Archive for January, 2015

Obama’s 50%

31/01/2015

Half of Americans approve of President Obama’s job performance for the first time in 19 months, according to a new poll released Monday. It is the first time that Obama has held a 50 percent approval rating in the Gallup daily tracking poll since June 2013. He’s now 5 percentage points above water, with 45 percent of Americans disapproving of his job performance. The Gallup survey is the latest in a series of polls showing the president’s numbers rebounding — although most show more voters disapprove than approve of the president. An NBC News/Wall Street Journal poll released earlier this month showed Obama with 46 percent approval and 48 percent disapproval, while an ABC News/Washington Post report showed the president at a 47percent to 48 percent disadvantage. But in both cases, the president has shown significant improvement from November, when his party suffered devastating election loses — thanks, in no small part, to improving economic sentiments”.

Jordan and the Brotherhood

31/01/2015

A piece from the Economist discusses the attempts of Abdullah II of Jordan to contain the Islamist threat.

It begins “AS ALWAYS with King Abdullah of Jordan, politics is a bit of a gamble. As part of his war on Islamist extremism he wants to foster a version of the religion that is more submissive to the region’s regimes. In partnership with Abdel Fattah al-Sisi, a military man turned Egypt’s president, he is preparing to summon Muslim leaders next month to Cairo’s Al Azhar, one of Sunni Islam’s oldest seats of learning, for a summit on modernising Islam. Although their voices may be stifled by tightened anti-terrorism laws, many of his subjects are dubious. In a country where some 90% of the population is Sunni Muslim, many wonder why their monarch has joined the American-led coalition against jihadists from Islamic State (IS)”.

Yet this comparison is somewhat simplistic. To say, as the writer implies, that all King Abdullah has to do is bring Islamists into government and the problem will be solved is naïve. It draws comparisons between the Islamists of 30 years ago and now. It also assumes that they can be co-opted by a few ministries when in fact what they would want, depending on the country, is total control.

The author does make the point that “In his latter years, King Hussein reined back the Brotherhood after its visceral opposition to his peace treaty with Israel. He gerrymandered the boundaries of constituencies to dilute the vote in the cities where the Islamist support was strongest. But he never completely cut ties with his old allies. When Israel’s spooks poisoned Hamas’s Khaled Meshal in Amman in 1997, King Hussein threatened to cut relations with Israel unless Binyamin Netanyahu, prime minister then as now, not only produced the antidote, but released Hamas’s imprisoned leader, Ahmed Yassin”.

The report adds that “Last September King Abdullah publicly joined America’s coalition against IS, when a more discreet ruler might have operated behind the scenes. And in recent months he has detained more than 30 Brotherhood members and hauled many to military trial, including Zaki Bani Irshaid, the movement’s deputy in Jordan. Confidants of the king insist the crackdown is working. With Jordan’s Arab neighbours all in turmoil, or at war, the Brotherhood’s demand for political reform in Jordan no longer resonates, says one. The king is at the zenith of his power, and seems untouchable”.

The piece ends, “Some Brotherhood members, too, say their increasingly combative leaders are to blame for their plight. But others warn that, as it has done before, the Brotherhood could respond violently when its political path is obstructed. ‘We’re a peaceful movement,’ insists Muhammad Abu Faris, one of the Brotherhood’s senior and more radical ideologues. ‘But the people and King Hussein were in harmony, and now his son stands alone.'”

“A reminder of the ruthless crackdown”

31/01/2015

At least 18 people were killed in political violence on Sunday, the fourth anniversary of the Arab Spring uprising, a reminder of the ruthless crackdown the military-backed government has used to silence any echoes of that revolt. Security officials said three of those killed were militants trying to plant bombs that accidentally exploded in two Nile Delta towns, and three others were police conscripts. At least 12 others were civilians killed by security forces. As many as 10 civilians were killed in clashes in the Matariya district, a frequent flash point on the northern edge of Cairo, and dozens of civilians were reportedly injured in clashes at scattered protests around the country. After nearly 18 months of recurring police shootings at street protests since the military takeover in 2013, it was the deaths of two others killed over the weekend that most captured Egypt’s attention”.

Eritrean Catholic Church

29/01/2015

Pope Francis has created a new Eastern Catholic Church.

The official release from the Press Office of the Holy See notes that “Pope Francis has also erected the Metropolitan Church of Eritrea in Asmara. Although Eritrea as a nation got its independence in 1991 the Catholic Church of Ethiopia and Eritrea have always been regarded as one Episcopal conference. As of today, the two are now separate”.

A report notes that “Francis has established a new Eastern Catholic church for Eritrea– the first Eastern Catholic church formally erected since the early 20th century. According to the Code of Canons of the Eastern Churches, there are four kinds of Eastern Catholic churches: patriarchal (led by a patriarch), major archepiscopal (led by a major archbishop), metropolitan sui iuris (led by a metropolitan archbishop), and other sui iuris churches. (The term sui iuris means “of its own right” or “of its own law.”) According to a January 19 announcement from the Holy See Press Office, Pope Francis has separated the four Eritrean eparchies (dioceses) from the Ethiopian Catholic Church and has created a new metropolitan sui iuris church for Eritrea. The Pontiff has named Bishop Menghesteab Tesfamariam of Asmara, Eritrea’s capital, as the church’s first metropolitan archbishop. The metropolitan archbishop of Asmara will henceforth be head of the church”.

It adds “Eritrea, a, nation of 6.5 million, has 155,000 Catholics, all of them in Eastern-rite jurisdictions”.

In a related article posits a theory behind the new creation, “Establishing the Eritrean Catholic Church as a separate jurisdiction may be calculated to improve its standing in the eyes of the government of Eritrea, which has fought a series of bloody wars with its more powerful neighbour Ethiopia including a long struggle for independence. The Eritrean government has been accused of horrendous human rights abuses. According to Human Rights Watch, it is one of the most closed countries in the world and is characterised by “indefinite military service, torture, arbitrary detention, and severe restrictions on freedoms of expression, association and religion”. The United Nations High Commissioner for Refugees (UNHCR) estimates that more than 305,000 Eritreans – more than five per cent of the population – has fled the country during the past decade. Many of the migrants who perished in the Lampedusa tragedy, in which 360 people died when their ship sank, were from Eritrea”.

“No grounds to lift economic sanctions against Russia”

29/01/2015

European Union foreign ministers said on Monday there were no grounds to lift economic sanctions against Russia despite conciliatory proposals from the EU’s foreign policy chief, as violence intensified in Ukraine. Federica Mogherini had suggested in a confidential memo seen by Reuters that EU governments could start talking to Russia again about global diplomacy, trade and other issues if Moscow implemented the Minsk peace agreement to end the separatist conflict. “In light of the current events in eastern Ukraine, no one had the idea of loosening the sanctions,” German Foreign Minister Frank-Walter Steinmeier told reporters after talks among EU ministers.

“Beating Beijing at its own game”

29/01/2015

Following the recent news that India has outstripped Chinese growth a piece discusses the need for India to become more like China economically, “In 2003, MIT’s Yasheng Huang and Tarun Khanna of Harvard Business School argued in Foreign Policy that India would eventually overtake China. It was a case of fundamentals: Driven by fickle and unreliable foreign investment and technology, the Chinese economy would peter out while India, buoyed by more reliable drivers such as domestic savings and entrepreneurship, would one day thrive — and at China’s expense. Huang and Khanna’s controversial argument made a big splash at the time. To many then and now, suggesting that India could overtake China seemed outlandish”.

He rightly adds that “many experts were sympathetic to the notion that democratic India ought to do better than authoritarian China. But China stubbornly refuses to undergo the existential political crisis that many Western observers have predicted for decades. And India’s democracy, especially during Manmohan Singh’s left-of-center government, failed to accomplish much in the way of structural economic reform and instead became a case study in policy paralysis”.

He reminds readers that “According to the World Bank’s latest Global Economic Prospects report, India’s real GDP growth will reach 6.2 percent this year, 6.8 percent next year, and 7 percent in 2017, just overtaking China, whose growth is expected to slow to 6.9 percent. And the International Monetary Fund’s World Economic Outlook predicts that in 2016, India’s 6.6 percent growth rate will overtake China’s 6.3 percent. If these forecasts hold true, India will become the world’s fastest-growing large economy for the first time in living memory. The World Bank and the IMF say these improved growth projections are due, at least in part, to the Narendra Modi government’s renewed vigor for economic reform”.

He pointedly notes that “India surpassing China in the future has as much to do with its economy as it does with New Delhi’s renewed growth impetus. But given the enormity of the challenge facing Modi — transforming his country into a manufacturing powerhouse — predicting that India will achieve China-style economic expansion anytime soon would be an awfully big gamble”.

He makes the fair point that “Textbook growth models predict that economies beginning from a lower base will grow more rapidly than their richer counterparts, all else being equal, due to what are known as diminishing marginal returns. India’s economy is still a fraction the size of China’s — so in theory, excluding other important differences between them, India should be growing more rapidly than China”.

The writer then argues that “to beat China, India must become more like China — in a sense, the opposite of what Huang and Khanna originally argued. As it happens, this is indeed what the Modi government is trying to do, with its emphasis on building top-notch infrastructure and promoting large, labour-intensive manufacturing projects, both for export and for the domestic market — a model that will require foreign investment and technology, key drivers of China’s success”.

He ends “The government’s initiative to create 100 new “smart cities” — aimed at attracting large-scale, foreign investment-led growth — fits this paradigm perfectly. So does the government’s larger commitment to revamping the country’s creaky roads, bridges, highways, and power plants. If India can do all this while leveraging its demographic advantage — a youthful population whose median age of 25 bests China’s aging population — it has a legitimate shot at beating Beijing at its own game”.

He concludes, “If India overtakes China, it will most likely be because it emulates the best practices of Beijing’s growth miracle. Whether or not that goal is achieved, it’s clear that Prime Minister Modi’s economic team understands what needs to be done. What remains to be seen is whether it can overcome India’s fractious democracy and get the job done”.

 

“A 27-strong delegation to cement ties”

29/01/2015

Barack Obama is travelling with a 27-strong delegation to cement ties with the new king of Saudi Arabia on Tuesday as concerns over Yemen and the Islamic State take centre stage in the increasingly volatile region. Central Intelligence Agency director John Brennan, Republican hawk senator John McCain and General Lloyd Austin, head of US Central Command forces in the region, are among the surprise additions to a hastily organised trip that has drawn critical comparisons with the US failure to send any senior figures to Paris following recent terrorist attacks. Secretary of state John Kerry and leading House Democrats Nancy Pelosi and Joe Crowley, who have both been travelling with Obama in Delhi, will also accompany him on the unscheduled stop off at the king’s palace in Riyadh. Obama broke short his trip to India, skipping a promised visit with Michelle Obama to the Taj Mahal, in order to make the visit – something officials say was a logistical necessity to get security assets in place in time that would have been used on the trip to Agra. Officially, the visit is to pay respects following the death of King Abdullah, but officials concede that its wider purpose is to ensure that the handover of power to successor King Salman does not affect US interests at a time of great uncertainty”.

“The verge of establishing their first viable national homeland”

29/01/2015

After years of successive, slow victories, Christian Caryl writes the Kurdistan is on the brink of becoming the world’s newest country.

He begins “As you walk around the streets of this city of 500,000, you could be forgiven for thinking you’re in the capital of a small but up-and-coming Middle Eastern country. Police officers and soldiers sport the national flag on their uniforms — the same flag that flies proudly on public buildings, and, in a giant version, from a towering pole in the center of town. There’s a national anthem, which you might hear on the national evening TV news, broadcast solely in the local language. You’ll also notice imposing buildings for parliament and the prime minister, as well as the diplomatic missions of a number of foreign states, some of them offering visas”.

He writes that despite all these emblems the currency is still the Iraqi dinar, he adds “Nor do any of the foreign governments that maintain consulates in Erbil recognize Kurdish statehood; nor, for that matter, does the government of the KRG itself. For the time being, Iraqi Kurdistan is still under Baghdad’s writ”.

Caryl adds that “In July of last year, KRG President Massoud Barzani asked his parliament to start preparing for a referendum on independence. It was a suitably dramatic response to the stunning disintegration of the Iraqi state under then-Prime Minister Nouri al-Maliki. Earlier, in January 2014, Maliki’s government had cut off financial transfers to the Kurds as part of a fight over control of oil resources, enraging Erbil even as his repressive policies toward Iraq’s Sunni Arabs were fueling the dramatic rise of the Islamic State (IS). Last summer, after IS forces shocked the world by seizing control of Mosul, Iraq’s second-largest city, the jihadists pushed from there deep into Kurdish territory, at one point getting within 25 miles of Erbil”.

He adds predictably “Buoyed by U.S.-led airstrikes on IS positions, the Kurdish army, the Peshmerga, soon rallied, forcing the Islamic State to retreat. But the Kurds didn’t stop there. The collapse of the demoralized Iraqi Army in large swathes of northern Iraq had created a vacuum that Kurdish troops were only too happy to fill. Almost by accident, KRG leaders abruptly found themselves ruling 40 percent more territory than at the start of the conflict”.

The importance of this is clear when he writes “This expansion brought a particularly important prize: Kirkuk, the city long hailed by Iraqi Kurdish nationalists as ‘our Jerusalem,’ the spiritual and political focus of a future state. It also helps that Kirkuk sits at the center of one of Iraq’s biggest oil fields, and that gives the Kurds a lucrative source of income that could help to sustain the economy of a new country”.

He adds that the Kurds do not just live in Iraq but are spread across the region in Syria and Turkey, “All of this means that the Kurds, who enjoy the unenviable status of the world’s largest nation without a state, now find themselves on the verge of establishing their first viable national homeland — nearly a century after the Great Powers carved up the post-World War I Ottoman Empire into the countries of today’s Middle East, ultimately leaving the Kurds out in the cold”.

He adds that “If the dream finally becomes a reality, there is one nation in particular that the Kurds will have to thank for it: the United States. Even though U.S. policy toward the Kurds has often been subordinated to the same spirit of realpolitik that defines so many of Washington’s policies in the region, today’s Iraqi Kurdistan traces its origins to two key events: the establishment of a no-fly zone over the region after the Allied victory over Saddam in 1991, and the overthrow of the Iraqi dictator in the U.S.-led invasion in 2003. As a result, Kurds tend to be overwhelmingly pro-American — to an extent that comes as quite a jolt to anyone who’s spent time in other parts of the Middle East”.

However reality is somewhat different. America also urged the Kurds to overthrow Saddam at the end of the 1980s but instead of supporting them there was no US support and those that rose up were all killed.

This is tempered by the fact that “President Obama and his predecessors in the White House have all been notably reluctant to give their blessing to Kurdish statehood — out of the not entirely unreasonable fear that creating a new player in such a volatile neighborhood could invite serious instability. To name but one possible risk: a declaration of secession by Iraqi Kurdistan could prompt the final collapse of rump Iraq into separate Sunni and Shiite statelets, intensifying sectarian conflict throughout the region. This climate of uncertainty helps to explain why Kurdish leaders respond to questions about their timetable for statehood with perceptible caution. ‘The path is full of obstacles,’ says Fuad Hussein, President Barzani’s chief of staff. Iraqi Kurds, he says, are still a long way from standing on their own feet economically. Kirkuk may give them a promising source of petroleum, but since they have no access to the sea, they’re dependent on the goodwill of Baghdad or their neighbours to ship their oil to world markets”.

He ends “they’ll still need to proceed carefully. Given the vulnerabilities of their position, the Kurds can’t afford to be seen as the ones responsible for the final demise of Iraq. If Iraqi Kurdistan really does decide to grab the ring of independence, it will need to make sure that Baghdad, its own neighbors, and, perhaps, most importantly, the United States, are all more or less reconciled with the move. Hussein compares the birth of a Kurdish state to a newborn baby: “We don’t want to have a child that has many illnesses, and that will pass away after a few months. A child must have a good environment, and parents that will take care of it.” If Kurdistan is to be born, he says, “it must be a part of stability in this area.” Of course, even the healthiest babies have sometimes been known to give fits to the neighbors. The Kurds may yet pull it off. But don’t bet on it anytime soon”.

