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Azerbaijan: Snap Presidential Elections Called For April

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(EurActiv) — Azerbaijan’s strongman Ilham Aliyev called on Monday (5 February) a snap presidential vote for 11 April, six months ahead of schedule, as opposition politicians slammed the surprise move.

“Set the date of the election of the president of the Republic of Azerbaijan on 11 April,” Aliyev ordered in a decree posted on his website without providing an immediate explanation for the move.

Last week, the deputy chair of the ruling Yeni Azerbaijan party, Ali Akhmedov, said that Aliyev planned to run for a fourth consecutive term.

The oil-rich country was initially set to hold the vote on 17 October and the decision to call early elections sparked strong criticism from opposition parties.

“The Aliyevs have been in power for some 45 years already and that contradicts the principles of a democratic republic,” the leader of the opposition Popular Front party, Ali Kerimli, told AFP.

The veteran politician said the decision to hold an early vote was aimed at shortening the election campaign and “hampering the opposition’s efforts to prevent vote rigging”.

So far, two opposition candidates — Musavat party leader Isa Gambar and the chairman of the Classical Popular Front Party, Mirmahmud Miralioglu – have announced plans to run for president.

President for life?

Aliyev, 56, was first elected president in 2003, after the death of his father Heydar Aliyev, a former KGB officer and communist-era leader who had ruled Azerbaijan with an iron fist since 1993.

He was re-elected in 2008 and 2013 in polls that were denounced by opposition parties as rigged.

In 2009, Aliyev amended the country’s constitution so he could run for an unlimited number of presidential terms, in a move criticised by rights advocates who say he could become a president for life.

Furthermore, Azerbaijan adopted controversial constitutional amendments in 2016 to extend the president’s term in office to seven years from five.

The changes drew criticism from the Council of Europe constitutional law experts as “severely upsetting the balance of powers” and giving the president “unprecedented” authority.

Cementing his family’s decades-long grip on power, the president last year appointed his wife Mehriban Aliyeva as first vice president.

The Azerbaijani government has faced strong international criticism for routinely harassing and jailing those opposed to Aliyev’s regime.

Aliyev has denied any rights abuses.

Azerbaijan is locked in a bitter dispute with Armenia over separatist Nagorny Karabakh region, which has been under Armenian control since it was seized during a bloody conflict in the early 1990s, after the break-up of the Soviet Union.

Energy-rich Azerbaijan, whose military spending exceeds Armenia’s entire state budget, has repeatedly threatened to take back the breakaway region by force.


It’s Time For Merkel To Go – OpEd

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By Caleb Mills

It has been months since Germany’s September contest for the Bundestag, and still, government leaders have continued to tantalize the public at large with the slippery promise of a government being formed soon. While negotiations are taking place between Schulz’s Social Democrats and Merkel’s CDU, the two sides are still a long way off from forming an agreement. Indeed, judging by past statements from leaders in the SPD, it may not happen at all. And with support growing daily for the far-right AfD, it seems the end result of these talks might not only be the dissolution of Merkel’s precious coalition, but also, the political system in Germany itself.

Merkel is by far Germany’s most powerful leader since World War Two, but as the unfolding political dilemma shows, she’s not immune to threats to her power. The election in September of 2017, while providing a needed victorious outcome for the CDU, was disappointing to say the least. The center-right CDU garnered barely 33%, the party’s worst showing since 1949. While admittedly their most serious rival, the Social Democrats, didn’t do any better (they suffered their worst defeat since World War Two with only 20%), Merkel’s inability to rally the populace back into her camp significantly weakened her mandate to rule.

It’s easy to say that the election was a backlash based on immigration policy in Germany, seeing as how the country has faced the brunt of the migrant crisis for several years now. This backs the argument that the far-right’s success and rise as the third most powerful party in the Bundestag is a reaction to what many conservatives view as Merkel’s ‘lax’ immigration policies.

That would all be dandy, except it’s not the case.

A Brookings Institute study found that the allocation of refugees in Germany is distributed roughly evenly, with the main focus being in industrial areas such as Berlin and Hamburg. However, according to election results, Merkel’s party performed well in Berlin, and far-left parties such as Die Linke overperformed in urban areas. Not enough? Well, the CDU carried Frankfurt, Stuttgart, Dresden, and did well in Leipzig. The SPD won in Hamburg and Hanover. In fact, the only cities in the entire country that the AfD did do well in were Munich, and ironically, Nuremberg. Not only that, but Merkel ran farther to the right during the election. Reports from the German government show that last year, 158,000 were denied asylum over the course of a single week. Merkel did not back down on her claim that many asylum seekers had a fundamental right to safety, but her sidestep to the right was clear enough to stop much of the bleeding of her supporters to the Afd.

It’s not about immigration as much as it is about Merkel’s ongoing presence, and how she’s tied to the status quo. Despite her attempts to stop the bleeding, Merkel still lost support to the far-right; but that’s not to say their victory was won at the hands of Merkel’s detractors. The AfD also brought many young and previously inactive citizens to the ballot box, signaling there’s something deeper to this issue then the migrant crisis. As big as the story might continue to be, first-time voters don’t vote for a party based on such a partisan issue. They are non-voters because of partisan issues. The viciousness and pettiness of politics is unattractive to them, and this is practically a description of the political personas that characterize the refugee debate.

These voters come to the polls when it’s time for change, or at least an attempt at it. Obama’s historic numbers in the United States during the 2008 election was not only based on his policies, but the fact he was different. The same with Macron in France, and Trudeau in Canada. It’s not a “screw it” mentality as much as it is a “we’re gonna get screwed if we don’t do something” one. And yes, with Trump in America during the 2016 election, traces of this electoral phenomenon can be found too. It wasn’t really about immigration either that attracted many to his side of the spectrum, but the fact that he was different, that change was needed.

With almost 13 years in power, an economy brought back to life, a revolutionized energy sector, and a diplomatic stranglehold on the EU, Germany is arguably in the best place it’s ever been in. But Germany’s political stability relies on Merkel finally handing off the baton. It’s time for Merkel to go.

It’s hard for even Merkel’s contemporary critics to declare her time in power as a total negative. Part of her appeal in governance was her ability to inspire those across the aisle, either because of her likable personality, or most likely, because of her impressive approval rating. She ended mandatory conscription, instituted Elterngeld (essentially maternity pay), oversaw a rise in the minimum wage, not to mention she gave the go-ahead for the victorious vote on legalizing gay marriage.

But even the accomplishments of a popular leader will fade when the democratic process begins to pressure him/her to face the inevitable conclusion of their system of government: retirement. Merkel is still well-liked, but disappointing approval ratings are a sign of her lackluster popularity. Citizens like her because, well, there really isn’t anyone else to like in the field of competitors.

If Merkel persists on holding onto power, it will only serve to deepen the divide and pose as a recruitment tool for dangerous factions in the German political system. While there is a chance the coalition talks may succeed, indeed, that may only seal her fate by providing an enduring foe in Berlin for this new populist wave to rally against. Remember: a coalition between the SPD and CDU would legitimatize the AfD, as they would then become the official opposition party.

The best course for action, if the aim is to keep the centrist/neo-liberal mandate in Germany intact, would be Merkel’s resignation and appointment of a new CDU leader, perhaps Jens Spahn. Why? If the strategy was applied properly, it would leech support from the AfD and smaller parties, and the CDU could retain its hold on power. Or, as a response to the CDU acknowledging a more right-wing approach, the SPD could move to the center and take hold of power. Either way, Germany’s political system is spared a populist uprising.

Acknowledging the will of people, even if it’s just to the extent so as to not wreak havoc upon the positive elements of a system, is always preferable to holding onto power for too long. Weaken the blow or else it will kill you. In the end, Merkel has undeniably brought Germany back onto the world stage as a respected power. The question now becomes: How does she save that legacy?

 

The opinions, beliefs, and viewpoints expressed by the authors are theirs alone and don’t reflect any official position of Geopoliticalmonitor.com, where this article was first published.

Iran: Security Shoots Man Armed With Knife Outside Presidential Office

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A man armed with a knife and trying to trespass on the premises of the presidential office in downtown Tehran was shot by security guards on Monday, an official told Tasnim.

The deputy governor of Tehran province for security affairs, Mohsen Hamedani, said the intruding individual with a knife in his hand was trying to go through the gates of the presidential office without heeding warnings from the security guards.

The individual was detained after being shot in the leg, he said, adding that efforts are underway to discover his identity and motives.

In June 2017, terrorists launched simultaneous attacks on Iran’s parliament building and on the mausoleum of the late founder of the Islamic Republic Imam Khomeini in Tehran.

The Daesh (ISIL) terrorist group claimed responsibility for the attacks, which killed 17 people and wounded more than 40.

All five gunmen involved in the attacks were killed by security forces.

The Afghanistan War Under Trump – Analysis

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By Neil Thompson

US President Donald Trump announced this week that his administration would reject talks with the Afghan Taliban, a decision that commits the United States to pressuring the Islamist movement on the battlefield through the first phase of the Trump presidency.

The US president’s comments came after a spate of attacks by the Taliban targeted foreigners and civilians in the capital Kabul. In the most deadly recent attack, the Taliban claimed responsibility for a suicide bombing that killed over 120 people, which involved an explosives-laden ambulance destroying dozens of buildings and vehicles in a secure area.

The U.S. has blamed the Pakistan-backed Haqqani network, a Taliban affiliate with a reputation for ruthlessness, for the plot. Washington and Kabul have long accused Islamabad of offering the Afghan Taliban and its affiliates a safe haven from which to plot such attacks. Pakistan-US ties have deteriorated under President Trump, who cut off US military aid to Pakistan over its alleged harboring of terrorist groups. Pakistan in turn accuses the U.S. and Afghanistan of not doing enough to eliminate safe havens for the Pakistani Taliban in eastern Afghanistan.

