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Financial And Non-Financial Firms Need Same Strong Regulations To Protect Economies

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Researchers at IIASA and the Complexity Science Hub, Vienna, have discovered that non-financial firms, such as vehicle manufacturers and energy companies, contribute to systemic risk in financial systems in the same way as financial institutions like banks, and as such, should be regulated in the same way.

Systemic risk is the chance that a crisis at one institution could lead to the collapse of an entire financial system. The financial crisis in 2008 was triggered by the failure of a single bank, and in response to this, a new international regulatory framework was introduced to improve regulation and risk management, known as Basel III. The framework calls for stronger regulation of systemically important financial institutions (SIFIs) and recommends, for example, increased capital requirements, so-called SIFI surcharges, for them. However, such regulations are not applied to non-financial firms. Researcher Sebastian Poledna and his colleagues argue that such macro-prudential regulations should be applied to all systemically important companies, whether financial or non-financial.

The work is the first to study the systemic importance of non-financial firms.

“The mechanisms of how a financial crisis may lead to an economic recession, and vice versa, are not understood on a fundamental level. To clarify and map the financial ties between the financial and the real economy, which are at the core of such potential spreading mechanisms, are more important than ever,” says Thurner.

The team collected data on nearly all financial and non-financial firms in the Austrian economy. The data analyzed includes 80.2% of the liabilities, or debts, of firms to banks. It was collected from the financial statements of firms and banks in Austria, and anonymized interbank liabilities from the Austrian banking system. The researchers then reconstructed the financial network between 796 banks and 49,363 firms, effectively the Austrian national economy in 2008. Poledna says that to their knowledge, this is the most comprehensive financial network ever analyzed.

The next step was to identify systemically important firms, for which the researchers used a previously developed method called DebtRank. This gives each firm a number based on the fraction of the economic value in a network that will be affected if that firm is in distress. The highest-ranking firms are generally large banks with substantial total assets. In the Austrian economy, those with the highest DebtRank are, unsurprisingly, large banks, but the eighth most systemically important firm is non-financial. The firm in question has a DebtRank of 0.39, meaning that if it defaulted, up to 39% of the Austrian economy would be affected.

Systemically important firms came from multiple industries, and were not all large. The researchers identified a number of mid-sized firms, with assets worth less than €1 billion, that are systemically important in the Austrian economy. This was previously unknown.

Poledna and his colleagues additionally looked at the fraction of systemic risk coming from non-financial firms in the liability network, by dividing the sum of their DebtRank values by the total number of firms. They found that non-financial firms introduce more systemic risk than the financial sector, with 55% of systemic risk comes from non-financial firms. This strengthens the argument for regulations for SIFIs to be applied more widely.

The method used is broadly applicable.

“The results of this work could be the basis for a new approach to bank stress testing exercises that takes feedback effects between the real [goods and services] and financial economy into account,” says Poledna. “Bank stress testing exercises assess the impact of risk drivers on the solvency of banks and are typically conducted without considering feedback effects between banks or between banks and the real economy.”


Croatia: Ex-Premier Convicted Of War Profiteering

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By Anja Vladisavljevic

Zagreb County Court on Monday convicted former Prime Minister Ivo Sanader of war profiteering for accepting an unlawful payment of 3.6 million kunas (around 485,000 euros) during talks between Austria’s Hypo Bank and the Croatian government.

The talks took place during the war, between late 1994 and March 1995, when Sanader was Deputy Minister of Foreign Affairs.

He was sentenced to two years and six months in prison and ordered to repay 3.6 million kunas to the state budget, and to pay the costs of the court proceedings. His time spent in custody so far will be counted towards his sentence.

Sanader, who was Croatia’s premier between December 2003 and July 2009, is also the former leader of the centre-right Croatian Democratic Union, HDZ, which is currently in government.

Zagreb County Court on Monday also acquitted Sanader and another defendant, Robert Jezic, of abuse of office over the sale of cut-price electricity.

According to the indictment, Sanader instructed Croatia’s state electricity firm HEP to lend money and sell cut-price electricity to chemical company Dioki, which was owned by his friend Jezic.

In this case, the prosecution also charged the former director of HEP Ivan Mravak, who died in the meantime. However, his defence wants these proceedings to be suspended as Sanader’s lawyers failed to examine Mravak, who testified to the charges against the former prime minister, while he was still alive.

The Hypo Bank case was previously merged with the INA-MOL case, in which Sanader was convicted in 2014 of accepting a 10-million-euro bribe for selling the state energy company INA to Hungary’s oil firm MOL.

However, the Constitutional Court annulled the verdict in 2015, separating the two cases and ordered that the trials begin again from the start.

Sanader’s trial in the INA-MOL case begins on Tuesday.

The former premier was initially arrested in Austria in December 2010, while on the run from the authorities. He was extradited to Croatia in July 2011 and has been in custody since then.

He also faces another pending retrial in the Fimi Media case.

Sanader was found guilty in March 2014 by Zagreb County Court of abuse of office and corruption charges, along with two other officials from the HDZ, for unlawfully pumping 10.4 million euros of public funds into a private marketing agency called Fimi Media.

The first verdict in the Fimi Media case, which sentenced Sanader to nine years in prison, was quashed in 2015.

Sanader was also convicted last year under a first-instance verdict in the so-called ‘Planinska case’, named after the building in Zagreb’s Planinska Street which was owned by Sanader’s friend and fellow MP Stjepan Fiolic, and sold to the government for 80 million kunas (10 million euro).

In April 2017, Sanader was sentenced to four-and-a-half years in prison, and a Supreme Court decision is pending on an appeal.

Availability Of Nitrogen To Plants Is Declining As Climate Warms

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Researchers have found that global changes, including warming temperatures and increased levels of carbon dioxide in the atmosphere, are causing a decrease in the availability of a key nutrient for terrestrial plants. This could affect the ability of forests to absorb carbon dioxide from the atmosphere and reduce the amount of nutrients available for the creatures that eat them.

“Even if atmospheric carbon dioxide is stabilized at low enough levels to mitigate the most serious impacts of climate change, many terrestrial ecosystems will increasingly display signs of too little nitrogen as opposed to too much,” said study co-author Andrew Elmore of the University of Maryland Center for Environmental Science. “Preventing these declines in nitrogen availability further emphasizes the need to reduce human-caused carbon dioxide emissions.”

Although the focus on nitrogen availability is often on developed, coastal regions, such as the Chesapeake Bay, that struggle with eutrophication–runoff of nitrogen pollution from fertilized farms and lawns that feeds algae blooms and leads to the reduction in oxygen in the waters–the story is very different on less developed land, such as the mountains of western Maryland.

“This idea that the world is awash in nitrogen and that nitrogen pollution is causing all these environmental effects has been the focus of conversations in the scientific literature and popular press for decades,” said Elmore. “What we’re finding is that it has hidden this long-term trend in unamended systems that is caused by rising carbon dioxide and longer growing seasons.”

Researchers studied a database of leaf chemistry of hundreds of species that had been collected from around the world from 1980-2017 and found a global trend in decreasing nitrogen availability. They found that most terrestrial ecosystems, such as forests and land that has not been treated with fertilizers, are becoming more oligotrophic, meaning too little nutrients are available.

“If nitrogen is less available it has the potential to decrease the productivity of the forest. We call that oligotrophication,” said Elmore. “In the forested watershed, it’s not a word used a lot for terrestrial systems, but it indicates the direction things are going.”

Nitrogen is essential for the growth and development of plants. On the forest floor, microbes break down organic matter such as down fallen leaves and release nitrogen to the soil. The tree retrieves that nitrogen to build proteins and grow. However, as trees have access to more carbon, more and more microbes are becoming nitrogen limited and releasing less nutrients to the trees.

“This new study adds to a growing body of knowledge that forests will not be able to sequester as much carbon from the atmospheric as many models predict because forest growth is limited by nitrogen,” said Eric Davidson, director of the University of Maryland Center for Environmental Science’s Appalachian Laboratory. “These new insights using novel isotopic analyses provide a new line of evidence that decreases in carbon emissions are urgently needed.”

In the U.S. and Europe, regulations on coal-fired power plants have reduced the amount of nitrogen deposition as a consequence of clean air regulations trying to combat acid rain. At the same time, increasing carbon dioxide levels in the atmosphere and longer growing seasons are increasing the nitrogen demand for plants to grow.

“There are now multiple lines of evidence that support the oligotrophication hypothesis,” said study co-author Joseph Craine, an ecologist with Jonah Ventures. “Beyond declines in leaf chemistry, we are seeing grazing cattle become more protein limited, pollen protein concentrations decline, and reductions of nitrogen in many streams. These dots are starting to connect into a comprehensive picture of too much carbon flowing through ecosystems.”

Scientists Create Healthy Mice With Same-Sex Parents

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Chinese researchers use embryonic stem cells and gene editing to produce mice born from two parents of the same sex.

For the animal world, creating new life doesn’t always require a male and a female. Just ask birds, bees, fish, reptiles, amphibians and even laboratory mice.

Now it has taken a considerable feat of genetic engineering to break the rules of reproduction and breed healthy mice with two mothers. The study, published in the journal ‘Cell Stem Cell’, explored what makes it so difficult for some animals to reproduce with same-sex parents. The findings suggest some obstacles to same-sex reproduction can be tackled with stem cells and targeted gene editing.

The bimaternal mice – mice with two mothers – appeared healthy and bore their own young. “This research shows us what’s possible,” said co-senior author Dr Wei Li from the Chinese Academy of Sciences (CAS) in an interview with ‘BBC’. “We saw that the defects in bimaternal mice can be eliminated and that bipaternal reproduction barriers in mammals can also be crossed.” Quoted in ‘CNN’, he added: “We also revealed some of the most important imprinted regions that hinder the development of mice with same sex parents, which are also interesting for studying genomic imprinting and animal cloning.”

