Bangladesh, Cambodia and China today signed the Framework Agreement on Facilitation of Cross-border Paperless Trade in Asia and the Pacific, a new United Nations treaty aimed at strengthening digital trade in the region.

“ESCAP Member States have played a leading role in the development of the trade agreement,” said Dr. Shamshad Akhtar, United Nations Under-Secretary-General and Executive Secretary of the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).

“This agreement has the potential to harness the development dividends at the nexus of technology and trade, two key means of implementation for the 2030 Agenda for Sustainable Development,” Dr. Akhtar added.

Several other countries at the signing ceremony hosted by ESCAP in Bangkok, also expressed their commitment to sign the treaty during the September 2017 session of the United Nations General Assembly in New York.

Open to all 53 ESCAP Member States, this unprecedented regional treaty illustrates Asia and the Pacific’s leadership in adopting innovative trade facilitation measures. It will provide the foundation for participating countries in the region to cooperate and accelerate progress in achieving paperless trade across borders, cut trade time and costs, and ultimately boost economic competiveness.

According to a recent ESCAP study, regional export gains for the Asia-Pacific region are estimated to reach US$250 billion annually with the full implementation of cross-border paperless trade. Even partial implementation of cross-border paperless trade could lead to an export increase of US$36 billion annually, and decrease the time required to export by as much as 44 per cent and reduce costs by up to 31 per cent.

The regional signing ceremony was held as part of the ‘High-Level Dialogue on Enhancing Regional Trade through Effective Participation in the Digital Economy’ taking place this week in Bangkok. The treaty is open for signature at the United Nations headquarters in New York until 30 September 2017 and will enter into force 90 days after five countries have ratified the agreement.

On Monday, August 21, President Donald Trump delivered a prime-time speech almost shocking in its ordinariness. It was such an address as either of his immediate predecessors, George W. Bush or Barack Obama, could easily have given over the previous decade and a half. While hinting at nebulous new strategies and ill-defined new metrics to measure success, President Trump announced that the 17 year old war in Afghanistan will go on pretty much as it has. And the establishment breathed a sigh of relief.

Reviews were glowing. While acknowledging how low the bar had been set, on August 25, the Washington journal The Hill opined that “even the most hardened members of the anti-Trump camp must admit that Monday’s speech communicated a remarkable amount of humility and self-awareness, particularly for this president.” The timing of the president’s crowd pleasing speech was duly noted: “Unfortunately, his very presidential announcement of the Afghanistan decision was bookended by Charlottesville and the president’s rally in Phoenix on Tuesday night.”

Ten days before, in Charlottesville, Virginia, torch bearing white supremacists had marched in a “Unite the Right” rally to protest the planned removal of a statue of the Confederate General Robert E. Lee. Replete with flags of both the Confederacy and the Nazi Third Reich and traditional fascist chants of “blood and soil,” the rally met with resistance from anti-racist activists, one of whom was murdered and others injured when one of the united right used his car as a weapon of terror, driving it into the crowd. There was outrage when Trump responded by condemning the violence “on all sides” and declaring that there are “very fine people” on both sides of the issue.

In the next days, thousands marched in cities nationwide and the denunciations of racism and white supremacy resounded from many surprising quarters. Trump’s tolerance of the use and celebration of overt symbols and slogans associated with hatred, slavery, anti-Semitism and genocide offended all but his most fanatical base. Members of his own party, many who had stood by Trump through other scandals, took steps to distance themselves from his statements, if not from Trump himself.

Five of the Joint Chiefs of Staff, representing the Navy, Marines, Army, Air Force and National Guard, came extraordinarily close to rebuking their commander in chief. While they did not address Trump by name, they posted massages on social media condemning neo-Nazis and hatred, citing the events at Charlottesville. “@USNavy for ever stands against intolerance and hatred.” “No place for racial hatred or extremism in @USMC.” “The Army does not tolerate racism, extremism or hatred in its ranks.” “We’re always stronger together- it’s who we are as # Airmen.” “I stand with my fellow Joint Chiefs in condemning racism, extremism & hatred. Our diversity is our strength # NationalGuard.”

In his primetime address on the war, Trump called for the national unity that he had seemed in the days before and after to disdain- “Loyalty to our nation demands loyalty to one another.” Saying that “the young men and women we send to fight our wars abroad deserve to return to a country that is not at war with itself at home,” Trump seemed even to shame his detractors for letting down those he calls the “special class of heroes whose selflessness, courage, and resolve is unmatched in human history.” . Let us make a simple promise to the men and women we ask to fight in our name: that when they return home from battle, they will find a country that has renewed the sacred bonds of love and loyalty that unite us together as one.”

The healing balm that should bring Americans together, Trump said to general applause, will be a continuing commitment to a seventeen year old war. When that war began in October of 2001, Vice-President Richard Cheney suggested that the US would eventually take it to forty to fifty other nations, an expanding war that he predicted “may never end” but would “become a permanent part of the way we live.” Like Cheney before him, Trump urges Americans to set aside the issues that divide us and unite behind an endless war of aggression against a people who never meant us harm.

It should be self-evident that the war against Afghanistan and the broader war on terror, like every war that the US has engaged in since the end of World War II, is as much a war about race and white supremacy as was the Civil War. The fact that the war on terror was presided over for eight years by our first African American president (who in his last year in office dropped 26,171 bombs exclusively over populations of people of color) does not alter the fact that it is a racist war. If the war on terror does not divide our nation’s people as severely as did our war against the people of Southeast Asia fifty years ago, it is only because fewer Americans are paying attention to it.

In 1967, Dr. Martin Luther King, Jr. noted “Now, it should be incandescently clear that no one who has any concern for the integrity and life of America today can ignore the present war.” He said that for those working against racism in the US, silence on the war against Vietnam was nothing less than betrayal. Many questioned whether peace and civil rights mix and if by trying, King was hurting the cause of his people. “Indeed,” he said of these critics, “their questions suggest that they do not know the world in which they live.” About that same time, Eldridge Cleaver said “The black man’s (sic) interest lies in seeing a free and independent Vietnam, a strong Vietnam which is not the puppet of international white supremacy. If the nations of Asia, Latin America and Africa are strong and free, the black man in America will be safe and secure and free to live in dignity and self-respect.” Last year, the Movement for Black Lives excited great controversy publishing its platform that draws these connections in the present context: “…we know that patriarchy, exploitative capitalism, militarism, and white supremacy know no borders. We stand in solidarity with our international family against the ravages of global capitalism and anti-Black racism, human-made climate change, war, and exploitation. We also stand with descendants of African people all over the world in an ongoing call and struggle for reparations for the historic and continuing harms of colonialism and slavery. We also recognize and honor the rights and struggle of our Indigenous family for land and self-determination.”

The violence that we see in American streets is a direct and inevitable result of the violence of our county’s wars. Since the war on terror began, police departments from large cities to rural counties have been plied by the Defense Department with an array of offensive weaponry from tanks to assault rifles, accompanied with training in counterinsurgency. Police department hiring preferences favor veterans who often bring with them skills honed in night raids of Iraqi and Afghan homes. Full scale Special Weapons and Assault Tactics (SWAT) teams then terrorize American families, disproportionally in communities of color and most often to serve simple warrants and summonses for nonviolent offences.

The Obama administration’s determinations that any male 14 years or older found dead in a drone strike zone is a “combatant” unless explicit intelligence posthumously proves him innocent and that “the condition that an operational leader present an ‘imminent’ threat of violent attack against the United States does not require the United States to have clear evidence that a specific attack on US persons and interests will take place in the immediate future,” have poisoned the culture of policing at home. The consequence of these policies is the summary killings of innocent young men because of who they are and where they live, in American cities as well as in places far way. The racial profiling that results in the killings of unarmed black citizens by American police is the domestic expression of surveillance by drones of the “patterns of behavior” that trigger the “signature strike” executions of countless people of color in our wars abroad.

“A nation which continues year after year to spend more money on military defense than on programs of social uplift is approaching spiritual death,” Dr. King noted in 1967. There is no serious discussion of racism in the United States today, or of providing healthcare and education and basic human services that does not address the ever expanding cost of the present war.

Some of the outrage over the Trump’s responses to the events in Charlottesville and for his shameless affinity for hate and misogyny in general from his campaign until today may well actually be for his violation of a tacit “gentlemen’s” agreement not to say such things aloud. None the less, it is a sign of social progress that language and symbols celebrating hate raise so much public indignation. The discredited institutions of slavery and Nazism need to stay discredited and those who forget that are rightly and necessarily called out. There are, however, manifestations of hatred and racism that continue to be tolerated and celebrated even in the most polite, progressive and politically correct venues and these need be called out as well.

As grating and offensive as Trump’s off-script train wreck persona is, it is when he is most “very presidential,” when he acts and speaks from the same teleprompter as those who preceded him, that he is at his most malicious and hateful. When he declares as he did on August 21 that “we are killing terrorists” and threatens “attack we will” and when he praises the civilian catastrophe that he called the “liberation of Mosul in Iraq” as a model for the future of the war in Afghanistan, Trump is on a racist rant. His speech on August 21 calling for more war is hate speech, pure and simple.

The generals of the Joint Chiefs of Staff who bravely spoke out against neo-Nazis, where are they now? Some of them apparently huddled with Trump to devise his hateful and racist assault on the Afghan people and all of them, along with Defense Secretary General Mattis (whose advice to the troops is “You just hold the line until our country gets back to understanding and respecting each other and showing it.”) and White House Chief of Staff General Kelly are busily working to implement it. If generals Lee and Jackson of the 19th century who served under Confederate President Jefferson Davis in the cause of slavery and white supremacy deserve the censure of history and the scorn of every person of good will, so much more these generals who serve the hateful and vile agenda of Trump and his predecessors. To give Trump his due, one truth that he told in his celebrated speech is that those “who slaughter innocent people will find no glory in this life or the next. They are nothing but thugs and criminals and predators, and that’s right—losers.”

Those thousands of good people who took to the streets to denounce the celebration of racism and hate in its archaic and discredited forms need to seek the courage get back out and demand an end to racism and hate in its present, most virulent form. Together we need to demand a US withdrawal from Afghanistan and reparations for all the nations that have suffered US aggression in the so-called war on terror.

