It’s hard to stick to budget, especially when it comes to marketing today. For management, there is long-standing concern about inflated marketing budgets, and about just what causes spending discipline to go out the window.

According to research by IESE’s Miguel Ángel Canela and Burçin Güçlü (PhD `14), experts may be barking up the wrong tree if they blame poor strategy decisions or a lack of financial accountability for blown budgets. Instead, too much information may be the problem.

When Less Is More: An Experiment

Market research relies on a number of analytical tools to size up the state of the competition. In an experiment set in the auto industry, Canela and Güçlü separate “simple” from “complex” research tools and examine what happens when the more complex tools are added to the mix.

Simple marketing tools in this study were focus groups and concept tests — the latter based on consumer surveys or interviews. The complex tools were perceptual maps (i.e., renderings to help understand the competition from customers’ points of view) and conjoint analyses (which estimate customers’ underlying choice structures, what’s most important to them, and which product attributes they prefer).

Only using simple tools led management to decide to stay on budget and move ahead as planned, for more efficient resource allocation. But when the complex analytical tools were brought in, management perceived greater threats from the competition. They tended to see risk all around, and respond, preemptively, by spending more on marketing.

Complex analytical tools may seem to give you a competitive edge — but often the added information just leads to overspending.

Information Overload… to Alarmism

In a competitive market, perceiving that a rival business is getting an edge is sure to make management nervous. And decision-makers may worry about the costs of not matching — or exceeding — rivals’ marketing budgets.

Of course, outspending a rival on marketing can be smart in the right circumstances. The problems arise when management’s perceptions of risk are awry. And Canela and Güçlü point out that, contrary to the neo-classical economic tenet that more information is always better, more sources of information can cause perceptions of risk to be inflated, prompting alarmist actions — i.e., overspending.

And this is a lesson that can be exported to other fields: after all, it’s not just marketing managers who suffer from information overload. In a world where there is ever more and more data, what else might you be overreacting to?

Methodology, Very Briefly

The research is based on an experiment using StratSim, a management simulation game set in the automotive industry, in which the authors manipulated the availability of market research tools to then observe investment decisions made by 75 graduate students in a required marketing course at a European university. The students were assigned to teams and required to make strategic decisions in the face of different market research tools. In the rounds of the game, various simple or complex analysis tools were used. All participants completed surveys immediately after the simulation.

Some US multinationals have displayed a willingness to relinquish their American nationality and move their headquarters abroad. Such ‘inversions’ generally aim to avoid and minimise taxes. This column argues that the new Trump tax plan is likely to halt tax inversions by US multinationals. However, the plan will increase treaty shopping, incentivising multinationals to redirect dividends through third-party countries with generous tax treaties.

By Sijbren Cnossen, Arjan Lejour and Maarten van ’t Riet*

The recently announced Trump tax plan (US Treasury 2017) proposes to cut the corporate tax rate from 35% to 20%, and to shift the tax base from a worldwide to a territorial system. The new statutory rate of 20% brings the US corporate tax in line with the average rate of 22% for the other OECD member countries. With this move, the US joins the steady decline of statutory corporate tax rates around the world (Auerbach 2017). Similarly, with the move to a territorial system, the US aligns itself with other OECD countries that exempt foreign source income (generally, if taxed in the source country). Note that other large economies, such as the UK and Japan, have also made this move in recent years.

As is well known, under the current US worldwide system, taxes on foreign earnings are due only upon actual repatriation to the US. Therefore, firms have an incentive to keep these earnings ‘off-shore’, that is, outside the US. This ‘lock-out’ effect does not occur under a territorial system. Overseas unrepatriated earnings of US multinationals are estimated at some $3 trillion. The Trump tax plan proposes to deem these earnings as repatriated and hence taxable in the US, with a higher rate on earnings held in cash and a lower rate on illiquid assets (the rates have not yet been specified). It should be noted that abandoning worldwide taxation makes profit-shifting to tax havens even more attractive for US multinationals because it makes tax avoidance final. The worldwide system provides a backstop to base erosion since the shifted profits should eventually be repatriated and taxed (Marples and Gravelle 2017). The Trump plan suggests that rules to prevent profit-shifting will follow.

Another important change of the corporate tax base is the proposed immediate write-off of the cost of new investments for a period of at least five years – a move in the direction of a cash flow tax. This element of the tax plan finds support in the destination based cash-flow tax proposed by the Speaker of the House of Representatives, Paul Ryan,¹ and it is also advocated by Auerbach et al. (2017). A fundamental characteristic of business cash-flow taxation is that it exempts the normal or hurdle rate of return on capital. By contrast, a large number of European countries (Cnossen 2017) are moving toward comprehensive business income taxation (CBIT) (US Treasury 1992) which involves base broadening by denying a deduction for interest at the business level and exempting it at the level of the recipient. Further, the rate-cutting/base narrowing of the Trump tax plan should inflate the budget deficit. We leave these aspects for another column and confine our comments to the consequences for tax inversions.

Tax inversions and the US Treasury: An arms race

Tax inversion involves a restructuring of a multinational organisation in which its legal residence – a criterion for defining the taxing jurisdiction – is shifted abroad without a corresponding shift in economic activity. Early examples are inversions to tax havens, such as Bermuda and the Cayman Islands. A recent example is the merger of Tim Hortons and Burger King, which moved the latter’s headquarters to Canada. This merger is noteworthy because it circumvented a provision in the American Jobs Creation Act of 2004 (AJCA), which was meant to discourage inversions. ACJA stipulated that the tax benefits of inversion would be denied if the original US shareholders owned 80% or more of the post-inversion company. This provision was avoided by bringing a foreign company on board, which brought the non-US ownership up to 20% or higher. Mergers did the trick and after an initial decline the number of inversions went up again (Neely and Sherrer 2017). In a Vox column written by two of us January 2015, we predicted a continuation of the arms race between the US Treasury and multinationals (Van ’t Riet and A Lejour 2015). Time after time, new legal obstacles that the Treasury put into place left the main rationale for inversions – enormous tax benefits – largely untouched. Although the Burger King relocation was not halted, new rules did stop the Pfizer-Allergan deal (US Pharma giant Pfizer had announced a $160 billion merger with Ireland-based Allergan, involving a move of its headquarters to Dublin).

New average dividend repatriation taxes will halt inversions

We demonstrate the underlying tax motives for inversion with dividend repatriation tax rates (Van ‘t Riet and Lejour 2017). For a set of 108 jurisdictions, including tax havens, we consider all pairwise combinations of host (source) and home (residence) countries and construct bilateral tax rates which are the double taxation on top of the corporate income tax of the host country. These double taxes are incurred upon repatriation of the dividends and typically consist of the non-resident withholding taxes levied by the host country. Next, the repatriation tax may include home country taxation of the foreign-source dividend income, depending on its double tax relief system. Usually, countries will have signed bilateral double tax treaties, reciprocally agreeing on reduced withholding tax rates. Given the bilateral rates, GDP-weighted average repatriation tax rates can be computed for inbound dividends on a country-by-country basis. Low average rates for inbound dividends make a country attractive for situating its multinational headquarters. For a number of selected countries, Table 1 presents tax parameters and the average dividend repatriation tax rates.

Table 1 Tax parameters and average repatriation tax rates (2013) for inbound dividends

The Netherlands heads the list with a low average rate of 3.4%. It applies exemption as double tax relief and has a large number of bilateral tax treaties (74) within the set of 108 countries with which it has negotiated reduced withholding tax rates. Several times, the Netherlands has been host to inversions; a recent example is the 2015 Mylan-Abott deal. Finland is second on the list, which may be surprising since it applies a credit system; however, dividend repatriation from treaty partners is exempt. The same holds for Canada. Ireland, ranked 11th on the list, does have a worldwide tax system, but in practice its low corporate income tax rate of 12.5% implies a territorial system because with taxes paid abroad, nothing will be payable in Ireland.

The tax benefits for US multinationals of relocating their headquarters are obvious when considering the US average repatriation tax rate of 16.7%. A move to Canada or a European country makes a difference, on average, of at least 10 percentage points of the tax on repatriated dividends. Under the Trump tax plan, the bilateral rates and the average repatriation tax rate for inbound dividends to the US become 6.6% instead of 16.7%. The substantial difference with the other OECD countries has vanished and inversions are no longer lucrative. We observe that the base narrowing and tax rate shift each would remove, or strongly reduce, the tax rationale for inversion. Burger King, Mylan, and other inverted US multinationals can return home!

Profit repatriation and treaty shopping: New opportunities for tax avoidance

Table 2 Tax reduction (gain) possible by treaty shopping on dividend repatriation to the US, number of countries

The tax rates presented above are averages for 107 countries. At the country level, however, the system shift and the tax rate cut offer new opportunities for tax avoidance. In the current system, repatriation taxes are paid on top of the corporate income tax in the foreign country. These are the dividend withholding tax paid on outgoing dividends in the foreign country and the tax in the US, subject to the tax credit. Upon introduction of the territorial system, the US tax will be eliminated. At that point, the incoming dividends from 29 countries will not be taxed at all, because these countries do not have a withholding tax on dividends repatriated to the US; the bilateral tax rate is zero. The other 78 countries do levy a tax on dividend repatriations to the US, but in most cases this tax can be reduced by redirecting the dividends through third countries, which have more generous tax treaties – a practice called treaty shopping. For dividends from 52 countries, the bilateral tax can even be lowered to 0%, which is not possible under the current system (see Table 2). Moreover, the average gain (tax reduction) possible via treaty shopping will also be higher. Thus, although the Trump tax plan will stop inversions and eliminate the lock-out problem, it may stimulate new tax avoidance in the form of treaty shopping.

*About the authors:
Sijbren Cnossen, Academic Partner, CPB Netherlands Bureau for Economic Policy Analysis

Arjan Lejour, CPB Netherlands bureau for Economic Policy Analysis and Tilburg University

Maarten van ’t Riet, Researcher, CPB

References:
Auerbach, A (2017), “Understanding the destination-based approach to business taxation”, VoxEU.org, 26 October.

Auerbach, A, M P Devereux, M Keen and J Vella (2017), “Destination-based cash flow taxation”, Oxford University Centre for Business Taxation, WP17/01.

Cnossen, S (2017), “Corporation taxes in the European Union: Slowly moving toward comprehensive business income taxation?”, International Tax and Public Finance, online 1 August.

Knowles, D (2015), “Donald Trump: Don’t blame Pfizer for Corporate Inversion Problem”, Bloomberg, 2 November.

Marples, D J and J G Gravelle (2017), “Corporate expatriation, inversions, and mergers: Tax issues”, Congressional Research Service Report.

Neely M C and L D Sherrer (2017), A look at corporate inversions, inside and out, Federal Reverse Bank of St. Louis.

US Treasury (1992), “Integration of the individual and corporate tax systems: Taxing business income once.”

US Treasury (2017), “Tax reform: Unified framework for fixing our broken tax code”, 27 September.

Van ’t Riet, M and A Lejour (2015), “Tax inversion remains (huge)”, VoxEU.org, 5 January.

Van ’t Riet, M and A Lejour (2017), “Optimal tax routing: Network analysis of FDI diversion”, CPB Discussion Paper 349.

Endnotes:

[1] https://abetterway.speaker.gov/_assets/pdf/ABetterWay-Tax-PolicyPaper.pdf

By Aline Robert

(EurActiv) — The Spanish government is challenging a decision by its main electricity provider to shut down two coal-fired power plants. An attitude that contravenes the Paris Agreement on climate change. EURACTIV France reports.

The Spanish government has engaged in a strange stand-off over Iberdrola’s plan to phase out coal, announced at climate talks in Bonn last week. The company’s CEO, Ignacio Sánchez Galán, pledged to close Iberdola’s coal power plants, including the two Spanish power stations, in Lada in Asturias and Velilla, in the autonomous community of Castilla y Leon.

The Spanish company’s plan is to become carbon neutral by 2050, with a 50% reduction of its emissions in 2030 compared to 2007, and investments of €85 billion in renewables in total.

