Showing posts with label Iran. Show all posts
Showing posts with label Iran. Show all posts
Wednesday 20 March 2024
Friday 8 September 2023
Sunday 7 May 2023
Monday 12 December 2022
The Moral Governance of Others
Nadeem F Paracha in The Dawn
In September, 22-year-old Mahsa Amini was admonished by the Guidance Patrol for ‘improperly’ wearing her hijab. She was then allegedly beaten to death. Her death triggered an unprecedented protest movement, in which women as well as men are attacking symbols of Iran’s theocracy like never before.
The protests have evolved into an open rebellion against Iran’s morality laws and against groups that the state has employed to implement these laws.
The Guidance Patrol is the successor of the Islamic Revolution Committees that were formed in 1979 to forcibly implement ‘Islamic morality’ in public spaces — especially when wearing the hijab was made compulsory in 1983. Over the years, there have been isolated protests against this law, but nothing like what Iran is witnessing today.
The protests are challenging the whole idea of ‘moral policing’ that began to be adopted by the state in many Muslim-majority countries from 1979 onwards. After Iran, moral policing units also emerged in Saudi Arabia and, from the 1990s, in Sudan, Afghanistan, Nigeria and, in certain regions of Malaysia and Indonesia.
The state gives the units powers to check and correct ‘moral digressions’, such as ‘inappropriate’ dressing (especially by women), ‘unseemly’ interaction between men and women in public, or the exhibition of any other ‘un-Islamic’ behaviour. Moral policing outfits have often been accused of using violent methods, mostly against women.
However, as morality policing organisations are now being openly challenged in Iran, recently they were disbanded in Saudi Arabia by the crown prince Muhammad bin Salman. Their presence contradicts his reformist agenda. Also, the criticism against the tactics used by the police was intensifying. Morality policing units were also dismantled in Sudan in 2019, after the overthrow of the dictator Omar al-Bashir.
According to Amanda F. Detrick (University of Washington, 2017): “States with religious systems of government, employ morality police as a formal method of social control to expand and stabilise their rule. Morality police units enable the regime to project power into society and retain dominance by affirming religious legitimacy, suppressing dissent and enforcing socio-religious and political uniformity.”
Moral policing can also emerge as an informal method of social control. According to the French philosopher Michel Foucault, the “governance of the self” can lead to the “governance of others.” In other words, sometimes, when an individual or a group embraces an idea of morality, they may end up enforcing this idea on others. If the enforcement finds traction among a large body of people in a society, the state is likely to adopt it as policy.
For example, even though most Muslim-majority countries do not have moral policing outfits formed by the state, ever since the 1980s, vigilante groups have been known to implement ‘morality’ by force. Such enforcements have often been turned into law by governments.
In Pakistan, for years, non-state groups campaigned to oust the Ahmadiyya from the fold of Islam. At first, the state treated the campaigns as subversive. But when the campaigns began to find greater traction among the polity, especially in the Punjab, the government declared the Ahmadiyya as a non-Muslim minority.
Informal methods of social control that emerge from below have been highly successful in Pakistan. From the late 1960s, there were campaigns against nightclubs, cinemas and the sale of alcoholic beverages by right-wing vigilante groups. They were suppressed by the government. But in the late 1970s, when a government was struggling to stall a political movement against it, it suddenly agreed to close down clubs and ban alcohol. But this was a futile attempt to regain social control.
Consequently, in 1980, there were plans by the Ziaul Haq dictatorship to form state-backed moral policing units. They were to enforce gender segregation in public spaces, ‘proper’ dressing habits (especially among women), compulsory prayers in the mosques, etc. Women’s organisations saw these as a way to strengthen a myopic patriarchal ethos. Their activism deterred the dictatorship from forming moral policing squads.
However, the frequency of vigilante groups enforcing (their ideas of) morality increased. For example, a group calling itself the ‘Allah Tigers’ started to raid hotels and even homes on every New Years Eve. Technically, their actions were unlawful, but the dictatorship tolerated them and saw them as the actions of ‘common people’ who were willingly implementing the state’s ‘Islamisation’ project.
There have also been non-state groups enforcing the hijab and discouraging the celebration of events such as Valentine’s Day. Although the government and the state have not appropriated these as policy, many educational institutions have.
But formal and informal methods of social control through moral policing are not only restricted to Muslim-majority countries. Ironically, outside the myths of ancient ‘pious’ states, one of the first formal examples in this respect appeared in 19th century England.
The regular police force in 19th century England was encouraged to ‘morally regulate’ the society. To 19th century British ‘gentry’, morality was deemed a necessary part of life, in order to hold and keep social stability. The police often took action (sometimes preemptive) against alleged prostitutes, drunkenness, betting and ‘habitual’ criminals.
Nevertheless, moral policing in most Muslim and, particularly in non-Muslim regions, has largely remained informal. But it has been rather successful in influencing state institutions. For example, years of anti-abortion activism in the US finally led to an abortion ban imposed by the US Supreme Court.
Also, in many countries, non-state moral policing of content on social media and the electronic media has pushed governments to pull down websites, films and TV shows. Interestingly, informal moral policing in a non-Muslim country has been most rampant in India. Vigilante groups often emerge to enforce ‘Hindu values’. These can include action against those celebrating Valentine’s Day, to lynching those who are accused of eating beef.
Moral policing is a serious issue. Morality has mostly to do with factors rooted in religion. There may be a consensus on the more general aspects of a faith, but there are always many interpretations of various topical aspects of it. One cannot impose morality based on a single interpretation.
Instead, states need to educate citizens to embrace pluralism and tolerance and exhibit behaviour that does not create social disruption and divisions. An individual’s choices that form their moral self-governance should be respected, as long as they are not raging to turn it into the governance of others.
In September, 22-year-old Mahsa Amini was admonished by the Guidance Patrol for ‘improperly’ wearing her hijab. She was then allegedly beaten to death. Her death triggered an unprecedented protest movement, in which women as well as men are attacking symbols of Iran’s theocracy like never before.
The protests have evolved into an open rebellion against Iran’s morality laws and against groups that the state has employed to implement these laws.
The Guidance Patrol is the successor of the Islamic Revolution Committees that were formed in 1979 to forcibly implement ‘Islamic morality’ in public spaces — especially when wearing the hijab was made compulsory in 1983. Over the years, there have been isolated protests against this law, but nothing like what Iran is witnessing today.
The protests are challenging the whole idea of ‘moral policing’ that began to be adopted by the state in many Muslim-majority countries from 1979 onwards. After Iran, moral policing units also emerged in Saudi Arabia and, from the 1990s, in Sudan, Afghanistan, Nigeria and, in certain regions of Malaysia and Indonesia.
The state gives the units powers to check and correct ‘moral digressions’, such as ‘inappropriate’ dressing (especially by women), ‘unseemly’ interaction between men and women in public, or the exhibition of any other ‘un-Islamic’ behaviour. Moral policing outfits have often been accused of using violent methods, mostly against women.
However, as morality policing organisations are now being openly challenged in Iran, recently they were disbanded in Saudi Arabia by the crown prince Muhammad bin Salman. Their presence contradicts his reformist agenda. Also, the criticism against the tactics used by the police was intensifying. Morality policing units were also dismantled in Sudan in 2019, after the overthrow of the dictator Omar al-Bashir.
According to Amanda F. Detrick (University of Washington, 2017): “States with religious systems of government, employ morality police as a formal method of social control to expand and stabilise their rule. Morality police units enable the regime to project power into society and retain dominance by affirming religious legitimacy, suppressing dissent and enforcing socio-religious and political uniformity.”
Moral policing can also emerge as an informal method of social control. According to the French philosopher Michel Foucault, the “governance of the self” can lead to the “governance of others.” In other words, sometimes, when an individual or a group embraces an idea of morality, they may end up enforcing this idea on others. If the enforcement finds traction among a large body of people in a society, the state is likely to adopt it as policy.
For example, even though most Muslim-majority countries do not have moral policing outfits formed by the state, ever since the 1980s, vigilante groups have been known to implement ‘morality’ by force. Such enforcements have often been turned into law by governments.
In Pakistan, for years, non-state groups campaigned to oust the Ahmadiyya from the fold of Islam. At first, the state treated the campaigns as subversive. But when the campaigns began to find greater traction among the polity, especially in the Punjab, the government declared the Ahmadiyya as a non-Muslim minority.
Informal methods of social control that emerge from below have been highly successful in Pakistan. From the late 1960s, there were campaigns against nightclubs, cinemas and the sale of alcoholic beverages by right-wing vigilante groups. They were suppressed by the government. But in the late 1970s, when a government was struggling to stall a political movement against it, it suddenly agreed to close down clubs and ban alcohol. But this was a futile attempt to regain social control.
Consequently, in 1980, there were plans by the Ziaul Haq dictatorship to form state-backed moral policing units. They were to enforce gender segregation in public spaces, ‘proper’ dressing habits (especially among women), compulsory prayers in the mosques, etc. Women’s organisations saw these as a way to strengthen a myopic patriarchal ethos. Their activism deterred the dictatorship from forming moral policing squads.
However, the frequency of vigilante groups enforcing (their ideas of) morality increased. For example, a group calling itself the ‘Allah Tigers’ started to raid hotels and even homes on every New Years Eve. Technically, their actions were unlawful, but the dictatorship tolerated them and saw them as the actions of ‘common people’ who were willingly implementing the state’s ‘Islamisation’ project.
There have also been non-state groups enforcing the hijab and discouraging the celebration of events such as Valentine’s Day. Although the government and the state have not appropriated these as policy, many educational institutions have.
But formal and informal methods of social control through moral policing are not only restricted to Muslim-majority countries. Ironically, outside the myths of ancient ‘pious’ states, one of the first formal examples in this respect appeared in 19th century England.
The regular police force in 19th century England was encouraged to ‘morally regulate’ the society. To 19th century British ‘gentry’, morality was deemed a necessary part of life, in order to hold and keep social stability. The police often took action (sometimes preemptive) against alleged prostitutes, drunkenness, betting and ‘habitual’ criminals.
Nevertheless, moral policing in most Muslim and, particularly in non-Muslim regions, has largely remained informal. But it has been rather successful in influencing state institutions. For example, years of anti-abortion activism in the US finally led to an abortion ban imposed by the US Supreme Court.
Also, in many countries, non-state moral policing of content on social media and the electronic media has pushed governments to pull down websites, films and TV shows. Interestingly, informal moral policing in a non-Muslim country has been most rampant in India. Vigilante groups often emerge to enforce ‘Hindu values’. These can include action against those celebrating Valentine’s Day, to lynching those who are accused of eating beef.
Moral policing is a serious issue. Morality has mostly to do with factors rooted in religion. There may be a consensus on the more general aspects of a faith, but there are always many interpretations of various topical aspects of it. One cannot impose morality based on a single interpretation.
Instead, states need to educate citizens to embrace pluralism and tolerance and exhibit behaviour that does not create social disruption and divisions. An individual’s choices that form their moral self-governance should be respected, as long as they are not raging to turn it into the governance of others.
Tuesday 27 September 2022
Sunday 31 July 2022
Thursday 23 December 2021
Tuesday 18 May 2021
Wednesday 19 February 2020
The white swan harbingers of global economic crisis are already here
Seismic risks for the global system are growing, not least worsening US geopolitical rivalries, climate change and now the coronavirus outbreak writes Nouriel Roubini in The Guardian
A swan fighting with crows on a beach. Photograph: Kamila Koziol/Alamy Stock Photo/Alamy Stock Photo
In my 2010 book, Crisis Economics, I defined financial crises not as the “black swan” events that Nassim Nicholas Taleb described in his eponymous bestseller but as “white swans”. According to Taleb, black swans are events that emerge unpredictably, like a tornado, from a fat-tailed statistical distribution. But I argued that financial crises, at least, are more like hurricanes: they are the predictable result of builtup economic and financial vulnerabilities and policy mistakes.
There are times when we should expect the system to reach a tipping point – the “Minsky Moment” – when a boom and a bubble turn into a crash and a bust. Such events are not about the “unknown unknowns” but rather the “known unknowns”.
Beyond the usual economic and policy risks that most financial analysts worry about, a number of potentially seismic white swans are visible on the horizon this year. Any of them could trigger severe economic, financial, political and geopolitical disturbances unlike anything since the 2008 crisis.
For starters, the US is locked in an escalating strategic rivalry with at least four implicitly aligned revisionist powers: China, Russia, Iran and North Korea. These countries all have an interest in challenging the US-led global order and 2020 could be a critical year for them, owing to the US presidential election and the potential change in US global policies that could follow.
Under Donald Trump, the US is trying to contain or even trigger regime change in these four countries through economic sanctions and other means. Similarly, the four revisionists want to undercut American hard and soft power abroad by destabilising the US from within through asymmetric warfare. If the US election descends into partisan rancour, chaos, disputed vote tallies and accusations of “rigged” elections, so much the better for rivals of the US. A breakdown of the US political system would weaken American power abroad.
Moreover, some countries have a particular interest in removing Trump. The acute threat that he poses to the Iranian regime gives it every reason to escalate the conflict with the US in the coming months – even if it means risking a full-scale war – on the chance that the ensuing spike in oil prices would crash the US stock market, trigger a recession, and sink Trump’s re-election prospects. Yes, the consensus view is that the targeted killing of Qassem Suleimani has deterred Iran but that argument misunderstands the regime’s perverse incentives. War between US and Iran is likely this year; the current calm is the one before the proverbial storm.
As for US-China relations, the recent phase one deal is a temporary Band-Aid. The bilateral cold war over technology, data, investment, currency and finance is already escalating sharply. The Covid-19 outbreak has reinforced the position of those in the US arguing for containment and lent further momentum to the broader trend of Sino-American “decoupling”. More immediately, the epidemic is likely to be more severe than currently expected and the disruption to the Chinese economy will have spillover effects on global supply chains – including pharma inputs, of which China is a critical supplier – and business confidence, all of which will likely be more severe than financial markets’ current complacency suggests.
Although the Sino-American cold war is by definition a low-intensity conflict, a sharp escalation is likely this year. To some Chinese leaders, it cannot be a coincidence that their country is simultaneously experiencing a massive swine flu outbreak, severe bird flu, a coronavirus outbreak, political unrest in Hong Kong, the re-election of Taiwan’s pro-independence president, and stepped-up US naval operations in the East and South China Seas. Regardless of whether China has only itself to blame for some of these crises, the view in Beijing is veering toward the conspiratorial.
But open aggression is not really an option at this point, given the asymmetry of conventional power. China’s immediate response to US containment efforts will likely take the form of cyberwarfare. There are several obvious targets. Chinese hackers (and their Russian, North Korean, and Iranian counterparts) could interfere in the US election by flooding Americans with misinformation and deep fakes. With the US electorate already so polarised, it is not difficult to imagine armed partisans taking to the streets to challenge the results, leading to serious violence and chaos.
Revisionist powers could also attack the US and western financial systems – including the Society for Worldwide Interbank Financial Telecommunication (Swift) platform. Already, the European Central Bank president, Christine Lagarde, has warned that a cyber-attack on European financial markets could cost $645bn (£496.2bn). And security officials have expressed similar concerns about the US, where an even wider range of telecommunication infrastructure is potentially vulnerable.