*Brian Terrell is a co-coordinator of Voices for Creative Nonviolence and will be making his fifth visit to Afghanistan in September

Philippine President Rodrigo Duterte told police on Monday, August 28 they could kill “idiots” who violently resist arrest, two days after hundreds of people turned the funeral of a slain teenager into a protest against his deadly war on drugs, Reuters reports.

Duterte met the parents of the schoolboy, 17-year-old Kian Loyd delos Santos, at the presidential palace in Manila on Monday, officials said. Details of the meeting were not immediately available.

Earlier, Duterte broke off midway through a prepared speech at the Hero’s Cemetery on the outskirts of Manila and addressed impromptu comments to Jovie Espenido, the police chief of a town in the south where the mayor was killed in an anti-drugs raid.

“Your duty requires you to overcome the resistance of the person you are arresting… (if) he resists, and it is a violent one… you are free to kill the idiots, that is my order to you,” Duterte told the police officer.

Duterte added that “murder and homicide and unlawful killings” were not allowed and that police had to uphold the rule of law while carrying out their duties.

Duterte unleashed the anti-drugs war after taking office in June last year following an election campaign in which he vowed to use deadly force to wipe out crime and drugs.

Thousands of people have been killed and the violence has been criticized by much of the international community.

Domestic opposition has been largely muted but the killing of delos Santos by anti-drugs officers on Aug 16 has sparked rare public outrage.

More than 1,000 people, including nuns, priests and hundreds of children, joined his funeral procession on Saturday, turning the march into one of the biggest protests yet against Duterte’s anti-drugs campaign.

Delos Santos was dragged by plain-clothes policemen to a dark, trash-filled alley in northern Manila before he was shot in the head and left next to a pigsty, according to witnesses whose accounts appeared to be backed up by CCTV footage.

Police say they acted in self defense after delos Santos opened fire on them, and Duterte’s spokesman and the justice minister have described the killing of the teenager as an “isolated” case.

The advent of farming, especially dairy products, had a small but significant effect on the shape of human skulls, according to a recently published study from anthropologists at UC Davis.

Humans who live by hunting and foraging wild foods have to put more effort into chewing than people living from farming, who eat a softer diet. Although previous studies have linked skull shape to agriculture and softer foods, it has proved difficult to determine the extent and consistency of these changes at a global scale.

Graduate student David Katz, with Professor Tim Weaver and statistician Mark Grote, used a worldwide collection of 559 crania and 534 lower jaws (skull bones) from more than two dozen pre-industrial populations to model the influence of diet on the shape, form, and size of the human skull during the transition to agriculture.

They found modest changes in skull morphology for groups that consumed cereals, dairy, or both cereals and dairy.

“The main differences between forager and farmer skulls are where we would expect to find them, and change in ways we might expect them to, if chewing demands decreased in farming groups,” said Katz, who is now a postdoctoral researcher at the University of Calgary, Alberta.

The largest changes in skull morphology were observed in groups consuming dairy products, suggesting that the effect of agriculture on skull morphology was greatest in populations consuming the softest food (cheese!).

“At least in early farmers, milk did not make for bigger, stronger skull bones,” Katz said.

However, differences due to diet tended to be small compared to other factors, such as the difference between males and females or between individuals with the same diet from different populations, Katz said.

By Shounaz Mekky

Egyptian actresses Nelly Karim and Hala Shiha have been criticized over pictures they posted on social media, slamming them for what they were wearing.

Karim was trolled after she shared a picture of her wearing a bikini on a beach. While this week, former actress Shiha shared a picture on Facebook of her wearing a veil.

“When actors post pictures on personal social media, they understand those platforms are public and should accept a backlash may follow,” art critic Magda Khairallah told Arab News.

Karim’s photo was of her in a non-provocative pose, showing little of her body. But some still reacted angrily.

Comments included: “We did not expect that from a star like you,” while another remarked: “I used to respect you, why did you do this?” and: “why are you wearing a bikini?”

Meanwhile Shiha’s photo of her veiled also sparked a backlash.

People said she looked like a “trash bag,” while others doubted it was her, as her face was covered.

Shiha first wore a headscarf during the filming of 2006 film “Kamil El Awsaf.”

At the time, fans embraced her decision. She later left acting and moved to the US to preach Islam.

“I personally think Karim’s picture was normal given she was wearing what people usually wear on the beach,” Khairallah said.

“Some people are not aware of the fine line between an actor’s lifestyle and private beliefs, and try too hard to force their opinions on them.”

The critic said fans might have questioned Shiha’s motives for posting a photo of her wearing a niqab, when other Egyptian actresses who quit and wore veils, left the public eye. “People may have reacted that way because they were suspicious of the message she could be trying to convey.”

“But impolite comments are definitely unacceptable.”

By Conn Hallinan*

When voters in Spain’s Catalan region go to the polls on October 1, much more than independence for the restive province will be at stake.

In many ways the vote will be a sounding board for Spain’s future. But it’s also a test of whether the European Union — divided between north and south, east and west — can long endure.

In some ways, the referendum on Catalan independence is a very Spanish affair, with grievances that run all the way back to Catalonia’s loss of independence in the War of the Spanish Succession (1701-1714). But the Catalans lost more than their political freedom when the combined French and Spanish army took Barcelona. They lost much of their language and culture, particularly during the long and brutal dictatorship of Francisco Franco from 1939 to 1975.

The current independence crisis dates back to 2010, when — at the urging of the right-wing People’s Party — the Spanish Constitutional Court overturned an autonomy agreement that had been endorsed by the Spanish and Catalan parliaments. Since then, the Catalans have elected a pro-independence government and narrowly defeated an initiative in 2014 calling for the creation of a free republic. The October 1 vote will re-visit that vote.

But the backdrop for the upcoming election has much of Europe looking attentively — in part because there are other restive independence movements in places like Scotland, Belgium, and Italy, and in part because many of the economic policies of the EU will be on the line, especially austerity, regressive taxation, and privatization of public resources as a strategy for economic recovery.

The Pain in Spain

When the economic meltdown of 2008 struck, there were few countries harder hit than Spain.

At the time Spain had a healthy debt burden and a booming economy, but one mainly based on real estate speculation fed by German, Austrian, French, British, and U.S. banks. Real estate prices ballooned 500 percent.

Such balloons are bound to pop, and this one did in a most spectacular fashion, forcing Spain to swallow a bailout from the EU’s “troika” — the International Monetary Fund, the European Commission, and the European Bank.

The price of the bailout — the bulk of which went to pay off the banks whose speculation had fed the bubble in the first place — was a troika-enforced policy of massive austerity, huge tax hikes, and what one commentator called “sado-monetarism.” The results were catastrophic. The economy tanked, and unemployment rose to 27 percent — and to over 50 percent for youth. Some 400,000 people were forced to emigrate.

While the austerity bred widespread misery, it also jump-started the left-wing Podemos Party, now the third largest in the Spanish parliament and currently running neck and neck with the center-left Socialist Party. Podemos-allied mayors control most of Spain’s largest cities, including Madrid, Valencia, and Barcelona.

In the 2015 election, the ruling People’s Party lost its majority and currently rules as a minority party, allied with the conservative Catalan Citizens’ Party and the main Basque party.

Needless to say, the PP’s control of Spain is fragile.

Hysteresis

Starting in 2014 the Spanish economy began to grow, unemployment came down, and Spain seemed on its way back to economic health. Or at least that’s the story the People’s Party and the EU are peddling.

True, Spain’s economy is the fastest growing in the EU, averaging around 3 percent a year. Next year’s projections are that it will grow 2.5 percent. Unemployment has dropped to just over 17 percent.

But youth unemployment remains at 37 percent, the second highest in Europe, and wages still haven’t caught up to where they were before the 2008 crisis. Spain is adding some 60,000 jobs a year, but many of them are temporary positions without the same benefits full time workers get.

This temp worker strategy is continent-wide. Of the 5.2 million jobs created between 2013 and 2016, some 2.1 million were temporary.

The “recovery” is partly due to “labor reforms” that make it easier to lay off workers and replace full-time employees with temps. The shift has been from full-time workers protected by labor agreements to insecure temps with few protections. While that might make products cheaper and, it impoverishes the work force.

The strategy has become so widespread that economists have borrowed a term from physics to describe it: hysteresis. Hysteresis describes a phenomenon where force permanently distorts what it’s applied to.

“When unemployment is high for a long period of time, the shape of the labor market alters,” says Financial Times economist Claire Jones. “Would-be workers lose their skills, or find that technology or other economic forces make them obsolete. When the recovery comes, they are unable to join in. Longer-term, or structural, levels of unemployment set in and economy’s potential diminishes.”

In short, hysteresis produces an army of under and unemployed workers, whose living standards decline and who are economically marginalized. It also creates a vicious cycle that eventually dampens an economy.

If governments aren’t spending — which is a given under the strictures of the troika — and if consumers don’t have money, growth will eventually come to a halt, or at least become so anemic that it will be unable to absorb the influx of a younger generation.

All Eyes on Catalonia

Those marginalized communities and sectors of the economy are fertile ground for rightists who use xenophobia and racism to whip up anti-immigrant sentiment, as recent elections in Europe and the U.S. have demonstrated.

The vote by Britain to withdraw from the EU was put down to racism, and for some good reasons. But while anti-immigrant sentiment did play a role in the Brexit, that argument is a vast oversimplification of what happened. Much of the Brexit vote was not so much xenophobic as a repudiation of the major political parties that abandoned whole sectors of the country.

In the UK, this particularly included the policies instituted by former Prime Minister Tony Blair and his “New Labor” Party, which jettisoned its ties with the trade union movement and bought on neoliberal policies of free trade and globalization.

However, many of those Brexit voters turned around a few months later and backed the Labor Party and Jeremy Corbin’s left agenda. Given an opportunity to vote for ending the long reign of austerity and for free university tuition, improved health services, and re-nationalizing transportation, they voted Labor, xenophobia be dammed.

Because the Spanish Popular Party claims that the current economic recovery is the direct result of its austerity and labor policies, other EU players are paying attention to the Catalan vote. If the vote goes badly for Catalan independence — and polls currently suggest it will be defeated — the PP will claim a victory, not only over Catalan separatism, but also for the party’s economic recovery strategy.

