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Scientists Use Stem Cells To Create Human/Pig Chimera Embryos

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Efforts by Salk Institute researchers to grow the first embryos containing cells from humans and pigs proved more challenging than anticipated, they report January 26 in Cell.

Human/animal chimeras can offer insights into early human development and disease onset and provide a realistic drug-testing platform. According to researchers, they may also someday provide a means of growing human cells, tissues, and organs for regenerative medicine. For now, however, they are helping scientists understand how human stem cells grow and specialize.

“The ultimate goal is to grow functional and transplantable tissue or organs, but we are far away from that,” said lead investigator Juan Carlos Izpisua Belmonte, a professor in the Salk Institute of Biological Studies’ Gene Expression Laboratory. “This is an important first step.”

Despite decades of work, scientists are still struggling to coax stem cells growing in Petri dishes to become fully functional specialized adult cells, let alone three-dimensional tissues and organs.

“It’s like when you try to duplicate a key. The duplicate looks almost identical, but when you get home, it doesn’t open the door. There is something we are not doing right,” said Izpisua Belmonte. “We thought growing human cells in an animal would be much more fruitful. We still have many things to learn about the early development of cells.”

As a first step, Izpisua Belmonte and Salk Institute staff scientist Jun Wu created a rat/mouse chimera by introducing rat cells into mouse embryos and letting them mature. Other researchers had already created a rat/mouse chimera in 2010. That chimera was a mouse with pancreatic tissue formed from rat cells.

Izpisua Belmonte and Wu built on that experiment by using genome editing to flexibly direct the rat cells to grow in specific developmental niches in the mouse. To accomplish this, they used CRISPR genome editing tools to delete critical genes in fertilized mouse egg cells. For instance, in a given cell, they would delete a single gene critical for the development of an organ, such as the heart, pancreas, or eye. Then, they introduced rat stem cells into the embryos to see if they would fill the open niche.

“The rat cells have a functional copy of the missing mouse gene, so they can outcompete mouse cells in occupying the emptied developmental organ niches,” said Wu. As the organism matured, the rat cells filled in where mouse cells could not, forming the functional tissues of the organism’s heart, eye, or pancreas.

Rat cells also grew to form a gall bladder in the mouse, even though rats stopped developing this organ themselves over the 18 million years since rats and mice separated evolutionarily.

“This suggests that the reason a rat does not generate a gall bladder is not because it cannot, but because the potential has been hidden by a rat-specific developmental program,” said Wu. “The microenvironment has evolved through millions of years to choose a program that defines a rat.”

The team’s next step was to introduce humans’ cells into an organism. They decided to use cow and pig embryos as hosts because the size of these animals’ organs more closely resembles humans than mice. The team encountered many logistical challenges, but the scientific challenge was determining what kind of human stem cell could survive in a cow or pig embryo.

Experiments with cow embryos were more difficult and costly than pigs, so the team zoomed in on pigs. The effort required to complete studies of 1,500 pig embryos involved the contributions of over 40 people, including pig farmers, over a four-year period.

“We underestimated the effort involved,” said Izpisua Belmonte. “This required a tour de force.”

Not only are pigs and humans about five times more distant evolutionarily than mice and rats, but pigs also have a gestation period that is about one-third as long as humans, so the researchers needed to introduce human cells with perfect timing to match the developmental stage of the pig.

“It’s as if the human cells were entering a freeway going faster than the normal freeway,” said Izpisua Belmonte. “If you have different speeds, you will have accidents.”

The researchers injected several different forms of human stem cells into pig embryos to see which would survive best. The cells that survived longest and showed the most potential to continue to develop were “intermediate” human pluripotent stem cells. So-called “naïve” cells resemble cells from an earlier developmental origin with unrestricted developmental potential; “primed” cells have developed further, but still remain pluripotent. “Intermediate cells are somewhere in between,” said Wu.

The human cells survived and formed a human/pig chimera embryo. Embryos were implanted in sows and allowed to develop for between three and four weeks.

“This is long enough for us to try to understand how the human and pig cells mix together early on without raising ethical concerns about mature chimeric animals,” said Izpisua Belmonte.

Even using the most well-performing human stem cells, the level of contribution to the chimerized embryo was not high. “It’s low,” said Wu.

Izpisua Belmonte considers this good news. One concern with the creation of human/animal chimeras is that the chimera will be too human. For instance, researchers don’t want human cells to contribute to the formation of the brain.

In this study, the human cells did not become precursors of brain cells that can grow into the central nervous system. Rather, they were developing into muscle cells and precursors of other organs.

“At this point, we wanted to know whether human cells can contribute at all to address the ‘yes or no’ question,” he said. “Now that we know the answer is yes, our next challenge is to improve efficiency and guide the human cells into forming a particular organ in pigs.”

To do this, the researchers are using CRISPR to perform genome editing on the pig genome, as they did with mice, to open gaps that human cells can fill in. The work is in progress.


Premature Death Rates Diverge In US By Race And Ethnicity

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Premature death rates have declined in the United States among Hispanics, blacks, and Asian/Pacific Islanders (APIs)–in line with trends in Canada and the United Kingdom–but increased among whites and American Indian/Alaska Natives (AI/ANs), according to a comprehensive study of premature death rates for the entire U.S. population from 1999 to 2014.

This divergence was reported by researchers at the National Cancer Institute (NCI), and colleagues at the National Institute on Drug Abuse (NIDA), both part of the National Institutes of Health, and the University of New Mexico College of Nursing. The findings appeared January 25, 2017, in The Lancet.

Declining rates of premature death (i.e., deaths among 25- to 64-year-olds) among Hispanics, blacks, and APIs were due mainly to fewer deaths from cancer, heart disease, and HIV over the time period of the study. The decline reflects successes in public health efforts to reduce tobacco use and medical advances to improve diagnosis and treatment. Whites also experienced fewer premature deaths from cancer and, for most ages, fewer deaths from heart disease over the study period. Despite these substantial improvements, overall premature death rates still remained higher for black men and women than for whites.

In contrast, overall premature death rates for whites and AI/ANs were driven up by dramatic increases in deaths from accidents (primarily drug overdoses), as well as suicide and liver disease. Among 25- to 30-year-old whites and AI/ANs, the investigators observed increases in death rates as high as 2 percent to 5 percent per year, comparable to those increases observed at the height of the U.S. AIDS epidemic.

“The results of our study suggest that, in addition to continued efforts against cancer, heart disease, and HIV, there is an urgent need for aggressive actions targeting emerging causes of death, namely drug overdoses, suicide, and liver disease,” said Meredith Shiels, Ph.D., M.H.S., Division of Cancer Epidemiology and Genetics (DCEG), NCI, and lead author of the study.

“Death at any age is devastating for those left behind, but premature death is especially so, in particular for children and parents,” emphasized Amy Berrington, D.Phil., also of DCEG and senior author of the study. “We focused on premature deaths because, as Sir Richard Doll, the eminent epidemiologist and my mentor, observed: ‘Death in old age is inevitable, but death before old age is not.’ Our study can be used to target prevention and surveillance efforts to help those groups in greatest need.”

The study findings were based on death certificate data collected by the National Center for Health Statistics, part of the Centers for Disease Control and Prevention.

DeFazio Urges Trump To File Trade Dispute Against OPEC

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Rep. Peter DeFazio (D-OR) has sent a letter to US President Donald Trump urging him to file a trade dispute with the World Trade Organization (WTO) against the Organization of Petroleum Exporting Countries (OPEC) for manipulating oil production.

For decades, OPEC has consistently manipulated the supply and price of oil, colluding to establish production levels in order to control prices in the world market, according to DeFazio, who for the past twenty years has asked the sitting President to bring a WTO dispute against OPEC member nations for these manipulations.

“I share President Trump’s commitment to strengthening America’s position in the global economy by negotiating fairer trade deals,” said Rep. DeFazio. “By challenging the OPEC’s unfair collusion to manipulate oil production, President Trump has an opportunity to not only make good on his campaign promises, but break from the tradition of previous presidents and take a stand on a critical trade issue that costs the U.S. economy billions of dollars. I am urging the Trump administration to stand up for American consumers and businesses that are being gouged by OPEC.”

According to DeFazio, OPEC’s most recent collusion occurred in November 2016, where OPEC and non-OPEC nations agreed to decrease production by 1.8 million barrels per day, effective January 1, 2017, in order to keep the price of oil at artificially high levels. Since that meeting, the countries have made significant progress in limiting output, already having reduced production by 1.5 million barrels per day.

Under Article XI of the General Agreement on Tariffs and Trade (GATT), member countries are prohibited from using anything other than “duties, taxes or other charges,” to limit imports or exports across their borders. Oil production quotas clearly violate this statute, according to DeFazio.

How Hollywood Movies Define US Policies – OpEd

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By Ray Hanania*

The battle between the biased US news media and President Donald Trump was not the only thing on the minds of Americans during these past few weeks. Nearly 20 million of them went to theaters to watch “Patriots Day,” a dramatization of how two Chechen Muslims killed four Americans and injured hundreds during a five-day terror campaign that began at the Boston Marathon on April 15, 2013.

Although the 143-minute movie vaguely presented some of the motives of the two bombers, brothers Dzhokhar and Tamerlan Tsarnaev, the focus was on the suffering of the victims and the people involved in capturing them. In the end, the film brought American audiences together against terrorism by Muslims. It was a very emotional film, only one of a dozen movies that define Arab and Muslim terrorism against Americans.

Movies like this strengthen US resolve against terrorism while reinforcing stereotypes, such as the false notion that terrorism only occurs when an Arab or Muslim kills American civilians. Most Americans do not consider it terrorism when an American or an ally such as Israel kills Arabs or Muslims.

The movie cost $45 million to make, funded by 19 people including actor Mark Wahlberg, who served as an executive producer.

Why have the Arab and Muslim worlds not presented their hundreds of “Boston Marathon bombings” to Americans through film? Do we not have the talent to tell our stories? Do we not have stories to tell? That is what some Americans might think when they see nothing from us. Hundreds of similar stories can be told, stories that can significantly alter the American view of Arabs, Muslims, and causes such as Palestine and Syrian refugees.

Occupied Palestine is a litany of untold stories that can be turned into powerful and compelling movies. Gaza alone would be a movie series of Israeli carnage and violence. Yet none of their stories have been told through movie production. Despite the propaganda, the violence is not caused by Palestinians firing Qassam rockets erratically at Israel. It is caused by Israelis who frequently attack and kill civilians.

Are the four people who died in Boston any more deserving of attention than the thousands of Gaza civilians blown up by Israeli bombings? How about the story of Kafr Qasim, when terrorist Ariel Sharon ordered the murder in cold blood of dozens of Arab civilians who were returning to their homes in occupied Palestine in 1956? They were unaware that Israel had imposed a shoot-to-kill curfew. Among the 48 murdered were 23 children.

I would like to see a movie convey the horrific image of an Israeli soldier pointing his US-made gun at a six-year-old Arab child. Maybe a movie about Deir Yassin, when Menachem Begin and Yitzhak Shamir, both later Israeli prime ministers, ordered the massacre of 100 civilians. Years later, Israel expelled its Arab citizens, razed the village and built over it a memorial to Jews murdered during the Holocaust, Yad Vashem.

Maybe a movie about American Rachel Corrie, who was killed by an Israeli soldier driving a US-made D9 Caterpillar bulldozer who was destroying Arab civilian homes so they could expand an illegal Israeli settlement in 2003. Maybe a movie about Abdel Fattah Al-Sharif, the wounded Palestinian accused of attacking an Israeli soldier along with a friend at a checkpoint in occupied Hebron when they were shot.

As Al-Sharif was lying on the ground seriously wounded and unable to move, Israeli soldier Elor Azaria walked up to him and shot him in the head in cold blood. Azaria was charged and convicted of murder last week, but Israeli officials are already urging he be pardoned. We never would have known the facts had a courageous civil rights activist not videotaped the killing. That activist is now the target of an Israeli hate campaign and death threats.

Movies are a powerful means of convincing people of truths. Compelling movies can open closed minds, especially in the US, where for most Americans movies are their only education about Middle East events.

The Arab world could easily counter seven decades of Israeli propaganda and lies about Palestine, and stereotypes of Arabs and Muslims through just a couple of good films. One movie is far more effective than a dozen speeches at the UN or human rights reports, much of which most Americans will never see or hear.

Americans are not listening to the pleas of Arabs, Muslims and Palestinians. We are not telling our story to Americans. They cannot hear us. They only see us when we are presented to them as bloodthirsty terrorists, usually through movies. Many of the films are directly or indirectly financed by Israeli and pro-Israeli investors.

What is stopping us from telling our stories? Is it money? Wealthy Arabs and Muslims spend millions on luxury cars, spacious homes and extravagant vacations. I am not saying they do not deserve it, but can they not spend a fraction on making a movie that tells a powerful truth?

I remember in the 1960s when Hollywood released the movie “Exodus,” based on a novel by Leon Uris. The movie was filled with lies, exaggerations, distortions and obvious fiction, yet Americans embraced it as the definitive story of Israel.

We can achieve so much by producing our own films for US audiences that offer a compelling truth about who we are. We would not even lie, like the Israelis do. All we have to do is tell the truth. In the war between lies and truth, truth has no standing if it can never reach an audience. A few dollars can change all that.

*Ray Hanania is an award-winning Palestinian-American former journalist and political columnist. Email him at rghanania@gmail.com.

US Has Moral Obligation To Help Rebuild Ravaged Middle East – OpEd

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To turn our backs on the tens of millions of innocent men, women and children, who had absolutely nothing to do with the “conflict of bankers/globalists,” would be tantamount to condemning them to death, and would be wholesale genocide…If the Western countries no longer want to take these newly created refugees within their own borders, then they must immediately re-create and re-build the nations that they destroyed, so that these people can go home.

Although the vast majority of Americans are grateful and happy to hear the news from President Donald Trump that he wishes to withdraw from the world, in terms of military conflicts, paramilitary affairs, and pointless regime changes that span the globe, in direct contravention to the abject insanity of the Neo-Conservatives/Neo-Liberals which have plagued American foreign policy for the past 15 years, it is vital to understand that even though these criminal acts were perpetrated by previous regimes/administrations of the United States, which gorged themselves on the proverbial meal in the proverbial restaurant, it is unfortunately incumbent upon the new administration to also pay the proverbial bill, and to fix and rectify the mistakes of the past.

While it is fair and good to state as a matter of foreign policy that the USA will now try and adhere to Thomas Jefferson’s mantra of “Peace, commerce and honest friendship with all nations, entangling alliances with none,” it would be altogether grossly irresponsible and cruel to now leave the entire world in smoke and shambles, burning embers of once great civilizations that have often existed for thousands of years uninterrupted and unmolested.

So even though President Donald Trump and the vast majority of America (and the rest of the European world) wish to move forward into the future, it would be absolutely unforgivable if they did not also assist in actively re-building those damaged and destroyed societies, while not attempting to re-colonialize them again.

The United States through the World Bank and IMF, as well as Russia, Brazil, India, China and South Africa through the BRICS Bank, need to join hands and extend billions and billions of dollars in loans and project finance to those poor ravaged nations in order to help them re-build their infrastructure, waterways, electric grids, internet, buildings, health facilities and hospitals, schools, and other major points of civilized life.

To turn our backs on the tens of millions of innocent men, women and children, who had absolutely nothing to do with the “conflict of bankers/globalists,” would be tantamount to condemning them to death, and would be wholesale genocide.

Now that Europe, followed by America, has slammed the door shut on the tens of millions of poor refugees created by such monsters as NATO, George Soros, and other megalomaniacs, the latter of which had betted on simply incorporating these bedraggled refugees within Western societies, these poor masses have been relegated to drowning in the waters in between North Africa and Europe, and dying or being raped at the hands of barbarians in the Middle East.