By next year, the US-China conflict could have escalated from a cold war to a near hot one. A Chinese regime and economy severely damaged by the Covid-19 crisis and facing restless masses will need an external scapegoat, and will likely set its sights on Taiwan, Hong Kong, Vietnam and US naval positions in the East and South China Seas; confrontation could creep into escalating military accidents. It could also pursue the financial “nuclear option” of dumping its holdings of US Treasury bonds if escalation does take place. Because US assets comprise such a large share of China’s (and, to a lesser extent, Russia’s) foreign reserves, the Chinese are increasingly worried that such assets could be frozen through US sanctions (like those already used against Iran and North Korea).
Of course, dumping US Treasuries would impede China’s economic growth if dollar assets were sold and converted back into renminbi (which would appreciate). But China could diversify its reserves by converting them into another liquid asset that is less vulnerable to US primary or secondary sanctions, namely gold. Indeed, China and Russia have been stockpiling gold reserves (overtly and covertly), which explains the 30% spike in gold prices since early 2019.
In a sell-off scenario, the capital gains on gold would compensate for any loss incurred from dumping US Treasuries, whose yields would spike as their market price and value fell. So far, China and Russia’s shift into gold has occurred slowly, leaving Treasury yields unaffected. But if this diversification strategy accelerates, as is likely, it could trigger a shock in the US Treasuries market, possibly leading to a sharp economic slowdown in the US.
The US, of course, will not sit idly by while coming under asymmetric attack. It has already been increasing the pressure on these countries with sanctions and other forms of trade and financial warfare, not to mention its own world-beating cyberwarfare capabilities. US cyber-attacks against the four rivals will continue to intensify this year, raising the risk of the first-ever cyber world war and massive economic, financial and political disorder.
Looking beyond the risk of severe geopolitical escalations in 2020, there are additional medium-term risks associated with climate change, which could trigger costly environmental disasters. Climate change is not just a lumbering giant that will cause economic and financial havoc decades from now. It is a threat in the here and now, as demonstrated by the growing frequency and severity of extreme weather events.
In addition to climate change, there is evidence that separate, deeper seismic events are under way, leading to rapid global movements in magnetic polarity and accelerating ocean currents. Any one of these developments could augur an environmental white swan event, as could climatic “tipping points” such as the collapse of major ice sheets in Antarctica or Greenland in the next few years. We already know that underwater volcanic activity is increasing; what if that trend translates into rapid marine acidification and the depletion of global fish stocks upon which billions of people rely?
As of early 2020, this is where we stand: the US and Iran have already had a military confrontation that will likely soon escalate; China is in the grip of a viral outbreak that could become a global pandemic; cyberwarfare is ongoing; major holders of US Treasuries are pursuing diversification strategies; the Democratic presidential primary is exposing rifts in the opposition to Trump and already casting doubt on vote-counting processes; rivalries between the US and four revisionist powers are escalating; and the real-world costs of climate change and other environmental trends are mounting.
This list is hardly exhaustive but it points to what one can reasonably expect for 2020. Financial markets, meanwhile, remain blissfully in denial of the risks, convinced that a calm if not happy year awaits major economies and global markets.
In my 2010 book, Crisis Economics, I defined financial crises not as the “black swan” events that Nassim Nicholas Taleb described in his eponymous bestseller but as “white swans”. According to Taleb, black swans are events that emerge unpredictably, like a tornado, from a fat-tailed statistical distribution. But I argued that financial crises, at least, are more like hurricanes: they are the predictable result of builtup economic and financial vulnerabilities and policy mistakes.
There are times when we should expect the system to reach a tipping point – the “Minsky Moment” – when a boom and a bubble turn into a crash and a bust. Such events are not about the “unknown unknowns” but rather the “known unknowns”.
Beyond the usual economic and policy risks that most financial analysts worry about, a number of potentially seismic white swans are visible on the horizon this year. Any of them could trigger severe economic, financial, political and geopolitical disturbances unlike anything since the 2008 crisis.
For starters, the US is locked in an escalating strategic rivalry with at least four implicitly aligned revisionist powers: China, Russia, Iran and North Korea. These countries all have an interest in challenging the US-led global order and 2020 could be a critical year for them, owing to the US presidential election and the potential change in US global policies that could follow.
Under Donald Trump, the US is trying to contain or even trigger regime change in these four countries through economic sanctions and other means. Similarly, the four revisionists want to undercut American hard and soft power abroad by destabilising the US from within through asymmetric warfare. If the US election descends into partisan rancour, chaos, disputed vote tallies and accusations of “rigged” elections, so much the better for rivals of the US. A breakdown of the US political system would weaken American power abroad.
Moreover, some countries have a particular interest in removing Trump. The acute threat that he poses to the Iranian regime gives it every reason to escalate the conflict with the US in the coming months – even if it means risking a full-scale war – on the chance that the ensuing spike in oil prices would crash the US stock market, trigger a recession, and sink Trump’s re-election prospects. Yes, the consensus view is that the targeted killing of Qassem Suleimani has deterred Iran but that argument misunderstands the regime’s perverse incentives. War between US and Iran is likely this year; the current calm is the one before the proverbial storm.
As for US-China relations, the recent phase one deal is a temporary Band-Aid. The bilateral cold war over technology, data, investment, currency and finance is already escalating sharply. The Covid-19 outbreak has reinforced the position of those in the US arguing for containment and lent further momentum to the broader trend of Sino-American “decoupling”. More immediately, the epidemic is likely to be more severe than currently expected and the disruption to the Chinese economy will have spillover effects on global supply chains – including pharma inputs, of which China is a critical supplier – and business confidence, all of which will likely be more severe than financial markets’ current complacency suggests.
Although the Sino-American cold war is by definition a low-intensity conflict, a sharp escalation is likely this year. To some Chinese leaders, it cannot be a coincidence that their country is simultaneously experiencing a massive swine flu outbreak, severe bird flu, a coronavirus outbreak, political unrest in Hong Kong, the re-election of Taiwan’s pro-independence president, and stepped-up US naval operations in the East and South China Seas. Regardless of whether China has only itself to blame for some of these crises, the view in Beijing is veering toward the conspiratorial.
But open aggression is not really an option at this point, given the asymmetry of conventional power. China’s immediate response to US containment efforts will likely take the form of cyberwarfare. There are several obvious targets. Chinese hackers (and their Russian, North Korean, and Iranian counterparts) could interfere in the US election by flooding Americans with misinformation and deep fakes. With the US electorate already so polarised, it is not difficult to imagine armed partisans taking to the streets to challenge the results, leading to serious violence and chaos.
Revisionist powers could also attack the US and western financial systems – including the Society for Worldwide Interbank Financial Telecommunication (Swift) platform. Already, the European Central Bank president, Christine Lagarde, has warned that a cyber-attack on European financial markets could cost $645bn (£496.2bn). And security officials have expressed similar concerns about the US, where an even wider range of telecommunication infrastructure is potentially vulnerable.
By next year, the US-China conflict could have escalated from a cold war to a near hot one. A Chinese regime and economy severely damaged by the Covid-19 crisis and facing restless masses will need an external scapegoat, and will likely set its sights on Taiwan, Hong Kong, Vietnam and US naval positions in the East and South China Seas; confrontation could creep into escalating military accidents. It could also pursue the financial “nuclear option” of dumping its holdings of US Treasury bonds if escalation does take place. Because US assets comprise such a large share of China’s (and, to a lesser extent, Russia’s) foreign reserves, the Chinese are increasingly worried that such assets could be frozen through US sanctions (like those already used against Iran and North Korea).
Of course, dumping US Treasuries would impede China’s economic growth if dollar assets were sold and converted back into renminbi (which would appreciate). But China could diversify its reserves by converting them into another liquid asset that is less vulnerable to US primary or secondary sanctions, namely gold. Indeed, China and Russia have been stockpiling gold reserves (overtly and covertly), which explains the 30% spike in gold prices since early 2019.
In a sell-off scenario, the capital gains on gold would compensate for any loss incurred from dumping US Treasuries, whose yields would spike as their market price and value fell. So far, China and Russia’s shift into gold has occurred slowly, leaving Treasury yields unaffected. But if this diversification strategy accelerates, as is likely, it could trigger a shock in the US Treasuries market, possibly leading to a sharp economic slowdown in the US.
The US, of course, will not sit idly by while coming under asymmetric attack. It has already been increasing the pressure on these countries with sanctions and other forms of trade and financial warfare, not to mention its own world-beating cyberwarfare capabilities. US cyber-attacks against the four rivals will continue to intensify this year, raising the risk of the first-ever cyber world war and massive economic, financial and political disorder.
Looking beyond the risk of severe geopolitical escalations in 2020, there are additional medium-term risks associated with climate change, which could trigger costly environmental disasters. Climate change is not just a lumbering giant that will cause economic and financial havoc decades from now. It is a threat in the here and now, as demonstrated by the growing frequency and severity of extreme weather events.
In addition to climate change, there is evidence that separate, deeper seismic events are under way, leading to rapid global movements in magnetic polarity and accelerating ocean currents. Any one of these developments could augur an environmental white swan event, as could climatic “tipping points” such as the collapse of major ice sheets in Antarctica or Greenland in the next few years. We already know that underwater volcanic activity is increasing; what if that trend translates into rapid marine acidification and the depletion of global fish stocks upon which billions of people rely?
As of early 2020, this is where we stand: the US and Iran have already had a military confrontation that will likely soon escalate; China is in the grip of a viral outbreak that could become a global pandemic; cyberwarfare is ongoing; major holders of US Treasuries are pursuing diversification strategies; the Democratic presidential primary is exposing rifts in the opposition to Trump and already casting doubt on vote-counting processes; rivalries between the US and four revisionist powers are escalating; and the real-world costs of climate change and other environmental trends are mounting.
This list is hardly exhaustive but it points to what one can reasonably expect for 2020. Financial markets, meanwhile, remain blissfully in denial of the risks, convinced that a calm if not happy year awaits major economies and global markets.
Tuesday 10 April 2018
The Skripal affair: a counter view
Jawed Naqvi in The Dawn
IF one were to anchor a TV programme with the archival revelation that it was Benazir Bhutto who introduced Theresa May’s husband to the future British prime minister at an Oxford reunion ball in 1976, many of us would perhaps happily spend a lot of our precious time glued to the looped and re-looped discussion.
On the other hand, if one were to ask whether Prime Minister May posed a bigger threat to a stable world order than does President Donald Trump it would likely pass for a precipitous canard. This despite that fact that we are ever so often cautioned about the rear view mirror in the car: the objects one sees may be closer at heel than they appear. The warning can be easily applied to international politics.
What we see, or believe we are seeing, can be different from what is afoot. What seems distant or remote could be the trigger for what passes for domestic turbulence. Astute social scientists call it dialectics, whereby everything in the world can be connected with everything else.
Take the poisoning of the double agent Sergei Skripal in Salisbury or consider the latest chemical attack near Damascus in the rebel-held region of Douma. There are legitimate ways of seeing a link between the two. But the way the avenues of news and information have been dumbed down, it would be a challenge to engage an average citizen in a discussion on what to them would be a distant blip on their mirror, if not an imagination of a foggy mind.
So let us quickly come to the facts at hand, and we can crosscheck them too. It is a fact, after all, as distinct from false news, that Trump was elected US president in November 2016. Wasn’t he? Then his election was soon declared to be the handiwork of Russian agents. Right?
Indeed, Trump continued to annoy the deep state. He wanted to befriend Vladimir Putin and questioned the purpose of Nato. He went a step further. He began to question intelligence reports passed to him or leaked to the public.
Then came Theresa May to the rescue of the deep state with its roots on both sides of the Atlantic. When Trump in his pre-political avatar was misbehaving with women, May was already her country’s home secretary. She held that position from 2010 until she was elevated to lead her party and country in July 2016.
Her tenure as home secretary saw the destruction of Libya and the savage assault on Syria. Even more importantly, she was in the cockpit when the Crimea crisis erupted. And she had a good view of it even if she may have been privately appalled at the less than robust response that Nato was willing to offer Russia.
When she became the first foreign leader to visit President Trump on Jan 26 last year, Ms May was nursing another headache on the tour. And so her round trip to the White House included an equally vital stopover in Turkey on the way back. Leaders of both countries on her itinerary were allies of Nato and both were veering perilously close to Vladimir Putin. In a jiffy, she saw the centuries-old British policy of garrotting Russia slipping under her feet.
The mirror on the driver’s side may be telling us to watch out for Donald Trump, who everyone, including most Americans, agrees is speeding ahead rather recklessly on an uncharted trajectory. The mirror on the other side though is showing us a blip, and in a lane where it shouldn’t be. As far as the naked eye can see, the more threatening blip looks like Theresa May. Stated bluntly, Trump may be a decoy.
Double agent Sergei Skripal was swapped by Russia with the US in 2010 and sent for safekeeping to UK. There are some questions about his illness the Russians have asked, including the question: what purpose could it serve to bump off a used- up Russian double agent on the eve of a presidential election, or just ahead of the World Cup that Russia will be hosting? There can be a legitimate suspicion that Skripal and, unwittingly, his daughter fell victim to a strike by someone whose cover Skripal had blown.
But we could also ask, on the other hand, whether it is impossible for another country to replicate the poison that one country has manufactured. The question holds the key when the other side claims to know what that poison is. In other words they have the substance or can produce it to develop an antidote or, why not, to keep it in store for a useful false flag attack. This is not how it happened. This is how some questions come to mind.
A poor scientist died of smallpox in England, after all, when a laboratory accidently released the virus in 1978. The cause of Janet Parker’s infection sent shockwaves through the medical profession. It was reportedly accepted at the time that the virus had travelled through an air duct connecting a smallpox lab with Janet’s office directly above.
To assert that both attacks — in Salisbury and in Douma — can be blamed on Russia, is to state the obvious. A more involved discussion could look at the rise of John Bolton as the new national security adviser to Trump. He has advocated war with Iran, and the alleged Syrian chemical attack may tie up with that objective, as a ruse.
But why has Trump changed his tune on Russia? Has the deep state got the goods on him, in a manner of speaking? If so, Theresa May should have a better grip on the narrative. It was a former British agent in Moscow, after all, whose report is said to have brought the president of the United States to his senses, if that is the word.
IF one were to anchor a TV programme with the archival revelation that it was Benazir Bhutto who introduced Theresa May’s husband to the future British prime minister at an Oxford reunion ball in 1976, many of us would perhaps happily spend a lot of our precious time glued to the looped and re-looped discussion.
On the other hand, if one were to ask whether Prime Minister May posed a bigger threat to a stable world order than does President Donald Trump it would likely pass for a precipitous canard. This despite that fact that we are ever so often cautioned about the rear view mirror in the car: the objects one sees may be closer at heel than they appear. The warning can be easily applied to international politics.
What we see, or believe we are seeing, can be different from what is afoot. What seems distant or remote could be the trigger for what passes for domestic turbulence. Astute social scientists call it dialectics, whereby everything in the world can be connected with everything else.
Take the poisoning of the double agent Sergei Skripal in Salisbury or consider the latest chemical attack near Damascus in the rebel-held region of Douma. There are legitimate ways of seeing a link between the two. But the way the avenues of news and information have been dumbed down, it would be a challenge to engage an average citizen in a discussion on what to them would be a distant blip on their mirror, if not an imagination of a foggy mind.