The French are certainly paying attention. Newly elected president Emmanuel Macron is preparing a similar program of cutbacks and labor “reforms” that he intends to ram through by executive decree, bypassing the French parliament.

A victory for the PP is also in the interests of the troika as proof that its recovery formula works — even though the track record of austerity as a cure has few success stories, and even those are questionable. For instance, low energy prices and a weak euro have more to do with the Spanish recovery than cutbacks in social services and the evisceration of labor codes.

Spanish Crosscurrents

The Popular Party should be riding high these days, but in fact its poll numbers are declining. It is still the largest party in Spain, but that translates into only 31 percent of the voters. Between them, the Spanish Socialist Party and the leftist Podemos Party garner just short of 40 percent.

Part of the PP’s woes stem from the fact that many Spaniards recognize there is something sour about the recent “recovery.” But there are also the corruption charges leveled at the PP — charges that have even ensnared Prime Minister Mariano Rajoy, who was recently forced to testify in a bribery and fraud case against some leading members of his party.

While the Socialists have also been tarred with the corruption brush, the current case has riveted the public’s attention because some of it reads like a script from the Sopranos.

The key defendant is Francisco Correa, who likes to be called Don Vito, Marlon Brando’s character in The Godfather. Two of his associates are known as The Moustache and The Pearl. Correa and 10 others have already been sentenced to prison for fraud and bribery, but Correa is also on trial for setting up a slush fund. Rajoy testified in that trial, although so far the prime minister is not accused of any wrongdoing.

A survey by the CIS Institute found that almost 50 percent of Spanish voters are deeply concerned with corruption, and that sentiment is dragging the Popular Party down.

The left and center-left parties are split on the Catalan question. Both oppose separatism, but they come at it very differently. Podemos is urging a “no” vote October 1, but it supports the right of the Catalans to have their initiative. That position, along with Podemos’s progressive political program, has made it the number one party in Catalonia.

The Socialists have traditionally opposed Catalan separatism, and even the right of the Catalans to vote on the issue. But that position has softened since a major upheaval in the party that began last year when the Socialists’ right wing pulled off a coup and drove the party’s left wing out of power. But the Socialist right-wingers made a major mistake by voting to allow Rajoy to form a minority government and continue the austerity policies. That move was too much for the party’s rank and file, who threw out the right this past May and reinstated the Socialists’ left wing.

The Socialists’ willingness to consider allowing the initiative is partly a matter of simple math. The party’s opposition to Catalan independence has resulted in it being virtually annihilated in the province, and no Socialist government has ever come to power in Spain without winning Catalonia.

A Country Transformed, a Union Quaking

Whatever happens October 1, Spain isn’t going to be the same country it’s been since the restoration of democracy in 1977.

The old two-party domination of the government is over, and there’s general recognition that there has to be some shift on the Catalan question. Even Rajoy — who’s hinted that he might consider using the military to block the October 1 vote, or ruling the province from Madrid — has offered to give Barcelona the same deal the Basques have. That would include collecting taxes, something Catalans now don’t have the right to do.

There is no little irony in Rajoy’s offer. When the Catalans made that same offer in 2012, Rajoy and the Popular Party wouldn’t even discuss the proposal. It’s a measure of how the issue has evolved that Rajoy is now making the same offer the Catalans did a half decade ago.

Polls — weak reeds to lean on these days — show the initiative going down to defeat, but the situation is fluid. Rajoy’s recent proposal and the softening of the Socialist Party’s position might convince the majority of Catalans that some kind of deal can be cut. Young Catalans favor independence, but older Catalans are uncomfortable with what will be a leap into darkness.

On the other hand, if Rajoy comes down hard, it will likely bolster the “no” vote.

The European Union is in a crisis of its own making. By blocking its members from pursuing different strategies for confronting economic trouble and instead insisting on one-size-fits-all strictures, the bloc has set loose centrifugal forces that now threaten to tear the organization apart.

The eastern members of the EU have charted a course that throttles democracy in the name of stability. The southern members of the bloc are struggling to emerge from austerity regimes that have inflicted widespread, possibly permanent, damage to their economies. Even members with powerful economies, like Germany and France, are trying to keep the lid on the desire of their people for a better standard of living.

The Catalan vote reflects many of these crosscurrents, and is likely to be felt far beyond the borders of Iberia.

*Foreign Policy In Focus columnist Conn Hallinan can be read at dispatchesfromtheedgeblog.wordpress.com and middleempireseries.wordpress.com.

By Cecilia Remón

Peru’s President Pedro Pablo Kuczynski completed the first year of his term on July 28, with little to show. Corruption, an economy in recession, social conflicts and a hostile Congress has taken its toll. His popularity has fallen from 61 percent when he first took office, to 32 percent right now.

“In our first year the government faced, regrettably, various unexpected setbacks such as Lava Jato and the Coastal El Niño phenomenon. Maybe I underestimated the titanic effort that was required to reestablish the economic growth in such a context. I apologize if this was the case. I did not imagine that two such extreme events that were outside of our immediate control would coincide in just a few months,” said Kuczynski in his message to the nation.

“The Lava Jato scandal in Brazil has generated dreadful consequences in our country. In order to combat that wave of corruption we have had to put an end to important contracts that generated thousands of jobs. The payment chain of various contractors was interrupted. But it was of more importance to show that here, in Peru, we take immediate and vigorous action against corruption; actions that have been recognized in other parts of the world and looked upon as an example in the Latin American region. The so called Coastal El Niño hit us at around the same time, causing tremendous damage, particularly in the northern coast, but also in the highlands,” he added.

Although Prime Minister Fernando Zavala, has assured that Lava Jato — which involves Brazilian construction companies such as Odebrecht and OAS, who since 2001 had paid millions of dollars in bribes to senior government officials to, in return, approve megaprojects in Peru — probably resulted in a two point reduction of the gross domestic product; neither this case nor the Coastal El Niño — the abnormal warming of the waters off the Peruvian coast that presented itself between January and April, causing hard rains, overflowing of rivers, floodings, and mudslides that devastated half the country — can explain the critical economic situation nor the governmental paralysis.

According to projections from the Economic Commission for Latin America and the Caribbean (CEPAL), the GDP growth for this year will be of 2.5 percent. Although the Labor Ministry has said that the goal for this year is to generate 240,000 jobs, some economists have stated that the figure is not enough; reasoning that to generate 300,000 formal and quality jobs, the economic growth needs to be of at least 4 percent.

Economist Pedro Francke told the newspaper La República, that “these results will not be achieved unless there is a boost in the most intensive job generating sectors such as tourism, agriculture and industry. In the first year alone, the sudden brake put on public investment brought the industry to a standstill and prevented the employment of numerous people. The goal is the correct one, but the policies are wrong.”

Some things that did call the attention were the silence, omissions and voids in the message of Kuczynski. The indigenous population, the environment, decent employment, the right to health care, quality education, and social conflicts were simply not mentioned.

Neither revolution nor social

At taking power on July 28, 2016, Kuczynski, who had won the election by a narrow margin, said he wanted “a social revolution for my country. I long for a Peru in five years that is modern, fairer, more equitable and socially committed.”

“What does a modern country mean? It means that the inequalities between the poorest and the richest must be reduced by raising the income of the poorest,” he said.

One year later, this social revolution has not yet seen the light. Although Kuczynski has had to face a hostile Congress, with an overwhelming Fujimorista majority of 73 out of 130 seats, whose only objective was to take revenge on who has snatched the presidency from their natural leader, Keiko Fujimori, the reality is that the “dream team,” as he referred to his cabinet, has not shown its efficiency.

The majority of his ministers are technocrats from the private sector, some with previous experience working for the state, but with enormous political incapacity. The objective of Kuczynski and Zavala is to preserve the trend of the neoliberal economy, but they never understood the reason behind the effort of the Fujimorismo to hamper the progress of the government if they share the ideals of defending the economic model followed since the 90s by Alberto Fujimori (1990-2000) and maintained by the governments of Alejandro Toledo (2001-2006), Alan García (2006-2011) and Ollanta Humala (2011-2016).

The Fujimorista majority in Congress, represented by Fuerza Popular (Popular Force), censored two ministers — Jaime Saavedra Chanduví, from Education, who had continued on the post from the Humala government, and Alfredo Thorne, from Economy and Finance — and forced Vice President Martín Vizcarra to renounce as minister of Transport and Communications.

In order to prevent that the Fujimorismo continue hindering the progress of the government, Kuczynski and Zavala gave them more space by granting them important public posts, including two members to the directory of the Central Reserve Bank (BCRP), the Comptroller Office and supervisory bodies, among others.

Also, the opposition majority removed from various legislative decrees any mention of gender approach, sexual orientation, gender identity, human rights and interculturality.

Between Lava Jato and the Fujimorismo

The Lava Jato scandal has caused enormous havoc in the political scene. The last three presidents since 2001 are under investigation for this case. Toledo, who lives in the United States, is under an extradition request accused of having received a multi-million dollar bribe from the Brazilian construction company Odebrecht during his term in office; Humala and his wife Nadine Heredia are in preventive custody while they are being investigated for having received money from the Venezuelan government to help in their presidential election campaign in 2006, and from Odebrecht for their 2011 campaign. Alan García, who resides in Spain, is getting away of having a detention order thanks to the control that the Partido Aprista (Apra Party) has over the judiciary and the Public Prosecutor’s Office.

Something that could explain the reason behind the persecution of Toledo and Humala is the fragile situation experienced by them at the moment. Toledo no longer has a party to back him up and Humala, who just over a year ago was president, has no one now to defend him. The Public Prosecutor’s Office, faced with pressure from the media and in their attempt to show some concrete achievements, decided to go after the two with the least possibilities to establish a defense.

Kuczynski has also not been able to evade being investigated in the Lava Jato case for his participation in the Toledo government as Prime Minister and Economy Minister, in relation to the Interoceanic Highway pushed by Brazil to connect the Pacific and Atlantic oceans and to be constructed by Odebrecht. In the end, this route has only served to have illegal mining grow in the Madre de Dios region, bordering the Brazilian department of Acre and the Bolivian department of Pando, while destroying vast areas of Amazon rainforest.

The next four years of the Kuczynski government will be marked by the rivalry with the Fujimorismo. One of the most contentious points is a possible pardon to Alberto Fujimori, who since 2007 has been serving a 25-year prison term for corruption and human rights violations.

