’s own party are among those most reluctant to give Obama what he wants”.

Extending the talks


The United States, Iran, and five other major powers said late Friday that they would extend the high-stakes talks over Iran’s nuclear program for four months while negotiators try to close what both sides acknowledge to be major divides over several issues. Iran and the so-called P5+1 countries — the United States, Britain, Russia, France, China, and Germany — signed a deal in Geneva last November that effectively froze Iran’s uranium enrichment program in exchange for a modest loosening of the West’s punishing economic sanctions on Tehran. The two sides set a July 20 deadline for striking a permanent deal. It has become clear for weeks that the deadline would not be met and that an extension was likely; the Obama administration and the government of Iranian President Hassan Rouhani have both invested so much time and political capital that neither would want to walk away from the negotiating table and fully concede that the efforts had failed. Obama administration officials insist that the talks have made major progress that justified giving negotiators until November to pursue a final deal. In a statement, Secretary of State John Kerry said “the very real prospect of reaching a good agreement that achieves our objectives necessitates that we seek more time.” Still, Kerry and other administration officials acknowledge that major gaps remain. Iran, according to a new proposal put forth by Foreign Minister Javad Zarif, would be willing to maintain the current near-total freeze on its uranium enrichment program for seven years but then wanted the ability to resume larger-scale enrichment. The United States wants Iran to permanently dismantle major parts of its nuclear infrastructure and accept long-term limits on the amounts of uranium it can enrich”.

The case against Putin


An article outlines the blame of Putin to the events in Ukraine, “President Barack Obama pressed his case that the government of Russian President Vladimir Putin armed and trained the pro-Russian separatists responsible for downing Malaysia Airlines Flight 17 and needed to force the rebels to provide access to the crash site in war-torn eastern Ukraine. In laying out the administration’s indictment against Moscow, Obama and key members of his national security team have been pulling from a trove of classified intelligence. Among the most incriminating evidence against the separatists are images taken by U.S. spy satellites showing a plume of smoke rising from the separatist-held area where the missile was fired, officials said. The missile also was detected by the Defense Support Program, a constellation of Air Force reconnaissance satellites that sense the infrared signature of ballistic missile launches and nuclear explosions, Reuters reported”.

Importantly the piece mentions, “officials are also building their case against Putin with a mounting pile of evidence posted on social media, including posts by separatist leaders, tweets about the location of missile launchers, and YouTube videos documenting potentially incriminating conversations between the men who may have shot down the jetliner. Washington’s willingness to use Twitter and the Russian equivalent of Facebook to bolster its case against Putin is a signal moment in the history of social media, which is now taking its place alongside classified intelligence as an important source of information for world leaders”.

Interestingly the writer adds, “The public case against the separatists began to rapidly expand. On Friday, a day after the crash, the SBU published on its YouTube channel another set of intercepted phone calls between separatists in the east. In these conversations, the militants discussed the arrival and movements of Buk anti-aircraft missiles in the country’s east. The Buk missile system is an advanced, medium-range missile system capable of shooting down an aircraft traveling at 33,000 feet, the reported altitude of Flight MH17 before it crashed. Other reports on social media from ordinary Ukrainians as well as journalists said that Buk missiles were present in the area where the plane was shot down. The Ukrainian government and U.S. officials seized on these too, noting in their public statements reports of the missiles’ presence in eastern Ukraine. A video released by the Ukrainian Interior Ministry showed what appeared to be a Buk missile system transported by a truck toward the border with Russia. The missile system looked to be missing a missile, an indication that one had been fired”.

Crucially he writes “In the aftermath of the shoot-down, observers have flocked to the crash site and posted dozens of photos of the wreckage, which have been pored over by forensics experts and crash-scene investigators. Many of the bodies are scattered in fields of wildflowers that also contain macabre visual evidence that the plane was downed by a missile. In one photograph, a section of the plane’s fuselage is riddled with shrapnel. Other photographs from the crash site also show evidence of metallic tearing that appears consistent with shrapnel. The body of evidence, which anyone with an Internet connection can review, points undeniably toward pro-Russian separatists and their backers in Moscow, according to U.S., Ukrainian, and other European leaders. Those officials all have access to classified sources of intelligence, which they’ve also been using to bolster the credibility of the tweets and YouTube videos”.

It concludes, “following Russia’s invasion of Crimea in February, the United States pointed more imagery satellites at eastern Ukraine, which helped track a buildup of Russian forces along the border. That intelligence prompted officials to warn in March that a Russian invasion of eastern Ukraine could occur at any moment. After Malaysia Airlines Flight 17 went down, officials provided even more evidence from these earlier satellite scans to bolster their case that Russia was ultimately responsible for the shoot-down. But as impressive as spy photos and voice analysis may be, it’s social media that has helped build the public case against Russia and that has rallied world leaders to call for a thorough investigation of the shoot-down and consider imposing new sanctions on Moscow. Given the volume and the specificity of this publicly available intelligence, it’s likely that the case against Putin would be just as persuasive even if all the usual sources of state spycraft weren’t on the table”.

“Drone fired several missiles”


A U.S. drone fired several missiles at a sprawling compound in Pakistan’s northwestern tribal region bordering Afghanistan on Saturday, killing eleven militants, two Pakistani intelligence officials said. The officials said the strike happened in Datta Khel, a town in North Waziristan, where the Pakistani military has been carrying out a major offensive against militants since last month. They said most of the slain men were members of Tehrik-e-Taliban Pakistan, an umbrella group encompassing militant organizations across the tribal areas. The officials spoke on condition of anonymity because they are not authorized to talk to media. Tehrik-e-Taliban Pakistan has called for overthrowing the Pakistani government in order to implement its hard-line version of Islamic law and end cooperation with the Americans in Afghanistan. For several years now, Washington had pushed Pakistan to take action against militant groups operating in North Waziristan. After assuming office a year ago, Pakistan’s Prime Minister Nawaz Sharif tried to resolve the issue through negotiations with the militants and urged the U.S. to refrain from drone strikes during the peace process”.

Ashton’s legacy


Bruno Waterfield in the Telegraph writes about the legacy of Baroness Ashton, “‘Absent. And even when she’s present there is a sense of absence,’ is the damning assessment by a senior diplomat of Baroness Ashton of Upholland. Ahead of a meeting of EU leaders tonight expected to choose her successor – due to take over her post at the end of October – many in Brussels are assessing the legacy of the European Union’s first ever foreign minister. To be fair, reviews of Lady Ashton’s time at the helm are not completely negative and she has earned grudging praise for her deft handling of difficult talks over Kosovo and Iran’s nuclear programme”.

Some have argued that Ashton was central to the Iran talks but this is a highly contentious argument.

He goes on to write “‘A lot of people thought she would be a catastrophe, a train wreck, a disaster. But those fears did not materialise and she’s shown an unexpected degree of competence while chairing talks,’ said another Brussels diplomat. Nevertheless, arecent report by the EU’s auditors criticised her legacy – the European External Action Service – as riddled with bureaucratic in-fighting, red tape and missed meetings by Lady Ashton. One key problem has been Lady Ashton’s post, who is both the EU foreign minister or high representative and vice-president of the European Commission, two roles, one requiring her to be in Brussels, the other demanding international travel, that have been impossible to juggle”.

He makes the point that “She has missed over two-thirds of commission meetings, leaving Britain without a voice at key moments leading to resentment in Whitehall and fears that British influence has declined on her watch. Her political absence has been felt in Britain: at a time when her country is going through a debate on leaving the EU, Lady Ashton has not made one single television, radio or newspaper appearance to put the case for membership”.

He adds, “The Labour peer, 58, is famously thin skinned about public appearances and criticism, a lack of political character that most attribute to the fact that she has never been troubled by election to public office. She was deeply angered by press ridicule after footage emerged two years ago showing her and one of her most senior diplomats panicking before a crucial meeting with Serbia’s president because they do not know what he looks like became an internet hit. Her rise was meteoric: a 13-year journey of serial appointments from being Hertfordshire’s health authority chairman to the EU foreign minister via the House of Lords and the internal turmoil of the Labour Party”.

He closes, “Lady Ashton will not be under any pressure to find a new job too quickly. Generous “transitional allowances” mean that she will earn £400,000 at the taxpayer’s expense over next three years for doing nothing after her term at the end of 2014.