So let us quickly come to the facts at hand, and we can crosscheck them too. It is a fact, after all, as distinct from false news, that Trump was elected US president in November 2016. Wasn’t he? Then his election was soon declared to be the handiwork of Russian agents. Right?
Indeed, Trump continued to annoy the deep state. He wanted to befriend Vladimir Putin and questioned the purpose of Nato. He went a step further. He began to question intelligence reports passed to him or leaked to the public.
Then came Theresa May to the rescue of the deep state with its roots on both sides of the Atlantic. When Trump in his pre-political avatar was misbehaving with women, May was already her country’s home secretary. She held that position from 2010 until she was elevated to lead her party and country in July 2016.
Her tenure as home secretary saw the destruction of Libya and the savage assault on Syria. Even more importantly, she was in the cockpit when the Crimea crisis erupted. And she had a good view of it even if she may have been privately appalled at the less than robust response that Nato was willing to offer Russia.
When she became the first foreign leader to visit President Trump on Jan 26 last year, Ms May was nursing another headache on the tour. And so her round trip to the White House included an equally vital stopover in Turkey on the way back. Leaders of both countries on her itinerary were allies of Nato and both were veering perilously close to Vladimir Putin. In a jiffy, she saw the centuries-old British policy of garrotting Russia slipping under her feet.
The mirror on the driver’s side may be telling us to watch out for Donald Trump, who everyone, including most Americans, agrees is speeding ahead rather recklessly on an uncharted trajectory. The mirror on the other side though is showing us a blip, and in a lane where it shouldn’t be. As far as the naked eye can see, the more threatening blip looks like Theresa May. Stated bluntly, Trump may be a decoy.
Double agent Sergei Skripal was swapped by Russia with the US in 2010 and sent for safekeeping to UK. There are some questions about his illness the Russians have asked, including the question: what purpose could it serve to bump off a used- up Russian double agent on the eve of a presidential election, or just ahead of the World Cup that Russia will be hosting? There can be a legitimate suspicion that Skripal and, unwittingly, his daughter fell victim to a strike by someone whose cover Skripal had blown.
But we could also ask, on the other hand, whether it is impossible for another country to replicate the poison that one country has manufactured. The question holds the key when the other side claims to know what that poison is. In other words they have the substance or can produce it to develop an antidote or, why not, to keep it in store for a useful false flag attack. This is not how it happened. This is how some questions come to mind.
A poor scientist died of smallpox in England, after all, when a laboratory accidently released the virus in 1978. The cause of Janet Parker’s infection sent shockwaves through the medical profession. It was reportedly accepted at the time that the virus had travelled through an air duct connecting a smallpox lab with Janet’s office directly above.
To assert that both attacks — in Salisbury and in Douma — can be blamed on Russia, is to state the obvious. A more involved discussion could look at the rise of John Bolton as the new national security adviser to Trump. He has advocated war with Iran, and the alleged Syrian chemical attack may tie up with that objective, as a ruse.
But why has Trump changed his tune on Russia? Has the deep state got the goods on him, in a manner of speaking? If so, Theresa May should have a better grip on the narrative. It was a former British agent in Moscow, after all, whose report is said to have brought the president of the United States to his senses, if that is the word.
Saturday 11 November 2017
Saudi crown prince’s revolution is the real Arab spring
Zev Chafets in The Dawn
WHEN Crown Prince Mohammed bin Salman of Saudi Arabia rounded up 500-head of royals and billionaires last weekend and tossed them into luxury confinement, it was more than just a power grab by a young man in a hurry. It was a revolution. But of what kind?
Faisal Abbas, editor of Arab News, the English-language daily that normally speaks for the government, provided an answer of sorts from the Saudi perspective.
“With all due respect to the pundits out there, ‘experts’ analysing Saudi Arabia in previous decades had it too easy,” he wrote on Tuesday. “We need to understand that the days when things took too long to happen — if they happened at all — are forever gone. The exciting part is that thanks to the ambitious reforms being implemented … we are finally living in a country where anything can happen.”
Muhammed, known as MBS, is 32. He looks like a storybook Arabian prince and he talks like a progressive. He says he plans to liberalise and modernise his sclerotic society, expand the civil rights of women, reduce the economic power of the Saudi fossil fuel industry, and loosen the grip of the 5,000-member royal cousins club that has bled the country dry for generations.
Not only that: the prince also promises to transform Saudi Islam into a more tolerant brand of religion that does not fund extremist mosques in the West or underwrite jihadists in the Middle East.
Isn’t this the Arab leader we have been waiting for?
Yet so far, there doesn’t seem to be much enthusiasm in world capitals. With the exception of US President Donald Trump, who has tweeted his support, events in Riyadh have elicited mostly silence.
This is understandable. Sometimes bright young Arab revolutionaries turn out to be Anwar Sadat, whose radical vision brought peace between Egypt and Israel. More often, they are tyrannical like Gamal Abdul Nasser or murderous like Osama Bin Laden or hapless like the Egyptian yuppies in Cairo’s Tahrir Square in 2010. Let’s hope the dismal outcomes of that so-called Arab Spring have taught gullible Westerners not to engage in wishful thinking.
Still, you have to admire the boldness of the young prince. He has made enemies of the Saudi aristocracy, its billionaire class and their foreign business partners, who will eventually be looking for revenge. He has also locked up some senior clerics. The Saud family has historically derived its status as the Protector of Makkah from its alliance with the ultra-conservative Wahhabi sect of Islam. The kingdom is full of young disciples who will not take kindly to the silencing of their jihadist preachers. (It’s true, however, that the prince has shown a less enlightened penchant, cracking down on human-rights advocates and academics as well.)
The prince also faces a threat from Iran. This week, President Hassan Rouhani warned that a Saudi alliance with the US and “Zionist regime” of Israel would be a “strategic mistake”. Since the US has been allied with the Saudis for decades, this sounded like a redundant warning.
It was not. Adding “Zionists” to the equation made it a death threat. Open collaboration with Israel by Arab heads of state is life-threatening. In the early 1950s, King Abdullah I of Jordan was assassinated in Jerusalem for allegedly talking peace. In 1981, after signing the deal with Israel, Sadat was shot to death by Islamic extremists at a military parade in Cairo. The next year, Bashir Gemayel, the president-elect of Lebanon, was blown to bits in Beirut, presumably by Syrian agents.
Like MBS, Gemayel was the scion of an aristocratic family, one that publicly allied himself with Israel. The Saudi crown prince is too young to remember Gemayel, but Saad Hariri — who resigned as Lebanese prime minister over the weekend and is currently hiding in Saudi Arabia (or a nearby Gulf state) from Hezbollah assassins — can fill him in on what happens to Arab leaders who get accused of philo-Semitism.
This dynamic, by the way, explains Israel’s silence over MBS’s manoeuvrings. Prime Minister Benjamin Netanyahu is delighted by the emergence of a new Arab leader who shares his view of Iran. The last thing Bibi wants to do is get him shot.
Let’s be optimistic. Suppose Prince Mohammed survives hitmen, the wrath of his cousins and the fiery opposition of jihadist clerics — that he rises to the throne and moves to implement his domestic reforms. Granting women equal civil rights, permitting theatres and cinemas to open, tamping down the more inflammatory mosques, diversifying the economy — it is, as Abbas writes, an exciting prospect.
But there remains the question of his wider ambitions. He has made it clear that he considers Iran a mortal enemy. It is equally clear that he wants to lead a Sunni Arab coalition that can take on Tehran and end its regional aggression. This is a worthy goal, but not realistic.
The crown prince is the commander-in-chief of the army. He knows that it is a third-rate fighting force, unable to defeat even Houthi militia bands in Yemen, let alone Iran and its allies. His father and previous kings have been elderly rulers, cautious and focused on self-preservation. The most impressive fighting force in the kingdom is the National Guard, whose main role is guarding the royal family. The Saudi style of warfare has been funding proxy armies, while the US defends its borders.
Will MBS follow prudently in the footsteps of his predecessors? Or will he be seduced by dreams of restoring his family’s ancient warrior tradition and imposing Sunni primacy in the Muslim Middle East? I vote for option No 1.
An energetic, liberalising young king in Saudi Arabia would be a very good thing for the Middle East. He could be an important ally in the international war against terror, and a fine role model for other aspiring Arab revolutionaries. It would be a shame to waste this potential on half-baked military adventures. He needs to bring the Gulf into the modern world, not get bogged down in an Iranian Bay of Pigs.
WHEN Crown Prince Mohammed bin Salman of Saudi Arabia rounded up 500-head of royals and billionaires last weekend and tossed them into luxury confinement, it was more than just a power grab by a young man in a hurry. It was a revolution. But of what kind?
Faisal Abbas, editor of Arab News, the English-language daily that normally speaks for the government, provided an answer of sorts from the Saudi perspective.
“With all due respect to the pundits out there, ‘experts’ analysing Saudi Arabia in previous decades had it too easy,” he wrote on Tuesday. “We need to understand that the days when things took too long to happen — if they happened at all — are forever gone. The exciting part is that thanks to the ambitious reforms being implemented … we are finally living in a country where anything can happen.”
Muhammed, known as MBS, is 32. He looks like a storybook Arabian prince and he talks like a progressive. He says he plans to liberalise and modernise his sclerotic society, expand the civil rights of women, reduce the economic power of the Saudi fossil fuel industry, and loosen the grip of the 5,000-member royal cousins club that has bled the country dry for generations.
Not only that: the prince also promises to transform Saudi Islam into a more tolerant brand of religion that does not fund extremist mosques in the West or underwrite jihadists in the Middle East.
Isn’t this the Arab leader we have been waiting for?
Yet so far, there doesn’t seem to be much enthusiasm in world capitals. With the exception of US President Donald Trump, who has tweeted his support, events in Riyadh have elicited mostly silence.
This is understandable. Sometimes bright young Arab revolutionaries turn out to be Anwar Sadat, whose radical vision brought peace between Egypt and Israel. More often, they are tyrannical like Gamal Abdul Nasser or murderous like Osama Bin Laden or hapless like the Egyptian yuppies in Cairo’s Tahrir Square in 2010. Let’s hope the dismal outcomes of that so-called Arab Spring have taught gullible Westerners not to engage in wishful thinking.
Still, you have to admire the boldness of the young prince. He has made enemies of the Saudi aristocracy, its billionaire class and their foreign business partners, who will eventually be looking for revenge. He has also locked up some senior clerics. The Saud family has historically derived its status as the Protector of Makkah from its alliance with the ultra-conservative Wahhabi sect of Islam. The kingdom is full of young disciples who will not take kindly to the silencing of their jihadist preachers. (It’s true, however, that the prince has shown a less enlightened penchant, cracking down on human-rights advocates and academics as well.)
The prince also faces a threat from Iran. This week, President Hassan Rouhani warned that a Saudi alliance with the US and “Zionist regime” of Israel would be a “strategic mistake”. Since the US has been allied with the Saudis for decades, this sounded like a redundant warning.
It was not. Adding “Zionists” to the equation made it a death threat. Open collaboration with Israel by Arab heads of state is life-threatening. In the early 1950s, King Abdullah I of Jordan was assassinated in Jerusalem for allegedly talking peace. In 1981, after signing the deal with Israel, Sadat was shot to death by Islamic extremists at a military parade in Cairo. The next year, Bashir Gemayel, the president-elect of Lebanon, was blown to bits in Beirut, presumably by Syrian agents.
Like MBS, Gemayel was the scion of an aristocratic family, one that publicly allied himself with Israel. The Saudi crown prince is too young to remember Gemayel, but Saad Hariri — who resigned as Lebanese prime minister over the weekend and is currently hiding in Saudi Arabia (or a nearby Gulf state) from Hezbollah assassins — can fill him in on what happens to Arab leaders who get accused of philo-Semitism.
This dynamic, by the way, explains Israel’s silence over MBS’s manoeuvrings. Prime Minister Benjamin Netanyahu is delighted by the emergence of a new Arab leader who shares his view of Iran. The last thing Bibi wants to do is get him shot.
Let’s be optimistic. Suppose Prince Mohammed survives hitmen, the wrath of his cousins and the fiery opposition of jihadist clerics — that he rises to the throne and moves to implement his domestic reforms. Granting women equal civil rights, permitting theatres and cinemas to open, tamping down the more inflammatory mosques, diversifying the economy — it is, as Abbas writes, an exciting prospect.
But there remains the question of his wider ambitions. He has made it clear that he considers Iran a mortal enemy. It is equally clear that he wants to lead a Sunni Arab coalition that can take on Tehran and end its regional aggression. This is a worthy goal, but not realistic.
The crown prince is the commander-in-chief of the army. He knows that it is a third-rate fighting force, unable to defeat even Houthi militia bands in Yemen, let alone Iran and its allies. His father and previous kings have been elderly rulers, cautious and focused on self-preservation. The most impressive fighting force in the kingdom is the National Guard, whose main role is guarding the royal family. The Saudi style of warfare has been funding proxy armies, while the US defends its borders.
Will MBS follow prudently in the footsteps of his predecessors? Or will he be seduced by dreams of restoring his family’s ancient warrior tradition and imposing Sunni primacy in the Muslim Middle East? I vote for option No 1.
An energetic, liberalising young king in Saudi Arabia would be a very good thing for the Middle East. He could be an important ally in the international war against terror, and a fine role model for other aspiring Arab revolutionaries. It would be a shame to waste this potential on half-baked military adventures. He needs to bring the Gulf into the modern world, not get bogged down in an Iranian Bay of Pigs.
Thursday 5 January 2017
Americans can spot election meddling because they’ve been doing it for years
Owen Jones in The Guardian
As I write, president-elect Donald Trump – soon to become the most powerful individual on Earth – is having a tantrum on his Twitter feed. Losing the popular vote can have devastating consequences for a bigoted plutocrat’s ego, and accusations that Vladimir Putin’s regime intervened to his advantage are getting him down. “The ‘intelligence’ briefing on so-called ‘Russian hacking’ was delayed until Friday,” he claims (falsely, apparently), “perhaps more time needed to build a case. Very strange!”
Did Putin intervene in the US election? It is entirely plausible, although evidence from the CIA (with its dubious record) and the FBI needs to be carefully scrutinised, whatever our feelings on Trump. And if the Democratic establishment pin the supposedly unthinkable calamity of Trump’s triumph on a foreign power, they will fail to learn the real lessons behind their defeat.
That doesn’t mean alleged interference by the Russian regime shouldn’t be taken seriously. Putin heads a hard-right, kleptocratic, authoritarian government that persecutes LGBT people, waged a murderous war in Chechnya, and has committed terrible crimes in Syria in alliance with Bashar al-Assad’s dictatorship. It is a pin-up for populist rightwingers across the west, from Trump to Ukip, from France’s Front National to Austria’s Freedom party. Its undemocratic manoeuvres should be scrutinised and condemned.
But while Americans feel justifiably angry at alleged interference with their political process, they have also been handed a mirror, and the reflection should disturb them.