Impact

The BBC discovers a pervasive, country-wide footprint for the Taliban.

This month, a BBC study confirmed what many observers already knew: since the withdrawal of most international combat troops at the end of 2014, the Afghan government and its security forces have been unable to prevent the Taliban insurgency from expanding its presence across the country. The BBC found that just 122 district areas (just over 30 percent of the country) did not have an open Taliban presence from August-November 2017.

These districts with no open presence were not necessarily free of conflict; Islamic State has been making slow and steady gains in the country, and a multitude of other militant outfits have been disrupting government services and spreading misery among the civilian population.

The study found that the Taliban holds about 4 percent of Afghanistan’s territory, but maintains an active and open physical presence in all of the country’s remaining 263 districts (about 66 percent of the country). This second number is the one that merits closer consideration, since the Afghan Taliban’s modus operandi has never been to hold on to territory ala Islamic State in Iraq and Syria. Rather, the militant group’s presence has ebbed and flowed as required in its wider campaign to deny the government legitimacy and win new followers. A permanent presence is also not required to carry out the tax-collecting that funds the Taliban; tax collectors may come sporadically, but the local workers and businesses being targeted tend to comply out of fear of reprisals if and when their area falls to Taliban control.

Trump opts to turns the screw on Pakistan rather than negotiate.

Meanwhile, the latest UN figures available show that over 8,500 Afghan civilians were killed or injured in the fighting during the first three quarters of 2017. In response to President Trump’s order to increase US troops, air strikes, and other assistance to Afghan forces last year, the Taliban has now carried out a string of brazen attacks to highlight that Trump’s “policy of aggression” will not work. But the U.S. says that its policy will remain “firmly military” until it convinces the Taliban, or significant elements of it, that there is no military solution to the Afghan civil war. The Afghan government’s spy chief has visited Pakistan to share information of what Kabul claims is documentary evidence and phone tap records linking individuals and groups based in Pakistan with the recent attacks on the Afghan capital. This is unlikely to change any minds within the Pakistani establishment, but will help build Afghanistan’s case internationally, and further the idea that Pakistan is backing terrorist groups. As the diplomatic situation contains to deteriorate, the possibility of unilateral US airstrikes on the Pakistan side of the Afghan border cannot be ruled out.

US-Pakistan ties weathering the storm so far.

Despite fiery statements made by political leaders in both countries, the growing hostility between Islamabad and Washington has so far not been reflected in any general freeze in relations. US and Pakistani officials continue to meet and cooperate at all levels of government, despite the suspension of $1.1bn in US aid by President Trump in January. Nor do South Asia analysts think that there will be any change in Pakistan’s policy of covertly backing militant groups backing like the Haqqani network or the Afghan Taliban because of the aid halt. Pakistan’s foreign policy is still being controlled by the country’s powerful military, which has ruled the South Asia nation directly for approximately half of its 71-year history since independence. The Pakistani military, or elements of it, still sees great utility in maintaining close relations between itself and the Afghan Taliban (and their militant allies), because these groups are fiercely anti-India.

Forecast

With cities becoming the new global battlefields between modern militaries and irregular combatants in the low intensity but protracted civil wars of the 21st century, the Taliban-led insurgency will continue to target Kabul and other urban areas in 2018. Since the end of World War II, most global civil wars like Afghanistan’s have ended in 7-12 years; but foreign intervention tends to prolong the fighting, and Afghanistan has had US, Russian, Indian, Pakistani and a Chinese intervention since fighting first broke out there in 1978.

Moreover, only a military victory (unlikely as that seems after 17 years since the US intervention in Afghanistan) or a negotiated peace can end the violence there. Since both sides believe that a military victory is possible (President Trump having changed his mind about the issue since his election) and the Taliban see themselves as the rightful government of Afghanistan in any case, further conflict during the remainder of Trump’s first term is inevitable. The Taliban still continue to hope that if they can just wait the U.S. out until a president is elected who has announced that he (or she) will pull U.S. combat troops out, then they will be able to repeat their triumphant 1996 march into Kabul.

This article was published by Geopolitical Monitor.com

President Trump Isn’t A Threat To Democracy, But The Deep State Is – OpEd

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The Americans want the world to believe that their democracy is “exceptional,” which indeed it is for real believers, but the US political system is also second to none in its political criminality, corruption and aggressiveness against states that don’t follow its orders. In this respect, there hasn’t been any difference between Democratic or Republican presidents.

Since Trump became the nominee of the GOP, a conspiracy started against him that is unprecedented in modern American history. The then President Obama and its criminal Intel community, (Clapper and Brennan especially) plus the FBI and the DOJ began to conspire against Trump using a fake dossier to get a warrant against one of Trump’s advisers, Carter Page, from a kangaroo court, which is called FISA. This plot gathered full speed after Trump won the election against the most dangerous, hawkish and corrupt candidate the US has ever seen, Hillary Clinton.

The top brass of the Deep State has been keeping on with their criminal and undemocratic endeavor after Trump took the oath of office. The leftovers of the Obama administration within the Deep State even have still the infamy and mendacity to threat a sitting president.

Chuck Schumer, the minority leader of the Democrats in the Senate, tried to intimidate the US President. “Let me tell you: You take on the intelligence community — they have six ways from Sunday at getting back at you,” said Chuck Schumer Tuesday evening on MSNBC.

Even worse than Schumer, former CIA counterterrorism official Phil Mudd threatened Trump on CNN saying; “The workforce is going to look and this and say, this is an attack on our ability to investigate with integrity… The FBI people, I’m going to tell you, “are ticked” and they’re going to be saying, I guarantee you, “You think you can push this off this?”… You better think again, Mr. President. You’ve been around for 13 months. We’ve been around since 1908. I know how this game is going to be played. We’re going to win.”

Does it mean that Donald Trump could suffer the same fate as JFK to be killed by the CIA or any other US agency? The following video1 by Jimmy Dore, a Bernie Sanders supporter and one of the few authentic voices among American journalism, tells you more about the rottenness of the American political system and it’s “highly” regarded institutions than any textbook, not to speak of the media.

The political corruptness and criminality of the Intel community, the FBI, and the DOJ is so appalling that a genuinely democratic minded person can’t swallow. Without the intensive collaboration of the fawning and corrupt mainstream media, this could have never happened. As a foreign political observer of US foreign and domestic politics, I only believe 5 percent what CNN is airing. The NYT and the Post can write stories till Doomsday, but they will never change their minds on President Trump.

What they lacked was fairness a core principle of journalism. The vast majority of journalists worldwide had a bias towards Trump from day one. The following sentence of the renowned German journalist and TV anchorman Hanns Joachim Friedrichs should take the American journalists to heart. “A good journalist can be recognized by the fact that he does not associate with a cause, not even with a good one; that he is present everywhere, but doesn’t belong to it.”

There must be some heads rolling in Washington D. C.

Malaysia: Police Arrest 6 Thais, Seize Explosives

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By Hareez Lee and Mariyam Ahmad

Malaysian authorities on Monday said they recovered explosives, guns, ammunition and a small amount of methamphetamine during weekend raids in northern Kelantan state that led to the arrests of six Thai nationals.

The suspects, between the ages of 19 and 55, are all related and include two married couples from Thailand’s insurgency-stricken Deep South, according to police. The six were arrested following two raids Saturday morning raids on houses in Ketereh, a town along Kelantan’s border with the Deep South.

“Investigations revealed that the bomb was not related to Daesh and we believe that they wanted to use the explosive for their protection (from authorities),” state police Chief Hasanuddin Hassan said, using a different term for the extremist group Islamic State. “We also believe the guns were used by the suspects for protection as they were involved in drug trafficking.”

All six had entered Malaysia illegally and began renting the houses in the middle of last year, Hasanuddin said. The suspects are under remand until Feb. 10.

A team from the state police narcotics department raided the first house around 2:30 a.m. Saturday, arresting a married couple, ages 23 and 19, and a man, 39. Police recovered three pistols and explosive components including an electronic circuit board, batteries, sulphur and firecrackers, along with methamphetamine valued at 150 ringgit (U.S. $38.50).

“Kelantan state police’s bomb disposal unit was deployed to inspect the home-made explosive device,” Hasanuddin said.

The second raid occurred about 4:40 a.m. and led to the arrests of another couple and a woman between the ages of 31 and 55. Police recovered a fourth gun, 164 rounds of ammunition, methamphetamine valued at 100 ringgit ($25.70) and bomb-making components, according to Hasanuddin.

“We believe the seized items were smuggled through an illegal base at the Malaysia-Thailand border in Kelantan,” he said.

Police: Suspects rented handguns to others

Police believe the handguns were smuggled into Malaysia after the suspects bought them for between 5,000 ringgit ($1,283) and 6,000 ringgit ($1,539) each, Hasanuddin said.

“We believe they also rented their handguns to locals, but we are still investigating whether they had been used in drug or other criminal activities,” he said.

A security official in the Thai Deep South said the six had stayed in Kelantan illegally for nearly a year and the handguns likely were purchased and brought across the border through Sungai Kolok town to Kelantan.

The Malaysia-Thai border that runs through Kelantan and the neighboring northern states of Perlis, Kedah and Perak is infamous for smuggling activities involving drugs and weapons.

The Deep South has seen nearly 7,000 people – many of them civilians – killed in violence between Muslim and Malay-speaking separatists and the government since 2004.

Since 2015, Thailand’s military-controlled government has held exploratory talks with MARA Patani, a panel that claims to represent all rebel groups in the region. But those negotiations, facilitated by Malaysia, have failed to produce a limited ceasefire seen as a crucial first step in settling the conflict.

China’s Energy Claims Add To GDP Doubts – Analysis

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By Michael Lelyveld

China has claimed another substantial gain in energy efficiency during 2017, when the official economic growth rate accelerated for the first time in seven years.