This reality is altogether unacceptable.

If the Western countries no longer want to take these newly created refugees within their own borders, then they must immediately re-create and re-build the nations that they destroyed, so that these people can go home.

The USA must immediately join hands with Europe and the emerging nations of the BRICS Bank paradigm in order to rebuild the horrific destruction wrought by the previous American administrations/regimes, war criminals, pirates, Neo-Cons, and their proxies Saudi Arabia, Turkey, NATO, ISIS, and other clandestine mercenaries.

We must also punish the War Criminals involved in such horrendous atrocities spanning 15 years, with convened “Nuremberg Trials” and other such international judicial congress, in order to also deal with the devastating moral fallout of their behavior and actions, as these people can not be allowed to get away with their 15 year raping and pillaging of humanity, with impunity.

If the United States does not take the lead in this dispensation of much overdue justice, then the United Nations should do so, with or without America at the table – this is just quite simply the morally correct thing to do.

Otherwise the United States of America has no right to call itself a civilized nation.

This article appeared at Veterans News Now

Religious Intolerance In The Gulf States – Analysis

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By Hilal Khashan*

Interest in the state of Middle East Christians has largely focused on the quality of their lives in the Levant, Egypt, and Southern Sudan, predominantly Christian areas before the rise of Islam that still contain sizeable Christian minorities. By contrast, little attention has been paid to Christians in the Arabian Peninsula, which had no indigenous Christian presence in Islamic times.

However, the oil boom of the 1970s created a tremendous demand for foreign labor in the Persian Gulf rentier states. Unsurprisingly, the number of workers needed to drive the emerging economies of the Gulf states was bound to include significant numbers of Christians. There are now more than three and a half million expatriate Christians working in the six Gulf Cooperation Council (GCC) states, mostly Catholics from the Philippines, India, and Pakistan. As their numbers increased, the question of how—or whether—to allow them to openly practice their faith became a significant issue.

The Current Status of Arabian Christianity

In the West, the freedom to worship in any way one chooses has been a bedrock value at least since the late eighteenth century.

Lingering anti-Catholic and anti-Jewish restrictions in Europe or North America notwithstanding, the general trajectory has been one of growing tolerance for the modalities of faith. Perhaps the most notable example of this is also one of the earliest: the First Amendment to the U.S. constitution, which made illegal “prohibiting the free exercise” of any religion by the federal government.

Because of its deep-rooted nature within their societies, Westerners tend to frown on other societies that do not share the same ethic. Yet given the Middle East’s importance to their strategic and economic interests in the post-World War II era, Western chancelleries turned a blind eye to the glaring gap between believing in freedom of religion and interacting with those who flagrantly violated this principle. It was only after the 9/11 attacks and the attendant “war on terror” that Muslim intolerance of other faiths began to come under greater scrutiny.

Thus, an editorial in a British news-paper laments that Christians in the countries of the GCC are virtually “servants, abominably treated. Their religion must be practiced in secret, with converts threatened with death.”[1] Another writer went on to explain the emotional significance of this denial of a basic human right:

Most of the Christians who have come here have done so in order to find work in the Arab lands, and as a result, the majority live alone, having left their spouses and families back in their home country. As a result the parish, and also their Catholic faith, is like a piece of home for them.”[2]

The welfare of Christians in Saudi Arabia is particularly pressing because the government bans all non-Islamic religious practice alongside an aversion to non-Wahhabi Islamic creeds.

Yet the severity of the lack of Christians’ right to unencumbered religious freedom is all too often camouflaged by their own clerics who fear antagonizing the Gulf authorities. Rev. Andrew Thompson, the senior pastor of Abu Dhabi’s St. Andrew’s Church, astonishingly told a local newspaper that it is “easier being a Christian here [in Abu Dhabi] than it is back in the United Kingdom.”[3] According to Bill Schwartz, canon of the Anglican Church of the Epiphany in Doha: “In the Gulf, excluding Saudi Arabia, government attitudes are more [ones of] religious tolerance than religious freedom.”[4]

Spreading the Gospels through missionary activity is also severely curtailed among the member states of the GCC. Roy Verrips, the South African administrator of the Evangelical United Christian Church of Dubai, addressed this in diplomatic terms: “We respect and work within the boundaries they set for us” noting that his church had no issue with its members talking to others about Christianity in a private capacity.[5] In Bahrain, the authorities allow priests to spend time with Christian workers living on work sites and to join together in worship. However, “any form of mission among Muslims is forbidden everywhere [in the GCC states].”[6]

The acute lack of churches to accommodate the spiritual needs of the numerous Christian denominations in the GCC states is another serious matter. While the church space problem is ubiquitous in the Gulf region, the following example indicates its magnitude. Every Friday in Kuwait City, 2,000 Christians cram into the 600-seat Holy Family church or listen outside to the mass relayed on loudspeakers, prompting their Catholic bishop, Camillo Ballin, to worry about a stampede: “If a panic happens, it will be a catastrophe … it is a miracle that nothing has happened.”[7]

Limits on the number of allowed churches and entry restrictions on Christian clerics hinder the ability of priests to serve their congregations adequately since each one of them

has to celebrate several masses at the weekend, and many parishes also have very distant outstations. The work of the priest is taken above all in this sacramental service, for in addition to the celebration of Mass, there are also baptisms, marriages, and funerals.[8]

Bishop Paul Hinder, who oversees Catholic churches in the GCC states and Yemen, noted the role of lay volunteers in keeping the church going: “It is a Church resting on the shoulders of the laity.”[9]

Islamic Notions of Religious Tolerance

What are then the underlying causes of this predicament?

For Muslims there is no deity but God. This is the lens through which they interpret all other religions, and this view explains why many Muslims do not understand Christianity. For them, the Qur’an is the final word of God. By and large, Muslims may tolerate some latitude in the ability of Christians to exercise their religious duties within the frame-work of the legally and institutionally inferior “protected communities” (or dhimmis), but the Christian faith must not be given the chance to flourish.

The Christianity of the Qur’an was embroiled in a debate about the nature of Christ, leaving the impression that its followers disagreed about what their faith actually consisted of. As a consequence, early Muslims considered Christianity a blasphemous interpretation of the nature of Jesus, who is presented in the Qur’an as a prophet but not the son of God. This perception persists and has lost none of its intensity.

Religious pluralism as understood in the West does not exist anywhere in the Gulf region, and limited forbearance is probably the best that Christians can hope for in these deeply conservative countries. However, on paper, the GCC states do practice religious tolerance. Thus, the sultanate of Oman has been seen as one of the most tolerant in the peninsula. Christian worship is protected through that country’s Basic Law, which prohibits discrimination based on religion and considers it a criminal offense to defame any faith. Similarly, the Kuwaiti constitution theoretically provides for religious freedom. But reality tells a different story. In 2014, according to the official figures, locals accounted for some 1.2 million of Kuwait’s 4-million-strong population while expatriate Muslims totaled another 1.8 million and expatriate Christians about 700,000 (the remaining residents belonged to polytheistic religions).[10] Yet the emirate has over 1,000 mosques and only seven churches; also, the government imposes quotas on the number of clerics and staff in legally authorized churches and pressures Kuwaitis to refrain from renting apartments or villas for use as unofficial churches.[11]

Likewise, Article 32 of the United Arab Emirates (UAE) constitution guarantees the “freedom to exercise religious worship … in accordance with established customs and provided it does not conflict with public policy or violate public morals.”[12] That final caveat—”provided it does not conflict with public policy or violate public morals”—is the crucial stipulation; however, it flips constitutional provisions on their heads. Even in states run by autocrats—or perhaps precisely because they are run by autocrats—public opinion in these matters counts for a great deal. In the UAE and other GCC states, government capacity to grant true religious freedom to Christians is highly restricted because their devout publics are still not at ease with such freedoms. Indeed, while Saudi Arabia stands out as the single GCC state that openly does not tolerate religious diversity, last year’s gesture of the crown prince of Abu Dhabi, the country’s effective ruler, to grant the land for a Hindu temple is a singular manifestation of pragmatism that does not necessarily demonstrate public approval.

Indigenous and Imported Christian Denominations

Another important factor explaining the GCC attitude toward religious pluralism in the peninsula is that until relatively recently, there were few non-Muslims for the inhabitants to encounter. Muslim tradition holds that, shortly before his death, the Prophet Muhammad expressed the view that in Arabia there should be only one religion, namely Islam. While a few pockets of non-Muslims held out for a period of time—the Jews of Khyber and the Christians of Najran, near Yemen[13]—shortly after Muhammad’s death one of his immediate successors, the caliph Umar, is said to have finished the job. Whether the eradication of non-Muslims from Arabia took place in precisely this fashion is less relevant than the reality, which is that there are few native Christians in the Persian Gulf states apart perhaps from several hundred in Kuwait, Oman and Bahrain.[14]

The modern history of Christianity in the Persian Gulf goes back to 1893 when a group of Christians arrived in Oman and bought a large building with a plot of land that they obtained as a gift from the sultan. This group, members of the Reformed Church of America, came for missionary purposes. A Catholic church, St. Peter and Paul, was founded there only in 1977, followed by an Orthodox, a Syriac Orthodox, and a Coptic church.

Bahrain claims to have the oldest church building in the Gulf region. Known as the National Evangelical Church, it was erected in 1906 by an American evangelical missionary of the Reformed Church in America.

In Kuwait, the establishment of the National Evangelical Church dates back to 1931. A Coptic church was built in 1958, later followed by an Armenian one. Even this limited Christian presence has for some years been the object of fierce political battles between the Kuwaiti emir and the Islamists. Wahhabi Salafism established itself in Kuwait following the Kuwait-Najd war of 1919-20; and while it is a minority movement, it wields enough influence to slow down the spread of religious tolerance in Kuwait.

At least two-thirds of the Christians in the GCC work in Saudi Arabia where they are completely cut off from contact with the church or clerical representatives. Unconfirmed reports claim that there are thousands of converts to Christianity in the desert kingdom who cannot profess their new faith because renouncing Islam is punishable by death.[15]

Effects on Foreign Communities

Although there is no clear-cut tie in the Gulf region between religious intolerance and the abuse of migrant workers, the fact that so many foreigners in the region are non-Muslims and from the lowest socioeconomic rungs likely plays a role in the attitude of the authorities toward notions of religious pluralism.[16] Abuse of non-citizen workers is wide-spread in the GCC states, as in many other countries around the world. In the Gulf states, abuse is not religion-specific even though it may overlap with religious intolerance at times.

In truth, it is perhaps much easier to demand greater freedom of worship for Christians in the Gulf states than to curtail the abuse of foreign workers, irrespective of their faith, because such behavior is culturally embedded in the Arabian legacy of slavery. During its imperial moment in the Persian Gulf, the British government, torn between liberal politics and economic interests “generally tended to tolerate the institution of slavery in eastern Arabia.”[17] And while slavery was eventually abolished in most Gulf states, it persisted until 1964 in Saudi Arabia and 1970 in Oman, and the culture of slavery continues to pervade the region, especially in Saudi Arabia where it is “woven into the fabric of the psyche of the kingdom.”[18] In one of the countless episodes of abuse, Kenyan domestic workers in Saudi Arabia told disturbing stories of their abuse that ranged from food and sleep deprivation to corporal abuse and molestation.[19]

GCC officials persistently deny charges of abuse and dismiss them as cheap propaganda, but given the tight government censorship in the GCC states, which has long stymied local press outlets and journalists, there is little doubt that the full extent of abuse there is well under wraps.[20] That migrant workers continue to flood the labor market in the Gulf states helps defuse the pressure on the GCC states to deal with the issue.

Nevertheless, Gulf officials are keen on avoiding conflicts with the West over issues of abuse as well as religious freedom. Despite certain signs of displeasure among the locals, the Qatari leadership has tried over the last few years to promote the image of a modern state, building the Education City by Qatar (in 1997) and sponsoring major sport events in a drive for carving out a niche for itself on the world map. Thus, when Qatar opened the Church of Our Lady the Rosary in 2008, a government official expressed the hope that it would “send a positive message to the world.”[21] This, to be sure, does not prevent the emirate from closely monitoring the activities of Christian congregations, prohibiting them from advertising religious services but not banning them outright. In a similar step toward normalization and modernization, the UAE established diplomatic relations with the Holy See in 2007. According to Christian leaders, the Gulf governments struggle to strike a balance between the needs of their ever-growing foreign communities and the demands of their more conservative subjects.[22]

A striking example of this struggle can be seen in a highly controversial fatwa issued in 2012 by the Saudi grand mufti, Sheikh Abdulaziz al-Sheikh, calling for the destruction of all churches in the Arabian Peninsula. Except for scant condemnation from Iraqi, Lebanese, and Egyptian Christians, Arab officials kept silent on such a serious issue. “How could the grand mufti issue a statement of such importance behind the back of his king?” was the naïve response by Christian bishops in Germany, Austria, and Russia.[23] The answer is that the Saudi royal family invariably appeases the country’s powerful religious establishment because Wahhabi clerics provide it with the religious legitimacy it needs to rule.

But opposition to building churches and Christian schools is also linked to conspiracy theories. Building churches in the name of freedom of worship is viewed with suspicion as it is frequently asserted that Westerners aspire to alienate Muslims from Islam by opening missionary schools in their countries. Opponents fear that church building will strengthen the hand of Christian missionaries and thereby prevent the spread of Islam among foreign workers while simultaneously sowing confusion and doubt in the minds of the Gulf population about Islamic norms and values.[24]

Conclusion

The GCC states go to great lengths to enhance their religiously-based popular culture and heritage as a means of asserting both sovereignty and political legitimacy. The UAE, for example, grounds its political authority in a deeply-rooted social contract that cements the ties between leaders and the citizenry with authentic traditions and norms.[25] These refer to the preservation of time-honored customs and values that are based on ethnic purity and religious uniformity. Saudi Arabia has taken this religious legitimization one step further by claiming a form of pan-Islamic leadership centered around its guardianship of Islam’s two holiest sites.[26]

The influx of foreign workers into the Gulf states—ranging between 50-90 percent of the total populations—poses a serious threat to the future of the indigenous social order by eroding the traditional values that provide the main pillar of regime legitimacy.[27] Riyadh claims foreign workers to be less than a third of the population; however, Saudi statistical yearbooks are misleading. The most recent population figure places the country’s total population at 30.8 million people, including 33 percent expatriate workers.[28] Saudi population estimates make no reference to the dependents of the expatriates or illegal workers. Saudi economic expansion relies “exclusively on the efforts of foreign workers, which official statistics tend to grossly underestimate.”[29] It is unlikely to have occurred to the GCC leaders that the foreign workforce would become a permanent feature, albeit at the bottom, of their demographic mosaic.[30]

The truth is that, notwithstanding the odd allusion to citizenship extension to expatriates, there is no intention whatsoever to integrate them, let alone any Christians into the fabric of GCC societies. Nor is there practically any chance that Saudi Arabia will allow the building of churches in the kingdom because it carries the risk of undermining the Saud dynasty’s traditional, religiously-grounded legitimacy, one that is already showing signs of erosion.[31]

Furthermore, as long as local Christian leadership maintains its timorous approach, lack of external pressure will just keep the status quo in place. This approach is best exemplified by Camillo Ballin’s response to a Kuwaiti parliamentarian’s call for the destruction of existing churches: “You have nothing to fear from us. We are partners in life. We respect your laws and your traditions.”[32] Elsewhere in the GCC states, the ruling elites will continue to extend calibrated gestures of goodwill to non-Muslims, yet it would be delusional to expect them to transcend their traditional perception of Christians as dhimmis and grant them unfettered freedom of religion, let alone fully fledged political rights and equality.[33]

About the author:
*Hilal Khashan
is a professor of political science at the American University of Beirut.