 

More talks about Libya

27/01/2015

A new round of talks between rival Libyan factions will take place in Geneva on Monday, the United Nations said, even as gunmen kidnapped the deputy foreign minister of the recognised government. Nearly four years after a NATO-backed revolt ousted Muammar Gaddafi, Libya is in turmoil with two rival governments and two parliaments backed by armed factions who Western governments fear may drag the country into civil war. The internationally-recognised government of Prime Minister Abdullah al-Thinni and the elected House of Representatives have worked out of the east after one faction, Libya Dawn, took over Tripoli in the summer, set up its own government and reinstated the old parliament known as the GNC. A delegation from the House of Representatives and parties allied to Tripoli attended a first round of talks in Switzerland this month, but major representatives from Libya Dawn and the General National Congress have not joined. In a new push, the U.N. mission in Libya (UNSMIL) said two rounds of talks would take place this week in Switzerland. A first round pursing the “main political track” would convene on Monday followed by a second one gathering local councils”.

A divided Congress, helping the talks?

27/01/2015

An interesting piece argues that infighting in Congress could help the White House in its talks with Iran.

It opens “A hawkish Iran sanctions bill that President Barack Obama threatened to veto in his State of the Union address now faces an unexpected foe in Congress: competing legislation sponsored by Republicans. On Wednesday, Senator Rand Paul (R-Kentucky) offered an alternative proposal to a controversial piece of legislation sponsored by Sen. Mark Kirk (R-Ill.) and Democratic Sen. Robert Menendez of New Jersey that would impose new sanctions on Tehran if world powers fail to strike an agreement that would restrain the country’s nuclear program”.

The fact that Congress seems able to waste its time on putting on sanctions before the talks have ended is nothing sort of astounding. The fact that Sens Menendez and Paul can agree on this speaks volumes on their competence on this issue. As ever Senator Paul is unable to have his thoughts grounded in any sort of reality.

The writer goes on to note that “Paul’s proposal, which is still being hammered out with California Democrat Barbara Boxer, would mandate votes in Congress to reinstate sanctions against Iran if it violates any aspects of a final nuclear deal. Boxer called the proposal a “moderate” alternative that would give lawmakers the opportunity to re-impose ‘waived or suspended sanctions against Iran if the president in consultation with the intelligence community, determines that Iran has violated any existing nuclear agreement.’ She and her staff did not offer more details, saying the two lawmakers were still putting the “finishing touches” on the legislation. Unlike the Kirk-Menendez bill, the Obama administration remains open to the Paul-Boxer proposal because it would not derail the sensitive negotiations playing out in Vienna. That’s a problem for Menendez and Kirk, who want to unite Congress behind their own Nuclear Weapons Free Iran Act”.

He mentions that that “To build a veto-proof majority, the Kirk-Menendez bill needs the support of at least 13 Democrats. Given the impressive bipartisan support for the sanctions legislation last year — it garnered 60-cosponsors — many believed a Republican-controlled Congress could overcome the president’s veto. However, a number of hawkish Democrats who previously supported such legislation — including Sens. Ben Cardin (D-Md.) and Chuck Schumer (D-N.Y.) — have begun to waffle on the legislation in recent days”.

Interestingly he goes on to describe that “Menendez and Kirk have other problems too. Sen. Bob Corker of Tennessee, the Republican chairman of the Senate Foreign Relations Committee, is preparing a third bill: legislation that would require a vote on a joint resolution of disapproval for any final nuclear deal with Iran. Corker says his bill, co-sponsored by Sen. Lindsey Graham (R-S.C.)  is needed because Congress must ‘weigh in’ on final deal with Iran. Because the legislation is still being fleshed out, it’s unclear if a ‘no vote’ would simply stand as a symbolic protest, or go further and defund the specific administrative actions needed to implement the deal. Regardless, pro-Israel hawks in Congress want to keep the focus on the Nuclear Weapons Free Iran Act rather than Corker’s bill, because the legislation does not enjoy the Democratic support that Kirk-Menendez does”.

As has been stated here before, on foreign matters the president should be able to do as he pleases and Congress should have no part whatsoever on attempting to bully, blackmail or bribe the executive branch into choosing one course of foreign policy over another. Only the executive has the broadest view of the issue and he alone should decide.

Interestingly the GOP are split on the issue, “Some Republicans disagree with that strategy. John McCain, the chairman of the Senate Armed Services Committee Chairman, wants Corker’s bill to move first because it is less controversial and would not allow the administration to blame Republicans if an Iran deal does not materialize by the self-imposed June 30 deadline. McCain told Bloomberg last week that it’s too soon to ‘worry about the additional sanctions.’ The challenge for Senate Majority Leader Mitch McConnell will be to find a peaceable solution among a diverse GOP Senate that doesn’t fracture the Democratic support for Iran sanctions legislation”.

It ends “Critics of Kirk-Menendez received an unexpected boost from a separate hearing held on Wednesday by the GOP-controlled Senate Armed Services Committee. The panel hosted foreign policy luminaries Brent Scowcroft and Zbigniew Brzezinski, the former national security advisers of President George H.W. Bush and Jimmy Carter respectively. Both men opposed new Iran sanctions legislation”.

“After a power transmission line broke down”

27/01/2015

Pakistan was plunged into darkness after a power transmission line broke down early on Sunday in an incident blamed on a rebel attack. The power failure, one of the worst Pakistan has experienced, caused electricity to be cut in 80% of the country, including major cities and the capital Islamabad. It was later restored in much of the country, with the national power company saying normal distribution would resume within hours. Officials said the blackout began after midnight when a transmission line connecting a privately-run power plant to the national grid was damaged. An AFP reporter in the eastern city of Lahore said the airport was also affected by the breakdown. Minister of state for water and power Abid Sher Ali later issued an apology and said electricity had been restored in most of the country, blaming the breakdown on rebels blowing up the line in Naseerabad district, which lies in southwestern Baluchistan province”.

Poroshenko to the rescue?

27/01/2015

A report from Foreign Policy details the recent activity of President Petro Poroshenko, “As the 48-year-old Ukrainian business tycoon told journalists earlier this week, he hopes one day to represent his country in the European Parliament — which was an odd thing to say since Ukraine is not a member of the European Union and has little chance of joining anytime soon. You’d think that Poroshenko would have his mind on a more immediate task: winning election to the presidency in the election scheduled for this coming Sunday, May 25″.

It goes on to mention “there’s a deeper logic to Poroshenko’s European aspiration: It echoes the longing for a European future that played a part in the protests that toppled President Viktor Yanukovych earlier this year. The Euromaidan protests, which were actively and visibly supported by Poroshenko, also vaulted him into the ranks of Ukraine’s most popular politicians — and now to the leading position in this weekend’s presidential race. In the run-up to the balloting, eastern Ukraine has been wracked by the worst violence since the political crisis there first erupted earlier this year. On Thursday, at least 13 Ukrainian soldiers were killed by pro-Russian insurgents at a checkpoint 20 miles south of the restive city of Donetsk. The rebel group behind the attack said one of its militants was also killed”.

It adds later that “Poroshenko is no ordinary politician (even in a country that abounds in outsized political personalities). He made his fortune, now estimated by Forbes at $1.3 billion, in the chocolate business — an unlikely achievement that has led some to dub him “Ukraine’s Willy Wonka.” That hint of magic befits a man whose followers believe that only he can rescue the country from its current predicament”.

The writer notes “At the same time, he remained aloof from the three main opposition leaders, all of whom were regarded with various degrees of skepticism by the Euromaidan demonstrators. Poroshenko said the right things but also knew when to stay out of the way. This ultimately worked to his advantage. The three opposition leaders were left discredited for signing a deal with Yanukovych on Feb. 21, the night before the embattled president fled Kiev, eventually showing up in Russia. (Poroshenko was not among the signatories.) In March, boxer turned politician Vitali Klitschko, who had been the favorite candidate throughout the protests, announced his withdrawal from the race — and threw his support to the more popular Poroshenko, whose ratings then shot up even further. Poroshenko has since widened his lead over Tymoshenko, who was released from jail the day that Yanukovych fled”.

It continues “Poroshenko’s election slogan, promising no less than “a new way of life,” aims to capitalize on the widespread yearning for dramatic reform in the wake of the struggle against Yanukovych. “A new country was born and a new people was born,” he told Reuters in a recent interview. Referring to the casualties incurred during the protest, he added that Ukraine’s future leaders “should know why 104 people gave their lives.” It’s a line that echoes the mood of dissatisfaction among people who backed the protests, who wonder why more than 100 protesters died for the sake of change that is yet to come”.

The writer goes on to note “Despite his reformist ambitions, one risk of a Poroshenko presidency is that Ukraine could end up with business as usual — at just the moment when the country urgently needs decisive leadership and wide-reaching reform. Some Ukrainian commentators have wondered whether the current demand for fresh leaders will be enough to make people forget Poroshenko’s dubious political moves in the past. Despite his recent support for Yanukovych’s opponents, Poroshenko actually has a long history with the former president’s political machine, the Party of Regions. In 2000, the “Chocolate King,” as Poroshenko is also known, was one of the founders of a party that ultimately evolved into the current Party of Regions. Later, though, he crossed over to the government as a protégé of President Viktor Yushchenko (the victor of the Orange Revolution and a man who also promised wide-ranging democratic reforms). Poroshenko eventually served as Yushchenko’s foreign minister from  2009 to 2010″.

Optomistically he adds that “Poroshenko is now vowing to transform Ukrainian politics. Rivalries have plagued the pro-democratic forces for years, stalling reforms and playing into the hands of Yanukovych and, indeed, Russian President Vladimir Putin. In this sense, Poroshenko has presented his alliance with Klitschko as a new style of politics, not just a way to win the election. “From the times of King Yaroslav, from the times of King Volodymyr, there was a harsh contest for power that divided the country,” he said when announcing their cooperation in April. “We have decided to put an end to this tradition.” To drive home the point, he noted the “historic” nature of his alliance with Klitschko, which runs against the recent grain of Ukraine’s notoriously fractious political environment — at least for now”.

The writer adds that “Poroshenko has also vowed that one of his first moves will be to dismantle Ukraine’s oligarchic system. He has pledged to get rid of the “uncompetitive, corrupt benefits” the old authorities created for “families” of businessmen and has promised “zero tolerance for corruption.” This is also a message to voters. In one recent poll, 51 percent of respondents put “untainted by corruption” at the top of the list of criteria they’d like to see in the country’s future president. Needless to say, this is just what Ukraine needs — but these are strange words, coming from someone who made his career, and his fortune, in just the environment he now condemns. Eight years ago, when Poroshenko took a senior political position in the aftermath of the Orange Revolution, analyst Andreas Umland considered the ironies entailed by replacing old oligarchs with new ones. Fast-forward to 2014, and another revolution in Kiev, and that assessment remains current”.

He wealth is discussed when he mentions “Poroshenko’s assets are not limited to the confectionary business; they also include a stake in the media. Several observers have suggested that his popularity has been boosted by his ownership of Channel 5, a popular TV station that backed the protests. “Poroshenko can’t say that he is any different from Firtash or Akhmetov, for whom the media is an instrument in the political struggle,” wrote journalist Sergii Leshchenko in a recent column. Poroshenko has said that he will sell Roshen, his chocolate brand, if he becomes president, but has no intention of selling Channel 5 (to some observers’ dismay). Why? “Because this channel two times saved the country, and, reason number two, because the channel is not for sale,” he has said“.

Interestingly he writes that “If anything, a President Poroshenko could use his mandate to push for closer economic relations between Ukraine and the European Union. He already has a reputation as a victim of Moscow’s economic bullying: Russia banned his confectionary brand Roshen last summer and took over one of its factories in Russia. In March, Ukraine finally signed the political section of the EU association agreement that Yanukovych dropped in November 2013, sparking the protests in Kiev. The economic section of the agreement is yet to be signed, but Štefan Füle, the EU’s Commissioner for Enlargement and European Neighbourhood Policy, has said that it could be signed after the Ukrainian election. That would put the ball in Poroshenko’s court, testing both his commitment to European integration and his capacity for working with Russia”.

He ends “This level of support adds to the hope that Poroshenko can provide a rallying point for the millions of Ukrainians — from Lviv in the West to Dnipropetrovsk in the East and possibly beyond — who want to maintain the country’s unity. But even so, it will take more than the “golden ticket” of a Poroshenko victory — whether this weekend or in a second round in June — to sort out the country’s problems”.

 

“US and India have announced a breakthrough”

27/01/2015

The US and India have announced a breakthrough on a pact that will allow American companies to supply India with civilian nuclear technology. It came on the first day of President Barack Obama’s visit to India. The nuclear deal had been held up for six years amid concerns over the liability for any nuclear accident. Indian Prime Minister Narendra Modi said the nations were embarking on a “new journey” of co-operation, with stronger defence and trade ties. Mr Obama said that the nations had declared a new friendship. Security is intense in Delhi, with Mr Obama to be the guest of honour at Monday’s Republic Day celebrations. Thousands of security personnel have been deployed in Delhi”.

“Chinese military and naval officials will impute the worst”

27/01/2015

James Holmes writes about the strategy of China’s navy and America’s plan to block it.

He opens “Florentine philosopher-statesman Niccolò Machiavelli wrote that keeping pace with the times is the paramount challenge of statecraft. If so, the U.S. Navy, Marine Corps, and Coast Guard, known collectively as the sea services, have embroiled themselves in a truly Machiavellian enterprise. After a series of fits and starts, sea-service chiefs are preparing to release a “refreshed,” or revised, version of their 2007 Maritime Strategy. Put simply, maritime strategy is the art of using available means — ships, aircraft, ground-pounders, armaments — to fulfill national purposes. The updated strategy, accordingly, should provide clues to how the naval leadership sees the nautical world, and intends to cope with it amid finite and dwindling resources. Assessing that should indicate whether the services are fulfilling their Machivellian duty to evolve in concert with the surrounding environment”.

He goes on to mention that “Soon to be released, the directive will also be worth investigating because the 2007 strategy was ahead of its time: it pivoted to Asia a full half-decade before the Obama administration shifted its own foreign policy attentions eastward. The 2015 Maritime Strategy, then, may hint at the prospects for success of Obama’s signature policy. Blandly titled A Cooperative Strategy for 21st Century Seapower, the 2007 Maritime Strategy appeared just months before the Great Recession. Economic distress pinched shipbuilding budgets at a time when costs were spiraling upward and major segments of the fleet — tactical aircraft, nuclear-powered ballistic-missile submarines — were about to go out-of-date. As a result, the fleet stagnated, limiting the means available to execute the strategy”.

He goes on to argue that “Enter the refreshed Cooperative Strategy. Its framers, a team drawn mostly from the Navy, Marine, and Coast Guard staffs, must answer questions about ends, ways, and means”.

Holmes summarises the major questions, the first being about how the Navy views the international system, “Notably, the 2007 strategy elevated guardianship over the liberal system of seagoing trade and commerce to coequal standing with deterrence and combat. Policing the global commons in peacetime, in other words, now has as compelling a claim on sea-service resources and energy as thrashing enemies in wartime. This breaks with tradition. The Reagan-era Maritime Strategy, for instance, explained how U.S. mariners aimed to pummel the Soviet Navy during a hypothetical European war — all battle, all the time. The 2007 strategy, by contrast, instructs the services to ‘join with other like-minded nations to protect and sustain the global, inter-connected system through which we prosper.'”

Holmes notes that problems persist however, “The Maritime Strategy is mostly silent on the question of resources, and fails to specify how many ships and other platforms it requires. Naysayers, consequently, worried that sea-service chiefs were writing checks the fleet couldn’t cash with diminishing resources. Sceptics urged the services to husband resources for their most vital missions. And winning wars is the most basic mission for any armed force”.

On the question of whether the new strategy will “name names” he notes, “Military strategies are typically tailored to opponents — not so in the 2007 strategy. China, America’s most formidable potential antagonist, was conspicuously missing from the document. An oversight? Not really. In those days, no one knew whether China would challenge the United States and its allies for Asian primacy. Beijing was prosecuting a charm offensive meant to persuade its neighbors that it was a new, beneficent sort of hegemon. Unlike predatory Western empires, it could be trusted not to use naval power to abuse weak nations. After all, it had exercised self-restraint during bygone ages of nautical glory. And officialdom in Beijing insisted it was fated to do so again”.