“Resumed after suspension”


The vote audit resumed after suspension for a few hours due to misunderstandings between representatives of the two candidates, an official said on Sunday. The audit was launched at the Independent Election Commission (IEC) headquarters in the presence of representatives of both runners, Afghan and foreign observers three days ago. The recount resumed at around 2:00pm, IEC spokesman Noor Mohammad Noor told Pajhwok Afghan News. The audit had been going well until Saturday afternoon. But it was suspended due to disagreements between the two sides. “Differences between the two camps surfaced over voter signatures and thumb impressions on ballot papers. One of the teams said only those votes are valid which have signatures and thumb impressions,” Noor said”.

Too big for sanctions?


Keith Johnson argues that Russia is too big to target with sanctions. He opens  “Calling the deadly attack on a Malaysia Airlines flight an ‘outrage of unspeakable proportions,’ President Barack Obama said Friday that the United States will dial up the pressure on Russia if it continues to support armed groups in eastern Ukraine. But when it comes to the energy sector — a key chunk of Russia’s economy and the major focus of the current American sanctions — that won’t be a quick or easy job to do so”.

Johnson makes the valid point that “The tools available to the United States, such as export bans on key energy-sector technology, will be of limited use if the European Union continues to shy away from putting tougher measures in place against Russia. Fresh sanctions looked unlikely Friday, July 18, despite the airliner disaster; EU officials said they hope to finalise the latest list of sanctioned individuals and firms by the end of the month, but had not yet decided whether to take any further steps in the wake of the latest escalation”.

As has been stated here before, EU foreign policy barely exists and as such any sanctions that are put on Russia will be mild. Of course the problem with this is that it feeds into Putin’s image of the EU, which is accurate up to this point that the EU can be pushed around as a result of their inability to agree on anything. Unless, the EU sees the reality of the situation and realises that Putin needs to be taught a lesson which back breaking sanctions would do. This would mean pain for Europe now but positives in the long run.

Johnson goes on to write, “Even if Europe gets on board, more-ambitious sanctions, including a full Iran-style embargo of Russia’s energy exports, seem far-fetched, as Obama himself said in May. Russia is the world’s third-largest oil producer and a major exporter of natural gas. Russia, in other words, may be too big to nail”.

Johnson’s characterisation of Putin as “too big to nail” seems absurd. Putin is far weaker than he seems and as such people should be wary of such sweeping generalisation. If the EU and US were to co-ordinate properly and quickly real sanctions could start to bite within weeks which would anger large chunks of the people Putin relies on to remain in power. Eventually it would become so bad that Putin would either be forced to the bargining table or, in extremis, would be overthrown and his fantasy would be revealed to be what it is.

Johnson goes on to mention, “Putin has been working to reduce his reliance on the West for energy revenues and is finding fresh allies in Asia. Moscow just inked a landmark natural gas deal with China; Beijing will invest more than $20 billion to help develop energy infrastructure in Russia’s Far East, and it has exchanged billions of dollars in bank loans for long-term supplies of crude oil”. This is true but others have noted that the deal is not in Russia’s long term interest.

He continues, “the big energy firms are gambling that the administration’s bark is worse than its bite. So far, at least, they’re right: Even as it rolled out this week a new slate of sanctions on Russian firms — including two big banks and two large energy companies — the Obama administration has underscored its willingness to keep raising the temperature if Putin doesn’t respond”.

He writes, “The steps outlined Wednesday were the toughest yet: They bar four Russian firms from tapping U.S. capital markets, prohibiting them from issuing new stocks or bonds. That will certainly sow uncertainty in energy and financial markets and increase those companies’ cost of doing business, but alone it will not strangle them. The administration’s threats to tighten its grip reflect how incremental the steps to date have been”.

He ends the piece, “Any talk of sanctions immediately raises comparisons to Iran, another energy state that has been getting hammered by Western economic measures for years. Taking a page from the Iran playbook to fully block Russia’s energy exports, which account for just over half of Moscow’s revenues, seems exceedingly unlikely, however. The use of tough energy sanctions in the Iran case has set an unhelpful precedent for other international hot spots, such as Russia. For years, the United States had sought to put severe pressure on Iran in order to force Tehran to scale back its nuclear development. And for years, Iranian energy exports were off-limits to sanctions: In a global oil market, removing more than 1 million barrels a day of oil would have had severe economic repercussions for everyone, especially the oil-dependent United States”.

He concludes “Russia is a different kettle of caviar. It produces about 10 million barrels of oil per day and exports more than 7 million, compared with Iranian pre-sanctions numbers of about 3.5 million and 2.5 million barrels a day, respectively. Russia’s exports of crude, and especially natural gas, are crucial to the global economy in a way that Iran’s never were. Obama administration officials acknowledged as much this spring. In an April event at the Atlantic Council, Amos Hochstein, a top energy official in the State Department, dismissed the notion of removing Russian oil exports from the global market. Obama himself on Friday hinted at the limits of applying Iran-style energy diplomacy to Russia even in the present crisis”.

Obama backs Biden?


Vice President Biden would be “a superb president,” President Obama said in an interview published Monday. “He has seen the job up close, he knows what the job entails,” Obama told The New Yorker. “He understands how to separate what’s really important from what’s less important. I think he’s got great people skills,” Obama said. “He enjoys politics, and he’s got important relationships up on the Hill that would serve him well.” But, the president said, “you have to have that fire in the belly, which is a question that only Joe can answer himself.” The question for both Biden and former Secretary of State Hillary Clinton, Obama said, is whether they actually want to run for president, something he described as a “pretty undignifying process.” In May, Obama said Clinton would be a “very effective” president”.


The missile that sank Putin?


An interesting article speculates that the missile that destroyed MH17 over Ukranian airspace may weaken Vladimir Putin’s position in Russia, perhaps fatally.

The writer begins, “The tragic loss of Malaysian Airlines flight MH17, probably destroyedby a missile on July 17 while it overflew the restive region of Donetsk in eastern Ukraine, evokes memories of the 1983 shoot-down of flight KAL-007. On Sept. 1 of that year, a Korean Airlines Boeing 747 en route from New York to Seoul strayed off course into Soviet airspace. A Sukhoi Su-15 interceptor fighter jet downed it off Sakhalin Island in the Russian Far East, killing all 269 passengers and crew aboard. As the world reacted with disbelief and indignation (except for the Chinese, who abstained in the U.N. vote to condemn the USSR), Moscow issued conflicting denials, claiming first that the Soviets had tried to “assist” the plane to a nearby airfield, and then that they had fired warning shots along the flight path. It was not until a week later that Moscow admitted the plane had been shot down — but blamed the pilots of the “spy plane” who, they said, knew they were flying over forbidden territory and did not heed the signals of the Soviet interceptors. Some of these claims were later exposed as lies: The world now knows, for instance, that the plane received no warning before the Soviets fired on it. But the Soviet belief that the plane was on a spy mission was probably genuine”.

Interestingly the parrells go further, “The Soviets’ clumsy and callous handling of the salvage operation further inflamed passions: They barred foreign search vessels from the crash area, and stripped the Japanese patrol boat Tsugaru of weapons before allowing it into the Soviet port of Nevelsk to pick up piles of shoes and random clothing items recovered from the search. In the meantime, wreckage and mangled body parts washed up on the beaches of the northern Japanese island of Hokkaido. Shocked relatives, assembled on ferry boats in the Sea of Japan, called out the names of their lost loved ones — as they are doing today in Amsterdam, where MH17 originated, and in Kuala Lumpur, its intended destination”.

He notes that the shooting down of the airliner provoked the worst relations between the West and the USSR for decades, he makes the crucial point, “In retrospect, the KAL-007 downing was the beginning of the end for the Soviet Union. Coming after the Soviet invasion of Afghanistan in 1979 and tightening Western sanctions in the wake of the December 1981 declaration of martial law in Poland, this senseless atrocity highlighted the moral bankruptcy of the Soviet system and deepened Moscow’s international isolation. It was largely to overcome this isolation, lessen the dangers of accidental war, and recover his country’s prestige on the global stage that Mikhail Gorbachev set out to change the underlying principles of Soviet foreign policy, leading to broad rapprochement with the United States, withdrawal from Europe, and the end of Soviet Communism itself”.

The author then compares Andropov to Putin, “Like in the early 1980s, Russia today faces international isolation and Western sanctions over its actions in Ukraine. There is a widening gap between Moscow and the West in terms of understanding the other side’s perspective and likely actions. And in some ways, things might even be worse for Putin”.