Source:
This article was published by The Middle East Quarterly in it SUMMER 2016 Issue, VOLUME 23: NUMBER 3.

Notes:
[1] The Guardian (London), Dec. 25, 2014. The GCC comprises the monarchies of Qatar, Kuwait, Bahrain, Saudi Arabia, Oman, and the United Arab Emirates (UAE).

[2] Stefan Stein, “Christians in the Persian Gulf: ‘Our Faith is a piece of home,'” Aid to the Church in Need News (Aus.), Mar. 3, 2014.

[3] The Gulf News (Abu Dhabi), May 9, 2014.

[4] Reuters, Oct. 8, 2010.

[5] Ibid.

[6] Stein, “Christians in the Persian Gulf.”

[7] Reuters, Oct. 8, 2010.

[8] Stein, “Christians in the Persian Gulf.”

[9] Ibid.

[10] Kuwait Demographics Profile 2014, IndexMundi, accessed May 4, 2016.

[11] Al-Rai (Kuwait), Oct. 17, 2015.

[12] Gulf News (Abu Dhabi), May 9, 2014.

[13] The survival of Jewish communities in Yemen and to a lesser extent Bahrain is largely attributable to the former’s rugged mountains and the latter’s insular island.

[14] Jean-Loup Samaan, “The Evolving Condition of Christians in the Gulf,” Italian Atlantic Committee, Rome, Jan. 13, 2014.

[15] The Voice of Martyrs (Streetsville, Ont.), accessed May 2, 2016.

[16] Western Christians in the Gulf states, who represent a mere fraction of Christian expatriates, are mostly highly paid professionals who are less affected by religious restrictions or abuse since they can congregate on private property.

[17] Matthew S. Hopper, “Slavery, Family Life, and the African Diaspora in the Arabian Gulf,” Itinerario, 3 (2006): 77.

[18] Graham Peebles, “Killed Beaten Raped: Migrant Workers in Saudi Arabia,” Countercurrents.org, Kerala, India, Dec. 8, 2013.

[19] BBC News (London), Sept. 1, 2015; Daniel Pipes, “Saudis Import Slaves to America,” The New York Sun, June 16, 2005.

[20] Muftah (Doha), Feb. 5, 2015.

[21] Al-Jazeera TV (Doha), June 20, 2008.

[22] Reuters, Oct. 8, 2010

[23] Ibid., Mar. 23, 2012.

[24] Abdulaziz bin Ibrahim al-Askar, al-Tansir fi-l-Khalij al-Arabi (Riyadh: Dar al-Arabiya li-l-Mawsu’at, 2007), pp. 29, 102.

[25] Al-Ittihad (Abu Dhabi), Aug. 6, 2012.

[26] Al-Riyadh, Nov. 25, 2015.

[27] Ibid., Jan. 24, 2014.

[28] Arab News (Jeddah), Jan. 31, 2015.

[29] Hilal Khashan, Arabs at the Crossroads: Political Identity and Nationalism (Gainesville: University Press of Florida, 2000), p. 76.

[30] Al-Jazeera TV, Feb. 7, 2008.

[31] Daniel Pipes, “Churches in Saudi Arabia?” DanielPipes.org, updated Mar. 24, 2008.

[32] Al-Qabas (Kuwait City), Aug. 17, 2012.

[33] Daniel Pipes, “The Vatican Confronts Islam,” The Jerusalem Post, July 5, 2006.

Austria Busts Jihadist Network Linked To Balkans

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By Eleanor Rose

Several suspects from the Balkans, including two Bosnian men, were among 11 people arrested on Thursday in anti-terrorism raids by police in the Austrian cities of Vienna and Graz, according to local reports.

Eight initial arrests reportedly included three Austrians, two Bosnians, a Syrian, a Bulgarian and a Macedonian, all of whom were male, according to a police spokesman.

Reports said four arrests were made in each of the two cities.

Three more arrests – also suspects from the Balkans – were made later in the day.

Unofficial mosques and apartments in the two cities were also raided by up to 800 Austrian police officers, according to news agency AFP, in a huge operation against a suspected network of jihadists with links to the former Yugoslavia.

The Austrian tabloid Kronen Zeitung reports that the crackdown was linked to a group connected to a Muslim preacher from Bosnia, Ebu Tejma, who was sentenced to 20 years in jail last year by a court in Graz.

Tejma was convicted of recruiting young people to fight for the Islamic State, ISIS, and of spreading ISIS propaganda.

“As part of an ongoing investigation into suspected membership of a terrorist organisation [ISIS] a coordinated operation planned for some time took place,” a prosecution official in Graz, quoted by AFP, said.

While Austria has not been the subject of a major terrorist attack in recent years, authorities say about 300 people have left or tried to leave the country to fight for ISIS.

De-Hyphenating Kashmir From Pakistan – Analysis

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By Shubh Soni

Two events in recent months have returned Kashmir to the centre stage of public discourse in India. The first of was the death of Burhan Wani on 8 July 2016 and the protests that followed on the streets of Kashmir. The second was the surgical strike by the Indian armed forces to dismantle terrorist infrastructure across the Line of Control (LoC). But it would be incorrect for either popular discourse or the government’s response to conflate the two incidents. In essence, it is crucial to disassociate the domestic narrative about Kashmir from Indo-Pak relations — the only sustainable response to civil unrest in the valley is an outreach on the part of the Indian government towards the Kashmiri people.

Post the death of Burhan Wani, the people of the Valley took to the streets to voice their anger. The Indian government in response imposed a 107 day curfew wherein schools and colleges were shut, communication lines restricted, and media freedoms curbed. The surgical strikes, on the other hand, were a response to a terrorist attack on an army camp in Uri, Kashmir, by Pakistani insurgents. The Indian government, for the first time in decades, went public regarding an army operation across the LoC which serves as the de-facto border between India and Pakistan.

Prima facie, these two events do indeed have a common cause — the respective claims of India and Pakistan over the territory of Kashmir, from which emanates Pakistan’s support to Kashmiri separatists in India. However, at their core, these are two distinct challenges facing the Indian state,and the solutions, therefore, must also be separated.

Kashmir seldom enjoys the freedoms the rest of India has come to regard as a given.

Take the first, the killing of Burhan Wani. Wani was the son of a prominent school teacher in Kashmir. He supposedly took to militancy at the age of 15, when his brother was beaten to death by the Indian army, allegedly in a case of routine harassment. The killing of Burhan’s brother is not an isolated incident — Kashmir remains one of the world’s most militarised areas, with the Indian armed forces enjoying impunity over their actions. Such impunity has meant repeated violations of human rights by the Indian armed forces, as demonstrated by the case of Burhan Wani’s brother’s death. Added to this, Kashmir seldom enjoys the freedoms the rest of India has come to regard as a given — curfews, police raids, limited access to the Internet, and shutting down of schools, colleges, and businesses, are commonplace in the valley. As a result, the Indian state has successfully alienated the peoples of an entire state it deems a critical part of its national identity, and has only added fuel to their demands for Azadi (freedom).

The surgical strikes, in contrast, were a direct response to terror originating from Pakistan. Pakistan’s foreign policy is at its core anti-India, and destabilising Kashmir is an instrument towards this larger goal. In such a context, the Indian response to eliminate terror camps across the LoC was a long time coming. It was also a major diplomatic coup to announce that these strikes took place, and also to brief envoys of 25 countries in New Delhi of the operation; the international backing received, particularly from the SAARC community, is a testament to India’s diplomatic success. These attacks also demonstrated to the Indian people, to the Pakistani establishment, and to the global community at large, that India will not let terror attacks on its soil go unanswered.

The distinction between the two events — Burhan Wani and the like, emerging as a result of the heavy-handed approach of the Indian state, and the cross-border attacks, a result of an external actor — is complicated by the role of Pakistan.

It is true that Pakistan stokes fire in Kashmir and tries to incite the Indian youth against the Indian state. It readily provides financial and technical support to anyone demanding azadi from India. But to see Pakistan as the sole reason for the civil unrest in the valley is to miss the point entirely. Unless the two problems are de-hyphenated, Kashmir will not be a “normal” Indian state even if there is a transformational shift in India-Pakistan relations. The average Kashmiri cannot be made an average Indian by simply solving the Pakistan issue — successfully negotiating geographical boundaries will not make up for history.

In fact, in recent months, India has done well to distance its Pakistan policy from the historical dispute over Kashmir. Just like the India-Kashmir relationship is no longer predicated on just the Pakistan angle, the India-Pakistan relationship too should no longer be viewed through just the Kashmir lens. India has effectively drawn its red lines by making it clear that talks between the two countries must be centred on terrorism, and that Pakistan’s outreach to the Hurriyat will compromise any potential dialogue process. The public nature of the surgical strikes, followed by terming Pakistan the mother-ship of terror at the BRICS Summit, and further isolating Pakistan at the recently concluded Heart of Asia Conference, have all added to India’s strategy of taking Kashmir out of the equation, and making terror the central theme of its engagement with Pakistan.

Ironically, what the current government has achieved vis-à-vis its Pakistan policy needs to now be applied to its Kashmir policy, i.e., it is time to de-hyphenate Kashmir from Pakistan. Prime Minister Atal Bihari Vajpayee had hit the nail on the head when he called for insaniyat, i.e., a touch of humanity, in dealing with Kashmir. As long as the Indian establishment continues to violate even the basic civil liberties that are guaranteed by the Indian Constitution, the peoples of Kashmir will never truly consider themselves Indian. Pointing to high voter turn-out every time there is an election in Kashmir is to paper over the cracks — elections are a mere drop in the ocean. What is needed is good governance, where citizens can engage with their elected representatives on matters of daily concern; what is needed is the hope for economic prosperity, that working hard at school and college can lead to a life of material wealth. Prime Minister Modi is trying to address these very issues in the rest of India — indeed, he won the general election of 2014 on these promises — he would do well to address them in the valley as well.


Three Georgian Nominees Rejected To European Court Of Human Rights

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(Civil.Ge) — The Committee on the Election of Judges to the European Court of Human Rights, special committee of the Council of Europe’s Parliamentary Assembly, rejected at its meeting on January 24, three Georgia-nominated candidates to ECHR, citing lack of qualifications.

“The Committee on the Election of Judges to the European Court of Human Rights assessed the list of the candidates to the Court in respect of Georgia,” the committee report said, referring to the candidacies of Giorgi Badashvili, Aleksandre Baramidze and Eva Gotsiridze.

“As not all candidates are sufficiently well-qualified, the committee recommends that the list be rejected by the Assembly and that the Government of Georgia be requested to submit a new list of candidates,” the committee report added.

Giorgi Badashvili, case lawyer at the Registry of the European Court of Human Rights, Aleksandre Baramidze, deputy justice minister since 2013 and Eva Gotsiridze, member of the High Council of Justice, were shortlisted from the total of 47 applicants by the 11-member state commission under the Ministy of Justice and chosen for nomination by the Government of Georgia.

The Committee on the Election of Judges interviewed the three candidates on September 29 and decided to pospone its decision “until a later date.”

The Strasbourg-based European Court of Human Rights rules on individual or state applications alleging violations of the civil and political rights set out in the European Convention on Human Rights. The judges are elected by the CoE Parliamentary Assembly from lists of three candidates proposed by each member state for a non-renewable term of nine years. The tenure of Nona Tsotsoria, current Georgia-nominated ECHR judge, expires in January 2017.

Risk Sharing Across US And Eurozone: Role Of Public Institutions – Analysis

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Risk sharing across the Eurozone is well below the levels observed in other federations, including the US. This column argues that the US achieves more intensive risk sharing largely because of a more integrated financial market, and also that the contribution of public institutions to risk sharing is much higher in the Eurozone than in the US. The reason why the Eurozone needs more fiscal transfers to withstand idiosyncratic shocks is not because these institutions should do more to improve risk sharing, but because delegation of risk sharing to national governments threatens the stability of the currency union.

By Valentina Milano and Pietro Reichlin*

Risk sharing across Eurozone countries falls short of the level achieved in other federations – such as Canada, Germany, and the US – by a wide margin. This observation has been documented in various studies, such as Sala-i-Martin and Sachs (1991), Bayoumi and Klein (1997), Sorensen and Yosha (1998) and Von Hagen and Hepp (2013). Updates and refinements of this work (Alcidi et al. 2016, Furceri and Zdzienicka 2015, Rogantini Picco 2015, Milano 2016) confirm these findings and offer some answers to the following key questions. To what extent is the lack of risk sharing within the Eurozone a consequence of:

  • the limited role of centralised fiscal authorities,
  • the effort of peripheral countries to comply with the rules of the growth and stability pact, or
  • the lack of a developed and internationally integrated financial market?

These are the basic findings that we derive from more recent contributions:

  • The US federation achieves more intensive risk sharing largely because of a more integrated financial market.
  • Public (national and super-national) institutions have a larger role in providing risk sharing in the Eurozone than in the US, especially after the implementation of the ESFS, ESFM and the ESM.
  • The contribution of these institutions to risk sharing after the Great Recession more than compensated for the de-smoothing caused by a pro-cyclical fiscal consolidation and by households’ increased precautionary savings.

The procedure introduced by Asdrubali et al. (1996) gives rise to the estimation of an index (which we call ‘total risk sharing’) representing the percentage of idiosyncratic country-specific GDP shocks that are not smoothed via the available instruments in a sample of countries over a time interval. This is roughly equivalent to the sample covariance between the growth rates of country-specific consumptions and GDP as a ratio to the sample variance of GDP growth rates. In turn, the degree of risk sharing can be decomposed into the sum of four components, each one representing the percentage of GDP shocks that are smoothed on average (across the sample) via four channels: factor income flows (i.e. insurance via capital income from cross border asset ownership), capital depreciation, net international transfers, and national savings. A further decomposition of these channels into sub-components is provided in Milano (2016).

Comparing the Eurozone with the US

Some earlier estimates provided by Demyank et al. (2007) and Afonso and Furceri (2008) suggest that overall consumption smoothing through international credit markets has slightly declined in the Eurozone following the introduction of the euro and up to the big recession. This is mostly a consequence of a more modest role of private credit (as compared to public savings), less counter-cyclical credit flows, and large inflows of capital in the periphery (from the core) up to 2006, due to a perception that the adoption of a common currency limited country risks.

Ten years after the big recession, the situation has changed significantly in terms of investors’ behaviour and because of a significant overhaul of the Eurozone architecture and ECB interventions. As shown in Figure 1, country-specific GDP shocks are only partially smoothed, both in the Eurozone and the US, but much more so in the US. Within the time interval 1999-2014, total risk sharing is about 29% in the former and about 57% in the latter. Moreover, the introduction of the common currency has generated some limited benefits in terms of risk sharing. The estimated value of total risk sharing was about 22% in the interval 1970-1999.  Figure 1 also shows that, in the Eurozone, risk sharing is almost entirely accomplished through the savings channel (internal and external borrowing and lending by the private and the public sector), smoothing about 30% of idiosyncratic shocks, whereas, in the US, it is accomplished through a diversified range of mechanisms: factor income flows (smoothing about 27% of shocks), direct transfers from the Federation (19%) and savings (12%). In turn, risk sharing from the savings channel in the Eurozone is almost entirely generated through the government budget. Between 1999 and 2014, Eurozone government savings smoothed about 28% of shocks, compared to 11% from corporate saving and -7% from households (although this estimate is not significant). Quite interestingly, since the smoothing capacity of the net factor income channel is a proxy for the efficiency of international financial markets in providing insurance (within the union or federation), we conclude that the Eurozone lags behind the US by a wide margin. If these markets in the Eurozone were as developed as in the US, the degree of risk sharing in the former region would be roughly comparable.