He continues “Since then, however, China has gone out of its way to affront its neighbours, for instance, by claiming waters allotted to them under the law of the sea. If Chinese diplomats once beamed benevolently at fellow Asians, they have taken to glowering at them in recent years — and acted accordingly. Tracking how many times the 2015 update mentions China — and what it says about Beijing’s intentions — will help observers glimpse the future on these contested waters”.

On the question of whether the 2007 plan’s to build alliances will last into 2015, a rather uninteresting question, he writes “Naval officials and officers have few options when commitments outstrip resources. They can go before lawmakers and plead for money to fund more assets, prevail on administration officials to scale back commitments, or coax foreign partners into pooling resources. But it’s doubtful Congress will fund any serious naval buildup in these cash-strapped times. Indeed, Adm. Jonathan Greenert, America’s top uniformed naval officer, worries that a single initiative — replacing our 1980s-era nuclear-powered ballistic-missile submarines — will crowd out all other shipbuilding programs. Nor does Washington appear prepared to pare back its overseas diplomatic and military commitments. That leaves coalition-building, which featured prominently in what was, after all, billed as a cooperative strategy to bolster maritime security. In the best of worlds, coastal states in Europe, Asia, and elsewhere, will help police their offshore waters and skies, easing the burden on the American sea services. Accordingly, marshaling seagoing coalitions is crucial to supplementing U.S. naval power”.

He ends noting what the document says about battle, “Local, unilateral sea command across the globe may have been a realistic goal in 2007. Today, it sounds like bravado — if not outright hubris. Winning sea command from local opponents is no longer that easy, if indeed it ever was. A triumphal afterglow tinges memories of the Cold War, as though the Soviet Navy was a pushover”.

He concludes “The good news is that sea-service potentates appear to take the access-denial challenge seriously. They are grooming a new generation of maritime strategists, bolstering the human factor in naval warfare. On the operational and material sides, they’re exploring concepts for operating and thriving in fiercely contested settings. In all likelihood, then, the refreshed strategy will adopt a more sober tone than its predecessor took toward such matters. The attitude thus conveyed will ripple throughout the ranks, engendering new humility about the limits of American sea power. That’s all to the good. What’s less good is that Chinese military and naval officials will impute the worst motives to any Maritime Strategy, no matter how circumspectly worded. They interpreted the 2007 strategy as a scheme for containing and thwarting China’s rise — even though it said nothing about China. It’s doubtful the 2015 update will remain silent about China — and thus safe to say the strategy will set Beijing to caterwauling”.

“Pakistan has been hit with a gasoline shortage”

27/01/2015

As much of the world enjoys the lowest fuel prices in years, Pakistan has been hit with a gasoline shortage that has residents enraged at what they see as government incompetence. For more than a week, motorists across Pakistan have been scrambling to find even a few squirts of gasoline as the pumps in several major cities have dried up. The shortage has upended daily life here while exposing the nuclear-armed country’s vulnerability to public disorder and political upheaval. Over the weekend, in what officials say is the country’s worst fuel shortage in memory, an estimated 95 percent of gas stations in Pakistan’s second-largest city, Lahore, ran out of gas. The shortage was so severe it prompted a partial suspension of ambulance service, and motorists scuffled with each other at the few pumps that remained open”.

A win for Greece, a loss for Germany?

27/01/2015

The Greek election results have concluded with a resounding victory for the anti-austerity leftist Syriza party.

A report from the New York Times notes that “Greece rejected the harsh economics of austerity on Sunday and sent a warning to the rest of Europe as the left-wing Syriza party won a decisive victory in national elections, positioning its tough-talking leader, Alexis Tsipras, to become the next prime minister. With almost 98 percent of the vote counted, Syriza had 36 percent, almost nine points more than the governing center-right New Democracy party of Prime Minister Antonis Samaras, who conceded defeat. The only uncertainty was whether Syriza would muster a parliamentary majority on its own or have to form a coalition. Appearing before a throng of supporters outside Athens University late Sunday, Mr. Tsipras, 40, declared that the era of austerity was over and promised to revive the economy. He also said his government would not allow Greece’s creditors to strangle the country”.

The piece adds that “Syriza’s victory is a milestone for Europe. Continuing economic weakness has stirred a populist backlash from France to Spain to Italy, with more voters growing fed up with policies that require sacrifice to meet the demands of creditors but that have not delivered more jobs and prosperity. Syriza is poised to become the first anti-austerity party to take power in a eurozone country and to shatter the two-party establishment that has dominated Greek politics for four decades”.

It goes on to mention that “Youthful and seemingly imperturbable, Mr. Tsipras has worked to soften his image as an anti-European Union radical, joking that his opponents had accused him of everything but stealing other men’s wives. On the campaign trail, he has promised to clean up Greece’s corrupt political system, overhaul the country’s public administration and reduce the tax burden on the middle class while cracking down on tax evasion by the country’s oligarchical business class. But his biggest promise — and the one that has stirred deep anxiety in Brussels and Berlin as well as in financial markets — has been a pledge to force Greece’s creditors to renegotiate the terms of its financial bailout, worth 240 billion euros, or about $267.5 billion. Squeezed by policies intended to stabilize the government’s finances, Greece has endured a historic collapse since 2009; economic output has shrunk by 25 percent, and the unemployment rate hovers near 26 percent. While setting up an imminent showdown with creditors, led by Chancellor Angela Merkel of Germany, Mr. Tsipras has argued that easing the bailout terms would allow more government spending. That, he said, would stimulate economic growth and employment as well as help the Greeks who are most in need”.

What this expected victory means for the euro and the ever unbending Germans remains to be seen. Tsipras wants to keep Greece in the euro but Merkel demands it “honour” its debts. The report adds “Tsipras’s confrontational stance on renegotiating the bailout could create a game of chicken with Greece’s creditors. Mr. Tsipras has insisted that he will not adhere to the bailout’s austerity conditions; Greece’s creditors insist that they will not disburse funds unless he does. Mr. Tsipras has pledged immediate action, including restoring electricity to poor families who were unable to pay their bills. He has promised to raise the minimum monthly wage to €751 from €586 for all workers, restore collective bargaining agreements, prohibit mass layoffs and create 300,000 jobs”.

The piece is somewhat unfair in calling his style “confrontational”. Following the German line has gotten Greece nowhere and rather can carry on suffering the Greeks have taken the brave step of confronting Merkel. The same thing occurred recently when France and Italy both breeched their economic targets but rather than confront the biggest economies in Europe Germany has sought to reach agreement. If all three joined together then German would be backed into a corner and would have little choice but to change policy.

The piece ends showing just how narrowly Germans view the inherent in the problem, “For Syriza, the immediate question was whether the party would win the 151 seats needed for a majority in Parliament. Projections suggested a close final result. If he falls short, Mr. Tsipras might align with the Independent Greeks, a center-right fringe party that opposes austerity measures and might push for a harder line in any debt negotiations. Early returns also showed the neo-fascist Golden Dawn party in third place with roughly 6 percent of the total vote, even with some of its leaders campaigning from prison, awaiting trial on charges of being in a criminal gang. While Greece sees itself as being punished by creditors’ demands, Germany and a host of European officials have argued that Greece and other troubled nations in the eurozone must clean up the high debts and deficits at the root of Europe’s crisis. They say Athens has failed to make enough progress on structural reforms seen as necessary to stabilize the economy, and they are pressing Greece to raise billions of euros through more budgetary cutbacks and taxes”.

A related piece notes how the election shows how divided Greece really is, “beneath the arguments over austerity is a deeper conflict of democratic wills, between the verdict of voters in Greece, who are desperate for some relief, and those in Germany, Finland and the Netherlands, who do not want their taxes used to underwrite a blank check for countries that get into financial trouble”.

It adds “In a first test of how the European Union will deal with the political earthquake in Athens, finance ministers of the eurozone, the 19-nation bloc that uses Europe’s common currency, gathered in Brussels late on Monday for a previously scheduled meeting. They made no concrete decisions on Greece but pledged to begin negotiations with the new government in Athens, whose dominant party, Syriza, made a softening of terms imposed by creditors a central part of its election campaign”.

It mentions that “Merkel has been unswerving in demanding from European neighbors steps that will cut public spending and introduce budgetary discipline. In Berlin’s view, injecting more cash into Europe’s economy without first securing tighter budgets risks allowing debtor nations to avoid or postpone financial steps they will eventually have to make. This stern approach enjoys wide support among German voters, even those who vote for her rivals. The center-left Social Democratic party, with which the center-right Ms. Merkel governs in a “grand coalition,” for example, has shown no inclination to cut its political allies governing in Italy or France any slack in meeting European Union budget limits or missing other targets”.

“Has come under fire”

25/01/2015

An Indian minister has come under fire after he announced plans to make gay people “normal” in the Goa resort region. Ramesh Tawadkar, from prime minister Narendra Modi’s Bharatiya Janata party (BJP), said the Goa state government was planning to open centres to treat gay people in the region. “We will make them normal. We will have centres for them, like Alcoholics Anonymous centres,” the sports and youth affairs minister told reporters on Monday, adding that the government would “train them and give them medicines too”. Gay rights groups described the comments as offensive and ignorant, while the main opposition Congress party criticised the minister’s attitude as shameless. “We should not respond to this kind of stupidity,” said Anjali Gopalan, founder of Naz Foundation, which first launched a case to decriminalise homosexual sex in India”.

“Genuinely willing to reach a comprehensive agreement”

25/01/2015

A hopeful piece in the Guardian notes the progress made in the Iran talks, “The Iranian government has acknowledged that the US is genuinely willing to reach a comprehensive agreement with Tehran, in an unusual assessment of the progress of the ongoing nuclear talks. It comes after Barack Obama threatened to veto any new sanctions bill that the congress may impose on Tehran, and as Iran’s foreign minister, Mohammad Javad Zarif, was strongly criticised at home for taking a stroll with his American counterpart”.

The fact that Iran would say this publicly is encouraging. Firstly it is unlike the Iranians to say things for no reason, not least of which when they are complementary to the United States. Secondly, the remarks are even more interesting given the strategy of Iran during the talks. This strategy seems to be predicated on blaming America for slowing things down and being unwilling to give ground in the talks.

With these latest comments, either the strategy of Iran has changed, or the talks are going so well that Iran feels willing to speak up about the atmosphere in the talks.

It adds “The Iranian government’s spokesman, Mohammad Bagher Nobakht, who is a close ally of the country’s president, Hassan Rouhani, told reporters on Wednesday that Tehran viewed the US administration as determined to end the nuclear standoff with Iran”.

The piece continues “Nobakht’s comments were rare remarks reflecting Tehran’s view of where the other side stands in the nuclear talks. In his State of the Union address on Tuesday, Obama said new sanctions by the US congress will only jeopardise the chance to peacefully end the nuclear stalemate with Tehran through diplomacy. ‘Between now and this spring, we have a chance to negotiate a comprehensive agreement that prevents a nuclear-armed Iran, secures America and our allies – including Israel – while avoiding yet another Middle East conflict. There are no guarantees that negotiations will succeed, and I keep all options on the table to prevent a nuclear Iran,’ he said”.

The report adds “In the latest round of nuclear talks, Zarif, who is also Iran’s lead nuclear negotiator, met the US secretary of state, John Kerry, for several hours in Geneva last week. On the sidelines of those talks, Zarif and Kerry took a stroll in the city, which marked rare scenes of the two top officials from the old adversaries having a break together outside negotiations behind closed doors. In Tehran, pictures of Zarif and Kerry walking in downtown Geneva prompted criticism from the hardline camp, with Mohammad Reza Naqdi, the commander of Iran’s informal voluntary Basij militia, who is a close confidant of the Iranian supreme leader, Ayatollah Ali Khamenei, attacking the Iranian foreign minister for that stroll”.

It ends “Nobakht was questioned on Wednesday about the controversies surrounding the stroll. The Isna news agency quoted him as responding: “It is silly to say that our diplomacy is weak because these two officials took a stroll.” This sort of criticism was not supported by Iranian people, he said”.

“Proposed cabinet is at risk of falling apart”

25/01/2015

It took months to piece together, but Afghanistan’s proposed cabinet is at risk of falling apart quickly, as nominees come under scrutiny for dual citizenship, alleged criminal activities, and being underage. Just a week after President Ashraf Ghani and election rival Abdullah Abdullah proposed their new cabinet, the names of about half the 27 nominees could be thrown out. Such a result would be a blow to President Ghani, whose efforts to forge a “unity” government with Abdullah took more than three months. Negotiations with Abdullah, who in his role as government chief executive was given a share of nominees, were reportedly tense. But when the names were announced on January 13, the list appeared to meet Ghani’s promises to form a cabinet full of new faces chosen on merit and free of Kabul’s strong patronage system. Getting those nominees past parliament, which is to vote on the issue on January 20, will be easier said than done, however”.

Allowing Assad to stay?

25/01/2015

A report from the New York Times notes that America is beginning to shift policy on Syria.

It opens “American support for a pair of diplomatic initiatives in Syria underscores the shifting views of how to end the civil war there and the West’s quiet retreat from its demand that the country’s president,Bashar al-Assad, step down immediately. The Obama administration maintains that a lasting political solution requires Mr. Assad’s exit. But facing military stalemate, well-armed jihadists and the world’s worst humanitarian crisis, the United States is going along with international diplomatic efforts that could lead to more gradual change in Syria”.

It notes that a ceasefire has been proposed by the UN, yet “the diplomatic proposals face serious challenges, relying on the leader of a rump state who is propped up by foreign powers and hemmed in by a growing and effective extremist force that wants to build a caliphate. Many of America’s allies in the Syrian opposition reject the plans, and there is little indication that Mr. Assad or his main allies, Russia and Iran, feel any need to compromise. The American-backed Free Syrian Army is on the ropes in northern Syria, once its stronghold, and insurgents disagree among themselves over military and political strategy”.

It mentions that “Secretary of State John Kerry declared last week that the United States welcomed both initiatives. He made no call for Mr. Assad’s resignation, a notable omission for Mr. Kerry, who has typically insisted on it in public remarks. Instead, he spoke of Mr. Assad as a leader who needed to change his policies”.

It notes that “The shifts reflect a longstanding view among United Nations officials in Syria that the West must adapt to the reality that Syrian insurgents have failed to defeat Mr. Assad. Syrians on both sides have said frequently in interviews that they fear the growing influence of foreign militants, and while they mistrust all international players that have financed warring parties, they are willing to explore compromise with other Syrians. Western diplomats who had long called for Mr. Assad’s immediate resignation say now that while he must not indefinitely control crucial institutions like the military, a more gradual transition may be worth considering. One Western diplomat at the United Nations said that while a ‘post-Assad phase’ must eventually come, “the exact timing of that, we can discuss,” as long as the solution does not ‘cement his position in power.’ Western leaders now openly talk about a deal allowing some current officials to remain to prevent Syria from disintegrating, like Iraq and Libya”.

The consequence of this however is that “such statements have further alienated Washington from ordinary anti-Assad Syrians and rank-and-file insurgents, reinforcing the idea that the West has decided to tolerate Mr. Assad. The view that the United States supports Mr. Assad is spreading even among the groups receiving direct American financing, groups deemed moderate enough to receive arms and work with a United States-run operations center in Turkey”.

The writers continue “Tarek Fares, a secular Syrian Army defector who long fought with the loose-knit nationalist groups known as the Free Syrian Army but who has lately quit fighting, joked bitterly about American policy one recent night in Antakya, Turkey. ‘This is how the Americans talk,’ he said. ‘They say, ‘We have a red line, we will support you, we will arm you.’ They do nothing, and then after four years they tell you Assad is the best option.’ The United Nations freeze proposal tries to improve on efforts over the last 18 months inside Syria, where the government and insurgents have reached local cease-fire deals to restore basic services and aid delivery — most recently on Thursday in the Waer neighborhood of the city of Homs”.

Indeed, America would not be in this mess if it committed overwhelming force to the war in Syria at the start. It could have then fashioned a settlement that would keep Syria intact but allow for religious diversity. Instead years of dithering have led the White House to seek any solution possible to rescue Obama’s legacy.