Breaking down barriers preventing genetic coupling between same-sex individuals

Dr Li and his colleagues at the CAS produced the healthy bimaternal mice by using haploid embryonic stem cells (ESCs). These cells contain half the normal number of chromosomes and DNA from only one parent. They believe the haploid ESCs were the key to their success.

The team created the bimaternal mice by deleting three imprinting regions of the genome from haploid ESCs containing a female parent’s DNA. Then, it injected them into eggs from another female mouse. This work resulted in 29 live mice from 210 embryos. The mice were normal, lived to adulthood and had babies of their own.

The study also marks the first time that offspring from pairs of male mice were carried to full term. The researchers used a similar but more complicated procedure. They injected the sperm and the haploid ESCs into an immature egg stripped of its nucleus, the part of a cell that carries the majority of its genetic material. However, the results weren’t promising. The mice from two fathers didn’t survive for long, and died soon after birth. Just 2 of the 12 survived more than 48 hours. No one knows why the male offspring died so quickly.

Can the researchers use these methods in other mammals? Several barriers make this prospect challenging, even with the help of fertilisation technology. And that doesn’t include the serious ethical and safety concerns. At this point in time, it also takes quite a reach of the imagination to think such findings could lead to the development of ways for human same-sex couples to reproduce healthy children of their own.

Cordis Source: Based on media reports

Armenia Needs To Pay Off $1,055 Billion Worth State Debt In 2020

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In 2020 Armenia needs to pay off state debt worth 506.9 billion drams or about $1,055 billion. The information was passed by Ministry of Finance of RA to the appropriate inquiry by PanARMENIAN.Net

It was also stated that the amount of payable debt in terms of external loans is worth 127.3 billion drams, 121.1 billion drams in terms of government treasury bonds and 258.5 billion drams in terms of state FX bonds.

Earlier Reuters reported that Armenia, as a result of large debts and small national currency reserves, is in the list of the most vulnerable countries in relation to external debt refinancing. Meanwhile it was also stated that in 2020 Armenia needs to pay off an external debt worth half a billion dollars which is 3.9% of the country’s GDP.

Commenting on the indicators characterizing the risks associated with government debt; it was stated by the ministry that in the strategic plan of the debt management of the government of the Republic of Armenia for 2019-2021, approved by the executive, option of allocating new foreign currency bonds for the refinancing of foreign currency government bonds to be repaid by 2020 was also discussed.

“At the same time in mid-term period, in case of the availability of the opportunity to involve more attractive borrowings from international financial institutions or availability of favourable conditions in the domestic market, the government will discuss the expediency of refinancing the foreign currency bonds that are to be repaid by 2020 or early repayment of foreign currency bonds in parallel with involving borrowings via each of these sources or their combination”, reported the Ministry adding that as long as each year’s state budget of RA is deficient, Armenia will be a net borrower country. At the same time, according to the decision of the government made on July 10, 2018, the 2019-2023 project on decreasing Armenian government’s debt was approved. According to the project, the debt / GDP ratio will be gradually reduced till 2023 to the targeted 49.8%.

Donald Trump Looms Large On Mid-Term Elections – Analysis

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By Seema Sirohi

The US mid-term elections are generally seen as a referendum on the president and depending on his performance, his party can get a boost or get busted at the polls.  

Elections will be held on Nov. 6 for all 435 seats in the House of Representatives and 35 of the 100 seats in the Senate. Currently, the Republicans hold 235 seats to Democrats’ 193 in the House with seven seats vacant.  

In the Senate, the Republicans have 51 and Democrats hold 47. Two remaining seats are held by independents who normally vote with the Democrats.  

Will President Donald Trump’s disruptive policies at home and abroad help maintain Republican Party’s control over the US Congress or will the Democrats take over the House of Representatives as many predict, thereby putting the brakes on the president’s political agenda?  

Trump’s approval ratings hover between 40 to 44%, figures comparable to Bill Clinton’s in 1994, George W. Bush’s in 2006 and Barack Obama’s in 2010 before they had a mid-term referendum.  

A Fox News poll released Oct. 18 showed a majority (53%) of likely voters want the next Congress more to be a check on the president than a vehicle for his policies. This is not good news for the Republican Party.  

The same poll showed race relations to be Trump’s worst issue with a 22-point negative rating. Health care (negative 16) and immigration (negative 14) came in second and third.  

But Trump gets positive ratings for handling the economy (positive 6) and the hurricanes (positive 2). However, historically, a good economy is no guarantee of success for the president’s party.  

Trump has been talking a lot about the economy at his rallies. With GDP growth at 4.2% and unemployment at 3.7% is the lowest since 1969, he has boasted that this the “best” the economy has ever been. The stock market has soared under him, apparently unaffected by his tariff wars against China and others.  

But the Democrats have raised more money, registered more voters, and turned out in greater numbers during the primaries. They are angry and raring to go.  

However, intervening events could hamper their chances.  

The recent storm over the confirmation of conservative judge Brett Kavanaugh to the Supreme Court is one such event whose full impact on voters is not fully known. The Fox News poll shows voters are split – 47% approve of his nomination while 48% disapprove.

The loud protests against Kavanaugh on Capitol Hill by women and Democratic Party supporters have energised the Republican base just as they have the Democratic base.  

There is plenty of talk of a “blue wave” rising with the Democrats taking over the House – they need 23 to gain majority — while the Republicans maintain control of the Senate, even adding a couple of extra seats.  

After polls and pundits proved so wrong in 2016 about Trump’s prospects, it’s no surprise the experts are cautious this time around. Yet, there is convergence that signs of a “blue” wave for the House are growing.  

The Democrats have been anxious ever since Trump won the presidency. They have been fund-raising furiously and keeping the base active. The “resistance” movement – often led by women – has grown across the country.  

While the bitter fight over Kavanaugh’s nomination and confirmation improves their prospects in the House, it adversely affects their chances in the Senate, especially in “red” states where incumbent Democrats could be in jeopardy. 

The Congressional hearings on Kavanaugh brought out the most primal instincts among supporters and opponents, raising the question whether the Democrats mishandled the process by publicly airing the sexual assault allegations by Christine Blasey Ford. 

The Kavanaugh episode has made the “reds redder and the blues bluer,” according to Charles Cook of the famed Cook Political Report. This means Senate Democrats hoping for independent or Republican-leaning votes to win have dimmer chances.   

But the story for the House seats is different and more interesting. The gender gap is glaring and whatever advantage Republican men in certain Congressional districts have is offset by Democratic advantage among women.  

Another key issue is the Affordable Care Act or “Obamacare,” which could hurt Republicans. American voters are anxious about losing benefits they have come to rely on over the last five years.  

According to the Fox News poll, health care is on top of voters’ mind and 58% said it would be the deciding issue. Among this group, the Democrats lead by a 24-point margin.  

After promising to repeal Obamacare during the 2016 campaign, the Republicans haven’t been able to despite controlling both the Congress and the White House. They have chipped away at it, reducing benefits and stripping down insurance policies and relaxing regulations.  

The reason for not going for outright repeal is simple – some provisions of Obamacare are popular even among Republicans. Coverage for pre-existing conditions, affordability of health care and losing health insurance are topmost concerns for average voters.  

Even though health care is the most pressing concern, Trump is cleverly trying to force illegal immigration as a major issue in the final days of campaigning. Reports of a “caravan” of roughly 4,000 Central Americans heading to the US border have given him the fodder to whip up fear about public safety. 

This week he talked of deploying the military at the southern border and scrapping a newly negotiated trade deal with Mexico and Canada if the caravan was not stopped.  

But focusing on the caravan and intrusion by criminals, Trump has once again raked up the issue of border security, something that does resonate with voters.  

Those opposed to illegal immigration cite the fact that more than 60 countries have some kind of barrier on the border and the US can’t be the exception. The Democrats don’t have a good answer to the question apart from pleading on humanitarian grounds. 

As important as the issues are, as always it is voter turnout that holds the key. With Americans being notoriously disinterested in exercising their democratic right, especially in a mid-term election when the turnout is only around 40%, it remains to be seen if they are more energised this time. 

Time Out For Nukes! – OpEd

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By Alice Slater*

With 122 nations having voted last summer (July 2017) to adopt a treaty for the complete prohibition of nuclear weapons, just as the world has banned chemical and biological weapons, its seems that the world is locked in a new Cold War time-warp, totally inappropriate to the times.

We were warned last week from the Intergovernmental Panel on Climate Change (IPCC) that prior calculations about the risk of catastrophic climate change were off, and that without a full scale immediate mobilization humanity will face disastrous rising sea levels, temperature changes, and resource shortages.

Now is an opportunity to take a time-out on nuclear gamesmanship, new threats, trillions of wasted dollars and IQ points on weapons systems that Presidents Reagan and Gorbachev acknowledged, back in 1987 at the end of the Cold War, could never be used, warning that “A nuclear war cannot be won and must never be fought.”

Now in 2018, more than 30 years later, when 69 nations have signed the treaty to ban the bomb, and 19 of the 50 nations required to ratify the treaty for it to enter into force have put it through their legislatures, the U.S. and Russia are in an unholy struggle to keep the nuclear arms race going – with Washington accusing Russia of violating the Intermediate Nuclear Force treaty which eliminated a whole class of land-based conventional and nuclear missiles in Europe, and Russia planning new weapons systems in response to a whole stream of U.S. bad faith actions, the most egregious of which was President Bush walking out of the 1972 Anti-Ballistic Missile Treaty negotiated with the Soviet Union to ratchet down the nuclear arms race.

