By Nidhal Guessoum*

The world awoke to a shocking piece of news late last month: A Chinese scientist had edited the genes of two twin girls at the fertilization stage and let the two embryos be carried to birth. Furthermore, another woman is currently carrying a baby whose genes have also been edited.

I must first stress that no scientific breakthrough was made in this instance — no procedure that other scientists could not have achieved. Indeed, the technique that was utilized, Crispr-Cas9, often simply referred to as Crispr, was developed a few years ago and was known to potentially have wide-ranging and powerful applications, including on human genes.

Crispr, in a nutshell, is a biochemical technique that allows scientists to send molecules to literally cut pieces of a gene (a little segment of DNA) and thus either render it inoperative or modified in a specific way. Everyone knew that this could, in principle, be used on humans, most likely with good intentions, but the consequences of editing human genes are very difficult to predict, hence committees have been at work to set guidelines on the use of Crispr. In December 2015, a few months after the technique was revealed to the world, an international summit on human gene editing was held in Washington.

What makes Crispr so powerful? Suppose you inherited from one of your parents a gene that makes you likely to develop a certain deficiency (myopia, type 1 diabetes, etc.); one could, in principle, target the genes that are responsible for these illnesses and turn them off before conception. Surely, we would all welcome that and encourage scientists to perform it, right? Similarly, the Chinese scientist who edited the two baby girls’ genes tried to make them “resistant” to the HIV virus and claims to have at least partially succeeded.

What’s wrong with this approach? First, one cannot guarantee success, and indeed one of the few experts who got the chance to review Dr. He Jiankui’s paper (it is still unpublished) has stated that, in one of the twins, the editing was successful in only one of the two genes; the girl will thus not have the resistance to HIV that was intended. Secondly, and more importantly, there was evidence in He’s data that other genes or segments of the DNA were affected, and who knows what impact that will have on the girl’s traits, not to mention her children’s? Indeed, modifications on genes often express themselves only in offspring. And, last but not least, impacts on genes are difficult to detect, so a full list of modifications that will have occurred in this intervention is impossible to draw up.

And, if you’re not yet shocked by these developments, here’s the worst of it. He did perform a gene sequence of the two groups of cells after the gene editing (or “surgery,” as he prefers to refer to it) but before the cells were put into the uterus for the mother to carry until birth. Guess what: He saw (or at least should have seen) that the editing was not totally successful but he still proceeded with the implantation into the mother’s uterus.

He didn’t bother to consult with colleagues, let them review the results, and supervise or monitor the experiment. No, he proceeded single-handedly, being convinced that “parents should get the chance to use this technique.” I wonder whether he even informed the parents of the full results of his work.

Is this kind of experiment even allowed? Dozens of countries have laws that explicitly prohibit this, but not China — at least not yet.

There are additional concerns with this line of research. First, any error made on a gene in an embryo will be carried by the descendants and passed on to others by reproduction, and such errors will be impossible to remove from humanity.

Moreover, even if one checks that no mistakes have been made in such “surgery” before any further steps are taken, who is to guarantee that the technique will only be used for therapeutic purposes, and not for enhancements or evil intentions? In fact, clinics around the world are already offering “designer babies,” and who doesn’t want their child to become a sports champion, a piano virtuoso or other such talent?

Indeed, once that genie is out of the bottle, nobody knows what consequences will follow.

The 2015 international summit on human gene editing issued very clear and strong recommendations: “It would be irresponsible to proceed with any clinical use of (hereditary cell) editing unless and until (1) the relevant safety and efficacy issues have been resolved, based on appropriate understanding and balancing of risks, potential benefits, and alternatives; and (2) there is broad societal consensus about the appropriateness of the proposed application. Moreover, any clinical use should proceed only under appropriate regulatory oversight. At present, these criteria have not been met for any proposed clinical use.”

Ethical international guidelines, if not red lines, are urgently needed for human gene editing. We must not allow individual scientists to recruit consenting parents for dubious experiments through false promises or decide on their own what research is good or bad. The whole of humanity is at stake in such research.

*Nidhal Guessoum is a professor at the American University of Sharjah, UAE. Twitter: @NidhalGuessoum

Ukrainian media have obtained a copy of a draft tomos that the Universal Patriarchate has prepared for delivery to a meeting of Ukrainian Orthodox Church now scheduled to take place on December 15. Because it was not officially released, it is likely that the document is still undergoing editing and may be significantly changed.