It ends “That leaves American policy ambiguous, offering only modest verbal support to the new mediation efforts while continuing to finance some Syrian insurgents, yet not enough to seriously threaten Mr. Assad. Even a new program to train them to fight ISIS will not field fighters until May. Critics argue that Washington is simply trying to disengage and offload the Syria problem to Mr. Assad’s allies, Russia and Iran, even at the cost of empowering them”.

“Iran and Russia signed”

25/01/2015

Iran and Russia signed an agreement Tuesday to expand military ties in a visit to Tehran by the Russian defense minister. Sergei Shoigu, in remarks carried by Russian news agencies, said Moscow wants to develop a “long-term and multifaceted” military relationship with Iran. He said that the new agreement includes expanded counter-terrorism cooperation, exchanges of military personnel for training purposes and an understanding for each country’s navy to more frequently use the other’s ports. Iran’s Defense Minister Hossein Dehghan urged greater cooperation as a means of opposing American ambitions in the region. Moscow and Tehran have staunchly supported Syrian President Bashar Assad throughout Syria’s civil war, while Washington advocates regime change and supports rebel group”s.

Francis reboots the Synod debate

23/01/2015

A piece by John Allen notes that Pope Francis has changed the nature of the debate on sexual morality.

He starts “When Pope Francis arrived in the Philippines Jan. 15, both his mind and his heart were focused on the people he was coming to see. His primary motive was to comfort the survivors of an almost apocalyptic 2013 super-typhoon, but he also knew the entire nation would be ecstatic that the pope — any pope, really — was in town. The Philippines — 81% Catholic — arguably represent the greatest home court advantage for a pope on the face of the planet, and Francis wanted to return the favour. Yet popes, like politicians, tend to craft their messages for multiple audiences. Although Francis’ principal concentration may have been on the Filipinos who defied a tropical storm to turn out in the millions, he simultaneously seemed to be speaking to a much smaller group, one that wasn’t even physically present”.

Allen goes on to make the point “In effect, Francis appeared to be talking to the roughly 300 bishops and other Church leaders who will make up the next Synod of Bishops on the Family in October. One way to read what the pope was trying to accomplish is as a reboot of the synod debate, reassuring conservatives that whatever happens in October, the basics of Catholic teaching on sexuality and the family are not at risk”.

Allen fairly writes that “Let’s start with a premise: In his heart of hearts, Pope Francis would like to see some accommodation made for Catholics who divorce and then remarry outside the Church, and who are thus barred from Communion”.

He continues “Watching last October’s synod play out, Francis surely realises that discussion of the divorced and remarried was swept up into broader tensions over other topics — how welcoming the Catholic Church ought to be for gays and lesbians, for instance, and how positive its evaluation should be of all sorts of other “irregular” relationships, such as living together outside marriage. Clash over those issues was monumental, and the divisions profound. There’s absolutely no indication that’s any less true now than it was last October”.

Pointedly Allen correctly notes that “Francis is nothing if not politically astute, and thus he grasps that if he wants something resembling consensus on the divorced and remarried question, he’s got to separate it from the controversies over sexual morality. Politically-minded observers will find it difficult not to think that’s part of what his messages on the family in the Philippines were designed to accomplish. On Friday night in Manila, Francis held a meeting with 20,000 Filipino families in which he blasted what he called the “ideological colonization” of the family. It’s a phrase that requires some unpacking for the outside world, but is immediately recognizable to Catholic cultural conservatives”.

Allen writes that “That night in Manila, Francis also departed from his prepared text to offer a strong defense of Pope Paul VI and his controversial 1968 encyclical Humanae Vitae that upheld the contraception ban. ‘He had the strength to defend openness to life at a time when many people were worried about population growth,’ Francis said. Anyone who’s been watching this pope knows that when he goes off-the-cuff in Spanish, it’s because whatever follows is truly important to him. Francis came back to these subjects in an airborne news conference on the return flight to Rome on Monday. Before the flight departed, word came back to the press corps that the pope wanted to be asked about ‘ideological colonization.’ Eager to hear what he had to say, we were happy to oblige”.

However, in the long term, the efforts by Francis to separate Communion for the divorced and remarried will only delay the reopening of questions about gays and lesbians. Naturally the Church will try to avoid the issue but there is little doubt that such issues will again resurface if Francis gets his way when it comes to Communion.

Allen ends the piece “Francis described this colonization as an assault on the right of peoples to make their own choices and to preserve their own identity. He also cited the African bishops as having brought this up at the last synod. During that summit, the Africans emerged as a strong center of resistance to any liberalization on sexual ethics, and by aligning himself with their diagnosis about ideological colonization, the pontiff indirectly let them know he’s not the enemy”.

He closes “Some headlines from that news conference focused on the pope’s green light to limit the size of Catholic families, in part because he served up an irresistible sound-bite: ‘To be good Catholics, we don’t have to breed like rabbits.’ Yet as insiders parse the pope’s words, they’ll discover that he was in no way talking about contraception, since he once again praised Paul VI and even said that Pope Paul was trying to ward off a ‘neo-Malthusian’ ideology of population control”.

He concludes “The bottom line is that the Church’s pro-life camp may look at what Francis had to say in the Philippines and conclude that whatever happens on the divorced and remarried question, the balance of the Church’s teaching on human sexuality is safe. It’s noteworthy that amid all this talk about the family, Francis never said word one about the divorced and remarried. The seeming implication is that it’s a separate question”.

“Try to convince Cuba to lift travel restrictions”

23/01/2015

The United States will try to convince Cuba to lift travel restrictions and upgrade its interest section to an embassy during historic talks in Havana this week, a senior State Department official said on Monday. “We are looking forward to the Cubans lifting travel restrictions, to trying to lift the caps on the number of our diplomat personnel, to try to gain unimpeded shipments for our mission and to the free access to our mission by Cubans,” the official told a conference call. The talks aimed at normalization relations with Cuba will be led by Roberta Jacobson, the State Department’s top diplomat for Latin America, the first visit by a senior American diplomat in more than three decades”.

 

“They do not yet fully trust Abadi”

23/01/2015

A short article from Foreign Affairs discusses the first 100 days of Haider Abadi’s rule and asks what he has done to mend sectarian strife in Iraq.

The writer begins, “Prime Minister Haider al-Abadi, once an obscure parliamentarian who had been exiled to the United Kingdom under former President Saddam Hussein, recently emerged from the shadows of the Dawa party to lead his country out of the most threatening security and political crisis it has seen since 2003. He was formally appointed to office on September 8, inheriting a country that was essentially in ruins. A third of Iraq had fallen to the Sunni militants of the Islamic State of Iraq and al-Sham (ISIS), including Mosul, the country’s second-largest city; the Kurds had moved to take oil-rich Kirkuk and threatened to secede; and the Shia were bracing for further ISIS advances”.

The writer notes that “Although Abadi was an untested leader, his initial appointment solicited broad domestic and international approval because of his promise, as a Shia, to balance the conflicting interests of Iraq’s ethno-sectarian groups: Sunnis, Shia, and Kurds. Abadi also had a reputation in the parliament as a conciliatory and solution-oriented leader. To be fair, some of the premature fanfare around Abadi might have actually stemmed from the collective relief that his divisive predecessor, Nouri al-Maliki, was finally departing”.

He goes on to make the point that “A defining moment of Abadi’s first few months as prime minister was easing the long standoff between Baghdad and Iraqi Kurdistan over oil wealth sharing and finally offering support to the Kurdish military forces, known as the peshmerga, which had been sorely neglected under Maliki. Under a new agreement forged in mid-December, Baghdad will pay the Kurdistan Regional Government (KRG) half of all revenue generated from Kurdish-controlled oil fields“.

Pointedly he argues “Although the Sunnis are pleased to see Maliki go, they do not yet fully trust Abadi. Only a handful of Sunni tribes in Anbar province, the majority of which is occupied by ISIS, have joined government forces to defeat the insurgents. But the Sunnis’ reluctance may soften over time if Abadi continues to remain sensitive to their demands, such as ending discriminatory policies that target Sunni members, freeing Sunni prisoners, and granting more powers to Sunni provincial governments, among others. His new government has allocated more ministerial posts to Sunni leaders—seven in total—and, for the first time since 2010, parliament approved the interior and defense minister appointments, after two months of fierce debate. The latter position was filled by Khaled al-Obeidi, a prominent Sunni politician from Mosul. In November, when a Maliki-appointed judge issued a death sentence against Ahmed al-Alwani, a Sunni political leader whose tribe is helping Baghdad fight ISIS, Abadi reached out to the Alwani tribal chiefs and suspended the sentence”.

Hopefully he adds “Abadi’s motivation to reform the military goes beyond just balancing sectarian tensions. The U.S.-led air campaign against ISIS has worked to contain the militants’ advance, but defeating ISIS requires rehabilitating Iraqi ground forces that scattered in the face of ISIS’ advance on Mosul in June 2014. To jumpstart this process, Abadi replaced 36 corrupt, mostly Shia officers with others from a balance of ethnic and religious backgrounds, and has been working with U.S. advisers and other foreign powers in retraining, arming, and equipping vetted units of the Iraqi army. In fact, signaling a new level of trust in the Iraqi government, the United States has pledged $1.5 billion to train and arm these units and has resumed the sale of F-16 fighter jets, which had been suspended after the 2003 U.S.-led invasion”.

To make things more complicated he goes on to make the point that “Alleviating Kurdish and Sunni grievances is not cost-free. Abadi could lose some support from within the State of Law, a Shia political bloc that includes the Dawa party once controlled by Maliki, and from the wider Iraqi Shia community. Angered by the deal with the Kurds, people in the oil-rich city of Basra—part of the southern Shia region that produces 90 percent of Iraq’s oil—are waging a public campaign for self-governance. In order to appease both Shia and Sunnis, Abadi has had to make public stands in support of the Shia while privately placating the Sunnis”.

On the foreign policy front he writes “When it comes to foreign policy, Abadi’s most significant effort has been soothing long-standing animosity between Iraq and the Sunni Arab states. Over the past three months, Iraq has sent high-level officials to Bahrain, Kuwait, Saudi Arabia, and the United Arab Emirates in attempts to ease tensions, build trust, and garner support in the struggle against ISIS. These diplomatic overtures underscore key changes in Iraq’s foreign policy and illustrate an understanding that any chance for success in defeating ISIS and reconciling with Sunnis at home requires the support of Sunni Arabs across the region”.

The piece ends “Within only three months, Abadi has decorated his short résumé with a number of impressive political feats: successfully appeasing the disenchanted Kurds, rebuilding a corrupt military, opening dialogues with estranged Arab neighbors, and renewing ties with the United States. These measures are only the tip of the iceberg; he needs to sustain his achievements to truly succeed. Still, Abadi’s commitment to resolving Iraq’s sectarian strife—“even if I get assassinated by it,” he had boldly stated—is a welcome change from the schismatic style of his predecessor”.

“Almost 1.5 percent higher”

23/01/2015

Oil prices jumped in early Asian trading on Friday as news of the death of Saudi Arabia’s King Abdullah added to uncertainty in energy markets already facing some of the biggest shifts in decades. Abdullah died early on Friday and his brother Salman became king, the royal court in the world’s top oil exporter and birthplace of Islam said in a statement carried by state television. U.S. benchmark WTI crude futures rose more than 2 percent to a high of $47.76 a barrel in early Asian trading. International benchmark Brent futures opened up almost 1.5 percent higher at $49.10 per barrel at 0100 GMT. The Saudi King’s death comes amid some of the biggest shifts in oil markets in decades”.

 

“Kiev could offer a much friendlier environment”

23/01/2015

A piece argues that since the revolution in Ukraine hopes for an improvement in gay rights has not occurred.

The writer begins by noting that a cinema was destroyed by fire, “The fire was eventually put out, but much of the cinema was destroyed. An incendiary smoke grenade was deemed the most likely cause; fortunately, there were no casualties. The official investigation has yet to close, but two suspects were apprehended, reportedly confessing that they had aimed to disrupt the event and ‘express … contempt for LGBT people.’ Two days after the fire at Zhovten, about a dozen men in camouflage and the insignia of the ultranationalist group Right Sector tried to shut down another LGBT film screening“.

The author goes on “It was not supposed to be that way in the new Ukraine. The February revolution was aimed, first and foremost, at the ouster of the notoriously corrupt president Viktor Yanukovych and his criminal cabal. But there was also hope among many of the revolution’s liberal supporters that Ukraine would choose a pro-Western European course, not just politically, but culturally as well — one that would include a space for the LGBT community”.

These were indeed the goals of the revolution in Ukraine but the author is being naïve when he thinks that only two years on from the revolution gay rights would have not been advanced. First and foremost it was a revolution about governance. Yet, within this governance theme is accountability and respect for the law. Within these realms lie progress on gay rights. Therefore to separate one from the other is unfair and unjust. The link must be strengthened. When corruption has been stamped out and the rule of law have taken hold then and only then will progress follow. This is not to say that it is not frustrating but see how long these changes took to take hold in Western Europe.

Unsuprisingly he writes “Life has changed radically in Ukraine over the past year: Old attitudes toward politics, history, and national identity have altered beyond recognition and a new civic spirit has taken root among many, revitalizing Ukraine. But conservative attitudes toward people of different sexual orientation have doggedly persevered — and in some cases even worsened”.

For important context he writes “The annexation of Crimea in March of 2014 and the ongoing armed engagement with pro-Russian forces in the east of the country have pushed a large swath of Ukrainians to reject Moscow and its overbearing influence. At the same time, the ensuing daily chaos and uncertainty, as well as the rising levels of nationalism and militarization in Ukraine, have drawn many to the emotional safety of the traditional family and religious values of the Orthodox Church — an institution that has been often guilty of bigotry and open hostility to sexual difference. Old Ukrainian folk narratives, where men are supposed to be warriors while women play nurturers, have experienced a revival”.

Thankfully he notes that “The Ukrainian gay and lesbian community is large and vibrant, especially in Kiev, where gay clubs and bars operate in relative peace. But many of its members prefer to remain closeted. Homophobia in Ukraine is pervasive and deep-rooted, sharing many parallels with Russia’s. Homosexuality was illegal in the Soviet Union and was often equated with ‘counterrevolutionary’ positions and even fascism — a convenient way to deal with the regime’s enemies. Although it was decriminalized after Ukraine became independent in 1991, negative social attitudes persist to this day. According to a 2013 poll conducted by GfK Group, almost 80 percent of Ukrainians say they oppose any sexual relations between people of the same sex. In another poll, by the Ukrainian Gay Alliance and Ukrainian State Sociological Institute, 63 percent labeled homosexuality ‘a perversion’ and ‘a mental disease.’ That same year, a survey within the LGBT community carried out by Nash Mir Center found that 65 percent of respondents faced infringements of their rights due to sexual discrimination”.

However, he continues “Ukrainian laws also make no explicit provision for protecting from discrimination on grounds of sexual orientation. In fact, even the post-revolutionary Ukrainian government has actively fought off the EU’s urging to introduce any such legal language, since officially raising the issue of LGBT rights in Ukraine is seen as a huge political liability in today’s highly charged political climate”.

He adds later that “Even before the Maidan had ended there were signs that gay rights would be a contentious issue in post-revolutionary Ukraine. Local LGBT organizations decided not to promote queer politics or to display any related symbols at the Maidan protests last winter in order to keep the peace with more conservative, nationalist groups, who fought against the Yanukovych regime side by side with liberals”.

He ends the piece noting Russian tactics to undermine the revolution, “Despite the precautions, a small flash mob with rainbow flags at Maidan in January 2014 threatened to break the apparent harmony. Official LGBT spokespersons immediately denounced the event as ‘fake’ and a provocation organized by pro-Russian groups and possibly the Ukrainian Security Service (SBU) with the goal of breaking the unity of protestors and confirming the propaganda that presented Maidan as a product of European ‘degeneracy.’ Quite possibly, the flash mob was really a provocation — such tactics are not new in the handbook of the security services — but the paradox remains: LGBT groups took an active stand against a display of LGBT identity because of the understanding that talking about gay rights in Ukraine in the current political situation was a huge liability. Although one of the tacit goals of the revolution was to create a more just and equal society, many in Ukraine remain deeply prejudiced against gays and lesbians, even compared to conservative societies in places like Turkey, where the Gezi Park protests against the government of Recep Tayyip Erdogan in the summer of 2013 openly embraced LGBT groups”.