An honest appraisal of the bad actors in this frightening scenario for the destruction of all life on earth, must conclude that the U.S. has been the constant provocateur in the relationship, starting with Truman’s refusal of Stalin’s 1945 request to put the bomb under international control at the newly established UN, the mission of which was to “end the scourge of war”.

Of course Russia got the bomb. Further, Reagan refused to forego his Star Wars program to “dominate and control the military use of space”, so Gorbachev backed off on any further talk of nuclear abolition. Then Clinton rejected Putin’s offer to cut our arsenals of some 18,000 bombs at the time, to 1,000 each and call everyone to the table to negotiate for their elimination, provided we didn’t put our missiles in Eastern Europe.

The U.S. now has them in Romania, with a new missile emplacement to open this year in Poland, and NATO has been expanded up to Russia’s borders despite assurances to Gorbachev, when the wall came down and he miraculously freed all of Eastern Europe without a shot, that NATO would not move “one inch” to the East.

At this time, none of the nine nuclear weapons states – USA, Russia, UK, France, China, India, Pakistan, Israel, North Korea – and their nuclear alliance states are supporting the new ban treaty. This is the time for Russia and China to step forward, with whichever other nuclear weapons states would be willing to join them and call for a time out on any further nuclear weapons development. Mother Earth can ill-afford another nuclear arms race to nowhere.

*The author is a member of the World Beyond War Coordinating Committee and the UN NGO Representative of the Nuclear Age Peace Foundation

A Look Inside Los Angeles’ Movie-Making Machinery

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By Martin Wigham

First-time visitors to America often remark that arriving feels like stepping onto one almighty film set. The country’s iconography, look and feel is so instantly recognizable — already deeply embedded in our collective consciousness, via the land’s greatest cultural export: The movies. Which makes a visit to Los Angeles surreality squared. The home of Hollywood is at once both the most-photographed fantasyland on the planet and an uncomfortable glimpse behind the curtain, at the mechanisms and people bringing these daydreams to the world.

The mask slipped the moment I arrived, when an airport minibus spurted me out on top of a lump of faded metal etched into a grubby sidewalk, and I realized I was standing atop one of 2,627 stars making up the Hollywood Walk of Fame.

That night I was served pizza by an aspiring opera singer, and I chatted with jobbing actresses in the coffee queue the next morning. When I brazenly strolled into a famed Sunset Boulevard rehearsal studio, rather than finding gold records on the walls I was asked, “La La Land”-style, if I was there to audition for the prestigious Berklee College of Music. I didn’t even have to look for the oily engine room beneath the star machine.

And of course, I was expecting to. Disavowing jetlag, I had booked an early slot on an arduous $139 “LA in a Day” guided two-wheel tour, from the excellent Bikes and Hikes LA — a 52km-workout through numerous neighborhoods and landmarks I knew only from the movies: from West Hollywood through Westwood to Santa Monica Promenade, down to Venice Beach and through Marina Del Rey. Peddling furiously up the titular inclines of Beverly Hills, our endlessly enthusiastic guide (and, naturally, aspiring film director) Zack pointed out gleaming once-residences of Michael Jackson, Tom Cruise and Lucille Ball.

To recover, that evening I feasted at Barney’s Beanery, the diner where Quentin Tarantino reportedly wrote much of his seminal early movies. When we asked which table he sat at, our waitress was as unimpressed as any of QT’s characters.

The next day I rested my legs, riding Starline Tours’ two-hour Movie Locations bus tour ($55), winding around a giddyingly geeky list of sights which, if you squint at them in the right light, remind you of the movies.

We glimpsed the US Bank Tower aliens obliterated in “Independence Day,” stopped at the historic Bradbury Building — its restored interior heavily exploited in the original “Blade Runner” — and visited Union Station, familiar from “The Dark Knight Rises” to “Catch Me if You Can.” We found the pond Jack Nicholson rowed through in “Chinatown” and the Hollywood United Methodist Church used as a dancehall in “Back to the Future.” Towering above was Griffith Observatory, the locale of the famous showdown in “Rebel Without a Cause.”

Spotting all these real-life sites had the jolting effect of demystifying the movies, but nothing could prepare me for my visit to the modern Warner Bros Studio, Hollywood’s biggest surviving back lot, stretching to 110 acres out of town in Burbank.

For $65 visitors can join the 1,400 people who call this giant playground their office on an official studio tour and ride a golf cart through the fake streets and makeshift neighborhoods across multiple centuries and worlds that have been brought to life in hundreds of movies.

We visited a studio where dozens of weekly sitcoms are shot in front of a live audience with factory-like precision. (Shows such as “The Big Bang Theory” can wrap in just two hours.) We saw the dull soundstages used by make-believe epics including “Inception” and “Dunkirk,” and were shown a warehouse storing real-life Batmobiles, used over three decades of “Batman” movies.

Any semblance of mystery was totally annihilated with the closing blockbuster ‘Stage 48: Script to Screen’ complex, a collection of interactive educational exhibits allowing visitors the chance to ride a Harry Potter broom in front of a green screen, hold a real Oscar, and hear the award-winning audio to “Gravity” broken down layer by layer — and even act out a scene on the original Central Perk coffeehouse set of “Friends”. As I mimed firing up a fake espresso machine at the edge of the frame and served another tourist an unbreakable plastic mug, I realized my journey inside the Hollywood machine had gone far enough. Sometimes, illusion beats reality.


Have The Chinese Reached A Tipping Point? – Analysis

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The Tipping Point by Malcolm Gladwell asserts that, “Little Things Can Make a Big Difference.” This year small, innocuous events are building towards possible big changes for the Chinese government, it’s citizens, Southeast Asia and globally as well if geopolitical and economic events continue down this path. And with the United States (US) forging a new path confronting China – financial markets and geopolitics could be in for turbulence – that hasn’t been seen since the Cold War.

President Trump’s early October speech to the United Nations (UN) and Security Council where he accused the Chinese of, “attempting to tamper with US election,” and where Trump stated, “it’s not just Russia, it’s China and Russia” caused a stir at the UN. While the US media was fixated on the Judge Kavanaugh confirmations and burgeoning US-China trade tussle, the Trump administration is taking a harder stance against Chinese intelligence encroachments against US businesses. A report in early October from Bloomberg BusinessWeek exposed, “a sprawling multi-year investigation into China’s infiltration of US corporate and defense infrastructure.” The Report also:

“Confirmed that, in addition to efforts designed to sway US elections, China’s intelligence community orchestrated pervasive infiltration of servers used to power everything from MRI machines to drones used by the CIA and US army.”

The day before Trump’s UN address a 27-year old Taiwanese national in Chicago was arrested for attempting to turn eight; US defense contractors who could reveal, “sensitive defense-related technology.” Then in a first for US-China relations, Yanjun Xu, deputy division director for the Ministry of State Security (China’s main spy agency) was arrested in Belgium and extradited to the US where he will stand trial in open court for attempted, “stealing of trade secrets from companies including GE Aviation.” The New York Times asserted the arrest was, “a major escalation of the Trump administration’s effort to crack down on Chinese spying.” This could mean the US is leveling the global manufacturing field to earn the goodwill of global lower educated employees and blue-collar workers in emerging and mature markets. But this rankle Beijing where they have enjoyed a comparative trade advantage for decades that have lifted hundreds of millions of Chinese out of crippling poverty.

Columnist Walter Russell Mead in the Wall Street Journal wrote about Vice President Mike Pence’s speech to the Hudson Institute that Pence outlined a new “Cold War” against China. Pence denounced China’s, “whole of government,” approach with its rivalry against the US. Pence then blamed the Chinese of suppressing Tibetans and Uighurs, the “Made in China 2025 plan for technology supremacy, and using the Belt and Road initiative (BRI), as “debt diplomacy,” for economic enslavement.

Pence, moreover: “Detailed an integrated, cross-government strategy to counter what the administration considers Chinese military, economic, political and ideological aggressions.”

As bad as these issues are for global financial and geopolitical stability it’s internal Chinese discontent that should be causing greater concern. Highlighting the BRI’s destructive affects, Pakistan – one of the largest beneficiaries of BRI largess – has requested a bailout from the International Monetary Fund (IMF), “amid growing concerns that Beijing’s program is pushing recipient countries into financial crisis. The Pakistani’s are now being forced to court the Saudi’s to avoid additional crippling Chinese debt associated with the BRI and, “pushing China to realign goals in its Belt-and-Road initiative.” Now Europeans and Asians have joined “Washington’s fight against Beijing’s,” state-run capitalism model that uses BRI as a weapon against lesser countries like Sri Lanka, Pakistan and Malaysia. Free-market countries have a vested interested to block China’s ascendance and see real opportunities to gain market share from China. The “pushback” against China is real and ongoing.

China is also releasing over $175 billion of state credit to enhance commercial banks lending and pay down short-term borrowing debt. These actions are in response to the slowing economy resulting from the trade war escalating with US tariffs on $250 billion on Chinese goods and possibly taxing another $257 billion of products. To counter the US the People’s Bank of China has lowered reserve requirements for many commercial banks by one percentage point effective October 15th. This is Beijing’s latest effort to assist their ailing economy.

The Financial Times reported:

“Chinese state-owned enterprises (SOE) have nationalized at least 10 privately owned groups this year, prompting warnings that the trend risks sucking the vitality out of China’s economy.”

Private groups in China instead of SOEs have suffered from Beijing’s push to eliminate, “debt and financial risk over the past 18 months upsetting the social and economic fabric of society that has enjoyed un-paralleled success since former President Deng’s “Four Modernizations,” program. But these actions also illustrate China’s unwillingness to allow open trad, and political freedom. Their recent actions in Hong Kong (a city in real trouble) by using the bullet train coupled with large infrastructure projects to tighten their grip and banning the city’s Pro-Independence Party demonstrate the Communist government is confronting serious issues.