Moreover, as few have pointed out, autocephaly is a process rather than a single action; and anything Constantinople grants is in fact the beginning of that process rather than the end of the game. Nonetheless, many in Ukraine and Russia are suggesting that at this point, Kyiv is getting less than it hoped for and that it will now be very much under Constantinople.

The Apostrophe news agency provides a list of the provisions of the document (apostrophe.ua/article/politics/government/2018-12-04/tomos-ukraine-chto-reshil-konstantinopol/22520). They include:

• The head of the newly unified and self-standing Ukrainian Orthodox Church will be a metropolitan rather than a patriarch, a relatively lower status than most autocephalous Orthodox church heads have.
• The church will be governed by a synod consisting of 12 metropolitans who will rotate every 12 months rather than a more permanent holy synod. And the church’s order will follow the book of order of the Greek churches.
• The Constantinople Patriarch will be “the informal head of the Orthodox Church in Ukraine” and the ultimate authority to whom religious there can appeal to resolve conflicts.
• The Ukrainian diaspora congregations and dioceses will be directly under Constantinople rather than in the autocephalous church in Kyiv, something that is in marked contrast to the powers of other autocephalous Orthodox churches.
• And the Ukrainian Orthodox Church will appeal to Constantinople on questions regarding the naming of new saints.

Not surprisingly, Russian Orthodox commentators like Archpriest Vsevolod Chaplin are treating this document as the final version – it isn’t – and as the last word about Ukrainian autocephaly – it isn’t that either. And they are saying that it represents a major defeat for Kyiv (actualcomment.ru/ukrainskaya-tserkov-ne-poluchit-nezavisimost-o-kotoroy-mechtala-1812051440.html).

To be sure, this draft is not everything the Ukrainian church would like or even expected. But it does give that church what it wants most: it establishes the principle that Ukraine must have its own national church and that that church must on no account be subordinate to the imperial diktat of Moscow.

By Victor Mambor

Suspected insurgents fired at security forces in Papua who were retrieving bodies of 16 slain construction workers, the military said Thursday, while a rebel spokesman confirmed that they took casualties in launching one of the bloodiest attacks in the province.

Soldiers traded shots with the guerrillas, but were unsure if there were injuries on the rebel side during the gunfight that took place Wednesday on Puncak Kabo hill in Nduga regency, local military commander Col. Jonathan Binsar P. Sianipar said.

“When we were moving 16 bodies to the helicopter landing site, we were fired on by the separatist group,” Sianipar said in a statement issued by the military’s regional command.

Government forces did not suffer injuries, Sianipar said.

In addition, Puncak Kabo’s thick forest and rough terrain hampered attempts to remove the bodies, he said.

On Wednesday afternoon, soldiers and police managed to reach Puncak Kabo, where workers who were building roads and bridges were killed over the weekend, the military said.

All the bodies were recovered later in the evening despite difficulties faced by the security forces, regional military chief Maj. Gen. Yosua Pandit Sembiring told reporters.

A search was ongoing for several people still missing, he said. Police earlier said that 31 workers and a soldier were killed, but military officials on Thursday were still trying to verify what caused the discrepancy in casualty figures.

Biggest attack

The West Papua National Liberation Army (TPNPB), the armed wing of the Free Papua Movement (OPM), has claimed responsibility for the killings, alleging that the people they killed were soldiers from the military’s engineering detachment, and not civilian workers.

Officials said the attack was the worst carried out by separatist rebels in the last 10 years in Papua, located at the far eastern end of Indonesia and one of the archipelago’s poorest regions despite its rich natural resources.

Eleven civilians and 11 security personnel were killed in 19 cases of armed violence in the province, from 2014 through 2017.

Armed with ‘military-grade’ weapons

Egianus Kogoya, the leader of the rebel group claiming the attack, commands around 50 members armed with military-grade weapons, authorities said.

Egianus is the son of Silas Kogoya, the TPNPB leader in the 1990s.

In a video posted on YouTube, Egianus said that the weapons the group used were seized from Indonesian security forces.

Sebby Sembom, a rebel spokesman, confirmed Egianus’ claim.

“We seized all (weapons) from the TNI-Polri (soldiers and police). We killed them and seized their weapons,” he told BenarNews. He declined to say how many weapons Egianus’ group had.

Papuan military spokesman Col. Muhamad Aidi acknowledged that Egianus’ group had dozens of standard-issue military weapons, mostly rifles.

“Some of the firearms were seized from soldiers and police,” he told reporters, adding that some of their weapons also came from outside the country.

The Egianus group is one of the many TPNPB guerrilla factions, mostly operating in Papua’s central highlands.