He concludes “Meanwhile, LGBT refugees have been arriving in Kiev from Crimea and eastern Ukraine, running away from both war and rising levels of violent homophobia. In Crimea, for example, the new prime minister, Sergei Aksyonov, has said that they ‘do not need such people,’ while separatist governments in eastern Ukraine have reportedly criminalized homosexuality using Soviet legal templates. But whether Kiev could offer a much friendlier environment is still under question. Post-Maidan Ukraine is still a place where law and order remain deeply problematic, the security services are ineffective, and aggression and military machismo have become part of daily life — not the sort of atmosphere in which gay and lesbian Ukrainians can feel a part of their new, remodeled country”.

India outpaces China

23/01/2015

India is expected to grow at 6.3 per cent this year and 6.5 per cent in 2016 by when it is likely to cross China’s projected growth rate, the IMF said on Tuesday while terming the new government’s reforms as “promising” but insisted that their implementation is key. In 2014, India’s growth rate was 5.8 per cent against China’s 7.4 per cent, said the World Economic Report update released by the International Monetary Fund. India’s growth rate in 2013 was five per cent as against China’s 7.8 per cent”.

King Salman

23/01/2015

Last night it was announced that King Abdullah of Saudi Arabia had died. He was succeeded by his half brother, Salman.

NPR reports that “Abdullah was born before Saudi Arabia was even a country. It was the early 1920s, and his father, Abdul Aziz ibn Saud, set out to conquer the tribes of the Arabian Peninsula. In one famous battle, ibn Saud surrounded the capital of a rival tribe. ‘Famously, instead of executing everybody, he invited them to be his guests,’ says Robert Lacey, author of two books on Saudi Arabia. And ibn Saud married one of those guests; Abdullah was a result of this marriage. His father eventually declared the land he’d conquered a kingdom. It remained of little interest to the West until 1938, when an American company discovered vast reserves of oil. After World War II, oil exports soared and Saudi Arabia boomed. Abdullah’s father died in 1953, and his dozens of sons vied for power and influence, but Abdullah did not stand out from the crowd. ‘I can remember when I lived in Saudi Arabia in the late ’70s, early ’80s. Abdullah was a sort of joke,’ Lacey recalls. ‘He was very butch and powerful-looking with his black beard, and then he would open his mouth and out would come this stutter.’ Abdullah later got a speech coach. Unlike the so-called playboy princes, he was known for austerity and toughness”.

The New York Times reports that Abdullah “who came to the throne in old age and earned a reputation as a cautious reformer even as the Arab Spring revolts toppled heads of state and Islamic State militants threatened the Muslim establishment that he represented, died on Friday, according to a statement on state television. He was 90. The Royal Court said in a statement broadcast across the kingdom that the king had died early Friday. The royal court did not disclose the exact cause of death. An announcement quoted by the official Saudi Press Agency said the king had a lung infection when he was admitted on Dec. 31 to a Riyadh hospital. The king’s death adds yet another element of uncertainty in a region already overwhelmed by crises and as Saudi Arabia is itself in a struggle with Iran for regional dominance. The royal family moved quickly to assure a smooth transition of power in a nation that is a close ally of the United States, the world’s largest exporter of oil and the religious center of the Islamic faith. In a televised statement, Abdullah’s brother, Crown Prince Salman, announced that the king had died and that he had assumed the throne”.

The report goes on to note “Abdullah became, in some ways, a force of moderation. He contested Al Qaeda’s militant interpretations of the faith as justifying, even compelling, terrorist acts. He ordered that textbooks be purged of their most extreme language and sent 900 imams to re-education sessions. He had hundreds of militants arrested and some beheaded. But he was also mindful that his family had, since the 18th century, derived its authority from an alliance with the strict Wahhabi sect of Sunni Islam. He accordingly made only modest changes to the kingdom’s conservative clerical establishment. When Islamic State forces conquered vast stretches of Syria and Iraq, imposing a creed linked to Saudi Arabia’s own, the kingdom was slow to respond. However, Abdullah chastised senior clerics for not speaking out more forcibly against the jihadists, and he eventually sent Saudi pilots to participate in an American-led campaign against the Islamic State. Abdullah’s Saudi Arabia had hurtled from tribal pastoralism to advanced capitalism in little more than a generation. The fundamentalist clerics who gave the family legitimacy remained a powerful force. Women who appeared in public without the required covering risked arrest or a beating from the religious police. Abdullah did make changes that were seen as important in the Saudi context. He allowed women to work as supermarket cashiers and appointed a woman as a deputy minister. At the $12.5 billion research university he built and named for himself, women study beside men.

It adds “However, he did not fulfill a promise made to Barbara Walters of ABC News in his first televised interview as king in October 2005: that he would allow women to drive, a hugely contentious issue in Saudi Arabia. Although he ordered the kingdom’s first elections for municipal councils in 2005, a promised second election, in October 2009, in which women would vote, was postponed until September 2011. Then in March of that year, the Ministry of Municipal and Rural Affairs announced that the question of women voting would be put off indefinitely “because of the kingdom’s social customs.” Abdullah’s greatest legacy, however, may prove to be a scholarship program that sent tens of thousands of young Saudi men and women abroad to study at Western universities and colleges. It has been suggested that the changes long resisted by conservative forces — resistance that even a king could not overcome — would one day come about as those men and women rose in the government, industry and academia. Perhaps Abdullah’s most daunting challenge arrived in the wake of the Sept. 11, 2001, terrorist attacks, with the revelation that 15 of the 19 hijackers were Saudis. The royal family at first railed at what it called a vicious smear campaign against the kingdom, then ruthlessly suppressed known militants — not least because the monarchy itself was a main target of Al Qaeda. Striking a balance was almost always Abdullah’s preference. He strove to keep oil prices high, but not so high that they prompted consumers to abandon petroleum, then hedged his bets by investing billions in solar energy research. In 2008, he convened a meeting of world religious leaders to promote tolerance, but held it in Madrid rather than Saudi Arabia, where the public practice of religions other than Islam is outlawed. Yet Abdullah could, and did, take strong positions. He denounced the American-led invasion of Iraq as “an illegal occupation”; proposed a comprehensive peace plan for the Middle East that included recognition of Israel by Arab nations; and urged in a secret cable that the United States attack Iran, Saudi Arabia’s great rival. “Cut off the head off the snake,” he said. His kingdom’s interests always came first. Although American companies discovered and developed the Saudi oil fields, he cut deals with Russian, Chinese and European petroleum companies. He made it clear that the world’s energy appetites mattered less than Saudi Arabia’s future”.

In a related article from Foreign Policy it argues incorrectly that there will be disruption. The writer argues “The king’s death comes at a delicate time for the oil-rich kingdom, which is struggling with the impact of plunging oil prices domestically, the rise of the Islamic State, and an Iran’s whose influence is growing across the Mideast as its proxies take on increasingly powerful roles in Iraq, Lebanon, and Syria. Abdullah’s successor will also face an intensifying crisis in Yemen, whose Saudi-backed government has been effectively overthrown by Iranian-backed Houthi rebels. A Saudi official said in a recent interview that Riyadh sees the future of Yemen as ‘an existential threat.'”

Yet the reason it is “struggling” with the low price of oil is largely as a result of the choice of the Saudi government. It is either an attempt to weaken Iran or perhaps a decision to try to undermine US shale. Meanwhile, the problems  faced by King Salman will be the same today as tomorrow, so could not be said to be overly disrtuptive. Of course they could become so if they are not dealt with in the correct way.

This message of continuity was underlined in comments by the new King when in a report mentions that “Hours after the death of Saudi Arabia’s ruler, his successor, King Salman, moved quickly on Friday to project a sense of continuity, saying in a televised address that the oil-rich nation, a Western ally that has long played a dominant role in Arab politics, would not change course. “We will continue adhering to the correct policies which Saudi Arabia has followed since its establishment,” Salman, the former crown prince, declared. Salman was speaking as leaders from the Muslim world converged in Riyadh, the Saudi capital, for the funeral of Abdullah, his brother. Abdullah steered his deeply conservative land through the turmoil of the Arab Spring and was caught up in the region’s seething rivalries before his death early Friday at 90. In his address, Salman seemed to acknowledge the tensions that have gripped the region, playing out in Syria’s civil war and the consequent rise of the militant group Islamic State, also known as ISIS and ISIL”.

Interestingly the piece ends “Despite the tensions between Iran and Saudi Arabia, Tehran said Friday that its foreign minister, Mohammad Javad Zarif, would attend an official memorial service for Abdullah. The Iranian Foreign Ministry also expressed “condolences to the government and people of Saudi Arabia.” The rivalry between the two countries is one of the region’s principle fault lines. It is in part a geopolitical struggle between nations that see themselves as the regional superpower and the leader of the Islamic world. But it also reflects the broader division between Shiites, who govern in Iran, and Sunnis, such as those who dominate in Saudi Arabia”.

Relatedly, Deputy Crown Prince Muqrin  has become Crown Prince. There was some talk that he would not transfer to the role of full Crown Prince due to his mother’s heritage. Muqrin, 69, should become king himself in the not too distant future as King Salman is not in good health.

However, in what may the end to the Saudi succession crisis, “Saudi Arabia’s Interior Minister, Prince Mohammed bin Nayef, a close friend of the United States and a scourge of Islamist militants, will be the country’s first king from the third generation of its ruling dynasty. King Salman moved swiftly to appoint Mohammed Deputy Crown Prince on Friday, hours after he took the throne following the death of King Abdullah. The decision appeared to settle for many years to come tough decisions over the kingdom’s future succession. By sending an assassin to try to kill Prince Mohammed when he was Saudi security chief in 2009, al Qaeda paid him the compliment of treating him as one of its most dangerous enemies”.

It goes on to mention that “The 55-year-old is now firmly established as the most powerful member of his generation in the ruling al-Saud family, and even before he becomes king will be one of the most important figures in the world’s top oil exporter”.

Interestingly the article adds that “Diplomats and Saudi analysts and academics are uncertain what positions he holds on the big long-term issue facing the kingdom: reconciling social change and a young population with conservative traditions and an oil-dependent economy”.

 

 

 

Pope Francis backpedals

23/01/2015

Pope Francis praised big families on Wednesday as a gift from God, after his comments that Catholics don’t have to breed “like rabbits” made headlines this week. Francis said numerous children don’t cause poverty in the developing world, as some have suggested, and that the real cause of poverty is an unjust economic system that idolizes money over people. Francis reviewed his recent trip to Sri Lanka and the Philippines during his weekly general audience. During the trip, Francis strongly defended the Vatican ban on artificial contraception. But he also restated the church’s position that Catholics needn’t breed “like rabbits” and should practice “responsible parenthood” through church-approved birth control methods. On Wednesday, he gave a nod to big families, who may have felt somewhat insulted by his comments aboard the plane returning to Rome. Just weeks ago, Francis met with an association of large Catholic families to show his support”.

Still wrong on Russia

23/01/2015

An article attacks Mitt Romney’s claim from 2012 that Russia is the greatest enemy of the United States. The writer argues that Romney, despite the recent events in Ukraine is still incorrect.

He opens “In 2012, Republican presidential nominee Mitt Romney possessed no real foreign-policy experience. But that didn’t stop him from attacking President Barack Obama as weak on national security. With Osama bin Laden dead and the wars in Iraq and Afghanistan poised to wind down, Romney looked elsewhere for a place where Obama was failing: Russia. It all started in March 2012, when a hot mic caught Obama telling then Russian President Dmitry Medvedev that he would have more “space” to negotiate on missile defense after the November presidential election in the United States”.

Interestingly he makes the argument that “Romney, though, wasn’t right then, and he isn’t right now. The Crimea invasion, as Obama has said, was the act of a cowed ‘regional power‘ — and a declining one at that. The days when Moscow could challenge the United States on a global scale are long gone. Russia is boxed in by sanctions and wracked by a collapsing economy, thanks in part to plummeting oil prices. Romney’s attempt to claim victory on all things Russia is misplaced, and it will certainly undermine his foreign-policy credibility if he chooses to run once again”.

He elaborates on the point, writing ,”The rapid decline in oil prices in 2014 has exposed Russia’s weakness both at home and abroad. With the country a petrostate, the Russian government is now desperate for cash, with over half of its revenue coming from oil and gas. This month, Finance Minister Anton Siluanov attributed $180 billion of Russia’s current $240 billion budget shortfall to the drop in oil prices. This, in turn, has hurt wages as the value of the rouble plummets. And, on a global scale, Russia has lost much of its leverage. As professor Cullen Hendrix of the University of Denver has argued, Russia long used its position as an energy exporter for coercive diplomacy. The decline in oil prices will, consequently, sap that power”.

He makes the point that “Putin’s aggression has been motivated, in part, by a need to bolster his domestic position amid a dismal economy. That he was willing to invade Crimea — at the cost of inviting both international scorn and powerful sanctions that have helped to further bludgeon his country’s economy — demonstrates that he is focused on his country’s own backyard, with little regard for the world stage. These are the actions of a country struggling to stay relevant, not of a state on the same geopolitical tier as the United States”.

The author adds “Since the end of the Cold War, the United States has focused on “cooperative threat reduction” that seeks to secure the thousands of tactical nuclear weapons in Russia’s arsenal. As Harvard University’s Graham Allison has noted, many of these weapons are vulnerable to unauthorized use and sale on the black market. The Obama administration has stepped up efforts to secure this material, but a return to a Cold War-era position on Russia — as Romney prefers — would undermine cooperative efforts to secure it”.

He goes on to mention that “Romney today fails to understand that the United States and Russia can work together when they share common interests. In 2013, Russia helped devise the framework for the destruction of Syria’s chemical weapons. And in the past year, Moscow has actively engaged in nuclear talks with Iran and today remains an important player in these negotiations. Though such cooperation may be limited, the Obama administration now realizes that there may well be an opening with Russia on the geopolitical stage”.

The author makes the wholly valid assertion that “Romney’s accusation that this amounts to ‘bowing to the Kremlin‘ is hyperbole. The reality is that Obama has done pretty much what Romney suggested in 2008: hold ‘frank and open’ conversations with Russia about cultural and political differences, while finding areas on which to cooperate where there are shared values. It is true that Russia has used its veto in the Security Council to undermine U.S. interests, as it did when it vetoed a resolution permitting the use of force in Syria, but Romney’s own answer during his run for the 2008 presidential nomination was that America must work with Russia on this; the fact remains that they are all a part of the Security Council together”.

He ends “If Romney does run again, he will tell the American people his hawkish stance on Russia has been validated since the last election. This may get him somewhere with the Republican base, which perceives Russia as a threat. But the general electorate does not share this view. While the United States can and should confront Russia’s aggression in Crimea and elsewhere, it should not inflate Russia’s importance on the world stage”.

Peace talks in Libya

21/01/2015

Libya’s warring factions have agreed on an “agenda” to form a unity government after two days of U.N.-brokered talks in Geneva, the U.N. said Friday. The North African nation has been gripped by civil conflict since the overthrow of dictator Muammar Qaddafi in a 2011 uprising, with rival governments and powerful militias battling for control of key cities and the nation’s oil wealth. “The participants agreed after extensive deliberation on an agenda that includes reaching a political agreement to form a consensual national unity government and the necessary security arrangements to end the fighting,” a U.N. statement said”.

Obama’s missed opportunity

21/01/2015

Following on from President Obama’s State of the Union, an article argues that the speech was a missed opportunity.

The author begins, “A president who has lost control of the Congress has basically three options: 1) steal the opposition’s ideas and generously offer them the opportunity to work with you to make them law; 2) refuse to implement legislation passed by the Congress, bringing government to grinding halt; or 3) pivot to foreign policy. You’ll notice there isn’t a section in the playbook about laying out an agenda that has just been repudiated in elections and daring the Congress to ignore it. That tends to result in the Congress ignoring the agenda, which is likely what the 114th Congress will do with this one. Sitting behind the president, John Boehner didn’t look worried — he looked embalmed”.

Of course each of these options ignores the role of the GOP to play a constructive role by proposing legislation that President Obama would want to sign.