He argues that “What really undermined the Soviet position in 1983 were the regime’s blatant lies and unwillingness to cooperate in an international investigation. Putin’s record in this respect is far from reassuring. Memorably, his presidency started with deception in the August 2000 sinking of the Kursk nuclear submarine, which Moscow initially blamed on NATO while refusing foreign help in rescuing the crew. Putin then lashed out at a then-still-free Russian media for criticizing the government response and infuriated grieving families with his comment on the fate of the submarine: “It sank,” he said with a callous smirk. At a time when Russia’s relations with the West are at their lowest point since 1983, it is not surprising that Putin blamed the Ukrainian authorities for the disaster. The Russian media, in an attempt to shift the onus from Russia-sponsored separatists, has airedstories claiming that the Ukrainian air force downed the Malaysian airliner”.

He makes the vital point that “By refusing to acknowledge the possibility that the pro-Russian militias may be responsible for the disaster, the Russian president risks losing moral ground by becoming an apologist and an accomplice to the crime”.

He ends the piece,”If the investigation reveals that the separatists were responsible, only unequivocal denunciation of the perpetrators will save Putin from moral bankruptcy. Yet doing so will mean a drastic reversal for Russia’s support for the separatists, a prospect too painful for the Kremlin to contemplate. Accustomed to deception and disinformation, Putin evidently hopes to muddle through this latest setback. But this will only lead to a deeper crisis in Russia’s relations with the West”.

Of course, the problem is that this assumes a clear simple investigation, which may not be the case. There have been concerns expressed over the black boxes that were in rebel hands may have been tampered with. Putin needs to cut ties with the rebels and have their weapons supply dry up but there is no certainity that Putin would do this as the real world and his own mind seem to be increasingly detached.

Russian cover up?


Fears that evidence will be lost from the Malaysia Airlines flight shot down over Ukraine grew on Saturday amid widespread charges that the crash site had been corrupted. U.S. lawmakers fiercely criticized Russian separatist groups who are controlling access to the site, while reports from the ground suggested bodies and pieces of the aircraft had been taken from the site. There were also reports that the belongings of victims had been rifled through by people on the ground. “All you need to know about the character of Ukrainian rebels is the disgraceful way they are handling crash site, bodies,” tweeted Sen. Chris Murphy (D-Ct.). President Obama and other international leaders have called for investigators to be given unfettered access to the crash site, but a team from the Geneva-based Organization for Security and Cooperation in Europe on Friday was only given 75 minutes access to the site. “They did not have the kind of access that they expected,” said Thomas Greminger, the council chairman. “They did not have the freedom of movement that they need to do their job. The crash site is not sealed off.” Rep. Ed Royce (R-Calif.), the chairman of the House Foreign Affairs Committee, said it appears groups in Eastern Ukraine are working to cover up the crash site to make it more difficult to pin blame on Russian separatists for shooting down the plane”.

“An earlier-than-scheduled withdrawal”


A piece discusses the recent Chinese actions in the South China Sea when it removed the oil rig off Vietnamese waters.

It starts, “More than two months after China sparked a regional crisis with the dispatch of a billion-dollar deep-water oil rig to waters claimed by Vietnam, Beijing announced that the rig had finished its work ahead of schedule and was heading back to China. The big question now is: What does this really mean? Opinions are divided on how to read the move — as unexpected as the initial placement of the rig in disputed waters in early May — but few outside observers believe Beijing is ultimately backing down from its aggressive claims of maritime rights in the South China Sea. Indeed, the fact that foreign ministry officials said the move had been made for commercial reasons, reiterated their claims to the disputed waters, and left the door open for the rig to return suggests that the maritime battles between China and its neighbours are far from over”.

He goes on to write “Vietnamese officials warned China Wednesday not to send any more rigs or to repeat what Hanoi believes are violations of its exclusive economic zone, which extends 200 miles off the coast. Last week, Vietnam’s foreign ministry again demanded the withdrawal of the rig and on Wednesday reaffirmed the country’s claims to the disputed Paracel Islands. For the moment, China is ignoring Hanoi’s demands and painting the rig’s relocation as a purely commercial move. Early Wednesday, the two Chinese firms operating the rig said that they had finished drilling two exploratory wells in waters not far from the disputed Paracel Islands, about 120 nautical miles off the coast of Vietnam. The firms, China National Petroleum Corporation (CNPC) and China Oilfield Services Limited, said that the rig found some oil and gas prospects in the region, and was withdrawn ahead of the arrival of a typhoon. The companies had earlier said that the rig would operate until the end of the good weather season in mid-August”.

China has again shown its own incompetence and shortsightedness by again provoking Vietnam and with it, the rest of Asia.

He goes on to make the point that “Many Chinese users of Weibo, a Twitter-like microblogging service, criticized the withdrawal, Reuters reported, suggesting that Beijing had backed down to pressure from the United States and others. But Chinese Foreign Ministry spokesman Hong Lei told reporters the rig’s withdrawal was a purely commercial decision. ‘The oil rig is relocated in accordance with the relevant company’s plan of operation at sea. It has nothing to do with any external factor,’ he said. The United States ‘welcomes’ news of the rig’s withdrawal, State Department spokesperson Jen Psaki said at a briefing Wednesday, but she said she would not speculate on the reasons that drove Beijing to retire the rig ahead of schedule”.

He goes on to make the point that the rig may return to Vietnamese waters in the near future, yet he speculates that “there are several other possibilities. China may have felt that it sufficiently made its point by dispatching a rig to disputed waters and successfully operating it despite vehement protests and limited tactical responses from Vietnam and others. The United States, for example, repeatedly denounced Chinese actions as ‘provocative,’ but did not seek to force the issue. Or China may have decided to throttle back the controversial operation in light of the blowback it sparked around the region. Massive anti-Chinese riots gripped Vietnam in the days after the rig’s placement. The Philippines, Japan, and Australia have all announced closer defence ties with the United States, in part because of China’s aggressive and sweeping claims to big chunks of the South China Sea”.

He concludes, “‘Of course, moving the rig does not mean that China is backing down. However, it is clear that China underestimated the Vietnamese and international reaction to the deployment of the rig,’ Fravel said. ‘As a result, an earlier-than-scheduled withdrawal of the rig, from a tactical perspective, might be undertaken to reduce focus on the issue.'”

Business keeps quiet


Business groups are silent on whether they will continue to oppose sectoral sanctions against Russia now that a plane appears to have been shot down by separatists in Ukraine. President Obama and members of his diplomatic team are pointing the finger at rebel groups for the crash of Malaysia Airlines Flight 17, though they have yet to definitely attribute blame. If the separatists were responsible, members of Congress say the United States should punish Russian President Vladimir Putin with crippling economic sanctions. “Impose the harshest possible sanctions on Vladimir Putin and Russia,” Sen. John McCain (R-Ariz.) told Fox News on Friday. “There are much tougher sanctions we can issue,” echoed Sen. Kelly Ayotte (R-N.H.) on MSNBC the same day. Business groups such as the Chamber of Commerce and The National Association of Manufacturers (NAM) have resisted broad, sectoral sanctions against the Russian economy, arguing the step would backfire on U.S. businesses. Both groups have blanketed Washington with ads opposing unilateral sanctions against Russia. But the crash of the Malaysia Airlines flight — which killed nearly 300 civilians, including infants and one American — could change the calculus”.


The missile the ended Putin’s dream


An article argues that the tragic shooting of a civilian airliner over eastern Ukranian airspace will end Putin’s war on the new democratic aspirations of Ukraine.

It opens, “There is little room for doubt that a missile fired by separatist rebels brought down Malaysia Airlines flight MH17, killing 298 innocent people. It seems that the rebels didn’t realise they were targeting a civilian airliner. Indeed, intercepted telephone conversations between rebel commanders reflect their surprise and dismay: They presumably had thought it was a Ukrainian government military aircraft (that is certainly what rebel ‘minister of defence’ Igor Strelkov claimed). But it is hardly relevant whether the downing of MH17 was a deliberate atrocity or a murderous mistake. Regardless, this disaster poses the greatest challenge yet for the Kremlin in its months-long covert war in Ukraine, one likely to bring the war to a close soon — if not without more bloodshed. While there are undoubtedly grounds for resentment in eastern Ukraine — and while most of the rebel fighters are locals — the rebellion is, for all intents and purposes, a Russian creation. Since the insurgency began, Russia has armed, encouraged, facilitated, and protected the rebels while maintaining an official air of detachment. Strelkov is a known Russian intelligence officer; weapons and volunteers have been moved across the border into Ukraine on a constant basis; and Moscow has threatened retaliation if the Ukrainian government takes tough measures against a rebellion within its own borders. Despite all that, the Kremlin claims that Ukraine’s woes are simply an internal matter“.