Now Mexico, Canada, the EU, Japan, and the United Kingdom have all agreed under the revised NAFTA agreement and in separate negotiations with the US to “cut China out of trade deals with partners.” This new “pivot” means all countries have to notify the US before trade negotiations with a “non-market economy,” take place. This new NAFTA is a major setback to Beijing trying to co-opt the US-led post World War II liberal order for its Marxist-Capitalistic system. The world is confronting China using trade instead of guns for this new battle and if Beijing doesn’t change course there is the real possibility of economic, cultural and political stagnation for decades ahead.

But what’s causing this new Cold War stance from Washington? As talks with North Korea falter and the South China Sea continues militarizing, Washington believes they are challenging China in preparation for the multilateral summit in November between Trump and Xi. And it seems to be working – from the Chinese economy’s overreliance on exports to Xi’s newfound respect for the US under Trump – the US is rewriting the global, geopolitical rules in a far-reaching campaign against Xi and Beijing.

However, what China understands about this US-led fight is the wide disconnect taking place in the US and its allies. China can still bully US allies at-will – evidenced by its recent deal with the Philippines – to control oil and gas resources in their waters. The US has incredible job growth and a booming economy but its political economy is fragmented and in tatters. But according to Foreign Affairs, “China’s Return to Strongman Rule,” under Xi’s Presidency-for-life means badly needed reforms; political realignment and ending systemic corruption won’t be taking place in the near or distant future. Yet there is a striking dissonance and pessimism that fatigued western leaders and their countries don’t have the stomach for a new Cold War. What will win geopolitically is anyone’s guess when it comes to China versus the world with Trump at the forefront of this fight.

*Todd Royal, M.P.P. is the Managing Partner for Energy development, Oil & Gas, and Renewables for Ascendance Strategies, a global threat assessment and political consulting firm that is based in Los Angeles, California

World Economic Forum Objects To Misuse Of ‘Davos’ Brand

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The World Economic Forum said Monday that it objects to the proliferation of the use of the “Davos” brand for events that have nothing to do with its own activities. The Forum, together with the City of Davos, will use all means to protect the Davos brand against illicit appropriation. The Forum also draws attention to its policy not to organize conferences on behalf of a specific government, always preserving its independence and impartiality.

Since 1971, the World Economic Forum has been organizing the Annual Meeting of its constituents in the Swiss town of Davos, and the Forum and Davos brands are closely linked. Any use of “Davos” for another event can only lead to confusion and may mislead the public, members of the World Economic Forum and the media as it may imply that the World Economic Forum is responsible for, or part of, that event.

According to Professor Klaus Schwab, Founder and the Executive Chairman of the World Economic Forum, “The sole ambition of the Annual Meeting, which the World Economic Forum organizes every January in Davos, is to bring the leaders of all major governments, business and civil society together for collaborative efforts to address global, industrial and regional issues.”

The World Economic Forum, as the International Organization for Public-Private Cooperation, is not related to any political, commercial or personal interests. For the Annual Meeting 2019 in Davos, more than 30 heads of state and governments, and over 1,000 top executives of the world’s leading companies have already confirmed their participation.

Who Would Have Imagined This? – OpEd

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Who would’ve imagined that Jamal Khashoggi, a Saudi journalist and Washington Post columnist who had been living in the U.S, would be killed inside the Saudi Consulate in Istanbul? But now we know better. Thanks to Saudi Arabia’s crown prince MBS, such has become a reality.

According to the CNN, the Turkish officials suspected within hours of Jamal Khashoggi’s disappearance that he might have been killed. They raced to Istanbul airport to intercept — a chartered Gulfstream (a private Saudi) plane — that was waiting to take off. Disguised as airport staff, officers searched the plane while seven Saudis including one with a diplomatic passport waited in the airport. But they found nothing suspicious, and the flight in question was allowed to leave at about 11 p.m. local time. The other Saudi plane had taken off before investigators arrived at the airport.

In the two weeks since, authorities have been trying to piece together what happened on that fateful afternoon when Khashoggi walked into the Saudi consulate to obtain paperwork to marry his Turkish fiancée — and was never seen again. Khashoggi’s fiancée Hatice Cengiz raised the alarm just before 5 p.m. on October 2 — three hours and a half after the journalist entered the consulate. At that time, she was still waiting outside.

Turkish officials now say they believe that 15 Saudi men who arrived in Istanbul in two private planes on October 2 were connected to Khashoggi’s death. At least some of them appear to have high-level connections in the Saudi government.

When Saudi Ambassador Waleed Al Khereiji was contacted by an adviser to Turkish President Recep Erdogan, he told him that he had not heard anything about Khashoggi. However, grisly details from an audio-visual feed from inside the consulate suggest that Khashoggi was tortured and then killed soon after entering the consulate, according to Turkish media. Turkish officials believe that his body was dismembered inside the consulate.

Time-stamped surveillance images from October 2, which the newspaper Sabah published after obtaining such from Turkish security sources, captured Saudi intelligence officer and former diplomat Maher Abdul-Aziz Mutreb outside the Saudi consulate, leaving the consul general’s residence, at a nearby hotel, and arriving at the airport shortly before the chartered plane departed for Riyadh.

Mutreb, who was the first secretary at the Saudi embassy in London and has been described as a colonel in Saudi intelligence, is now believed to have played a “pivotal role” in the apparent assassination of Saudi journalist Jamal Khashoggi. He is closely connected to Saudi Crown Prince Mohammed bin Salman (MBS), and photographs have emerged of the two together during the Crown Prince’s tour of the United States earlier this year.

Under pressure from international media, Saudi Arabia, which has changed its narratives several times – on the mysterious disappearance of one of its loyal and yet disgruntled voices, now claims that Khashoggi was accidentally strangled Oct. 2 in a fight with 15 Saudis employed by the nation’s security services and military inside the Saudi Consulate in Istanbul.

The Saudi government said it has arrested the entire team and three others. It blames two of the Saudi crown prince’s key aides – the deputy director of Saudi intelligence and his top communications adviser – for Khashoggi’s death. And the kingdom appointed that same crown prince to head a committee to review the incident and restructure the nation’s intelligence agency.

Many analysts find the Saudi report as an all-too-convenient cover story that is aimed at trying to protect MBS by blaming Khashoggi’s murder on Maj. Gen. Ahmed al-Assiri (MBS’s senior military adviser) and Saud al-Qahtani (the crown prince’s top communications adviser).

As noted by Fox News, the last-ditch effort by the Saudi announcement, made in the dead of night over a weekend, appears to be a pathetic attempt not only to salvage the vital strategic U.S.-Saudi relationship but to exonerate the man responsible directly or tacitly for Khashoggi’s brutal murder. That man is Crown Prince MBS, who is now described, perhaps deservingly, on Twitter by his critics as “Mr. Bone Saw”.

Fox News reporter Judith Miller writes, “But the Saudi government’s explanation of how Khashoggi was killed – offered 18 days after insisting that he had left the consulate alive – is dismal. For strategic reasons, it may pass muster with the White House. But it shouldn’t. And if initial reaction is any indication, Congress may not buy in.” I pray and hope that she is right.

Can this MBS monster be tamed? Can he be brought to justice in a world when monsters and demons seem to feel invigorated, if not rule? As a newly minted 29-year-old defense minister in 2015, MBS promoted Riyadh’s intervention in the Yemeni civil war against the Zaydi Shi’ite Houthis. The intervention that resulted in deaths of tens of thousands and wanton destruction has been a humanitarian and public relations disaster for the desert kingdom.

MBS has also led the effort to boycott Qatar for its ties to Iran, Riyadh’s strategic competitor, and for its support for the Muslim Brotherhood. The Brotherhood is a rival Islamic movement despised by Saudi Wahhabis, who promote their own brand of extremist Islam, which many see as a resurrection of the much-despised Khariji movement of the early Islamic Caliphate.

MBS was also known to have been responsible for the temporary detention and possible beating of Lebanese Prime Minister Sa’ad al-Hariri, whom MBS saw as too close to Iran and the Hizbullah, which is now Lebanon’s leading political force.

MBS talked about reforming the Saudi society and dragging the kingdom into the 21st century by, among other things, letting women drive. But he arrested several of the Saudi women who had led the campaign for which he claimed credit. Under his rule, the number of jailed dissidents has grown. He touted Vision 2030, a campaign to shift the base of the Saudi economy away from oil. But that vital effort to employ young, frustrated Saudis in real, non-government jobs is yet to see its first daylight.

Last year MBS imprisoned some 400 Saudi officials and businessmen in a five-star Ritz-Carlton Hotel without formal charges to extort what he claimed were their ill-gotten gains. Don’t the Saudis have right to know about his own wealth?

How did MBS, a 33-year old prince, amass so much wealth in such a short time? What entitled him to buy Salvator Mundi, the most expensive painting ever sold, for $450 million? He lectures Saudis about working harder and tightening their belts while he buys $300 million villas in France and $450 million yachts with their money. Is he a hypocrite or a robber? Or, both?

Obviously, MBS, like his mentor and cheer leader in the White House, won’t share such vital information. With friends like Kushner and Trump, he thinks he can get away with murder of dissidents and even hire mercenaries to do his dirty job outside the kingdom.

By the way, MBS is not the only one in our time doing such heinous acts. Since Israel’s birth, its leaders have used Mossad agents to kill Palestinian leaders, and even Iranian and Iraqi scientists. Kremlin has done the same thing with its own dissidents. For years, the monarchs in the Middle East have hired mercenaries to do their unfinished tasks of silencing dissidents that live outside their reign of authority. Since 9/11, we have already seen Erik Prince’s American mercenaries deployed in places like Iraq, the UAE and even in Africa, carrying out targeted assassinations and wanton massacre of civilians in war-torn countries.