“The attack carried out by TPNPB had been prepared. We declared a war in early 2018,” Sebby told BenarNews in a phone interview.

He claimed that during the attack on Dec. 2, no TPNPB member was killed, but several were injured by gunfire.

Agreement between insurgents and workers

Nathal, a former employee of PT Istaka Karya, a state-owned construction company that builds roads and bridges in Nduga, told reporters there was an agreement last year between construction workers and the rebel group.

Under the deal, workers would vacate their camps starting Nov. 24 each year to allow separatists to celebrate their independence day in the area on Dec. 1.

“At that time in November 2017, an agreement was made that every Nov. 24, the dorms or camps must be vacated because Dec. 1 is their independence day,” said Nathal, referring to the insurgents.

“I’m sorry, why were they still in the camp, even though it was clear that the camp had to be vacated starting Nov. 24?” said Nathal, who uses only one name, like many in Indonesia.

Another worker named Makbul told reporters that a gunfight between rebels and soldiers during an attack, which killed a soldier at a military post on Monday, lasted from 5 a.m. until around 7 p.m.

“The post was attacked because four people who escaped the shootings (on construction workers) fled to the TNI (military) post,” Makbul said.

A video seen by BenarNews showed the bodies of the victims lying on a rocky road, while charred heavy equipment, some still burning, could be glimpsed nearby.

Social Security, the retirement program established by President Franklin D. Roosevelt and the Democrats in Congress in 1936 as a cornerstone of the New Deal programs that were put in place to help Americans struggling with the Great Depression, has been under attack by Republicans ever since it began.

In the early 1980s, they finally got their first chance to really take a whack at it. It was the first term of the administration of Ronald Reagan and thanks to medical advances that were allowing people to live much longer and to the Medicare and Medicaid programs or the mid 1960s that made those advances available to most Americans for the first time — the elderly, the disabled and the poor — the retirement program was under stress and heading towards being unable to meet its benefit payment obligations with just the payroll taxes being paid into the system by current workers and their employers.

If that sounds familiar, it should. Once again, this time because of even further improvements in longevity, combined with a declining US birthrate and the fact that since 2007 Baby Boomers, that wave of new Americans born after the end of WWII and through 1964, have been reaching retirement age and have begun receiving their Social Security benefits, the Social Security system is heading towards a financial crisis. It’s not bankruptcy as Republican scaremongers claim, but if nothing is done to bolster funding for the system, as of 2034 surplus funds deliberately built up in advance to finance Baby Boomer benefits will be exhausted, and the payroll taxes paid into the system by then-current workers and their employers will only be enough to fund 78% of promised benefits to those eligible for benefits at that time.

That would, or course, be a disaster for the nearly 80 million older and disabled Americans who will have reached retirement age by that time, but it’s a disaster that a mobilized public can avert by simply demanding that Congress take action and raise the necessary funds promptly to cover the difference. (More on that later in this piece, but suffice to say that our politicians have been dawdling on dealing with this for two decades.)

But first I want to address a more urgent problem: the theft of retiree benefits.

This theft began in 1983 when a compromise between President Reagan and House Speaker Tip O’Neill, the leader of the Democratic-led House of Representatives fixed that earlier Social Security funding crisis. As part of that fix, which included raising the age of so-called “full” retirement gradually from a current 65 to 66 and eventually 67, the elderly and disabled have been screwed out of their benefits, and the pain and suffering caused by that blow has only worsened over the years as cost-of-living adjustments in Social Security benefits have been consistently and deliberately been kept lower than the actual inflation in costs, especially for the elderly.

The dirty trick pulled on the nation’s retirees and disabled was that as part of the deal struck between Reagan and O’Neill, Social Security benefits, which were not taxed in the original program set up by FDR, suddenly became subject to tax.

Under the “reform” plan of 1983, suddenly any retirees who earned more than $25,000 a year (or $32,000 for a couple), found themselves having to pay income tax on 50% of their Social Security benefit income. In other words, more “well-off” retirees living grandly on more than $25,000 or retiree couples living the good life on more than $32,000 suddenly began having to pay taxes on 50% of their own benefits to help fund the system paying them those benefits!

Once that bridge of ripping off of the elderly and infirm had been crossed, along came President Bill Clinton, a wolf in sheep’s clothing who upped the ante. In 1993 he and a craven Democratic Congress pushed up the amount that “upper income” Social Security beneficiaries — those single retirees earning more than $34,000 a year and couples earning more than the princely sum of $44,000 — would have to pay taxes on to 85% of their benefits. That is, 15% of the benefit check would be tax-free but the other 85% would be taxed at whatever the person’s tax rate was.