On Jan. 19, the National Bureau of Statistics (NBS) said that China’s energy consumption per unit of gross domestic product fell 3.7 percent, exceeding the government’s target of 3.4 percent for the year.

The key efficiency index, also known as energy intensity, is a measure of China’s progress in reducing waste in industrial production and economic output.

While the government invariably reports annual improvements in energy intensity, the latest claim is notable because the NBS has also estimated that China’s GDP rose at a 6.9-percent rate, gaining speed after growing 6.7 percent in 2016.

The intensity estimate paints a picture of the best of both worlds — faster economic growth with higher efficiency and less energy waste to cause climate change and smog.

While that sounds like good news, it has been hard to verify.

According to the NBS, China’s total energy consumption edged up 2.9 percent last year, a far slower pace than the official GDP growth, supporting the calculation of less energy use per-unit of GDP.

But indicators released so far suggest higher rates of energy use.

China’s electricity consumption rose 6.6 percent last year, the National Energy Administration (NEA) said. The rate outpaced the 5-percent increase in 2016 and a weak 0.5- percent rise a year before when GDP growth was also recorded as 6.9 percent.

Apparent oil demand increased 5.9 percent last year, according to the research arm of state-owned China National Petroleum Corp. (CNPC). In 2016, apparent oil demand crept up 1.3 percent, S&P Global Platts energy news estimated last year.

Natural gas consumption jumped by some 16.6 percent, based on figures from the official Xinhua news agency, as China pressed northern cities to replace coal with the cleaner-burning fuel.

The National Development and Reform Commission (NDRC) reported a slightly lower growth figure for gas consumption of 15.3 percent, but that was still the biggest rise since 2012, Reuters said.

As for coal, production and import figures both pointed to the first consumption increase since 2013. Domestic output rose 3.2 percent, the NBS reported. Coal imports climbed 6.1 percent, the General Administration of Customs said.

Validity of economic claims

While the electricity and fuel figures seem to be pushing against the NBS estimate of total energy consumption, they may also raise doubts about the validity of economic claims.

But there were also signs that supported the story of stronger economic growth. Rail tonnage, a favorite “surrogate” indicator of the economy, along with power, rose 10.7 percent after an 0.8-percent decline in 2016.

The wide year-to-year disparities in component figures raise questions about the relatively minor changes in GDP growth rates from 6.9 percent in 2015, to 6.7 percent in 2016 and back again to 6.9 percent in 2017.

In reporting the 2017 results, The New York Times called the official GDP figures “implausibly smooth and steady.”

In a blog posting for the American Enterprise Institute in Washington, resident scholar Derek Scissors noted the virtually seamless stability of the official quarterly GDP growth rates, varying by only 0.1-0.2 percentage points over the past two years.

The uncanny smoothness has prevailed despite jagged variations in contributing factors, including fixed-asset investment, retail sales, trade, and energy use. The preliminary NBS estimates are also typically unchanged despite more accurate data available later in the year.

“Better numbers for calculating GDP appear later because they are hard to measure for such a huge population in less than three weeks after a quarter ends. GDP is easy because growth is so smooth that one almost knows the result in advance,” Scissors said.

The questions are compounded in the case of energy intensity, since it is a ratio of consumption estimates to official GDP. In a further complication, the NBS converts all forms of energy into “millions of tons of coal equivalent” (Mtcoe), using its own formulas.

Yet, energy efficiency gains have also been remarkably stable, reaching a substantial 5 percent in 2016 and a whopping 5.6 percent in 2015, despite big variations in electricity use and outbreaks of smog.

The intensity reduction announced for 2017 appears to put China on track to meet its five-year target of a 15-percent cut by 2020.

Subject to revision

David Fridley, staff scientist for the China Energy Group at the U.S. Department of Energy’s Lawrence Berkeley National Laboratory in California, said the latest estimates are subject to revision.

“These early reports need to be taken with a grain of salt. No huge economy such as China’s could possibly have GDP and energy consumption numbers for a year that just ended three weeks ago,” said Fridley, who has tracked the energy intensity figures as far back as the 1980s.

In practice, significant revisions of GDP and energy intensity estimates are rare, or rarely publicized, with some notable exceptions.

In 2015, the NBS disclosed a massive revision to its coal figures, indicating that the country had been consuming up to 17 percent more of the high-polluting fuel than it previously recorded.

“Even for a country of China’s size, the scale of the correction is immense,” The New York Times said at the time.

The revision was seen as a major setback for efforts to curb greenhouse gases by the world’s largest emitter, boosting estimates of China’s carbon dioxide (CO2) releases by nearly 1 billion metric tons per year.

Fridley said that factors like growth in power consumption may be of little value in assessing the official intensity estimates, since electricity represents only 19 percent of China’s final energy use.

When asked whether the latest efficiency claims appear credible, given the data that has been seen so far, Fridley gave a mixed response.

“Yes and no. Yes, in that the figure is certainly consistent with performance of other years and there was no huge jump in heavy industrial activity,” he said by email. “But no, in the sense that I rather doubt the GDP figure.”

Fridley cited more concern for the climate implications of the estimates than for the efficiency numbers themselves.

In November, international climate scientists of the Global Carbon Project warned that world CO2 emissions would rise two percent, citing an estimated three-percent increase in China’s coal consumption in 2017.

“The intensity numbers are not that important, since we still saw an absolute increase in CO2 emissions, and that’s the bottom line,” Fridley said.

More Than 800 Rohingya Leave Myanmar’s Northern Rakhine For Bangladesh

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More than 800 Rohingya Muslims have left Myanmar’s volatile Rakhine state for neighboring Bangladesh in the past week, while others continue to cross the border daily, authorities in Buthidaung township said Monday.

In total, nearly 700,000 Rohingya have fled Rakhine’s three northern townships of Buthidaung, Maungdaw, and Rathedaung since a military crackdown targeting them began in August 2017.

Buthidaung township administrator Kyaw Min Tun told RFA’s Myanmar Service that the government and other organizations have provided support to the remaining Rohingya to get them to stay.

“Actually, the government, civil society organizations, and the U.N.’s refugee agency have provided support to them for their survival, and they also can work on farms and in the fishing business because the situation in the region is getting calm,” he said.

Kyaw Min Tun also said Rohingya residents from Rathedaung, which has the smallest number of Rohingya of the three townships, are crossing the border as well.

“Most people from Rathedaung are going to Bangladesh,” he said. “They are going there for their own reasons, such as to join relatives already in Bangladesh, and they asked them to leave Rakhine state or else they have threatened to move out.”

Myint Kyaing, permanent secretary of Myanmar’s Ministry of Labor, Immigration and Population, said the government has been trying to give the Rohingya what they need so that those still living in northern Rakhine will remain.

“[But] we can do nothing when they go to Bangladesh, even though we try to stop them, because it is their right to decide where they want to live,” he said.

About 850 people from 12 villages in Buthidaung township arrived at Dawdu Tharya Creek to go to Bangladesh on Jan. 28, Myanmar’s Information Ministry said in an announcement.

Some Rohingya who escaped the crackdown have accused Myanmar forces of conducting a brutal campaign, including killings, rapes, torture and arson, in their communities. The U.N. and the United States have said that the atrocities amount to ethnic cleansing.

The Myanmar government has denied the reports and blocked both a U.N. commission of investigators and the media from independently investigating refugees’ claims.

Myanmar and Bangladesh signed an agreement in November 2017 for the voluntary repatriation of the Rohingya with returns slated to begin in January. But delays in compiling and verifying the list of people to be sent back has held up the process, and it remains uncertain whether significant numbers are willing to return.

Zeid Ra’ad Al Hussein, the U.N.’s high commissioner for human rights, said during a speech in Jakarta on Monday that possible acts of “genocide and ethnic cleansing” against the Rohingya could spark a religious-based conflict that spreads beyond Myanmar’s borders, Agence France-Presse reported.

“Myanmar faces a very serious crisis with a potentially severe impact on the security of the region,” he was quoted as saying.

“It is sometimes said that today’s human rights violations will become tomorrow’s conflicts,” he said. “If the Rohingya crisis were to spark a broader conflict based on religious identities, the ensuing disputes could be a cause for great alarm.”

Rakhine state to sue AP

Zeid’s remarks came on the heels of the publication of an Associated Press report saying the news agency had confirmed the existence of more than five previously unreported mass graves in Buthidaung township’s Gu Dar Pyin village through interviews of survivors in refugee camps in and time-stamped cellphone videos.

Myanmar’s government rejected the report, denying that there were five mass graves of Rohingya in the village, and saying that 19 terrorists had been killed and buried in the area.

The Rakhine state government said on Monday that it will sue the Associated Press for what it called a false report, though it has yet to announce under which laws it will file the case.

“We are going to sue the AP,” said Maung Maung, secretary of Rakhine state’s Information Committee. “We investigated the situation as AP said and found nothing. We have to find out what charges are applicable in order to sue it.”

Government authorities said that a commission consisting of the Buthidaung township administrator, a police officer, a legal officer, a doctor, and an immigration officer went to the five places AP mentioned, but had found nothing.

Village heads and residents also said that no such incident as the AP reported had occurred in their village.

Meanwhile, the Myanmar government is committed to not using the term “Rohingya,” Thein Swe, Myanmar’s minister of labor, immigration, and population told lawmakers on Monday in the capital Naypyidaw.

He made the comment in response to a question from opposition lawmaker Tin Aye of the Union Solidarity Development Party (USDP) about the use of the term, which is not recognized by the Myanmar government.

The government refers to the Rohingya as “Bengalis,” because they are considered illegal immigrants from Bangladesh. As such, they are excluded from Myanmar’s official list of 135 ethnic groups, and thereby are prevented from becoming citizens.

Thein Swe also said that the Myanmar government has repeatedly told the media that there is no Rohingya ethnicity in Myanmar and that the term cannot be used in any speech or official message.