Figure 1. Risk sharing in the Eurozone and the US, 1999-2014

Before and after the Great Recession

From Figures 2 and 3, we see that, after the Great Recession (i.e. in the 2007-2014 period), the percentage of idiosyncratic national GDP shocks smoothed through the available channels increases substantially in the Eurozone (from 23% in the 1999-2006 period to 31% in the 2007-2014 period), whereas it falls in the US (from to 70% to 60%). Furthermore, these changes hide some notable modifications in the way risk sharing is achieved. In both areas the percentage smoothed through factor income flows falls dramatically – from 7% to 2% (i.e. by 71%) in the Eurozone (although these estimates are insignificant) and from 40% to 22% (i.e. by 45%) in the US. In other words, capital markets failed to provide more insurance during the crisis. In the US, the contribution to income smoothing of direct transfers and savings increases by a modest amount – from 19% to 22% and from 10% to 15%, respectively. In the Eurozone, instead, the amount of risk sharing achieved through savings jumps up from 15% to 39%, whereas that achieved through direct transfers remains very close to zero. Since risk sharing through corporate savings does not change significantly and households’ savings contributes negatively after 2007, the increase in the degree of risk sharing achieved in the Eurozone in this period is entirely achieved via government saving.

Figure  2. Risk sharing in the Eurozone, before and after the recession

Figure 3. Risk sharing in US, before and after the recession

The role of public institutions

To assess the amount of risk sharing provided by public institutions, we can lump together into a single estimate the risk sharing provided by international (interstate) transfers and net lending of country’s (states’) governments. Notice that risk sharing through government net lending is almost zero for the US, as US states have a balanced budget rule. On the other hand, international transfers within the Eurozone provide almost no risk sharing because of very limited centralised fiscal transfers for insurance purposes. Then, in the period 1999-2014, total risk sharing provided by public institutions (central and local) was about 28% in the Eurozone (through government savings) and 19% in the US (through transfers). The same numbers for the post-recession period (2007-2014) are 38% and 22%, respectively. In other words, the contribution of public institutions to risk sharing is much higher in the Eurozone than in the US. Notice that these measures do not take into account the amount of loans from the ECB to banks after the recession and, then, the contribution to risk sharing of public institutions in the Eurozone is probably higher than estimated.

By splitting the net borrowing of national governments into that obtained through markets (including central banks) and through centralised public European institutions – i.e. the ESFS, the ESFM and the ESM – we observe that the latter have played a very important role in the post-recession period (Figure 4), smoothing about 55% of shocks. As mentioned in the previous point, this figure probably underestimates the contribution of the centralised public institutions of the Eurozone, because it does not include the lending facilities provided by the ECB to national banks at below market rates. One may conjecture that these loans explain why the percentage of shocks smoothed via corporate savings increased from 13% in the pre-recession period (1999-2006) to 16% in the post-recession period (2007-2014). In any case, the reason why the effective net percentage of shocks that were smoothed overall after the recession in the Eurozone is only 38% is that two channels played a significantly negative role: government net borrowing from markets (whose contribution to risk sharing has been -17%) and household savings (-12%). Not surprisingly, the magnitude of these numbers is almost entirely driven by the behaviour of the periphery (Greece, Ireland, Portugal, Spain), which faced fiscal consolidation and reduced access to credit markets. For this group of countries, in the 2007-2014 period, the beta related to government net borrowing from markets is about -63% and that related to government borrowing from centralised public European institutions is about 86%. On the other hand, for the core countries in the Eurozone these numbers are, respectively, 73% and 3%. Figure 5 shows the patterns of the government net lending to centralised public European institutions (EU net lending) and to markets.

Figure 4. Risk sharing in the Eurozone, 2007-2014

Figure  5. Government savings versus EU and markets in the periphery

Some concluding remarks

Public institutions in the Eurozone play an important role, although this poses more than a challenge to the overall stability of the currency union. Precisely because the US is a federal political union, states are subject to strict fiscal discipline in exchange for more direct transfers. In contrast, the lack of a political union in the Eurozone implies that transfers contribute very little to risk sharing and that there is less fiscal discipline at the country level. The latter is, in turn, responsible for pro-cyclical fiscal expansions and contractions, contributing negatively to the risk sharing obtained through public savings. In other words, the reason why the Eurozone needs more fiscal transfers to withstand idiosyncratic shocks is not because public (local and centralised) institutions should do more to improve risk sharing, but because delegation of risk sharing to national governments threatens the stability of the Eurozone.

*About the authors:
Valentina Milano
, PhD candidate, LUISS Guido Carli University; Public Debt Division, Italian Treasury

Pietro Reichlin, Professor of Economics at LUISS Guido Carli University; Research Fellow, CEPR

References:
Alcidi, C, P D’Imperio and G Thirion (2016) “Intertemporal risk sharing in the EMU: Disentangling the role of international credit markets and of the governments”, Mimeo.

Afonso, A and D Furceri (2008) “EMU enlargement stabilization costs and insurance mechanisms”, Journal of International Money and Finance, 27(2): 169–87.

Asdrubali, P, B Sorensen and O Yosha (1996) “Channels of interstate risk sharing: United States 1963-1990”, Quarterly Journal of Economics, 111: 1081–1110.

Bayoumi, T and M Klein (1997) “A provincial view of economic integration”, IMF Staff Papers, 44: 534–556.

Demyank, Y, C Ostergaard and B Sorensen (2007) “Risk sharing and portfolio allocation in EMU”, European Commission, Working Paper, Brussels.

Furceri, D and A Zdzienicka (2015) “The Euro area crisis: Need for a supranational fiscal risk sharing mechanism?”, Open Economies Review, 26: 683–710.

Milano, V (2016) “Risk sharing in the Eurozone: The role of European institutions”, mimeo., LUISS G Carli.

Rogantini Picco, A (2016) “International risk sharing in EMU”, Mimeo.

Sala-i-Martin, X and J Sachs (1991) “Fiscal federalism and optimum currency areas: Evidence for Europe from the United States”, NBER, Working paper 3855.

Sorensen B and O Yosha (1998) “International risk sharing and European monetary unification”, Journal of International Economics, 45: 211-238.

Von Hagen, J and R Hepp (2013) “Interstate risk sharing in Germany: 1970-2006”, Oxford Economic Papers, 65(1): 1–24.

The Deepening Rohingya Crisis: Will It Engulf The Region? – Analysis

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By Iftekhar Ahmed Chowdhury1

The Rohingya issue, to paraphrase from Lord Alfred Douglas’ poem ‘Two Loves’ published in 1894, is a crisis that literally ‘dare not speak its name’. The Myanmar authorities have forbidden the use of the term by which much of the world knows the minority Muslim community in that country’s Rakhine State, bordering Bangladesh.

This ban on the use of the term ‘Rohingya’ was imposed on 29 March 2014, and the Muslim minority in Rakhine were asked to be registered as ‘Bengalis’. Just as by whatever name a spade is called, it does not alter the object, not describing the Rakhine minorities by the name they have been widely known to-date, does not cause the issue to disappear. Indeed it is rapidly evolving as a deepening crisis, the name of the concerned notwithstanding, which if not appropriately addressed could engulf the neighbouring region in a mighty and disastrous conflagration.

Origin of the Term

According to an analyst Jacques Leider, the term ‘Rohingya’ appears in a writing by one Francis Buchanan-Hamilton as early as 1799.2 The term itself means “inhabitant of Rohang’, an early name used by Muslims for the Arakan State of then Burma (now Myanmar), presently known as ‘Rakhine’. The Muslim community, according to Leider, an expert in the field, had been present there since the 15th century. This is also the time when they spread to the rest of Southeast Asia, in countries such as Malaysia and Indonesia. Even prior to the British colonial period, people from Bengal were brought in by Rakhine Kings and settled in the Arakan region as farmers. Eventually the English stopped Indian immigration, but the absence of borders meant unimpeded free movement.

The demographic numbers grew, and with it there was burgeoning resentment among the Rakhine Buddhists. The frays that followed were joined by a third party, the Myanmar armed forces. There were resultant conflicts which from time to time, led to the displacement of these people, initially to Bangladesh, but now to the other parts of South and Southeast Asia as well. Things came to such a pass that a respected English journal posed the query if the Rohingyas were the most “persecuted people on earth”.3

History of Conflict

There was an attempt, though in vain, for Arakan to join Pakistan at one point, around 1947. But it was not till the early 1950s that the ‘Rohingyas’ began to describe themselves as such in order to establish a distinct indigenous identity, to the chagrin of the Arakanese Buddhists. According to Thant Myint-U, even though the Burmese were historically exposed to mass immigration (he states that in 1927 Rangoon exceeded New York City as the greatest immigration port in the world!), the Arakanese Buddhists reacted to the Muslim presence with “racism that combined with feelings of superiority and fear’’.4 The Rohingyas, themselves, founded a Mujahid Party as far back as in 1947 that supported a Jihad Movement, but were countered by the coup d’etat of General Ne Win in 1962.

Around 1978 the Burmese government introduced an immigration check-code named ‘Dragon King’, purported to upgrade its demographic information, to classify residents as ‘Burmese citizens’ or ‘foreigners’, and issue them with registration certificates. Most Rohingyas being classified as ‘foreigners’, there was a consequent influx of their numbers into Bangladesh, with figures exceeding 200,000, who arrived with complaints of atrocities perpetrated by the Burmese authorities.5 But on that occasion bilateral diplomacy was able to resolve the problem, mainly because of perceived national self-interest of both Bangladesh and Burma. By 1979, most Rohingya refugees were repatriated to the country of their origin.6

But simmering discontent among the Arakanese minority continued, largely flowing from their non-recognition as Burmese citizens. In 1982 the Burmese government enacted the citizenship law, by which Rohingyas were described as “Bengalis’, and thus as ‘foreigners”. In 1991, some 250,000 fled by foot and boat to Bangladesh, and had to be settled in camp for years as the hosts and international organizations negotiated their ‘wilful return’ to Burma. Between 2007 and 2009 the author, then Bangladesh Foreign Advisor (Foreign Minister), continued the negotiations with the Myanmar Foreign Minister U Nyan Win. But the problem was that the refugees were unwilling to return till the situation in Myanmar improved, socially politically and economically.7

This would be in consonance with the internationally accepted principle of non-refoulement according to which refugees should not be forced to return in risk.
Such a glimmer of hope seemed to appear in November 2015, when Aung San Suu Kyi, a Nobel peace laureate , led the National League for Democracy (NLD) to victory in the elections (the contested one in 25 years) , following political reforms initiated by the armed forces. She assumed the office of State Councillor and Foreign Minister, and became the de facto head of government. But in terms of power-sharing with the Army, it was still a ‘pull devil, pull baker’ contest. The communal violence that had peaked in 2012, continued unabated, and now the Rohingyas had expanded their destinations to include other countries in Southeast Asia as well as the Middle East and Europe. The exodus assumed massive proportions, by land and sea, and in the process many lives were lost. On 7 May 2014 the United States House of Representatives adopted a resolution calling upon the Myanmar Government to end discrimination and persecution.8 The Rohingya resistance also stiffened. Insurgents attacked border posts on 9 October 2016, following which the Myanmar military reportedly unleashed a string of repressive measures, spiking refugee outflow.

Bangladesh and the Crisis

With regard to the Rohingya refugee crisis, Bangladesh has once again become a frontline State, harbouring this community as a diaspora.9 The issue has literally placed Bangladesh between the devil and the deep blue sea. An observer has written that “in the conditions which prevail today, morality suggests that Rohingya fleeing persecution in their country be let into Bangladesh. At the same time, a sense of reality points to the terrible burden that could be put on Bangladesh’s resources if they are allowed entry, with hardly any guarantee that they will soon, or ever, go back home”.10 The dilemma was sufficiently significant to have had a domestic political impact on the government led by Sheikh Hasina. While the silence of Aung San Suu Kyi, once greatly admired in Bangladesh as an icon of democratic forces, on the issue, or rather her failure to stand up for who the Bangladeshis saw as the obviously ‘repressed’, drew negative reactions, Myanmar did despatch a special envoy to interact with the Bangladesh Government in January 2017. The United Nations was reporting that between October 2016 and January 2017, over 65,000 more of the community had fled to Bangladesh.11

The envoy, the Myanmar Deputy Minister for Foreign Minister Kyaw Tin met Sheikh Hasina. He was clearly told that normalcy must be returned in the Rakhine State of Myanmar quickly, so that the “Myanmar nationals” (the italics are meant to stress the Bangladeshi position that they are ‘Myanmarese’ rather than ‘Bengali’) who have taken shelter in Bangladesh can return home “in full safety and security” to their livelihood.12

International and Regional Ramifications

The ruling authorities of the Rakhine State, belonging to the Arakan National Party (ANP) are already in a collision course with the United Nations. They, including the Vice President of the ANP, Khine Pyi Soe, have refused to meet the UN Special Rapporteur on Myanmar, Yanghee Lee in January. She was in the region, investigating, among other things, the military ‘lock- down’. Lee has slammed the ‘lock-down’ as ‘unacceptable’ and called for an international inquiry into claims that troops raped, murdered and tortured civilians from the Muslim minority groups.13 Similarly, the Rakhine civil society organizations have declined to meet former UN Secretary General Kofi Annan (who heads the government-appointed Rakhine Advisory Commission, on account of his having used the term ‘Rohingya’ at a press conference).14 The current Secretary General of the UN, Antonio Guterres, when he headed the UN Refugee office, had expressed great concern at the humanitarian situation with regard to the Rohingya refugees at an event at the Ditchley Foundation in the UK in 2013.15 So this is a subject which will continue to find salience in the UN system.

The reaction from Malaysia, at the highest level of its government – that is, from Prime Minister Najib Razak – was unusually strong (particularly as Malaysia is also a fellow ASEAN country). He described the situation in the Rakhine State as a “genocide” and at a public rally, urged the UN “to do something”.16 He seems to have picked up the cudgels for the Rohingyas in a big way. His government has hosted an extraordinary meeting of the Foreign Ministers of the Organization of Islamic Cooperation (OIC) on the subject during the current month. Not only is Malaysia host to Rohingya refugees but is wary of reactions from extremists and jihadist groups. In an article in The Straits Times on 8 December 2016 two experts from the S. Rajaratnam School of International Studies in Singapore, Jasminder Singh and Muhammad Haziq Jan, have stated: “That the Myanmar military is made up largely of Buddhists, and Rohingyas are Muslims has added a religious element to the situation (which has) drawn the attention not just of human rights groups but also (of) extremists and jihadists groups in Southeast Asia”.17

Daw Aung San Suu Kyi had to actually cancel a visit to Indonesia with the rising anti-Myanmar public sentiments there. But the government shunned what it called ‘megaphone diplomacy’, and instead the Foreign Minister Retno Marsudi met Aung San Suu Kyi in the Myanmarese capital, Nay Pyi Taw, and conveyed her country’s “concerns” over the issue.18

‘Responsibility to Protect’

Once in the past, following Cyclone Nargis in 2009, when the Myanmar Government appeared to be unresponsive to the massive relief needs of the people, some Western politicians including the then French Foreign Minister Bernard Kouchner, had wondered in public if the UN principle of ‘Responsibility to Protect (‘R2P’)’ could be invoked. While the Malaysian Prime Minister did not specifically cite it, he did call upon the UN to intervene. The ‘R2P’ was adopted by global leaders in the UN ‘Outcome Document’ unanimously in 2005. Simply put, it states that governments have a ‘responsibility to protect’ civilians from ‘genocide, war- crimes, crimes against humanity and ethnic cleansing’. When a government is unable or unwilling to protect its civilians from these crimes, the ‘responsibility to protect’ falls upon the international community to help the state to exercise the responsibility.