However, rather than encourage the country’s biggest electricity provider, the energy ministry drafted a decree on the procedure of closure of energy facilities, which poses new and very restrictive conditions to close an electricity production site: a site cannot be closed if it is profitable, or if its closure is a threat to the security of supply, or if the prices of electricity may climb.

“There is still an incredible inertia on the subject of climate,” responded Teresa Ribera, director of the think tank of the Institute for Sustainable Development and International Relations.

Spain is a signatory, like the rest of the EU, of the Paris Agreement, which commits the EU to cutting 40% of its emissions by 2030 and, above all, to revising the ambition of each country to be able to limit the rise of the temperatures between 1.5° and 2°.

The European Commission, whose climate commissioner is Spanish, does not seem overly concerned about this situation. “The Commission is analysing the draft decree and will react in due course,” a spokesperson told EURACTIV.

Spain’s Energy Minister Álvaro Nadal fears that closing power plants will create power cuts. But the reasons seem more complex.

Asked by EURACTIV, Iberdrola said the pledge to ditch coal remains intact after a meeting with the country’s energy minister on Thursday (23 November).

According to the unions, 200 jobs would be destroyed, but Iberdrola ensured that the jobs lost would be fully offset by reclassifications. This makes the government’s reaction all the less understandable.

And the argument of the risk of power cuts is unconvincing; Spain is today in a situation of electrical overcapacity after high investments in renewables.

As the temperature continues to rise, one of COP23’s most notable initiatives has been that of the Coalition Alliance, proposed by the United Kingdom and Canada and joined by twenty other countries. But not by Spain.

The U.S. and Mexican bishops’ conferences have issued a joint statement saying NAFTA renegotiations must respect the poor, alleviate the need for migration, protect laborers and intellectual property rights, and care for creation, indigenous people, and small farmers.

The statement, issued Nov. 21, urged leaders to remember the “human and moral dimensions” of the 1994 North American Free Trade Agreement, which eliminated many tariffs on trade and investment among the US, Mexico, and Canada.

In July 2017, President Donald Trump initiated talks to renegotiate the agreement, criticizing the impact of the agreement on the American labor market. Talks stalled this week after five rounds, as the Mexican and Canadian government have shown little interest in proposals for revision suggested by the Trump administration.

The joint statement from U.S. and Mexican bishops called for measures beyond NAFTA to “prevent the deepening of inequality between families and regions.” The statement also called for negotiators to develop mechanisms respecting “participation rights” in the negotiation process, noting that “human dignity demands that people have a voice in decisions that touch their lives.”

“The Church believes that trade must, first of all, benefit people, in addition to markets and economies. It is crucial that these complex and multifaceted agreements arise from a sound legal and moral framework that protects the common good and the most vulnerable,” the statement said.

“If adequate compensatory economic, political, and social policies are not adopted that mitigate and counteract the previously mentioned adverse effects, as has been the case thus far,” the bishops warned, “inequalities between regions, sectors, and various groups will deepen, as well as forced displacement and disordered, involuntary and unsafe migration, as well as violence, will continue to predominate.”

As ratifying NAFTA was considered by Congress in 1993, the US bishops wrote a letter to the Senate expressly declining to take a position on the proposed agreement, “given the many specific prudential judgments required, the lack of a clearly compelling case for or against this particular agreement and the absence of strong consensus among the bishops here or in Mexico.”

The 1993 letter called for any international trade agreement to be attentive to the poor, laborers, migration, small farmers, and others, expressing concerns similar to those raised by the 2017 joint statement.

The Church of Sweden is encouraging its clergy to use the gender-neutral term “God” instead of referring to the deity as “he” or “the Lord”, The Telegraph reports.

The decision was made on Thursday, November 23, wrapping up an eight-day meeting of the church’s 251-member decision-making body. The decision will take effect on May 20 during Pentecost.

It is the latest move by the national Evangelical Lutheran church to modernise its 31-year-old handbook setting out how services should be conducted.

The decision to update the book of worship gives priests new options on how to refer to God during their services.

Priests can now open their services by referring to the traditional “Father, son and Holy Ghost” or the gender-neutral phrase “in the name of God and the Holy Trinity”. Other gender-neutral options are available for other parts of the Church of Sweden liturgy.

Beijing’s new global project Belt and Road Initiative (DRI) includes the Silk Road Economic Belt and the 21st Century Maritime Silk Road.

The Silk Road Economic Belt (SREB) is based on the different economic corridors. One among of these corridors – the Central Asia–West Asia Economic Corridor is very important for Caucasian Georgia, which is located on it.

Georgia, together with its neighbor and strategic ally, Azerbaijan, has been considered in the context of the historical Great Silk Road right from the beginning of the 1990s. The practical implications of this idea have been the TRACECA project initiated by the EU in 1993, the INOGATE project starting in 1996. In fact, practically all projects envisaged in terms of the Silk Road transport corridor are functioning successfully today.

The inclusion of Georgia (and Azerbaijan) in the SREB project is facilitated by the already implemented Silk Road Transport Corridor (SRTC) project.

If we compare the SRTC or TRACECA and the SREB’s Central Asia-West Asia Economic Corridor projects, the differences, on the other hand, lie in at least two things: first of all, the first project was initiated by the West (more specifically, the EU) while the second one originated in China and second of all the first project is clearly and primarily a transport project while the second one is much more complex as it is economic.

According to the assessments of most analysts, one of the main threats to the successful functioning of the BRI (more specifically, the Central Asia-West Asia Economic Corridor), crossing Georgia and Azerbaijan, is Russia. Moscow wants not only to retain but also expand its influence in the post-Soviet area. This is exactly why from the very beginning Moscow was not interested in the development of the SRTC crossing Azerbaijan and Georgia independently from Russia.

In order to balance the BRI initiative, Moscow put forward a Greater Eurasian Partnership (GEP) initiative which is a large-scale vision of the Russian-Kazakh initiative started in 2015, the Eurasian Economic Union (EAEU), and it aims at encompassing Russia, China, India, Iran, Turkey and other countries, confronting US hegemony and Atlanticism in general. At first glance, the GEP has formally similar scopes, objectives and priorities with the OBOR initiative; however, for the government of the Russian Federation, the GEP is not just a large-scale economic cooperation project but rather it has quite a large geopolitical significance as well.

It is also noteworthy that the leadership of Russia and China signed a joint statement about cooperation between the EAEU and the SREB in May 2015 while reaffirming their statement about a solid partnership and cooperation between the EAEU and the OBOR initiative in June 2016. Despite this, it has still not been possible to sign agreements on future trade and economic cooperation between China and the EAEU.

The main reason can be identified for this: the Russian model of economic modernization (which relies mostly on the principles of consumer economics) has turned out to be utterly useless as compared to the Chinese model (which is based upon the prioritization of innovation development) which is exactly why Russia significantly lags behind China in terms of economic and technological development, creating impediments for Moscow in establishing more-or-less equality-based economic relations with Beijing.

According to the views of some experts, China’s economic cooperation with the Central Asian countries and the membership of Kazakhstan and Kyrgyzstan in the Moscow-created EAEU as well as a clear geopolitical approximation between Russia and China in recent years (especially in the energy sector) creates the probability that the EAEU and the SREB could move to a potential cooperation.

For developing the importance of the BRI initiative in Beijing’s relations with Moscow, it could be instrumental for China to refuse implementing the paradigms of the predominant and confrontational alternative economic corridors. Instead of this, it would be more beneficial to move to the paradigm of the compatibility of economic corridors which would facilitate the harmonization of these corridors and their harmonic development. This is exactly why the GEC and BRI initiatives must be seen as complementary to one another.

Given the increased risks of terrorism and other industrial disasters in the contemporary world, it is important to have complementary transport and energy corridors which should ensure the maximum continuity of transport flows.

The fact that the institution of a free trade regime between China and the EU is under active discussion is very important for Georgia. In this regard, the SREB creates a new stage in the economic cooperation between China and the EU.

China and Georgia are members of the World Trade Organization. The fact that a free trade agreement has been signed between the two countries is very important in terms of the development of trade relations. Georgia also has the Deep and Comprehensive Free Trade Area (DCFTA) agreement with the EU as well as a free trade agreement with the European Free Trade Association (EFTA). Hence, the expansion of trade between the EU and China will enable Georgia to become a logistical hub, connecting China with Europe (for which the Baku-Tbilisi-Kars railway and the implementation of the Anaklia Black Sea Deep Water Port project will have vital importance).

Of further note is that due to the transportation of Caspian oil and gas to Turkey, Georgia already plays the role of an energy resources transportation hub.

For Georgia, the SREB project creates an opportunity to transform its role as an energy resources transportation hub to a regional economic hub in general. In this regard, it should be underlined that with the DCFTA agreement signed between the EU and Georgia, products exported from Georgia to the EU must be produced in Georgia. This, therefore, makes Georgia attractive to all countries without free trade agreements with the EU to invest in Georgia and export the production manufactured here to the EU market. This includes China as well which is already investing in Georgia.

Consequently, Georgia can actually become an economic hub in the region which would be in full accordance with the content of the Central Asia-West Asia Economic Corridor project crossing Georgia.

At the 19th Conference of Parties (COP 19) held in December 2013 in Warsaw, a mechanism called the Warsaw International Mechanism (WIM) on Loss and Damage was agreed upon. The Loss and Damage Mechanism was commenced to address the implementation of approaches which would tackle loss and damage associated with “the adverse effects of climate change”. Initiated under the United Nations Framework Convention on Climate Change (UNFCCC), the main functions of this mechanism are the following three (UNFCCC, 2017):

1. Enhancing knowledge and understanding of comprehensive risk management approaches to address loss and damage associated with the adverse effects of climate change.
2. Strengthening dialogue, coordination, coherence and synergies among relevant stakeholders.
3. Enhancing action and support, including finance, technology and capacity-building, to address loss and damage associated with the adverse effects of climate change.

Two years later on December 2015, we saw the formation of the Paris Agreement on COP 21. Article 8 of the Paris agreement focused on loss and damage. It again recognized the importance of averting, minimizing and addressing loss and damage associated with “the adverse effects of climate change” which included extreme weather events and slow onset events. It also expressed intention to promote the understanding, action and support among parties and emphasized on the role of sustainable development in reducing the risk of loss and damage (COP 21, 2015). But to be honest, these achievements have mostly become throwback meeting minutes for people in high tables. The real solutions still hasn’t come from these initiatives which was initially anticipated.

Neither the Paris Agreement nor the COP decisions had any specific direction regarding any financial support for loss and damage. It was merely suggested that the parties should increase support for loss and damage. In fact, paragraph 52 of the COP decision is similar to an “exclusion clause” which states that “provisions defined in article 8 of the agreement do not include or are a basis for liability or compensation.” (Künzel, Schäfer, Minninger, & Baldrich, 2017) This obviously didn’t get a warm welcome from the affected parties who expected more from the countries mainly responsible for rapid climate change.

The major instrument discussed by the WIM so far to address the issue of loss and damage is climate risk insurance. The idea is that it will serve as a facilitative mechanism for support against the loss of assets, livelihoods and lives caused by climate change. But as the global climate change-induced disasters are on the rise, how this instrument will sustain in the long run remains a topic of contention (Thomas et al., 2017).

In just July this year, unusual heavy floods have resulted in the death of more than 1,200 people and it affected the lives of 43 million people in Bangladesh, Nepal and India. Pakistan was also the victim of an ominous monsoon cyclone which killed 16 and affected millions. These extreme weather events in South Asia are predicted to rise as the global temperature continues to hike (GBSNP Varma, 2015). In fact, it has been projected that South Asia will be among the worst affected regions to be devastated by climate change (Eckstein, Künzel, & Schäfer, 2017). In a region where a quarter of the world’s population lives, how the insurance mechanism will work after a major climate-change induced disaster is not clear.

Following COP 19 and the Paris Agreement, this year’s COP (COP 23 in Bonn) was started with the hope of a more definite and practical addressing to “Loss and Damage”. Affected parties really wanted something meaningful to happen. But, ultimately, there were no real outcome on this at the end of the conference. Many climate vulnerable countries which includes island nations and developing countries, was hoping to get permanent and secure monetary support for their adaptation programs to mitigate the loss and damages, but the developed countries seemed to have found a way to not reach a consensus on this issue in COP 23 (Saiful Islam, 2017).