Shortly before July 28 there were strong rumors that Kuczynski would grant Fujimori the humanitarian pardon. Keiko Fujimori maintains that she is fighting to obtain her father’s freedom because he is innocent of the crimes for which he was convicted, although she does not agree with a presidential favor because this would mean an acceptance of culpability; and also to have Alberto Fujimori out of prison, who would return to the political stage and the control of the party.

Nothing promotes bad public policy as much as disaster. An economic depression gives rise to demands for Keynesian “economic stimulus” spending; elevated rates of unemployment among low-skilled workers give rise to demands for increases in the legal minimum wage; shortages of goods and services caused by floods, hurricanes, tornadoes, and other such acts of God give rise to demands for legal prosecution of “price gougers”; and so on and on.

Probably the single most beneficial amendment to the U.S. and state constitutions would be an amendment to forbid the government from “doing something” beyond its normal actions in response to national or local emergencies.

Nearly everything the government does on such occasions makes matters worse, ultimately if not immediately. If only the people understood that the government waits for emergencies with saliva flowing, knowing that it can then get away with extensions of its power and the enrichment of its cronies to an extent that would be impossible in normal circumstances.

Today’s phrase is “crisis and leviathan.” Can you say “crisis and leviathan,” boys and girls?

This article was published at The Beacon.

By Steve Marshall

One day after Texas Gov. Greg Abbott called up the entire 12,000-member Texas National Guard to assist civilian authorities with the epic flooding resulting from Hurricane Harvey, several other state Guard units are in the hard-hit areas to offer manpower, equipment and support.

“This will be a big undertaking,” said Air Force Gen. Joseph L. Lengyel, the chief of the National Guard Bureau. Lengyel, quoted in the Houston Chronicle. Before the response ends, he added, Guard troops from dozens of other states could be involved in an area stretching from Corpus Christi to Houston and areas inland that have been hit by disastrous flooding.

As of Tuesday, the tally of Air National Guard representation from other states includes:

— Alaska: About 13 airmen with the 176th Rescue Wing;

— California: About 90 airmen with the 129th Rescue Wing;

— Connecticut: A C-130 Hercules transport plane with eight airmen from the 103rd Airlift Wing;

— Florida: Nearly 100 airmen with the 920th Rescue Wing;

— Kentucky: Nearly 20 airmen with the 123rd Special Tactics Squadron;

— New York: More than 100 airmen, a C-130, three HH-60 Pave Hawk search-and-rescue helicopters and two C-17 transport jets with the 106th Rescue Wing; and

— Oregon: About 15 members of the 125th Special Tactics Squadron whose missions include rescue as well as restoring airfields so supplies can be flown in.

Other Guard Support

Additionally, six helicopters from units in Utah, Nebraska and North Carolina were heading to Texas, National Guard Bureau officials said. Other Guard missions in the stricken areas include bridging, water rescue, logistics movement, airfield openings and medical water purification.

Meanwhile, neighboring Louisiana is bracing for the rains from what is now Tropical Storm Harvey. As directed by Gov. John Bel Edward, the Louisiana Guard has activated about 210 soldiers and airmen, with an additional 230 full-time Guard members supporting efforts.

Last week, the Louisiana National Guard began positioning Guard members, high-water vehicles and boats in southern Louisiana parishes, including Calcasieu, Vermillion, Orleans and Lafayette.

“Being ready and in place is as important as any training that we do, and our engagements at parish level are absolutely critical,” said Army Maj. Gen. Glenn H. Curtis, Louisiana’s adjutant general. “In anticipation of the storm’s track, we continue pre-positioning equipment and vehicles in potentially affected areas, as well as responding to the immediate needs of today.”
In addition to vehicles and boats, the Louisiana Guard has eight helicopters ready to support search and rescue, evacuation and reconnaissance missions as needed, officials said.

By Hun Kee Kim*

Ho Chi Minh City (HCMC) has seen its population and the number of vehicles on its roads rapidly increase over the last ten years. Today, there are close to 8 million motorbikes in the city, and over half a million cars.1

The city has engaged in a range of responses to these strains on transport infrastructure and congestion. Most recently HCMC authorities, following their counterparts in Hanoi, have been considering the implementation of a motorbike ban in the urban core, to be implemented as early as next year. Urban planners have advised against such a drastic measure, citing that such a ban privileges one of the primary causes of the traffic—the growth in the number of cars in the city, while regressively punishing those without cars who presently have limited public transportation options.

HCMC, however, does have a comprehensive public transportation plan in place, involving a series of ring roads, light-rail/metro-rail lines, bus rapid transit and city bus corridors. While these plans are ambitious and on the surface represent a comprehensive approach to public transport, the city will need to overcome a number of challenges first.

For one, urban development in Ho Chi Minh City is simultaneously a highly bureaucratic and flexible process, a paradox born out of the city’s development at the nexus of state and market practice—what is now referred to as late socialism. Decentralized government agencies and foreign investors who bring capital and infrastructure expertise to the city negotiate a wide range of possibilities. The result is a heterogeneous urban landscape where each project is made piecemeal, often in defiance of the central city master plan.

Cutting across this urban patchwork are large-scale transport infrastructure projects conceived, planned and built by foreign investors and development institutions: Highways, roads, metro/subway developments, bus rapid transit, city bus systems, etc. Such projects are often planned as coherent wholes, but must subsequently be disarticulated and disassembled to deal with the political, legal and bureaucratic realities of the city. Further, transport infrastructure projects themselves are not only made piecemeal, but are themselves diverse with regards to their sources of investment, models of development, and the conditional and contingent connections forged with government agencies. As a result, those who produce urban space in Ho Chi Minh City have developed a range of adaptive strategies to see their projects come to fruition amidst these uncertainties.

INFRASTRUCTURAL CHALLENGES

According to a former director of the Department of Architecture and Planning in Ho Chi Minh City, planning for infrastructure is difficult, largely because every five years, master plans must be altered in two ways. First, urban master plans are often altered by political changeover. Second, urban plans must be updated to conform to an increasing number of new urban development projects, the majority of which sidestep urban regulations and planned development principles. This, as informants in the real estate sector have indicated, is due to a pervasive regulatory opacity caused by the confluence of three main factors: decentralization, legal pluralism and dependency on foreign direct investment. As a result, some planners see the master plan as a document that effectively works backwards, by conforming to a defiant past rather than confidently projecting a progressive future.

Decentralization

Decentralization policies have created overlapping regulatory jurisdictions and a general lack of clarity about the scope and reach of government agencies. In Ho Chi Minh City (HCMC), the decentralization of planning approvals has unleashed new powers of the province, city and its districts. These smaller political units, following Annette Kim, operate like “fiefdoms” where district leaders can develop their own urban investment and development plans.2

For example, while the Department of Architecture and Planning (DAP) creates the master plan for the city, it does not coordinate with the city’s Department of Transport (DOT). A former planner in the Department of Architecture and Planning suggested during an interview that their version of the master plan lacked coordination with a separate agency that was governed according to political motivations outside the technical purview of the DAP. This tension between politically-oriented governing bodies like the HCMC People’s Committee and more technically-oriented agencies, is a major subject of government reform efforts—most notably initiatives under the purview of Public Administrative Reform (PAR). PAR attempts to separate the political functions of the communist party from the bureaucratic functions of the state, a process that is nevertheless shaped by political struggles for city and state resources.3

This paradox creates a form of government that is extremely flexible on the one hand, capable of making and bending plans and creating exceptions to rules in order to meet the needs of foreign investment and cater to the needs of city developers, and on the other, it is a system that cannot forecast city development according to a centralized logic. This inability to predict how conflicts are settled between contrasting regulatory regimes requires much political know-how among those engaged in urban development.

Legal Pluralism

The effects of decentralization are compounded by uncertainties produced by multiple overlapping legal orders. 4 These stem from legacies spanning French administrative law, borrowed Soviet legal principles, Vietnamese communist principles from the central planning era, transition era laws, (many of which were experimental, I might add), and western legal principles now imposed as standards of global finance and development.

Adding to these multiple orders of legality are conflicts of law and city regulation. There are at least a dozen regulatory agencies in the city, such as the Department of Architecture and Planning, the Ministry of Construction, the Department of Investment and Planning, the Department of Land and Natural Resources in addition to city and province level political institutions like each city and district’s people’s committee. While the state produces general laws, each respective ministry has the power to interpret these laws by issuing circulars and decrees—ones that often contradict one another.

FDI/ODA Dependency

Thirdly, defiance of urban plans comes about because the need for transnational investment supersedes these plans. For example, the current 2013 (adjusted) transportation master plan for HCMC has a total of 469 projects. Although these projects are approved, the Department of Planning and Investment estimates that the city’s budget accounts for only 5% of the total funds (US $121 billion) required to execute these projects.5

Thus, according to the planning consultancy, Centre de Prospective et d’Etudes Urbaines or PADDI in HCMC, projects of equal importance can be pushed through or held back depending on whether they can be made attractive to private investment capital and ODA loans or assistance.6 Infrastructure projects themselves are therefore drawn into the competitive logic of global capital. In transportation alone, there are at least six separate projects funded by different international cooperations: The Japanese International Cooperation Agency (JICA), the World Bank, the Asian Development Bank, the German government, and the European Investment Bank,
Since the city lacks funds to support over 95% of its approved transport infrastructure projects (totalling US $121 billion), it has to rely on foreign capital in the form of official direct assistance (ODA) or private foreign direct investment capital (FDI). It has therefore incentivized infrastructure and engineering firms to engage in real estate development and speculation in property markets. This is acheived primarily through the mechanism of “build, transfer or build, operate, transfer” agreements (BOTs/BTs) in which the city exchanges land (and utilizes its powers to convert rural land to urban real estate) to secure investments from both local and global engineering and construction firms. Korea’s GS Engineering and Construction (formerly part of LG), for example, obtained land for its Nha Be new town development in the periphery of the city through its investments into Saigon’s ring road infrastucture, a US $340 million project. Today, GS is completing parts of the engineering and construction for the elevated subway lines in District 1 and has received urban land to be developed into real estate.