For months in war-torn Yemen, some of America’s most highly trained soldiers worked on a mercenary mission of murky legality to kill prominent clerics and political figures.

On December 29, 2015 Anssaf Ali Mayo, the local leader of a political party Al-Islah in Yemen, was the target of assassination by a group of former American Green Beret and Navy SEALs. The UAE considers Al-Islah to be the Yemeni branch of the worldwide Muslim Brotherhood, which the UAE calls a terrorist organization. [Many experts insist that Al-Islah, one of whose members Tawakkul Karman won the Nobel Peace Prize, is no terror group. They say it’s a legitimate political party that threatens the UAE not through violence but by speaking out against its wrong and illicit ambitions in Yemen.]

The US mercenaries’ plan was to attach a bomb laced with shrapnel to the door of Al-Islah’s headquarters, located near a soccer stadium in central Aden, a key Yemeni port city. The explosion, one of the leaders of the expedition explained, was supposed to “kill everybody in that office.” Just imagine the magnitude of the criminal intent – killing everyone including Mayo!

The company that hired the soldiers and carried out the attack is Spear Operations Group, incorporated in the state of Delaware, USA and founded by Abraham Golan, a charismatic Hungarian Israeli security contractor who lives outside of Pittsburgh in Pennsylvania. He led the team’s strike against Mayo. “There was a targeted assassination program in Yemen,” he told BuzzFeed News. “I was running it. We did it. It was sanctioned by the UAE within the coalition.” [The Mayo assassination was ultimately unsuccessful. Mayo disappeared from Yemeni politics for a while, and the Spear crew even thought he was dead, but he is currently serving in the Yemeni government, alive and well.]

Based on credible reports, Spear Operations Group arranged for the UAE to give military rank to the Americans involved in the mission, which might provide them legal cover for their otherwise illicit activities, including war crimes.

Interestingly, the deal that brought American mercenaries to the streets of Aden was hashed out over a lunch in Abu Dhabi, at an Italian restaurant in the officers’ club of a UAE military base. Their host was Mohammed Dahlan, the fearsome former security chief for the Palestinian Authority. [Dahlan has been living in exile in Abu Dhabi, where he “works closely” with the ruling Al Nahyan family (being described as “the UAE’s favorite Palestinian”) and is also aligned with Egyptian President Abdel Fattah el-Sisi.]

What a messy world that we are living in that brings in former archenemies to conspire to assassinate politicians and dissidents whose only crime is to speak their mind and demand better for their people! In this newly found fondness, the ends justify the means blurring the difference between the right and the wrong.

Nearly 14 centuries ago, Muhammad (S), the Prophet of Islam famously said, “A time will come upon the people when adhering to one’s religion will be like holding on to hot coal.” [Tirmizi, narrated by Anas ibn Malik (RA)] The sad fact is: in our time, even an agnostic is not safe!

It is a difficult time indeed for conscientious human beings who dare to speak the truth. Betrayed by their own government they often live under insecurity. No place is safe for them unless they either become cheerleaders for the despots and thugs or are nonchalant and mum about their own sufferings and surroundings.

But the struggle for a just society must go on whether the despots like it or not. The guys like MBS may need people like Sisi and Trump to protect them. But for how long will such unholy honeymoon last? Let the lessons of history awake them to amend their ways before it is too late.

Fortum-Rusnano Wind Investment Fund To Start Implementation Of 200 MW Project In Russia

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The Fortum-Rusnano wind investment fund has taken the investment decision for a 200-megawatt (MW) wind power project in Russia. The project is the second of the total 1,000 MW awarded to the fund in the Russian wind auction in June 2017.

The wind farm is expected to start production during the first half of 2020. The first 50-MW project was started in late 2017 and is expected to start production during the first half of 2019.

The Fortum-Rusnano wind investment fund is a 50/50 owned investment partnership to invest in wind power in Russia. The investment decisions related to the renewable capacities won by Fortum and the Fortum-Rusnano wind investment fund in 2017 and 2018 will be made on a case-by-case basis. Fortum’s maximum equity commitment is RUB 15 billion. In the longer term, Fortum seeks to maintain an asset-light structure by forming potential partnerships and other forms of co-operation.

In June 2017, the Fortum-Rusnano wind investment fund won the right to build 1,000 MW of wind capacity in a CSA auction and will receive a guaranteed CSA price corresponding to approximately RUB 7,000-9,000 per MWh for a period of 15 years. In June 2018, the fund won the right to build a further 823 MW. In June 2018, Fortum also won the right to build 110 MW of solar capacity.

In December 2017, the Fortum-Rusnano wind investment fund entered into a non-binding cooperation agreement with the Government of the Rostov Region to build up to 600 MW of wind power plants in 2019-2022.

Iran Claims Its Oil Exports ‘Unstoppable’

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Iranian Oil Minister Bijan Namdar Zanganeh shrugged off US plans to drive the country’s crude exports down to zero, saying the Islamic Republic’s oil exports cannot be stopped.

Speaking to the Tasnim News Agency, Zanganeh pointed to recent fluctuations in oil prices and said, “As long as the US seeks to impose sanctions on the oil (exports) of Iran as one of the world’s largest oil suppliers, the market turmoil will continue.”

Highlighting Iran’s “steady and stable supply of oil to customers”, he stressed that no country has “the capacity to provide a replacement for the Iranian oil in the world’s demanding market.”

The fluctuations in the global oil market will continue until sanctions on Iranian oil sales are lifted, Zanganeh said, adding, “Iran’s oil exports are unstoppable.”

In relevant remarks earlier this month, Iranian Foreign Ministry Spokesman Bahram Qassemi said the country has launched talks with other nations and already formulated the necessary mechanisms to foil the US attempts at bringing Iran’s oil exports to zero with new sanctions.

“I believe that our (oil) exports could continue at a suitable level and…Trump cannot reach his objective,” he told reporters at a weekly press conference in Tehran on October 15.

On May 8, US President Donald Trump pulled his country out of the nuclear deal known as the Joint Comprehensive Plan of Action (JCPOA), which was achieved in Vienna in 2015 after years of negotiations among Iran and the Group 5+1 (Russia, China, the US, Britain, France and Germany), and announced plans for new sanctions against Tehran.

The White House has also announced plans to get as many countries as possible down to zero Iranian oil imports and launch a campaign of “maximum economic and diplomatic pressure” on Iran.

Morocco : Agriculture To Catalyze Youth Employment And Entrepreneurship – OpEd

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Morocco is in the process of elaborating a new and comprehensive strategy for the benefit of the rural world in order to create new activities that will generate employment and income, mainly for the youth.

This can be certainly done through broadening the scope of agricultural investment to all categories, while promoting the emergence of an agricultural middle class and making more accessible agricultural land to productive investment through gradually providing an additional one million hectares of collective land to the beneficiaries, as outlined in the Royal Speech delivered at the official opening of the parliament last Friday.
In fact, Morocco is in need to renew and refocus its investment in agriculture that will catalyze youth engagement, employment, and entrepreneurship in the rural world.
It is absolutely normal to see the majority of youth in Morocco , as in the rest of the world, claiming that their future is outside agriculture. For that reason, they are always tempted to leave their villages and small towns and go to large cities in an unsuccessful search for jobs that usually require technical skills that unfortunately those young job-seekers lack.

So now the challenge that Morocco is facing is how to make agriculture jobs more appealing to the youth and especially to make the agricultural sector more competitive through innovation, public investment in supportive rural public goods and services. For that reason, infrastructure and the development of both villages and small towns is of paramount importance. Villages and towns should absolutely become sufficiently attractive to young and older farmers alike. Electricity, potable water, roads, schools, hospitals, sport and cultural centers and mainly on site vocational training centers should be on top priority of the government agenda. This remains equally important to reach the twin goals of eradicating extreme poverty and boosting shared prosperity.

Many young Moroccans still live in rural areas, and the majority of them are having odd jobs in the agricultural sector. However, agriculture in most of the regions is marked by low productivity and underdevelopment. A serious major challenge that limit the capacity—and appeal—of employment opportunities in this key sector.

The government should absolutely take this challenge seriously and Invest more in agricultural transformation so that it will become more effective in advancing youth livelihoods, alleviate poverty and ensure more prosperity for the farmers.

Young people who lack economic opportunities to lift themselves out of poverty can easily become prey of extremism, crime, social unrest, or illegal migration. A transformed agricultural performed by skillful young workers will minimize all those social scourge and help young Moroccans living in rural areas to alleviate poverty and to improve their living conditions. So now the ball is in the government’s court. A comprehensive agricultural strategy will certainly generate employment among youth over the coming decades, and businesses around farming, including processing, packaging, transportation, distribution, marketing and financial services, could also create jobs for young people.

Saudi Arabia: Deals Worth More Than $50 Billion Signed At Investment Initiative

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At least 25 deals worth more than $50 billion have been signed at Future Investment Initiative (FII) in Riyadh.

The contracts struck on the first day of the event included what were described as 12 “mega deals.”

Among the projects announced on Tuesday in front of an audience of international bankers, investors and thought leaders, was the second phase of Haramain high-speed railway.

The deals were struck across the energy and transportation sectors despite the boycott of the event by several company chiefs following the death of journalist Jamal Khashoggi at the Saudi embassy in Turkey earlier this month.

A number of major public transport projects, including the development of the Saudi Land Bridge project, a rail line connecting the Red Sea coast with Riyadh, were among the raft of deals signed.

Such large-scale infrastructure projects form a key part of Saudi Arabia’s Vision 2030 blueprint for economic and social diversifcation. It aims to reduce the country’s historical reliance on oil and gas revenues by investing in new industries that will also provide employment for the Kingdom’s youthful population.