For the US is a world leader in the field of intervening in the internal affairs of other countries. The alleged interference is far more extensive than hacking into emails belonging to unfavoured political parties. According to research by political scientist Dov Levin, the US and the USSR/Russia together intervened no less than 117 times in foreign elections between 1946 and 2000, or “one out of every nine competitive, national-level executive elections”.
Indeed, one cannot understand US-Russian relations today without acknowledging America’s role in the internal affairs of its defeated cold war foe. As Stephen Cohen puts it, after the collapse of the Soviet Union, the approach of US advisers “was nothing less than missionary – a virtual crusade to transform post-communist Russia into some facsimile of the American democratic and capitalist system”.
As soon as Bill Clinton assumed the White House in 1993, his experts discussed “formulating a policy of American tutelage”, including unabashed partisan support for President Boris Yeltsin. “Political missionaries and evangelists, usually called ‘advisers’, spread across Russia in the early and mid-1990s,” notes Cohen: many were funded by the US government. Zbigniew Brzezinski, the former national security adviser, talked of Russia “increasingly passing into de facto western receivership”.
The results were, to put it mildly, disastrous. Between 1990 and 1994, life expectancy for Russian men and women fell from 64 and 74 years respectively to 58 and 71 years. The surge in mortality was “beyond the peacetime experience of industrialised countries”. While it was boom time for the new oligarchs, poverty and unemployment surged; prices were hiked dramatically; communities were devastated by deindustrialisation; and social protections were stripped away.
To the horror of the west, Yeltsin’s popularity nosedived to the point where a communist triumph in the 1996 presidential elections could not be ruled out. Yeltsin turned to the oligarchs, using their vast resources to run an unscrupulous campaign. As Leonid Bershidsky puts it, it was “a momentous event that undermined a fragile democracy and led to the emergence of Vladimir Putin’s dictatorial regime”. It is even alleged that, in 2011, Putin’s key ally – then-president Dmitry Medvedev – privately suggested the election was rigged. In the run-up to the election, Russia was granted a huge US-backed IMF loan that – as the New York Times noted at the time – was “expected to be helpful to President Boris N Yeltsin in the presidential election”.
Yeltsin relied on US political strategists – including former aides to Bill Clinton – who had a direct line back to the White House. When Yeltsin eventually won, the cover of Time magazine was “Yanks to the rescue: The secret story of how American advisers helped Yeltsin win”.
Without the chaos and deprivations of the US-backed Yeltsin era, Putinism would surely not have established itself. But it’s not just Russia by any means, for the record of US intervention in the internal affairs of foreign democracies is extensive.
Take Italy in 1948: as the cold war unfolded, the US feared that a socialist-communist coalition would triumph in Italian elections. It barred Italians who “did not believe in the ideology of the United States” from even entering the country; funded opposing parties via the CIA; orchestrated a massive propaganda campaign, including millions of letters from Americans of Italian origin; and made it quite clear, via the State Department, that there was “no further question of assistance from the United States” if the wrong people won. Its efforts were a success. This was the first of many Italian elections featuring US interference.
CIA concludes Russia interfered to help Trump win election, say reports
Take the CIA’s self-professed involvement in the military coup that overthrew democratically elected secular Iranian president Mohammad Mosaddeq in 1953: it was “carried out under CIA direction as an act of US foreign policy, conceived and approved at the highest levels of government”, as the agency later confessed. The nature of the 1979 Iranian revolution cannot be understood without it. Or what of CIA backing for Augusto Pinochet’s murderous overthrow of Salvador Allende in Chile in 1973?
There are more recent examples too. Take the military overthrow of Honduras’ Manuel Zelaya in 2009. The then secretary of state – a certain Hillary Clinton – refused to describe the toppling of Zelaya as a “military coup”, which would have required the suspension of US aid, including to the armed forces. Rather than call for Zelaya’s reinstatement, Clinton called for new elections. US assistance – including military aid – continued as dissidents were treated brutally; as death squads re-emerged; as violence against LGBT people surged; and as widely boycotted unfair elections took place.
Allegations of Russian interference in the US elections are undoubtedly alarming, but there’s a double standard at play. Meddling in foreign democracies only becomes a problem when the US is on the receiving end. The US has interfered with impunity in the internal affairs of so many other countries. The day that all such interference is seen for what it is – a democratic outrage, unworthy of any great nation – will be a great day indeed.
As I write, president-elect Donald Trump – soon to become the most powerful individual on Earth – is having a tantrum on his Twitter feed. Losing the popular vote can have devastating consequences for a bigoted plutocrat’s ego, and accusations that Vladimir Putin’s regime intervened to his advantage are getting him down. “The ‘intelligence’ briefing on so-called ‘Russian hacking’ was delayed until Friday,” he claims (falsely, apparently), “perhaps more time needed to build a case. Very strange!”
Did Putin intervene in the US election? It is entirely plausible, although evidence from the CIA (with its dubious record) and the FBI needs to be carefully scrutinised, whatever our feelings on Trump. And if the Democratic establishment pin the supposedly unthinkable calamity of Trump’s triumph on a foreign power, they will fail to learn the real lessons behind their defeat.
That doesn’t mean alleged interference by the Russian regime shouldn’t be taken seriously. Putin heads a hard-right, kleptocratic, authoritarian government that persecutes LGBT people, waged a murderous war in Chechnya, and has committed terrible crimes in Syria in alliance with Bashar al-Assad’s dictatorship. It is a pin-up for populist rightwingers across the west, from Trump to Ukip, from France’s Front National to Austria’s Freedom party. Its undemocratic manoeuvres should be scrutinised and condemned.
But while Americans feel justifiably angry at alleged interference with their political process, they have also been handed a mirror, and the reflection should disturb them.
For the US is a world leader in the field of intervening in the internal affairs of other countries. The alleged interference is far more extensive than hacking into emails belonging to unfavoured political parties. According to research by political scientist Dov Levin, the US and the USSR/Russia together intervened no less than 117 times in foreign elections between 1946 and 2000, or “one out of every nine competitive, national-level executive elections”.
Indeed, one cannot understand US-Russian relations today without acknowledging America’s role in the internal affairs of its defeated cold war foe. As Stephen Cohen puts it, after the collapse of the Soviet Union, the approach of US advisers “was nothing less than missionary – a virtual crusade to transform post-communist Russia into some facsimile of the American democratic and capitalist system”.
As soon as Bill Clinton assumed the White House in 1993, his experts discussed “formulating a policy of American tutelage”, including unabashed partisan support for President Boris Yeltsin. “Political missionaries and evangelists, usually called ‘advisers’, spread across Russia in the early and mid-1990s,” notes Cohen: many were funded by the US government. Zbigniew Brzezinski, the former national security adviser, talked of Russia “increasingly passing into de facto western receivership”.
The results were, to put it mildly, disastrous. Between 1990 and 1994, life expectancy for Russian men and women fell from 64 and 74 years respectively to 58 and 71 years. The surge in mortality was “beyond the peacetime experience of industrialised countries”. While it was boom time for the new oligarchs, poverty and unemployment surged; prices were hiked dramatically; communities were devastated by deindustrialisation; and social protections were stripped away.
To the horror of the west, Yeltsin’s popularity nosedived to the point where a communist triumph in the 1996 presidential elections could not be ruled out. Yeltsin turned to the oligarchs, using their vast resources to run an unscrupulous campaign. As Leonid Bershidsky puts it, it was “a momentous event that undermined a fragile democracy and led to the emergence of Vladimir Putin’s dictatorial regime”. It is even alleged that, in 2011, Putin’s key ally – then-president Dmitry Medvedev – privately suggested the election was rigged. In the run-up to the election, Russia was granted a huge US-backed IMF loan that – as the New York Times noted at the time – was “expected to be helpful to President Boris N Yeltsin in the presidential election”.
Yeltsin relied on US political strategists – including former aides to Bill Clinton – who had a direct line back to the White House. When Yeltsin eventually won, the cover of Time magazine was “Yanks to the rescue: The secret story of how American advisers helped Yeltsin win”.
Without the chaos and deprivations of the US-backed Yeltsin era, Putinism would surely not have established itself. But it’s not just Russia by any means, for the record of US intervention in the internal affairs of foreign democracies is extensive.
Take Italy in 1948: as the cold war unfolded, the US feared that a socialist-communist coalition would triumph in Italian elections. It barred Italians who “did not believe in the ideology of the United States” from even entering the country; funded opposing parties via the CIA; orchestrated a massive propaganda campaign, including millions of letters from Americans of Italian origin; and made it quite clear, via the State Department, that there was “no further question of assistance from the United States” if the wrong people won. Its efforts were a success. This was the first of many Italian elections featuring US interference.
CIA concludes Russia interfered to help Trump win election, say reports
Take the CIA’s self-professed involvement in the military coup that overthrew democratically elected secular Iranian president Mohammad Mosaddeq in 1953: it was “carried out under CIA direction as an act of US foreign policy, conceived and approved at the highest levels of government”, as the agency later confessed. The nature of the 1979 Iranian revolution cannot be understood without it. Or what of CIA backing for Augusto Pinochet’s murderous overthrow of Salvador Allende in Chile in 1973?
There are more recent examples too. Take the military overthrow of Honduras’ Manuel Zelaya in 2009. The then secretary of state – a certain Hillary Clinton – refused to describe the toppling of Zelaya as a “military coup”, which would have required the suspension of US aid, including to the armed forces. Rather than call for Zelaya’s reinstatement, Clinton called for new elections. US assistance – including military aid – continued as dissidents were treated brutally; as death squads re-emerged; as violence against LGBT people surged; and as widely boycotted unfair elections took place.
Allegations of Russian interference in the US elections are undoubtedly alarming, but there’s a double standard at play. Meddling in foreign democracies only becomes a problem when the US is on the receiving end. The US has interfered with impunity in the internal affairs of so many other countries. The day that all such interference is seen for what it is – a democratic outrage, unworthy of any great nation – will be a great day indeed.
Friday 19 August 2016
The Shias are winning in the Middle East – and it's all thanks to Russia
Robert Fisk in The Independent
The Shias are winning. Two pictures prove it. The US-Iranian photo op that followed the signing of the nuclear deal with Iran last year and the footage just released – by the Russian defence ministry, no less – showing Moscow’s Tupolev Tu-22M3 bombers flying out of the Iranian air base at Hamadan and bombing the enemies of Shia Iran and of the Shia (Alawite) regime of Syria and of the Shia Hezbollah.
And what can the Sunni Kingdom of Saudi Arabia match against this? Only its wretched war to kill the miserable Shia Houthis of Yemen – with British arms.
Poor, luckless Turkey — whose Sultan Erdogan makes Theresa May’s political U-turns look like a straight path – is at the centre of this realignment. Having shot down a Russian jet and lost much of his Russian tourist trade, the Turkish president was quickly off to St Petersburg to proclaim his undying friendship for Tsar Vladimir. The price? An offer from Erdogan to stage Russian-Turkish “joint operations” against the Sunni enemies of Bashar al-Assad of Syria. Turkey is now in the odd position of assisting US jets to bomb Isis while ready to help Russian jets do exactly the same.
And Jabhat al-Nusrah? Let’s remember the story so far. Al-Qaeda, the creature of the almost forgotten Osama bin Laden, sprang up in both Iraq and Syria where it changed its name to the Nusrah Front and then, just a few days ago, to “Fatah al-Sham”. Sometimes allied to Isis, sometimes at war with Isis, the Qatari-funded legion is now the pre-eminent guerrilla army in Syria – far eclipsing the black-costumed lads of Raqqa whose gruesome head-chopping videos have awed the West in direct proportion to their military defeats. We are still obsessed with Isis and its genocidal creed. We are not paying nearly enough attention to Nusrah.
But the Russians are. That’s why they are sprinkling their bombs across eastern Aleppo and Idlib province. Nusrah forces hold almost all the rebel areas of Syria’s second city and much of the province. It was Nusrah that fought back against its own encirclement by the Syrian regime in Aleppo. The regime kicked Isis out of Palmyra in a short and bloody battle in which Syrian soldiers, most of whom are in fact Sunnis, died by the dozen after stepping on hidden land mines.
But Nusrah is a more powerful enemy, partly because it has more Syrians among its ranks than Isis. It’s one thing to be told that your country is to be ‘liberated’ by a Sunni Syrian outfit, quite another to be instructed by the purists of Isis that your future is in the hands of Sunni Chechens, Pakistanis, Iraqis, Saudis, Qataris, Egyptians, Turks, Frenchmen, Belgians, Kosovars and British. Isis has Sunni Saudi interests (and money) behind it. Nusrah has Sunni Qatar.
As for Turkey – Sunni as well, of course, but not Arab – it’s now being squeezed between giants, the fate of all arms smuggling nations as Pakistan learned to its cost. Not only has it been pushed into joining Moscow as well as the US in waging war on Isis, it’s being politically attacked from within Germany, where a leaked state intelligence summary – part of a reply to a parliamentary question by the interior ministry – speaks of Turkey as a “central platform for Islamist and other terrorist organisations”. State interior secretary Ole Schroder’s remarks, understandably stamped “confidential”, are flawed since he lumps Erdogan’s support for the Egyptian Muslim Brotherhood and Hamas with armed Islamist groups in Syria.
The Sunni Brotherhood, prior to its savaging by Egypt’s President-Field Marshal al-Sissi, did indeed give verbal approval to Assad’s Sunni armed opponents in Syria, and Sunni Hamas operatives in Gaza must have cooperated with Isis in its struggle against Sissi’s army in Sinai. But to suggest that Turkey is in some way organising this odd triumvirate is going too far. To claim that “the countless expressions of solidarity and supportive actions of the ruling AKP (Justice and Development Party) and President Erdogan” for the three “underline their ideological [affinity] to their Muslim brothers” is going too far. “Ideological affinity” should not provide a building block for intelligence reports, but the damage was done. In the report, the Turkish president’s name was written ERDOGAN, in full capital letters.
Someone in the German intelligence service – which regularly acts as a negotiator between Israel and the Shia Hezbollah in Lebanon, usually to exchange bodies between the two sides – obviously decided that its erring Sunni NATO partner in Ankara should get fingered in the infamous “war on terror” in which we are all supposed to be participants. So Erdogan offers help to Russia in the anti-Isis war, continues to give the US airbases in Turkey – and gets dissed by the German federal interior ministry, all at the same time. And the only Muslim state in Nato, which just happens to be Sunni Muslim, is now being wrapped up in the Sunni-Shia war. What future Turkey?
Well, we better not write it off. Just as Erdogan has become pals with Putin, the Turkish and Iranian foreign ministers have been embracing in Ankara with many a promise that their own talks will produce new alliances. Russia-Turkey-Iran. In the Middle East, it’s widely believed that Tehran as well as Moscow tipped Erdogan off about the impending coup. And Erdogan himself has spoken of his emotion when Putin called after the coup was crushed to express his support.
The mortar to build this triple alliance could well turn out to be the Kurds. Neither Russia nor Iran want independent Kurdish states – Putin doesn’t like small minorities in nation-states and Iran’s unity depends on the compliance of its own Kurdish people. Neither are going to protect the Kurds of Syria – loyal foot-soldiers of the Americans right now – in a “new” Syria. Erdogan wants to see them crushed along with the dreams of a “Kurdistan” in south-east Turkey.