He goes on to make the point “Of late, the Kremlin had been showing signs of impatienceand uncertainty when it came to eastern Ukraine. Separatist leaders, including Strelkov, have been grumbling about a lack of support from Moscow. Kremlin mouthpieces duly smeared them back. Eduard Bagirov, one of Putin’s main political managers, went further and publicly warned that Strelkov would be ‘squashed like a flea‘ if he didn’t come to heel. However, compelling evidence emerged at the same time that the Russians were upping the ante in Ukraine. After the fall of Slavyansk, until then the epicenter of the rebel military, Russian forces apparently launched short-range rocket strikes on Ukrainian positions, and the U.S. government stated that the rebels had started to receive more heavy equipment from across the border, including artillery and armored vehicles. This may well have included the Buk surface-to-air (SAM) missile system that apparently brought down MH17. Although the rebels subsequently claimed not to have any such systems, they incautiously had tweeted a picture of at least one in their arsenal at the end of June. The Buk may have been stolen from Ukrainian government stocks, as they and Moscow claim. Or it may have come directly from Russia. It makes little difference. The fact is that without Russian protection (and perhaps technical assistance), the rebels would not have been in a position to launch the fateful missile”.

He goes on to make the senisble point that “the shooting down of MH17 provides both a powerful symbol of the wider risks of allowing this conflict to continue as well as ample ammunition for hawks eager to see a tougher Western line. The Kremlin has a time-honored playbook for dealing with inconvenient truths and Putin quickly turned to it when MH17 came down. At first, there was simple denial (for the first few hours, the Russian media simply reported a mysterious crash, with no mention of a missile), while efforts were made to cover tracks (those social media posts by the rebels about having Buk SAMs and even having shot down a plane were hurriedly deleted). Then the Russians began introducing hints of conspiracy, such as the flimsy claim that two Ukrainian fighters had been shadowing MH17. That gave way to outright role-reversal, not least the bizarre claim that the Ukrainians shot it down, thinking it was Putin’s personal jet“.

He rightly goes on to note “For all of Strelkov’s efforts to assert tight central control over the rebels, they remain a loose and often undisciplined collection of forces ranging from local thugs to deserters from the government security apparatus to Russian volunteers. It is unlikely that Strelkov and what passes as the rebel government would be able to arrest and discipline those who fired the missile, even if they were willing to”.

He adds that “after seeing what the rebels are capable of, there is now a chance that Western countries will offer Kiev weapons, trainers, and even special forces to bring an end to the conflict. For Putin, the only thing more dangerous than backing away from a conflict in Ukraine would be losing one. The pressure will grow to further expand sanctions to punish Russia for continuing to incite the insurrection. This week, the United States extended its sanctions on Russia. The European Union, which on the whole has been more cautious, is now likely to toughen its line as well. President Barack Obama’s warning in his statement today that ‘time and again, Russia has refused to take the concrete steps necessary to de-escalate the situation’ was a clear statement of where he believes the blame lies. It also leaves the door open for further measures if Moscow does not quickly change its position”.

He writes that Moscow has little control over the rebels in Ukraine, “Even Strelkov — a retired Russian intelligence officer who should still be under Moscow’s thumb — is showing signs of recalcitrant independence. Besides, even if Strelkov were to follow Kremlin orders, there is no guarantee he could force a toxic and unruly rebel coalition to accept peace, especially as it is unlikely that Kiev will now offer amnesties, something President Petro Poroshenko had floated before as a way to bring an end to the stalemate. Putin could double down and try to help the rebels win quickly, before sluggish Western democracies can act to bolster Kiev. But turning the tide would require something much more dramatic than providing covert men and materiel, such as an air campaign or even an invasion by Russian troops. It is hard to see even today’s more belligerent Putin being willing to pay the political and economic price for this. Russians rejoiced at their near-bloodless reunion with Crimea, but a bloody war in eastern Ukraine would be very different. Polls show that 73 percent of Russians opposeintervention”.

He ends noting the only real option of Putin is “to back away from the insurgency. And mere rhetoric will not be enough. He will actually need to take concrete steps to close the borders and stop the supply of weapons if he is to convince the West that he is serious about distancing himself from the men who brought down MH17. In these circumstances, re-energised government forces will probably be able to win the war militarily, and sooner than would otherwise be the case. If the war ends sooner, however, it may also be bloodier. The rebels will have their backs to the wall, especially because most of them will probably have no option to retreat into Russia or receive asylum. Kiev may also feel more able to resort to the kind of artillery and airstrikes that won the battle for Slavyansk, regardless of the inevitable civilian casualties, when they move against the remaining strongholds of Lugansk and Donetsk”.

He finishes the article noting importantly that “Putin has increasingly framed himself as the guardian of Russians around the world and the master of post-Soviet Eurasia. No matter how the state-controlled media spin it, a reversal in eastern Ukraine will undermine him both at home and in Russia’s neighbours. The tragedy of Flight MH17 has reshaped the political context of the Ukrainian conflict. It also represents an unexpected and unwelcome challenge to Putin himself”.

“Even as foreign policy concerns dominated his agenda”


President Obama used his weekly address to the nation on Saturday to tout a growing economy and push his economic policies even as foreign policy concerns dominated his agenda. “Over the past 52 months, our businesses have created nearly 10 million new jobs,” Obama said. “The unemployment rate has fallen to its lowest point since 2008. “In fact, for the first time in over a decade, business leaders worldwide have declared that China is no longer the world’s best place to invest – America is,” Obama said.  Obama’s push on the economy comes as his attention is being diverted to a range of foreign policy issues, most notably the conflict in Ukraine. The White House has sought to keep a focus on the economy ahead of a midterm election where the economy is likely to be a driving issue.  Republicans have been pressing Obama to take on jobs bills approved by the GOP House. In his address, he urged support for several of his economic policies, including raising the minimum wage, that he said would improve things for the middle class”.

Francis tackles the finances


A story by John Allen notes the recent reform of Pope Francis in the sphere of Vatican finances, “Unveiling the most radical financial reforms to date under Pope Francis, the Vatican announced new leadership Wednesday and a sharply limited role for the troubled Vatican bank, a new office to administer its several billion dollars in investments, studies of its pension fund and media operations, and enhanced powers for a new secretariat for the economy. Officials say the aims of the overhaul include compliance with global best practices and legal standards, internationalization of leadership, and shared authority between clergy and laity. The changes strive to overcome a history in which perceptions of intrigue and shady practices vis-à-vis money management have repeatedly given the Vatican a black eye. ‘The ambition is to become a model of financial management, rather than an occasional source for scandals,’ said Cardinal George Pell of Australia, tapped by Francis in February as his new finance czar. ‘The pope has said clearly that he wants rapid movement,’ Pell said”.

In a related piece Allen writes that “As anyone who paid attention in history class knows, when Spanish explorer Hernán Cortés landed in what’s now Mexico in 1519, he promptly scuttled his ships, thereby leaving his men no choice but to press on in conquest of the Aztec empire. For centuries, that rash act has loomed as an object lesson in total commitment. This week Pope Francis scuttled some ships of his own, on two fronts which have been sources of scandal and heartache for the Catholic Church: sex and money. On Monday, Francis held his first meeting with victims of clerical sexual abuse [Pontifical Commission for the Protection of Minors]. Two days later, the Vatican announced a sweeping financial overhaul, including new leadership and a sharply limited role for the troubled Vatican bank. There’s such hunger in the world to believe Francis is the real deal that it’s tempting to confuse announcing a plan for reform with actually implementing it. To be clear, what happened this week was not reform itself — it was more like a prelude to action, an attempt to create the conditions for something good to happen. In both cases, the key effect was to commit Pope Francis definitively to a particular course of action.

Allen adds that “On finances, the Vatican unveiled changes on Wednesday that include tapping French businessman Jean-Baptiste de Franssu as the new president of the Vatican bank, creating an “Asset Management” office to coordinate several billion dollars in investments currently spread across several departments, launching study panels for pensions and media operations, and assigning the new Secretariat for the Economy control over purchasing and human resources. Several aspects of the strategy seem clear, including breaking the Italian monopoly on money management by bringing in international experts, and injecting a healthy dose of laity into what has heretofore been a mostly clerical governance structure. In political terms, however, the clear take-away is that the Secretariat for the Economy under Australian Cardinal George Pell is the Vatican’s new 800-pound gorilla. It absorbed a key chunk of the Administration of the Patrimony of the Apostolic See, or APSA, the new asset management office answers to Pell, and de Franssu at the Vatican bank is a Pell ally. Yes, there are checks and balances. Yes, as Pell insists, the financial experts who now sit on boards aren’t milquetoasts likely to just rubber-stamp whatever’s put in front of them. The Vatican’s anti-money-laundering watchdog unit under Swiss lawyer Renè Bruelhart also remains independent. Its new board includes a former Bush administration official named Juan Zarate who literally wrote the book on combatting financial crime, a 2013 volume titled “Treasury’s War,” and such figures probably won’t be inclined to gamble with their reputations”.