Should the state manifestly fail to protect civilians, the international community can act, first with peaceful measures, using economic, political and legal tools, and that failing, with collective use of force through the UN Security Council under Chapter VII of the Charter, only as a last resort. The responsibility of the international community also involves capacity- building in potentially vulnerable states so that situations calling for such interventions do not occur in the first place. This would mean that any ‘intervention’ would not imply military action, but economic and other support so that the issue can be addressed ‘upstream’.

OIC Foreign Ministers’ Extraordinary Meeting

Malaysia has already taken steps to internationalise the issue by taking the initiative for the OIC Foreign Ministers meeting on 19 January 2017 in Kuala Lumpur. The Communique, from information available as of now, called for three major measures; first, it called on Myanmar to abide by its obligations under international law and prevent the worsening of what is now an acute humanitarian crisis (implying Myanmar has not been doing so to-date); second, it urged Myanmar to ensure the safe return of displaced Rohingyas; and third, it called for unimpeded humanitarian access of the international authorities to the affected community (implying that so far it has been impeded).

Conclusion

The issue can be viewed from three different aspects: First, political. The goodwill that Aung San Suu Kyi commanded when she initiated the democratic transition in Myanmar is threatened to be eroded not only in the region, but also internationally because of this crisis. Already there are some calls for the withdrawal of her Nobel prize but these are unlikely to be heeded. Nonetheless the process of global opprobrium that has begun with the OIC meeting is likely to mount with resolutions and discussions in other multilateral bodies including the United Nations. Secondly, the humanitarian. Already it is said to be the largest embarrassment that the ASEAN confronts as a social issue. The regional grouping, which failed to forge a united position on the South China Sea issue, runs the risk of a division again. Third, the security issue. This is assuming alarming proportions, not just for Myanmar which can become a destination for eager-beaver ‘jehadists’ from the region, but also for Bangladesh, Thailand, Malaysia, and Indonesia. India, which now is said to shelter 50,000 Rohingyas in at least seven of its States, including Jammu and Kashmir, is not immune either, and needs to become an interested party. The Rohingyas are also fertile recruitment ground for the extremists all across the world, and this situation is likely to worsen unless the problem is vigorously tackled now.

A series of steps must begin, first, with an objective international examination of the problem. This could be conducted by a committee of Eminent Persons drawn from, mainly SAARC and ASEAN countries, buttressed by some prominent global personalities. Their recommendations must be heeded. Second, financial resources to ameliorate the material problems of the Rohingyas should be raised, if necessary by the methods through which donors raise funds for Afghanistan. Third, the Myanmar authorities should cooperate in these efforts, which will only enhance their credibility and their fledgling democratic credentials. Finally, the international community and key neighbours and global actors should desist from stoking the fire of an admittedly complex situation that can easily blow up into a mighty conflagration.

Cecil Rhodes once said, to be born an Englishman is to win the first prize in the lottery of life. We are aware how his statue was removed in the University of Cape Town in 2015 after the ‘Rhodes Must Fall Campaign’. At this day and age, it would be sad, if to be born a Rohingya in Myanmar would mean having to lose out in the lottery of life altogether. This must be prevented at all costs, not just because it is right, but also because it is wise, given the consequences of failure.

Source:
This article was published by ISAS as ISAS Insights No. 38 (PDF).

Notes:
1 Dr Iftekhar Ahmed Chowdhury is Principal Research Fellow at the Institute of South Asian Studies (ISAS), an autonomous research institute at the National University of Singapore, and a former Foreign Advisor (Foreign Minister) of Bangladesh. He can be contacted at isasiac@nus.edu.sg. The author bears full responsibility for the facts cited and opinions expressed in this paper.
2 Jacques P. Leider: “Interview: History Behind Arakan State Conflict’ The Irrawaddy, retrieved on 16 January 2017.
3 Economist, 13 June 2015.
4 ‘The River of Lost Footsteps: A Personal History of Burma. (New York: Farrar, Strauss and Giroux) pp 185- 187.
5 Asiaweek. 19 May, 1978, pp21-22.
6 Bangladesh Observer, 31 December, 1979.
7 Iftekhar Ahmed Chowdhury, ‘The Malaise in Myanmar: What is to be Done?’, ISAS INSIGHTS No 62, 8 May 2009.
8Cristina Marcos: ‘House passes resolution pressuring Burmese government to end genocide”, The Hill, 7 May 2014.
9There exists an excellent unpublished PhD dissertation, by Kazi Fahmida Farzana, entitled “Forced Migration and Statelessness: Voices and Memories of Burmese Rohingya Refugees in Bangladesh’, that was submitted at the National University of Singapore in 2011. It argues that: “A community of people may remain without a formal identity, being displaced from its geographical origin, but it can maintain its original identity in virtual memories and cultural means in Diaspora”. p. xi)
10 Syed Badrul Ahsan, ‘Dhaka’s Rohingya Dilemma’, Indian Express, 9 December, 2016. http://indianexpress.com/article/opinion/columns/bangladesh-myanmar-rohingya-issue…13/1/2017
11 Straits Times, 13 January, 2017
12 Ibid.
13 Straits Times, 14 January 2017.
14 Radio Free Asia, 30 November 2016.http://www.rfa.org/English/news/Myanmar/Malaysia-calls-on-asean-to-
review-myanma…17/1/2017
15 The author attended the Annual Lecture by Antonio Guterres at Ditchley Foundation, Oxford.
16 The Guardian, 4 December 2016. http://www.theguardian.com/world/2016/dec/04/malaysia-pm-urges-world-to-act-agai…18/1/2018
17 Cited in’ Malay Mail’ 8 December 2016. http://www.themalaymailonline.com/malaysia/article/rohingya- crisis-may-fuel-militant…13/1/17
18 Jakarta Post, 8 December 2016. http://www.thejakartapost.com/news/2016/12/08/indonesia-raises-rohingya- concerns-w…17/1/2017

Climate Change Contributed To Kill Super-Sized Ice Age Animals In Australia

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During the last Ice Age, Australia, Tasmania and New Guinea formed a single landmass, called Sahul. It was a strange and often hostile place populated by a bizarre cast of giant animals.

There were 500-pound kangaroos, marsupial tapirs the size of horses and wombat-like creatures the size of hippos. There were flightless birds that weighed twice as much as modern emu, 33-foot snakes, 20-foot crocodiles, 8-foot turtles with horned heads and spiked tails, and giant monitor lizards that measured greater than 6 feet from tip to tail and were likely venomous.

By about 30,000 years ago, however, most of these ‘megafauna’ had disappeared from the Sahul as part of a global mass extinction that saw the end of nearly all of the super-sized animals that had evolved to survive in extreme Ice Age climates. The factors that forced the Australian megafauna into extinction remain a matter of considerable controversy. Many experts argue that the ancestors of the Australian aborigines, who made an appearance approximately 50,000 years ago, either hunted them into extinction or gradually destroyed the habitat they required by practices such as fire-stick burning. Others argue that the gradual drying out of Australia and weakening of the Australian monsoon played a major role in their demise.

A new study has compared the diet of a variety of Australian megafaunal herbivores from the period when they were widespread (350,000 to 570,000 years ago) to a period when they were in decline (30,000 to 40,000 years ago) by studying their fossil teeth. The analysis suggests that climate change had a significant impact on their diets and may well have been a primary factor in their extinction.

“We have found evidence that, as the climate was changing and getting drier, animal diets were shifting dramatically,” said Larisa DeSantis, assistant professor of earth and environmental studies at Vanderbilt University, who directed the study. “If climate change was a primary or contributing factor in their demise, as it appears, we need to pay more attention to how current levels of climate change are affecting animals today.”

The results of the study are described in a paper titled “Dietary responses of Sahul (Pleistocene Australia-New Guinea) megafauna to climate and environmental change” published Jan. 26 by the journal Paleobiology. Co-authors on the paper are Judith Field and John Dodson from the University of New South Wales and Stephen Wroe from the University of New England.

Michael Archer, a leading Australian paleontologist at the University of New South Wales who was not involved in the study, commented, “This new study, based on hard evidence, makes it clear that changes in late Pleistocene climate had a major impact on the late Pleistocene megafauna of Australia, adding even more evidence to challenge the imaginative a priori assumption that ‘blitzkrieg’ by early humans caused the extinction of this continent’s lost megafauna. Climate change clearly has been in the past and will continue to be a major cause of extinction into the future.”

The teeth that were analyzed came from the Cuddie Springs site in southeastern Australia. It is located on a prehistoric ephemeral lake and it is the only site on mainland Australia that has produced fossil evidence of the co-existence of humans and megafauna. “Unfortunately, many of the advocates of the human predation hypothesis have discounted Cuddie Springs because it does not support the popular ‘blitzkrieg’ theory that maintains the megafauna went extinct in the 1,000-year period after humans arrived on the scene,” said DeSantis.

It’s amazing how much information about the prehistoric environment paleontologists can extract from fossil teeth using a dental drill, dental impression material and some sophisticated instruments. The ratios of oxygen and carbon isotopes locked in the enamel provide clues about the animals’ diet and the average temperature and humidity of the environment at the time the teeth formed.

Differences within individual teeth mirror climate variability. Analysis of the microscopic scratches on the surface of the teeth provides evidence of what the animal was eating in the last few weeks of its life. Differences in wear-patterns can differentiate between animals that were grazing on grass and browsing on bushes.

“For example, we know from the analysis of modern day kangaroos that oxygen isotope ratios in their teeth are highly correlated with the relative humidity and amount of precipitation in their environment,” DeSantis said. “This makes them ideally suited for tracking changes in aridity over time.”

During the megafaunal heyday around 500,000 years ago, the dental analysis revealed that the climate was semi-arid. In addition, the animals’ diets were highly variable, implying that there were a number of ecological niches available to them. That contrasts markedly with the period from 30,000 to 40,000 years ago. Here, the analysis indicates that the climate was substantially drier and the diet of the giant herbivores was considerably more restricted.

“It appears that long-term aridification may have reduced the ability of megafauna to consume certain types of plants, including salt-bush. Eating salt-rich plants requires drinking additional water that was less available and likely increased competition for similar plant resources,” said DeSantis. “These data clarify the impacts of climatic change on marsupial megafauna and suggest that the long-term drying out of Australia, identified here and in other records, likely played a key role in the decline and disappearance of this unique suite of animals.”

Next Debt Crisis Could Affect Emerging Market Corporate Sector – Analysis

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Emerging markets enjoyed cheap loans since 2008, but now confront rising interest rates and a struggle to refinance.

By Anthony Rowley*

There are disturbing signs that yet another international debt crisis could be brewing, given the toxic mix of huge debt, built up over a decade of record low interest rates, and the fact that rates have begun rising again now. This comes less than a decade after the global financial crisis of 2008.

International debt crises increased in frequency and intensity in recent decades, from the Latin American debt crisis of 1982 to the Asian financial crisis of 1997 and the global financial crisis of 2008. Each is said to be the “crisis to end all crises” with governments making some perfunctory fixes, until the next one came along.

What’s different this time is that, rather than being a sovereign debt crisis or a crisis for the banking and financial system, the epicenter of the eruption now could be in the emerging market corporate sector.

Global debt has reached $217 trillion, equal to a record 325 percent of global gross domestic product with buildup being particularly marked among business corporations in the world’s leading emerging economies as well as among some governments in mature economies.

“The sheer size of global debt raises the risk of unprecedented [debt] deleveraging that could hamper growth worldwide,” notes the International Monetary Fund. The sentiment is echoed by Tim Adams, head of the Institute of International Finance in Washington. The institute has almost 500 members including banks and insurance firms that promote sound practices and regulatory policies, global financial stability, and sustainable economic growth.

In absolute money terms, debt is largest in advanced or “mature” economies where total debt across the household, central government, financial and non-financial corporate sectors has reached $165 trillion or 390 percent of GDP with government debt rising especially sharply.

Total emerging market debt is around $53 trillion or 217 percent of GDP with nearly a half of this, or $25 trillion, concentrated in the non-financial corporate sector rather than banks and other financial institutions.

According to the Institute of International Finance, the highest ratios of non-financial sector corporate debt to GDP among emerging markets are seen in Hong Kong, China, Singapore, Thailand, Chile, Saudi Arabia, Turkey, Indonesia, Mexico. Malaysia, the Czech Republic and South Korea.

High levels of debt do not in themselves indicate an impending crisis. But when a dramatic surge in borrowing is followed by a sudden, and almost certainly sustained, rise in interest rates, the cost of servicing debt threatens to outrun the ability of borrowers to repay.

The crisis building now is not really like past crises. It is very much a “monetary” phenomenon where borrowers have succumbed to the lure of ultra-cheap, even “free,” credit made available in vast and unprecedented quantities, courtesy of the world’s leading central banks.

The so-called “Great Recession” which followed the global financial crisis after 2008 was prevented from developing into a Great Depression by a massive official bailout of mainly US financial institutions, with only Lehman Brothers directly “going to the wall.”

The bailout funds were supplied largely by central banks, notably the US Federal Reserve. But it was really the follow-up action of these central banks – in particular the Bank of Japan, the European Central Bank and the Bank of England – that sparked the big debt buildup.

Under quantitative and qualitative easing programs, central banks bought trillions of dollars’ worth of financial assets from governments and from the private sector to drive down the cost of money, and so avert bankruptcies, repair balance sheets and restore credit creation.

Credit: BIS, IIF

Credit: BIS, IIF

This strategy meant that a potential Great Depression became instead a Great Moderation in economic growth. But there was a dark side to the massive bailout, and that dark side is threatening to emerge in the shape of a new emerging market debt crisis that could expand into a global crisis.

Not only did credit become historically cheap, in “real” or inflation-adjusted as well as nominal terms, but capital also began to be re-routed globally. Funds fled from the US where yields on government bonds and Treasury Bills fell to derisory low levels under the impact of the Fed’s quantitative and qualitative easing assaults. The “hunt for yield” was on, and yield was to be had especially in emerging markets.

Emerging market companies not surprisingly took advantage of this situation, and many borrowed up to the hilt. Not only that, some have borrowed in dollars while their revenues are in local currencies – creating a classic “currency mismatch” situation.

Global investors have been eager to snap up corporate bonds issued by emerging market companies during the era of low, zero and even in some cases negative interest rates – this despite the fact that credit ratings were often very low and risk premiums very narrow on such bonds.

Corporate borrowers in Brazil, South Korea, Thailand and other emerging markets especially have been big borrowers. While most of this has been in local currencies, corporates in India, Saudi Arabia, Turkey and Russia as well as Hong Kong and Singapore have borrowed heavily in foreign currency.

How could this turn into a new crisis? Companies need to renew or roll over their debts, and if banks raise lending rates or even deny fresh loans, some borrowers will be in trouble. The same is true if bond market borrowing rates rise or credit dries up.

An ominous sign in this regard is that, as the IIF has noted, the “with higher global interest rates, emerging market corporates with large refinancing needs could face headwinds” – and a lot of refinancing is coming due in 2017.

Downgrading of credit ratings accelerated rapidly in 2016 among emerging market business corporations, especially those in Brazil, China and Hong Kong, and among financial institutions, particularly in Brazil, China and Russia.

Meanwhile, the interest rate squeeze is tightening. The US Federal Reserve  raised its key short-term rate, to a range of 0.5 to 0.75 percent from 0.25 to 0.5 percent in December, and it plans for three rate hikes this year instead of the two originally planned.

Local-currency borrowing rates have risen by 100 to 150 basis points since the US election in the case of Mexico and Turkey and the cost of two-year interest rate swaps, a good indicator of wider market rates, has risen sharply in the case of China and the US especially.