Any restored Syrian state will insist on national unity. When Assad praised the Kurds of Kobane for their resistance at the start of the war, he called their town by its Arab name of Ein al-Arab.
It is, of course, a paradox to talk of the Middle East’s agony as part of an inter-Muslim war when one side talks of its enemies as terrorists and the other calls its antagonists apostates. Arab Muslims do not deserve to have their religious division held out by Westerners as a cause of war.
But Saudis and Qataris have a lot to answer for. It is they who are supporting the insurgents in Syria. Syria – dictatorial regime though it is – is not supporting any revolutions in Riyadh or Doha. The Sunni Gulf Arabs gave their backing to the Sunni Taliban in Afghanistan, just as they favour Sunni Isis and Sunni Nusrah in Syria. Russia and America are aligned against both and growing closer in their own weird cooperation. And for the first time in history, the Shia Iranians have both the Russians and the Americans on their side – and Turkey tagging along.
The Shias are winning. Two pictures prove it. The US-Iranian photo op that followed the signing of the nuclear deal with Iran last year and the footage just released – by the Russian defence ministry, no less – showing Moscow’s Tupolev Tu-22M3 bombers flying out of the Iranian air base at Hamadan and bombing the enemies of Shia Iran and of the Shia (Alawite) regime of Syria and of the Shia Hezbollah.
And what can the Sunni Kingdom of Saudi Arabia match against this? Only its wretched war to kill the miserable Shia Houthis of Yemen – with British arms.
Poor, luckless Turkey — whose Sultan Erdogan makes Theresa May’s political U-turns look like a straight path – is at the centre of this realignment. Having shot down a Russian jet and lost much of his Russian tourist trade, the Turkish president was quickly off to St Petersburg to proclaim his undying friendship for Tsar Vladimir. The price? An offer from Erdogan to stage Russian-Turkish “joint operations” against the Sunni enemies of Bashar al-Assad of Syria. Turkey is now in the odd position of assisting US jets to bomb Isis while ready to help Russian jets do exactly the same.
And Jabhat al-Nusrah? Let’s remember the story so far. Al-Qaeda, the creature of the almost forgotten Osama bin Laden, sprang up in both Iraq and Syria where it changed its name to the Nusrah Front and then, just a few days ago, to “Fatah al-Sham”. Sometimes allied to Isis, sometimes at war with Isis, the Qatari-funded legion is now the pre-eminent guerrilla army in Syria – far eclipsing the black-costumed lads of Raqqa whose gruesome head-chopping videos have awed the West in direct proportion to their military defeats. We are still obsessed with Isis and its genocidal creed. We are not paying nearly enough attention to Nusrah.
But the Russians are. That’s why they are sprinkling their bombs across eastern Aleppo and Idlib province. Nusrah forces hold almost all the rebel areas of Syria’s second city and much of the province. It was Nusrah that fought back against its own encirclement by the Syrian regime in Aleppo. The regime kicked Isis out of Palmyra in a short and bloody battle in which Syrian soldiers, most of whom are in fact Sunnis, died by the dozen after stepping on hidden land mines.
But Nusrah is a more powerful enemy, partly because it has more Syrians among its ranks than Isis. It’s one thing to be told that your country is to be ‘liberated’ by a Sunni Syrian outfit, quite another to be instructed by the purists of Isis that your future is in the hands of Sunni Chechens, Pakistanis, Iraqis, Saudis, Qataris, Egyptians, Turks, Frenchmen, Belgians, Kosovars and British. Isis has Sunni Saudi interests (and money) behind it. Nusrah has Sunni Qatar.
As for Turkey – Sunni as well, of course, but not Arab – it’s now being squeezed between giants, the fate of all arms smuggling nations as Pakistan learned to its cost. Not only has it been pushed into joining Moscow as well as the US in waging war on Isis, it’s being politically attacked from within Germany, where a leaked state intelligence summary – part of a reply to a parliamentary question by the interior ministry – speaks of Turkey as a “central platform for Islamist and other terrorist organisations”. State interior secretary Ole Schroder’s remarks, understandably stamped “confidential”, are flawed since he lumps Erdogan’s support for the Egyptian Muslim Brotherhood and Hamas with armed Islamist groups in Syria.
The Sunni Brotherhood, prior to its savaging by Egypt’s President-Field Marshal al-Sissi, did indeed give verbal approval to Assad’s Sunni armed opponents in Syria, and Sunni Hamas operatives in Gaza must have cooperated with Isis in its struggle against Sissi’s army in Sinai. But to suggest that Turkey is in some way organising this odd triumvirate is going too far. To claim that “the countless expressions of solidarity and supportive actions of the ruling AKP (Justice and Development Party) and President Erdogan” for the three “underline their ideological [affinity] to their Muslim brothers” is going too far. “Ideological affinity” should not provide a building block for intelligence reports, but the damage was done. In the report, the Turkish president’s name was written ERDOGAN, in full capital letters.
Someone in the German intelligence service – which regularly acts as a negotiator between Israel and the Shia Hezbollah in Lebanon, usually to exchange bodies between the two sides – obviously decided that its erring Sunni NATO partner in Ankara should get fingered in the infamous “war on terror” in which we are all supposed to be participants. So Erdogan offers help to Russia in the anti-Isis war, continues to give the US airbases in Turkey – and gets dissed by the German federal interior ministry, all at the same time. And the only Muslim state in Nato, which just happens to be Sunni Muslim, is now being wrapped up in the Sunni-Shia war. What future Turkey?
Well, we better not write it off. Just as Erdogan has become pals with Putin, the Turkish and Iranian foreign ministers have been embracing in Ankara with many a promise that their own talks will produce new alliances. Russia-Turkey-Iran. In the Middle East, it’s widely believed that Tehran as well as Moscow tipped Erdogan off about the impending coup. And Erdogan himself has spoken of his emotion when Putin called after the coup was crushed to express his support.
The mortar to build this triple alliance could well turn out to be the Kurds. Neither Russia nor Iran want independent Kurdish states – Putin doesn’t like small minorities in nation-states and Iran’s unity depends on the compliance of its own Kurdish people. Neither are going to protect the Kurds of Syria – loyal foot-soldiers of the Americans right now – in a “new” Syria. Erdogan wants to see them crushed along with the dreams of a “Kurdistan” in south-east Turkey.
Any restored Syrian state will insist on national unity. When Assad praised the Kurds of Kobane for their resistance at the start of the war, he called their town by its Arab name of Ein al-Arab.
It is, of course, a paradox to talk of the Middle East’s agony as part of an inter-Muslim war when one side talks of its enemies as terrorists and the other calls its antagonists apostates. Arab Muslims do not deserve to have their religious division held out by Westerners as a cause of war.
But Saudis and Qataris have a lot to answer for. It is they who are supporting the insurgents in Syria. Syria – dictatorial regime though it is – is not supporting any revolutions in Riyadh or Doha. The Sunni Gulf Arabs gave their backing to the Sunni Taliban in Afghanistan, just as they favour Sunni Isis and Sunni Nusrah in Syria. Russia and America are aligned against both and growing closer in their own weird cooperation. And for the first time in history, the Shia Iranians have both the Russians and the Americans on their side – and Turkey tagging along.
Thursday 10 March 2016
Barack Obama says Saudi Arabia needs to learn to share region with Iran
Mark Landler in The Times of India
President Barack Obama believes that Saudi Arabia, one of America's most important allies in the Middle East, needs to learn how to "share" the region with its arch enemy, Iran, and that both countries are guilty of fuelling proxy wars in Syria, Iraq and Yemen.
In a series of interviews with the magazine Atlantic published on Thursday, Obama said a number of US allies in the Persian Gulf — as well as in Europe — were "free riders," eager to drag the United States into grinding sectarian conflicts that sometimes had little to do with US interests. He showed little sympathy for the Saudis, who have been threatened by the nuclear deal Obama reached with Iran.
The Saudis, Obama told Jeffrey Goldberg, the magazine's national correspondent, "need to find an effective way to share the neighbourhood and institute some sort of cold peace". Reflexively backing them against Iran, the president said, "would mean that we have to start coming in and using our military power to settle scores. And that would be in the interest neither of the United States nor of the Middle East."
Obama's frustration with much of the Arab world is not new, but rarely has he been so blunt about it. He placed his comments in the context of his broader struggle to extract the United States from the bloody morass of the Middle East so that the nation can focus on more promising, faster-growing parts of the world, like Asia and Latin America.
"If we're not talking to them," he said, referring to young people in those places, "because the only thing we're doing is figuring out how to destroy or cordon off or control the malicious, nihilistic, violent parts of humanity, then we're missing the boat."
Obama also said his support of the Nato military intervention in Libya had been a "mistake," driven in part by his erroneous belief that Britain and France would bear more of the burden of the operation. He defended his refusal not to enforce his own red line against Syria's president, Bashar Assad, even though Vice-President Joe Biden argued internally, the magazine reported, that "big nations don't bluff."
The president disputed criticism that he should have done more to resist the aggression of President Vladimir Putin of Russia in Ukraine. As a neighbour of Russia, Obama said, Ukraine was always going to matter more to Putin than to the United States. This meant that in any military confrontation between Moscow and the West, Russia was going to maintain "escalatory dominance" over its former satellite state.
"The fact is that Ukraine, which is a non-Nato country, is going to be vulnerable to military domination by Russia no matter what we do," he said. "This is an example of where we have to be very clear about what our core interests are and what we are willing to go to war for."
Obama, who has spoken regularly to Goldberg about Israel and Iran, granted him extraordinary access. The portrait that emerges from the interviews is of a president openly contemptuous of Washington's foreign-policy establishment, which he said was obsessed with preserving presidential credibility, even at the cost of blundering into ill-advised military adventures.
"There's a playbook in Washington that presidents are supposed to follow," Obama said. "And the playbook prescribes responses to different events, and these responses tend to be militarized responses." This consensus, the president continued, can lead to bad decisions. "In the midst of an international challenge like Syria," he said, "you are judged harshly if you don't follow the playbook, even if there are good reasons."
Although Obama's tone was introspective, he engaged in little second-guessing. He dismissed the argument that his failure to enforce the red line in Syria, or his broader reticence about using military force, had emboldened Russia. Putin, he noted, invaded Georgia in 2008 during the presidency of George W Bush, even though the United States had more than 100,000 troops deployed in Iraq.
Similarly, the president pushed back on the suggestion that he had not been firm enough in challenging China's aggression in the South China Sea, where it is building military installations on reefs and islands, some of which are claimed by the Philippines and other neighbours.
"I've been very explicit in saying that we have more to fear from a weakened, threatened China than a successful, rising China," Obama said.
The president refused to box himself in as a foreign-policy thinker.
"I suppose you could call me a realist in believing we can't, at any given moment, relieve all the world's misery," he said.
But he went on to describe himself as an internationalist and an idealist. Above all, Obama appeared weary of the constant demands and expectations placed on the United States.
"Free riders aggravate me," he said.
He put France and Britain in that category, at least as far as the Libya operation was concerned. Prime Minister David Cameron of Britain, he said, became distracted by other issues, while President Nicolas Sarkozy of France "wanted to trumpet the flights he was taking in the air campaign, despite the fact that we had wiped out all the air defences."
Only on the threat posed by the Islamic State did Obama express some misgivings. He likened the extremist group to the Joker in "The Dark Knight," the 2008 Batman movie. The Middle East, Obama said, was like Gotham, a corrupt metropolis controlled by a cartel of thugs.
"Then the Joker comes in and lights the whole city on fire," Obama said. "ISIL is the Joker," he added, using an acronym for the Islamic State.
Still, Obama acknowledged that immediately after the terrorist attacks in Paris and San Bernardino, California, he did not adequately reassure Americans that he understood the threat, and was confronting it.
"Every president has his strengths and weaknesses," he said. "And there is no doubt that there are times where I have not been attentive enough to feelings and emotions and politics in communicating what we're doing and how we're doing it."
President Barack Obama believes that Saudi Arabia, one of America's most important allies in the Middle East, needs to learn how to "share" the region with its arch enemy, Iran, and that both countries are guilty of fuelling proxy wars in Syria, Iraq and Yemen.
In a series of interviews with the magazine Atlantic published on Thursday, Obama said a number of US allies in the Persian Gulf — as well as in Europe — were "free riders," eager to drag the United States into grinding sectarian conflicts that sometimes had little to do with US interests. He showed little sympathy for the Saudis, who have been threatened by the nuclear deal Obama reached with Iran.
The Saudis, Obama told Jeffrey Goldberg, the magazine's national correspondent, "need to find an effective way to share the neighbourhood and institute some sort of cold peace". Reflexively backing them against Iran, the president said, "would mean that we have to start coming in and using our military power to settle scores. And that would be in the interest neither of the United States nor of the Middle East."
Obama's frustration with much of the Arab world is not new, but rarely has he been so blunt about it. He placed his comments in the context of his broader struggle to extract the United States from the bloody morass of the Middle East so that the nation can focus on more promising, faster-growing parts of the world, like Asia and Latin America.
"If we're not talking to them," he said, referring to young people in those places, "because the only thing we're doing is figuring out how to destroy or cordon off or control the malicious, nihilistic, violent parts of humanity, then we're missing the boat."
Obama also said his support of the Nato military intervention in Libya had been a "mistake," driven in part by his erroneous belief that Britain and France would bear more of the burden of the operation. He defended his refusal not to enforce his own red line against Syria's president, Bashar Assad, even though Vice-President Joe Biden argued internally, the magazine reported, that "big nations don't bluff."
The president disputed criticism that he should have done more to resist the aggression of President Vladimir Putin of Russia in Ukraine. As a neighbour of Russia, Obama said, Ukraine was always going to matter more to Putin than to the United States. This meant that in any military confrontation between Moscow and the West, Russia was going to maintain "escalatory dominance" over its former satellite state.
"The fact is that Ukraine, which is a non-Nato country, is going to be vulnerable to military domination by Russia no matter what we do," he said. "This is an example of where we have to be very clear about what our core interests are and what we are willing to go to war for."
Obama, who has spoken regularly to Goldberg about Israel and Iran, granted him extraordinary access. The portrait that emerges from the interviews is of a president openly contemptuous of Washington's foreign-policy establishment, which he said was obsessed with preserving presidential credibility, even at the cost of blundering into ill-advised military adventures.
"There's a playbook in Washington that presidents are supposed to follow," Obama said. "And the playbook prescribes responses to different events, and these responses tend to be militarized responses." This consensus, the president continued, can lead to bad decisions. "In the midst of an international challenge like Syria," he said, "you are judged harshly if you don't follow the playbook, even if there are good reasons."
Although Obama's tone was introspective, he engaged in little second-guessing. He dismissed the argument that his failure to enforce the red line in Syria, or his broader reticence about using military force, had emboldened Russia. Putin, he noted, invaded Georgia in 2008 during the presidency of George W Bush, even though the United States had more than 100,000 troops deployed in Iraq.
Similarly, the president pushed back on the suggestion that he had not been firm enough in challenging China's aggression in the South China Sea, where it is building military installations on reefs and islands, some of which are claimed by the Philippines and other neighbours.
"I've been very explicit in saying that we have more to fear from a weakened, threatened China than a successful, rising China," Obama said.