The writer continues “This would have been an advantageous moment for President Obama to surprise us; to take for credit the best ideas Republicans are considering: for job creation and tax reform, budgeting to alleviate sequestration, regulation to advance America’s energy independence while protecting our environment, strengthening our national security at a time when the public is worried. To identify areas for potential compromise that show the government working for the American people, and invite Republicans to work together in a new spirit of unity. A time to explain that the world is uncertain and dangerous and therefore requires ever closer cooperation with our friends, and ever greater efforts to create positive change in parts of the world slipping into chaos. President Obama did none of those things in his State of the Union address”.

The writer does make the valid point that “He again counterpoised “being dragged into another ground war in the Middle East” as a counterpoint against wise policy. His claim to a “smarter kind of American leadership” would be funny if it weren’t so sad on the day Yemen’s presidential palace was overrun — Yemen being the example President Obama used as a success story last time”.

The writer then makes the partisan point that “He did not thank Congress for its strong stand on sanctions against Iran or ask its tolerance, even after his deadline passed for an Iran agreement. Instead he insisted Congress’s approach ‘doesn’t make sense.'”

Yet what is amazing is the writers inability to see the stupidity of what he is writing. To bemoan that President Obama did not thank the party that have constantly made already difficult and delicate talks even harder is beyond belief. The fact that the writer seems to think that President Obama should ask Congress for tolerance in the talks is laughable. The authors claim that the deadline has passed is either ignorant or biased, if not both and should therefore be completely ignored. The approach of Congress, which is not just the GOP in this instance, is stupid as it is predicated on trying to stop a deal before the talks have even ended.

In a related article Kate Brannan writes that it was mission unaccomplished. She opens “President Barack Obama has long used State of the Union addresses to boast that he has fulfilled a central promise from his 2008 campaign: ending what he once derided as a ‘dumb war’ by bringing all U.S. troops home from Iraq. And even though this year’s State of the Union is Obama’s first since he was forced to deploy hundreds, and now thousands, of U.S. troops to Iraq to combat the Islamic State, the president’s message remains largely the same: the long war there is over, and he will not be launching a new one”.

She goes on to make the valid point “The statement is emblematic of a president who wants to maintain some distance from what’s going on in Iraq and Syria. There is clearly a ground war raging in both countries, but the president’s view is that by sticking to airstrikes and keeping U.S. troops solely in a training mission, rather than a combat one, the U.S. can avoid getting ensnared in a potentially long and bloody ground war”.

She continues “Meanwhile, there are lawmakers in both parties that believe Obama’s decision to withdraw all American troops from Iraq in 2011 allowed the rise of the Islamic State. And as U.S. troops continue to leave Afghanistan, some in the military are considering whether more troops need to stay in the country longer to ensure security. In his speech, the president acknowledged that the effort to destroy the Islamic State would take time, although he didn’t specify exactly how long it could take”.

She adds correctly, “The Obama administration was slow to respond to the Islamic State’s advances, ignoring entreaties from Baghdad and not launching airstrikes until August, by which point the group had already taken sizable portions of Iraq and Syria. U.S. and coalition aircraft have carried out 1,821 strikes, but U.S. and Iraqi officials say that truly beating back the group will require American troops on the ground to retrain the battered Iraqi security forces to help take back and hold territory. That presents a thorny question for Obama, who has consistently insisted that no U.S. combat troops would return to Iraq even as the number of American forces there has ticked steadily higher”.

She writes later that “In 2013, the president didn’t even mention Iraq, an indication of the White House’s trying to turn the page on a war it promised to end. This year he’ll have no choice but to address it again — even if he tries to minimize the scale, and dangers, of the growing U.S. presence in Iraq, where it’s becoming increasingly difficult to describe the U.S. troops deployed there as noncombat troops. At Al Asad air base, U.S. troops are under regular, but “completely ineffective,” mortar and rocket fire from Islamic State fighters, according to the Pentagon. Meanwhile, Canadian special forces who are on a similar training mission exchanged fire with Islamic State fighters last week”.

She ends “Jeffrey said he’d like to see the president have a hard, honest talk with the American people about what it’s going to take to “degrade, and ultimately destroy” the Islamic State. It won’t require hundreds of thousands of troops or more than a trillion dollars, which the United States poured into the last war in Iraq, but it will require a serious commitment and a willingness to take risks, Jeffrey said”.

Afghans fighting for ISIS

21/01/2015

The first concrete evidence has emerged of attempts to recruit fighters in Afghanistan for the so-called Islamic State (IS). A former Taliban commander in Helmand province, Mullah Abdul Rauf, has declared his allegiance to IS. An elder from the Sangin district, Sayeduddin Sanginwal, told the BBC that the new group had fought with the Taliban after replacing white Taliban flags with the black flags of IS. He said about 20 people from both sides had been killed and injured. The deputy commander of the Afghan army unit responsible for the area, General Mahmood, confirmed that he had received reports of the new group within the past few days”.

“His sixth State of the Union”

21/01/2015

President Obama, last night, delivered the State of the Union. Much of the speech was on the financial crisis with smaller amounts on foreign policy and then education.

A piece from the Washington Post notes that, “President Obama, who took office six years ago amid a historic recession and two U.S. wars, declared unequivocally Tuesday that the nation had clawed its way out of those dire straits, praising Americans for their resilience but also pointedly taking credit for leading the way. ‘America, for all that we’ve endured; for all the grit and hard work required to come back; for all the tasks that lie ahead, know this: The shadow of crisis has passed,’ Obama said in his sixth State of the Union address to the nation and a joint session of Congress in the House chamber. After years of fighting with Republicans over where to take the country, Obama delivered an hour-long defense of his policies that at times sounded like a victory lap. He asserted that the brightening economic picture — including accelerating job growth, more people with health insurance and lower gas prices — had proved that he was right, and his adversaries misguided, all along”.

The report goes on to make the point that “The president had been cautious over the past two years not to gloat over news of fitful economic growth, mindful that the economy remained tenuous and public confidence uneasy. But with the jobless rate well below 6 percent, the stock market nearing record highs and his job-approval ratings rebounding, Obama on Tuesday night dropped his veneer of reserve and appeared to delight in having proved his critics wrong”.

The piece adds that “Obama chided Republicans to help improve Washington’s political discourse. He harked back to the themes of national unity that helped him get elected in the first place in 2008 and called for more bipartisan cooperation on key issues. But in doing so, Obama also served to remind the GOP of the reasons their relationship is so fraught — pausing at one point from his prepared text to deliver a spontaneous, and quite partisan, barb. When Republicans jokingly applauded after Obama noted that he had run his last campaign, the president quipped: “I know because I won both of them.” Obama took the spotlight in front of Vice President Biden and House Speaker John A. Boehner (R-Ohio) intent on proving that he would remain relevant in the final quarter of his presidency as the race to replace him next year begins”.

This is one of the key problems not just with the GOP. The paper is quite right to point out the desire of Obama to be bipartisan. However, it was the GOP that gave President Obama the opportunity to make his immature comment. If they had not applauded the remark would probably not have been said. Instead, the GOP look childish and partisan as does Obama for stooping to their level. Both need to grow up.

The article goes on to mention that “Just two months after Democrats suffered a severe blow in the midterm elections, when voters handed control of both chambers to the GOP for the first time during his tenure, Obama’s speech came amid warnings from Republicans to avoid divisive rhetoric and policies. ‘Tonight isn’t about the president’s legacy. It’s about the people’s priorities,’ Boehner said in a video posted to YouTube on Tuesday. ‘Making the government bigger isn’t going to help the middle class. More growth and more opportunity will help the middle class, and those are the Republican priorities.’ But Obama had told allies that he would not kowtow to GOP demands despite the party’s new majorities. The president announced early in his speech that he would focus less on the usual laundry list of new proposals — the White House had revealed most of them ahead of time — and instead focus on the ‘values at stake’ for the American people moving forward”.

The piece notes that “Obama laid out proposals to revamp the tax code by raising taxes and fees on the wealthiest Americans and largest financial institutions — and using the money to pay for free tuition for two years of community college and for a $500 tax credit for married couples in which both spouses have jobs. Though the White House knew the ideas have a slim chance of being approved by lawmakers, the point was to start a debate on Obama’s terms. And the president and his advisers were determined to begin to frame his legacy as having delivered on his promise to improve the lives of ordinary Americans”.

Naturally none of these will be passed, which is a great pity, but it is as much legacy building as setting the ground for his successor, most likely Clinton in 2016.

The report adds that “On foreign policy, Obama sought to build on the idea, first enunciated during a lengthy speech at West Point last spring, of a ‘smarter kind of American leadership’ in which the United States balances military intervention with diplomacy and coalition-building. Obama has made the case in recent weeks, as he marked the end of U.S. combat operations in Afghanistan, that the nation is safer after more than a decade of combat abroad — even though he authorized renewed U.S. military operations in Iraq and Syria to combat the Islamic State militant group. American leadership ‘is stopping ISIL’s advance,’ Obama said, using an acronym for the group. But such a declaration seemed premature, set against images Tuesday of two orange-clad Japanese hostages kneeling in the desert before a black-robed militant”.

This is where reality and President Obama diverge. His desire for a smarter leadership is commendable but it is increasingly looking like a half baked isolationism, at least when it comes to the Middle East. This means that it is the worst of both worlds. Obama neither has the satisfaction of ignoring the problem, yet nor has he the courage of giving it his full attention. It is true that the advance of ISIS has been stopped but they still hold territory and the airstrikes have not been successful in rolling back their gains.

The article continued, “Obama was determined to project an optimistic view of the nation’s future, and he maintained faith that the country could rise above its divisions. He alluded to his own diverse upbringing in Hawaii and Chicago and cited his keynote address as an Illinois state senator at the 2004 Democratic National Convention, which launched him on the national political radar as a bright young prospect for higher office. ‘A better politics isn’t one where Democrats abandon their agenda or Republicans simply embrace mine,’ Obama said Tuesday. ‘A better politics is one where we appeal to each other’s basic decency instead of our basest fears.’ The president acknowledged that he had heard the political pundits declare since he took office six years ago that he had failed to make good on his vision at a time when ‘our politics seems more divided than ever. It’s held up as proof not just of my own flaws — of which there are many — but also as proof that the vision itself is misguided, and naive.’ To the contrary, Obama insisted, as he pledged to keep working to change Washington, even as he was, in many ways, declaring victory over his rivals”.
In a related article the confidence of Obama is noted, “Seventy seven days ago, Barack Obama’s party lost control of Congress — largely due to his unpopularity nationwide. You’d have never known it watching the president deliver his sixth State of the Union address to a joint session of Congress Tuesday night. From start to finish, Obama was supremely confident, challenging — and mocking — Republicans at every turn. Touting the turnaround of the economy, Obama turned to Republicans, who, in classic State of the Union symbolism, had refused to deliver a standing ovation, and joked “That’s good news, people.” On Cuba, Obama challenged those who disagreed with his Administration policies; “When what you’re doing doesn’t work for fifty years, it’s time to try something new,” he said”.

It goes on to mention “more than the words on the page, it was Obama’s tone and overall demeanor that absolutely oozed confidence. He winked. He laughed at his own jokes. And he ad-libbed. Repeating his “I’ve run my last campaign” line, Obama was clearly irked by the sarcastic applause from Republicans in the audience. “I know because I won both of them,” he added, in a rare moment of candour”.

It adds “Obama is quite clearly feeling a renewed sense of purpose and mission — bolstered by the strengthening economy and poll numbers that reflect that growing confidence from the American public. This was the same Obama on display in his end-of-the-year press conference. Supremely confident in his own views, largely dismissive of his Republican critics”.

“Will meet again next month to try to narrow”

21/01/2015

Iran and major powers will meet again next month to try to narrow differences over Tehran’s nuclear programme after making limited progress on Sunday, as Washington lobbied to stave off fresh sanctions, diplomats said. All sides agreed to step up efforts to reach a political understanding by the end of March with a view to clinching a full-blown deal by their self-imposed deadline of June 30. “The mood was very good, but I don’t think we made a lot of progress,” France’s negotiator Nicolas de la Riviere told reporters as he left the European Union mission in Geneva. Iranian deputy foreign minister Abbas Araqchi said that discussions had been “good” and “extensive”. “We reviewed all subjects on the table and we had very serious and business-like negotiations,” he told reporters. “We are still trying to bridge the gap between the two sides.” The negotiations, held at the level of political directors, capped five days of diplomacy in Geneva and Paris, including lengthy meetings between U.S. Secretary of State John Kerry and Iranian Foreign Minister Mohammad Javad Zarif”.

Welby poses some questions

21/01/2015

An article in the Daily Telegraph has reported on a new book launched as the 2015 General Election campaign begins, informally at least.

The piece starts “Britain under the Coalition is a country in which the poor are being “left behind” and entire cities “cast aside” because politicians are obsessed with Middle England, the Church of England says today in a damning assessment of the state of the nation. In a direct and unapologetically “political” intervention timed for the beginning of the General Election campaign, the Archbishops of Canterbury and York, warn party leaders are selling a “lie” that economic growth is the answer to Britain’s social problems”.

Yet the same newspaper defends the fact that the Church of England is a state church. At the same time they moan that the Church of England has a voice in politics. Which is it to be? The other alternative interpretation is that they are against those with religious views having a say in the public sphere at all.

The real reason for the paper’s reaction was the questioning by the Church of England of a bankrupt economic theory that has destroyed the world and brought misery to millions, while making a small elite even wealthier. This is the true reason for the reaction of the paper to the comments by the bishops.

The report goes on to note that the prelates were “Questioning David Cameron’s slogan “we’re all in this together” they condemn inequality as “evil” and dismiss the assumption that the value of communities is in their economic output as a “sin”. Britain, they argue has been “dominated” by “rampant consumerism and individualism” since the Thatcher era, while the Christian values of solidarity and selflessness have been supplanted by a new secular creed of “every person for themselves”. And while London and the South East forge ahead, much of the rest of the country is still “trapped in apparently inevitable decline”, they argue”.

It is true that the South East has been almost recession proof, apart from the parts that are already deprived which will soon be filled with wealthy people and push those who have been living there for years out, but this is not the fault of Cameron per se but is more down to geography and other long held factors that he has chosen not to fix. In reality the point of the bishops is correct. A toxic individualism has prevailed and is bearing its rotten fruit in the form of societal decay and sin.

The piece adds that “The challenge to politicians and voters alike is contained in a new volume of essays to be published next week, edited by the Archbishop of York, Dr John Sentamu, and including lengthy contributions from the Archbishop of Canterbury, the Most Rev Justin Welby, the former Labour Cabinet minister Lord Adonis and others. It sets out an excoriating critique of a country “ill at ease with itself” amid a widening “gulf” between rich and poor, between the capital and the rest of the country and between politicians and voters. The book, entitled “On Rock or Sand?”, explicitly invites comparisons with Faith in the City, the Church of England report published 30 years ago which was attacked by Conservatives as “pure Marxist theology””.

Yet this is exactly the kind of thing Rush Limbaugh said about Pope Francis. All this has done however is made fools of those who attack the Gospel and its values while they try and defend greed, sin, gross inequality, materialism and excess.

The article ends “The book characterises the welfare state as the embodiment of the Christian command to “love thy neighbour” and warns that people should not rely on what the founding father of free-market capitalism Adam Smith called the “invisible hand” of the market to create a fair society”.

It closes “Archbishop Welby provides a bleak assessment of the economic recovery in Britain claiming that “entire towns and regions” have been excluded and “trapped in an apparently inescapable economic downward spiral”. “Our economy appears to be, in one sense, a tale of two cities – one being a growing and constantly improving London (and the South East generally), and the other being most, but not all, other cities, alike in that they are each trapped in apparently inevitable decline,” he writes. Spending cuts have, he adds, helped widen that gap. “The hard truth is that many of these cities are in what appear to be lose-lose situations”.

The report concludes “But the archbishops go on to reject what they characterise as an obsession with economic growth as the solution to social problems. “There is a general social assumption that the economy has the power to dictate what is and is not possible for human beings,” Archbishop Welby writes. “We believe that if we can fix the economy, the fixing of human beings will automatically follow. “That is a lie. “It is a lie because it is a narrative that casts money, rather than humanity, as the protagonist of God’s story.” Dr Sentamu adds that a post-war vision through which the welfare state and NHS developed has “given way to an individualist and consumerist vision, with public goods such as health … and education … increasingly becoming privatised, where society has become a market society, with everything going to the highest bidder and the poor being left behind in the unceasing drive to increase the nation’s Gross Domestic Product.” Setting out his own vision, Archbishop Welby adds: “Our human journey is not a journey of individuals, it is a journey held in common, and no individual can safely be left behind”.