HETEROGENEOUS INFRASTRUCTURE

The state’s reliance on foreign investment to finance and construct its transportation infrastructure, in conjunction with decentralization and legal pluralism, produces a heterogeneous set of pathways for infrastructure projects to be planned, financed and developed, often times in competition with one another. What results is a patchwork of transportation infrastructure plans and projects that lack coordination. So while the problem of transportation infrastructure is often treated as a technical problem requiring technical solutions by foreign investors and planning agencies, such plans are often undone by the political infrastructure of the city and state governments.

There are currently six metro lines planned for the city, funded by a combination of different foreign investors such as the Japanese International Cooperation Agency, the Asian Development Bank, the European Investment Bank, the KFW Development Bank (Germany), and the Spanish government. Lines one and two are partially funded as is line five while the other three lines are currently looking for financing. There is also a plan for a Bus Rapid Transit system in HCMC, funded by the World Bank. These plans work in concert with a series of concentric ring roads or belt roads surrounding the urban core.

According to the Urban Development Management Support Centre in HCMC, otherwise known as PADDI, investors often bring their own conditions to each project, usually revolving around procurement of technology, equipment, natural resources and contractors. For example, JICA has conditions for the use of Japanese technology and equipment for their line. Others also have similar provisions. Further, currently, there is no citywide agreement for a shared governing body to oversee and maintain the entire metro system, although some ODA agencies publicly support such a move. The result is a transport system currently under construction without provisions in place guaranteeing a unified system.7

ODA COMPETITION

Additionally each project spans large swaths of the city, requiring coordination across multiple bureaucratic, political and geographically designated institutions like districts and provinces and regulatory and planning agencies each, of whom produce separate plans or produce legal interpretations independently of one another. Those planning infrastructure projects must therefore coordinate the competing interests of jurisdictions and overlapping regulatory rationalities of the agencies involved.

Furthermore, ODA investors do this planning work while competing with one another for technical cooperation contracts with the Vietnamese government. This coordination is a monumental task that requires project heads to envision a complete project only to disarticulate and disassemble them into component parts in order to negotiate and meet the demands of specific agencies, districts, neighborhoods and other stakeholders, while reacting to challenges from competing ODA- funded projects.

One example are the early transportation plans proposed for both Hanoi and Ho Chi Minh City by the World Bank. The plan was to introduce Bus Rapid Transit (BRT), based on Bogota’s Transmilenio infrastructure, to Hanoi and subsequently to Ho Chi Minh City.8 The project, initiated in 2005 through a feasibility study, and approved in 2007, was intended to be a comprehensive green transportation system, with multiple lines intersecting a large ring road. The project, garnering a $124 million loan from the World Bank, made it through the planning and design phase and was approved for implementation. In the words of a former World Bank coordinator of BRT projects in Vietnam:

“The bank put in all the effort in creating this BRT network, but once this is kind of in place, then all these other ODA agencies come. So the European Development Bank is one, and the ADB is another one, and JICA is another one. What happens is that all of the high demand BRT routes, you know you would begin with one of those complex but high ridership routes to build revenue and ridership, faith in the BRT as a form of transportation, are taken up by other banks that throw money in theory to complete the detailed design phase and make them into some form of rail system. This environment is problematic, because people will throw money to get [Vietnam] into loans without regard to existing plans and projects.”9

Here, the former BRT project coordinator describes a complex process of getting to the BRT’s project implementation phase, only to see the European Development Bank (approx. US $81 million), the Asian Development Bank (approx. US $293 million) and the Japanese International Cooperation Agency (approx. US $132 million) strike deals with the government to introduce competing rail projects. These rail/metro projects essentially reallocated high ridership routes from the BRT project—routes necessary to make the BRT system financially sustainable. While the BRT project was by no means the first to arrive, the account shows that there were many ODA agencies vying for technical cooperation loans for transportation projects on the city’s high ridership routes.

HCMC’s BRT project experienced similar difficulties. It was initially conceived as a citywide network of BRT lines in 2007, but was scaled back to a proof of concept design on a high ridership route by the time the project was approved in 2015. This route was later moved to a low ridership corridor along the Saigon river on Vo Van Kiet Expressway in favor of a metro-rail project. Ironically, the Vo Van Kiet expressway is an infrastructure project recently completed by JICA, one of the competing ODA investors building line one of the HCMC Metro (rail) system. According to the former World Bank BRT coordinator, a portion of that road will most likely now have to be demolished to create the reinforced bus lane for the BRT.

DEVELOPMENT WITHOUT TRANSPORT INFRASTRUCTURE

Because of these problems of coordination, many large-scale developments that would require transport infrastructure simply ignore the question all together. This approach is often made visible during the rainy season, when new luxury development areas like the Thao Dien area of District 2, which hosts some of the city’s most expensive real estate, are subject to intense flooding—a byproduct of piecemeal real estate development without city investment in drainage and waterway systems.

Currently, Vietnam has two notable real estate developments that will likely put greater strain on the city’s existing congestion and pollution problems. The real estate conglomerate, Vingroup is currently constructing its Central Park and Golden River luxury apartment complexes that will introduce 14,000 new luxury units in the city core without a meaningful plan to address the significant added impact to traffic, power and water management. Developments like these have prompted both Hanoi and HCMC authorities to consider a variety of regulatory responses. In one case, the Department of Transport simply denied the existence of traffic jams, citing that the city had zero days of gridlock, while admitting the existence of a secondary category of “heavy traffic.” The city is also currently entertaining the idea of a motorbike ban in selected portions of the urban core, a measure that urban planners and transportation experts argue will be detrimental to the city if no alternative forms of travel like a coordinated bus and rail system are implemented.10 Such a ban would hurt the city’s poor and middle-income residents who have limited public transportation options.

CONCLUSION

Legal pluralism, decentralization and FDI dependency encourage a flexible approach to state and city governance. This functions now as a key operating logic in the real estate sector, as a primary mode of accumulation and as a driver of city and national economic growth for Vietnam.

Thus, rather than seeing scaled-back infrastructure projects as failures of planning, it is important for policy makers to recognize the inherent tensions and structural limitations involved. Reforming these legal, political and economic structures are long-term endeavours.

In this light, it is important that city authorities push for incremental improvement in the coordination of agencies with similar goals. For example the Department of Transportation and the Department of Architecture and Planning should produce coordinated plans for the city’s transportation infrastructure. Similarly, ODA organizations should recognize how inter-agency competition and FDI dependency in Vietnam contributes to infrastructure heterogeneity and to the lack of planning coordination across the city.

About the author:
* Hun Kee Kim is Visiting Fellow at ISEAS – Yusof Ishak Institute

Source:
This article was published by ISEAS as ISEAS Perspective 2017 Number 65 (PDF)

Notes:
1 Department of Transport, Ho Chi Minh City.
2 Kim, Annette Miae. 2008. Learning to Be Capitalists: Entrepreneurs in Vietnam’s Transition Economy. New York: Oxford University Press.
3 Painter, Martin. 2003. “Public Administration Reform in Vietnam: Problems and Prospects.” Public Administration and Development no. 23 (3): 259-271.
4 Legal pluralism is a term coined by Sally Engle Merry. See: Merry, Sally Engle. 1988. “Legal Pluralism.” Law & Society Review no. 22 (5): 869-896. Merry, Sally Engle. 2014. “Global Legal Pluralism and the Temporality of Soft Law.” The Journal of Legal Pluralism and Unofficial Law The Journal of Legal Pluralism and Unofficial Law no. 46 (1): 108-122.
5 Musil, Clement and Morgane Perset. 2015. “Financing Transport Infrastructures in Ho Chi Minh City (Vietnam): Tools, Innovations and Challenges.” Urban Development Management Support Centre– PADDI no. Working Paper Series (2):1-19.
6 Ibid.
7 Clement Musil and Charles Simon. 2015. “Building an Ambitious Public Transport System in Ho Chi Minh City (Vietnam). Working paper of the Urban Development Management Support Centre Centre (PADDI).
8 See: http://projects.worldbank.org/P083581/hanoi-urban-transport-development- project?lang=en&tab=overview
9 Interview with former World Bank BRT projection coordinator. March 8, 2017.
10 Hai, Vo. 2017. “Hanoi Revives Plan to Ban Motorbikes in Uphill Battle against Congestion.” VN Express International, June 3, 2017.

By Dusica Tomovic

The Telegraph published on Tuesday what it said were surveillance photographs “obtained by European intelligence agencies” that could offer “key proof” that Russian intelligence officers plotted a violent takeover of power in the Balkan state last October.

The coup would have ended in the assassination of Milo Djukanovic, the Montenegrin prime minister at the time, the newspaper said.

The photos allegedly show two officers of Russia’s GRU military spy service, Eduard Shishmakov and Vladimir Popov, meeting Serbian nationalist Sasa Sindjelic in a Belgrade park.

Sindjelic was allegedly hired to orchestrate the coup in Montenegro during the October 16 elections.

Shishmakov and Popov are to stand trial starting on September 6, alongside 13 others, for their part in the alleged plot to attack Montenegro’s parliament and Djukanovic in order to prevent the country joining NATO.

According to the Telegraph, the photographs are believed to have been taken in the Serbian capital around the time of the foiled coup.

The opposition in Montenegro and some anti-government media outlets continue to claim that the coup was staged by the authorities to ensure Djukanovic won another election.

Russia also has denied involvement in the alleged plot, although Moscow supports Montenegro’s Democratic Front and other opposition groups which oppose NATO membership and champion closer ties to the Kremlin.

Russia strongly objected to Montenegro joining NATO, and threatened unspecified retaliation after the country became a member of the Western military alliance in June.

Bitcoin rose sharply Tuesday, at one time surging 6.5% to a new record high of $4,703.42, or almost 70% in the month of August. Later in the day, prices eased a bit, trading around $4,600, or up about 60% for the month.

Some market analysts said the spike in Bitcoin came as demand from South Korea and Japan spurred more safe haven, just as buying in gold and Treasury bond prices rose, following North Korea’s latest missile launch.

For their part, Bitcoin cash was trading at $580 per coin, and ethereum’s ether token at $360, up 4.6%.

Measured in dollars, the US is by far the most indebted country in the world. As this column describes, however, the country still has a positive capital income in spite of its high net debt position, and its external debt position is much smaller than one would expect based on cumulated current account deficits. Furthermore, fluctuations in the dollar exchange rates have a strong direct effect on the country’s international investment position. As long as it can finance its external obligations in dollars, its international debt position is no cause for concern for the US. For the rest of the world, however, the story may be different.