Myanmar embassy officials around the world and Myanmar diplomats at the United Nations do not use the term, he said.

But Thein Swe told reporters after the parliamentary meeting that the media can now use whichever term they want.

“We have been working for all interests for the nation [and] ethnic groups in the long term with a broad perspective and corrected actions,” he said. “We have responded with proper consideration and wisdom according to rules and regulations instead of responding emotionally.”

Reported by Min Thein Aung, Wai Mar Tun, and Win Ko Ko Latt for RFA’s Myanmar Service. Translated by Khet Mar. Written in English by Roseanne Gerin.


Malaysia: Election Race Tightening For PM Najib Razak

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Malaysian Prime Minister Najib Razak assures Malaysia’s impending 14th general election will be free and fair but says he needs inspiration on when to dissolve parliament and allow the nation’s citizens to deliver judgment on his spotty leadership.

“As long as we do it within the ambit of the constitution. Let’s see whether we have to wait until June [the automatic dissolution of parliament] or earlier. We will see how things develop,” he was reported him as saying on Jan. 30 after chairing a meeting of his party, the United Malays National Organisation (UMNO), in Kuala Lumpur.

His remarks paint a picture of a worried, even fearful coalition government conceding it is facing one of its most difficult tests since coming to power in 1957.

Najib knows he is being given a run for his money, some of which was allegedly looted from a state wealth fund. He is the subject of a kleptocracy investigation by the U.S. Department of Justice and government investigators in several foreign capitals. He denies any wrongdoing.

But the swell of popular opinion against him and UMNO, the lynchpin of the Barisan Nasional coalition government, has only increased concerns that electoral fraud and dirty politics will be used to carry him and the coalition over the finish line again.

A significant number of voters are frustrated and scared about the direction Malaysia appears headed since he became prime minister in April 2009. Fundamental Islam has gained strength under him, the cost of living has risen and living standards have tumbled, especially among lower-income groups.

Najib claims to be leading the country to a better future. Yet communal and religious discord has grown, the economy is sputtering and new security laws are in place. In the 2013 elections, Barisan Nasional lost its two-thirds majority in parliament and its victory was with only 47 percent of the popular vote.

It showed that the electoral system was tilted in the government’s favor by increasing seats in the rural Malay heartlands despite fewer voters and limiting seats in urban areas with more voters because Najib is popular there.

More rural constituencies are due to be added, improving Barisan Nasional’s chances of hanging on to power. Electoral boundaries have been redrawn and new constituencies demarcated along ethnic lines in the multi-religious and multi-ethnic nation.

Fears of another skewed election are genuine. Complaints about irregularities during the re-delineation process have been ignored. Electoral reform movement Bersih warns that postal voting remains open to abuse as observed in previous elections. Its calls for greater checks and balances have gone unheeded.

Nurul Izzah Anwar, the daughter of charismatic jailed opposition leader Anwar Ibrahim, has predicted that the new electoral boundaries drawn up will be passed by parliament in March.

She believes the ruling coalition will ram through the re-delineation niceties without scrutiny, paving the way for what she calls the “dirtiest elections ever” and further damaging faith in the Malaysian system of government. Some youth have already given up on their leaders and started a campaign to boycott the lot of them.

The opposition alliance, Pakatan Harapan, wants Najib to invite independent election observers to Malaysia for the election to prove his claim that the poll will be free and fair.

The alliance’s deputy president, Muhyiddin Yassin, the former deputy prime minister who was ousted from office by Najib for questioning his role in the 1MDB scandal, said this was the only way to prove the claim that there would be “no room” for cheating.

It wants the government to invite election observers from the Commonwealth Secretariat and the United Nations. Malaysia has never invited established and independent international election observation teams before. In 2013, observers from the Election Commission’s counterparts in the Asean region were invited but disallowed from publicizing their findings.

Muhyiddin said Najib’s claim that there was no room for cheating was meaningless as cheating was already taking place.

“Anyone who studies the electoral maps will know that changes were intentionally made to favor Barisan Nasional. Is this not a form of cheating?” he said in a statement on Feb. 2.

Critics have also noted how there are thousands of dubious entries in the voter list, often without proper addresses.

The government’s decision to establish a special committee to formulate laws to curb “fake news” has also raised concerns about the freedom of the press.

Efforts to curb “fake news” should not come at the expense of freedom of speech, expression, information and the press, said Eric Paulsen, head of the NGO Lawyers for Liberty, in a statement on Feb. 2.

Meanwhile, the vast majority of opposition supporters have placed their faith in former prime minister Mahathir Mohamad, once described as authoritarian and corrupt himself, to lead the charge against Barisan Nasional and Najib.

Ironically, it was Mahathir who paved the way for current abuse of the political system. He will get a dose of his own medicine when elections are called.

The notion that a government can carry on without change after the shellacking it received in 2013 is absurd. Is all that it has done legitimate? Technically, yes. But it is arrogant and stupid to ignore the common sense demands of Malaysian citizens — accountability, fairness and an end to corruption.

Changing Weather Patterns Throwing Ecosystems Out Of Whack

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Day and night will soon align, marking the start of spring. But the timing of nature’s calendar is starting to fall out of sync.

In a study published in Nature Climate Change, a team of researchers from the University of South Florida in Tampa found that animal species are shifting the timing of their seasonal activities, also known as phenology, at different rates in response to changing seasonal temperatures and precipitation patterns.

“As species’ lifecycles grow out of alignment, it can affect the functioning of ecosystems with potential impacts on human food supplies and diseases,” said lead author Jeremy Cohen, PhD, postdoctoral researcher at the University of South Florida Department of Integrative Biology. “We rely on honeybees to pollinate seasonal crops and migratory birds to return in the spring to eat insects that are crop pests and vectors of human diseases. If the timing of these and other seasonal events are off, ecosystems can malfunction with potentially adverse effects on humans.”

Dr. Cohen and his team found that cold-blooded species and those with small body sizes are breeding or aggregating earlier than warm-blooded or large-bodied species in spring. They come to this conclusion after reviewing thousands of records of phenological shifts dating back to the 1950s.

“Our research elucidates the drivers of phenological responses and the traits of organisms that influence their ability to track changing climates,” said co-author Jason Rohr, PhD, professor at the University of South Florida. “We expect these findings to improve our ability to forecast the locations, systems and species that might be at the greatest risk from climate change and ideally mitigate any adverse effects that these changes might have on the services that ecosystems provide to humans.”

Nearly One In Three Pugs Has An Abnormal Gait

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Nearly one in three pugs has an abnormal gait, which in turn is linked to other health issues, finds a Swedish study of owners of the breed, and published online in Vet Record.

The findings suggest that gait abnormalities might be rather more serious than previously thought, say the researchers.

A growing body of evidence indicates that pugs are prone to various orthopaedic and neurological problems, but it’s not clear how common these conditions might be.

In a bid to find out, the research team quizzed the owners of 2374 pugs who were registered with the Swedish Kennel Club, and aged 1, 5, and 8 years old in 2015/16.

Pug owners were asked whether their dogs had any gait problems, and if so, how long these had been going on.

Gait abnormalities included lameness, poor coordination (ataxia), weakness, as well as any indirect signs of gait abnormality, such as inability to jump, and abnormal wearing of the nails and the skin on their paws.

They were also asked about their dog’s general health, and encouraged to send in video footage of their pet walking slowly back and forth on a leash, including a side view.

Some 550 pug owners responded to the questionnaire (26% response rate) and after excluding 30 accompanying videos for technical/quality reasons, 59 were assessed by two veterinary neurologists.

Just under 80 percent of pug owners (381) thought their dog’s gait was normal, while 169 described this as abnormal. In 4 percent of the pugs, the problem had lasted less than a month; in 16 percent, it had gone on for longer.

Among the 128 respondents who said their pet had worn down their nails/paw skin–a sign of gait abnormalities, 57 owners felt their dogs had a normal gait.

Some 46 of the 59 owners who submitted a video also claimed their dogs had a normal gait (78%), but expert analysis suggested this figure was lower at just under 68 percent (40 dogs).

When all the cases were added up, a prevalence of gait problems of just under 31 percent emerged across the group.

On average, pugs were 2 years old when the gait abnormality first started, with front leg problems tending to show up earlier than problems with the back legs. But gait abnormalities were strongly associated with older age.

They were also associated with breathing problems and excessive scratching around the neck/ears and head. And pugs with abnormal gait were more likely to have incontinence issues.

Previous research has linked overweight with breathing problems in short nosed, flat faced (brachycephalic) breeds, like pugs. But the researchers found no association between weight and gait abnormalities in these dogs.

Forty seven owners said their dogs had been put to sleep: abnormal gait was the single most frequently cited cause (17/59; just under 29%), “which suggests gait abnormalities to be a more significant health problem that what previous published scientific literature has suggested,” comment the researchers.

Orthopaedic and/or neurological conditions can cause abnormal gait, they point out.

“Although this study did not aim to differentiate orthopaedic from neurological causes for gait abnormalities, the high prevalence of wearing of nails reported in the questionnaires, and the fact that lameness was not a common finding in the submitted videos, suggest that the majority of gait abnormalities in the pugs were indeed related to neurological rather than orthopaedic disorders,” they explain.

The researchers acknowledge that the response rate for their questionnaire wasn’t very high, although this might have been influenced by the Swedish petition for the right of brachycephalic breeds to breathe, which launched the same year as the survey, they suggest.

But they nevertheless conclude that the prevalence of gait abnormalities was “high,” which indicates that these may be more of a health problem than previously thought.

Dim Light May Make Us Dumber

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Spending too much time in dimly lit rooms and offices may actually change the brain’s structure and hurt one’s ability to remember and learn, indicates groundbreaking research by Michigan State University neuroscientists.