The president refused to box himself in as a foreign-policy thinker.
"I suppose you could call me a realist in believing we can't, at any given moment, relieve all the world's misery," he said.
But he went on to describe himself as an internationalist and an idealist. Above all, Obama appeared weary of the constant demands and expectations placed on the United States.
"Free riders aggravate me," he said.
He put France and Britain in that category, at least as far as the Libya operation was concerned. Prime Minister David Cameron of Britain, he said, became distracted by other issues, while President Nicolas Sarkozy of France "wanted to trumpet the flights he was taking in the air campaign, despite the fact that we had wiped out all the air defences."
Only on the threat posed by the Islamic State did Obama express some misgivings. He likened the extremist group to the Joker in "The Dark Knight," the 2008 Batman movie. The Middle East, Obama said, was like Gotham, a corrupt metropolis controlled by a cartel of thugs.
"Then the Joker comes in and lights the whole city on fire," Obama said. "ISIL is the Joker," he added, using an acronym for the Islamic State.
Still, Obama acknowledged that immediately after the terrorist attacks in Paris and San Bernardino, California, he did not adequately reassure Americans that he understood the threat, and was confronting it.
"Every president has his strengths and weaknesses," he said. "And there is no doubt that there are times where I have not been attentive enough to feelings and emotions and politics in communicating what we're doing and how we're doing it."
Wednesday 30 December 2015
Recession, retrenchment, revolution? Impact of low crude prices on oil powers
Guardian writers: Shaun Walker in Moscow Dominic Rushe in New YorkChris Stein in Lagos Chris Stephen in Tunis Sibylla Brodzinsky in Caracas Hugh Miles in Cairo and Saeed Kamali Dehghan
A glut of oil, the demise of Opec and weakening global demand combined to make 2015 the year of crashing oil prices. The cost of crude fell to levels not seen for 11 years – and the decline may have further to go.
There have been four sharp increases in the price of oil in the past four decades – in 1973, 1979, 1990 and 2008 – and each has led to a global recession. By that measure, a lower oil price should be positive for the world economy, with lower fuel costs for consumers and businesses in those countries that import crude outweighing the losses to producing nations.
But the evidence since oil prices started falling from their peak of $115 a barrel in August 2014 has not supported that thesis – or not yet. Oil producers have certainly felt the impact of the lower prices on their growth rates, their trade figures and their public finances but there has been no surge in consumer spending or business investment elsewhere.
Economist still reckon there will be a boost from a lower oil price particularly if it looks as if the lower cost of crude will be sustained.
Dhaval Joshi, an economist at BCA, a London-based research company, said: “A commodity bubble has deflated three times in the past 100 years: the first was after world war one; the second was after the 1980s oil shock; the third is happening right now.”
For the big producer countries, this is a major headache, the ramifications of which are only starting to be felt. Oil powers base their spending plans on an assumed crude price. The graphic below shows just how far below water their budgets are.
Joshi says crude prices may fall by a further 35% to reach its long-term trend. That would mean an oil price closer to $25 a barrel - and fiscal crises in some of the world’s most pivotal economies.
Saudi Arabia
The Ras Tanura oil production plant in Saudi Arabia’s eastern province. Photograph: Bilal Qabalan/AFP/Getty Images
Low oil prices are not just squeezing Saudi Arabia’s domestic budget, imposing austerity on a kingdom not used to it: it is taking its toll on Saudi support for foreign projects too.
The kingdom this week announced swingeing budget cuts for 2016 to address an alarming deficit of 15% of GDP run up this year. Subsidies for water, electricity and petroleum products are likely to be cut, and government projects reined in.
But overseas beneficiaries will face some austerity too. For years, Saudi Arabia has used its oil wealth to support friends and allies around the world, including media organisations, thinktanks, academic institutions, religious schools and charities. Countries that have traditionally benefited from Saudi largesse include Jordan, Lebanon, Bahrain, Palestine and Egypt.
But now the IMF has raised the prospect that Saudi Arabia could go bankrupt in five years without changes to its economic policy, cuts in support to foreign allies seem inevitable.
Egypt’s black-hole economy is potentially the kingdom’s most expensive foreign policy commitment. In recent years, Saudi Arabia has donated billions in cash and oil products but, despite this, the Egyptian economy, battered by war, terrorism and political instability, is facing an acute foreign currency shortage.
Speculation is mounting that Saudi financial support to Egypt is starting to dry up – something the Egyptian authorities have denied – and that this is damaging the bilateral relationship.
There have been some signs of tension. In July, Egypt’s oil minister said he had no objections to importing crude oil from Iran, a move sure to ruffle the Saudis. In September, the Saudi journalist Jamal Khashoggi – known for his closeness to the Saudi state – raised eyebrows when he said the new Egyptian culture minister, Hilmi al-Namnam, who is well known for his secularism and dislike of Wahhabi Islam, should never have been appointed.
So far, the Saudi authorities have given few clear signs about how they are planning to respond to the oil price crisis, let alone lay out a long-term plan for a post-oil Saudi Arabia.
Options under consideration are thought to include cutting construction projects, energy subsidies and public sector wages, introducing new taxes and privatisations, and issuing debt.
Another possibility foreign observers have posited is that the Saudis will be forced to unpeg the riyal from the dollar, although given the potential this would have for uncontrollable knock-on effects on the rest of the economy, this seems likely to be a last resort.
Cuts impacting on ordinary Saudis are something the government will be keen to avoid to maintain political stability, so industry, the public sector and foreign allies are likely to bear the brunt of the economic burden.
Nigeria
Nigeria’s president, Muhammadu Buhari, swears in his cabinet in November. Photograph: Afolabi Sotunde/Reuters
The oil price slump has not prevented Nigeria’s new government from unveiling big spending plans – but analysts warn that the generosity is misplaced at a time when oil prices languish below $40 a barrel.
Nigeria is Africa’s top oil producer and the World Bank estimates crude sales fund about 75% of the country’s budget.
In its £19.8bn budget proposal, the government plans to increase spending by about one quarter over last year’s budget, and to pay for it by improving tax collection and cutting the cost of government.
The budget includes £1.65bn for cash transfers to poor Nigerians. The programme was a campaign promise of the president, Muhammadu Buhari, who was elected in March on a platform of cutting corruption and weaning Nigeria’s economy off its dependence on oil revenue.
But some analysts think the proposed budget is unrealistic during times of $40 oil.
“This brings a dose of reality to a people who have extremely high expectations,” said Bismarck Rewane, the chief executive of Financial Derivatives Co. He predicted the government would have to back down on some of its promises.
Nigeria is Africa’s largest economy, but most of the money is concentrated in the hands of a wealthy elite and about two-thirds of Nigerians live in poverty, according to the United Nations development programme.
Analysis Nigeria overtakes South Africa to become Africa's largest economy. Complicated statistical recalculation adds $240bn to the economy - the equivalent of finding six Ghanas within Nigeria, says Tolu Ogunlesi
Unemployment has climbed this year, hitting 9.9% in the third quarter, according to the National Bureau of Statistics.
Chuba Ezekwesili, research analyst at Nigerian Economic Summit Group, says despite the falling price of crude, the country has been able to avoid a jump in inflation by imposing limits on the availability of foreign currency.
While other major oil producing economies have let their currencies lose value along with oil prices, Nigeria has spent its reserves to prop up the value of the naira. But Ezekwesili says they can only do that for so long.
“They’re sort of delaying the inevitable,” he said. “I feel like eventually it has to give way, and by the time it does I feel the economy is going to be hurt because a lot of businesses can’t work under those conditions.”
Ezekwesili was also sceptical of the government’s ability to generate the revenue necessary to pay for programmes such as cash transfers to the poor. He doubts the government can accomplish its goals of streamlining its costs and generating more revenue by next year.
“One thing I’ve learned about policies in Nigeria is we tend to be very optimistic but it never really works out exactly as we want it to,” Ezekwesili said.
Russia
Oil extraction at a Gazprom field in Khanty-Mansiysk, Russia. Photograph: TASS/Barcroft Media
Vladimir Putin goes into 2016 with record approval ratings but the shakiest economic outlook since he took charge. In the 15 years he has been at the helm, 2015 was the first year that real wages registered a decline, something that did not happen even during the 2008-09 financial crisis.
Oil and gas exports make up about half of the Russian budget, and the rouble rate has been strongly linked to the price of oil.
Sanctions against Russia, particularly the ban on Russian banks seeking western credit, combined with falling oil prices in late 2014 to create a perfect storm that demolished the rouble, with the currency losing half of its value against the dollar, reviving memories of previous crashes. The currency regained some of its value by spring, but falling oil prices in autumn have caused it to fall back to lows similar to those it experienced in late 2014.
Rouble in freefall despite rate hike
Falling oil prices were one of the principal reasons for the collapse in the Soviet economy, and some economists are warning of history repeating itself. Riding on a wave of high oil prices for most of his presidency, the Russian president did not expect such a sharp downturn. Last October, Putin said that if the price of oil fell below $80 a barrel, the world economy would crash. A range of other top Russian officials made similar statements, in effect ruling out the possibility that oil could fall below $70.
Some analysts say the rouble is still overvalued, and the current oil price should theoretically push the rouble down further. This is necessary to balance the budget: the fewer dollars Russia receives for the oil it sells, the higher the exchange rate needs to be for the budget to receive the requisite amount of roubles. For the budget to balance at 65 roubles, not far off the current rate, the price of oil should be $70, a recent Bank of America Merrill Lynch report found.
For ordinary Russians, it could be a tough year ahead. Those who were used to travelling abroad have already had to scale back as the rouble made the cost of visiting foreign cities prohibitive; and rising food prices have made it harder to balance the books for many families.
The 2016 budget, fixed in October, requires oil to be at $50 in order to run a 3% deficit within “acceptable” rouble rate limits, meaning if the price does not rise soon, cuts will need to be made or reserves spent. The war in Syria is an extra cost, and the announced increases in military spending are not likely to be reversed.
US
Belridge, California, is one of the oldest and largest oilfields in the US containing tens of thousands of wells, many of which are being fracked. Photograph: Les Stone/Corbis
Filling up at the gas station hasn’t been this cheap in the US since the recession. The nationwide average price of a gallon of regular is now $2.02 (£1.36), down 58 cents from this time last year, according to auto club AAA, and expected to fall further.
Scared that North America’s oil boom threatens its grip, Opec, the oil cartel, stepped up production and forced a price war that has driven oil prices down to below $35 a barrel. US consumers have benefited from lower petrol prices to the tune of about $700 a year, according to the US government, and that money is fuelling consumer spending. According to a recent report from JP Morgan, 80% of that saving is being spent on goods and services.
But the collapsing price of oil has also cast a shadow over the US energy industry – formerly one of the country’s fastest growing employers. Fracking – the controversial process of extracting oil and gas from shale rock – has become less attractive to investors as the oil price has fallen, and tens of thousands of jobs have been lost as a result. This year, the International Energy Agency said low oil prices would “slam the brakes” on the US shale industry and the impact is already being felt across the country’s oil producing areas.
The US energy sector has cut more than 90,000 jobs this year, according to outplacement company Challenger, Gray & Christmas. And while the overall US unemployment rate has continued to fall, in Texas unemployment has risen since August, according to the Bureau of Labour Statistics. In North Dakota, home of the Bakken shale oil field, more than 17% of the mining jobs – which include oil and natural gas – have disappeared in the past year. More jobs look certain to be lost in the coming months.
North of the border in Canada, things are even worse. In Alberta, “the Texas of the north”, job layoffs and the downturn of the economy have been blamed for a 30% rise in suicides between January and June, compared with 2014. In Saskatchewan, another energy-dependent region, there have been 19% more suicides this year.
Daniel Pavilonis, senior commodity broker with RJO Futures, said the situation was only likely to get worse for those employed in the US energy sector. “There are oil tankers just sitting off the coast because we don’t need more supply. We have too much,” he said. “There’s oversupply and a lack of anybody trying to tighten production because they don’t want to lose market share.”
As a result he predicts oil prices will go lower, taking more jobs with it. But for most consumers, it’s a win. Unlike other global economic trends, the oil price fall actually benefits average Americans, said Pavilonis. “This is our money,” he said. “For most people, it’s a good thing.”
Venezuela
A mural depicts President Nicolás Maduro, who, having lost the Venezuelan National Assembly, has a battle to keep economy and his leadership afloat. Photograph: Luis Robayo/AFP/Getty Images
In most of the world, falling oil prices have caused significant reductions in petrol prices. But in the country with the world’s largest oil reserves, the oil glut could force a price rise.
“It’s probably the only place in the world where with oil prices so low, they may raise gasoline prices,” says Pedro Méndez, an informal taxi driver in Caracas, the Venezuelan capital, who fills the tank of his Ford Laser for less than a dollar.
But the lower the price of oil goes, the deeper Venezuela’s economy sinks. It’s near total dependence on crude exports for hard currency has seen the government of president Nicolás Maduro struggling to try keep the economy afloat.
The political effect is already being felt. Gripped by spiraling inflation, chronic shortages of basic goods and a quickly depreciating currency, Venezuelan voters this month gave the opposition an overwhelming majority in the new legislature, which takes office in January.
Each $1 drop in oil prices results in more than $685m in lost yearly oil income for PDVSA, the state-owned oil company, according to analysts.
And every drop in crude prices means less funding for the health, education and housing and other social welfare programmes that won Maduro’s predecessor, Hugo Chávez, widespread support for his self-styled “Bolivarian revolution”.
While dwindling oil revenue hurts the social programmes, Antonio Azpurua, a financial consultant with CFS Partners/LA Group, says it could be a blessing in disguise, allowing Venezuela to wean itself of its dependence on crude. “Venezuela needs to take advantage of low oil prices to build its industrial base,” he says.
With a super-majority in the National Assembly, the opposition could reverse some of Maduro’s populist measures, which have contributed to the current economic crisis. They could also choose to raise petrol prices.
Iran
Libya
Fuel depots and tankers have been targets for years in the struggle for control of Libya and its oil resources. Photograph: EPA
Plunging oil prices are threatening disaster in Libya, where civil war has left the population depending on fast-dwindling oil revenues to survive.
Libya has Africa’s largest oil reserves and in normal times this provides 95% of the country’s export revenues, keeping the economy afloat. But civil war between rival governments at either end of the country has shattered the economy, leaving the population almost wholly dependent on revenue generated overseas.
The crash in oil prices has halved revenues, and shortages of foodstuffs and medicines – even petrol – are starting to be felt.
This cash squeeze has triggered a three-way battle for control of what remains of the country’s oil wealth. Much of Libya’s largest group of oil fields, the Sirte Basin, is now held by Islamic State, which has interposed itself between forces of the rival governments. Most of what remains is in eastern Libya, held by the elected parliament based in Tobruk.
Tobruk is using its status as the internationally recognised government to battle in foreign courts for the right to income from other producing fields, opposing the state-owned National Oil Corporation, whose headquarters remains in Tripoli, held by a rival parliament.
Tobruk has set up a second National Oil Corporation, based in eastern Libya, and last month demanded international oil companies switch payments that currently go to Tripoli.