The debt situation in mature markets is meanwhile not good. Again, total debt stood at $165 trillion in the final quarter of 2016 with $50 trillion of that being government debt. Around $95 trillion is in the financial and non-financial corporate sectors and some $20 trillion among households. The big borrowers in debt to GDP terms among mature economies are Britain and Japan with government debt being by far the lion’s share, and then Denmark, Norway and Canada. Corporate creditworthiness continues to deteriorate, and net debt is at a record compared to corporate earnings.

As the IMF points out, fiscal policies are limited in an era with low interest rates. Crisis could be averted with debt restructuring, tax policy reforms that reduce incentives for debt, and regulatory policies that keep debt at sustainable levels.

Governments must also brace and prepare for inevitable, publicly-financed bailouts of banking and, in this case, corporate sectors.

*Anthony Rowley is a former business editor and international finance editor of the Far Eastern Economic Review and is currently field editor (Japan) for Oxford Analytica and Tokyo correspondent of the Singapore Business Times. During a long career in journalism, Rowley has written extensively on issues of economic and financial development in Asia and elsewhere, and his books include Asian Stock Markets – the Inside Story published by Dow Jones Irwin in 1986 as well as The Barons of European Industry, published by Croom Helm in 1973. 

What The Gibraltar Arc Was Like 9 Million Years Ago

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Researchers, led by the University of Granada, have proven that large blocks of land, about 300 kilometers long and 150 kilometers wide, have rotated clockwise (in the case of the Baetic System) and counterclockwise (in the case of the Rif mountain range, in the north of Morocco)

Said movements have completely reshaped the Gibraltar Arc, one of the narrowest landforms on Earth, as they have been carried out at a very high speed for geological standards: 6 degrees per million years

A team of Andalusian scientists, led by the University of Granada (UGR), has been able to reconstruct for the first time what the Gibraltar Arc was like 9 million years ago. It’s one of the most narrowest landforms on Earth.

The researchers have been able to prove that, since then, large blocks of land, with sizes of about 300 kilometers long and 150 kilometers wide, have rotated clockwise (in the case of the Baetic System mountain range) and counterclockwise (in the case of the Rif mountain range, in the north of Morocco).

Said movements have completely reshaped the Gibraltar Arc, since they have been carried out at a very high speed: 6 degrees per million years (in total, 53 degrees for the block of the Western Baetic System), and are compatible with both the opening of the Strait of Gibraltar about 5 million years ago as with the current movements measured with GPS.

As Ana Crespo-Blanc, professor from the Department of Geodynamics at the UGR and lead researcher of the project, explained, the Gibraltar Arc is a geological region corresponding to the arched mountain range that surrounds the sea of Alborán (located between the Iberian peninsula and Africa), and it is formed by the Baetic System (south of Spain), the Strait of Gibraltar and the Rif (north of Morocco).

The team of geologists, belonging to the universities of Granada, Pablo de Olavide (Seville) and the Andalusian Earth Sciences Institute (IACT from its abbreviation in Spanish), has analyzed the existing connection between the different episodes of deformation that the Baetic and Rif mountain ranges have suffered (which include folds and ridges), as well as the paleomagnetism data of previous publications.

“This work, published in the journal Tectonophysics, is the first in the world that shows both the homogeneity of block rotations and the speed of said rotations for the Gibraltar Arc. It allows to reconcile many apparently contradictory data, particularly in relation to the kinematic markers of the movements associated with large geological structures such as faults systems 9 million years ago,” Professor Crespo-Blanc said.

Their research culminates with a reconstruction of the Gibraltar Arc 9 million years ago, at a key moment in the tectonic history of the collision between Africa and Iberia, shortly before the closure of the connection between the Atlantic and the Mediterranean and when the Gibraltar Arc was situated more to the East than at present.

Surge In Trade Deficit Holds Down Fourth Quarter GDP – Analysis

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A surge in the trade deficit held GDP growth to just 1.9 percent in the 4th quarter, bringing the growth rate for the full year to 1.9 percent, the same as for the fourth quarter of 2015. (That is, GDP grew 1.9 percent between the fourth quarter of 2014 and the fourth quarter of 2015, then grew an additional 1.9 percent between the fourth quarter of 2015 and the fourth quarter of 2016.) The growth rate in final demand in the quarter was even worse, at 0.9 percent, as inventories accumulation added a full percentage point to growth in the quarter. The 2016 GDP growth brought the average for the eight years of the Obama administration to 1.8 percent.

Most of the growth in the quarter was attributable to consumption, which advanced at a 2.5 percent annual rate. Durable goods consumption was the driving force, rising at a 10.9 percent rate, its second consecutive double-digit growth figure. Much of this is due to car sales, which are likely at, or near, a peak for this cycle. If that is the case, the contribution of durable goods to growth will be considerably less in future quarters.

Consumption of non-durables rose at a 2.3 percent rate after falling at a 0.5 percent rate in the third quarter. This is roughly equal to its 2.4 percent growth rate over the last year.

Service consumption grew at just a 1.3 percent rate. This is partly due to a drop in reported spending on housing and utilities, which subtracted 0.26 percentage points from the overall growth rate. These figures are erratic and often reflect weather-driven use of utilities.

However service consumption was also held down by the continued moderation in the growth of health care spending. Real spending rose at a 1.6 percent annual rate in the fourth quarter, while nominal spending rose at a 3.1 percent annual rate, almost a full percentage point below the 4.0 percent growth rate of nominal GDP in the quarter.

The relative stability in health care spending over the last seven years has been striking. Health care costs have risen far less than had been projected by the Congressional Budget Office and other forecasters. This has led to enormous savings on Medicare and Medicaid and also meant a shift from health care benefits to wage compensation. The slow growth in spending is especially striking since it is occurring at a time when the aging of the population should be putting substantial pressure on costs.

The rise in the trade deficit is likely the result of the run-up in the value of the dollar earlier in the year, and it has continued through the fourth quarter. Imports rose at a 8.3 percent annual rate, while exports fell at a 4.3 percent rate. Whether or not the trade picture turns around likely depends far more on the value of the dollar than whatever deals Donald Trump is able to negotiate with individual companies about keeping jobs in the United States.

Fixed non-residential investment grew at a weak 2.4 percent annual rate. Structure investment fell at a 5.0 percent rate while equipment investment increased at a 3.1 percent rate after declining the prior three quarters. Investment in intellectual property products rose at a 6.4 percent rate. The rise in the trade deficit is having a dampening effect on investment, as it lessens the need for manufacturing firms to expand. Housing investment rose at a 10.2 percent rate after falling in the prior two quarters.

A striking aspect of this report is the weak evidence of any inflationary pressures in spite of the tightening labor market in recent years. The overall GDP deflator increased at 2.1 percent annual rate in the fourth quarter. The core personal consumption expenditure deflator targeted by the Federal Reserve Board rose at just a 1.3 percent annual rate. There is no evidence of any upward trend in this measure, which remains well below the Fed’s 2.0 percent target rate.

The absence of any inflationary pressures, coupled with the modest overall growth rate, should mean that the recovery can continue on this path for some time into the future. While it would be desirable to see more rapid growth to further tighten the labor market and produce larger real wage gains, there is little reason to believe there will be any notable uptick in the immediate future barring changes in policy.

Source: CEPR


Abe’s Pacific Rim Diplomacy (Part I) – Analysis

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Japanese Prime Minister Abe Shinzo started the year 2017 with his foreign policy activism by undertaking a six-day tour to four Asia-Pacific nations –the Philippines, Australia, Indonesia and Vietnam in January 2017. Abe’s foreign policy priorities during the year could be to establish a level of understanding with President Donald Trump that helps maintain the existing level of relationship with the US while seeking ways to deepen further. At the time of this writing, it seems Abe’s first meeting with Trump is scheduled for 10 February in Washington. The other area of focus as demonstrated by his four-nation tour could be to seek an increasingly proactive regional diplomacy. It was also aimed at strengthening security cooperation amid China’s rising maritime assertiveness in the South China Sea, thereby addressing to the issue of maritime security.

Trump’s march to the White House has ushered in a plethora of uncertainties around the world, the impact of which in Asia could be huge as the fallout of Trump’s policies could threaten Asian interests compared to elsewhere in the world. The old alliances could feel the heat as Trump starts crafting his new foreign policy as it would take time to readjust to the new demands of the time. Despite Trump demanding that Japan bear more security cost and pay more for American marines in bases around Japan, Prime Minister Abe was the first leader from a major country to travel to the US in November to congratulate Trump and establish relationship early on. Therefore his Asia-Pacific tour amidst uncertainties of US commitments as well as possible shift to a protectionist trade policy should be seen as an attempt to reaffirm “the importance of the U.S. alliance network in the Asia-Pacific region and strengthening coordination with major countries in the region”.

The fact that Trump did mention in his inauguration speech that the US would “reinforce old alliances and form new ones” may be read as reassuring allies in Asia and the Pacific, though his assertion that allies must pay more for US deployments abroad and thus share the security burden is a matter where differences could occur and complicate matters.

The institutional edifice built during the post-War years could be crumbling down during the Trump administration as radical changes, as expected, are being introduced. That would shatter the political confidence on the institutional framework that guaranteed “economic openness” and “economic and political security” throughout the world as Trump’s policies unleashes the spectre of trade war and calls for protectionism. So, there is a deeper disquiet amongst Asian allies as doubts lurk on what the future US economic and security strategies would be.

Amidst uncertainties over Trump’s ‘America First’ foreign policy rhetoric, Prime Minister Abe undertook the four-nation trip to the Asia-Pacific nations in order to seek common positions across the region and sound that there is merit in early engagement with the new President. There can never be a second opinion in most Asian countries that a possible withdrawal or even downsizing of the US presence from the Asia-Pacific region can have unpredictable consequences, which is why engagement strategy with the US remains imperative.

Objectives

The main objective of this Pacific Rim sojourn was to strengthen ties in the political, security and economic fields. While the Philippines and Australia are allies of the US, Indonesia is a leading member of the 10-member Association of Southeast Asian nations (AEAN). Vietnam, another member of the grouping is the 2017 chair of the Asia-Pacific Economic Cooperation forum (APEC). APEC gathers Pacific Rim economies including the US.

Abe discussed both bilateral as well as regional/multilateral issues with the leaders of the four countries. Among the regional issues included multilateral free trade pacts such as the Trans-Pacific Partnership (TPP) free trade agreement from which Trump has pulled the US out, and the region’s maritime security issue. The TPP was led by the outgoing President Barack Obama as a major component of his policy of pushing a strategic rebalancing to the Asia-Pacific region and after the US pulls out from it, the other signatories to this pact need to be prepared the consequences and look to alternatives.

The fact that the world’s biggest economy may shift to a protectionist trade policy is a matter of worry. This was a key topic of Abe’s discussion with the leaders of the four nations. The other important regional topic that dominated discussion was their concerns about China’s military build-up and assertiveness in disputed waters of the South China Sea. The fact that China’s sole aircraft carrier sailed into the western Pacific for the first time in December 2016 was another matter of concern. By choosing to visit the four Pacific countries, Abe wanted “to have frank talks with the leaders of respective countries about how to join efforts and how to contribute to regional peace and stability”.

Abe and Duterte

The Philippines was Abe’s first stop followed by Australia, Indonesia and Vietnam in that order. Abe’s talks with the Philippines President Rodrigo Duterte, who took office in June 2016, covered range of issues such as Japan’s cooperation with the Philippines in economic development, the fight against terrorism and infrastructure building among others. While Japan is not a claimant in the South China Sea disputes between China and five other governments, including Vietnam and the Philippines, Japan is concerned about China’s rising military presence in the resource-rich area which is also a busy shipping lane. Abe extended Japan’s cooperation on this common cause. Japan also faces challenges from Beijing related to China’s claim to the Japanese-controlled Senkaku Islands in the neighbouring East China Sea.

After briefly meeting with Duterte, Abe moved to Davao, the southern Philippine city where Duterte long served as mayor, the same day to hold another round of detailed talks at the President’s private residence. Both agreed on economic and security cooperation amid China’s growing assertiveness in the region. The two leaders discussed the issue of China’s military build-up in the South China Sea and vowed to resolve disputes under the rule of law. The symbolism of choosing Davao for the meeting cannot be missed as this island city is also home to many Filipinos of Japanese descent. The city is also recipient of Japanese-funded projects for development. Japan has a consular office there too. Interestingly, China is also seeking to increase its presence in the area and expressed the wish to Duterte to open a diplomatic mission in the city when the Filipino leader visited China in October 2016.

The Philippines has conflicting claims with China in the disputed waters, along with four other countries. Duterte’s predecessor Benigno Aquino III fiercely confronted China and highlighted cooperation with Japan and the US. She had approached the UN-backed tribunal at The Hague for arbitration, which concluded in its ruling of 12 July 2016 that China’s claim over the entire South China Sea has no legal basis. Though China rejected outright, Duterte during his October visit to China suggested setting aside the territorial dispute in favour of boosting economic cooperation with China. Abe urged Duterte to respect the tribunal’s verdict. It is necessary to co-opt Duterte on regional issues as The Philippines as chair of ASEAN in 2017 can have important influence to uphold the principle of the law of the sea at a series of ASEAN-related meetings.

Earlier when Obama had criticised Duterte’s war on drugs, including on human rights violations, he had foulmouthed and used objectionable language on Obama and had threatened to cut off ties with the US. It had become difficult to strengthen cooperation between Japan, the US and the Philippines. After sharing views with Abe, both leaders agreed that continued US commitment to the Asia-Pacific region is in the interest of the region.

Trump in the White House has dramatically seemed to have altered the scenario. While Abe hopes to keep the existing ties on track, the fact that President-elect Trump and Duterte earlier spoke on phone with the latter having an invitation for a cup of tea with the former either in New York or in Washington, Abe was happy to hear Duterte making favourable comments about Trump. This presented Abe with a good opportunity to make a fresh start towards building a cooperative relationship between Japan, the US and the Philippines.

While Trump has not determined exactly what his Asia policy would be, China is expected to remain prepared to face if there are serious policy reversals in Trump’s announcements that would be against its interests and respond appropriately. On his part, Duterte was willing to junk the tribunal’s verdict in return of massive economic assistance from China. Duterte might not hesitate to play China over Japan or vice versa if it suits his country’s interests. For the time being, a dramatic U-turn in Duterte’s China policy is unlikely. Abe seemed to have succeeded in restoring some confidence on the Philippines’ relations with the US and so keep Duterte on board in common platform on regional issues.

The import of Abe’s engagement with Duterte stems from his judgment that Manila can have a decisive voice during its tenure in the capacity of being the chair of the ASEAN in 2017 on the South China Sea issue in a series of multilateral meetings, including the East Asia Summit (EAS). Abe hopes that by hyping the South China Sea issue, China can be put through more pressure in the Asia Pacific region and the international community to see reason in his policy stance. Abe would hope to acquire more leverage to counter Beijing in the East China Sea and have his combat plan ready by March 2018 to deal with any contingency. Abe could also expect to strengthen US-Japan alliance if a conflict erupts over the South China Sea issue as China’s attention would have been diverted somewhat from the Senkaku Islands dispute in the East China Sea. If tensions brew further in the South China Sea, it would be easy for Abe to accelerate the transformation of his intended national security strategy and help it become a justified military power. In this situation, it would be easy for Abe to sell his idea to his domestic constituency which still remains fiercely opposed to any militaristic posture for the country.

Yet, it is too premature to understand Duterte’s future stance on South China Sea. ASEAN’s celebration of the 50th birthday is scheduled sometime in August 2017 and it is to be seen if Manila’s position on the South China Sea is now at variance with Duterte’s earlier pronouncement that sought economic cooperation with China in favour than harping on the tribunal’s verdict. The ideal outcome would be if the leaders can come out with an agreed statement to craft a framework for a legally binding Code of Conduct in the South China Sea. To do so, a great deal of political mutual trust among parties involved is necessary and there is no guarantee at the moment that it is secured. Even Vietnam does not want a conflict with China. During his visit to China in December 2016, General Secretary Nguyen Phu Trong of the Communist Party of Vietnam Central Committee even expressed the desirability of inter-party diplomacy as the means to deepen Vietnam-China relations.