He goes on to make the point that “That said, there’s also no doubt about who’s in command, and his name is George Pell. As one proof of the point, there’s no role in the new structures for the Secretariat of State, which traditionally has wielded almost unchallenged authority over internal management. On the power of the purse, the pope has sidelined it in favour of Pell’s team. That’s the other ship down: Francis now has fully committed himself to the Secretariat for the Economy as his chosen engine of reform. If things go south, there will be no way to disassociate him from the outcome. In an interview with the Globe, Pell said the aim of the cleanup operation is to get the Vatican “off the gossip pages” due to financial scandals, making it “boringly successful.” Time will tell if that happens, as it will as to whether the pope cracks episcopal heads over the abuse scandals. What’s no longer up for grabs is whether those are the correct standards for evaluating success, because the pope has set the bar himself.



“Broke two weeks of political deadlock”


Iraq’s parliament on Tuesday broke two weeks of political deadlock to elect a speaker, a crucial first step toward forming a new government that Iraqi leaders hope will pull this divided country out of crisis. Sunni lawmaker Salim al-Jubouri received 71 percent of the votes. The session, broadcast live on state television, was attended by 273 of the Iraqi parliament’s 328 members, acting speaker Mahdi Hafidh said. The election of a new speaker appeared to bring Iraq one step closer to forming a government led by someone other than Nouri al-Maliki, the controversial prime minister. Widespread opposition to Maliki, a Shiite Arab, among Iraq’s Sunni Arab and Kurdish minorities, as well as some Shiite lawmakers, has been the main reason for the deadlock. “There is no chance for Maliki,” Jawad al-Jubouri, a spokesman for the Shiite al-Ahrar party, said Tuesday night. “All of the political blocs and the [Shiite] religious authority are telling him to leave.” But it remains unclear whether Maliki, who has ruled Iraq for eight years and whose State of Law party controls the largest bloc in parliament, will step down”.

Too late for Obama’s help?


James Traub argues that President Obama’s decision to do something meaningful in Syria is two years too late.  He begins noting that mass murder and atrocities do not always threaten Western interests, “Syria has always been a special case. The collapse of a country in the middle of an explosive neighbourhood automatically threatened American interests. But it wasn’t clear, at least at the outset, whether openly siding with the rebels was more likely to stabilise or destabilise that neighbourhood. As Hillary Clinton writes in her memoirs, ‘The risks of both action and inaction were high.’ It’s probably fair to say that those who believed in the moral case for supporting the rebels found good reason to assert that inaction would harm American national interests rather than otherwise. Clinton and other senior officials made that case to President Barack Obama in 2012, and Obama turned them down. He thought inaction better served American interests. Now, apparently, Obama has come around”.

The events of the “definitive collapse in January of peace talks with Russia and Syria proved beyond any doubt that diplomacy, by itself, was not going to solve the problem. And the stunning spread of the apocalyptic jihadi group known as the Islamic State of Iraq and al-Sham (ISIS) — and in recent days as just the Islamic State — has radically changed the balance of America’s national interest in Syria. President Bashar al-Assad’s war on his own people created a vacuum of authority that ISIS has filled”.

Traub asks whether what Obama has ordered is the correct course of action at this stage in the Syrian conflict, “There’s a very serious argument that it’s not. If the country is an impossibly fragmented state, as Syria scholar Joshua Landis has arguedin Foreign Policy, then helping the rebels is a formula not for regional stabilisation but for “civil war and radicalisation.” Rather than helping the rebels against Assad, perhaps, as Leslie Gelb recently proposed, the White House should work directly with Assad, along with Iran and Russia, to crush the extremists. Leaving aside the moral issue of openly siding with the author of unspeakable atrocities, or his entourage, the fact that until now Assad has more or less seen ISIS as an ally in his fight against the rebels suggests that he would not make for much of a partner in the war on terror”.

Traub goes on to mention, “In other words, the national-interest question has shifted from whether actively helping the FSA will do more good than remaining on the sidelines, to whether it’s the regime or the rebels who are most likely to blunt the advance of ISIS. Standing on the sidelines has ceased to be an option, just as allowing al Qaeda to flourish on the Afghanistan-Pakistan border in the aftermath of 9/11 was not an option. And even if you refuse to acknowledge the categorical moral difference between a regime waging war on its citizens and the rebels (who include terrible people who have done terrible things) fighting to bring that regime down, it’s clear that the rebels view ISIS as their mortal enemy — and the regime does not. Having said that, it’s hardly clear that the rebels have the capacity to do what the United States would like them to do. The moderate rebels, a vague phrase that may or may not encompass Salafist brigades that would fit many people’s definition of “extremist,” have barely sustained a stalemate against the combination of Assad’s artillery and air attacks and ground forces led by Hezbollah and Iranian officers. And now, they are simultaneously locked in combat with the battle-hardened jihadists of ISIS, who have begun to stream back from Iraq armed with missiles and even American Humvees. The Iraqi army melted away before ISIS battalions, despite in many cases greatly outnumbering them”.

He continues, “The Syrian rebel command remains hopelessly fragmented, with the Supreme Military Council enduring a meltdown literally as Obama was announcing the new program last week. American military planners will thus have to work with individual commanders, as they have been doing on a very modest scale for the last few years. What’s more, since the White House program envisions the Defense Department taking over the vetting and preparation of fighters from the CIA (though a covert effort is likely to continue, and perhaps even grow), producing freshly trained units is likely to take a year or more. Will Pentagon trainers pull entire units out of combat? Perhaps instead they’ll train Syrian trainers. All this will make the process agonizingly slow, while Assad continues his murderous assaults”.

He makes the excellent point, “Arming the rebels is only one element of what must be a much wider strategy involving pressing for political change in Iraq, regaining control over the Iraqi side of the border with Syria, sealing off the border between Turkey and Syria that jihadists have poured through — and, yes, working with Iran and Russia, both of which fear Sunni extremism. In all likelihood, Obama will wind up authorising limited airstrikes against ISIS forces in Iraq. At that point, logic would dictate that he do so in Syria as well. The president will find that he has to do far more today to stave off disaster in Syria than he would have needed to do in 2012”.

“Should be protected”


health minister Harsh Vardhan on Thursday said the rights of homosexuals, like everyone else’s, should be protected — a statement interpreted as his support for decriminalization of consensual homosexual act between adults.  “Everybody has human rights. It is the job of the government to protect them,” Vardhan said, in response to a question posed by journalists about his views on gay rights and decriminalization of consensual gay sex between adults. He was speaking on the sidelines of an event organized by the health ministry in the capital. The health minister declined to elaborate when asked whether he was diverging from the stand of his party. BJP had supported the Supreme Court judgment that upheld the validity of Section 377 of IPC, criminalizing homosexuality.

No insurmountable challenges


In an excellent article former National Security Adivser, Tom Donilon writes that America is not in decline.

Donilon writes “For all our optimism, Americans have always worried about our place in the world. It’s in our DNA, and it helps drive our renewal. To borrow from the great political scientist Samuel Huntington, “[T]he United States is unlikely to decline so long as its public is periodically convinced that it is about to decline. The declinists play an indispensable role in preventing what they are predicting.” When Kissinger wrote the above words in 1961, he did have some valid concerns. At the time, the U.S. economy was struggling to grow its way out of a recession. The Soviet Union had launched the world’s first artificial satellite, known as Sputnik, into orbit. The nation went into a panic, thinking we had fallen behind in technological innovation and would soon be outspent and outmatched by Moscow. And yet the decade and a half that was the subject of Kissinger’s fears — the period from the end of World War II until John F. Kennedy’s administration — is now seen by most historians as an era of unparalleled American economic growth and power. The decade that followed was even more prosperous, ending with the United States, not the Soviet Union, making the first lunar landing. And a mere 30 years after Kissinger wrote those words, the Soviet Union had ceased to exist entirely”.