The researchers studied the brains of Nile grass rats (which, like humans, are diurnal and sleep at night) after exposing them to dim and bright light for four weeks. The rodents exposed to dim light lost about 30 percent of capacity in the hippocampus, a critical brain region for learning and memory, and performed poorly on a spatial task they had trained on previously.

The rats exposed to bright light, on the other hand, showed significant improvement on the spatial task. Further, when the rodents that had been exposed to dim light were then exposed to bright light for four weeks (after a month-long break), their brain capacity – and performance on the task – recovered fully.

The study, funded by the National Institutes of Health, is the first to show that changes in environmental light, in a range normally experienced by humans, leads to structural changes in the brain. Americans, on average, spend about 90 percent of their time indoors, according to the Environmental Protection Agency.

“When we exposed the rats to dim light, mimicking the cloudy days of Midwestern winters or typical indoor lighting, the animals showed impairments in spatial learning,” said Antonio “Tony” Nunez, psychology professor and co-investigator on the study. “This is similar to when people can’t find their way back to their cars in a busy parking lot after spending a few hours in a shopping mall or movie theater.”

Nunez collaborated with Lily Yan, associate professor of psychology and principal investigator on the project, and Joel Soler, a doctoral graduate student in psychology. Soler is also lead author of a paper on the findings published in the journal Hippocampus.

Soler said sustained exposure to dim light led to significant reductions in a substance called brain derived neurotrophic factor – a peptide that helps maintain healthy connections and neurons in the hippocampus – and in dendritic spines, or the connections that allow neurons to “talk” to one another.

“Since there are fewer connections being made, this results in diminished learning and memory performance that is dependent upon the hippocampus,” Soler said. “In other words, dim lights are producing dimwits.”

Interestingly, light does not directly affect the hippocampus, meaning it acts first other sites within the brain after passing through the eyes. Yan said the research team is investigating one potential site in the rodents’ brains – a group of neurons in the hypothalamus that produce a peptide called orexin that’s known to influence a variety of brain functions. One of their major research questions: If orexin is given to the rats that are exposed to dim light, will their brains recover without being re-exposed to bright light?

The project could have implications for the elderly and people with glaucoma, retinal degeneration or cognitive impairments.

“For people with eye disease who don’t receive much light, can we directly manipulate this group of neurons in the brain, bypassing the eye, and provide them with the same benefits of bright light exposure?” Yan said. “Another possibility is improving the cognitive function in the aging population and those with neurological disorders. Can we help them recover from the impairment or prevent further decline?”

Asia’s Dark Underbelly: Conflicts Threaten Long-Term Stability And Development – Analysis

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A host of conflicts, stretching across the Asian landmass from the Middle East to Southeast Asia and northwest China, are likely to spark violence, complicate economic development, and dash hopes for sustainable stability.

The conflicts and tensions range from ethnic strife in Kurdish areas of Syria and Iran, mortally wounded Israeli-Palestinian peace efforts, embattled Baloch nationalism in Pakistan, disposed Rohingya in Southeast Asia, and widespread discontent in Iran, to iron-grip repression in Egypt, Saudi Arabia, and Xinjiang. Individually and collectively, they promise to create black swans and festering wounds that threaten economic growth and social development.

Stripped to their bare essence, the conflicts and tensions have one thing in common: a quest for either cultural, ethnic or national, or political rights or a combination of those, that governments not only refuse to recognize but are willing to suppress with brutal force.

Repression and military action are designed to suppress political, ethnic and/or national, and economic and social grievances in the false belief that a combination of long-term suppression and economic development will weaken ethnic and/or national and political aspirations as well as undermine dissent.

That is true in case of the Rohingya and Uyghurs as well as for brutal repression in Egypt, Saudi Arabia, Iran, and northwest China, and military actions such as the Turkish intervention in Syria’s Afrin.

Problems in the Middle East and South Asia are aggravated by a debilitating struggle for regional hegemony between Saudi Arabia and Iran that threaten to destabilize the Islamic republic and Pakistan, have already produced a devastating war and a humanitarian catastrophe in Yemen, and are dragging the Horn of Africa into its orbit.

If history teaches anything, it is that only a minority of autocrats have achieved economic and social development. General Augusto Pinochet ensured that Chile is the only South American member of the Organization of Economic Cooperation and Development (OECD), albeit at a high human cost, while Asia gave birth to tigers like South Korea and Taiwan.

Moreover, Asia’s multiple conflicts and tensions do not distract from the fact that by and large, the continent is flourishing economically.

History, however, also teaches that ethnic and/or national aspirations explode with vehemence the moment opportunity arises. Seventy years of communist rule in the Soviet Union failed to smother nationalist sentiment in parts of the empire like Chechnya and the Caucasus or erase nationalist differences between Armenia and Azerbaijan.

Forty-seven years of communism did not prevent nationalist sentiment from breaking Yugoslavia apart in a series of bloody wars in the 1990s in the wake of the demise of the Iron Curtain.

Carved out of the ruins of the Ottoman empire, modern Turkey has failed to erase demands for Kurdish cultural, if not ethnic or national aspirations, through economic development and political integration based on the principle of Mustafa Kemal Ataturk, the visionary who founded the republic, that “happy is he who is a Turk.”

Similarly, Palestinian nationalism is alive and kicking 51 years into Israeli occupation of lands conquered during the 1967 Middle East war.

The aftermath of the 2011 Arab popular revolts, involving a concerted counterrevolution co-engineered by the United Arab Emirates and Saudi Arabia, has laid bare the essence of current conflicts and disputes: a determination of regimes to impose policies on minorities or states at whatever cost.

The UAE-Saudi-led diplomatic and economic boycott of Qatar is a case in point as are Asia’s multiple ethnic conflicts. They erupt in a world in which post-colonial borders are being called into question in countries like Syria, Iraq, Libya, Myanmar and Pakistan.

The Rohingya, amid the dizzying array of ethnic and national conflicts stretching from the Middle East or West Asia to China in the East, exemplify the problem in, perhaps, its purest form. Potentially, the Rohingya could become Southeast Asia’s Palestine.

What makes the Rohingya unique is the fact that their aspiration, unlike Palestinians, Kurds, Baloch or Uyghurs, does not involve attachment to a specific piece of land despite a centuries-old history in the Myanmar state of Rakhine. That is also what potentially enables creative thinking about a solution that could open the door to innovative thinking about a multitude of other conflicts.

To many Rohingya, lingering in abysmal conditions in Bangladesh’s Cox Bazaar, after some 650,000 fled repression and terror in Myanmar, securing a sense of belonging on whatever territory that guarantees them protection from persecution as well as economic and social development, is more important than returning to an uncertain existence in Rakhine state. “All I want, is a place to which I can belong,” one refugee said.

Few Rohingya, analysts and officials believe that an agreement that in theory allows Rohingya in Bangladesh to return to Rakhine state will solve the problem. Even if the Rohingya were allowed to return in significant numbers, something that many doubt, nothing in Myanmar government policies and statements suggests that they would be anything more than a barely tolerated, despised ethnic group in a country that does not welcome them.

The makings of a Palestine-like conflict that would embroil not only Myanmar but also Bangladesh and that could spread its tentacles further abroad are evident. In a rare interview with Al Jazeera, Mohammed, a spokesman for the Arakan Rohingya Salvation Army (ARSA) using a false name, predicted that suicide bombings constitute the next phase of their effort to secure a safe and stable existence.

The Falah-i-Insaniat Foundation, a charity associated with Lashkar-e-Taiba, one of South Asia’s deadliest groups, claimed in December that it had established operations in Rakhine state where it had distributed blankets and cash.

“We attacked them (the Myanmar military) because they refuse to give us our basic rights as citizens. Again and again, [the] Myanmar government lies to the world. They say they treat us well and give us rights, but they don’t. We are unable to travel from one place to another. We are not allowed to run a business. We are not allowed to go to university. The police and military use various way to suppress us. They beat, torture and humiliate us. That is why we decided to stand up,” Mohammed said.

Preventing the Rohingya issue from spiralling out of control and becoming a problem that can no longer be contained to a specific territory, much like the multitude of similar conflicts, disputes, and repression-based regime survival strategies across Asia, requires out-of-the box thinking. Short-term repression and efforts to impose one party’s will at best buys time and sets the scene for avoidable explosions.

With out-of-the-box thinking a rare commodity, nationalism and protectionism on the rise, and regimes, emboldened by an international community unwilling to stand up for basic rights, able to go to extremes like the use of chemical weapons against rebels in the Syrian province of Idlib, long-term prospects for stable and secure development in Asia are dimmed and potentially threatened by predictable black swans.

US Embassy Move To Jerusalem To Significantly Complicate Tense Situation In Region – Analysis

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The US embassy in Jerusalem will begin its work in 2019. This was announced by US President Donald Trump during a meeting with Israeli Prime Minister Benjamin Netanyahu at the World Economic Forum in Davos.

“We’ve developed a great relationship […] We have discussions going with Israel on many things, including trade. But the big move and something that was very historic and very important was the fact that we will be moving our embassy, as you know, to Jerusalem,” the American leader said and added that it would be “a small version” of the diplomatic mission in this city.

In turn, Benjamin Netanyahu stressed that this decision “will be forever etched in the hearts” of the Israeli people.

However, the possible consequences of the US Embassy’s move to Jerusalem have caused concern among a number of world powers, including countries of the EU and the Middle East. For example, French President Emmanuel Macron considered the actions of the US president to be “deplorable,” and Palestinian leader Mahmoud Abbas called the Jerusalem decision “slap of the century.”

UN Secretary General Antonio Guterres said that Jerusalem should remain the capital of both states as there is no plan B for resolving the Israeli-Palestinian conflict.