By Wim Boonstra*

Measured in dollars, the US is by far the most indebted country in the world. Due to ongoing current account deficits of its balance of payments in the past, the country has accumulated a negative net international investment position (NIIP) of $8,318 billion (-43.5 % of GDP), the highest level ever recorded by the US.

Figure 1 The US current account balance and its composition ($ billion)

Figure 2 Net international investment position (NIIP) and cumulative current account (CUMCA), (percent of GDP)

A closer look unveils a number of remarkable facts.

• First, the US still has a positive capital income, in spite of its high net debt position (Figure 1).
• Second, the US external debt position is substantially smaller than one would expect based on cumulated current account deficits (Figure 2).
• A third observation is that fluctuations in the exchange rate of the dollar have a strong direct effect on the international investment position of the US.

After a discussion of these facts, I will come back to their consequences for US international debt sustainability.

Indebted, but with positive capital income

Usually, a country with a negative NIIP has a negative balance of primary income (part of the current account). However, the US has a substantial surplus here, as has been observed by other authors. Hausmann and Sturzenegger (2005), for example, suggest that the surplus on the capital income account implies that the US external investment position must be much better than official statistics indicate. They argue that there must be more US international assets than captured by official statistics, which they label ‘dark matter’. However, one doesn’t need ‘dark matter’ to explain the surplus on the capital income balance.

A closer look at the composition of the US’ international assets and liabilities is enough (Figure 3).

Figure 3 Composition of US external assets and liabilities, 2016 ($ billon)

The US NIIP is the balance of its international assets, which are huge, and its international liabilities, which are even larger. If you look at the composition, the differences are striking. The US’ international assets have a strong emphasis on direct investment and portfolio equity investments, while its liabilities are overwhelmingly in debt securities and ‘other investments’ (basically, loans and deposits). The large share of relatively high-yielding investments in US international assets on the one hand, and the large share of low-yielding categories in its liabilities on the other, explain why the US has a positive balance of primary capital income. It receives more in dividends and profits on its investments abroad than it has to pay on its (lower-yielding) external liabilities.

International debt is smaller than cumulative current account deficits

In 1976, the first year for which the Bureau of Economic Analysis reports the US NIIP, the US had a net asset position of $85 billion. Since then, the cumulative current account deficit has reached an impressive $10,500 billion. In contrast, the country’s NIIP has ‘only’ deteriorated during this period to -$8,100 billion. There is gap of $2,400 billion between these figures, which should be explained. Again, the answer lies not with faulty statistics, but in the composition of US assets and liabilities.

In the past, international economy textbooks stated that the current account balance of a country is the driving factor behind the development of that country’s international wealth position; some textbooks still do. A surplus on the current account enables a country to repay foreign debts and/or increase its international assets. A deficit, on the other hand, results in increasing debts and/or decreasing reserves.¹

The problem with this approach is that once a country has built up cross-border assets and liabilities, their value can change without being registered on the balance of payments (which is based on registered flows). Stock exchanges go up and down, just like the market values of foreign direct investments and bond prices. The larger the size of the gross international positions, the larger such value changes are.²

When we get the formula right, we take account of value changes of international assets and liabilities. These value changes reflect only capital changes, as dividends, profits, and interest rates payments are already included in the current account balance. As with the positive capital income balance, the composition of US assets and liabilities explains why the US NIIP moves more or less independently from the current account balance. Capital gains on the asset side, especially on US investments in equity and FDI, are often higher than capital increases on its liabilities (overwhelmingly bond, loans, and deposits).

Of course, in years in which stock exchanges are very volatile, the NIIP can fluctuate in a very erratic way. In 2008, when stock markets collapsed after the demise of Lehman Brothers, the US NIIP deteriorated by no less than $2,700 billion. In 2009 it improved again by $1,300 billion, only to deteriorate again by $1,000 billion in the following two years. Such fluctuations dwarf the current account deficit, which actually since 2008 has markedly improved due to increases in net services trade and capital income. The conclusion is that for a country with large gross international assets and liabilities, the importance of the current account balance as the explaining factor behind a country’s NIIP declines rather strongly (Figure 4). The short-term forecasting power of the current account balance suffers in particular.

Figure 4 Annual changes in the NIIP and the current account balance

But the dollar may be even more important

The US is not a normal indebted country; it still has the world’s most important currency. Although the euro is an important currency as well, it is dwarfed in all respects by the US dollar (ECB 2017). One of the consequences is that a huge part of US external liabilities is denominated in dollars, while substantial parts of its foreign assets are denominated in foreign currencies. This means that when the dollar decreases in value, the US gains on its foreign assets, while the value of its foreign liabilities, expressed in dollars, is more or less unchanged (see Figures 5 and 6). As a result, its NIIP improves. On the other hand, a stronger dollar has a negative impact on the US NIIP. As a rule of thumb, a 10% depreciation of the US dollar results in an improvement of the US NIIP by $1,000 billion. This means that the moment that markets start to worry about the US debt position, which may result in a weaker dollar, the problem for the US more or less solves itself. The rest of the world, of course, experiences a decline in value of their US assets.

As long as the US dollar remains the dominant global currency, the US has no need to worry much about its debt position. Only when markets would require the US to finance its deficits in foreign currency – as they did for a short period during the 1980s, when the US also borrowed in Japanese yen – might this situation change. But today, such a situation is far off. In spite of the US financial situation, there is simply no market with a size and liquidity comparable to the market for US treasuries. And anyway, currency risks can be hedged. For the time being, there is no serious competition from the euro or the renminbi, which actually plays a negligible role in world financial markets.

Figure 5 Impact of the dollar on US international assets ($ billion)

Figure 6 Impact of the dollar on US international liabilities ($ billion)

Conclusion

A weakening of the dollar quickly helps the US external investment position to improve, not so much via the traditional trade channel, but via currency gains on its foreign liabilities. The beneficial composition of its international assets and liabilities also helps to explain why its net international investment position is less negative than one would expect from looking only at the cumulative deficits on the current account. This second factor also explains why the US, in absolute figures the largest debtor country on the planet, still earns more capital income on its foreign assets than it has to pay on its foreign debt. On a net basis, the international debt position of the US is not a drag on the current account.

The conclusion is that, as long as it can finance its external obligations in dollars, the country’s international debt position is no cause for concern for the US. For the rest of the world, of course, the story may be different.

About the author:
* Wim Boonstra, Special Adviser, Raboresearch; Professor in Economic and Monetary Policy, Vrije Universiteit Amsterdam

References:
ECB (2017), “The International position of the euro”, Frankfurt, July.

Hausmann, R and F Sturzenegger (2005), “‘Dark Matter’ Makes the US Deficit Disappear”, Financial Times, 8 December.

Endnotes:
[1] In formula: NIIP_t = NIIP_t-1 + CA_t

[2] So the correct formula is: NIIP_t = NIIP_t-1 + CA_t + k_tIA_t-1 – k_tIL_t-1

“That gives us great cause for concern that there’s something out there that we’re not getting at.” -— Admiral John Richardson, New York Times, Aug 21, 2017

The large question for naval watchers and those with an interest in maritime matters is what is happening to the US navy. All powerful, seemingly all invincible, it has been humbled of late by a series of severe mishaps, some of the most severe since 1989, when the USS Iowa lost 47 sailors to a turret explosion. If it is a question of navigation and safety, things have been far from rosy.

In June, the Philippine-flagged merchant vessel ACX Crystal collided with the USS Fitzgerald 50 miles southwest of Yokosuka, leading to the deaths of seven sailors. Cmdr. Bryce Benson and Cmdr Sean Babbitt, first and second-in-command respectively, were fired for having “lost trust and confidence in their ability to lead”.[1] But nothing could get rid of that nagging feeling that something else was afoot, a deeper problem rooted in the navy.

What beggars belief is that two entities of such size could possibly collide in the first place, even if the view from Haaretz is that such incidents “are bound to happen” in a world unqualified merchant ship crews and crowded waterways.[2]

With little else to make sense of, the naval report could only add some soothing balm to a terrible loss, noting those “swift, and in many cases, heroic actions” of the crew in saving lives. But the damage was done.

The latest accident – on August 21 – was even more gruesome, seeing the loss of 10 sailors, and triggering the search and rescue teams of several countries, including Indonesia, Malaysia and Singapore. Remains have been found within the USS John S. McCain, which wound its wounded way back to Singapore’s Changi naval base after colliding with the Liberia-flagged tanker, the Alnic MC. The McCain’s portside had been given a frightful puncture, leading to flooding that found its way into crew compartments.

The Alnic MC was more fortunate, sustaining damage near the front some 7 metres above the waterline. There were no reported injuries, nor was there a disastrous oil spill that would have compounded the entire fiasco. The John S. McCain, it would seem, did not stick to its designated traffic lane, pathways meticulously crafted by the Singapore authorities. The tanker, on the other hand, did.

In dramatic fashion, and one distinctly more so for a superpower, a global “operational pause” was ordered by Chief of Naval Operations Admiral John Richardson for its startled fleet. A mighty force had been halted, to be subject to a general review of training and seamanship standards, with a more specific investigation of the Pacific theatre.

The Fitzgerald and McCain accidents mean that the navy is short of two operational guided missile destroyers that would provide ballistic missile defence, a point that troubles such maritime watchers as the director of the Centre for American Seapower at the Hudson Institute, Seth Cropsey. “The US combat fleet,” he claims solemnly, “is already overstretched.”[3]

Such incidents – there have been four this year so far, including January’s run aground in Tokyo Bay of the poorly guided missile cruiser USS Antietam, and May’s collision between the cruiser USS Lake Champlain and a South Korean fishing boat – do much to feed Chinese assumptions that US prowess may be waning.

The reasons vary, a sort of medley of entropic decline: exhaustion, constant deployment, thinly stretched operations after the attacks of September 11, 2001. Also telling is its logistical link: the recent chain of command has no line to patrol boats or destroyers. Bread and butter basics are being neglected. The way these basic points have been ignored by those in the Fox News camp is to suggest that the Chinese may well have been behind it – in the sense of an electronic attack.[4]

In the aftermath of the McCain collision, Admiral Scott Swift, commander of the US Pacific Fleet, would pencil a lesson from history, showing “that continuous operations over time causes basic skills to atrophy and in some cases gives commands a false sense of overall readiness.”[5]

In the dark view of Bryan McGrath, deputy director of the Centre for American Seapower in the Hudson Institute, and himself a former destroyer commander, naval decline was already recognised fifteen years ago. Despite the making of various changes, the “Pacific Fleet has really been pressurized in a way that has harmed the surface forces’ proficiency in very basic things.”