Instead, the latest conference in Bonn appeared to have gain an altogether different purpose than intended, which is the promotion of the concept of a clearing house. Clearing house for risk transfer is basically a repository of information on insurance and related subjects. Harjeet Singh, global lead on climate change for ActionAid International said a harsh truth about the Clearing house to an interview on the third pole. He commented, “All this fanfare about the clearinghouse is actually just about a matchmaking website that can help private companies meet more clients.” He also expressed concern about the efforts and money of developed countries in this cause, which, in his opinion are ultimately helping private companies make profit from selling insurance to the poor (The Third Pole, 2017).

This is indeed disappointing for the affected countries and regions like South Asia but they have to be determined and resilient as ever. It will be important to note that apart from the clearing houses, some of the best practices identified by the Executive Committee of the Warsaw International Mechanism on Loss and Damage (ExCom) include ideas like comprehensive risk management capacity with risk pooling and transfer, contingency finance, climate-themed bonds, catastrophe bonds and financing approaches to make development climate more resilient (Künzel et al., 2017).

Affected countries and regions have to think about other innovative means of addressing Loss and Damage. Several actors have indeed come up with some innovative financial means for addressing this pressing issue. Germanwatch compiled a list of innovative solutions suggested from around the world (Künzel et al., 2017), they are:

Financial Transaction Tax (FTT): This proposes a fee on transactions and trades such as bonds, stocks and currencies. Proponents say that it could generate a significant amount of money. But there remains some practical challenges when it comes to the implementation of this idea.

International Airline Passenger Levy (IAPAL): This proposes a fee on international airline tickets. It was first proposed to UNFCCC in 2008 and was renewed in 2016. It also suffers the same problem of implementation.

Solidarity Levy: A concept of levy determined individually by the countries and on various things. It focuses the collection of money for a common cause.

Bunker Fuels Levy: This is a highly potential area for development. It proposes Tax on emissions by cargo ships and airplanes. Although it hasn’t been implemented yet.
Fossil Fuels Major Carbon Levy: The concept of this is developed by the Climate Justice Programme (CJP). It proposes to levy tax targeting the 90 major fossil fuel extracting companies who are alone responsible for 63 % of greenhouse gas emissions (Climate Justice Programme, 2014).

Global Carbon Levy: It proposes a global carbon pricing system either by tax or a trading scheme. An additional advantage of this is it that could shift consumption away from fossil fuels. Although it hasn’t been implemented on the international level as yet.
We have to rethink and reevaluate the way we are handling the issue of climate change. Especially South Asia has to be more vocal & innovative in demanding its rights to compensation for loss and damages. Hopefully, Countries from this region will take COP 23 as a wake-up call and take a more organized approach in COP 24.

Bibliography:
Climate Justice Programme. (2014). Introducing… The Carbon Levy Project – Climate Justice Programme. Retrieved November 26, 2017, from http://climatejustice.org.au/issue/carbon-majors/
COP 21. (2015). The Paris outcome on loss and damage. Retrieved from https://unfccc.int/files/adaptation/groups_committees/loss_and_damage_executive_committee/application/pdf/ref_8_decision_xcp.21.pdf
Eckstein, D., Künzel, V., & Schäfer, L. (2017). GLOBAL CLIMATE RISK INDEX 2018: Who Suffers Most From Extreme Weather Events? Weather-related Loss Events in 2016 and 1997 to 2016. German Watch. Retrieved from https://germanwatch.org/en/download/20432.pdf
GBSNP Varma. (2015). Studies show increasing monsoon variability, intensity. Nature India. https://doi.org/10.1038/nindia.2015.88
Künzel, V., Schäfer, L., Minninger, S., & Baldrich, R. (2017). Loss and Damage at COP23: Looking at Small Island Developing States. Retrieved from https://germanwatch.org/en/download/20288.pdf
Saiful Islam, A. (2017). What COP23 achieved | Dhaka Tribune. Retrieved November 26, 2017, from http://www.dhakatribune.com/opinion/op-ed/2017/11/19/what-cop23-achieved/
The Third Pole. (2017). COP23: Climate insurance not enough for loss and damage | The Third Pole. Retrieved November 26, 2017, from https://www.thethirdpole.net/2017/11/16/climate-insurance-not-enough-for-loss-and-damage/
Thomas, A., Hare, B., Serdeczny, O., Zamarioli, L., Saeed, F., Ly, M., & Schleussner, C.-F. (2017). A year of climate extremes: a case for Loss & Damage at COP23. Retrieved from http://climateanalytics.org/blog/2017/a-year-of-climate-extremes-a-case-for-loss-und-damage-at-cop23.html
UNFCCC. (2017). Warsaw International Mechanism for Loss and Damage. Retrieved November 24, 2017, from http://unfccc.int/adaptation/workstreams/loss_and_damage/items/8134.php

*Md. Sajjad Azim, South Asian Fellow Climate Tracker

The governments of Bangladesh and Myanmar, the two comparatively economically and technologically less-developed Asian countries, have exhibited extraordinary qualities of wisdom and understanding to reach an accord for peaceful repatriation of Rohingya refugees, who are now in Bangladesh, to return to Myanmar.

When the so-called economically and technologically developed countries are engaged in bitter conflicts directly or indirectly in various parts of the world, these two Asian countries have shown to the world as to how civilized behavior between two countries is possible, however under developed they may be.

Apart from this fact, the Rohingya crisis once again has highlighted the ground reality that the United Nations Organization has virtually become a helpless agency that is not able to influence or implement any positive peace accord anywhere in the world. In the conflicts between different nations, the UN at best provides a forum for exchange of views and perhaps bitter remarks but could serve no other purpose.Bangladesh and Myanmar governments have virtually received no support from the UN in resolving the Rohingya crisis.

According to United Nations, more than 6,20,000 Rohingyas have fled to Bangladesh from Myanmar since August,2017. They now live in squalor in what is described as the world’s largest refugee camp.

While the UN, USA and several other countries condemned the Myanmar government for the lakhs of refugees fleeing to Bangladesh, terming it as constituting “ethical cleansing, it is remarkable that the government of Bangladesh, which is the one directly affected by the influx of refugees from Myanmar, reacted with caution and understanding and did not unduly criticize the Myanmar government. Despite of the extremely difficult conditions faced by Bangladesh as thousands of refugees walked in into its territory, still the Bangladesh government kept the communication channel open with Myanmar. Such healthy and civilized approach of the Bangladesh government have now made the accord with Myanmar to reach a repatriation agreement possible.

Showing high level of lack of understanding of the ground realities in Myanmar, the UN and several countries including USA accused Myanmar of launching military crackdown on Rohingyas. Several so called human rights activists even called for withdrawing the Nobel Peace Prize accorded to Aung San Suu Kyi, the State Counsellor of Myanmar, (a position akin to Prime Minister )

The fact is that the Rohingya issue have been haunting Myanmar for the last several decades and it is not a problem that has happened after Aung San Suu Kyi has taken over,.

This is a case of typical conflict of interests between Rohingya Muslims and Buddhists, with militant groups infiltrating into the Rohingya camp and waging violent conflict. It was a serious law and order scenario. Any government has to necessarily react with force when such conflicts between two sections of people happen, to restore peace and harmony. Every country in the world including Russia, China and United States have used such force to quell riots when violent clashes take place in the country. In the case of Myanmar, the military has to come down heavily ,since section of Rohingyas armed themselves, obviously with the support of militant and terrorist groups from elsewhere and indulged in arson and killings.

Rohingyas in Myanmar are people living in extreme poverty conditions, with little education. Most of the Rohingyas are not part of the militant group who indulged in violence and they had to face the brunt of the fight between the army and Rohingya militants and have to helplessly run to Bangladesh to save themselves.

After so many anxious days of Rohingya refugees running towards Bangladesh in big number, what need to be recognized is the fact that Myanmar government has not disowned the Rohingyas and is willing to take them back and do whatever it can to settle them in Myanmar. This attitude of Myanmar government effectively disproves the allegation of the UN and USA that Myanmar was indulging in ethnic cleansing.

What is particularly shocking is that the United Nations Refugee Agency has raised concern about the repatriation agreement instead of welcoming it. UN agency says that the conditions to enable refugees to safely return of Rakhine state in Myanmar are not there.

Instead of taking a proactive stance towards this healthy and progressive repatriation agreement between Myanmar and Bangladesh, the UN is taking a negative and counter productive stand ,which is not in tune with the objectives and cherished goals of the UN. Let the UN do whatever it can to facilitate implementation of the agreement in the best manner possible instead of behaving like an armchair critic.

The attitude and approach of Myanmar government towards the Rohingya refugees is in sharp contrast to the attitude and approach of Chinese government towards Tibetan refugees. Obviously, this highlights the fact that one need not expect that economically and militarily strong nation will always adopt civilized and compassionate approach towards its neighbors.

By Andrew Glencross*

(FPRI) — Herman Melville first understood that the essence of the modern world is confidence. Confidence permeates all corners of public life. Financial markets and global banking depend on it; central bankers and other policy wonks do their utmost apparently to maintain it; opinion writers agonize over the loss of trust in elected leaders and hazard guesses as to whether democratic institutions can withstand daily assaults from Donald Trump’s demotic twitter feed. In 1857, business and politics were already among the targets of Melville’s satire, The Confidence Man, which dissects the follies of those desperate to be believed alongside those determined to believe.

One character missing from Melville’s tale, though, is the Academic Confidence Man—multi-lingual, internationally networked, and an inveterate name-dropper. Someone like Dr. Joseph Mifsud, the Maltese academic now inextricably linked to the Mueller investigation into Russian involvement in the 2016 US presidential election. As soon as the indictment documents were unsealed, there was a flurry of media speculation over the identity of the mysterious London-based “Professor” in contact with Trump’s former foreign policy advisor, George Papadopolous. According to the latter’s testimony, the Professor “had told him about the Russians possessing ‘dirt’ on then-candidate Hillary Clinton”. In an interview to the Italian newspaper, La Repubblica, Mifsud acknowledged putting Papadopolous in touch with Russian contacts.

I met Mifsud on four occasions during my time working at the University of Stirling, which had a short-lived partnership with the London Academy of Diplomacy (LAD) he directed. Do not be surprised if you have never heard of it and do not expect to find much information about it: traces of its existence are quickly disappearing from the internet. The point was that it sounded credible at the time, and its flashy website reinforced this impression, as did its glossy brochures featuring what may or may not have been its students. In April 2015, I travelled to London to give a talk at LAD about David Cameron’s pledge to hold a referendum on EU membership if he won the upcoming election; the event was part of a bi-monthly Diplomatic Forum to which academics, ambassadors, and other interesting speakers contributed. LAD occupied a nice modern building close to Liverpool Street station, there was an intelligent crowd numbering around 30, and I got treated to a three-course meal in a swanky restaurant nearby. So far, so normal.

Dinner conversation was dominated by The Professor, with his never-ending flow of anecdotes involving international leaders and events where he had had the privilege to brief them or pick up snippets of how they approached global problems. There’s nothing unusual about academics puffing themselves up by regaling an audience with stories about who they know: it’s a standard part of the job that reflects the power dynamics between senior and junior professionals and the associated self-importance of rank. What was striking in this case was the complete absence of an academic hinterland of research and publications to justify access to the upper echelons of power.

When I was told in 2014 that my university would be collaborating with Mifsud’s diplomacy outfit, my first reaction was to go online for some information because I had no idea with whom we were dealing. Apparently, he held multiple honorary positions bestowed by international institutions of standing and travelled the world speaking at events. That kind of resume is not a red flag in of itself. One of the perks of (and possible motivation for) forging an academic career is precisely to be in such demand as an authority or policy advisor on various subjects. But Mifsud’s PhD was in Education, obtained at Queen’s University Belfast, not an obvious stepping stone to the world of diplomatic intrigue.