In yet another twist to the Philippines’ diplomacy, Manila protested Beijing’s recent activity in South China Sea, with Defense Minister Delfin Lorenzana calling China’s installation of weapons on artificial islands in the disputed area as “very troubling and is at variance with Chinese government’s claims its purpose is “peaceful and friendly”. This was a rather stronger statement than what Foreign Secretary Perfecto Yasay had earlier said that “the issue had to be handled carefully”. It may be noted that the Mischief Reef, one of the islands where China has modern weapons, is located within the Philippines’ 200 nautical mile exclusive economic zone, and the Philippines’ reaction was in this context.

In order to deepen economic relations, Abe pledged a public-private package of 1 trillion yen ($8.7 billion) to spur infrastructure development in the fast-growing Southeast Asian country over five years, including for promoting agricultural business in Mindanao. Abe also offered assistance for countermeasures against illegal drugs and maritime security. Abe’s objective is to strengthen strategic ties with the key nation in the Asia Pacific region amid China’s growing presence. Abe was the first foreign head of government to visit the country since Duterte took power in June 2016 and met Duterte for the third time.

Earlier, when Duterte visited Japan in October 2016, Japan had agreed to provide high-speed boats to the Philippines Coast Guard in a bid to enhance maritime security. Accordingly, a number of agreements were signed and documents exchanged, including a grant of 600 million yen ($5 million) for boats and other counterterrorism equipment for the Coast Guard. This time, Abe agreed to aid flood prevention work in the southern Philippine island of Mindanao, Duterte’s home state. It is believed that Abe also offered to provide Manila with a missile but was declined by Duterte, claiming that he does not want to see a World War III. This report, however, is unconfirmed.

Abe and Turnbull

Australia was Abe’s second stop in the four-nation swing. Like in the Philippines, trade and security engagements amid concern over China’s emergence as a military power in the Pacific dominated Abe’s agenda. The year 2017 marked the 10th anniversary of Japan-Australia joint declaration on security cooperation. Taking the opportunity, Prime Minister Malcolm Turnbull reiterated Australia’s commitment to advance economic, investment and trade relationship, defence and security cooperation and commitment to a secure and prosperous region. Like in the Philippines, Abe also discussed with his Australian counterpart about China’s increasing control over the disputed South China Sea and how it is directly linked to regional peace and stability and therefore a concern to the entire international community.

Both agreed to resist the rising trend of protectionism and reaffirmed their commitment to the Trans-Pacific Partnership trade agreement in the wake of President-elect Donald Trump’s declaration to withdraw from this pact. As it happened, Trump lost no time to sign an executive order after assuming office, leaving the world in economic turmoil. At the time of writing, the eleven of the 12 original signatory countries are debating their future course of action. Both Japan and Australia are now exchanging opinion how to salvage this pact. Turnbull has opined that “protectionism is a path to poverty”.

While agreeing to work with the Trump administration, both Abe and Turnbull agreed to explore scope for deeper and more sophisticated defence ties as security challenges in the region become more complex. Having Trump threatening a trade war with China, it remains to be seen if both Japan and Australia shall come under pressure from the Trump administration to act as a bulwark to China in the region. Trump’s Secretary of State Rex Tillerson’s remarks that the US allies in the region should support the US in its efforts to block China’s access to artificial islands it was building in the South China Sea is seen as an attempt by the Trump administration to draw the allies in a war with China. China has been warning time and again outside powers not to meddle in the region’s disputes, which Beijing wants to be settled through one-on-one negotiations with other rival claimants. But outside powers having no claims on the South China Sea say that “the issue of the South China Sea is linked directly to regional peace and stability and is a concern to the entire international community”.

In view of the above concern, Abe and Turnbull signed a revised bilateral pact to boost logistics cooperation between their defence forces. Japan’s Self-Defence Forces will now be able to supply ammunitions to the Australian military under the revised Japan-Australia acquisition and cross-servicing agreement (ACSA). This decision by Abe is in tune with his policy of “proactive pacifism”, characterised by contentious new security legislation expanding SDF’s role in various areas. Though Abe faced criticism at home as it was perceived the new policy eroding the spirit of Japan’s post-War pacifist Constitution, Abe went ahead with the legislation allowing Japan to supply ammunition to foreign defence forces responding to situations deemed to have an “important influence on Japan’s peace and security”. The past version of the ACSA that came into force in January 2013 had excluded provision of weapons and ammunitions. The revised ACSA enabled the SDF and Australian military to share food, fuel and other supplies during UN peacekeeping operations, international relief operations and joint exercises.

Though both leaders agreed that the relationship between the two countries have now become closer, stronger and more constructive than ever, the real challenge lies ahead in the Trump era which is going to witness path-breaking changes that are bound to impact power relations in the coming months. It is unclear how both Japan and Australia will readjust their priorities that would serve both their national interests as well as interests of the partners and the region. Accommodating Trump’s demands and reorienting the trilateral partnership to achieve common goal acceptable to the three stakeholders would be the key challenge, for which there can be no definite answer at the moment. Alternately, how both the leaders can work out alternative strategies to arrest, if not prevent, the downsides unleashed by the Trump administration would be the real future challenge.

See: Part II

The author is ICCR India Chair Visiting Professor at Reitaku University, JAPAN.
Disclaimer: Views expressed are personal and do not represent either of the ICCR or the Government of India.

Abe’s Pacific Rim Diplomacy (Part II) – Analysis

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Japanese Prime Minister Abe Shinzo started the year 2017 with his foreign policy activism by undertaking a six-day tour to four Asia-Pacific nations –the Philippines, Australia, Indonesia and Vietnam in January 2017. This article is the second part of a series. To read the first part, click here.

Abe and Joko Widodo

Indonesia was the third stop of Abe’s four-nation Pacific swing. Like in Australia and the Philippines, maritime security issue dominated Abe’s discussion with the Indonesian President Joko Widodo. Both the leaders agreed to boost coordination on maritime security amid tension over China’s military build-up in disputed waters of the South China Sea. Besides, Abe extended Japan’s cooperation in developing infrastructure, including a new port in eastern Jakarta.

How is Indonesia important for Japan in its foreign policy calculus? Indonesia is the world’s fourth-largest population with high economic potential. It is a major power in the 10-member ASEAN grouping and Japan expects that Indonesia shall play a leading role in addressing regional challenges such as the South China Sea. As is well-known, territorial disputes in the South China Sea involve China and five other governments – Brunei Darussalam, the Philippines, Malaysia, Vietnam and Taiwan. Neither Japan nor Indonesia is a claimant in the dispute. But both are worried about China’s increasing military presence in the busy shipping lane and therefore want that rule-based order in the sea is maintained for larger interest of global maritime commerce. China claims almost the entire South China Sea, through which about $5 trillion worth of trade passes each year. Japan has a separate dispute with China over the Japanese-controlled Senkaku Islands in the East China Sea, which China calls Diaoyu and Taiwan calls Tiaoyutai.

It was therefore Abe and Jokowi Widodo agreed to strengthen maritime cooperation with regard to the Indonesian navy’s patrolling of the vicinity of the Natuna Islands on the southern edge of the South China Sea. Chinese fishing boats operate illegally in Indonesia’s exclusive economic zone and therefore needs its naval capability to be enhanced to stop such illegal fishing activities. On the one hand China recognises Indonesia’s sovereignty over the Natuna Islands. At the same time it argues that both China and Indonesia have overlapping claims for maritime rights and interest in the area that need to be resolved. Indonesia rejects such assertion. It appears China wants to create a new conflict when there is none.

The Natuna Islands area is also believed to be endowed with oil and gas deposits. Therefore Indonesia proposed Japan to cooperate in exploration activities to achieve three objectives: to make an economically viable project, deter the Chinese presence at the same time, and protect its fishing zone within its exclusive economic zone. Abe expressed Japan’s willingness to support the development of remote islands in Indonesia and the strengthening of the country’s coastal patrol capability.

Infrastructure development is another area closely connected with any program for economic development in any country. Both the leader, therefore, discussed a medium-speed railway project linking Indonesia’s two largest business hubs of Jakarta and Surabaya. The project is part of efforts to revitalise the existing 725-km railway between Jakarta and Surabaya, after Japan lost out to China in September 2015 in bidding to construct a high-speed railway between Indonesia’s capital and West Java provincial capital Bandung.

Besides committing to maritime security, both leaders also affirmed security ties in light of an agreement to seek a pact on the transfer of Japanese defence equipment and technology. Acknowledging the growing threat of Islamic extremism, both sought ways to cooperate on counterterrorism measures. Other areas of cooperation included a yen loan of 73.9 billion yen ($646 million) to help finance port development, irrigation facility construction and beach protection projects in West Java. Discussion on starting a two-plus-two consultative meeting involving two countries’ foreign and defence ministers were also in the menu, which is to commence by the end of 2017.

Japanese investment in Indonesia has also seen significant increase, doubling to $4.5 billion in January-September 2016. The agreements on joint development of the Patimban deep-sea port and the Masela gas field with Japanese involvement are noteworthy. Indonesia has also some other wish-list for Japan to consider: open access for Indonesian agricultural goods, improved access for Indonesian nurses to work in Japan, a review of the Indonesian-Japan economic partnership agreement by 2017-end, and grant national carrier Garuda rights for a Jakarta-Tokyo-Los Angeles route. Thus, the menu in the list is long, which throw up scope for further close cooperation.

Thus it transpires that Abe’s swing through Asia that included two of America’s main allies in the region – Australia and the Philippines – despite Philippines President Rodrigo Duterte’s open hostility to the US during the Obama administration, can be seen as Abe’s willingness to take a leadership role in promoting regional cooperation in the region to counter Beijing at a time when tension is heightened between China and the US during the Trump era amid uncertainty about policies of the Trump administration.

Abe and Nguyen Xuan Phuc

Vietnam was the last stop in Abe’s trip to the Pacific Rim nations. Like in the preceding three nations, maritime security cooperation was at the core during Abe’s discussion with his Vietnam counterpart Nguyen Xuan Phuc. The former US President Obama had started cultivating stronger ties with Vietnam to make it a part of his pivot to Asia policy and even visited Vietnam to get the country on board. Abe’s policy towards Vietnam was in similar direction.

With a view to boost maritime security, Abe offered Vietnam to provide new patrol ships to boost its maritime security capabilities. Through such assistance, Japan aims to support Vietnam against China, whose advance in the South China Sea is a matter of concern that needs to be checked. This was the fourth time that both Abe and Phuc met to confirm a policy of joining forces for stability in the South China Sea. Being the chair of the Asia-Pacific Economic Cooperation in 2017, Vietnam enjoys a special position for Japan for joining forces on the common cause. In addition, Abe announced financial aid aimed at supporting large-scale projects to improve Vietnam’s infrastructure, such as sewage and electricity systems and also for the development of the Hoa Lac high-tech park on the outskirts of Hanoi.

Japan is one of Vietnam’s top investors and trading partners, besides being the single largest bilateral donor. Though both are locked in separate maritime disputes with China, Japan has already provided Vietnam with six used patrol vessels to help strengthen maritime capability and now agreed to provide some more new ones as a part of a fresh yen loan offer totalling 120 billion yen. In 2016, Vietnam withdrew contracts to build nuclear power reactors with Japanese assistance. It was a blow to the Abe government, which views the export of infrastructure as a pillar of his economic growth strategy. This time around, Abe seems to have succeeded to bring back Vietnam on board in his economic growth strategy through other collaborative projects using Japanese capital and technology.

Both Japan and Vietnam are concerned that the US under Trump is shifting gear towards a protectionist trade policy, including the withdrawal from the Trans Pacific Partnership (TPP). With the TPP’s future now uncertain, both Abe and Phuc discussed about promoting trade through the Regional Comprehensive Economic Partnership (RCEP) to which both are members. Unlike the TPP, the RCEP is an Asia-Pacific mega-pact that excludes the US but includes China.

President Trump has already signed the executive order to pull the US out of the TPP. However, the leaders of the rest 11 signatory countries are still trying to salvage the 12-nation trade treaty, if possible, without the US. Vietnam, however, was yet to submit a proposal to ratify the TPP in its National Assembly. That itself remains uncertain now.

Abe’s discussion with the leaders of the four countries – Australia, the Philippines, Indonesia and Vietnam – clearly demonstrated that Japan is really concerned about China’s assertiveness on regional territorial disputes as well as maritime claims on the resource-rich South China Sea. Abe, therefore, stressed in his meeting with leaders in the four countries the level of importance that Japan puts on upholding the law and solving disputes peacefully. Indeed, the issue of South China Sea is no longer confined to the claimant countries but has drawn the attention of the international community as it directly affects the peace in the region and threatens to disrupt global commerce. All efforts, therefore, are to be made to maintain peace and stability to serve every country’s national interests. Maritime security cooperation remains the key for fellow maritime nations.

The author is ICCR India Chair Visiting Professor at Reitaku University, JAPAN.
Disclaimer: Views expressed are personal and do not represent either of the ICCR or the Government of India.

Violation Of Indus Water Treaty? – OpEd

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The liberal water-sharing pact known as Indus-Water Treaty was signed by Pakistani President Ayub Khan and Indian Prime Minister Jawaharlal Nehru on September 19, 1960, in Karachi and the water of six rivers-Beas, Ravi, Sutlej, Indus, Chenab and Jhelum was shared between two countries.

This landmark pact was brokered by World Bank. Since this agreement, India and Pakistan have fought three major wars and there is a constant strain on their diplomatic relations, but thus far the treaty has survived despite the severe nature of relations between both countries.

Recently, Indian Premier Narendra Modi stated that, “Blood and Water can’t flow simultaneously,” but in fact, this Indian move will simultaneously flow blood over water.

Historically, the partition of Sub-continent created a conflict over the water of the Indus Basin. The newly born states were unable to share water and manage an essential and cohesive network of irrigation. Moreover, during the partition, the tributaries of the Indus Basin were given to India and Pakistan felt its livelihood threatened by the possibility of Indian control over the tributaries that bolstered water into the Pakistani portion of Indus Basin.

The IW system of rivers comprises of three Eastern Rivers, the Sutlej, the Beas and the Ravi while three western rivers are the Indus, the Jhelum, and the Chenab. As per arrangements, Ravi, Beas, and Sutlej, which constitute the eastern system, are exclusively allocated to India. Similarly, Pakistan was allowed exclusive use of western rivers and India was bound to supply water to Pakistan for 10 years until Pakistan was able to construct a canal system for the utilization of water of Indus, Jhelum, and Chenab.

Initially, the water was divided by Inter-Dominion accord of May 4, 1948. This understanding obliged India to release sufficient waters to the Pakistani regions in return for an annual payment from Government of Pakistan. The accord was meant for the permanent solution of water between India and Pakistan, but none of them was eager to trade off their particular positions and arrangements achieved a stalemate. Pakistan attempted to take the matter to the International Court of Justice (ICJ) for the peaceful settlement of dispute, but India refused, instead arguing that the issue be resolved bilaterally.

The treaty has placed limitations on the design and operation of hydroelectric plants, storage works and other river works that are to be constructed by India on the western rivers. India is bound to provide information relating to these works in advance while Pakistan has right to communicate its objection with India.

The Indus Water Treaty was meant for resolving issues bilaterally, but now the water dispute is intensely politicized in India because hawks in that country are publicaly demanding for abrogating the treaty without realizing the side effects or rationality of their demand. Indeed, their demand is an attempt of pushing both countries toward the brink of war.