Other deals were struck on Tuesday with Trafigura, Total, Hyundai, Norinco, Schlumberger, Halliburton and Baker Hughes.

Oil giant Saudi Aramco signed 15 initial agreements worth $34 billion.

Total CEO Patrick Pouyanné, told the gathering that the French oil and gas producer would announce a retail network in the Kingdom with Saudi Aramco.

The $10 billion Russian Direct Investment Fund also had a large presence at the event, led by Kirill Dmitriev.

Saudi Arabia’s Public Investment Fund (PIF), the main backer of the event, is driving the Kingdom’s economic reform agenda.

Managing director Yasir Al-Rumayyan said that the fund had invested in 50 or 60 firms via SoftBank Group’s Vision Fund and would bring most of those businesses to the Kingdom. PIF has committed to invest $45 billion in the Vision Fund.

The FII event, which debuted in the Kingdom last year, concludes on Thursday.

Saudi Arabia’s Minister of Communications and IT Abdullah Al-Sawahah praised the speed at which Saudi Arabia is progressing in the digital worl, and said: “We are moving at light speed in becoming the tech hub of the region.”

Meanwhile, Emirati businessman Mohamed Alabbar said: “There is so much room for technology growth and innovation in the Middle East, especially in Saudi Arabia, the UAE and the whole region.”


Alqasem’s First Lesson Is On Israel’s Assault On Democracy – OpEd

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By Yossi Mekelberg*

Not for the first time, Israel’s Supreme Court has saved the country’s blushes. This time by reversing a decision, which was backed by the government and a lower instance court, to prevent a young American student, Lara Alqasem, from entering the country even though she arrived with a perfectly valid visa.

Alqasem, who went to Israel to pursue a master’s degree in human rights at the Hebrew University in Jerusalem, turned all of a sudden into an enemy of the Jewish state. Her alleged “crime” was being a supporter of the Boycott, Divestment, Sanctions (BDS) movement while she was an undergraduate. When the dust settles on the sorry story of the efforts of the Israeli government to prevent her from entering the country, the question that will probably remain with everybody is that posed by one of the Supreme Court judges who heard her case, who asked: “How does this advance Israel’s fight against BDS?”

There is only one answer to this question: It does not and it will not. And one can add another question: How does it serve Israel at all? Treating a young student, just 22 years of age, who may or may not have supported the BDS movement during her undergraduate years, as an enemy of the people is nothing short of folly and an action verging on a panic attack. For all its efforts, the BDS movement has so far had very limited success. This is mainly due to its own shortcomings, among them being oriented on ideology, rather than on policy, and its harboring of elements that question not just Israel’s role in blocking a two-state solution, but beyond that the very right of a Jewish state to exist, not to mention international conditions that at the moment favor Israeli policies.

This is where the hysterical overreaction by Israel is self-defeating and plays into the hands of the BDS movement by giving it ample ammunition to question whether Israel is a genuine democracy, while also discouraging other young people from studying in the country. By its own actions, the state of Israel is inviting prospective students to shun its universities, especially if they have been condemned on some questionable “pro-Israel” websites that monitor the activities of students whom they deem hostile to Israel. The irony is that Alqasem, by deciding to study in Israel, is defying the call to boycott Israeli academia. Logic dictates, therefore, that she should have been received with open arms, one might even suggest enjoying VIP treatment — but definitely not 15 days’ detention, as in this case. Inadvertently, the Israeli authorities have been behaving like a local branch of the BDS movement.

And, let’s face it, similar to many other youngsters with a developed sense of justice, fairness and care for the underdog, Alqasem most likely objects to Israel’s policies toward Palestine. Yet she took a courageous decision, which is bound to be unpopular with many of her contemporaries, to study at the Hebrew University in Jerusalem, which is the second-oldest university established by the Zionist movement, and in a city at the heart of the Israeli-Palestinian conflict.

But this, of course, was not enough for Minister of Public Security Gilad Erdan. In his clumsy attempt to climb down from the gigantic rickety structure created by those who stopped and detained Alqasem in the airport, he suggested that she would be allowed to enter the country if she “declares clearly and specifically that she made a mistake in the past and she now believes that supporting a boycott of Israel and BDS is a mistake and is not legitimate and if she regrets her time in the past as chapter head of a boycott organization.”

So his solution was public humiliation: Some kind of modern-day walk of shame to the town square to atone for her past sins, otherwise she would not be allowed to study in Israel. Erdan’s interpretation of his role of protecting the public takes here an unwelcome twist of curtailing freedom of speech. His role is to head the police, not the thought police.

Alqasem, despite there being no evidence that she poses any threat to anyone and though she arrived on a valid student visa, was still deprived of her freedom for 15 days and treated as if she was one of Israel’s arch-enemies. Erdan and his like are causing irreparable damage to Israel’s image and international reputation. They are spreading paranoia and fear, as if anyone connected to the BDS movement poses an existential threat to the future of the country.

Prof. Tallay Ornan, of the Hebrew University, asserted that this case is not just a personal issue. She said: “This is a declaration of war on what we are working for: To broaden knowledge, freedom of information, recognizing the other, and enlightenment.” Considering the constant attacks on liberal democratic values and institutions by Cabinet ministers and the ruling parties, one can only agree with this assessment.

Sadly for Alqasem, her first lesson in human rights in Israel was to spend more than two weeks in a detention center at Ben Gurion International Airport while engaged in a legal battle that should have never reached the courts in the first place. However, it is still a story with a happy(ish) ending. Despite the Israeli government’s best efforts to considerably weaken the Supreme Court, the court has proved itself to be a beacon of human and civil rights in its halting of the authorities’ ongoing assault on the country’s democratic foundations.

Alqasem will now not be prevented from studying at one of the most prestigious universities in Israel and acquiring the necessary skills for a lifelong career in the human rights world; a world that scares so many of those who in their daily life prefer to violate those rights rather than guard them. She may have missed her first week of studies but she has learned, as we all have, a great lesson that standing up for what is just and right can yield, even against the odds and against mighty powers, the right result.

*Yossi Mekelberg is professor of international relations at Regent’s University London, where he is head of the International Relations and Social Sciences Program. He is also an associate fellow of the MENA Program at Chatham House. He is a regular contributor to the international written and electronic media. Twitter: @YMekelberg

Education In Kashmir: Issues, Concerns And Way Out – OpEd

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The prosperity and development of a nation is directly proportional to the reckoning educational force. Education is the transition of an individual from unknown to known, darkness to light and so on. Education is the sum total of all-round development of personality of an individual and strives for transformation of his/her life.

It is not merely the acquisition of degrees or certificates from educational institutes, but, rather an unfaltering tool which facilitates the paradigm shift in a learner in terms of ethical development, morality, decent behaviour, ethical and responsible role towards the society, creation of skills, inculcation of values and good belief systems in the society, etc. Education is a continuous process and never ending. It starts from the confines of crave and ceases to operate with the depths of grave.

Education moulds an individual into a real human being. It is a grand virtue that delineates a man from animal instincts and makes man a true human being. Education is a sine qua non precondition for the civilization of a nation. Education is a purposeful and a well planned activity.

Education facilitates a learning state in a student from the day one makes inroads within an institution. History is witness to the fact that in earlier times, the centres of learning where Madrassas and patshalas in India, including Kashmir. Thence after, with the advent of an institutional mechanism in the world, the learning equations underwent a major shift and institutions became the centres of knowledge dissemination and skill creation, with further impetus post-arrival of science and technology and paraphernalia of the post-modern times.

Education is today at the fingertips of the masses, but, it is the teacher and the institution that play a pivotal role in the real dissemination of the knowledge and pull a learner towards the state of enlightenment from the confines of the utter neglect and darkness. Even, the globalisation of knowledge has made the facilitation of knowledge easy and at convenience. In the union of India, Kashmir region is today in search of peace through the unrelenting struggle of yearnings day-in and day-out where educational sector has suffered massively since 2016.

Issues and concerns

Education in the past times was although an enterprise of a few privileged and affluent, but, today in stark contrast, everybody has a bunch of degrees to his/her credit, although variable across the spectrum of specialisation. However, the educational system of Kashmir is beset with a majority of looming problems. The major harm that has been done to the educational sector is due to the political turbulent phases of waywardness in our state of J&K.

Every other day, due to uncertain nature of the situations in Kashmir, the educational institutions are closed day-in and day-out. Major portion of the year is lost in the whirlpool of political uncertainty. The recurring uncertain phases of the events have badly affected our educational sector and inflicted a heavy damage thereof. Today, the children are not ready to come to school. Others, who attend the days in the educational institutions lack patience. This is a major concern for the current times.

Education is an asset of the nation. Due to prevailing uncertain situation in our state, the students have turned awry. Gone are the days when students used to respect teachers. Today, a single taunt of discipline from a teacher is a heart-wrenching affair. Teachers who suggest the student to modify their their behaviour invite ire of their parents. Government has made teachers like handicapped entities as they can’t do anything in the current political crisis. Recently, when in a government institution, the teachers after much parleys denied student’s entry into school on account of proper school shoes, next day, a respectable citizen came fuming and said that don’t mend them, tomorrow, if they pick guns, it will trouble you. What can a teacher do at that point of time? Last year, a teacher had a face off with a media man for the reason that he provoked the former that why the students were not in the school, probably, on 2nd of Eid. What get away message on can discern from thereof. Society even looks through the lens of narrow perspective of the teacher.

A teacher is today a thorn in the eye of the people. He is being victimised by taunts, like he is any hardcore criminal and takes salary from the people’s pockets. For God sake, when the wards of these people do not come to school or bunk the classes, is it the fault of a teacher? The major problem is that there should have been some moderate sort of corporal punishment for the students, because in our times, the stick was called as mind-striver (akalnuma) as we beared it and also safeguards for the teacher’s.