He does correctly say that “We need to be humble about our ability to predict the future with certainty, but the evidence is that there has long been a tendency to underestimate America’s staying power. Today, the declinists are back, arguing that China will soon overtake us and that our gridlocked politics, long-term deficits, and decaying infrastructure will prevent us from playing the same global role that we have since World War II. We must take these concerns seriously and not assume that America will retain its primacy simply because declinists in the past have turned out to be wrong. Leadership is not something the United States has by happenstance — it is something we have had to earn over and over again”.

Donilon goes on to discuss five core strengths of America, the first being as he terms it “economic resiliency”, “The 2008 financial crisis tested our resilience and dealt a real blow to our international prestige and authority. Long-term challenges remain. But the fact is that no country comes close to matching our fundamental economic strength. The U.S. economy is built on a sound structural foundation, combining an entrepreneurial orientation, deep and efficient capital markets, highly experienced managers, and strong technological leadership. By every measure, the United States has the largest national economy in the world today, generating nearly $17 trillion in GDP. Our economy is nearly double the size of the second-largest, China’s. Our stock market capitalization is five times bigger than China’s. We lead the world in attracting foreign direct investment and are also the world’s largest single investing economy. An economy’s most important asset, however, is not its sheer size. China’s enormous population base will put it on a path to become the largest economy in the world at some point in the future. But history shows that size alone has not been the most important factor in determining the most powerful nation. At the peak of Britain’s global power, it was China that had the world’s largest economy, even though the country was then a middling power”

Donilon argues correctly that “A far better measure of an economy’s health is its quality and sustainability. We have the wealthiest large economy in the world, as well as one of the most diversified and technologically advanced. China has a very large economy, but it’s still a poor country. According to the World Bank, U.S. GDP per capita is $53,143; China’s is $6,807. That provides an important perspective. And when we look to our prospects for the future, it’s clear that the United States is well poised to maintain our leading position. Think about three aspects of our economy: innovation, energy, and higher education. First, the United States has an innovation edge over the rest of the world. Apple, Google, Facebook, Twitter — all are synonymous with American economic vitality today, but only one of these companies existed 15 years ago. The eight largest technology companies in the world by market capitalization are based in the United States. And when it comes to the next frontiers in extraordinary breakout technology, like 3-D manufacturing, artificial intelligence, nanotechnology, cloud computing, robotics, big data, and advanced material science, American entrepreneurs and companies are leading the way. The United States also leads the world in research and development, with a projected $465 billion in spending this year — that’s over 30 percent of all global R&D”.

He goes on to discuss the much mentioned resource boom, “For most of the past 40 years, the United States thought of itself as a nation dependent on oil and energy-related events beyond our shores. Now, as U.S. innovation and technology allow us to tap unconventional resources, nearly every prediction about our energy future has been turned on its head. Today, the United States is the No. 1 producer of natural gas in the world, and the price of natural gas here is a fraction of what it is elsewhere. The International Energy Agency projects that the United States will be the world’s largest producer of oil by the end of the decade. Unconventional energy will propel our economy and support American jobs — nearly 900,000 by next year will come just from shale gas”.

He makes the excllent point, via the Sage of Omaha, “Warren Buffett summed it up nicely in his latest letter to his shareholders: ‘I have always considered a ‘bet’ on ever-rising U.S. prosperity to be very close to a sure thing. Indeed, who has ever benefited during the past 237 years by betting against America? If you compare our country’s present condition to that existing in 1776, you have to rub your eyes in wonder. And the dynamism embedded in our market economy will continue to work its magic. America’s best days lie ahead.'”

The second point is the military strength of America, “And by historical measures, the current U.S. defense burden is not excessive as a share of GDP. As we wind down the war in Afghanistan, our military now stands on a more sustainable footing, without the kind of overstretch that some have worried about. We also possess a network of formal alliances with over 50 nations — the largest in history. Centered on our treaty alliances in Asia and Europe, this network has been built for over half a century on a bipartisan basis. No other country can look to anything like it. These enduring partnerships are a unique American strength, and we continue to deepen them across the globe today”.

He then correctly notes the lucky position of America geographically. He goes on to write about the power of American demography as opposed to that of China’s, “We are likewise blessed to have a bright demographic future. Our workforce is relatively young and still growing. Between now and 2050, the U.S. population is expected to grow by nearly 100 million people, expanding our workforce by 40 percent. Contrast that with the populations of other developed nations in Western Europe, Japan, and South Korea, which are aging and shrinking. By 2050, the median age in China will be nearly 50; in the United States it will be 40. A big part of the reason our demographic profile looks better than the rest of the world’s is that we are a nation of immigrants. Immigrants are both younger than the population at large and participate in the workforce in larger numbers than those born in the United States”.

As others have written, he correctly notes that there are problems however, “For all the tangible and intangible virtues of American primacy, we must also be clear-eyed about the liabilities side of our strategic balance sheet. Here are five big concerns.  Getting control of the U.S. long-term budget deficit is critical. America’s fiscal position risks undermining its overall economic foundation. Despite the general impression to the contrary, the fact is that in the last several years our deficit has dropped precipitously — in fact, faster than in any period since the demobilization after World War II. But in just two years, deficits will begin rising again, driven mainly by mandatory entitlement spending. As a result, we will have less flexibility to make useful investments in the future of our country, from science and technology to the national defence. In taking on our deficits, economic growth should continue to be our priority in both the short term and the long term. Former Treasury Secretary Larry Summers has estimated that an increase of just one-fifth of 1 percent in annual economic growth would address the projected long-term budget gap. Second, our infrastructure is falling into disrepair. Just five years ago, the World Economic Forum ranked our infrastructure ninth best in the world — today it’s 19th, and U.S. public construction spending as a percentage of GDP has plummeted to its lowest point in 20 years. Our overburdened roads and bridges create a situation that is environmentally, politically, and economically unsustainable”.

Donilon rightly points out the problems in the American education system, “Similarly, we need a wake-up call when it comes to primary and secondary education. Our universities are the best in the world, but we rank 14th on Pearson’s well-regarded education index for grade school. This is simply unacceptable. If we are going to prepare Americans for the jobs of the future and restore middle-class security, we have to out-educate the world. That starts with a strong school system that stretches from pre-K through college. Overcoming these liabilities will take time and difficult choices. But here’s the key point: None of these challenges is insurmountable”.

He ends with the anecdote, “I was recently reminded of a conversation I had with Henry Kissinger during my time in the White House. I asked him what he made of all this renewed talk of American decline. And I’ll never forget his reply. He said “Well, Tom, would you rather be national security advisor for any other country?” The answer was self-evident — of course not”.

China’s enoy for Afghanistan


China’s Foreign Ministry said on Friday that it had appointed a special envoy for Afghanistan, underscoring Beijing’s concerns that the withdrawal of NATO troops will leave a hotbed of militancy on its doorstep. Sun Yuxi, a former ambassador to both Afghanistan and India, has been named to the new position and will have “close communication” with Afghanistan and other relevant parties, the ministry said in a statement. “China and Afghanistan are traditional friendly neighbors. China pays great attention to developments in Afghanistan and is committed to deepening both countries’ strategic partnership, and so decided to appoint a special envoy,” it added.The envoy’s appointment will also help “ensure lasting peace, stability and development for Afghanistan and the region”, the ministry said, without providing further details”.

Gazprom, breaking even


Following on from the Russian-Sino energy deal an article from Chatham House argues that insiders win but Gazprom is a looser in the deal.

He begins the article, “Gazprom has been in protracted talks with the China National Petroleum Corporation (CNPC) over gas supplies for over a decade. The price range under discussion had been between $380 and $590 per thousand cubic metres(mcm). Now, Gazprom has refused to reveal any details of the 30-year $400 billion contract signed on 21 May, other than that Russia is to supply 38 billion cubic metres per annum (bcma) with an oil-basket price link (without specifying the proportion that oil and spot markets play in the formula). Alexander Novak, the Russian energy minister, confirmed an average price of $350/mcm, only hinting at links to fluctuations in the oil price. However, prominent experts say reaching $350/mcm and breaking even is the best case scenario for Gazprom. The minimal ‘take-or-pay’ requirements (gas volumes that China is obliged to take or pay for under any circumstances) and future price negotiation clauses (which remain undisclosed), are likely to be less favourable than in Gazprom’s long-term European contracts. This is because China already has multiple alternatives (such as piped gas from Central Asia, Myanmar, LNG supplies and its own coal and gas output) and so enjoys a strong bargaining position. Nor is there any indication of how much interest Gazprom will have to pay on the $25 billion loan China has agreed to provide. It is, though, likely to be higher than that which Russia used to get from international banks in 2013 as it has effectively been cut off from Western borrowing under the recent sanctions over Ukraine”.