So, what lies behind his mysterious ascent to the rank of professor with a myriad of ties to the international set? In fact, it is all quite banal – although perhaps counter-intuitive – and relatively simple to explain. He is a networker who understands that connections beget connections. There is an academic article from 2002 referencing one of his early roles as a Maltese education official in charge of projects financed by the European Union. It describes him as “a powerful actor whose knowledge of EU procedures, systems and networks has thrust him into a supranational epistemic community as one of Malta’s main representatives in the EU.” That quote says it all; Mifsud grasped that by helping to develop projects of international collaboration and by becoming a conduit of information for different stakeholders, he could increase his own importance. That does not mean his trajectory must have been easy or that anyone could accomplish such a feat. Far from it, because doing all that takes dedication, a gift for languages, and a genuinely warm personality allied with an unerring focus on self-promotion.

The mystery of Mifsud’s success cannot be elucidated by asking how it was possible for someone without a record of published work in international affairs to jet around the world lecturing on diplomacy. The only way to generate interesting answers about this whole affair is to question whether those associated with him – and I include myself here – either didn’t want to know about his lack of credentials or perhaps just didn’t care that he was an empty shell. What mattered to individuals such as Papadopolous, or institutions such as the University of Stirling, was that Mifsud could potentially be useful. If anything, they are probably more suspicious of what Melville called “the destroyers of confidence and gloomy philosophers” who contradict the brilliant visions of confidence men.

I certainly cannot pretend that I was duped. It was clear when I first encountered the big delegation from LAD who visited my campus that there was a complete mismatch between words and deeds. How could he be a professor (and of what?) if the institution for which he worked could not award degrees? Mifsud and his cronies excelled in offering glimpses of what could be achieved by partnering with them—recruiting international students bringing high tuition fees, lucrative contracts to train foreign diplomats, or providing advice to policy makers. But there was never a realistic plan to meet such objectives. I kept asking myself why none had been realized under LAD’s previous arrangement with another British university? The bonanza obviously never materialized, and the fact that within fourteen months the plug was pulled on this link-up tells its own story.

Looking back, it could seem that the people and institutions in Mifsud’s orbit did not want to enquire too much into the specifics, preferring to live in the moment of wonderful promises facilitated by some lavish hospitality and intriguing conversation. That’s part and parcel of networking, academic or otherwise: sometimes it pays off, sometimes it doesn’t. Yet there’s more to this story than just a gamble that did not pay off (for Papadopolous and his erstwhile boss Paul Manafort, the cost could include the loss of liberty). If Mifsud could be useful to certain people, then it stands to reason that they in turn could serve his own agenda, which patently had nothing to do with traditional academic research and dissemination.

The tentacular reach of Mifsud across universities and international organizations thus points to a more fundamental problem of accountability among those responsible for maintaining institutional respectability. Due diligence does not appear to have been the order of the day. He was hired in a personal capacity by my old university after the LAD relationship ended in failure. I cannot have been the only one to have my doubts, but still this academic with the flimsiest of credentials only stopped riding the crest of his wave of networking when the FBI got involved in a drama with an ever-expanding cast of characters, including a Russian associate of Mifsud who Papadopolous mistook for Vladimir Putin’s niece.

Ultimately, the whole episode requires deep reflection on the institutions connected to Mifsud and their management practices as much as on the man himself. The quack herb-doctor in Melville’s story insists that the sick man “must have confidence, unquestioning confidence” in the medicine he proffers. Yet in the case of the affable Maltese academic I barely knew, he was not really the one asking for confidence. It was the university top brass and their equivalents elsewhere who expected unquestioning confidence in their own decision to work with him. That was his confidence trick: he could rely on making connections with important people uninterested in asking too many questions because – short of law enforcement getting involved – there was little way their judgment could be scrutinized. There is probably more to come from the FBI in this sorry saga about shadowy Russian interests and their intermediaries. What is already clear, though, is that for the public to have trust in academia, just as in politics or business, there needs to be more accountability, which starts by recognizing that confidence is something earned and, as Melville demonstrated, always open to question.

About the author:
*FPRI Senior Fellow Andrew Glencross is Senior Lecturer in the Department of Politics and International Relations at Aston University. His most recent book is Why the UK Voted for Brexit: David Cameron’s Great Miscalculation (Palgrave, 2016)

Source:
This article was published by FPRI.

By Chris Calton*

In the first episode of the new season of Historical Controversies, which will focus on the sectional crises that led to the Civil War, I gave a brief explanation of my problem with the “Tariff Thesis” for the cause of southern secession. My arguments on the subject were the primary subject of criticism for the episode, and I feel it may be worth offering a more detailed explanation as to why I reject this popular interpretation for the cause of secession.

It is worth mentioning that although this article is only intended to address the tariff thesis for southern secession, there is also a separate tariff thesis — the “Tariff War Thesis” — which states that tariff revenues were the reason for Lincoln’s desire to wage the war.

Although I reject both tariff theses, Tariff War Thesis is, at least, more plausible. Although many people combine both tariff theses into a single interpretation of secession and the war, some historians only maintain one while rejecting the other.

The Tariff and Southern Secession

The expositors of the tariff thesis for southern secession point to the nullification crisis that grew out of a protective tariff of 1828, known by the South as the “Tariff of Abominations.”

As I discussed in the podcast, John C. Calhoun secretly wrote the South Carolina Exposition and Protest, which argued that individual states have the right to nullify federal laws that they deemed unconstitutional. In 1832, after a new tariff bill was passed (which actually lowered duties, but was still criticized for being protectionist), South Carolina passed a nullification act and started mobilizing troops to defend against the threatened aggression by the Andrew Jackson administration, which came in the form of a “Force Bill” passed by Congress to empower the president to use the military against the nullifying state.

The crisis was averted after Henry Clay stepped up with a compromise tariff that offered to lower duties gradually over a period of years (the new bill, interestingly, never addressed the conflict between a “protectionist” and a “revenue” tariff, the latter of which was considered to be constitutional by southerners).

In the early 1830s, it is fair to say that tariffs were a legitimate cause of controversy between the North and the South (or, at least, South Carolina, which was the only state that took real action in response to the tariff). But even in these years, there is reason to question whether tariffs were the sole reason for the dispute. John Calhoun himself, as revealed in a private letter to Virgil Maxy written in 1830, said:

I consider the Tariff, but as the occasion, rather than the real cause of the present unhappy state of things. The truth can no longer be disguised, that the peculiar domestick institutions of the Southern States, and the consequent direction which that and her soil and climate have given to her industry, has placed them in regard to taxation and appropriation in opposite relation to the majority of the Union; against the danger of which, if there be no protective power in the reserved rights of the states, they must in the end be forced to rebel or submit to have . . . their domestick institutions exhausted by Colonization and other schemes, and themselves & children reduced to wretchedness. Thus situatied [sic], the denial of the right of the state to interfere constitutionally in the last resort, more alarms the thinking than all other causes.

At least in Calhoun’s view, it is clear that the institution of slavery — often referred to euphemistically as the “peculiar institution” — was threatened by northern anti-slavery schemes such as “Colonization.” Calhoun reveals quite clearly that even during the tariff dispute, the fear of administrative usurpations of the constitution would threaten the survival of slavery.

In fact, some of the arguments in favor of the tariff thesis for secession have pointed out that slavery was dying out, so it is unlikely that this would have motivated southern action. One article on the subject says, “Slavery was actually on the wane … [but] the issue of slavery provided sentimental leverage [to rally public opinion for the Union war effort], whereas oppressing the South with hurtful tariffs did not.”

The first problem with this argument is that the North never made slavery the issue upon which to rally public opinion in support of the war. Quite the opposite was true, as Lincoln made clear himself that the goal was to maintain the union, and that he had no desire to end the institution of slavery. In fact, even though anti-slavery sentiments had become more common among northerners, such views were still held by a small enough percentage of the population that appeals against slavery would never have been successful in gaining support for the war effort. This is an argument that is designed to appeal to modern sentiments (and ignorance), but depends on the complete denial of historic fact.

The second problem with this argument is that the dying out of slavery was explicitly a motivation for southern action to protect the waning institution. Leading up to the Civil War, southern “filibusters” were trying to re-establish slavery in areas of the world in which it had already died, such as Nicaragua, where southern slaveholders attempted to set up a new government in which slavery was re-legalized. Southerners also advocated the annexation of Cuba in order to add a new slave state to the union.

Most significant was the small-scale war that took place in Kansas during the 1850s, known as “Bleeding Kansas,” in which pro-slavery “Border Ruffians” from Missouri agitated for slavery through violence, which drove many anti-slavery activists like John Brown to respond in kind, and voter fraud to establish a pro-slavery government. The pro-slavery government of Kansas even instituted a slave code that made it a criminal offense to speak out against the institution of slavery.

Kansas was the stage for this controversy because it shared a border with Missouri, and slave owners were afraid that a free Kansas would provide a new haven for their fugitive slaves (which ultimately was the case, as anti-slavery guerillas like John Brown and James Montgomery engaged in raids to help free Missouri slaves).

So it might be correct to say that slavery was on its way out, but the dying institution was one of the reasons the South wanted to secede; southerners were trying to hold on to their peculiar institution.

But most importantly, when trying to argue that the southern secession was motivated by tariffs is the complete lack of evidence on the matter, and the volumes of evidence to support the slavery thesis. The secession documents themselves provide the most straightforward evidence. Although the second wave of secession was motivated largely by Lincoln’s mobilization of troops to wage war on the South, as I mentioned in the episode, the first wave of secession was quite clearly motivated by slavery.

The secession documents themselves don’t really mention tariffs. Some people have argued that the South couldn’t openly admit that tariffs were the real issue because they needed to impose tariffs to fund the Confederate government. In addition to the fact that this argument essentially boils down to arguing that “the absence of evidence is the evidence,” the actual context of the events refutes this logic.

South Carolina was the first southern state to officially secede. At the time of secession, South Carolina was hoping other states would join them, but there was certainly no guarantee of it. A “Confederate government” was an idea, but not a ratified reality. Furthermore, South Carolina was the primary agitator against tariffs in the 1830s, so the idea that they were afraid to use tariffs as the explicit reason for their secession is countered by the very episode promoters of the tariff thesis point to: the nullification crisis.

But South Carolina, along with the rest of the states in the initial wave of secession, had no worries about confessing the role of slavery in their decision. With zero mention of the tariff in its secession document, South Carolina made slavery the primary subject of their pronouncement. The most telling paragraph, in fact, is the one in which South Carolina justifies secession because of “an increasing hostility on the part of the non-slaveholding States to the institution of slavery, [which] has led to a disregard of their obligations [to enforce the Fugitive Slave Act of 1850].” The document then lists a number of northern states who “have enacted laws which either nullify the Acts of Congress or render useless any attempt to execute them” (emphasis added). Not only was South Carolina objecting to northern opposition to the Fugitive Slave Act, but it was hypocritically hostile to the use of nullification – a doctrine proposed by Calhoun himself for South Carolina to use against the tariffs of 1828 and 1832 – in opposition to the Fugitive Slave Act of 1850.

Additionally, at the secession convention, South Carolina fire-eater Laurence Keitt explicitly addressed the tariff question to the members of the assembly:

But the Tariff is not the question which brought the people up to their present attitude. We are to give a summary of our causes to the world, but mainly to the other Southern States, whose co-action we wish, and we must not make a fight on the Tariff question. …

African slavery is the corner-stone of the industrial, social, and political fabric of the South; and whatever wars against it, wars against her very existence. Strike down the institution of African slavery and you reduce the South to depopulation and barbarism. . . . The anti-slavery party contend that slavery is wrong in itself, and the Government is a consolidated national democracy. We of the South contend that slavery is right, and that this is a confederate Republic of sovereign States.

Keitt was appealing to a group of men of whom, roughly ninety percent owned slaves.

Other secession documents are equally clear about southern motivation to secede. In the opening of the Mississippi secession document, the legislature declares that “Our position is thoroughly identified with the institution of slavery.” The document then goes on to enumerate all the attacks on slavery that the South had suffered since “before the adoption of the Constitution” itself.