Following the terrorist attack on the Indian Parliament in 2001, key policymakers in India asked the government to scrape the Indus Water Treaty. The Atal Bihari Vajpayee government made no intimation because such a move would be considered as a violation of Indus Water Treaty. Prior to this, the Kargil conflict happened and a transition was seen in their defence posture from conventional to nuclear. In this situation, Indian Premier Atal-Bihari Vajpayee felt the need for normalizing ties with Pakistan and visited Lahore where he signed the Lahore declaration with Nawaz Shareef. It was a wise decision praised by social and political leaders of both countries.

The legal instrument had so far been sustained and delivered — despite ups and downs in Indo-Pak relations — but it is now that for the first time that Modi’s government has called for abrogating IWT. The possible reason behind this statement is that the Modi government has lost its credibility and capability in delivering good governance. Hence, it has come down to terrorist activities likes abrogating IWT. In this way, Modi’s statement is an attempt to divert the mind of people and gain anti-Pakistan sympathy.

It is not so easy to scrap the Indus Water Treaty because World Bank is the mediator, while certain restrictions are implemented on both parties in case of violating the treaty. The article nine of IWT provides a better explanation and restricts both countries from violating the Indus Water Treaty. Simultaneously, the treaty can’t be scraped unilaterally. Without consultation with Pakistan, such an Indian move would be treated as an act of war and again it might trigger conflict between hostile neighbors over water, which has serious consequences for both countries.

Pakistan is an agricultural country and water is the source of survival. Similarly, Indian robbery over water will never be accepted from Pakistan side. In fact, it is the matter 180 million lives. In this situation, Indian ambitions of scraping the Indus Water Treaty is dangerous.

Linking water with security,  is a narrow-minded approach as there should be no connection with war. As such, these policies will not only make India and Pakistan,but the entire region too. In this situation, the leaders should come up with durable solutions, rather than triggering hostility.

In conclusion, Modi’s claim of withdrawing from the Indus Water Treaty is nothing more than a political and strategic stunt. Modi’s statement is a major blow within the country and it would be political suicide in international forums.

The writer is a Research Affiliate at Strategic Vision Institute Islamabad and he can be reached as babar@thesvi.org/babarkhanbozdar@yahoo.com

Unclear Nuclear Pathways For 2017 – Analysis

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By Manpreet Sethi*

The inauguration of Donald Trump as the 45th president of the US has just taken place. A lot of what happens in the nuclear domain in the coming 12 months will be dependent on the direction that is adopted by the new president as he settles in. Every fresh incoming administration normally brings in its own policies, and hence changes in economic, political, foreign policy and nuclear issues are always expected. But, the uncertainties being felt this time are more than usual. The statements and tweets made by Donald Trump as a presidential candidate and later as president-elect indicate a reversal of many of the previous administration’s nuclear-related policies and actions. For the moment then, Trump looks like the proverbial bull in the nuclear china shop, and all are closely watching to see what all breaks, or not, under his nuclear watch. A few of the issues that will vie for his attention fairly quickly can be highlighted amid an as yet unclear nuclear path for 2017.

The first of the issues that can be expected to be handled by President Trump is the resetting of US relations with Russia. There is no doubt that this particular relationship has been left in a sorry state by the outgoing administration. Trump will most likely act quickly to arrest the trend and mend the situation. Will he do this by making compromises on sanctions, as he has indicated earlier? Will he link these actions to Russian concessions on nuclear arms control? Does the US itself have an inclination to undertake arms control given that it is looking to upgrade its own nuclear arsenal? After having been in a nuclear weapons reduction mode for some time, the US now appears to have moved in favour of modernisation. Before demitting office, Barack Obama approved a budget of US$ 1 trillion to be spent over three decades for this purpose. President Donald Trump has indicated the intention to stay the course and even tweeted that the US would not shy away from an arms race if his rivals so desired. While neither Russia nor China may rise to the bait, both are nevertheless engaged in modernising or building their own nuclear capabilities as per their visions of credible deterrence.

As the US, Russia, and China proceed with their nuclear weapons programmes with an eye on one another, their behaviour and actions will have an impact on the global nuclear picture with ripples being felt in India and Pakistan too. Better US-Russia relations can be expected to have a positive fallout on the overall atmospherics. They may even help revive some of the bilateral US-Russia arms control agreements that have recently fallen by the wayside owing to lack of communication from both sides. But unless they specifically target arms control, a mere thawing of relations is unlikely to arrest the ongoing nuclear modernisation currently underway across all nuclear-armed states.

A second issue sure to grab Trump’s attention is the nuclear agreement with Iran. In January 2017, international diplomacy should have been celebrating the first anniversary of the Implementation Day of the Joint Comprehensive Plan of Action (JCPOA) that brought a negotiated halt to the suspected military oriented activities of Iran’s nuclear programme. 2016 saw Iran living up to its promises under the agreement. It dismantled centrifuges that could have led it to enrich uranium, shipped out of the country enriched uranium in excess of what the JCPOA allows it to keep, removed the core from the Arak reactor that could have helped it build plutonium, and met the necessary requirements of IAEA inspections. In return, the country gained from a lifting of a majority of the sanctions imposed upon it. There was an upsurge in its oil production and exports, and many international leaders made a beeline to Tehran to establish new political and economic relations.

However, instead of celebrating the successful conclusion of the first year of the JCPOA, the past few months have been spent in trying to read the tea leaves on how President Trump (and the Republicans now dominating Congress) would treat the Iran deal on assuming office. Trump has been vocal about his dissatisfaction with the JCPOA, and even let it be known that he intended to “rip open the deal” once elected. Now that he is the elected president, will he go through with the threat? Would he find it in US interest to do so, thereby destroying years of negotiations? Iranian leaders have signalled that any such act would mean the end of the agreement for Iran. They have been reminding the international community that the JCPOA involved multiple parties and that it cannot be for the US to kill it unilaterally. The other major powers – Russia, China and the European Union – too have invested heavily in the deal. The Iranian appeal, therefore, is to the rest of the actors to use their good offices to make good sense prevail on the new US administration.

A third thorny nuclear issue that will seek Trump’s attention pertains to North Korea’s provocative nuclear actions and behaviour. It may be recalled that in 2016, the country not only conducted two nuclear tests – in January and May – but also announced that it had miniaturised its nuclear weapons enough to be able to deliver them atop a ballistic missile. These actions and announcements were attention-seeking gestures, hoping to get the US to agree to conduct some kind of direct negotiation with Kim Jong-un, along the lines of those with Iran. However, the US was hesitant to be seen as negotiating with Pyongyang with the latter apparently holding a gun to it. President Obama appeared content to leave the issue to be resolved by China, which nevertheless had little initiative to do so since it kept the US unsettled. China also claimed that its leverage upon North Korea was diminishing. With the change in administration, there is once again a window of opportunity for the US to take a serious relook at the issue. President Trump’s long experience as a successful businessman and his behaviour now as a politician show him to be a risk-taker. North Korea is obviously keen to engage directly with the US and there may be a deal here to look out for.

The North Korean issue also has special significance since it is tied up with relations between the US and its allies in Northeast Asia. Given that Donald Trump, during his campaign speeches, had mentioned that Japan and South Korea must bear a greater burden of the nuclear umbrella extended to them, including the BMD deployments, the two countries are anxious about how the North Korean imbroglio would be resolved.

As President Trump grants some clarity on his nuclear policies towards Russia, Iran, North Korea, and by extension, towards Japan and South Korea, he will be shaping the nuclear discourse that will dominate this year and beyond. Interestingly, amid this flux, a conference to negotiate a nuclear ban treaty is planned for 2017. The UN First Committee Resolution passed in October 2016 that calls for negotiations on a legally binding instrument to prohibit nuclear weapons, leading to their total elimination, has not yet caught the attention of President Trump. Of course, it may be recalled that the Obama administration had not succumbed to its charms either. But as the momentum for the conference builds up, it could catch Trump’s fancy. After all, former President Reagan immortalised himself through the sanity he brought to the nuclear arms race when he and Soviet Premier Gorbachev pronounced in 1988 at Reykjavik that a nuclear war can never be won and must never be fought. Who knows if Trump might grow to like the idea of disarmament and does something about it – after all, he is a risk-taker.

Meanwhile, it can only be hoped that President Trump understands the significance of the Nuclear Security Summits (NSS) that concluded last year. While the usual politics can be expected to get in the way of a Republican president acknowledging merit in a former Democrat president’s initiative, there is no doubt that the NSS process achieved success in raising awareness and political action on nuclear security at the highest level in countries across the globe. The consensus so built and momentum acquired in setting international benchmarks for national efforts must not be lost. While Trump has not paid much attention to this issue, nuclear terrorism remains a palpable threat and the world cannot afford to lose out on efforts towards securing nuclear material and technologies from non-state actors.

The nuclear pathways that the US adopts will become clear in the coming months. Undoubtedly, their impact will be felt worldwide as the fashion on the nuclear ramp is set by Washington. President Trump may believe in “America First” for many of his policy decisions, but on the nuclear front, one hopes he realises that he carries the burden of international security, too.

* Manpreet Sethi
Senior Fellow and Project Leader, Nuclear Security, Centre for Air Power Studies (CAPS), New Delhi

Trump’s Misplaced Wall – OpEd

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With the signing of an executive order Wednesday, President Trump has begun to make good on his campaign promise to build a “big beautiful wall” along the as yet unwalled parts of the border with Mexico. But this epic project, which could cost as much as $25 billion according to some reports, is being put in the wrong location and, in any case, will be a complete waste of money anyhow in terms of deterring illegal immigration.

As the Manchus famously proved in the case of China’s laughably ineffective Great Wall, a wall, while perhaps a great tourist attraction, is only as strong as the people behind it. After multiple successful raids across the wall, a Manchu army poured through a fortified gate, not by breaking it down but by convincing and bribing a rebel Ming warlord to open it for them so they could march on Beijing and finish off the Ming dynasty, establishing the Qing dynasty that lasted until the early 20th Century).

Already, some 580 miles of the 2000-mile border between Mexico and the US is fenced off, either with actual walls of various types from razor-wire-topped fences to fancier iron-grated structure, or by “virtual walls” of motion sensors and cameras. But despite these fences, desperate immigrants still cross at about pre-fence rate, either by tunneling, climbing or making a dash and hoping not to get caught before they can reach some urban center and melt into the crowd. There’s no reason to suspect that completing the wall across the whole of what used to be proudly called one of the world’s longest unguarded borders, would stop the flow of people seeking a better life for themselves and their families. Some will attempt to climb it risking death or serious injury. Others will burrow under it. Most, or course, as now, will just come to the US legally on visitor visas and then just stay on, working, building a life, and hoping not to get caught and deported.

Clearly, spending what could end up being as much as the entire budget of the State Department, Energy Department, the Department of Housing and Urban Development or two Departments of Interior to build a wall that will not work seems like a really dumb idea. But it’s actually much worse than that.

The thing is, we really do need to be building walls in the US. It’s just that we don’t need to be building them on the Mexican border. Our coastal cities need them.

As Hurricanes Katrina and Sandy demonstrated in New Orleans and in New York and northern New Jersey, climate change-induced sea level rise is threatening some of the country’s great cities, and unless the federal government starts working to build hugely expensive Dutch-style dikes and levies and surge gates to keep rising waters and storm surges at bay, hundreds of billions of dollars’ worth of real estate and possibly tens of thousands of lives will be at risk.

Of course, Trump and his cabinet of Republican sycophants scoff at the idea of climate change, or pretend to disbelieve in it, but the science is clear: Earth is warming at an accelerating rate, and sea level is rising inexorably in response, also at an accelerating rate. The oceans, on average, have already risen three inches over the last 20 years according to the Climate Institute [1]. That may not seem like much, but it’s just an inkling of what’s coming. The last time the earth was this warm, seas were 30 feet higher than they are now. It’s just that this time, the temperature has risen so quickly the ice melt hasn’t had time to happen, but the future is already baked into that temperature rise.

Meanwhile, the oceans are also not rising uniformly at the same rate. Since much of the increase in sea level at this point is coming from expansion of warmer water, the increase in lower latitudes, like along the Florida and Gulf of Mexico, is greater than further to the north. That explains why the lower reaches of Miami Beach are now flooding even during average high tides, requiring the city to spend tens of millions of dollars to install pumping systems to try and push the rising water back out to sea before it comes up through storm drains and floods low-lying business streets.

According to climate expert Harold Wanless, a leading climatologist based at the University of Miami, Greenland’s mile-thick ice sheet, which holds enough ice to raise oceans by 23 feet, is melting at a rate that doubles every seven years, and together with increased melting of ice in Antarctica, could produce a 20-foot of sea rise by the end of this century. Meanwhile, he warns that seas could rise by as much as 2 feet, instead of just inches, by 2040, which is just 23 years off.

That two feet of sea level rise, he notes, would make future storm surges catastrophic, allowing the water pushed ahead of a major storm, which can range as high as an added 15 feet or more, to surge right over urban areas like Brooklyn, NY, much of Boston, and most of Miami. But the rising seas would actually destroy those cities much sooner, he notes, simply by pushing salt water into the aquifer under coastal cities, which would rot out city utilities like sewers, water lines and electrical conduits.

Unfortunately, Wanless notes that there’s not much that can be done to protect Miami and other cities on Florida’s peninsula from such a threat. Much of the peninsula, recall, is really just the remains of a giant coral reef that was all under water as recently as 2.5 million years ago. The problem is that because the “bedrock” of the peninsula is former coral, it is like a dried sponge, full of holes and entirely porous. Pick up a chunk of it, hold it to your lips and blow, and air comes whistling out the other side. Building a dike on such a base would do nothing to keep out the water, as it would just go under the dike and percolate up on the landward side.

That said, while southern Florida may be toast by 2100, something could be done to stave off disaster for cities like New York, Boston, perhaps the San Francisco metropolitan area, and even Los Angeles and San Diego. That something would be building dikes — kind of like Donald Trump’s “big beautiful wall” on the Mexican border.

Such dikes would have to be more than beautiful. They would have to be huge, like the massive dike that holds the North Sea at bay from overrunning Holland, much of which is already some 15 feet below sea level. As in Holland, they’d have to be supported by massive and costly pumping stations, too, running all the time, to keep seeping seawater from sneaking under the walls, like desperate immigrants under Trump’s planned Mexican wall.

That said, it would make much more sense to take all that money that Trump wants to waste on walling off Mexico, and apply it to at least pushing back the demise of America’s great coastal cities.

Of course, a better use still would be to put that money to use working to develop new renewable energy sources that could reduce US dependence upon the fossil fuels that are propelling climate change and raising sea levels, but it might be a bit of a leap to get climate denier Trump and his climate denying cabinet to do that. Still, it should be clear even to Trump, a New Yorker after all, and a developer who owns a bunch of expensive properties located at near sea level, that something needs to be done to stave off disastrous flooding in cities along all US coast lines, or at least those where it is determined that dikeworks would be feasible.

It would be ironic if Trump went ahead and, like the Ming emperors of yore, built his monstrous 2000-mile wall to keep Mexican immigrants out of the US, only to have it turn out that for starters it didn’t work, and then later that Mexicans really no longer wanted to come to a country where the big metropolises are all underwater, while that old standby immigrant job — farmworker — no longer existed because most of the US grain belt and salad bowl had become parched deserts. One can imagine the graffiti his wall would sport on the US side: “This should be in Boston Harbor” or perhaps “Why wasn’t this built around Brooklyn?”

Of course, by then, there probably will be a new even longer wall being constructed, this time by the Canadians, designed to prevent desperate Americans from fleeing illegally to the relatively temperate and above sea-level refuge of Canada. Hopefully the Canadians won’t be demanding that we US citizens pay for that epic project!

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