It was long time ago that Zakat Foundation of India chairman, Syed Zaffar Mehmood said that Kashmiri students are highly talented. But, that talent should be nourished and properly channelized under the auspicious aegis of teachers. Besides, the teachers should also focus on the creative aspect of the education.

It is not merely the passage of knowledge in the classrooms, rather, there should be an inbuilt medium created by a teacher in the classroom to vent the creative talent of the students. The second most problem in our classrooms is that there are no or less demonstrative activities in the classroom. A classroom should become like a laboratory in itself, where students can themselves perform the activities themselves regarding their lessons, under the guidance of their subject specialist teachers. Another important problem is that parents force themselves on their wards, so far as career choices are concerned, without looking for the inbuilt literary taste of their wards. Long time back, there was medical and engineering craze in Kashmir. Since, Dr. Shah Faesal topped the IAS in 2010; the wavy nature of the students is caught in the quagmire of civil services as of now. It should not be like this. There is something beyond the confines of short-term visions of goal. There is a plethora of career choices beyond the intermediate level. The proper counselling of the students is the need of the hour. There should be the pause of parent’s intervention in the student’s career choice and an end to the switch-off and switch on mechanisms.

Cutting a long story short, education as of now in Kashmir is caught in a distraught situation. Well-offs have sent their wards to learning abodes of knowledge centres and institutions. It is the poor who suffers as of now. Children should maximise their learning within the minimum of time they get in the academic session of the year. Parents should create an ethical environment in their homes for their wards.

Teachers should change their strategy of learning and move beyond the pages of books towards a greater clarity and focus on skill development, demonstrative abilities and research inculcation in the students. This way of a healthy triangular relationship between student, teacher and parents can become a boost in arm for the rectifying the faulty system of education in our Kashmir. Every teacher is a good scholar, but that scholastic aptitude must droop down towards the students as the world of today’s cut-throat competition demands so. Together, the wheel of education can be pushed towards the greater good of the society. Parents should keep a tight vigil on their students and inculcate a spirit of morality in them. This way they can perform as the better students of today and best citizens of tomorrow who respect their teacher’s and elders totally.

During our college days, some teachers were more inclined towards female students and assigned more marks in practicals to them although we all boys as well as girls attended the same classes.This happens even today,that is discrimination in the name of empowerment. Boys should report it to their parents,institution heads and create a media narrative thereof. This will serve as a deterrent.

The government has made enormous provisions in the educational institutions in terms of highly qualified teacher’s, infrastructure, scholarships, etc for the students in general and poor in particular. Only that is required is the zeal and zest from the students to learn, achieve their goals and make the name of the state and country, time and again, high in achievements.

Way out

Education is restructuring of the societies the world over. It has charted a rich discourse since ancient times. God has always been kind enough to man to reveal the knowledge of that which man was unknown to. Today, when education at the global level has scaled a marvelous route, the role of man in the process cannot be sidelined. Education is a tripolar process between a pupil, teacher and parent with an individual and an ensuing collective role thereof.

Teachers have the major responsibility in the whole process. They ought to create a moral and a learning environment in the schools. Also, they must maintain a gap between themselves and the students. There must be moral lessons in the school on behalf of heads of the institutes. The heads should also form moral committees in the institutes to oversee the behaviour of the teachers.

Unfortunately, some teachers have brought disrepute to the department by mingling with the minor students, particularly girls. They should keep the sanctity of the profession in vogue and desist from coming close to students. Day in and out, over the social media, reports of student molestation pour over and create unhealthy scenes thereof, which should be given off. Since, teaching is a noble profession of the ages and a Prophetic profession, a teacher should act as a guide, instructor and pointer in the whole process and not as an exploiter.

Due to political uncertainty, the students have lost the sheen of responsibility and regards for the elders. There are today plunged in the moral bankruptcy. The easy access to social media, addiction substances and finance has ruined their lives. Recently, when a video over social media surfaced with students having wine bottles in a park, it took all the denizens by surprise. Where were the parents of these students? They should overlook their behaviour and keep a tight vigil and watch over them.

The modification of student behaviour is primarily the duty of parents, especially mother who is equated with the first learning abode of a child. The provision of a right moral environment at home can rectify their ills and give them a noble sense of role and respect vis-a-vis students. The students ought to soak themselves in moral devotion vis-a-vis teachers and elders.

Finally, the role of the government is mandatory. Government should oversee the work and conduct in the educational institutions of the valley and observers should be chosen for this noble work.

There must be rewards for the good teachers and erring ones, particularly blot on the face of education should be put to task to set a strong precedent for the others that yes morality is a non-compromising entity and every this and that ought to follow it in letter and spirit. Also, CCTV cameras should be installed in the schools and colleges in toto of vale to keep a tab on the others, one and sundry. This way we can envision an educationally sound environment for the overall socio-economic development of our state J&K.

*Abid Ahmad Shah works in theGovt. Education Dept. J&K, views are personal

‘Himalayan Gold’ On The Brink

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A parasitic fungus that grows wild throughout the Himalayas and sells for more than its weight in gold could vanish if current harvesting and climate trends continue, according to new research from Stanford University.

The fungus, Ophiocordyceps sinensis, survives by preying on ghost moth caterpillars in some of the highest reaches of the Himalayas. The fungus infects and eats the insides of a caterpillar that burrows underground for winter. What the parasite does next may be too gruesome to mention over a supposedly healing bowl of aphrodisiac soup (price: $688) made in Las Vegas with a mere quarter-ounce of the stuff.

“It kills them and then sprouts out of their heads, like a unicorn horn,” said lead author Kelly Hopping, an ecologist who conducted the research as a postdoctoral scholar at Stanford’s School of Earth, Energy & Environmental Sciences (Stanford Earth).

Beginning in the 1990s, demand for the fungus as an aphrodisiac, impotence cure and remedy for the deadly SARS virus – while unsupported by scientific evidence – helped to jumpstart a global trade. Since then, belief in a wide range of healthful effects from the fungus has fueled a market valued at some $11 billion, as well as concern that harvesting rates have become unsustainable.

Official harvest records are unreliable, however, because much of the caterpillar fungus trade goes through illegal channels. This new study, published in the peer-reviewed Proceedings of the National Academy of Sciences, presents the most comprehensive data to date addressing whether and why caterpillar fungus production might be on the decline, and the likely consequences of a possible crash on the communities that depend on the fungus for their livelihood.

Species and livelihoods under threat

Hopping and study co-author Eric Lambin, a Stanford professor of Earth system science, became interested in the fungus as a way to understand what happens when a niche biological product gives wealthy consumers outsized influence over rural livelihoods, land-use choices and ecosystems in producer regions.

Research on ecosystem degradation tends to focus on the expansion of globally traded agricultural commodities such as oil palm, soy, cattle and timber – the biggest drivers for deforestation. The ripple effects of commodities that grow and trade on a smaller scale are less understood – but potentially profound, Lambin said. He points to rhinoceros horn as an example.

“An emblematic mammal species is being brought to extinction due to the demand for a product which is viewed in some traditional cultures as having virtues,” Lambin said.

Caterpillar fungus may lack the charisma of a rhinoceros, but as one of the world’s most expensive biological commodities, it has become a primary source of income for hundreds of thousands of collectors. And at a time when up to one-third of the world’s parasite species could go extinct within a few decades – potentially opening new niches for other, invasive parasites to exploit – conservation biologists increasingly see a need to protect parasites as well as their hosts.

According to Lambin, who is also a senior fellow at the Stanford Woods Institute for the Environment, there’s no question intensive harvesting takes a toll on both people and the environment across an increasingly vulnerable landscape. While many local collectors try to minimize impacts, he said, large influxes of people drawn to the Himalayan rangelands during the peak harvest season can end up degrading ecosystems by disturbing fragile soils, cutting swaths of shrubs and trees for fuel and leaving trash around their harvesting camps.

‘Himalayan gold’

Widely known in Tibet as yartsa gunbu, or “summer grass, winter worm,” caterpillar fungus has been used in traditional medicine throughout the Himalayan region and in China for centuries to treat ailments ranging from cancer and kidney disease to inflammation and aging. In more recent years it has earned the nicknames “Himalayan Viagra” and “Himalayan gold.”

To get around the problem of patchy trade data for the valuable fungus, the team turned to collectors’ own knowledge of production trends in China, Bhutan, Nepal and India, as reported in dozens of case studies. The researchers then bolstered the published accounts by interviewing 49 collectors across the Tibetan Plateau.

With this data and 400 records of where the fungus has been found throughout the four countries since the 1970s, the group built models predicting how much fungus would grow in a given area based on factors like climate and elevation. The results show the fungus tends to be more prolific in higher, colder areas around the margins of areas underlain by permafrost.

Warmer winters

Currently, caterpillar fungus is sufficiently abundant in springtime in prime production areas that many people can collect enough in a month or two to support themselves for the rest of the year. However, production is already on the decline due to intensive harvesting – and warming winters may be exacerbating that trend.

In a region where average winter temperatures in some places have already increased by as much as 4 degrees Celsius since 1979 – “an enormous amount of warming,” Lambin said – the researchers found that every degree of winter warming makes it makes it harder for the fungus to thrive. As permafrost disappears from lower elevations, the fungus can adapt by shifting to colder upslope habitats only if its caterpillar hosts – and the vegetation and seasonal patterns on which they depend – shift upward, too.

In the long term, if income from caterpillar fungus can be sustained, the study suggests, it could provide an important financial cushion for those whose livelihoods herding livestock on high-altitude grasslands face mounting threats from climate change. “Caterpillar fungus collection has emerged as a way for people in these areas to make relatively easy money,” Hopping said, “and in some cases to really raise their standard of living.”