None of the secession documents mention tariffs. In the first wave of secession, slavery was the primary theme, and states’ rights were a secondary (and contradictory, considering the states who listed nullification of the Fugitive Slave Act among the northern offenses) justification.

It is important to stress, of course, that the Union apologists who argue that the Civil War was waged over slavery are distorting the history as well. Secession was one thing, and the war to end it was another, as Ryan McMaken succinctly reminded us in a recent article. The fallacy that the war was fought over slavery is based on the inappropriate application of algebraic logic to historical analysis: according to the transitive property of algebra, if secession was driven by slavery and the war was driven by secession, then the war must have been driven by slavery.

But this kind of mathematical logic cannot logically apply to history, which as Mises reminds us in The Ultimate Foundations of Economic Science, is one of the two sciences of human action (page 41). Human action is driven by ideas. Action is purposeful. Action employs means to obtain desired ends. The study of history attempts to establish what these ends were during different historic episodes, and what means humans employed historically to achieve these ends. To determine this, Mises explains, historians must look at the historical evidence (unlike the other science of human action, praxeology, which is an a priori deductive science).

The evidence is clear. For the South, the ends aimed at was the preservation of slavery, and the means they employed to realize these ends was secession. The historical evidence makes this interpretation entirely evident. For the North, the ends aimed at was the preservation of the Union, and the means they resorted to in order to achieve this end was war.

About the author:
*Chris Calton is a Mises University alumnus and an economic historian. He is writer and host of the Historical Controversies podcast. See also his YouTube channel here.

Source:
This article was published by the MISES Institute

By Ángel Manuel García Carmona*

During his two-day official visit to Tunisia in late October, the president of European Parliament Antonio Tajani proposed the establishment of a “Marshall Plan” for Africa. Evoking the plan of subsidies the U.S. transferred to Western Europe following World War II, Tajani estimated the cost of a plan for Africa at €40 billion (or roughly $47 billion U.S.).

The objective of these investments will be the building of new infrastructure, support for small and medium enterprises (SMEs), and boosting youth entrepreneurship and employment in Africa. Besides, Tajani stressed that, without tackling these issues, “there are thousands, and in the future millions, of people who could leave their country.”

Nevertheless, the free-market end does not justify the government-transfer means. My native Spain, which has the second-highest unemployment rate in the EU-28, proves this. Among EU-28 regions with the most unemployment and lowest GDP, there are two Spanish regions: Extremadura and Andalusia. Despite national and regional government subsidies to “promote the creation of new businesses,” Spain has the most obstacles to businesses growth and entrepreneurship of all OECD countries, according to the IMF.

Africa remains the poorest continent in the world. Its GDP per capita is almost $8,500 (U.S.) below the world average. But there are signs of hope. Famines have largely disappeared outside of war zones. Average life expectancy has risen from 50.3 years in 2000 to 59.9 in 2015. All of this progress has taken place because of free-market economic reforms.

According to the Heritage Foundation, sub-Saharan Africa’s overall score on economic freedom is 55 percent, almost three percent higher than at the beginning of the century. Trade freedom has risen 18 points. The tax burden seems to be diminishing. However, not one African country ranks among the 20 freest economies of the globe. The rule of law falters and repression too often prevails.

Deeper, laissez-faire economic reforms are the only road to prosperity. At the same time, corruption must be fought efficiently. Botswana is a model, as one of the richest countries in Africa, the least corrupt African nation, and one of the 34 freest economies on the globe (Africa’s second freest).

There is no country where development aid and cooperation agencies have successfully lifted a nation out of poverty. These funds are merely transfers from one state’s governmental apparatus to other. Post-colonial Singapore, which was far from being a rich country a few decades ago, is a case study for supporters of open economies. Policies oriented toward free markets and attracting foreign investment help it grow and prosper.

The European Parliament has no competence, nor responsibility, outside its own jurisdiction. But that does not mean it can do nothing to improve Africa’s economic condition. More exactly, some European policies are putting obstacles in the way of Third World merchants. The infamous Common Agricultural Policy makes it more difficult for underdeveloped nations to export their products to the EU. CAP exerts a particularly high economic prejudice against non-European farmers. These protectionist policies haven’t caused farming to become an economic powerhouse for the EU-28. Despite its annual budget of €59 billion (which finances income support for farmers and rural development programs, which less developed countries cannot afford), agriculture made up less than two percent of the EU’s GDP.

There is a model for the kind of transition the EU would need to implement if Africa is to have freer access to European markets. New Zealand, whose rural sector was similar to that of Europe three decades ago, endured a process of economic liberalization. There were widespread worries about failing farms, but in the end only about 800 farms were forcibly sold. Farmers who hoped to compete began to operate in a more efficient and innovative way based on market conditions. Today, agriculture still makes up seven-to-10 percent of New Zealand’s GDP.

Undoubtedly, a true a suppression of protectionist agrarian measures would lead to fierce protests in Brussels and other national capitals. Europeans are used to interventionism. Even Eurosceptics would show their indignation. Notwithstanding that risk, politicians should try to explain the policy changes in a more popular way – and a more effective, morally appealing way.

In a hypothetical campaign for agrarian market liberalization, politicians and supporters of liberty must not focus only on GDP statistics and other macroeconomic data. They must reinforce that Europeans would be able to buy cheaper products, since they are currently charged for costly regulations and subsidies, and they can exchange with a wider variety of non-European countries.

Most importantly, from a moral standpoint, as in real life, it’s easy to understand trade is a way to benefit oneself and one’s neighbor. Lower prices free up more capital for other family priorities. At the same time, Africans can begin to expand their export market and purchase more of the necessities of life. Everyone benefits. Trade is a way of giving life to others. On the other hand, commercial boycotts are a way to protest views that we wish to stamp out.

My fellow Europeans must come to see trade liberalization as a way to express solidarity with Third World farmers, to lift African people out of property, and to benefit their own families through lower prices. They must see it is a good and moral choice. When morality is engaged, human flourishing will follow.

About the author:
*Ángel Manuel García Carmona is a student of computer engineering in Spain. You may follow him on Twitter at @GarciaCarmonaAM.

Source:
This article was published by the Acton Institute

Sen. Al Franken broke his silence and did a media tour explaining away his sexual offenses. “I’m looking forward to getting back to work tomorrow,” he said. He should instead take some of his own medicine and resign.

Five years ago, Franken co-sponsored a bill, the End Trafficking in Government Contracting Act, to strengthen federal legislation on human trafficking, which includes sexual exploitation. The bill, which was approved by the Senate in December 2012, was necessitated because of the failure of the existing “zero tolerance” policy.

In July 2013, Franken co-sponsored another bill, the Military Justice Improvement Act, to deal with the “epidemic of sexual assault in the military.” It was necessitated because of the failure of the existing “zero tolerance” policy.

It was noble of Franken to support going beyond “zero tolerance” to combat sexual abuse by government contractors and subcontractors who operate overseas. Similarly, it was noble of him to support going beyond “zero tolerance” to combat sexual molestation in the armed forces.

It was ignoble of him to go back to work today. Does he think that his support for legislation combating sexual abuse should not extend to him? He has admitted to one act of sexual abuse, and is accused by three other women of violating them.

Ironically, it was the Catholic Church that first instituted a “zero tolerance” policy for abusers. And what did Franken do? He mocked it.

Now that Franken has proven that he has no integrity left, it is up to the Senate to show him the door. He is utterly shameless.

President Trump announced last week that he was returning North Korea to the US list of “state sponsors of terrorism” after having been off the list for the past nine years. Americans may wonder what dramatic event led the US president to re-designate North Korea as a terrorism-sponsoring nation. Has Pyongyang been found guilty of some spectacular terrorist attack overseas or perhaps of plotting to overthrow another country by force? No, that is not the case. North Korea is back on the US list of state sponsors of terrorism because President Trump thinks the move will convince the government to give up its nuclear weapons and ballistic missile program. He believes that continuing down the path toward confrontation with North Korea will lead the country to capitulate to Washington’s demands. That will not happen.

President Trump and Secretary of State Rex Tillerson argued that North Korea deserved to be back on the list because the North Korean government is reported to have assassinated a North Korean citizen – Kim Jong-Un’s own half-brother — in February at the Kuala Lumpur International Airport. But what does that say about Washington’s own program to assassinate US citizens like Anwar al-Awlaki and his 16 year old son under Obama, and later Awlaki’s six year old daughter under Trump? Like Kim’s half brother, Awlaki and his two children were never tried or convicted of a crime before being killed by their own government.

The neocons, who are pushing for a war with North Korea, are extremely pleased by Trump’s move. John Bolton called it “exactly the right thing to do.”

Designating North Korea as a state sponsor of terrorism will allow President Trump to impose the “highest level of sanctions” on North Korea. Does anyone believe more sanctions – which hurt the suffering citizens of North Korea the most – will actually lead North Korea’s leadership to surrender to Washington’s demands? Sanctions never work. They hurt the weakest and most vulnerable members of society the hardest and affect the elites the least.

So North Korea is officially a terrorism-sponsoring nation according to the Trump Administration because Kim Jong-Un killed a family member. Meanwhile, Saudi Arabia is in the process of killing the entire country of Yemen and no one says a word. In fact, the US government has just announced it will sell Saudi Arabia $7 billion more weapons to help it finish the job.

Also, is it not “state-sponsorship” of terrorism to back al-Qaeda and ISIS, as Saudi Arabia has done in Syria?

The truth is a “state sponsor of terrorism” designation has little to do with actual support for global terrorism. As bad as the North Korean government is, it is does not go abroad looking for countries to invade. The designation is a political one, allowing Washington to ramp up more aggression against North Korea.

Next month the US and South Korean militaries will conduct a massive military exercise practicing an attack on North Korea. American and South Korean air force fighters and bombers will practice “enemy infiltration” and “precision strike drills.” Are these not also to be seen as threatening?

What is terrorism? Maybe we should ask a Yemeni child constantly wondering when the next Saudi bomb overhead might kill his family. Or perhaps we might even ask a Pakistani, Somali, Iraqi, Syrian, or other child who is terrified that the next US bomb will do the same to his family. Perhaps we need to look at whether US foreign policy actually reflects the American values we claim to be exporting before we point out the flaws in others.

This article was published by RonPaul Institute.

Too little rain, or too much, is often a driver of poverty and hunger, leading to poor nutrition and food insecurity among vulnerable populations. According to a new study, rainfall patterns also provide clues on how to most effectively alleviate food insecurity.

The study, to be published November 24 in Scientific Reports, is the first to analyze on a large scale the relationship between food insecurity among smallholder farms in Africa and Asia, rainfall patterns and a range of interventions – from agricultural inputs to agricultural practices to financial supports – designed address the issue.

Smallholder farms are small farms with limited resources that depend on the family for labor and on the operation’s crops for food or income. There are an estimated 460 to 500 million smallholder farms in the world, who grow 80 percent of the food consumed in low income countries.

The study examined the experiences of nearly 2,000 smallholder farms in 12 countries in West Africa, East Africa and Asia.

“The big picture is that one strategy is unlikely to work everywhere,” said Meredith Niles, a faculty member in the University of Vermont’s Department of Nutrition and Food Science and lead author of the study. “Understanding the climate context is important in determining what interventions may be most effective,” she said.

Farms in the study were grouped into three categories: those that received less than average rainfall in a given year compared to the past, those that received average rainfall and those that received more than average.

The drier farms experienced more food insecurity, an average of 3.81 months in the study year; the average farms less, 3.67 months, and the wetter farms still less, 2.86 months – as would be expected. But all experienced significant food insecurity. “The study reaffirms what we know: that food insecurity is a widespread problem in these areas,” Niles said.

Cash or pesticides? It depends.

Whether various interventions were correlated with better food security was statistically linked with the amount of rain the farms had received in the previous year, the study found.

For farms with drier than average conditions, financial supports – cash from other businesses, loans or cash gifts – were more frequently correlated with improved food security.

For wetter farms, agricultural inputs and practices – including the use of pesticides, fertilizer, veterinary medicines, and livestock – were most correlated with an increase in food security.