In a related article, though hardly a surprise, David Cameron defends a system based on radical inequality, mass poverty, unemployment, deprivation and greed, “David Cameron has said that he “profoundly disagrees” with the leaders of the Church of England after they accused the Coalition of creating a country in which the poor are being “left behind”. The Prime Minister pledged to speak “vigorously in defence” of his Government’s economic record after the Archbishops of Canterbury and York accused him and Britain’s other political leaders of selling a “lie” that economic growth is the answer to social problems”.

The sad fact is that all the figures say that Cameron is wrong. They all point to the fact that poverty levels are rising and people are being punished for being poor with all the ignorance that comes with this. They are accused of being lazy but politicians in safe seats with half a dozen directorships to top up their income are in no way fit to judge in such harsh terms the lives of others.

The report mentions that “Cameron insisted that the Coalition has is successfully tackling poverty and that improving people’s lives across the country can only be done when the economy is strong. He said: “Also, we are tackling poverty by giving 1.75million more people a job in our country. Actually under this Government inequality has fallen so I don’t think the picture they paint is accurate. “I look forward to debating and discussing it with them. They have a right to speak out as long as they don’t mind when I speak pretty vigorously in defence of the excellent economic and social record of this government. “The fact is you can’t do any of these things in terms of tackling poverty, growing opportunity, rebalancing the economy unless you have a strong economy and we have restored or are restoring the strength of the British economy.” The Archbishops said that Britain has been “dominated” by “rampant consumerism and individualism” since the Thatcher era”.

Mubarak charges overturned

21/01/2015

A court in Egypt has overturned the convictions for embezzlement of former President Hosni Mubarak and his two sons and ordered a retrial. Mr Mubarak was jailed for three years in May after being found guilty of fraudulently billing the government for $14m (£9.3m) of personal expenses. But the Court of Cassation found legal procedures were not followed properly. It was the last remaining case keeping Mr Mubarak behind bars. The 86-year-old has been in detention since April 2011. Mr Mubarak’s lawyer told the BBC he hoped his client would soon be released from Cairo military hospital, where is being held. Charges of conspiring in the killing of hundreds of protesters during the uprising that ended his rule in 2011 were dropped in November. The former president and his sons – Alaa, 53, and Gamal, 51 – were also cleared of two separate corruption charges”.

“A different kind of slowdown”

19/01/2015

Simon Cox argues that the lower growth rates in China are far below the expectations of the CCP.

He starts, “China’s economy must become more innovative, Its leaders insist. But the same is not true of its economic slogans, it seems. If anything, they are becoming more derivative. Over the last few months, China’s officials have referred relentlessly to the “new normal,” an economic catchphrase that is as fresh as the air in as the air in Hebei. The term was popularized back in 2009 by Mohamed El-Erian, the former CEO of Pimco (and who once had a regular column in Foreign Policy called “The New New Normal”). He used it to describe the world’s feeble recovery from the global financial crisis, which, he feared, would inflict lasting economic damage, even after calm returned to the financial markets”.

He goes on to write “El-Erian was more optimistic about the big emerging economies. The only one to repay that confidence fully was China. Thanks to a (much-maligned) stimulus effort, its economy grew by over 9 percent in 2009, according to the country’s National Bureau of Statistics (NBS), and by double digits the following year. The financial shock in September 2008 made a mockery of most pre-crisis predictions. But China’s economy managed to live up to people’s prelapsarian hopes. Its 2013 GDP turned out to be bigger than the International Monetary Fund had predicted it would be in its pre-crisis April 2008 forecast. No member of the G7 can say the same. Having escaped El-Erian’s new normal, why are China’s leaders now embracing the term? In their distinctive usage, it describes a different kind of slowdown”.

Crucially he adds that “China’s underlying rate of growth is easing not because of a financial disaster, but because of three deeper trends. Its population is aging (the cohort that will turn 16 over the next five years is 15 percent smaller than the cohort that will turn 60, according to the census), its economy is maturing (services, which are 20 percent more labor-intensive than industry, now account for a bigger share of its GDP, according to the NBS) and the aspirations of its citizenry are broadening, encompassing safer food and cleaner air, as well as higher incomes. China’s leaders in Beijing seem to accept this slowdown. In describing it as “normal” (albeit new), they imply that it is here to stay and nothing much to worry about. China need not grow as fast as it did to maintain high employment, which is Beijing’s chief concern, and it cannot grow as fast as it did, if the environment is to improve”.

He mentions “Policymakers in Seoul were faced with a secular slowdown, which they misinterpreted as a cyclical dip. Their efforts to keep growth unsustainably high only made things worse, culminating in a crisis and crunching recession eight years later. That was a macroeconomic blunder. It is, however, possible to make the opposite mistake. It is possible to misinterpret cyclical weakness as structural decline. Slowing growth, after all, can have many causes. It can reflect inadequate demand as well as flagging supply, fading animal spirits as well as diminishing productive powers. The economic engine can suffer from a lack of gas, as well as a lack of capacity”.

Yet there is some uncertainty that the CCP will assume the economy has “structural decline”. Having been listening for nearly a decade of those predicating “American decline” the most likely path they will take is an overcorrection.

He goes on to argue “If, on the other hand, growth ebbs and inflation does the same, the slowdown could represent something else: a cyclical lack of demand. Downward price pressure is a sign that spending is too weak to keep the economy operating at full capacity. China’s slowdown is a mixture of both, it seems to me. Its growth is falling short of its natural, warranted rate, which is itself slowing. This weakness is increasingly evident in its inflation figures: consumer-price inflation has remained below the government’s target for almost three years, according to the NBS, which also reports that producer prices fell by as much as 3.3 percent in December compared with a year earlier”.

Interestingly he continues “The chief economist of China’s central bank, Ma Jun, has forecast that the economy will grow by 7.1 percent this year. But, as he and his colleagues acknowledge, that will not be enough to reflate the economy. He foresees a further 0.4 percent fall in producer prices in 2015. A year ago, in his previous role at Deutsche Bank, Ma argued that China would have to grow as fast as 8.5 percent to stabilize producer-price inflation at a more reasonable range of 2 percent. Critics of Beijing’s economic stewardship argue that this decline in producer prices is itself structural. It is, indeed, a delayed consequence of China’s stimulus efforts after the financial crisis. That investment spree made wasteful additions to capacity in property, coal, steel, aluminum, and other industries”.

He ends “This easy money would allow other parts of the economy to expand, buoying prices in those sectors even as steel prices fall. For China’s critics, stimulus is often characterized as a clumsy communist maneuver, dragooning the economy into a Soviet-style growth drive. But this kind of easing is really just textbook macroeconomic management. Beijing, in my view, is right to embrace its “new normal” of slower trend growth. But falling prices suggest it is also facing something worse: a new subnormal of below-trend growth. That is worth resisting by stimulating demand (especially consumer spending). China’s growth rate must slow by as much as the arithmetic of population and productivity dictates. But by no more than that”.

 

Talks in Libya

19/01/2015

The United Nations said it will launch talks on Wednesday in Geneva between warring Libyan factions even though one side has delayed its decision on attending negotiations aimed at averting a broader civil war. Two rival governments and their forces are vying for control in Libya, three years after the fall of Muammar Gaddafi, with the internationally recognized government of Prime Minister Abdullah al-Thinni based in eastern Libya since a faction called Libya Dawn took over Tripoli last summer. Tripoli-based forces said their legislature had postponed a decision over joining the Geneva talks until Sunday because of concerns about how the negotiations were organized. Nevertheless, a U.N. statement released on Tuesday confirmed the meeting and said Bernardino Leon, Special Representative of the Secretary-General for Libya and Head of United Nations Support Mission in Libya (UNSMIL), would give a news conference before talks start and the list of participants was to follow. A delegation from the elected House of Representatives (HOR), representing Thinni’s government, was in Tunisia waiting to fly to Geneva, according to a parliament representative”.

Hurting Venezuela

19/01/2015

A report in Foreign Policy notes how the falling oil price has hurt Venezuela.

It begins “When writing about the world’s energy markets, the temptation is to focus on the shifting fortunes of petro-states and giant multinational corporations. And sure, these are important stories. But in the process it’s all too easy to overlook how the plummeting oil price is affecting the livelihoods of ordinary people. Take Venezuelans. They welcomed the New Year in a sour mood. And their depression has everything to do with the crash in the price of crude. Thanks to a combination of lower oil prices and an economic policy based on rigid price and currency controls, the scarcity of basic staples such as toilet paper, beef, chicken, and cooking oil has never been worse. People spend hours in line hoping to purchase essential items, but they’re rarely successful”.

The writer notes that “Even though final 2014 figures on the Venezuelan economy have yet to be made public, we do know a few things about the shape it’s in. Inflation closed at around 70 percent for the year. The country is in recession: GDP is expected to have dropped by around 4 percent once the numbers are in. The price of oil, which accounts for about 96 percent of the country’s exports, has dropped by about 60 percent since June”.

He goes on to add “Susana, 48, is a manicurist and hair stylist by trade. She lives in a small, run-down apartment she purchased years ago, thanks to a government subsidy.

Lately she’s been finding it difficult to keep her customers satisfied. Nail polish remover is difficult to find, and when she finds it, it’s only at black market prices. Hair dyes are practically nonexistent. She wishes she could hide her gray hair but can’t afford to do so any more.

Susana’s husband, 49, is a washing machine repairman. He’s also finding his job challenging, as spare parts have now become scarce parts. Because of this, both of their incomes have decreased in recent months. One of the things Susana and her husband have cut back on is therapy for their autistic child.

Luis, 43, is a divorced father of two. After getting his economics degree and trying out different ventures, he opened a small seafood restaurant a year ago.

He tells me that fish is one of the most difficult things to come by, since most of the catch is taken across the border to Colombia, where it fetches market prices. Seafood is being sold at black market prices, so high that it’s disappeared from his menu. “Ground beef,” he tells me, “is now costing me twice as much as what I paid three weeks ago.”

One of the more challenging aspects is the need to raise his prices every few days. “My menus now come with stickers. Every five days or so, I jack up the prices by replacing the stickers. It’s an impossible environment in which to do business.”

Elda, Susana, and Luis come from different social classes, but there is one worry that unites them: crime. Elda has been held up at gunpoint in public transportation several times, as have Susana’s children. Luis has had his cell phone stolen at gunpoint, and thieves have repeatedly tried to break into his restaurant. He even keeps the toilet paper in the public restroom under lock and key, because customers have stolen it in the past.

The Venezuelan crisis affects everyone, but to varying degrees. There are still plenty of wealthy people in the country, many of them connected to the government in one way or another. Some make enormous sums by playing the system, whether it be by taking advantage of the black market or exploiting other arbitrage opportunities.

But these are the exceptions. As the country’s economy goes from bad to worse, writers about Venezuela are running out of modifiers to describe the situation: imploding, reeling, collapsing.

Perhaps it’s time we incorporate a few more personal adjectives: despairing, soul-crushing, exasperating. That would probably better reflect the mood inside the country.

Canada vs Saudi Arabia

19/01/2015

As a test of wills between OPEC nations and US shale drillers fuels a global oil market slump, a brewing battle between Canadian and Saudi Arabia heavy crudes for America’s Gulf Coast refinery market threatens to drive prices even lower. While the standoff between the oil cartel and US producers of light, sweet shale oil has captured the limelight in recent months, the clash over heavier grades — playing out in the shadowy, opaque physical market — may put even more pressure on global prices that have halved since mid-2014. Two factors will emerge over the next few weeks: From the north, new oil pipelines will pump record volumes of Canadian crude to the southern refineries, many better equipped to process heavy crudes than lighter shale oil. From the Middle East, the top exporter Saudi Arabia is offering crude at discounted prices in an attempt to defend its remaining share of the important regional market, which has shrunk by more than half in recent months”.

 

“Their corrupt, economically stagnant, Central Asian homes”

19/01/2015

piece argues that the falling price of oil could cause unrest in Russia’s region.

It opens “With oil prices plummeting, the ruble tanking against the dollar, and the Russian economy squeezed by Western sanctions, Russian Prime Minister Dmitry Medvedev on Monday offered an assessment that might easily qualify as the understatement of the new year. “The economic situation is quite problematic to say the least,” he said. Even as Russian consumers find the value of their roubles shrinking and consumer goods harder to find, there is a flip side to the contraction, one that has potentially significant ramifications for Russia’s volatile domestic politics. Since the first week of January, labour migration into Russia — mostly from Central Asia and the Caucasus — has dropped 70 percent compared to the same period last year, according to data released by Russia’s official Federal Migration Service. That could be a boon for Russia’s vocal, xenophobic, and occasionally violent nationalist movement, which wants many of those immigrants to go home”.

The report goes on to mention “Russia, population 144 million, is home to at least 11 million immigrants, mainly from former Soviet countries like Moldova, Ukraine, Uzbekistan, and Tajikistan. The numbers of migrants had been growing for years, sparking clashes between members of Russia’s ethnic Slavic population and the mostly Central Asian newcomers. In 2014, 19 people were killed and 103 were injured in ethnically charged attacks, according to the Sova Centre, a Russian think tank”.

The writer adds that many of the Central Asian countries rely on remittances who worked in Russia during the time of high oil prices. This had the added benefit for “the autocratic and economically impaired Central Asian governments were eager to see workers go abroad, viewing labour migration as a type of social “safety valve” to postpone economic stagnation and ward off political instability at home, according to experts. Many native Russians, however, have become increasingly concerned that the immigrants will eventually take their jobs. According to a poll carried out in January 2014 by the Levada Center, a Russian think tank, 76 percent of Russians believe the number of immigrants should be restricted”.

Crucially he adds that “The Russian government has generally tolerated both legal and undocumented migrant workers, but it has begun to crack down recently as xenophobic feelings rise in much of the country. In the fall of 2014, Russian authorities arrested more than 7,000 migrants from Central Asia and the Caucasus in Moscow and deported another 800 others. In the last six months, Moscow has placed new restrictions on legal migrants, such as mandatory Russian language and history exams, which came into effect on Jan. 1, and begun turning away more would-be migrants at the border”.

He closes, “With more migrants staying at home in Central Asia, the region could see an upswing in political instability. To see how that might happen, look no further than Kyrgyzstan’s 2010 revolution. Following the 2008 economic crisis and a major drop in crude prices, the Russian economy went into a nosedive. The construction boom fizzled, and newly unemployed, mostly male migrants returned to Kyrgyzstan. Aided by opportunistic politicians and frustrated by their lack of economic opportunities, they launched a campaign of street protests and overthrew the corrupt government of President Kurmanbek Bakiyev in April 2010. Now, another generation of unemployed workers are heading back to their corrupt, economically stagnant, Central Asian homes. If more governments start collapsing along Russia’s periphery, Medvedev will have other “problematic” situations to worry about”.

No closer to taking action

17/01/2015

Venezuelan President Nicolas Maduro met Saudi Arabia’s Crown Prince Salman in Riyadh on Sunday as part of a diplomatic tour of OPEC members to discuss falling oil prices, which have hit its economy hard. The Saudi side in the meeting included Oil Minister Ali al-Naimi and several princes including Deputy Crown Prince Muqrin, intelligence chief Prince Khaled bin Bandar and three sons of King Abdullah, who is in hospital, state media reported. No details of the meeting were given by the official Saudi Press Agency and there was no indication that the world’s biggest oil exporter was any closer to taking action to stem the over 50 percent rout in oil prices. The Venezuelan government said in a statement that “we agreed to work to recover the market and oil prices with state policies between the two energy powerhouses.” It provided no details”.

Falling prices and America

17/01/2015

Keith Johnson writes in Foreign Policy that there is both good and bad in the ever falling price of oil with Iran and Russia suffering and its impact on US energy independence and production is unclear.