Even the three-star Vice Admiral Joseph Aucoin of the Seventh Fleet had to concede that, despite each incident being unique, “they cannot be viewed in isolation.” Last Wednesday, any moments of humility were deemed insufficient, and Auscoin was relieved, despite being a few weeks from retirement. Those in Pyongyang and Beijing may well be crowing at the spectacle, while sailors will reflect on Cmdr. W.B. Hayer’s famous misquotation of Thucydides: “A collision at sea can ruin your entire day”.[6]

Notes:
[1] http://www.latimes.com/politics/washington/la-na-essential-washington-updates-navy-fires-two-officers-of-destroyer-1503012966-htmlstory.html

[2] http://www.haaretz.com/us-news/.premium-1.808974

[3] http://nationalinterest.org/blog/the-buzz/the-us-navys-greatest-enemy-might-be-exhaustion-21997

[4] https://arstechnica.com/gadgets/2017/08/with-the-uss-mccain-collision-even-navy-tech-cant-overcome-human-shortcomings/

[5] https://www.washingtonpost.com/news/checkpoint/wp/2017/08/26/deadly-navy-accidents-in-the-pacific-raise-questions-over-a-force-stretched-too-thin/

[6] https://arstechnica.com/gadgets/2017/08/with-the-uss-mccain-collision-even-navy-tech-cant-overcome-human-shortcomings/

The Kremlin typically focuses on birthrates when it talks about demography, but in fact, many of Russia’s most pressing problems reflect death rates which for many age cohorts are today no lower than they were in 1965, according to Anatoly Vishnevsky, director of the Moscow Institute of Demography.

This is connected in the first instance, he says, with the “risky” behavior of adult males, particularly overconsumption of alcohol. Indeed, at present, “the main high contingent are adult males aged 35 to 40 who should not be dying but are (znak.com/2017-08-25/demograf_anatoliy_vishnevskiy_o_krizise_rozhdaemosti_roste_smertnosti_i_probleme_migracii).

Frequently, Vishnevsky continues, this is hidden by the statistics the authorities choose to talk about. Russian life expectancy has risen but only thanks to a reduction in infant mortality not mortality of older groups. That is because cutting mortality rates among the youngest groups has the greatest impact on overall mortality.

There are other problems among adults as well, he says. HIV infections and mortality from AIDS continue to grow in Russia even though deaths from this disease have declined in advanced countries. The infections largely occurred in the 1990s, but the deaths are only coming now as the disease has a long gestation period.

And Russian adults suffer from super-high levels of deaths from other causes like murder, suicides, accidents and so on. Some of the last can be blamed on bad roads, but a far larger cause is the inability of the government to ensure that ambulances will arrive at accident scenes soon enough to save people.

As a result, Vishnevsky says, “there has been a complete stagnation in Russia” as far as life expectancy is concerned at least compared to other developed countries. And the situation threatens to get worse. Russia passed the first demographic transition with the introduction of antibiotics for infectious diseases. But it is not doing well with the second.

That involves diseases not caused by infections and other causes. There Russia is lagging behind, and the government bears much of the responsibility. It is spending far less of its GDP on health care and other public services than any country with an aging population must if conditions are to improve.

Vladimir Putin likes to talk about reaching a life expectancy of 76 by 2025, Vishnevsky says; but the Kremlin leader and his supporters fail to point out that many countries are at that point now and will have longer life expectancies then. Thus, in what may appear to be its racing ahead, Russia is in fact falling further behind.

“The professional predilection of military,” says retired Army Colonel Lawrence Wilkerson in a Thursday Real News Network interview with host Paul Jay regarding the Afghanistan War policy President Donald Trump announced last week, “is to keep the war going, not to end it, because that’s where you get your rank, that’s where you get your progression, your notoriety, your fame, your fortune, and so forth.” This has been the case, Wilkerson argues, for the last 5,000 years and has “just gotten a little more sophisticated” over time.

In Afghanistan, with Trump having put the generals in charge, Wilkerson says we should expect the military to be ”reinforcing strategic failure and thus deepening that failure” that has developed over the last sixteen years of US military action in the country.

Wilkerson, who is a professor at the College of William & Mary and served as chief of staff for Secretary of State Colin Powell in the George W. Bush administration lays out the basics of the “deepening the failure” phenomenon in his first comments in the informative interview:

Paul, I saw this same thing happen with the Bush administration post-9/11, perhaps more understandably so given the impact of 9/11 on the American people. He turned essentially Afghanistan and then Iraq over to the generals, over to Secretary Rumsfeld in particular in terms of civilian control, and of course you always had Dick Cheney looking over their shoulders. But, basically, the generals were running it. And we saw what happened there.

What we just saw in Afghanistan is an illustration of 5,000 years of military history’s most egregious mistake by military commanders, generals, admirals of the fleet, and so forth and that is to reinforce strategic failure. That is the first desire of military officers in the field when they are losing is to say, “Give me more troops, and I will win.” Rarely do they win. What they do is they commit that incredible error of reinforcing strategic failure and thus deepening that failure. So we can have every expectation that, with the Pentagon running Afghanistan, and for that matter everything else we’re doing right now militarily, we will deepen the failure, and we’ll be even in worse trouble than we are now.

Watch Wilkerson’s complete interview here:

Following the interview, Wilkerson answered questions from viewers before losing his audiovisual connection to the program.

Wilkerson is a member of the Ron Paul Institute for Peace and Prosperity Advisory Board.

This article was published by RonPaul Institute.

North Korea has announced that its latest test of Hwasong-12 missile, observed by the country’s leader Kim Jong-un, was a successful demonstration of Pyongyang’s determination to counter any potential threat stemming from the US’ joint drills with South Korea.

“This ballistic rocket launch drill… is the first step in military operations on the Pacific Ocean conducted by our troops and will be a meaningful prelude to containing Guam Island,” the North’s official KCNA news agency quoted Kim as saying.

Pyongyang claimed the intermediate-range missile landed in a designated area and never posed any threat to neighboring countries. It also praised the test as proof of its full “combat performance” and “strategic capability.”

The missile launch was also a “prelude to decisive countermeasures against joint military exercises,” should Washington’s “belligerent aggression” continue, the statement added.

On Tuesday, North Korea launched a missile which passed through Japan’s northern airspace and triggered a barrage of criticism from the international community.

The rocket flew an estimated 2,700 kilometers, which indicates that Pyongyang’s threat to fire missiles toward the US Pacific territory of Guam was not a bluff, warned Konstantin Kosachev, head of the Foreign Affairs Committee in the Russian Federation Council.

Earlier, Pyongyang threatened to “contain Guam” by launching several missiles into waters some 30-40 kilometers off the island in order to demonstrate its technical capabilities to strike US bases there. The threat prompted US president Donald Trump to warn the North that it would face American “fire and fury” if its actions posed any danger to the United States.

“All options are on the table,” Trump said on Tuesday, after discussing North Korea’s threatening and destabilizing actions with regional partners in Seoul and Tokyo. Trump concluded that pressure on Pyongyang should further be ramped up.

China said the situation in the Korean peninsula was reaching a “tipping point,” where all relevant parties have no other choice but to seek deescalation.

“The facts have proven that pressure and sanctions cannot fundamentally solve the issue,” said Chinese foreign ministry spokeswoman Hua Chunying.

Hua also referred to the joint drills staged by the US and South Korea, the most recent of which began last week, saying the two sides “held one round after another of joint military exercises and they exerted military pressure on the DPRK (North Korea).”

“After so many rounds and vicious cycles, do they feel they are nearer to peaceful settlement of the issue?”

Moscow agrees it’s “obvious that the sanctions pressure resource is exhausted,” with Sergey Ryabkov, Russia’s deputy foreign minister saying the UN Security Council should come to an understanding that a military solution is also a road to nowhere and “categorically unacceptable.”

Beijing and Moscow believe the best way out of the crisis would be to implement its “double freeze” strategy, which would see North Korea suspend its missile launches in exchange for the suspension of the joint US-South Korea military drills.

The proposal has been rejected by the US, with State Department spokesperson Heather Nauert stating earlier this month that the “so-called double freeze, that’s not going to change… We’re allowed to do it (exercises) with our ally, South Korea. We will continue to do that and that’s just not going to change.”

Meanwhile, the United Nations Security Council unanimously adopted a statement condemning North Korea for its “outrageous actions and threats against another UN Member State.” The US-drafted document urges Pyongyang to abandon its nuclear and ballistic missile programs, while expressing a “commitment to a peaceful, diplomatic and political solution.” The 15-member body, which convened for an emergency session Tuesday, did not introduce any new sanctions against the North, with China and Russia reiterating that such pressure tactics is futile in terms of drawing Pyongyang into constructive dialogue.

Washington signaled that a stronger response is in store Tuesday after North Korea ignored earlier warnings and sanctions aimed at curbing its provocative actions and lobbed a missile over Japan.

U.S. President Donald Trump warned that “all options” are in play for dealing with the North, suggesting that Washington may consider military strikes against the isolated nuclear nation following its latest test, which flew over Japan’s northern island of Hokkaido early Tuesday, triggering sirens and announcements instructing residents to take cover.

“Threatening and destabilizing actions only increase the North Korean regime’s isolation in the region and among all nations of the world,” Trump said in a White House statement, adding that “all options are on the table.”

Last week, Trump suggested that his earlier warnings of “fire and fury” had effectively caused North Korea to halt testing, but the new missile test shows that regime leader Kim Jong Un is undeterred. Pyongyang has also resisted repeated calls from Washington to come to the negotiating table.

The U.S. and Japan had called for an emergency meeting of the United Nations’ Security Council following the test, and Washington’s U.N. ambassador Nikki Haley told Agence France-Presse that discussions would center on “what else is left to do” to rein in the North.

“It’s unacceptable,” Haley said, adding that North Korea had “violated every single U.N. Security Council resolution that we’ve had, and so I think something serious has to happen,” without providing any details.