For farms with average rainfall, both strategies appeared to be effective.

“Water is a fundamentally limiting factor,” Niles said. “If you don’t have it, then agricultural inputs likely don’t matter. What you need, at least in the short term, is cash.”

The availability of fertilizer was the one constant that helped farms reduce food insecurity, regardless of the amount of rain they received, according to the study.

Micro-financing: a cautionary tale

The study is both an endorsement of the micro-financing strategies that have been put in place to help farms in Africa and Asia and a cautionary tale that they might not universally be critical for smallholder farms experiencing food insecurity.

“We don’t see an effect that financial strategies in wetter than average households make a difference in the short-term,” Niles said. “But these financial strategies seem to be especially important when drought or reduced rainfall impacts crop production and income sources.”

Climate change increases importance of strategic intervention

The issue of what works and what doesn’t is particularly significant because of climate change, said Niles. “The majority of smallholder farms rely on rain-fed agriculture, so they are vulnerable to climate change, which is slated to likely increase rainfall variability. Our work suggests that absent appropriate interventions, these future conditions may worsen food insecurity.”

To reach its conclusions, the study cross analyzed two data sets. A smallholder farmer survey by the Climate Change, Agriculture, and Food Security (CCAFS) Program was coupled with 30 years of rainfall data for each household location in the survey using GPS coordinates.

According to the Food and Agriculture Organization of the United Nations, food security exists when all people, at all times, have physical, social and economic access to sufficient, safe and nutritious food which meets their dietary needs and food preferences for an active and healthy life.

White male gun owners who have lost, or fear losing, their economic footing tend to feel morally and emotionally attached to their guns, according to a Baylor University study.

This segment of the population also is most likely to say that violence against the United States government is sometimes justified, reported researchers F. Carson Mencken, Ph.D., and Paul Froese, Ph.D., professors of sociology in Baylor’s College of Arts & Sciences.

“This speaks to the belief in some ‘dark state’ within the government which needs fighting,” Froese said.

“What’s paradoxical is that white male gun owners in the U.S. see themselves as hyper-patriotic, but they are the first to say, ‘If the government impedes me, I have the moral and almost patriotic right to fight back.'”

In contrast, nonwhite gun owners who have faced or may be coping with financially difficult times do not place as much importance on the gun, researchers found. They also are much less likely to approve of violence against the federal government even if they feel high levels of economic stress.

“Perhaps it is because they’ve have always had economic anxiety but have developed different coping mechanisms,” Froese said.

The study, “Gun Culture in Action,” is published in the journal Social Problems. It analyzes differences in how American gun owners understand the meaning of gun ownership.

“Simply owning a gun does not predict an individual will express anti-gun control opinions, but rather whether the person feels empowered by the gun,” Froese said. “The emotional and moral connection explains variation within the population of gun owners.”

Co-authors Mencken and Froese analyzed data from the 2014 Baylor Religion Survey to develop a “gun empowerment” scale, discovering that white males under economic stress find guns morally and emotionally restorative, triggering an attraction to the “frontier gun” symbolism of freedom, heroism, power and making communities safer.

“Gun control for these owners has come to represent an attack on their masculinity, independence and moral identity,” Froese said.

But white male gun owners who are highly religious in terms of church attendance and religious belief are less likely to find guns emotionally empowering, researchers said. They suggest that strong religious ties do not enhance an owner’s attachment to guns but instead counterbalance it. White men with nominal connections to religious communities are most connected to their guns, researchers say.

“The gun becomes their central sacred object,” Froese said.

Mencken said that “guns and their inherent power restore in some people a sense of control stripped away by the economic consequences of globalism. The ability to protect their property, families and communities is restorative.”

The research data came from a survey of 1,572 respondents in the 48 contiguous states, conducted in January 2014 by the Gallup Organization.

Questions measuring gun empowerment were asked only of gun owners, a total of 577 of the respondents. They were asked what types of guns they owned; reasons for ownership (protection, recreation, as collector’s items); their attitudes on gun policies, such as bans, arming teachers and violence against the government; and the sources of violence, ranging from God’s absence in public schools to media violence to insufficient mental health screening and background checks.

The study also explored differences between those who own guns and those who do not, finding that:

• Gun owners, on average, are more likely to be white, male, married, older and rural, also reporting significantly higher incomes and statistically insignificant differences in education.
• Gun owners are politically more conservative and report being more alienated from society.
• Gun owners generally attend church more often and report greater levels of religiosity, although those who find empowerment in the symbol of the gun are low on religious participation, such as worship attendance.
• Gun owners are not statistically more likely to report that they or a loved one had been threatened by a gun
• Gun owners report similar levels of overall happiness.

In general, gun owners and non-gun owners report the same levels of a precarious economic existence — one lacking in predictability, job security, material or psychological welfare, researchers said.

But there are significant differences among gun owners when it comes to gun empowerment.

“Americans’ attachment to guns is not explained by religious or political cultures,” Froese said. “While church attendance and political conservativism predict gun empowerment, the effects of religiosity can offset the need for meaning and identity through gun ownership. And the significance of political identity is too broad.

“It’s not just money from gun manufacturers shaping gun legislation,” Froese said. “It is the cultural solidarity and commitment of a sub-group of Americans who root their identity, morality and patriotism in gun ownership. This is gun culture in action.”

By Jim Garamone

The Nov. 24 attack on an Egyptian mosque in northern Sinai that killed at least 305 men, women and children is an example of why the United States must remain involved in the Middle East, Pentagon spokesman Army Col. Rob Manning said Monday.

The United States must help partner nations build their own defense and police capacity to “ensure [the Islamic State of Iraq and Syria], al-Qaida and like-minded groups cannot plan and carry out attacks,” he said.

Manning gave an overview of the area during his weekly press gaggle with Pentagon reporters. He said there are roughly 500 U.S. forces in Syria and around 5,000 in Iraq. Defense Department officials are working on providing a better run-down of U.S. forces in the countries as security considerations permit, the colonel said.

Iraqi forces are working to improve security in areas they have retaken from ISIS control, Manning said. This includes going into areas to clear them of improvised explosive devices, clearing out weapons caches, disarm booby traps and rooting out ISIS hold-outs.

“In Syria, in the last 24 hours, the [Syrian Democratic Forces] has reinforced positions near the Iraq-Syria border, repelling an ISIS reconnaissance element,” he said.

Coalition forces aided the SDF as it advanced along the southern bank of the Euphrates River. “Also coalition forces provided counter-IED training to Raqqa internal security force soldiers,” he said. The coalition also passed over communications gear to Raqqa force personnel.

Over the weekend, President Donald J. Trump spoke with Turkish President Recep Tayyip Erdogan and discussed the U.S. supply of arms to the SDF. Turkish leaders are worried that arms supplied to the Kurdish portion of the SDF could end up in the hands of the [Kurdistan Workers’ Party] — a designated Foreign Terrorist Organization.

“Consistent with that policy, we’re reviewing pending adjustments to the military support provided to our Kurdish partners [in the SDF], in as much as the military requirements of our defeat-ISIS and stabilization efforts will allow us to prevent ISIS from returning,” Manning said. “We remain very clear in that we are going to continue to target ISIS and remain committed to protecting our NATO ally Turkey.”

Weapons provided to the SDF are limited and mission specific, the colonel said.

In their latest report a team of academics, clinicians and charity representatives, called MBRRACE-UK, has looked at the quality of care for stillbirths and neonatal deaths of babies born at term who were alive at the onset of labor, singletons (sole births) and who were not affected by a major congenital anomaly.

This type of death occurred in 225 pregnancies in 2015 in the UK. It is important to study the deaths of these babies as any normally formed baby who is alive at the onset of labor at term would be expected to be alive and healthy at birth.

A random representative sample of 78 of these babies who were born in 2015 was selected. The care provided for these mothers and babies was reviewed in detail against national care guidelines by a panel of clinicians, including midwives, obstetricians, neonatologists, neonatal nurses and pathologists who considered every aspect of the care.

Professor Elizabeth Draper, Professor of Perinatal and Paediatric Epidemiology at University of Leicester said, “The premise of the enquiry was that these babies would be born alive and healthy. Findings from the panels indicated that improvements in care may have made a difference to the outcome for almost 80% of cases.

“The main issues identified were care before labor was established including induction, monitoring during labor, delay in expediting birth, heavy workload of the units, a lack of joint obstetric and neonatal input into bereavement care and a lack of rigor in the local review of the deaths.”

Main findings from the expert enquiry included:

• ‘service capacity’ affected over a fifth of the deaths reviewed.
• heavy workload contributed to delays in induction in one third of cases being induced
• there was a significant delay in both the decision to expedite the birth and in actually achieving birth in approximately a third of the deaths reviewed.
• there was a failure to recognize the transition to the active phase of labor and to institute appropriate monitoring in one-eighth of cases
• there were errors in the method, interpretation, escalation and response to fetal monitoring during labor.
  • two fifths of babies had intermittent auscultation. This was not compliant with national guidance in a third of cases in the first stage of labor and a quarter in the second stage.
  • continuous electronic fetal monitoring was not commenced in a quarter of cases where abnormalities were detected by intermittent auscultation
  • there were delays in referral in nearly half of cases where escalation was required
• for most cases resuscitation was delivered effectively by clinical staff present at the delivery based on the Neonatal Life Support program
• overall the quality of bereavement care was variable, with a lack of joint obstetric and neonatal input
• although the majority (95%) of intrapartum-related deaths were reviewed, many of the reviews were lacking in quality. Review should be undertaken using the ‘Serious Incident Framework’ which should include review of contributory factors / root causes.

Professor Sara Kenyon, Professor of Evidence Based Maternity Care at the University of Birmingham and joint author of the report said “While fewer babies at term die after care in labor starts than previously, this report has identified that there remain problems with the quality of care.

The recommendations for improvement in service provision and local review of the death, the development of new national guidance and of training for staff provide an opportunity to reduce this further. The forthcoming introduction of a national standardized tool to support staff reviewing perinatal death in their Trusts is an important step forward. If we learn the lessons and implement the changes the report has highlighted, the numbers of babies like this that die should reduce.”

Professor Jenny Kurinczuk, Director of the National Perinatal Epidemiology Unit and National Programme Lead for MBRRACE-UK said: “The mother of a baby at term who is alive when care in labour starts quite reasonably expects to be safely delivered of a healthy infant. Sadly we know that for about 225 parents each year the outcome will be rather different. Some of these babies will die despite every possible effort of the staff involved in caring for the mother. However our report also highlights that for about four-fifths of the deaths reviewed there were areas for improvement in care which may have made a difference to the outcome for the baby. Importantly the findings of the report provide a blueprint for improvements which are likely to reduce serious complications in newborn babies as well as reducing the number of babies who die, provided that we learn the lessons and implement the changes which the in-depth review of these deaths has highlighted.”

By Najia Houssari

Lebanese President Michel Aoun held consultations on Monday with representatives of political parties in Prime Minister Saad Hariri’s coalition government as he declared that Hezbollah must stop interfering in regional conflicts and accept a neutral policy to bring an end to the political crisis.

According to Reuters, Hariri told French broadcaster CNews that he was ready to stay on as prime minister if Hezbollah accepted to stick by the state policy of staying out of regional conflicts.

The premier, however, said he would resign if Hezbollah did not keep to that, although consultations so far had been positive.

“I think in the interest of Lebanon, Hezbollah is carrying out a positive dialogue. They know we have to remain neutral in the region,” he added in the interview recorded on Monday.

Aoun’s talks on Monday took place after Hariri last Wednesday put off his resignation upon the president’s request to find a way out of the current crisis. Hariri had unexpectedly announced his resignation from Riyadh on Nov. 4, protesting that Iran and Hezbollah had taken hold of Lebanon, and he feared for his life.

The talks concerned the concept of “self-distancing” and how to apply it. Most of those whom Aoun consulted supported activating the Lebanese administration and reaffirming the ministerial statement and the political settlement, which resulted in naming Aoun president and Hariri prime minister until the next parliamentary elections in May. Aoun did not address the issue of Hezbollah’s weapons.