He opens “Crude oil prices plunged to a six-year low Tuesday in a potentially painful threat to oil-exporting nations that rely on crude to power their economies. The drop brings some welcome relief to countries that have been struggling with economic headwinds, but brings a mixed bag for others, like the United States, that are both big producers and consumers of oil. Oil prices are still looking for a floor, in part because the persistent mismatch between global supply and demand continues even as big oil producers inside OPEC keep spooking the market by refusing to countenance any voluntary production cut. The energy minister for the United Arab Emirates on Tuesday, Jan. 13, dismissed the idea that OPEC would cut production to boost prices and said it was up to other oil suppliers, such as the United States, to blink first”.

Johnson goes on to write that the ever falling prices will contiune to harm countries like Iran, Russia and Venezuela, “Brent crude prices in London fell 4 percent while he was speaking and hovered around $46.50 a barrel midday Tuesday. West Texas Intermediate prices in New York fell slightly to below $46 a barrel Tuesday. The speed and the scope of the fall in oil prices is stunning. The new year is not even two weeks old, and benchmark crude prices have already plummeted more than 15 percent. Look back further and the drop is even more eye-opening: Prices are down more than 60 percent since last summer. A top Saudi official, Prince Alwaleed bin Talal, said late last week that the days of $100-a-barrel oil are gone forever. Many analysts believe that oil prices between $30 and $40 per barrel are a real possibility. That level was last seen during the darkest days of the 2008 global financial crisis; now oil traders are placing bets on oil sinking as low as $20 a barrel“.

Johnson continues, “The oil-price plunge is becoming less a risk than a painful reality for countries that live and die by selling black gold. Ratings agency Moody’s just downgraded Venezuelan debt to the second-lowest rating. Moody’s says there is little that the Venezuelan government can do to halt the economic rot, short of praying for a rebound in oil prices. Venezuelan President Nicolás Maduro has toured the world, hat in hand, asking fellow petrostates to cut production to boost oil prices, but with no luck so far. The only bright spot: Moody’s upped Venezuela’s outlook from negative to stable, but only because the country has already hit rock bottom”.

He goes on to Russia, “Russia’s economic woes are getting worse too, with the rouble hitting one-month lows on Tuesday. Russian bond yields are at Venezuelan levels, and ratings agencies have also downgraded Russian debt. Default risk is soaring, making Russian debt some of the riskiest in the world. All that will translate into economic contraction this year, creating the very real risk that Russian President Vladimir Putin again looks for foreign adventures as a distraction”.

The winners according to Johnson is Asia, “Asian economies, in particular, stand to benefit. Ian Bremmer, head of risk consultancy Eurasia Group, says cheap oil will benefit China most of all, by giving President Xi Jinping the space to rejigger the world’s second-largest economy away from inefficient, state-owned businesses and more toward consumer spending. Like China, countries such as Japan and South Korea benefit in more ways than one from falling oil prices: The falling prices also make imported natural gas cheaper, because most natural gas contracts are still linked to the price of oil”.

Pointedly he writes “Globally, though, cheaper oil doesn’t look set to translate into stronger growth as it did in the past. The World Bank, in its latest outlook, trimmed the global growth forecast from 3.4 percent growth to 3 percent growth, despite expectations of further declines in the price of crude. That’s in part because many consumers around the world are still cautious and are recycling extra cash into savings rather than consumption, while big oil-producing economies are reeling. But the big question remains: Is cheap oil a blessing or a bane for the United States, which has ridden an unexpected oil and gas production boom in the last few years to become one of the world’s premier producers? Historically, for the world’s biggest oil consumer, cheaper crude is nothing but good news: Consumers who spend less money at the gas pump have more cash with which to buy other things. Nationwide gasoline prices have now fallen for 110 straight days in the United States and have fallen from $3.31 a gallon a year ago to an average of $2.12 a gallon today”.

He goes on to note that falling prices may begin to affect US producers, “As long as crude oil prices stayed relatively high, as they were through much of last year, U.S. oil producers could weather the downturn. But oil prices in the $40-per-barrel range are starting to seriously test the economics of many operations. That’s because unlike other new sources of oil production — such as Canada’s tar sands — U.S. tight-oil production relies on continuous drilling of wells to maintain output levels”.

He ends “If oil prices stay low, investment bank Goldman Sachs said, U.S. output will decline in the second half of the year. On Tuesday, the U.S. Energy Information Administration forecast that falling prices could indeed dent U.S. oil production this year, but just a bit. Ultimately, the big risk to the U.S. economy lies in just how that yin and yang play out. If cheaper oil helps consumers more than it hurts energy producers, the drop would essentially extend the Federal Reserve’s now-defunct policy of priming the economy with easy money. And while that could extend economic growth for another few quarters, it also sets the stage for a harder landing sometime next year — just in time for the 2016 presidential election”.

An Afghan cabinet, at last

17/01/2015

Afghan President Ashraf Ghani has unveiled his unity cabinet more than three months after he was sworn in. The names of 25 ministers were read out at a ceremony in Kabul presided over by Mr Ghani and government chief executive Abdullah Abdullah. The announcement comes after tortuous negotiations between the two former rivals who agreed to work together following disputed elections last year. The cabinet still needs to be approved by parliament. Mr Ghani’s cabinet contains three women, for the portfolios of women’s affairs, culture and higher education. As widely rumoured, his new foreign minister is confirmed as Salahuddin Rabbani, son of former president Burhanuddin Rabbani who was killed by a suicide bomber in 2011″.

McCain blocks the closure

17/01/2015

A report from Foreign Policy notes that Senator John McCain has begun plans to block the closure of Guantanamo Bay prison.

It opens “A key Republican ally in the White House’s battle to close the Guantánamo Bay detention facility reversed course Tuesday, delivering a potentially lethal blow to President Barack Obama’s hopes to shutter the controversial prison before he leaves office. Just last month, Senate Armed Services Chairman John McCain (R-Ariz.) promised to help Obama close the detention center where terrorism suspects have been held for years without being charged. But on Tuesday, McCain and three other Republican colleagues introduced plans to sharply restrict the removal or transfer of detainees from the facility, which has served as a long-standing target of worldwide criticism”.

Hudson goes on to note “Specifically, the proposal would prohibit the transfer of detainees to the United States and Yemen. The majority of the 127 detainees still being held — down from a high of about 680 — are from Yemen. But officials fear detainees who are released in Yemen, where al Qaeda commands a strong presence, could easily be lured into jihad. ‘We know for a fact that … those who have been released have re-entered the fight and usually at a higher level because it’s a badge of honour to have been an inmate at Guantánamo Bay,’ McCain said. He was flanked by Sens. Kelly Ayotte (R-N.H.), Richard Burr (R-N.C.), and Lindsey Graham (R-S.C.)”.

Pointedly the author notes “McCain, a former prisoner of war who now chairs the Senate committee that oversees the Pentagon’s detainee policy, has long advocated for the closure of the facility. And for months, Democratic administration officials repeatedly cited supportive comments by McCain as evidence that they could work with Congress to close the detention center”.

Perhaps it is for the best that Senator McCain came to his senses and for whatever reason, most likely sheer partisanship, changed his mind. Of course those detainees that should be sent away should go but the question is what to do with those that are too dangerous to be freed? The only rational and safe course is to have them remain in Cuba. Naturally this is not a palatable solution but it may be the only practical one available.

Hudson adds that “At the moment, 59 out of the prison’s 127 inmates are cleared for transfer and do not pose a significant threat to the United States, according to an internal assessment by six departments and agencies including the CIA, Pentagon, Justice Department, and State Department. That number was as high as 70 in mid-November, before the administration renewed its push to empty the facility. The administration is seeking to at least whittle down the detainee population to below 100. At that point, the administration hopes that the cost per prisoner at Guantánamo will become so exorbitant that lawmakers will acknowledge the absurdity of keeping the prison open. That strategy now appears highly unlikely”.

The report ends “McCain’s pivot on Guantánamo is his latest national security dispute — including over the withdrawal of troops from Iraq and U.S. intervention in Syria — with the White House. In December, McCain told CNN he would help Obama lift the ban on sending prisoners to U.S. prisons if the right plan is proposed. ‘I am prepared to and I think it can be done,’ he said. Earlier, in a joint 2013 statement with Sen. Dianne Feinstein (D-Calif.) and White House chief of staff Denis McDonough, McCain asserted ‘that it is in our national interest to end detention at Guantánamo, with a safe and orderly transition of the detainees to other locations.’ McCain told Foreign Policy on Tuesday that he still might reject the new Republican plan — but only if the Obama administration presents its own comprehensive solution on how to safely close the facility”.

“Claimed responsibility for the attack”

17/01/2015

Al Qaeda in Yemen has claimed responsibility for the attack on the French satirical newspaper Charlie Hebdo, saying it was ordered by the Islamist militant group’s leadership for insults to the Prophet Mohammad, according to a video posted on YouTube. Gunmen killed 17 people in three days of violence that began when they shot staff in Charlie Hebdo’s offices last week in revenge for the publication of satirical images of the Prophet. One Western source said no hard evidence of a direct operational link to Al Qaeda in the Arabian Peninsula (AQAP) had yet been found. But it was the first time that a group had officially claimed responsibility for the attack, which was led by Cherif and Said Kouachi, two French-born brothers of Algerian extraction who had visited Yemen in 2011. In Washington, a State Department spokeswoman said the United States believed the video was authentic but officials were still determining if the claim of responsibility is true”.

“They are not identical”

17/01/2015

An excellent article in the Washington Post notes the differing approaches to falling oil prices.

It begins “As oil prices dip below $50 dollars per barrel, media outlets from Bloomberg to The Economist to Foreign Affairs have analyzed the effects of this price drop on “The Arab Gulf” as a region. While faced with resource allocation problems common to rentier countries, Gulf countries have each in fact pursued a number of different strategies in response. Certain commonalities exist across Gulf countries, but it would be a mistake to think of them as identical”.

The author goes on to make the point that “Despite these differences, many articles on the recent decline in oil prices understate or largely ignore this variation. They treat the Gulf as a monolithic region without regard to variation in governance, economy and national outlook, drawing sweeping conclusions. An examination of Kuwait, Oman and Bahrain reveals the extent of differences in sub-regional approaches to the situation, and offers policymakers a better basis for assessing U.S. interests in the region”.

He gives the example of Kuwait, “Debate over the price drop has been most overt in Kuwait because of the relative openness of the country and power of its parliament. Because of the drop in oil revenue, Kuwait has been under pressure to cut government spending. As a result, the government decided on Oct. 15 to remove subsidies on kerosene and diesel for the first time in decades, raising their price from 19 cents per liter to 58 cents. The change, which became effective Jan. 1, has generated opposition in Kuwait. Lawmakers have demanded a debate in the parliament over the unpopular price increase”.

He cites Oman, “Oman’s system of government is more authoritarian than Kuwait’s, and the rapidly declining health of its leader Sultan Qaboos has necessitated careful planning by its government. Oman also produces significantly less oil than Kuwait and its population is greater by roughly 300,000 people. Therefore, Oman is even more likely than Kuwait to take seriously plans to generate revenue from sources other than oil. This revenue will be important in the coming years. In 2015, Oman expects a revenue reduction of $260 million, and a total deficit of $6.5 billion. It is unclear how the government will make up for this shortfall. A plan to tax foreign worker remittances was rejected by the State Council in late December. Other measures may be enough to recoup at least some of the loss. Oman is expecting a 25 percent increase in income tax revenue, and additional revenue from non-Omani labour licenses and customs duties. It also plans to privatize some state-owned companies, including certain units of Oman Air. While these measures may not balance the budget entirely, they represent a serious effort to diversify sources of government income”.

He ends the article discussing Bahrain, “While its economy is relatively diversified, political unrest prompted a response by security forces that created an $11.2 billion debt in 2012. Additionally, Bahrain overestimated the average price of oil in 2014 at $90 per barrel, which expanded the deficit to a projected $15.7 billion by the end of the year. The government has been working on a response to the debt issue since March 2014. However, following further disputes over elections that were boycotted by the opposition in November, the budget debate has been pushed off until March 2015. On Jan. 6, Bahraini Prime Minister Khalifa bin Salman al-Khalifa presented a four-year plan to the country’s Council of Representatives with significant investments in social welfare, housing and governance. Bahrain has further expenses that fall outside the budget, planning to spend $5 billion on a new airport and a second causeway to Saudi Arabia”.

He concludes, “While the strategies of these three Gulf states to falling oil prices have similarities, they are not identical. Kuwait is engaging in unpopular cutbacks whose political viability is limited, Oman is looking to increase economic diversification and Bahrain is focusing on long-term efforts to create both economic and political stability. Each country’s strategy is shaped by its history, regime type, economic portfolio and cooperation of its citizens. None of these considerations is common to all countries in the Gulf. As the fallout from the price drop continues, analysts should take care to appreciate these important differences, rather than treat the region as a homogenous block.

“Will explore way to give impetus to nuclear talks”

15/01/2015

Iran and the US will explore ways to give impetus to nuclear talks when their chief diplomats meet in Geneva on Wednesday, Iranian foreign minister Mohammad Javad Zarif said on Sunday. Zarif and US secretary of state John Kerry will confer ahead of a fresh round of negotiations between Iran and six world powers on settling their 12-year standoff over Tehran’s nuclear ambitions. Lower-level negotiators on both sides will meet at the same venue on Thursday to iron out technical details ahead of negotiations on 18 January between Iran and the “P5+1” powers – the US, France, Germany, Russia, China and Britain. Speaking at a Tehran news conference, Zarif said the purpose of the talks with Kerry “is to see if we can speed up and push the negotiations forward”. “We will see how useful it will turn out. We are constantly gauging the benefits,” he told reporters, referring to recent dialogue with the US after decades of hostility dating back to Iran’s 1979 Islamic revolution”.

More oil price volatility

15/01/2015

An interesting piece by Robert McNally and Michael Levi argues that as the current price of oil continues to fall, that this volatility in price will continue.

They open “Three years ago, in an essay for Foreign Affairs, we predicted a new era of volatile oil prices. The market laughed at us: the next three years were the smoothest in decades. Oil prices, on average, moved just three percent each month and even less from year to year. The calm was so eerie that analysts began to hail a new era of oil price stability. The past month, however, has upended that confident view. What began as a gradual slide, from $115 a barrel on June 19 to $100 a barrel by September 8, turned into something more serious, with prices plunging as low as $84 by mid-October. Volatility is back­­—and our 2011 essay explains why”.

Importantly they give context, “The story began this summer, when oil prices began to fall due to weak economic growth worldwide and increased oil production in Libya. More supply and less demand normally lead to lower prices, but traders assumed that Saudi Arabia—the largest oil producer in OPEC—would curb its own production to keep the market stable, creating a price floor of about $90 per barrel. Instead, Saudi Arabia shocked the market, hinting that it could live with lower prices and would not rush to cut production. As a result, prices dropped precipitously”.

They go on to make the point that “During the 2000s, however, Saudi spare capacity slowly dwindled, shrinking Riyadh’s ability to prevent price swings. The Arab Spring didn’t help: With demands for domestic spending on the rise, cutting production and sales became even more difficult for a country dependent on oil revenue”.

They question what held prices so stable, they posit the theory that it is mostly, just luck. They write that the many disruptions in Nigeria and the Middle East “were almost perfectly counterbalanced by unexpected gains in U.S. tight oil output. Lackluster GDP growth also helped tamp down global oil demand”.

The writers go on to note “The return to volatility poses an immediate risk to the global economy. It is volatility, rather than high prices, that endangers global economic growth; right now, for example, falling prices are a positive, as consumers with more money in their pockets can buy more and stimulate the economy. But with Saudi Arabia and OPEC less able or willing to moderate oil prices, consumers can expect more price spikes alongside sharp price declines. Volatility also scares investors and consumers, deterring them from investing in oil infrastructure and from buying more efficient cars and trucks. Policymakers should therefore not view falling prices only as a sign of relief, but also as an indicator of trouble”.

They end “In 2011, we compared the stable oil market of yore to the Disney ride “It’s A Small World”—gentle and unremarkable—and warned that consumers might soon find themselves on the scary and unpredictable “Space Mountain.” A bit of good luck handed them a three-year trip down a soothing waterway. But the roller coaster ride has returned with a vengeance. It would be wrong to dismiss the possibility of another spell of calm, but it would be equally foolish to assume that the ride is over”.