This step of the United States was not supported by the authorities of Great Britain, Germany, Canada and Mexico. Egypt, Iran, Lebanon, Saudi Arabia, Syria and Turkey condemned the position of Donald Trump, and Leonid Slutsky, Chairman of the State Duma’s international affairs committee, described the actions of the United States as “playing with fire in the literal sense of the word.”

Analyzing the reasons for this ambiguous decision, Hugh Gusterson, Professor of Anthropology and International Affairs at George Washington University, president of the American Ethnological Society, suggested that they have more to do with politics in the US than in Israel.

“The Trump Administration is closer to the Israel lobby than any previous administration has been; it is a guiding principle of Trump’s policy-making to do the opposite of what Barack Obama did; and, of course, Palestinians are largely Muslim, and it is clear that Donald Trump doesn’t like Muslims. The interesting question is whether Saudi Arabia […] approved the shift,” the professor told PenzaNews.

Answering the question about why the US authorities finally decided to move to the implementation of the bill approved 23 years ago, the expert reminded that “American politics are always in tension between the legislative and executive branches.”

“Congress was responding to pressure from the Israel lobby when it approved the relocation of the embassy in 1995. But the State Department has always blocked the move, fearing it would trigger violence in the Middle East, make peace between Israel and the Palestinians harder, and isolate the US diplomatically. So for years the US has had its cake and eaten it too. Now a President who does not do well with complexity has decided to simply eat the cake,” Hugh Gusterson explained and added that the State Department might still find a way to defer the move.

According to Lidia Averbukh, Associate for Middle East and Africa Research Division, German Institute for International and Security Affairs, Donald Trump thus is implementing an earlier public declaration he made in December 2017 designating, as he sees it, Jerusalem as the capital of Israel.

“The announcement is a major departure from more rhetorical statements made earlier that aimed to appeal to various domestic constituencies, including the evangelical Republican base. An actual presence of the US embassy in Jerusalem goes beyond symbolism, and the physical relocation of the embassy from Tel Aviv is likely to lead to changes in the administrative, political and ceremonial life of Israel. There would be a slight political toning down if the embassy moved to the Western part of the city instead to the significantly Arab East Jerusalem,” the expert said.

Answering a question about why the decision to move the embassy, made back in 1995, has not been implemented so far, the analyst stressed that neither the Israeli government, nor the US authorities had been interested in such a move until today.

“On the contrary, the bill to provide for relocation of the US-Embassy from Tel Aviv to Jerusalem from 1995 was brought about by the opponents of the Oslo peace process, who aimed to impede the then ongoing talks. Today we are witnessing the unique constellation of right wing and religious powers in Israel and the United States simultaneously,” Lidia Averbukh said.

“The most dangerous reaction would be the Israeli interpretation of these circumstances as a carte blanche for further legislation on settlements and expansion direction West Bank,” the analyst added.

In turn, Evgeniya Voyko, associate professor of the department of political science at the Financial University under the Government of the Russian Federation, reminded that the actions of the United States met rather strong resistance from the Arab world, as well as the UN General Assembly.

“According to the US president, this year the embassy will not be moved to Jerusalem for technical reasons, but the decision has already been made. Washington implements infrastructure tasks and is ready to go to the mat on this issue,” the analyst said, adding that the American leader “needed some loud steps against the backdrop of a rather sluggish US campaign in Syria.”

Analyzing the potential consequences of the embassy move, she stressed that this is only one of the US Middle East policy points.

“Donald Trump provided very strong support to Israel. This, of course, will further exacerbate the already tense situation in the Middle East. Arab countries are dissatisfied with the policy implemented by the United States in the region as a whole, and with the Jerusalem situation in particular,” Evgeniya Voyko said.

According to her, this can lead to local clashes and collisions.

“The situation in the region has repeatedly exacerbated earlier, so the predictable outcome can be a tough and militant reaction of Palestine,” the expert stressed.

In her opinion, all this will not contribute to strengthening the US position.

“There is also Syrian direction in Washington’s Middle East strategy; direction connected with Saudi Arabia, which is going through difficult times from a political point of view; there is also rather tense relations between the US and Iran, caused by Washington’s position on the Iran nuclear deal. Moving the embassy will only be an additional negative element for the US and Donald Trump personally,” Evgeniya Voyko said.

Meanwhile, Ilgar Velizade, Head of the Baku-based South Caucasus Club of Political Scientists, stressed that the decision to move the diplomatic mission goes against the existing resolutions of the UN Security Council on the Arab-Israeli conflict and Jerusalem.

“This decision rests on a law that mandates the relocation of the US embassy in Israel from Tel Aviv to Jerusalem. This law was signed in October 1995 by US President Bill Clinton. For more than 20 years, the law implementation was simply postponed, but nobody canceled it. Trump became the first president who decided to implement the provisions of the law. There is a certain logic in his actions. Why adopt the law, and then postpone its implementation for so many years? On the other hand, there should be no illusions about Trump’s position on Israel or Israeli-Palestinian relations: he is implementing his own election promises. It is known that the interests of the Trump family, his business interests are connected with Israel. Now these interests began to dominate American foreign policy in the Middle East,” the political scientist explained.

From his point of view, this can become bitter legacy for the future of American leadership.

“If the new administration comes to power on the wave of sharp criticism of the current policy, it will try to mitigate the consequences of this decision as much as possible,” Ilgar Velizade said.

“Nevertheless, we should not expect significant changes in the position of the current US administration regarding Jerusalem. […] Undoubtedly, the implementation of the embassy transfer plan will further complicate the situation in the Middle East, and will also reduce the already low Washington authority in the region,” the analyst concluded.

The status of Jerusalem is one of the key problems in the Palestinian-Israeli conflict.

As a result of 1948–1949 Arab-Israeli war initiated by the Arab countries after the proclamation of the State of Israel on 14 May 1948, Jerusalem, where the holy sites of Judaism, Islam and Christianity are located, was divided between Transjordan (now Jordan), which established control over the eastern part of the city, and Israel, which controlled its western part.

However, during the Six Day War of 1967, the Israelis annexed East Jerusalem. Since then, the Jewish state has insisted that Jerusalem is “eternal and indivisible” capital of Israel. In turn, the Palestinians want to make the eastern part of the city the capital of their state.

The UN did not recognize such “unification” under the Israeli flag. Jerusalem is considered the capital of Israel only by Israel, the US and some countries of Latin America. The rest consider Tel Aviv the capital of Israel, in accordance with the UN resolution. The diplomatic missions of 86 foreign states, including Russia, are located there.

Source: https://penzanews.ru/en/analysis/65043-2018

Change In US Income Tax Rate Leads To Billions In Unexpected Profits And Losses

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As politicians tout the merits of U.S. tax reform on personal returns and corporate investment, many companies are scrambling to deal with the law’s immediate impact on the value of their deferred tax assets and liabilities and their bottom lines in the fourth quarter.

Under the Tax Cuts and Jobs Act, signed into law by President Donald Trump on Dec. 22, companies filing calendar-year financial statements using generally accepted accounting principles, known as GAAP, are required to re-evaluate their deferred tax assets and liabilities in the fourth quarter as a result of the late-year change in the corporate income tax rate from 35 to 21 percent

In a paper published in Tax Notes, professors from Indiana University’s Kelley School of Business and the University of Virginia’s McIntire School of Commerce report that this could result in a median drop in earnings of $100 million for 211 companies in the Standard & Poor’s 500 needing to re-value their net deferred tax assets.

For the median company, that figure is equal to about 10 percent of prior net income. The total negative financial effect overall on these companies could total $108 billion.

“This tax act is going to have financial reporting considerations that have been largely overlooked so far in the discussion,” said Bridget Stomberg, assistant professor of accounting at Kelley. “It’s changing future cash flows. One company might be picking up a lot of income this quarter as a result, while their competitor might be recognizing a big expense.”

Among the companies they found with potentially large decreases in net earnings are Citigroup Inc. ($18.67 billion or 125 percent of prior-year net income), General Motors Co. ($13.84 billion or 147 percent of prior-year income), American International Group ($8.28 billion, or 975 percent, after a small loss the previous year), Bank of America ($7.6 billion, 43 percent) and Ford Motor Co. ($3.6 billion, 78 percent).

On the other hand, the tax law will have unexpected benefits for 317 publicly traded companies in the sample, who could report a median increase in accounting earnings of $341 million or about $400 billion overall.

Some of the biggest beneficiaries of the tax law change could include Berkshire Hathaway, which could report the largest increase in net earnings, $30.78 billion or 128 percent of prior-year net income, followed by AT&T Inc. ($23.49 billion, 181 percent), Verizon Communications Inc. ($18.36 billion, 140 percent), Comcast Corp. ($13.92 billion, 160 percent), Pfizer Inc. ($12 billion, 167 percent), Exxon Mobil Corp. ($11.96 billion, 153 percent) and Apple Inc. ($11 billion, 23 percent).

By law, companies report differences between financial statement income and taxable income each year, leading to deferred taxes. For one-third of companies in the study’s sample, future tax liabilities will go up because companies were recording an expected future benefit of 35 cents on the dollar, which the Tax Cuts and Jobs Act reduced to only 21 cents on the dollar.

Stomberg and her co-author, Jeri Seidman, an assistant professor at the McIntire School of Commerce, used disclosures of total deferred tax assets and liabilities from the income tax footnotes in the most recent annual reports of 528 companies that were listed in the Standard & Poor’s 500 anytime in 2016 or 2017.

They calculated the magnitude of net deferred tax assets and liabilities and estimated the expected change at each company given the 14 percentage-point reduction in the corporate tax rate. They also estimated the effect of these adjustments on profits, leverage and effective tax rates.

The authors hope the findings in their paper, “The Financial Reporting Consequences of Tax Reform: How the Corporate Tax Rate Will Affect Profits,” will help those reading financial statements anticipate and better understand the nature of these one-time adjustments. They acknowledge that many investors, as well as some company CEOs and CFOs, will struggle to understand the real impact of the law on fourth-quarter results.