The author goes on to argue that Gazprom will be left struggling to make a profit, “Simple arithmetic shows that Gazprom is left with a negligible profit margin for the $350/mcm price scenario even before tax. However, in order to push the deal through, Putin decided to suspend the Mineral Extraction Tax for China’s piped gas ($30/mcm from 2015), thus essentially depriving the Russian budget of at least $30 billion of revenue for the duration of the contract. It has been suggested Putin could go as far as to remove the other major tax – export duty – to help Gazprom break even. Further details of the contract may soon surface and it is probable that Russia will have to allow Chinese companies to enter parts of its upstream and midstream assets in eastern Siberia.The deal will also divert gas volumes and money from the previously announced Vladivostok LNG and Sakhalin-2 and -3 projects. In addition, the comparatively low price vis-à-vis current LNG pricing, the lack of capital and the need for expedited delivery of the maximum volume of piped gas all undercut the deal’s economic rationale for Russia. All these developments are contrary to Gazprom’s Eastern programme which, according to its plans in 2007, was meant to ensure that Russia plays an independent and predominant role in the Asia-Pacific region”.

This will have very serious implications for Putin and the long term stability of his regime with a huge proportion of the revenues needed to keep him in power, to pay off oligrachs and at the same time fund the decrepit Russian state that has had little or no modernisation since the end of the Cold War.

The writer concludes, “So why has Putin signed this contract? As a political opportunist with diminishing options, he needed the deal because creating an Asian outlet for Russian gas became his overriding geostrategic goal due to deteriorating relations with the West. Who benefits? As with recent energy deals, the contract with China should prove lucrative for Putin’s inner circle. Rosneft, chaired by Igor Sechin, plans to supply up to 18 bcma of gas to China and thus break Gazprom’s monopoly on piped export. Construction contracts will likely be picked up by companies controlled by Arkadiy Rotenberg and Gennadiy Timchenko or other similar sub-contractors who feel the heat of US sanctions in their European projects but are well-connected to Kremlin. The CEO of Summa Capital, Alexander Vinokurov (foreign minister Sergei Lavrov’s son-in-law), has stated that his company is planning to develop Yatek – a major gas asset in Yakutia that can benefit from export access to China. If necessary, Gazprom’s losses can always be nationalized – i.e. covered by the National Wealth Fund or through increased gas tariffs for the wider population – while profits will surely be pocketed by select producers and pipeline constructors. China is the real winner. By forcing on Gazprom the same price that it pays for Central Asian and Burmese gas, China has confirmed its status as a regional gas price setter. The latest annual figures show that these countries receive $355/mcm on average, practically the same price that Gazprom has now agreed to. The deal has also put China in a much stronger bargaining position against LNG suppliers in the United States, Canada, Australia and the Middle East, and opened doors for a relatively smooth transition to a more liberalized internal energy market. In sum, this deal is exactly what you would expect when an ex-KGB operative micro-manages energy policy – a desperate geopolitical gambit trumping all economic rationale”.



Obama’s excuses


President Obama made an unscheduled visit to the White House press briefing room Wednesday to address the nation on a host of foreign policy crises testing his administration. Obama’s visit was timed to coincide with the nightly newscasts and allowed the president to project the image that he is on top of a myriad of issues, including violence in the West Bank, nuclear talks with Iran and Russia’s interventions in Ukraine. “We live in a complex world and at a challenging time,” Obama said. “And none of these challenges lend themselves to quick or easy solutions, but all of them require American leadership. And as commander in chief, I’m confident that, if we stay patient and determined, that we will, in fact, meet these challenges.” The White House has come under heavy criticism throughout the year over their handling of world events”.

Never ending austerity


A piece in Foreign Policy writes that the EU and its institutions have remained wedded to the notion of austerity despite ample evidence to the contrary that it does not work. It begins, “Those of us in the reality-based community who have been calling for an end to Europe’s insistence on fiscal austerity, this month’s meeting of eurozone leaders should have been a cause for celebration: Italian Prime Minister Matteo Renzi finally managed to get Brussels and Berlin to adopt a more ‘flexible interpretation’ of rules regarding budget deficit targets. Finally, it seemed that a change of course had come after six years of disastrous budget cutting. Not so fast. Europe’s budget-enforcer-in-chief wasn’t going to let that happen. Shortly after Renzi wrenched this concession, Bundesbank President Jens Wiedmann slapped him down, saying that Italy’s insistence on a more flexible budget posed a threat to Europe’s economic recovery. But most of this is just posturing, anyway. Two much more important factors determine the future of Europe’s budgets. The first is the fiscal straightjacket countries in the eurozone adopted in 2012 via the Treaty on Stability, Coordination and Governance, that reduces the fiscal maneuvering room from “limited” to “don’t even think about it.” The second is the ongoing banking crisis that really lies behind Europe’s austere economics. A ministerial summit has little power to change either of them”.

The writer states correctly thay “The policy of austerity has twin goals: reducing growth in public debt and boosting investor confidence. On both counts, the eurozone’s attempts have been an unmitigated failure”.

He goes on to point out correctly that “Debt levels, far from collapsing, have ballooned under austerity, with countries that have cut the most seeing shrinking economies and growing debts. Greece, the poster child for austerity, went from 105 percent of debt to GDP in 2008 to 175 percent today, despite massive bondholder haircuts and a loss of nearly 25 percent of GDP. Over the same period, Portugal doubled its debts from 62 percent to 129 percent; Spain nearly tripled its debts, from 36 percent to 93 percent; and Ireland, hailed as the eurozone’s ‘success story’ for taking the pain and getting back to the markets first, almost quintupled its debt, from 25 percent in 2008 to 123 percent today. The confidence-inspiring powers of what was curiously called ‘expansionary fiscal contraction,’ the idea that budget cuts today make people spend more since they will have lower taxes in the future, haven’t been any better. European consumer confidence dropped precipitously during the crisis and has yet to return to positive territory. Investment expectations, as measured by business confidence surveys, similarly fell as austerity took its toll and are now barely positive. Growth rates track these declines but with a North-South twist: Germany is pulling ahead, France is flat-lining,Italy is stagnating, and the periphery remains in negative territory”.

He goes on to suggest that given the evidence, a halt would be called to austerity, “Few policymakers are willing to admit it, but the heart of Europe’s problems is not excessive government spending or the level of government debt. Instead, politicians focus on these factors since they are easy to blame and allow them to avoid the real issue: the banking crisis. The narrative put forward by the troika of the European Commission, the European Central Bank, and (before they jumped ship last year) the International Monetary Fund  that government spending caused the crisis — is flatly wrong. Eurozone debt-to-GDP was going down in the years before the crisis. The real problem was overlending from Europe’s big banks (going into the crisis) and how the downgrading of Europe’s sovereign debt blew up their highly leveraged model of funding (as the crisis deepened)”.

Indeed, as has been noted here before the poster child of the “European economy”, Germany is mired in vast bank debt with an aging population and slowing productivity.

He goes on to mention that “In December 2011 and March 2012, European Central Bank President Mario Draghi dumped nearly 1 trillion euros of public money into the European banking system in the form of Long-Term Refinancing Operations (LTROs). This, plus his promise to engage in outright bond purchases if needed, have kept European banks afloat. Indeed, as Oliver Wyman, leading consultant to the ECB, noted, such policies kept European banks afloat with “total state support approved for the EU financial sector total[ing] more than €5 trillion, equivalent to 40 percent of [eurozone] GDP.” When all this cash hit the banking system, banks in the periphery decided their best bet was to buy local sovereign bonds. It seemed like an obvious choice: Spanish 10-year bonds offered nearly 7 percent returns in 2012, while the ECB lent at 1 percent. The banks loaded up on these local high-yield bonds and used the profits to bury the huge amount of non-performing loans on their balance sheets. For a while, it seemed like a good idea”.