Countering that, Tripoli’s NOC chief, Mustafa Sanallah, convened a conference in London in October calling on oil buyers to stick with him. Two of the world’s largest oil buyers, Glencore and Vitol, have agreed, but the eastern government has vowed legal action.
London courts are likely to be the proving ground for this test of wills, with both governments already gearing up for a precedent-setting high court battle, due early next year, for control of the Libya Investment Authority, the country’s £65bn sovereign wealth fund.
But whoever wins control of what remains of the oil industry may find it a pyrrhic victory. John Hamilton, director of London’s Cross-border Information, says the glut of oil on world markets and turbulence around the few remaining oil ports means Libyan oil has already been “priced out” by many buyers.
A glut of oil, the demise of Opec and weakening global demand combined to make 2015 the year of crashing oil prices. The cost of crude fell to levels not seen for 11 years – and the decline may have further to go.
There have been four sharp increases in the price of oil in the past four decades – in 1973, 1979, 1990 and 2008 – and each has led to a global recession. By that measure, a lower oil price should be positive for the world economy, with lower fuel costs for consumers and businesses in those countries that import crude outweighing the losses to producing nations.
But the evidence since oil prices started falling from their peak of $115 a barrel in August 2014 has not supported that thesis – or not yet. Oil producers have certainly felt the impact of the lower prices on their growth rates, their trade figures and their public finances but there has been no surge in consumer spending or business investment elsewhere.
Economist still reckon there will be a boost from a lower oil price particularly if it looks as if the lower cost of crude will be sustained.
Dhaval Joshi, an economist at BCA, a London-based research company, said: “A commodity bubble has deflated three times in the past 100 years: the first was after world war one; the second was after the 1980s oil shock; the third is happening right now.”
For the big producer countries, this is a major headache, the ramifications of which are only starting to be felt. Oil powers base their spending plans on an assumed crude price. The graphic below shows just how far below water their budgets are.
Joshi says crude prices may fall by a further 35% to reach its long-term trend. That would mean an oil price closer to $25 a barrel - and fiscal crises in some of the world’s most pivotal economies.
Saudi Arabia
The Ras Tanura oil production plant in Saudi Arabia’s eastern province. Photograph: Bilal Qabalan/AFP/Getty Images
Low oil prices are not just squeezing Saudi Arabia’s domestic budget, imposing austerity on a kingdom not used to it: it is taking its toll on Saudi support for foreign projects too.
The kingdom this week announced swingeing budget cuts for 2016 to address an alarming deficit of 15% of GDP run up this year. Subsidies for water, electricity and petroleum products are likely to be cut, and government projects reined in.
But overseas beneficiaries will face some austerity too. For years, Saudi Arabia has used its oil wealth to support friends and allies around the world, including media organisations, thinktanks, academic institutions, religious schools and charities. Countries that have traditionally benefited from Saudi largesse include Jordan, Lebanon, Bahrain, Palestine and Egypt.
But now the IMF has raised the prospect that Saudi Arabia could go bankrupt in five years without changes to its economic policy, cuts in support to foreign allies seem inevitable.
Egypt’s black-hole economy is potentially the kingdom’s most expensive foreign policy commitment. In recent years, Saudi Arabia has donated billions in cash and oil products but, despite this, the Egyptian economy, battered by war, terrorism and political instability, is facing an acute foreign currency shortage.
Speculation is mounting that Saudi financial support to Egypt is starting to dry up – something the Egyptian authorities have denied – and that this is damaging the bilateral relationship.
There have been some signs of tension. In July, Egypt’s oil minister said he had no objections to importing crude oil from Iran, a move sure to ruffle the Saudis. In September, the Saudi journalist Jamal Khashoggi – known for his closeness to the Saudi state – raised eyebrows when he said the new Egyptian culture minister, Hilmi al-Namnam, who is well known for his secularism and dislike of Wahhabi Islam, should never have been appointed.
So far, the Saudi authorities have given few clear signs about how they are planning to respond to the oil price crisis, let alone lay out a long-term plan for a post-oil Saudi Arabia.
Options under consideration are thought to include cutting construction projects, energy subsidies and public sector wages, introducing new taxes and privatisations, and issuing debt.
Another possibility foreign observers have posited is that the Saudis will be forced to unpeg the riyal from the dollar, although given the potential this would have for uncontrollable knock-on effects on the rest of the economy, this seems likely to be a last resort.
Cuts impacting on ordinary Saudis are something the government will be keen to avoid to maintain political stability, so industry, the public sector and foreign allies are likely to bear the brunt of the economic burden.
Nigeria
Nigeria’s president, Muhammadu Buhari, swears in his cabinet in November. Photograph: Afolabi Sotunde/Reuters
The oil price slump has not prevented Nigeria’s new government from unveiling big spending plans – but analysts warn that the generosity is misplaced at a time when oil prices languish below $40 a barrel.
Nigeria is Africa’s top oil producer and the World Bank estimates crude sales fund about 75% of the country’s budget.
In its £19.8bn budget proposal, the government plans to increase spending by about one quarter over last year’s budget, and to pay for it by improving tax collection and cutting the cost of government.
The budget includes £1.65bn for cash transfers to poor Nigerians. The programme was a campaign promise of the president, Muhammadu Buhari, who was elected in March on a platform of cutting corruption and weaning Nigeria’s economy off its dependence on oil revenue.
But some analysts think the proposed budget is unrealistic during times of $40 oil.
“This brings a dose of reality to a people who have extremely high expectations,” said Bismarck Rewane, the chief executive of Financial Derivatives Co. He predicted the government would have to back down on some of its promises.
Nigeria is Africa’s largest economy, but most of the money is concentrated in the hands of a wealthy elite and about two-thirds of Nigerians live in poverty, according to the United Nations development programme.
Analysis Nigeria overtakes South Africa to become Africa's largest economy. Complicated statistical recalculation adds $240bn to the economy - the equivalent of finding six Ghanas within Nigeria, says Tolu Ogunlesi
Unemployment has climbed this year, hitting 9.9% in the third quarter, according to the National Bureau of Statistics.
Chuba Ezekwesili, research analyst at Nigerian Economic Summit Group, says despite the falling price of crude, the country has been able to avoid a jump in inflation by imposing limits on the availability of foreign currency.
While other major oil producing economies have let their currencies lose value along with oil prices, Nigeria has spent its reserves to prop up the value of the naira. But Ezekwesili says they can only do that for so long.
“They’re sort of delaying the inevitable,” he said. “I feel like eventually it has to give way, and by the time it does I feel the economy is going to be hurt because a lot of businesses can’t work under those conditions.”
Ezekwesili was also sceptical of the government’s ability to generate the revenue necessary to pay for programmes such as cash transfers to the poor. He doubts the government can accomplish its goals of streamlining its costs and generating more revenue by next year.
“One thing I’ve learned about policies in Nigeria is we tend to be very optimistic but it never really works out exactly as we want it to,” Ezekwesili said.
Russia
Oil extraction at a Gazprom field in Khanty-Mansiysk, Russia. Photograph: TASS/Barcroft Media
Vladimir Putin goes into 2016 with record approval ratings but the shakiest economic outlook since he took charge. In the 15 years he has been at the helm, 2015 was the first year that real wages registered a decline, something that did not happen even during the 2008-09 financial crisis.
Oil and gas exports make up about half of the Russian budget, and the rouble rate has been strongly linked to the price of oil.
Sanctions against Russia, particularly the ban on Russian banks seeking western credit, combined with falling oil prices in late 2014 to create a perfect storm that demolished the rouble, with the currency losing half of its value against the dollar, reviving memories of previous crashes. The currency regained some of its value by spring, but falling oil prices in autumn have caused it to fall back to lows similar to those it experienced in late 2014.
Rouble in freefall despite rate hike
Falling oil prices were one of the principal reasons for the collapse in the Soviet economy, and some economists are warning of history repeating itself. Riding on a wave of high oil prices for most of his presidency, the Russian president did not expect such a sharp downturn. Last October, Putin said that if the price of oil fell below $80 a barrel, the world economy would crash. A range of other top Russian officials made similar statements, in effect ruling out the possibility that oil could fall below $70.
Some analysts say the rouble is still overvalued, and the current oil price should theoretically push the rouble down further. This is necessary to balance the budget: the fewer dollars Russia receives for the oil it sells, the higher the exchange rate needs to be for the budget to receive the requisite amount of roubles. For the budget to balance at 65 roubles, not far off the current rate, the price of oil should be $70, a recent Bank of America Merrill Lynch report found.
For ordinary Russians, it could be a tough year ahead. Those who were used to travelling abroad have already had to scale back as the rouble made the cost of visiting foreign cities prohibitive; and rising food prices have made it harder to balance the books for many families.
The 2016 budget, fixed in October, requires oil to be at $50 in order to run a 3% deficit within “acceptable” rouble rate limits, meaning if the price does not rise soon, cuts will need to be made or reserves spent. The war in Syria is an extra cost, and the announced increases in military spending are not likely to be reversed.
US
Belridge, California, is one of the oldest and largest oilfields in the US containing tens of thousands of wells, many of which are being fracked. Photograph: Les Stone/Corbis
Filling up at the gas station hasn’t been this cheap in the US since the recession. The nationwide average price of a gallon of regular is now $2.02 (£1.36), down 58 cents from this time last year, according to auto club AAA, and expected to fall further.
Scared that North America’s oil boom threatens its grip, Opec, the oil cartel, stepped up production and forced a price war that has driven oil prices down to below $35 a barrel. US consumers have benefited from lower petrol prices to the tune of about $700 a year, according to the US government, and that money is fuelling consumer spending. According to a recent report from JP Morgan, 80% of that saving is being spent on goods and services.
But the collapsing price of oil has also cast a shadow over the US energy industry – formerly one of the country’s fastest growing employers. Fracking – the controversial process of extracting oil and gas from shale rock – has become less attractive to investors as the oil price has fallen, and tens of thousands of jobs have been lost as a result. This year, the International Energy Agency said low oil prices would “slam the brakes” on the US shale industry and the impact is already being felt across the country’s oil producing areas.
The US energy sector has cut more than 90,000 jobs this year, according to outplacement company Challenger, Gray & Christmas. And while the overall US unemployment rate has continued to fall, in Texas unemployment has risen since August, according to the Bureau of Labour Statistics. In North Dakota, home of the Bakken shale oil field, more than 17% of the mining jobs – which include oil and natural gas – have disappeared in the past year. More jobs look certain to be lost in the coming months.
North of the border in Canada, things are even worse. In Alberta, “the Texas of the north”, job layoffs and the downturn of the economy have been blamed for a 30% rise in suicides between January and June, compared with 2014. In Saskatchewan, another energy-dependent region, there have been 19% more suicides this year.
Daniel Pavilonis, senior commodity broker with RJO Futures, said the situation was only likely to get worse for those employed in the US energy sector. “There are oil tankers just sitting off the coast because we don’t need more supply. We have too much,” he said. “There’s oversupply and a lack of anybody trying to tighten production because they don’t want to lose market share.”
As a result he predicts oil prices will go lower, taking more jobs with it. But for most consumers, it’s a win. Unlike other global economic trends, the oil price fall actually benefits average Americans, said Pavilonis. “This is our money,” he said. “For most people, it’s a good thing.”
Venezuela
A mural depicts President Nicolás Maduro, who, having lost the Venezuelan National Assembly, has a battle to keep economy and his leadership afloat. Photograph: Luis Robayo/AFP/Getty Images
In most of the world, falling oil prices have caused significant reductions in petrol prices. But in the country with the world’s largest oil reserves, the oil glut could force a price rise.
“It’s probably the only place in the world where with oil prices so low, they may raise gasoline prices,” says Pedro Méndez, an informal taxi driver in Caracas, the Venezuelan capital, who fills the tank of his Ford Laser for less than a dollar.
But the lower the price of oil goes, the deeper Venezuela’s economy sinks. It’s near total dependence on crude exports for hard currency has seen the government of president Nicolás Maduro struggling to try keep the economy afloat.
The political effect is already being felt. Gripped by spiraling inflation, chronic shortages of basic goods and a quickly depreciating currency, Venezuelan voters this month gave the opposition an overwhelming majority in the new legislature, which takes office in January.
Each $1 drop in oil prices results in more than $685m in lost yearly oil income for PDVSA, the state-owned oil company, according to analysts.
And every drop in crude prices means less funding for the health, education and housing and other social welfare programmes that won Maduro’s predecessor, Hugo Chávez, widespread support for his self-styled “Bolivarian revolution”.
While dwindling oil revenue hurts the social programmes, Antonio Azpurua, a financial consultant with CFS Partners/LA Group, says it could be a blessing in disguise, allowing Venezuela to wean itself of its dependence on crude. “Venezuela needs to take advantage of low oil prices to build its industrial base,” he says.
With a super-majority in the National Assembly, the opposition could reverse some of Maduro’s populist measures, which have contributed to the current economic crisis. They could also choose to raise petrol prices.
Iran
Iranians took to the streets to celebrate the nuclear deal which will mean they can more freely trade their oil. Photograph: Abedin Taherkenareh/EPA
Iran is rushing to implement the landmark nuclear accord in order to cash in on sanctions relief as early as next month, but the plummeting price of oil is tempering its expectations even though its economy has become less dependent on crude sales.
Tehran currently exports 1.1m barrels of oil per a but the Iranian oil minister, Bijan Zanganeh, has announced that the country is aiming to double that amount within six months of sanctions being lifted, hoping it will return to the pre-sanctions level of 2.2m.
Although the EU lifted Iranian sanctions in October after the Vienna nuclear agreement, the measures will only come into effect after what has become known as “implementation day”, the unknown date when the UN nuclear watchdog, IAEA, will verify that Iran has taken the necessary steps as outlined under the nuclear deal. Iran is expediting whatever it can to bring this date forward to as early as January.
In an effort to woo foreign investment in the post-sanctions era, Iran put a set of new lucrative oil and gas contracts, worth more than $30bn, on the market this month. But all these efforts have come at a time when global oil prices are falling as a result of a crude surplus of 2m barrels a day, a phenomenon Tehran blames on the Saudis.
“The drop in oil prices hurts all oil producers, not just Iran,” said Amir Handjani, president of PG International commodities trading services and a member of the board directors of RAK Petroleum.
“Saudi Arabia is very aware that Iran will be able to sell its crude unencumbered by sanctions on the international market very soon and will use all means at its disposal to make sure Iran doesn’t recapture the market share it lost over the past four years,” he said.
“Basically, Riyadh’s message to Tehran is simple: we can endure low oil prices for a while; can you?”
But the experience of years under sanctions has made the Iranian economy “incredibly resilient”, according to Handjani. Iran’s economy faced huge economic problems in recent years due to international sanctions imposed over Tehran’s nuclear programme. Plummeting oil prices only added to economic woes in a country with the world’s fourth-largest oil reserves.
“To be sure, low oil prices deny Tehran much needed revenue but unlike the Saudis, Iran’s economy is not solely dependent on oil exports. Oil revenue accounts for about 15% of Iran’s GDP,” Handjani told the Guardian. Sanctions have forced Iran to diversify its economy, he said. It has a large manufacturing base, IT sector, and robust agro-industries, which make its economy on the whole “much more balanced” than Saudi Arabia.