The ministers and deputies who met with Aoun made statements in the lobby of Baabda Palace to voice their stances. Hezbollah’s allies preferred to discuss “reaffirming the ministerial statement,” which does not include the term “self-distancing.”

The Hariri government stated in its ministerial statement that it is “committed to what was stated in President Michel Aoun’s presidential speech, when he said that Lebanon, which is moving between the mines, is still free from the fire burning around it in the region because its people’s stances are one and they are holding on to civil peace.

“Therefore, Lebanon must distance itself from external conflicts while respecting the Charter of the League of Arab States, especially Article 8, and adopting an independent foreign policy based on Lebanon’s supreme interest and its respect for international law in order to protect its peace, stability and unity.”

Finance Minister Ali Hassan Khalil, representative of the Amal Movement, said: “We are committed to the agreed-upon values in the ministerial statement and to our national charter. We are positive that an understanding will be reached to restore work in the Cabinet and spare Lebanon any strike to its political and security stability.”

Public Works and Transportation Minister Youssef Fenianos, representative of the Marada Movement, said: “We wished for this government to continue. We are fully committed to its ministerial statement, under the umbrella of the Taif Agreement and the National Reconciliation Accord.”

Mohammed Raad, who chairs Hezbollah’s political wing Loyalty to the Resistance Bloc in the Lebanese Parliament, avoided discussing the self-distancing policy. “We discussed protecting Lebanon, guaranteeing the independence of its decisions, and restoring political life back to normal, and all opinions were identical,” he said. “We hope to start putting them into action.”

The head of the Syrian Social Nationalist Party, Hanna Al-Nashif, said: “We must define self-distancing scientifically and legally so that our speech doesn’t target certain countries and to avoid getting Lebanon involved in alliances rejected by all of us. We want Lebanon to be united, protect its security, sovereignty and unity, and embrace all Lebanese people in one strong social fabric.”
Sami Gemayel, leader of the Phalange Party, called for “the complete neutrality of Lebanon, and not the self-distancing policy, which is a broad concept with neither legal nor constitutional bases.”

He stressed that “neutrality cannot be achieved without sovereignty, and there is no state without sovereignty. We cannot take any step toward building a state unless the state is the master of its decision and the people are the ones deciding their future.

Therefore, we believe the main requirement for achieving neutrality is the sovereignty of the state and its exclusive possession of weapons.

“I am sorry no one is tackling the issue of weapons inside Lebanon,” he added.

Lebanese Forces leader Samir Geagea said: “We must do what it takes to keep Lebanon outside the region’s conflicts. This should be seen in our actions and not only our words.

Self-distancing means actually walking out of the region’s crises. Each of us can have an opinion, and we will continue to say that the regime in Syria cannot stay; this is our political opinion.

“In the first stage, the military decision must be made by the state, and at a later stage we will discuss a final solution for Hezbollah’s weapons,” he added.

Progressive Socialist Party leader Walid Jumblatt said it would be wise not to bring up the question of Hezbollah’s weapons in discussions.

“If we brought up this question, we will return to previous rounds of futile talks on this matter, which we held in the days of Berri in 2006 and in the days of President Michel Suleiman,” he explained.

“Let’s stick to discussing self-distancing and how to apply it.”

By Ajit Kumar Singh*

On November 20, 2017, a ‘commander’ of Communist Party of India (CPI-Maoist)’s ‘Jan Militia (People’s Army)’, identified as Baman Kawasi aka Chaman, carrying a reward of INR 100,000, was arrested by Chhattisgarh Police from neighbouring Telangana. Acting on specific inputs, the Chhattisgarh Police arrested Chaman from the Husnabad area in the Khammam District of Telangana. Chaman was a native of the Kuwakonda Police Station area in the Dantewada District of Chhattisgarh. The ‘People’s Army’, with an estimated current strength of around 12,000 cadres, forms the backbone of the Maoists’ operational capabilities, and is responsible for intelligence gathering, spreading ideology and also mobilizing people into joining the group.

On the same day, Akash Singh (24), an ‘area commander’ of the People’s Liberation Front of India (PLFI), a breakaway faction of CPI-Maoist, surrendered before Simdega (Jharkhand) Superintendent of Police (SP), Rajiv Ranjan Singh. Akash Singh of the Kolebira area in Simdega District had joined PLFI in 2012 and carried an INR 200,000 reward on his head in Jharkhand.

On November 17, 2017, Police claimed that two CPI-Maoist ’commanders’ were killed in an encounter with the Police in the Kanhaiguda Forests of Sukma District of Chhattisgarh. Each of the two slain Maoists carried a reward of INR 800,000. Interestingly, however, their identity was not revealed in media reports.

On October 31, 2017, a PLFI ‘area commander’, identified as Maina Gope, and three other cadres were killed in an encounter with Security Force (SF) personnel at Palsi village under Karra Police Station in the Khunti District of Jharkhand.

On October 25, 2017, SFs killed three Maoists, including Rakesh Dugga and Ranjit Nureti, ‘commander’ and ‘deputy commander’, respectively, of the Pallemadi Local Operation Squad (LOS); and Mahesh Potavi of the Madanwada LOS. The three operated together in the Kopenkadka village forest in the Khadgaon Police Station area of the Rajnandgaon District in Chhattisgarh. While Rakesh and Ranjit carried head money of INR 500,000 each, Mahesh carried a reward of INR 300,000. Dipanshu Kabra, Inspector General of Police (IGP), Durg Range, disclosed, on October 26, “After last night’s [October 25] action, the Pallemadi LOS has virtually been finished off.” The Pallemadi and Madanwada LOSs were instrumental in the July 12, 2009, attack at Manpur in Rajnandgaon District in which cadres of the CPI-Maoist had killed 29 Police personnel, including Rajnandgaon Superintendent of Police (SP) Vinod Kumar Chaubey. The Pallemadi LOS, according to reports, was looking after Maoist activities in tri-junction forests of Rajnandgaon, Kanker and Balod; all Districts of Chhattisgarh.

According to partial data compiled by the South Asia Terrorism Portal (SATP), at least 949 leadership elements of Left Wing Extremists (LWEs) across the country have been neutralized since 2010 (data till November 26, 2017). These included at least 19 national level leaders, 214 state level leaders, and 716 local level leaders. In 2017, at least 131 LWE leadership elements were neutralized across the country, including 23 State level leaders and 108 local level leaders.

While SFs killed 125 of these 949 leadership elements (three national level leaders, 20 state level leaders and 102 local level leaders), they arrested 513 (15 national level leaders, 163 state level leaders, and 335 local level leaders). Mounting SF pressure also resulted in the surrender of 311 Maoist leaders: one national level leader, 31 State level leaders, and 279 local level leaders. In 2017, SFs have killed at least 29 LWE leadership elements across the country (two State level leaders and 27 local level leaders), while another 58 were arrested (10 state level leaders and 48 local level leaders). 44 Maoist leaders surrendered in 2017 (11 State level and 33 local level).

At the time of its formation in 2004, CPI-Maoist reportedly had a 16-member strong ‘politburo’, the outfit’s highest decision making body. Those listed in the ‘politburo’ included: Muppalla Laxmana Rao aka Ganapathi, Prashanth Bose aka Nirbhay, Cherukuri Raja Kumar aka Uday aka Azad, Mallojula Koteshwara Rao aka Prahallad aka Kishenji, Nambala Keshavarao aka Basavraj aka Ganganna, Kobad Ghandy aka Saleem, Pramod Mishra aka Ban Bihari aka Janardhan, Sumanand Singh aka Sujith Da aka Sumith, Malla Raji Reddy aka Meesalanna aka Sathenna, Mallajula Venugolpal aka Bhupathi, Katakam Sudershan aka Anand aka Mohan, Mishir Besra aka Bhaskar aka Sunirmal, Akilesh Yadav aka Prabodh aka Satish aka Prashant, Balraj aka B.R. aka Arvind, Sushil Roy, B Narayan Sanyal aka Naveen Prasad aka Bijoy Dada. Of these, two have been killed: Cherukuri Raja Kumar aka Azad (killed on July 2, 2010) and Mallojula Koteshwara Rao aka Kishenji (killed on November 24, 2011). Another two died due to illness: Sushil Roy (on June 18, 2014) and B. Narayan Sanyal aka Bijoy Dada (on April 17, 2017). Four have been arrested: Kobad Ghandy aka Saleem (arrested on September 21, 2009); Balraj aka B.R. (arrested on February 8, 2010); Pramod Mishra aka Ban Bihari (arrested on May 11, 2008, acquitted on August 2, 2017); and Akilesh Yadav aka Prabodh (arrested on June 12, 2011, and acquitted in 2015). There are, at present, only eight members of the original ‘politburo’ ‘in position’ or whose whereabouts are not known.

Similarly, at the time of its formation in 2004, the CPI-Maoist reportedly had a 34-member strong ‘central committee (CC)’, the second highest decision making body in the outfit. The ‘CC’ included all the 16 members of the ‘politburo’ and another 18 members: Ashuthosh aka Bipul, Chandari Yadav aka Prayag aka Pralay, Ranjit Bose aka Kanchan, Vijay Kumar Arya aka Dilip Ji, Jantu Mukherji aka Shahebda, Rohit aka Mohit, Mohan aka Mahesh, Thipparthi Tirupathi aka Devuji aka Chetan, Jinugu Narisimhareddy aka Jampanna, Akkiraju Hara Gopal aka Ramakrishna aka RK, Krishnan Srinivasan aka Vishnu aka Sreedhar, Kuppu Dev Raj aka Kuppu Swamy, Anuradha Ghandy aka Janaki, Sande Rajamouli aka Prasad aka Murali, Gajanand aka Paresh, Lanka Papireddy aka Ranganna, Dev Kumar Singh aka Aravind, and Varanasi Subramanyam aka Sukanth. Of these latter 18, at least two have been killed, nine arrested, and one surrendered: Sande Rajamouli aka Prasad (killed on June 22, 2007), Kuppu Dev Raj aka Kuppu Swamy (killed on November 24, 2016), Ashuthosh aka Bipul (arrested in March 2009), Ranjit Bose aka Kanchan (arrested on December 3, 2010), Vijay Kumar Arya aka Dilip Ji (arrested on April 29, 2011), Jantu Mukherji aka Shahebda (arrested on April 30, 2011), Rohit aka Mohit (arrested, date not specified), Jinugu Narisimhareddy aka Jampanna (arrested on August 8, 2010), Krishnan Srinivasan aka Vishnu aka Sreedhar (arrested on August 19, 2007), Gajanand aka Paresh (arrested in May 2013), Varanasi Subramanyam aka Sukanth (arrested on April 20, 2011), and Lanka Papireddy aka Ranganna (surrendered on February 2, 2008). Further, Anuradha Ghandy aka Janaki died due to illness on April 12, 2008. Thus, at present there are only five of these 18 ‘in position’ or whose whereabouts are not known. Moreover, at least five members appear to be added to the ‘alternate CC’: including Pulluri Prasad Rao aka Chandranna, Kadari Satyanarayana Reddy aka Sadhu aka Gopanna, Modem Bala Krishna aka Bhaskar, Pankaj, and Patel Sudhakar Reddy aka Vikas. Of these five ‘alternate CC’ members, Patel Sudhakar Reddy was killed on May 24, 2009, while the whereabouts of the remaining four are not known. Thus, only 17 members of the 39-member ‘CC’, including the ‘alternate CC’, are ‘operational’: eight ‘politburo’, five ‘CC’, and four ‘alternate CC’ members. Further, according to a September 27, 2017, report, another three have been added to the ‘CC’ – Milind Teltumde (54), Ravalu Srinivas (53), and Sudhakar aka Oggu Burlal Satwaji (60), all of whom are reportedly underground. Further, Madvi Hidma, according to unconfirmed reports, has been promoted to the ‘CC’.