“Our anticipation is that companies are going to call it out as a transitory item,” Stomberg said of the one-time adjustment to deferred tax assets and liabilities. “This quarter there should be more of a focus on non-GAAP earnings, or pro-forma earnings, where companies compute book income with this number in it, but then take it out and say to everybody, ‘Try to focus on this other number instead.'”

“Obviously, if you’re a company that’s getting hurt by it, you have a big incentive to do that,” she added. “Because it’s so big and because it’s affecting everybody, it’s going to be hard for companies to not call it out, even it is a benefit to them.”

Stomberg said this is going to be a difficult financial reporting season for public companies because the legislation was passed so late in the year. Nearly all public companies are required to file their 10-K annual report within the first 60 days of the year, but many firms are unsure whether they’ll be able to make the calculations in time.

“There’s going to be a lot of work that companies have to do in a very short period of time to figure this out, to calculate the effects and communicate them to analysts and shareholders,” she said. “The SEC is allowing companies some flexibility in reporting these numbers in their annual reports because the act was passed so quickly and so close to the end of the year. The companies really need more time to digest the financial statement information.”

Although the large one-time adjustments do not affect taxes paid in the fourth quarter of 2017, these changes will affect the magnitude of future tax benefits and obligations.


Examining Long-Term Economic Impact Of Cover Crops

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It isn’t often that researchers have the luxury to examine data from a long-term research project. While most research projects last from three to five years, scientists with the University of Tennessee Institute of Agriculture recently published a study that covered a 29-year period to find the benefits of cover crops on no-till cotton fields.

Cotton is a major crop grown in the southeast and after harvesting there is very little residual biomass. Without a crop covering the ground, there is an increased amount of soil exposure that can lead to erosion from winter rains and runoff. No-till agriculture was steadily adopted by producers as a way to save topsoil and reduce soil erosion in their fields. Cover crops, such as winter wheat were also added to the mix by some producers to enhance the benefits of no-till production.

The study, published in Nov. 2017 in Agronomy Journal, was the brainchild of the late Don Tyler, a renown UTIA soil scientist, who was interested in how no-till and cover crops may help reduce erosion. “Back in the 80’s he saw that this was a potential problem down the road and set up an experiment in Milan, Tennessee, to see how no-till and cover crops can impact cotton yields,” said Chris Boyer, the paper’s lead author and a UTIA associate professor of agricultural and resource economics.

The team looked at the data from the past 29 years to determine whether it is profitable to include cover crops in an erosion management strategy. They found that while cover crops can cut into profitability over the short term, there are a number of benefits over long-term adoption. “The benefits are accumulated benefits and it takes a number of years of this practice before you see them,” said Boyer.

The study found that conventional tillage practices result in higher profits than no-till practices; however, continuous no-till planting reduces risk exposure by decreasing yield variability.

In addition, a number of environmental benefits may be realized through the adoption of no-till practices along with cover crops, primarily in decreased soil erosion. “While the study didn’t measure environmental impacts, it is a very valid reason for producers to adopt no-tillage and or cover crops,” said Boyer.

Boyer says that data sets covering such a long period of time are very unusual in research projects. “Our approach of looking at the problem from a long-term financial standpoint was really unique to what other studies have done. It was the genius of Don Tyler and his foresight that have us such an incredible data set to examine,” said Boyer.

Is US Backing Serious Reformer Or Reckless Driver In Riyadh? – Analysis

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By Christopher J. Bolan*

(FPRI) — The young, brash, and inexperienced Saudi Crown Prince Mohammad bin Salman (MbS) spent 2017 breaking long-standing Saudi traditions in both domestic and foreign policies. Supporters have heralded these moves as necessary to the future of the Kingdom, while critics have chided them as threatening to regional stability. American experts are divided as to whether these are developments to cheer or fear, but Bruce Riedel at Brookings expressed the concerns of many succinctly: “The kingdom is at a crossroads. . . . Its economy has flatlined with low oil prices; the war in Yemen is a quagmire; the blockade of Qatar is a failure; Iranian influence is rampant in Lebanon, Syria and Iraq; and the succession is question mark. It is the most volatile period in Saudi history in over a half-century.”

How should U.S. policymakers take the measure of this untested leader in Riyadh at a time of such tremendous uncertainty and in a region increasingly torn by violence? This critical question will occupy the Trump administration in 2018 as it attempts to operationalize its recently published National Security Strategy and National Defense Strategy in the Middle East.

MbS as Domestic Reformer

The Kingdom is in desperate need of economic and social reforms if it is to survive and thrive in the 21st century. Unemployment in Saudi Arabia has recently risen to nearly 13%, while youth unemployment is expected to rise above 40% by 2030. Despite its obvious oil wealth, some estimates suggest that nearly one quarter of the Saudi population lives in relative poverty. Moreover, the IMF recently estimated that overall GDP growth in the near term will be “close to zero.”

Meanwhile, years of low oil prices have compelled the Saudi leadership to spend down its substantial foreign reserves at an alarming rate to cover annual deficit spending. Without a substantial change in the oil market, these reserves estimated at slightly less than $500 billion can only provide the Kingdom a limited fiscal buffer of five years or so. It is this narrow window before economic calamity strikes that has invested so much urgency into Prince Mohammad’s drive to implement major economic reforms. Indeed, his Vision 2030 outlines a bold plan to reduce domestic spending on social subsidies, diversify the Saudi economy away from its heavy dependence on oil income, and modernize public sector services including health, education, infrastructure, and tourism.

Such an economic transformation, however, is also dependent on social transformations in Saudi Arabia’s traditionally conservative society. Here, too, MbS has taken important, if preliminary, steps. Most importantly, he has pledged to return the Kingdom to a “moderate, balanced Islam that is open to the world and to all religions and all traditions and peoples.” He has backed this pledge by arresting dozens of hardline clerics and curbing the arrest power of the religious police. He has also moved to loosen societal restrictions on women by allowing them to drive and attend sporting events, while improving their access to government services and expanding opportunities for women in the workplace. Harnessing the contributions of women will be critical to boosting the Kingdom’s economic output in a post-oil world.

It is in this broader economic and social context that the recent roundup of Saudi top ministers and other members of the royal elite should be viewed. In November 2017, Saudi authorities announced the arrest and freezing of the financial assets of dozens of top ministers and other members of the ruling family elite previously thought untouchable. Freezing the assets of these citizens could net the government as much as $800 billion which would provide MbS with additional time and resources to pursue his audacious reform agenda. Moreover, these arrests are a clear signal to the Saudi youth who comprise nearly half of the population that corruption by the sprawling royal family will no longer be tolerated. This crackdown might make economic reforms, such as ending subsides, more tolerable to the general population.

At least some regional experts are optimistic about prospects for success. The CIA’s former senior intelligence officer for Iran emphasized the good news associated with the recent shake-up in Saudi leadership noting that, having marginalized potential critics, MbS is now in a stronger domestic position to “push ahead with aggressive reforms.” Meanwhile, New York Times columnist Thomas Friedman hailed the reforms advocated by MbS as the emergence of a new “Arab Spring” in Saudi Arabia. Additionally, two scholars who study anti-corruption campaigns in authoritarian states suggest that MbS could follow in the path of Chinese President Xi Jinping by effectively exploiting unchecked power at home to successfully enact economic reforms.

Nonetheless, Western policymakers should be cautioned about placing too much confidence in the ability of MbS to implement quickly such wide-ranging social and economic reforms. First and foremost, academic studies indicate that very few countries heavily dependent on energy exports have ever successfully achieved meaningful economic diversification. Moreover, in the Saudi context, his ambitious social reform agenda will undoubtedly encounter strong domestic resistance from a number of quarters: the conservative Wahhabi clerics who are essential to the political and religious legitimacy of the Saudi family; a religiously conservative population resistant to change; and from members of the royal family itself who have been targeted by his anti-corruption campaign. The 1979 Iranian revolution is a cautionary tale for any monarch attempting to drive an ambitious modernization program without substantial buy-in from the public. Pushing too hard and too fast risks a dangerous backlash.

MbS as Reckless Foreign Policy Firebrand

While pursing these controversial domestic economic and social reforms at home, Crown Prince Mohammad has adopted aggressive foreign policies abroad that have been both costly to the Kingdom itself and threaten to further destabilize the region. As Defense Minister, MbS initiated an unwinnable war in Yemen that has drained the Saudi treasury of billions, created the world’s worst humanitarian crisis placing millions at risk, and provided Iran with yet another opportunity to strengthen its relations with local opposition groups such as the Houthis. Extensive U.S. military support to these operations has made America complicit in this humanitarian nightmare.

Weeks after President Trump’s May 2017 visit to the Kingdom, MbS initiated a Saudi-led blockade of Qatar that has been wholly ineffective. This futile effort has ripped apart the Arab Gulf Cooperation Council and provided unexpected opportunities for outside non-Arab actors, including Iran and Turkey, to increase their regional influence. Moreover, such a split among Arab GCC partners is a major setback for U.S. interests and could potentially disrupt ongoing and future U.S. military operations in region. Qatar hosts an important U.S. airbase and the forward headquarters of both U.S. Special Operation Central Command and U.S. Air Forces Central Command—all of which have been critical to U.S. operations against the Islamic State in Syria and Iraq. There is also an important forward positioning facility in Qatar that houses U.S. military equipment that was key to enabling the military campaign in Iraq in 2003 and would be essential to any future large-scale U.S. ground combat operations.

MbS has also increased the prospects for the collapse of an already tenuous sectarian balance in Lebanon by allegedly forcing the resignation of pro-Western Sunni Prime Minister Saad Hariri in early November during a visit to Riyadh. This incident threatens to destabilize Lebanon at the very time Beirut is struggling to accommodate millions of Syrian refugees (one third of Lebanon’s population), while prospects grow for Israeli military confrontation with Hezbollah.