“The Iranian economy has absorbed so many shocks over the past 36 years, from war to sanctions, that the pain of low oil prices now, as it breaks from international isolation, pales in comparison.”
Without naming Saudi Arabia, Zanganeh said last week that it was clear which country had an excess of supply and that there was “no ambiguity about who they are”. On the occasion of unveiling new oil contracts, the Iranian minister said last month that his country was willing to play a major role in oil supply and was even ready to work with American companies. “The way for the presence of these companies in Iran’s oil industry is open,” he said at the Iran Petroleum Contracts Conference in Tehran.
The deputy managing director of the national Iranian oil company (NIOC) told the Guardian in September that the Iranian government was earning more from tax than oil for the first time in almost half a century as the country shifts its traditional reliance on crude to taxation revenues in the face of falling oil prices. Critics say Iran is unlikely to maintain that equation when the lifting of sanctions allows it to export more oil.
According to Opec, Iran on average was selling oil at $38.92 a barrel in November, $5.63 less than the average in October, which is the worst drop among the group’s members.
Iran is rushing to implement the landmark nuclear accord in order to cash in on sanctions relief as early as next month, but the plummeting price of oil is tempering its expectations even though its economy has become less dependent on crude sales.
Tehran currently exports 1.1m barrels of oil per a but the Iranian oil minister, Bijan Zanganeh, has announced that the country is aiming to double that amount within six months of sanctions being lifted, hoping it will return to the pre-sanctions level of 2.2m.
Although the EU lifted Iranian sanctions in October after the Vienna nuclear agreement, the measures will only come into effect after what has become known as “implementation day”, the unknown date when the UN nuclear watchdog, IAEA, will verify that Iran has taken the necessary steps as outlined under the nuclear deal. Iran is expediting whatever it can to bring this date forward to as early as January.
In an effort to woo foreign investment in the post-sanctions era, Iran put a set of new lucrative oil and gas contracts, worth more than $30bn, on the market this month. But all these efforts have come at a time when global oil prices are falling as a result of a crude surplus of 2m barrels a day, a phenomenon Tehran blames on the Saudis.
“The drop in oil prices hurts all oil producers, not just Iran,” said Amir Handjani, president of PG International commodities trading services and a member of the board directors of RAK Petroleum.
“Saudi Arabia is very aware that Iran will be able to sell its crude unencumbered by sanctions on the international market very soon and will use all means at its disposal to make sure Iran doesn’t recapture the market share it lost over the past four years,” he said.
“Basically, Riyadh’s message to Tehran is simple: we can endure low oil prices for a while; can you?”
But the experience of years under sanctions has made the Iranian economy “incredibly resilient”, according to Handjani. Iran’s economy faced huge economic problems in recent years due to international sanctions imposed over Tehran’s nuclear programme. Plummeting oil prices only added to economic woes in a country with the world’s fourth-largest oil reserves.
“To be sure, low oil prices deny Tehran much needed revenue but unlike the Saudis, Iran’s economy is not solely dependent on oil exports. Oil revenue accounts for about 15% of Iran’s GDP,” Handjani told the Guardian. Sanctions have forced Iran to diversify its economy, he said. It has a large manufacturing base, IT sector, and robust agro-industries, which make its economy on the whole “much more balanced” than Saudi Arabia.
“The Iranian economy has absorbed so many shocks over the past 36 years, from war to sanctions, that the pain of low oil prices now, as it breaks from international isolation, pales in comparison.”
Without naming Saudi Arabia, Zanganeh said last week that it was clear which country had an excess of supply and that there was “no ambiguity about who they are”. On the occasion of unveiling new oil contracts, the Iranian minister said last month that his country was willing to play a major role in oil supply and was even ready to work with American companies. “The way for the presence of these companies in Iran’s oil industry is open,” he said at the Iran Petroleum Contracts Conference in Tehran.
The deputy managing director of the national Iranian oil company (NIOC) told the Guardian in September that the Iranian government was earning more from tax than oil for the first time in almost half a century as the country shifts its traditional reliance on crude to taxation revenues in the face of falling oil prices. Critics say Iran is unlikely to maintain that equation when the lifting of sanctions allows it to export more oil.
According to Opec, Iran on average was selling oil at $38.92 a barrel in November, $5.63 less than the average in October, which is the worst drop among the group’s members.
Libya
Fuel depots and tankers have been targets for years in the struggle for control of Libya and its oil resources. Photograph: EPA
Plunging oil prices are threatening disaster in Libya, where civil war has left the population depending on fast-dwindling oil revenues to survive.
Libya has Africa’s largest oil reserves and in normal times this provides 95% of the country’s export revenues, keeping the economy afloat. But civil war between rival governments at either end of the country has shattered the economy, leaving the population almost wholly dependent on revenue generated overseas.
The crash in oil prices has halved revenues, and shortages of foodstuffs and medicines – even petrol – are starting to be felt.
This cash squeeze has triggered a three-way battle for control of what remains of the country’s oil wealth. Much of Libya’s largest group of oil fields, the Sirte Basin, is now held by Islamic State, which has interposed itself between forces of the rival governments. Most of what remains is in eastern Libya, held by the elected parliament based in Tobruk.
Tobruk is using its status as the internationally recognised government to battle in foreign courts for the right to income from other producing fields, opposing the state-owned National Oil Corporation, whose headquarters remains in Tripoli, held by a rival parliament.
Tobruk has set up a second National Oil Corporation, based in eastern Libya, and last month demanded international oil companies switch payments that currently go to Tripoli.
Countering that, Tripoli’s NOC chief, Mustafa Sanallah, convened a conference in London in October calling on oil buyers to stick with him. Two of the world’s largest oil buyers, Glencore and Vitol, have agreed, but the eastern government has vowed legal action.
London courts are likely to be the proving ground for this test of wills, with both governments already gearing up for a precedent-setting high court battle, due early next year, for control of the Libya Investment Authority, the country’s £65bn sovereign wealth fund.
But whoever wins control of what remains of the oil industry may find it a pyrrhic victory. John Hamilton, director of London’s Cross-border Information, says the glut of oil on world markets and turbulence around the few remaining oil ports means Libyan oil has already been “priced out” by many buyers.
Monday 4 May 2015
Who is bombing whom in the Middle East?
Robert Fisk in The Independent
Let me try to get this right. The Saudis are bombing Yemen because they fear the Shia Houthis are working for the Iranians. The Saudis are also bombing Isis in Iraq and the Isis in Syria. So are the United Arab Emirates. The Syrian government is bombing its enemies in Syria and the Iraqi government is also bombing its enemies in Iraq. America, France, Britain, Denmark, Holland, Australia and – believe it or not – Canada are bombing Isis in Syria and Isis in Iraq, partly on behalf of the Iraqi government (for which read Shia militias) but absolutely not on behalf of the Syrian government.
The Jordanians and Saudis and Bahrainis are also bombing Isis in Syria and Iraq because they don’t like them, but the Jordanians are bombing Isis even more than the Saudis after their pilot-prisoner was burned to death in a cage. The Egyptians are bombing parts of Libya because a group of Christian Egyptians had their heads chopped off by what might – notionally – be the same so-called Islamic State, as Isis refers to itself. The Iranians have acknowledged bombing Isis in Iraq – of which the Americans (but not the Iraqi government) take a rather dim view. And of course the Israelis have several times bombed Syrian government forces in Syria but not Isis (an interesting choice, we’d all agree). Chocks away!
It amazes me that all these warriors of the air don’t regularly crash into each other as they go on bombing and bombing. And since Lebanon’s Middle East Airlines is the only international carrier still flying over Syria – but not, thank heavens, over Isis’s Syrian capital of Raqqa – I’m even more amazed that my flights from Beirut to the Gulf have gone untouched by the blitz boys of so many Arab and Western states as they career around the skies of Mesopotamia and the Levant.
The sectarian and theological nature of this war seems perfectly clear to all who live in the Middle East – albeit not to our American chums. The Sunni Saudis are bombing the Shia Yemenis and the Shia Iranians are bombing the Sunni Iraqis. The Sunni Egyptians are bombing Sunni Libyans, it’s true, and the Jordanian Sunnis are bombing Iraqi Sunnis. But the Shia-supported Syrian government forces are bombing their Sunni Syrian enemies and the Lebanese Hezbollah – Shia to a man – are fighting the Syrian President Bashar al-Assad’s Sunni enemies, along with Iranian Revolutionary Guards and an ever-larger number of Afghan Shia men in Syrian uniforms.
And if you want to taste the sectarianism of all this, just take a look at Saudi Arabia’s latest request to send more Pakistani troops to protect the kingdom (and possibly help to invade Yemen), which came from the new Saudi Crown Prince and Defence Minister Mohammed bin Salman who at only 34 is not much older than his fighter pilots. But the Saudis added an outrageous second request: that the Pakistanis send only Sunni Muslim soldiers. Pakistani Shia Muslim officers and men (30 per cent of the Pakistani armed forces) would not be welcome.
It’s best left to that fine Pakistani newspaper The Nation – and the writer Khalid Muhammad – to respond to this sectarian demand. “The army and the population of Pakistan are united for the first time in many years to eliminate the scourge of terrorism,” Muhammad writes. But “the Saudis are now trying to not only divide the population, but divide our army as well. When a soldier puts on a uniform, he fights for the country that he calls home, not the religious beliefs that they carry individually… Do they (the Saudis) believe that a professional military like Pakistan… can’t fight for a unified justified cause? If that is the case then why ask Pakistan to send its armed forces?”
It’s worth remembering that Pakistani soldiers were killed by the Iraqi army in the battle for the Saudi town of Khafji in 1991. Were they all Sunnis, I wonder?
And then, of course, there are the really big winners in all this blood, the weapons manufacturers. Raytheon and Lockheed Martin supplied £1.3bn of missiles to the Saudis only last year. But three years ago, Der Spiegel claimed the European Union was Saudi Arabia’s most important arms supplier and last week France announced the sale of 24 Rafale fighter jets to Qatar at a cost of around £5.7bn. Egypt has just bought another 24 Rafales.
It’s worth remembering at this point that the Congressional Research Services in the US estimate that most of Isis’s budget comes from “private donors” in – you guessed it – Saudi Arabia, Qatar, the UAE and Kuwait.
But blow me down if the Yanks are back to boasting. More than a decade after “Mission Accomplished”, General Paul Funk (in charge of reforming the Iraqi army) has told us that “the enemy is on its knees”. Another general close to Barack Obama says that half of the senior commanders in Isis have been liquidated. Nonsense. But it’s worth knowing just how General Pierre de Villiers, chief of the French defence staff, summed up his recent visits to Baghdad and Iraqi Kurdistan. Iraq, he reported back to Paris, is in a state of “total decay”. The French word he used was “decomposition”. I suspect that applies to most of the Middle East.
Let me try to get this right. The Saudis are bombing Yemen because they fear the Shia Houthis are working for the Iranians. The Saudis are also bombing Isis in Iraq and the Isis in Syria. So are the United Arab Emirates. The Syrian government is bombing its enemies in Syria and the Iraqi government is also bombing its enemies in Iraq. America, France, Britain, Denmark, Holland, Australia and – believe it or not – Canada are bombing Isis in Syria and Isis in Iraq, partly on behalf of the Iraqi government (for which read Shia militias) but absolutely not on behalf of the Syrian government.
The Jordanians and Saudis and Bahrainis are also bombing Isis in Syria and Iraq because they don’t like them, but the Jordanians are bombing Isis even more than the Saudis after their pilot-prisoner was burned to death in a cage. The Egyptians are bombing parts of Libya because a group of Christian Egyptians had their heads chopped off by what might – notionally – be the same so-called Islamic State, as Isis refers to itself. The Iranians have acknowledged bombing Isis in Iraq – of which the Americans (but not the Iraqi government) take a rather dim view. And of course the Israelis have several times bombed Syrian government forces in Syria but not Isis (an interesting choice, we’d all agree). Chocks away!
It amazes me that all these warriors of the air don’t regularly crash into each other as they go on bombing and bombing. And since Lebanon’s Middle East Airlines is the only international carrier still flying over Syria – but not, thank heavens, over Isis’s Syrian capital of Raqqa – I’m even more amazed that my flights from Beirut to the Gulf have gone untouched by the blitz boys of so many Arab and Western states as they career around the skies of Mesopotamia and the Levant.
The sectarian and theological nature of this war seems perfectly clear to all who live in the Middle East – albeit not to our American chums. The Sunni Saudis are bombing the Shia Yemenis and the Shia Iranians are bombing the Sunni Iraqis. The Sunni Egyptians are bombing Sunni Libyans, it’s true, and the Jordanian Sunnis are bombing Iraqi Sunnis. But the Shia-supported Syrian government forces are bombing their Sunni Syrian enemies and the Lebanese Hezbollah – Shia to a man – are fighting the Syrian President Bashar al-Assad’s Sunni enemies, along with Iranian Revolutionary Guards and an ever-larger number of Afghan Shia men in Syrian uniforms.
And if you want to taste the sectarianism of all this, just take a look at Saudi Arabia’s latest request to send more Pakistani troops to protect the kingdom (and possibly help to invade Yemen), which came from the new Saudi Crown Prince and Defence Minister Mohammed bin Salman who at only 34 is not much older than his fighter pilots. But the Saudis added an outrageous second request: that the Pakistanis send only Sunni Muslim soldiers. Pakistani Shia Muslim officers and men (30 per cent of the Pakistani armed forces) would not be welcome.
It’s best left to that fine Pakistani newspaper The Nation – and the writer Khalid Muhammad – to respond to this sectarian demand. “The army and the population of Pakistan are united for the first time in many years to eliminate the scourge of terrorism,” Muhammad writes. But “the Saudis are now trying to not only divide the population, but divide our army as well. When a soldier puts on a uniform, he fights for the country that he calls home, not the religious beliefs that they carry individually… Do they (the Saudis) believe that a professional military like Pakistan… can’t fight for a unified justified cause? If that is the case then why ask Pakistan to send its armed forces?”
It’s worth remembering that Pakistani soldiers were killed by the Iraqi army in the battle for the Saudi town of Khafji in 1991. Were they all Sunnis, I wonder?
And then, of course, there are the really big winners in all this blood, the weapons manufacturers. Raytheon and Lockheed Martin supplied £1.3bn of missiles to the Saudis only last year. But three years ago, Der Spiegel claimed the European Union was Saudi Arabia’s most important arms supplier and last week France announced the sale of 24 Rafale fighter jets to Qatar at a cost of around £5.7bn. Egypt has just bought another 24 Rafales.
It’s worth remembering at this point that the Congressional Research Services in the US estimate that most of Isis’s budget comes from “private donors” in – you guessed it – Saudi Arabia, Qatar, the UAE and Kuwait.
But blow me down if the Yanks are back to boasting. More than a decade after “Mission Accomplished”, General Paul Funk (in charge of reforming the Iraqi army) has told us that “the enemy is on its knees”. Another general close to Barack Obama says that half of the senior commanders in Isis have been liquidated. Nonsense. But it’s worth knowing just how General Pierre de Villiers, chief of the French defence staff, summed up his recent visits to Baghdad and Iraqi Kurdistan. Iraq, he reported back to Paris, is in a state of “total decay”. The French word he used was “decomposition”. I suspect that applies to most of the Middle East.
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