However, if demand continues to grow as supplies decrease, it could aggravate tensions over who has access to harvesting areas, Hopping said. “Communities in areas where it’s still growing will need to remain vigilant about potential conflicts and poaching as people seek to harvest this increasingly rare and valuable species.”

Lambin is also the George and Setsuko Ishiyama Provostial Professor. Hopping is now an assistant professor at Boise State University College of Innovation and Design. Study co-author Stephen Chignell is now a PhD student at the University of British Columbia.

The Bible Helps Researchers Perfect Translation Algorithms

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In search of inspiration for improving computer-based text translators, researchers at Dartmouth College turned to the Bible for guidance. The result is an algorithm trained on various versions of the sacred texts that can convert written works into different styles for different audiences.

Internet tools to translate text between languages like English and Spanish are widely available. Creating style translators–tools that keep text in the same language but transform the style–have been much slower to emerge. In part, efforts to develop the translators have been stymied by the difficulty of acquiring the enormous amount of data required. This is where the research team turned to the Bible.

In addition to being a source of spiritual guidance for many people around the globe, the Dartmouth-led team saw in the Bible “a large, previously untapped dataset of aligned parallel text.” Beyond providing infinite inspiration, each version of the Bible contains more than 31,000 verses that the researchers used to produce over 1.5 million unique pairings of source and target verses for machine-learning training sets.

According to the research published in the journal Royal Society Open Science, this is not the first parallel dataset created for style translation. But it is the first that uses the Bible. Other texts that have been used in the past, ranging from Shakespeare to Wikipedia entries, provide data sets that are either much smaller or not as well suited for the task of learning style translation.

“The English-language Bible comes in many different written styles, making it the perfect source text to work with for style translation,” said Keith Carlson, a PhD student at Dartmouth and lead author of the research paper about the study.

As an added benefit for the research team, the Bible is already thoroughly indexed by the consistent use of book, chapter and verse numbers. The predictable organization of the text across versions eliminates the risk of alignment errors that could be caused by automatic methods of matching different versions of the same text.

“The Bible is a ‘divine’ data set to work with to study this task,” said Daniel Rockmore, a professor of computer science at Dartmouth and contributing author on the study. “Humans have been performing the task of organizing Bible texts for centuries, so we didn’t have to put our faith into less reliable alignment algorithms.”

To define “style” for the study, the researchers reference sentence length, the use of passive or active voices, and word choice that could result in texts with varying degrees of simplicity or formality. According to the study: “Different wording may convey different levels of politeness or familiarity with the reader, display different cultural information about the writer, be easier to understand for certain populations.”

The team used 34 stylistically distinct Bible versions ranging in linguistic complexity from the “King James Version” to the “Bible in Basic English.” The texts were fed into two algorithms – a statistical machine translation system called “Moses” and a neural network framework commonly used in machine translation, “Seq2Seq.”

While different versions of the Bible were used to train the computer code, systems could ultimately be developed that translate the style of any written text for different audiences. As example, a style translator could take an English-language selection from “Moby Dick” and translate it into different versions suitable for young readers, non-native English speakers, or any one of a variety of audiences.

“Text simplification is only one specific type of style transfer. More broadly, our systems aim to produce text with the same meaning as the original, but do so with different words,” said Carlson.

Dartmouth College has a long history of innovation in computer science. The term “artificial intelligence” was coined at Dartmouth during a 1956 conference that created the AI research discipline. Other advancements include the design of BASIC–the first general-purpose and accessible programing language–and the Dartmouth Time-Sharing System that contributed to the modern day operating system.

Hong Kong: Global Or Chinese Capital? – Analysis

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Hong Kong became a global financial center with the help of democratic principles but China would prefer less independence.
By Philip Bowring*

Hong Kong is between a rock and a hard place. On the one hand, it is seen overseas and by most residents as a genuinely autonomous region characterized by free trade, free speech, free assembly and the separation of the executive from an independent judiciary. On the other, the government in Beijing and local acolytes regard Hong Kong’s citizens as insufficiently patriotic, prone to exaggerating their rights to autonomy and in need of rapid integration with the rest of China.

Tension between these perceptions has long existed, but a series of developments have made them far more pronounced and could eventually undermine Hong Kong’s international status, driving foreign companies and finance houses to Singapore or elsewhere. Hong Kong citizens could also find themselves deprived of benefits such as visa-free entry to dozens of countries that they enjoy – and other Chinese do not.

The roots of this enhanced tension go back to two events. One was installation of Xi Jinping, set on centralizing power and enhancing the singular role of the president in place of the more collective-style leadership practiced by his two predecessors. His policy centerpieces include anti-corruption at home and nationalism abroad, evidenced by actions ranging from militarily boosting claims to the whole South China Sea to the Belt and Road Initiative using Chinese money to build infrastructure and enhance China’s global commercial links.

The other event was the so-called Umbrella Movement, prolonged mass demonstrations disrupting the center of Hong Kong in 2014, in protest against Beijing’s imposition of rules snuffing out local hopes that autonomy would enable progress to a higher level of democracy. Protesters’ goals included direct election of the chief executive and all members of the Legislative Council. The Umbrella protests infuriated Beijing, and the Hong Kong government has since gradually taken revenge, with long prison terms for some leaders accused of rioting or incitement to riot. Democratically elected legislators have been removed on various legal grounds and other barred from standing for election.

Foreign reaction to Hong Kong’s problem was muted as countries prefer to chase China business or simply view Hong Kong as a useful place regardless of politics because of low taxes and commercial freedoms. However, tensions in recent months have increased as actions by the Hong Kong government against dissident voices coincide with the ramping up of US-China confrontation. What began as trade-focused moves by President Donald Trump have morphed into a broader US attempt, as evidenced by an October 4 speech by Vice President Mike Pence, to thwart China’s attempts to achieve technological and power parity if not ascendency: “Beijing is employing a whole-of-government approach to advance its influence and benefit its interests…. we will continue to stand strong for our security and our economy, even as we hope for improved relations with Beijing.”

Hong Kong itself has been subjected to a barrage of efforts by the local administration to prove its loyalty to Beijing, and its 7 million people are urged to see themselves as part of what is called the Greater Bay Area – perhaps with an eye to San Francisco’s prosperous Bay Area – where immense business opportunities are supposed to lie. The Greater Bay Area is a recent formulation that denotes a group of cities and municipalities in the Pearl River delta region, which lack an administrative framework but whose 65 million people dwarf those of Hong Kong. Other moves to reduce Hong Kong’s separate identity include a push to use more Mandarin, or Putonghua, at the expense of Cantonese, the ancient indigenous language of Guangdong used with pride in Hong Kong.

At the same time the Hong Kong government has made a full, frontal attack on those advocating greater autonomy, or even independence, reaching a pitch that has drawn protests and international attention. One spark was a speaker invitation by the Foreign Correspondents’ Club of Hong Kong to Andy Chan, a leader of the Hong Kong National Party. Chan’s tiny party attracts minimal support, but the government and Beijing’s office in Hong Kong tried to stop the speech. The club went ahead anyway, saying it was perfectly legal and journalists had a right to hear Chan. In retaliation, the government declared the HK National Party illegal on grounds of sedition and proceeded to deny renewal of a work visa to the Asian editor of the Financial Times, Victor Mallet, a veteran of postings in Bangkok, Madrid, Delhi and elsewhere. His offence: presiding over the luncheon meeting in his official capacity as the club’s vice president.

This seemingly minor visa issue sent shockwaves through the legal, business and media communities. Hong Kong it seemed, is using administrative measures at the instigation of Beijing to suppress freedoms and the rule of law which were supposed to be a hallmark. The American and European Chambers of Commerce expressed concern, and the United States and the United Kingdom filed official complaints. If discussion of Hong Kong is shut down on grounds of doubting Chinese sovereignty, how long would it be before bans are applied to bigger issues – Taiwan, Tibet, the South China Sea and more – or mere discussion of such topics becomes treasonous and criticism of China’s one-party rule is seditious?

Despite the storm of criticism, the government pressed on with shutting down critics, barring a high-profile candidate from running in a by-election on the grounds that she had once called for “self-determination” for Hong Kong. Four elected legislators had already been disbarred and other aspirants prevented from standing.

Meanwhile, as the US-China tariff war heats up, there are worries that a “patriotic” Hong Kong may find it hard to avoid harm. Although Hong Kong manufactures little, the possibility emerges that its role as a re-exporter of mainland goods could come under scrutiny, with the administrative region accused of tariff avoidance in the same way it provides tax avoidance for many mainland companies. The government insists that it would be “unfair” to target Hong Kong, nonetheless lobbying Washington to sustain the region’s separate identity, even while its policies on freedom of speech at home have pointed otherwise.

The region for now is protected by the 1992 US-HK Policy Act, which provides for special and separate treatment for Hong Kong. In a May review, the US State Department concluded that although there had been some suppression of democratic rights by the central government “inconsistent with China’s commitment … to a high degree of autonomy,” Hong Kong’s differences were “more than sufficient to justify continued special treatment by the United States.”

That remains the case. The State Department realizes that the US runs a large trade surplus with Hong Kong, home to some 85,000 US citizens and regional headquarters for many US businesses.

But the mood is changing. Both the United States and China harbor doubts that Hong Kong can be both patriotic and entitled to special economic status. Even in Hong Kong, some voices call for the United States to use the HK Policy Act as a lever to try and reverse authoritarian trends. The US president has authority to interpret the act.

Hong Kong is too valuable to all parties to be relinquished. Erosion of its international status will reduce the city’s significance in a world where globalization everywhere is under threat from nationalism.

*Philip Bowring is a journalist who has been based in Asia since 1973. He lives in Hong Kong, dividing his time between writing columns, books and helping develop Asia Sentinel, a news and analysis website.

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