How Should U.S. Policymakers React?

A sensible U.S. strategy going forward should aim at developing an institutionalized and trusted relationship with the young Crown Prince who is likely to become the next King for the coming decades. The U.S. should create a team of experienced U.S. diplomats, economists, and private business leaders to support his plans for economic reforms even as they temper expectations for rapid progress. This effort should be coupled with advisors from academia and non-governmental organizations tasked with outlining a parallel program of internal political reforms that will strengthen Saudi civil society and provide Saudis themselves a greater stake and say in shaping the detailed policies associated with these reforms.

At the same time, senior U.S. military and civilian defense officials should take the lead in working with MbS to curb his disturbing tendency to overreact and view events as a zero-sum competition with Iran. An expanded U.S. military assistance program specifically tailored to address Saudi concerns in the wake of the Iran nuclear deal, such as bolstering Saudi missile defense capabilities, could reassure MbS that the U.S. remains a dependable ally. These defense officials should also encourage MbS to de-escalate his unproductive war in Yemen and end his counterproductive blockade of Qatar, as the chaos and divisions being created are providing Iran more opportunities—not fewer—to expand Tehran’s regional influence.  Defense and State Department officials alike should encourage Saudi support to an upcoming international conference on reconstruction in Iraq as a means both of easing regional sectarian tensions and preventing the emergence of another ISIS-like extremist group.

Finally, given their close personal relationships with the Crown Prince, President Trump and Jared Kushner can send a convincing and private message that Saudi Arabia will have American backing for his ambitious domestic reforms as long as his foreign policies don’t endanger regional stability and put larger U.S. security interests at risk. This is a deal that both Riyadh and Washington should welcome.

The views expressed in this article are the author’s own and do not necessarily reflect the views of the U.S. government.

About the author
*Dr. Christopher J. Bolan
is Professor of Middle East Security Studies at the Strategic Studies Institute of the U.S. Army War College.

Source:
This article was published by FPRI.

US Tax Reforms Affect 50% Of Global Foreign Direct Investment – OpEd

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By Jaya Ramachandran

Almost half of global investment stock is either located in the United States or owned by American multinationals abroad. The United States ‘Tax Cuts and Jobs Act’, adopted in December 2017, will therefore significantly affect both investment into the U.S. and the investment positions of U.S. firms abroad, according to a special issue of the UNCTAD Global Investment Trends Monitor.

“The impact on investment in the developing world remains to be seen. However, developing countries need real investments in productive assets, not cash parked overseas,” said UNCTAD Secretary-General Mukhisa Kituyi.

The outcomes will also depend on reactions in other countries. The reforms fit in a wider trend of lower corporate income tax rates, which could lead to increased global tax competition.

The most significant change to the tax regime for multinationals is the shift from a worldwide system (taxing worldwide income) to a territorial system (taxing only income earned at home). Under the old regime, tax liabilities on foreign income became payable only upon repatriation of funds to the United States. As a result, U.S. multinationals kept their earnings outside their home country.

“The experience from the last tax break on the repatriation of capital in 2005 would indicate that multinationals could bring back almost $2 trillion, leading to sharp reductions in global FDI stocks,” said James Zhan, Director of UNCTAD’s Investment Division.

Measures in the tax reform include a one-off tax on accumulated foreign earnings, freeing the funds to be repatriated. Retained earnings overseas of American multinationals amount to an estimated $3.2 trillion. The 2005 Homeland Investment Act, the last tax break on funds repatriation, led firms to bring home two thirds of their foreign retained earnings. Funds available for repatriation are today seven times larger than in 2005.

Ultimately, the impact on global investment stocks will depend on the actions of a relatively small number of very large multinationals that, together, hold the bulk of overseas cash. Five high-tech companies alone (Apple, Microsoft, Cisco, Alphabet and Oracle) together hold more than $530 billion in cash overseas – one quarter of the total amount of liquid assets that are estimated to be available for repatriation.

The UNCTAD Global Investment Trends Monitor warns that repatriations could cause a large drop in the outward FDI (Foreign Direct Investment) stock position of the U.S., from the current $6.4 trillion to possibly as low as $4.5 trillion, with inverse consequences for inward FDI stocks in other countries.

About one quarter of United States outward stock of FDI is located in developing countries. However, it is likely that a large part of the stock located in developing countries is invested in productive assets and therefore not easily repatriated.

The removal of the need to keep earnings overseas could lead to structurally lower retained earnings in foreign affiliates of U.S. multinationals. The freeing up of overseas cash might also lead to a further increase in mergers and acquisitions.

Finally, says the UNCTAD Monitor, stimulus measures for investment in the United States included in the bill could lead to higher inward investment in the United States, and possibly to further re-shoring of manufacturing activity.

Most Macedonians Back ‘Name’ Deal

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By Sinisa Jakov Marusic

A majority of Macedonian citizens would support a compromise solution to the long-standing ‘name’ dispute with Greece, if that aids the country’s Euro-Atlantic prospects, a survey has shown.

Some 61 per cent of Macedonians support a solution to the dispute with Greece over their country’s name, if it speeds up Macedonia’s entry into NATO and the EU, a survey by the Skopje-based Institute for Democracy – Societas Civilis, a think tank, shows.

The survey showed that 33 per cent of respondents were categorically against making any compromises with Greece over Macedonia’s name, while 4 per cent said they were somewhat against a name change.

The opinion poll shows that the dominant ethnic Macedonians are less inclined towards a solution than members of the large ethnic Albanian minority.

However, even among ethnic Macedonians, who have stronger emotional ties to the country’s name, 50 per cent would either completely or somewhat support a solution to the decades-old dispute with the neighbouring country.

But 42 per cent of ethnic Macedonians said they were categorically against a “name” deal.

Ethnic Albanians, who make up about a quarter of Macedonia’s population of just over 2 million, are much keener on a solution. Some 82 per cent of them backed a solution to the dispute, while just 1 per cent were against.

The opinion poll also showed the political affiliations of the respondents.

Some 60 per cent of those who said they had voted for the opposition right-wing VMRO DPMNE party opted against a deal, while 33 per cent of this party’s supporters backed a compromise.

On the other hand, 76 per cent of the people who said they had supported the ruling Social Democrats said they would also support a deal with Greece, while 18 per cent were against.

Of the total number of respondents, 34 per cent think that if Macedonia changes its name to satisfy Greece, it could lead to a complete change of their Macedonian identity as well.

Another 19 per cent said they think that their identity will be changed – but only to a certain extent.

Fears about identity loss are most pronounced among ethnic Macedonians, 60 per cent of whom think that a name change would jeopardize their identity, while 35 per cent think otherwise.

The opinion poll was carried out between January 19-26 via phone by the M Prospect agency on a representative sample of 1,000 respondents.

The survey comes as Macedonia and Greece engage in intensive reinvigorated UN-sponsored talks that, if successful, should result in Greece lifting its blockade on Macedonia’s entry to NATO and to the start of EU accession talks.

The dispute centres on Greece’s insistence that use of the word Macedonia implies a territorial claim to the northern Greek province of the same name.

Athens insists that a new name must be found that makes a clear distinction between the Greek province and the country.

As a result of the unresolved dispute, in 2008, Greece blocked Macedonia’s NATO membership It has also blocked the start of Macedonia’s EU accession talks, despite several positive annual reports from the European Commission on the country’s progress.

Moscow Driving Ever More Firms Into Shadow Economy Or Bankruptcy – OpEd

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The Russian government has been making promises of a tax holiday to tempt unregistered Russian firms to come out of the shadow economy and eventually pay taxes to the state, but Moscow’s track record as far as keeping its promises means that very few firms have taken up its offer, official statistics show.

And in addition, the Russian government has added not only to the financial burdens of being registered with the state but also introduced a large number of new and burdensome reporting requirements that mean firms operating outside of its purview feel they are better off to remain there.

In short, Moscow commentator Vsevolod Istomin says, Moscow has succeeded in creating an extremely unwelcoming business climate, one in which firms that do try to play by official rules are increasingly likely to be bankrupted or driven right back into the shadow economy (versia.ru/v-rossii-proshhe-byt-v-teni-chem-na-vidu-u-gosudarstva).

After trying for the last several years to get firms to register with the state by threatening them with enormous fines, the Russian government decided to try the carrot of promising a tax holiday. Duma deputies favor the idea but neither they nor the businesses affected trust the government to keep its word.

As a result, despite these proffered incentives, Istomin says, only 936 firms chose to come out of the shadows, despite the fact that there are hundreds of thousands of such firms employing from 15 to 20 million people and supporting twice as many other Russians in addition.

Even Tatiana Golikova, the head of the Accounting Chamber, acknowledges that “people do not believe” what the government is promising, and it is quite clear, the commentator says, that at the same time, “citizens don’t believe that the authorities are capable of forcing them to share their modest incomes” with the state whatever the threats the regime makes.

Such businessmen can see that if they come out of the shadows, they will not only be required to pay more for insurance and the like but fill in a variety of burdensome reporting requirements. When firms thought they could come out of the shadows, they often discovered that within weeks, many of them had to declare bankruptcy.

According to Istomin, the Russian government has created conditions which are as unfavorable to business activity as can be imagined. In 2010, there were 4.6 million small and mid-sized enterprises with 19 million workers. By the start of 2017, the 5.8 million firms employed only 15.8 million people.

A year earlier, he continues, the number of firms forced out of business exceeded the number of new businesses created by almost a third of a million: 781,000 businesses ceased to exist, and only 498,600 were created. Still worse, the total number of firms disbanded was 2.4 times greater in 2016 than in 2015.

If current projections prove true, the situation for small and mid-sized business in Russia will be even worse in the coming year, Istomin says; and those that choose to stay in the shadow sector may very well have a better chance to survive than those that agree to register with the state.

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