He adds that “Eurozone governors, in particular the ECB, face what might be called a “Goldilocks dilemma.” A strong return to growth could paradoxically undermine periphery LTRO-repaired bank balance sheets while too little could leave the eurozone stuck in the doldrums indefinitely. If policy is loosened and growth accelerates, interest rates will have to rise. If that happens, the periphery banks holding all these now-profitable sovereign bonds will see their asset base shrink as yields go up, bond prices go down, and their balance sheets implode. Given this, the ECB needs super-low rates, more LTROs, and a host of monetary tricks to allow the banks to clean up their balance sheets, one non-performing loan at a time, in an environment of slow growth. And here’s the rub: If growth is too slow, these policies can’t work. Higher growth rates are needed to allow the banks to repair their balance sheets as new, healthy loans replace the non-performing loans. The ECB’s recent move to negative deposit rates for banks and the new round of targeted LTROs can be seen in this light as a way to boost lending while negotiating this dilemma. But it’s not going to be easy to find a way out”.

He ends the piece, “The institutional problem that turbocharges all this is the self-inflected wound called the Treaty on Stability, Coordination and Governance that came into effect in March 2012. This is the eurozone-wide treaty that Renzi wants some slack with — and little wonder. It calls for national budgets to be “balanced or in surplus” in the medium term with enforcement guaranteed by “preferably constitutional” provisions in national legal frameworks. Countries that have “significant observed deviations” from the fiscal limits in the treaty will be fined. This is constraining enough, but what makes it worse is the so-called macroeconomic imbalances procedure (MIP) at the heart of the treaty, which sets the scorecard for how well countries are doing. The MIP mandates that countries can only have a maximum current account deficit (imports over exports) of 4 percent or a surplus of 6 percent. Given that imports and exports sum to zero, that surplus of 2 percent must be offset somehow. Countries that export a lot, like Germany, could reduce their surpluses, but that’s going to be a tough sell in Berlin. The other option is for deficit countries, such Spain and Portugal, to run permanently tight policies to offset Germany’s surplus. That’s bad news for any attempt to ease up on austerity in the periphery”.

He concludes, “Between the petrified banking system and the procrustean treaty, it is hard to see how the eurozone countries can ease up on austerity even if they wanted to: Low growth isn’t just legally mandated, it’s needed for the banks to crawl their way back to solvency. And given that the surplus countries in the North, not just Germany, are doing just fine with the current setup, it’s not clear why they would really want to ease up anyway”.

43 nominees waiting


Next month, President Obama will host African leaders at what the White House describes as “the largest single engagement by any U.S. president with Africa.” But for the State Department, engaging those leaders has been more difficult. The Senate has yet to act on the nominations of 13 ambassadors to African countries, and two of the nominations have languished for over a year. With no ambassadors in place, the diplomats left in charge of embassies often have trouble meeting with the host country’s leadership, according to current and former State Department officials. “They are not getting in on a regular basis to see heads of state,” said Linda Thomas-Greenfield, the assistant secretary for African affairs. But the problem is not just in Africa. In all, 43 nominees to be ambassador are awaiting action by the Senate. “That means,” Secretary of State John Kerry said in a statement last week, “we’re going without our strongest voice on the ground every day in more than 25 percent of the world.” The difficulty for Mr. Kerry and the Obama administration has its roots in the rule changes Senate Democrats pushed through last year in response to Republican filibusters over many of the administration’s nominees. As a result of those rule changes, it is harder for the minority party to block a nomination through the threat of a filibuster, but the cooperation needed to rapidly confirm several nominees at once is much harder to come by. As payback for the rule changes, Senate Republicans are typically refusing to provide the unanimous consent required to proceed with quick confirmation votes”.

Producing nuclear fuel at current levels?


David Sanger writes that there maybe some light in the ongoing nuclear talks between Iran and the P5+1 amid the gloom, he opens “Iran’s chief nuclear negotiator, faced with an imminent deadline for an agreement with the West on the future of the country’s nuclear program, said in an interview on Monday that Iran could accept a deal that essentially freezes its capacity to produce nuclear fuel at current levels for several years, provided it is then treated like any other nation with a peaceful nuclear program. The proposal, which Iran said was conveyed to the United States and five other world powers during closed-door negotiating sessions in Vienna, would effectively extend a limited series of concessions Iran made last November as part of a temporary deal to get negotiations started on a permanent accord. In return, Iran wants step-by-step relief from sanctions that have substantially weakened its economy”.

Sanger writes that “Offering a rare glimpse into the secret talks, Iran’s foreign minister, Mohammad Javad Zarif, described a proposal that sought to satisfy Washington’s aim to verifiably limit the amount and purity of nuclear fuel that Iran can produce for a still-undetermined number of years. Mr. Zarif is also trying to satisfy a military and clerical leadership in Iran that is determined not to dismantle existing facilities and intent on resuming unhindered production in future years. ‘I’m not here to present maximalist positions,’ Mr. Zarif said in an interview in a 175-year-old neoclassical former palace, now a luxury hotel where the negotiators are living and working. ‘We’re here to reach an agreement.'”

Sanger makes the point that “Zarif’s decision to go public with what he called an ‘innovative proposal’ appeared motivated to achieve two goals: to make it harder for the White House to walk away from a deal that would establish intrusive inspections and freeze Iran’s program, but also to offer just enough for both sides to propose extending the talks beyond Sunday, the current deadline. But while American officials said Mr. Zarif was now showing a flexibility they had not seen before, his proposal does not address, in its current form, the most central American concern. Because the proposal would leave centrifuges spinning in place, Iran would retain what is known as a ‘breakout capability’ to race for a bomb if it ever decided to produce one. Mr. Zarif contended that other elements of his plan would lengthen that period to over a year, which Secretary of State John Kerry has said is a minimum. American officials are doubtful”.

Sanger writes that “Iran will press for the restrictions on its program to be short-lived, perhaps three to seven years; the United States has said that period must be in the ‘double digits,’ meaning at least a decade. After the agreement expired, Iran would be free to produce as much fuel as it wanted as a signatory of the Nuclear Nonproliferation Treaty, as long as it abided by the treaty’s inspection rules. Moreover, Congress will be looking for sharp, perhaps permanent, limits on Iran’s capability, or even on its development of next-generation centrifuges, in return for lifting American sanctions”.

Interestingly he makes the point that “Zarif’s decision to go public with the proposal in a 45-minute conversation before meeting with Mr. Kerry for a second time in two days was clearly tactical. His willingness to move away from Iran’s insistence that it must be free, immediately, to expand its nuclear program may give Mr. Kerry room to recommend to President Obama that the negotiations continue, for weeks or months. Mr. Zarif’s plan follows a declaration by Iran’s supreme leader, Ayatollah Ali Khamenei, last week that Iran would not dismantle any of its infrastructure under Western pressure, but would not need a major expansion of its fuel-making facilities for at least five years. That gave Mr. Zarif, who is viewed with suspicion by Iran’s military and its clerical leadership, some wiggle room. His proposal for a freeze moves significantly in the direction that the United States and the five other nations have been urging, and brings into focus the outlines of a possible deal, though one that would be extraordinarily hard to reach by Sunday”.

Sanger ends the piece, “At talks in Vienna on Monday, participants said, a series of exchanges focused on whether Iran’s leadership was willing to give up hopes of industrial-scale nuclear fuel production for more than a decade, along with specifics of how it would answer questions about evidence that its scientists had worked on nuclear weapons designs. Robert Einhorn, who left the American negotiating team last year to return to the Brookings Institution, said that Mr. Zarif was clearly setting up a trade-off. ‘Iran’s strategy seems to be to accept near-term limitations in exchange for longer-term freedom of action,’ he said”.

New sanctions on Russia


Barack Obama’s administration on Wednesday made good on threats to sanction Moscow for continuing to support pro-Russian separatists in Ukraine, imposing tough new restrictions on major Russian energy companies, banks, and weapons-makers. Charting a middle course between full-scale sanctions that would go after whole sectors of the Russian economy and the surgical sanctions used so far, the Obama administration’s latest steps are its strongest effort to date to dissuade Russia from continuing to back armed separatists who are trying to undermine the new Ukrainian government. On Monday, July 14, the U.S. State Department released a listof evidence it says proves Moscow is still supplying Ukrainian militants with weapons, financing, and Russian fighters. On Tuesday, Russian-backed rebels destroyed a Ukrainian apartment building close to the border with Russia. Videos released Wednesday appeared to show Russian-made rocketsbeing fired at Ukrainian targets from inside Russian territory. However, in the absence of full-throated cooperation with key European countries, it is unclear just how effective the latest U.S. measures will be. Capital markets in Europe, for example, remain open for Russian firms. And Gazprom, the main source of Russian energy exports to Europe via Ukraine, has yet to be targeted directly by any U.S. sanctions. What’s more, Russia and China, among other developing economies, announced the creation this week of a new international development bank precisely to allow them to start sidestepping Western dominance of the international financial system”.