Crucially, the existing leadership is rapidly ageing and many top leaders are chronically ill. According to a September 27, 2017, report published in Telangana Today, seven of the existing 19 active ‘CC’ members (17 according to the SATP database) were 60 years old, or more: Muppalla Laxmana Rao aka Ganapathy (66), Katakam Sudershan (61), Ranjit Bose (61), Dev Kumar Singh (60), Malla Raji Reddy (60), Sudhakar aka Oggu Burlal Satwaji (60), and Prashant Bose (70).

Indeed, the report stated that, in a meeting of ‘CC’ members in February 2017, it was decided to relieve the ‘veteran comrades’ of crucial responsibilities, if they were unable to discharge their duties due to physical or health reasons. A resolution on this issue adopted in the 2017 ‘CC’ meeting was the culmination of a discussion on this serious problem of ageing leadership taken up during an earlier ‘CC’ meeting in 2013.

These developments have had cumulative impact on Maoist activities across the country. According to partial data compiled by SATP, the number of total fatalities recorded in LWE-linked violence in 2017 stands at 285 (data till November 26) as against 411 during the corresponding period of 2016. More significantly, the number of civilian fatalities has come down considerably, from 123 in 2016 to 88 in 2017. It is only for the second time since the formation of the CPI-Maoist that fatalities in this category have remained within two digits – in 2015 there were 93 civilian fatalities (lowest ever recorded in a single year) – though there is still over a month to go in the current year.

Indeed, Union Home Minister (UHM) Rajnath Singh stated, on November 3, 2017,

During the meeting, it was brought out that the declining trend of LWE (Left-Wing Extremism) violence continues across the country which has seen an overall reduction of 21 per cent in violent incidents over the corresponding period of last year. The LWE continue to remain under pressure with ever shrinking influence, both in terms of geographical spread and public support.

The Maoists are manifestly in decline. According to another report published in Telangana Today on September 27, 2017, the CPI-Maoist ‘CC’, which met in February 2017 to review the progress of the ‘revolutionary movement’ in the country, had passed a resolution admitting that their movement was going through a ‘difficult’ stage all over the country. Several expressions, such as ‘weak’, ‘set back’, ‘difficult state’, and ‘stagnation’, were used in the resolution to describe the status of the ‘revolutionary movement’ in areas falling under four of their Regional Bureaus across India:

Clearly, the Maoists are a worried lot. In an effort to restore activities, efforts to strengthen their top leadership has been initiated to overcome this “difficult phase”. According to unconfirmed media reports, the ‘chief’ of ‘Battalion No.1’ of the People’s Liberation Guerrilla Army (PLGA), Madvi Hidma (32), has reportedly been ‘promoted’ to the ‘CC’. If this is confirmed, Hidma would be among the youngest ever ‘CC’ members. Moreover, it seems that the Maoists have made ‘strategic shift’ in identifying future leaders. An unnamed senior Police officer observed, “The ramifications of his (Hidma’s) promotion are many. This could be a new era of Maoist leadership as this is the first time that a Bastariya will be given command of the region…” In the past, the ‘CC’ almost entirely comprised Telugu leaders from Andhra Pradesh and Telangana, and had long been accused of ignoring local tribal ‘commanders’ of the Bastar region, despite the fact that Bastar had emerged as a Maoist stronghold over the last many years, particularly after the set back the Maoists suffered in undivided Andhra Pradesh . An unnamed senior officer noted that, though informers had confirmed Hidma’s promotion, things were still not clear: “We can confirm only when we see it in any Maoist literature.”

With their top leadership in doubt after suffering tremendous losses over the past years the Maoists are now at in disarray. This is an opportunity for the state to consolidate its power and activities, to fill the existing vacuum in areas of past Maoist ‘disruptive dominance’, and to restore governance and public services. The Maoists are certain to attempt a revival; their success or failure will depend essentially and inversely on the failure or success of SFs and the administration to take advantage of the present reverses the rebels have suffered.

*Ajit Kumar Singh
Research Fellow; Institute for Conflict Management

By Tushar Ranjan Mohanty*

Five bullet-riddled bodies of ethnic Punjabis were recovered by Levies Force personnel in the Tajaban area of Turbat tehsil (revenue unit) in the Kech District of Balochistan on November 18, 2017. The Levies Force disclosed that all the victims had received multiple bullet injuries and belonged to the Gujrat District of Punjab.

Three days earlier, 15 bullet-riddled bodies were recovered by Levies Force personnel in the Buleda area of Turbat tehsil in the Kech District on November 15, 2017. Makran District Commissioner Bashir Ahmed Bangulzai said that all the victims apparently belonged to various districts of Punjab, and were allegedly en route to Iran through an infrequent route illegally. Each of them received multiple bullets wounds from a close range. According to District Commissioner Kech Darmon Bhawani, “Armed men had kidnapped these men near the Iranian border and shot them near Goruk.” Balochistan Liberation Front (BLF) had taken responsibility for the attack. An alleged BLF commander, Younas Taukali, involved in the incident was later killed on November 17, 2017, during a Security Forces (SFs) operation. Inter-Services Public Relation (ISPR) claimed that BLF leader Taukali was killed by the Frontier Constabulary (FC) near Alandur, Abdur Rehman village in Kech District.

2017 also witnessed several other major incidents (each involving three or more fatalities) where non-ethnic Baloch people were targeted. Prominent among these were:

August 20: Three Punjabi labourers, who were abducted by unidentified militants four days earlier, were found dead in the Hoshab area of Kech District in Balochistan. These labourers, who belonged to the Rahim Yar Khan District of Punjab, were working on a development project in the area. The bodies were found with multiple bullet injuries. No group claimed responsibility for the attack.

May 19: Unidentified militants shot dead three labourers and injured another in Hoshab town, Turbat District. The slain labourers were part of a team working in the coastal Makran Division on a major highway linking the port-city of Gwadar to the provincial capital of Quetta. No group claimed responsibility for the attack.

May 13: At least 10 labourers were killed and two were injured when unidentified motorcycle-borne assailants opened fire at a construction site in the Pishgan area of Gwadar. Senior Levies Official Muhammad Zareef stated, “All the labourers were shot at close range.” The slain labourers belonged to the Naushahro Feroze District of Sindh. Balochistan Liberation Army (BLA) had claimed responsibility of the attack.

According to partial data compiled by the South Asia Terrorism Portal (SATP), a total of 198 settlers have been killed in Balochistan since the killing of Nawab Akbar Bugti , leader of the Bugti tribe and President of the Jamhoori Watan Party (JWP), on August 26, 2006. Bugti was killed in a military operation in the Chalgri area of the Bhamboor Hills in Dera Bugti District. Out of the 198 ‘outsiders’ killed, at least 75 were Punjabis. 23 Punjabi settlers have already been killed in the current year (data till November 26, 2017). 2016 witnessed no attack on Punjabis, while the number of such fatalities stood at a total of six in 2015; 17 in 2014; 29 in 2013; 26 in 2012; 13 in 2011; 21 in 2010; 18 in 2009; and one in 2008. No such fatalities were recorded in 2007 and 2006. While Punjabis have been the main targets, other ethnic groups, like Urdu-speaking people from Karachi and Hindko-speaking settlers from Haripur District in Khyber Pakhtunkhwa (KP), have also been singled out in acts of ethnic violence.

A series of attacks on Punjabi and other non-Baloch settlers in Balochistan, as well as the destruction of national infrastructure have followed the killing of Akbar Bugti. These killings have been orchestrated by Baloch militant organizations such as the BLA, BLF and the Baloch Republican Army (BRA), among others, who began to voice anti-Punjabi sentiments in their slogans in the wake of the military action against Bugti. A media report published on June 28, 2011, had noted, “Almost all non-Baloch are on their hit-list.” Muhammad Khalid of Balochistan-Punjabi Ittehad stated, “The militants began to target the Punjabi settlers after Nawab Bugti was taken out by the military (in August, 2006). Before that there were occasional incidents in which Punjabis were targeted.”

Significantly, most of the Punjabi settler killings are recorded in South Balochistan (principally in Bolan, Kech, Gwadar, Panjgur, Khuzdar, Sibi and Lasbela Districts) which accounts for 156 killings; followed by 27 in North Balochistan (mostly in Nushki, Quetta and Mustang District). The overwhelming concentration of such killings in the South is because of the presence and dominance of Baloch insurgent groups in this region, while the North is dominated by Islamist extremist formations such as the Tehreek-e-Taliban Pakistan (TTP) and Lashkar-e-Jhangvi (LeJ), who are primarily engaged in sectarian killings within Pakistan. The latter groups of Islamist terrorist formations enjoy the tacit support of Islamabad, which has, for long, used Islamist extremist violence as an instrument of domestic political management. These groups are engaged in a selective campaign against the Baloch people, and have sought to aggressively backed efforts to alter the region’s demography.

The targeted killings of non-Baloch persons can also be attributed to the rampant extra judicial killings and forced disappearances by the Pakistani SFs in the region. According to the SATP database, the Province has recorded at least 6,726 fatalities since 2004, which includes 4,000 civilians, 1,486 militants and 1,240 SF personnel. The maximum number of fatalities in the ‘civilian’ category was the result of extra-judicial killings by SFs in retaliation to target killings of SF personnel by ethnic Baloch insurgents. Of the 4,000 civilian fatalities recorded in Balochistan since 2004 [data till November 26, 2017], at least 1,152 have been attributable to one or other terrorist/insurgent outfit. Of these, 395 civilian killings (225 in the South and 170 in the North) have been claimed by Baloch separatist formations, while Islamist and sectarian extremist formations – primarily LeJ, TTP and Ahrar-ul-Hind (Liberators of India) – claimed responsibility for another 757 civilian killings, 674 in the North (mostly in and around Quetta) and 83 in the South. The remaining 2,848 civilian fatalities – 1,693 in the South and 1,155 in the North – remain ‘unattributed’. A large proportion of the ‘unattributed’ fatalities, particularly in the Southern region, are believed to be the result of enforced disappearances carried out by state agencies, or by their proxies, prominently including the Tehreek-e-Nafaz-e-Aman Balochistan (TNAB, Movement for the Restoration of Peace, Balochistan). The large number of unattributed civilian fatalities strengthens the widespread conviction that the Security Agencies are busy with “kill and dump” operations against local Baloch dissidents, a reality that Pakistan’s Supreme Court has clearly recognized.

According to the Federal Ministry of Human Rights, at least 936 dead bodies of ‘disappeared’ persons, often mutilated and bearing the signs of torture, have been found in Balochistan since 2011. Figures obtained from the Federal Ministry of Human Rights by the BBC Urdu on December 30, 2016, pointed to large-scale extrajudicial killings by state agencies and their proxies. Most of the bodies were dumped in Quetta, Qalat, Khuzdar and Makran areas, where the separatist insurgency has its roots. None of the mainstream media reported such state sponsored atrocities, as media reporting from these areas is strictly forbidden. The International Voice for Baloch Missing Persons (IVBMP) claims it has recorded 1,200 cases of dumped bodies, and there are many more it has not been able to document.

According to IVBMP, Pakistani Forces (military, Frontier Corps, intelligence and Paramilitary) have abducted 480, killed 26 persons including women and children, and torched at least 500 properties in more than 100 offensives just between March 1 and March 31, 2017. Only 30 persons among those abducted have been released thus far. None of the abducted persons have been presented to any court or given the right to defend themselves. Balochistan’s Dasht, Tump, Mand, Dera Bugti, Kohlu, Quetta, and Makran regions have been the most affected areas, where Pakistani military carried out attacks and offensives against Baloch civilians. Recently on July 8, 2017, three civilians were killed and 265 were abducted by the Army from Dera Bugti and Mastung. The Army also reportedly ‘stole’ civilian property and valuables, including 300 camels.

While the SFs are engaged in a systematic campaign of extermination of the ethnic Baloch people through enforced disappearances and extrajudicial killings, Baloch militants, in turn, frequently target non-Baloch people, particularly Punjabis, in acts of revenge, and as a measure to block the state-backed project of the demographic re-engineering of the Province. This cycle of the systematic genocide of Baloch people and retaliatory targeted killings is unlikely to end in the foreseeable future.

* Tushar Ranjan Mohanty
Research Associate, Institute for Conflict Management