Haley suggested that new sanctions could be discussed and expressed hope that China and Russia would continue to work with the U.S. on the issue.

Earlier on Tuesday, U.S. Senator Cory Gardner called for “additional pressure on all entities that enable” North Korea in a message posted to his Twitter account.

“China and Russia must finally join us to pressure North Korea into peaceful denuclearization,” he wrote, adding that the missile launch over Japan was “reckless” and “intended to drive conflict.”

Senator Lindsey Graham also tweeted that the missile test was a “big-time escalation of conflict,” adding that “clearly North Korean sanctions are not working the way we had hoped.”

“Trump Admin must forcefully respond to convince N. Korea their efforts to destabilize the region & world will not be allowed to mature,” the senator wrote.

Likelihood of military action

John Park, director of the Korea Working Group at the Harvard Kennedy School, told RFA’s Korean Service Tuesday that the likelihood of U.S. military action against the North is “increasing” with the latest test.

But he noted that the North’s decision to fire its missile over Japan’s more sparsely-populated northern island was intended to avoid confrontation. Pyongyang had also recently threatened to fire missiles into waters off the U.S. island territory of Guam, located southwest of Japan.

“If they went southward, that’s where it could potentially trigger a U.S. or Japanese military response,” Park said.

“So I think from that perspective, they were very careful in order to accomplish their goal of testing range but do it in a way that doesn’t provoke military reaction.”

James Przystub, a defense policy expert with the Institute for National Strategic Studies, warned against a military response, which he said “threatens a much wider engagement” that the U.S. is not interested in pursuing.

“But I think we’re going to be looking for some way to evidence to North Korea our extreme displeasure with their action,” he said.

Przystub added that any response would need to be coordinated with U.S. ally South Korea, whose capital, Seoul, is well within range of artillery strikes from the North.

“That’s the starting point for any potential response,” he said.

The North and the South remain technically at war because the 1953 armistice that ended fighting in the Korean War has never been replaced by a peace treaty.

Reported by RFA’s Korean Service. Written in English by Joshua Lipes.

By Mary Rezac

Parents are concerned after a California Catholic school has removed several religious statues from its campus in an effort to be more inclusive of other faiths.

San Domenico School in San Anselmo, California removed several religious statues from display on campus, donating some and relocating others to storage.

Many parents and members of the school community expressed worry that this could signify an erasure of the school’s Catholic identity.

Shannon Fitzpatrick, whose 8 year-old son attends the school, voiced her objections to the removal of the statues to the school’s board of directors, according to the Marin Independent Journal.

“Articulating an inclusive foundation appears to mean letting go of San Domenico’s 167-year tradition as a Dominican Catholic school and being both afraid and ashamed to celebrate one’s heritage and beliefs,” she said.

Cheryl Newell, who had four children graduate from the school, echoed concerns that attempts to be inclusive were actually erasing the school’s identity.

“They’re trying to be something for everyone and they’re making no one happy,” she told the Marin Independent Journal.

San Domenico was the first Catholic school in the state of California, founded by the Dominican Sisters of San Rafael in 1850. It now operates as an Independent Catholic school, meaning that most day-to-day decisions and operations are decided by the school’s board and administration, not by a parish or a religious order. The Dominican sisters maintain sponsorship of the school, as well as the approval of certain decisions like board members or the budget.

The school is within the boundaries of the Archdiocese of San Francisco, but runs largely independently of the archdiocese, archdiocesan spokesman Michael Brown told CNA. The canonical responsibility for the school falls to the Sisters.

Brown added that the archdiocese would have further clarifying conversations with school officials about the removal of the statues.

“We are going to be in contact with the school, just to clarify what the situation is, but it isn’t in any sort of crisis mode,” he said. “There’s just been a lot of publicity and public concern, so we’ll be having private conversations with the school hierarchy.”

School officials have maintained that the removal of the statues was in compliance with a plan that was approved unanimously by the school board, and that it was part of an attempt to be more welcoming to the growing number of non-Catholic students at the school.

“Over San Domenico’s 167-year history as California’s oldest independent and Catholic school, we have adjusted the number of statues on campus many times, and our recent effort is part of that continuum; the recent political climate and conversation have served to distort our intentions,” Kimberly Pinkson, Director of Marketing and Communications for the school, told CNA.

Pinkson added that previous numbers and photos shared by the media were misleading.

“For the record, there were 16 statues on campus prior to the school year and today there are 10 statues on campus,” she said.

She added that another photo of a statue that had been published had actually been in storage since 1965.

“In addition…at the start of this school year we moved our statue of St. Dominic to a more prominent place at the center of our school and put up a plaque honoring St. Dominic as our School’s patron saint. The plaque was placed the first week of school, prior to this news cycle. There has been and there is no plan to move any other statues,” she added.

Fitzgerald said she was concerned that the removal of the statues was only the latest in an overall backing away from the school’s Catholic identity, including “the word ‘Catholic’ has been removed from the mission statement, sacraments were removed from the curriculum, the lower school curriculum was changed to world religions, the logo and colors were changed to be ‘less Catholic,’ and the uniform was changed to be less Catholic,” she said.

Cecily Stock, Head of School, told the Marin Independent Journal that the removal of sacraments from the curriculum was on account of a lack of interest from families, not an attempt to erase the school’s Catholic identity.

“Over the last few years we’ve had fewer Catholic students as part of the community and a larger number of students of various faith traditions. Right now about 80 percent of our families do not identify as Catholic.”

Kate Martin, Director of Communications for the Dominican Sisters of San Rafael, told CNA that the publicity surrounding the removal of the statues has sparked a “good but hard” conversation about how to be welcoming of everyone while maintaining a Catholic identity.

She said the question can be especially difficult in a place as religiously and ethnically diverse as California, where Christian and Catholic values are not common.

“The Dominican values are still being taught (at the school) every minute, but there are lots of other families that have been coming to the school. How do we reach out and embrace everybody who wants this Dominican education?…how do we continue Catholic education and have lots of different families of different backgrounds?” she said.

Martin added that she did not believe the school “intended for this kind of upset” and that the sisters would be looking into the situation more deeply in the coming days, including exactly how many statues were removed or remained, and what will happen to the statues that will no longer be displayed.

As Jared Kushner traveled to the Mideast this week for meetings with Bibi Netanyahu and Mahmoud Abbas, several critical aspects of U.S. policy became clear, which had previously been muddied by vague Trumpian pronouncements.  Early in his term, he told an astonished world that the U.S. wasn’t necessarily wedded to the two-state solution.  No one could figure out what he meant since there was no other even slightly viable solution on the table.  Though of course there were numerous Israeli proposals which everyone knew would not pass muster.

One of these Kushner statements was covered by the world media, the other barely was at all; and it was far more important.

In his meetings with Abbas, Kushner told him two startling things according to media reports.  The first, reported by Al-Hayat and later by Haaretz, was that the U.S. could not pressure Israel for a settlement freeze because it would bring down Netanyahu’s government.  The statement in itself is shocking on many accounts: why should Abbas care a fig whether Bibi falls?  And if he did fall merely for advocating a settlement freeze then of what use is he in finalizing a peace agreement?  Finally, why should the U.S. be channeling the Israeli position on behalf of Bibi?  Are we little more than glorified messenger boys for him?  Kushner roundly denied the report, claiming he’d never made such a statement.  But that’s dubious since it sounds precisely like something Trump and Lesser Trump (Kushner) would say.

But the second thing Kushner told Abbas was that the U.S. could not lobby Israel on behalf of a two-state solution.  The Washington Post reports:

…The U.S. delegation refrained from committing to a two-state solution — the primary focus of peace efforts for decades….U.S. officials have said that they have not ruled out a two-state solution but that it is up to the two sides, not them, to agree on a way forward.

This seeming throw-away line in the article is really monumental.  It means that the Trump administration has abandoned a 30-year U.S. policy consensus that the two state solution is the only option for settling the dispute.  Progressives have disputed this contention for much of that time.  But at least there was a fall-back position that offered a small glimmer of hope for some possible solution if better ones were rejected.

But now, two-states has been thrown to the winds.  Trump will not advocate for it.  Which means, since no one in the Israeli governing coalition supports it, that it is a dead letter.  There is no way in hell that the Palestinians, divided and bereft as they are of leadership, can make two-states stick.  Israel does not want it and Israel has virtually all the cards.  Especially since it’s clear that the U.S. will exert no leverage or pressure on behalf of two-states.

I should add that I’m not particularly a fan of two-states.  One-state seems far more likely given Israel’s outright rejection of the alternative.  But I don’t believe that my own view means much so I’m agnostic on the overall question.

It’s vitally important to understand the broader implications: there will be no advances in the peace process as long as Trump is president.  We knew this implicitly.  But now we see it plain as day.

While Palestine has little leverage in getting to a final agreement, it does have veto power.  It can say No.  The Palestinian No means the peace process is dead.  The only way to undue that would be if Arab states like Saudi Arabia could somehow force or cajole the corrupt PA leadership into accepting a sweetheart deal.  But I doubt that any amount of money could make even Abbas take such a deal.  He would be forever labeled as the one who sold out Palestine.

On that note, it’s extraordinary that despite knowing all this, the PA has continued to speak favorably of the Trump administration’s efforts:

“We know that this delegation is working for peace, and we are working with it to achieve what President Trump has called a peace deal,” Abbas said at the beginning of the meeting, according to the Palestinian Authority news site Wafa. “We know that things are difficult and complicated, but there is nothing impossible with good efforts.”

What is there to praise when the U.S. is even backing off what was a pitifully minimalist prior policy advocating two-states?

I hate to repeat myself, as I’ve written something like this before: we are in for a wicked few years of chaos and violence given this policy vacuüm caused by Trump’s absconding from a meaningful role.  A people with no hope has nothing to lose.  If you think you’ve seen violence, it can and will get worse.  And in ways we can’t now foresee.

Even Peter Beinart, who first noticed the import of the quotation in the Post article, calls the Trump position “absurd.”  The only thing I could add is to call it criminally absurd.  That is because of this atrocious policy position tens of thousands are likely to die.  Among them will be scores, if not hundreds of Israelis (this last statement is meant for the hasbarafia who will likely cheer this development in the comment threads).

This article was published at Tikun Olam