The impact of this second pocket-picking maneuver by Clinton was profound. In 1983, the initial tax on Social Security benefits only impacted 10% of the elderly and disabled. Under Clinton’s second purloining of retiree income, it has come to impact the income of 56% of retirees and the disabled — in other words the majority of beneficiaries in the Social Security program.

At this point, the easiest way for the government to improve the lives of America’s elderly and disabled would be to end this shameful taking of taxes away from their benefits. (Those beneficiaries earning lower incomes who are not subject to having their benefits taxed get subsidies in the form of the Earned Income Tax credit, and if their incomes are low enough, also get Supplemental Security Income assistance.)

If the purpose of Social Security benefits is to reduce poverty among the nation’s elderly — and in an age when private pensions are almost non-existent, with 90 percent of the elderly relying on Social Security for at least half their income and 50% relying on the program’s benefits for 90% or more of their income — it makes no sense whatever to take some of that meager amount back in the form of income taxes. In fact, it’s downright heartless.

All Americans should demand an end to that taxation on the elderly and infirm.

We should also demand an end to FICA taxes for Social Security being deducted from the paychecks of retirees on Social Security who keep working to make ends meet, which is currently the case. Okay, I understand if some wealthy executive or even some moderately well-paid university professor or physician, wants to keep working full-time after becoming eligible for Social Security benefits, and if that person’s earnings could count towards that “highest 35 earning years” in calculating their monthly benefit amount, it could make sense for them to continue paying the FICA tax on those earnings. But most of the elderly who work are just doing part-time work that will never contribute towards their receiving a higher benefit calculation — they’re just trying to make ends meet, and perhaps trying to stay busy and engaged in society. They should not be taxed for that as a way of helping to fund the very program that they are receiving benefits from. It shouldn’t be hard to set some high earnings level — perhaps $50,000 a year beyond one’s Social Security income — below which no FICA tax would be assessed on working Social Security beneficiaries.

Likewise, some may argue that wealthy people, for whom Social Security benefit checks are just playing money, should be taxed on their benefits to help pay for the program. I don’t have a problem with that notion either. Again, it would be easy to set some level — perhaps $80,000 for an individual or $120,000 for a retired couple — after which Social Security income would be taxed. But it clearly should be set at a level that only affects well-off retirees, not people who are struggling to get by as is the case today.

These are demands that everyone in America should support. Retirees clearly want it. So do people nearing retirement. And younger people, who want the best for their parents and grandparents, and who certainly don’t want to have to support their elders while they are also saddled with the cost of raising kids of their own or paying off their college debts, should support them too.

Once we’ve won this battle over the taxing of Social Security benefits, which is premised upon a return to the basic concept behind Social Security, which was to alleviate poverty among the elderly and disabled, we can turn to the necessary bolstering of the Social Security system for everyone. We need to ensure that those working and paying into the system now can rest assured that it will be there in full for them when they reach old age. Currently over a third of millennials, thanks to scare stories from conservative politicians, shameless ad campaigns by financial advisory firms and mass media propaganda, say they don’t believe Social Security will be there for them when they get old.

The first step in easing those fears and fixing the system is to act now, and to get rid of the politicians in Congress — mostly Republicans — who have been stalling and delaying, causing the price of fixing the system before 2034 to rise by the year in hopes that it will eventually be so high that the system will collapse, leaving us all to the tender mercies of the Darwinian capitalist system as it was before 1936.

Nobody, Republican or Democrat, who doesn’t agree to a fix of Social Security’s future funding in the next Congress that gets seated January 3, should be returned to office. Period.

And no fix they come up with should come out of the pockets of workers or retirees.

So where do we get the money? Actually it’s still not that hard to find. The first thing is to eliminate entirely the cap in income — currently $128,400 per year — after which no FICA tax is owed. Let the rich pay the full 6.2% on all income they earn into the system. While we’re at it, let’s also put a FICA tax on so-called “unearned income” from non-retirement investments (not IRAa and 401(k) funds — and also a small tax — say 0.5% — on high-speed computerized and day-traded stocks and bonds. These measures alone would probably solve the problem with Social Security’s long-term funding, but we could also raise benefits to allow our elderly and disabled to live better.

How? Well, if you think about it, there is absolutely no reason why the employer share of the FICA tax has to be equal to the share paid by their workers. In Europe, where government social security pensions are generally much more generous, often intentionally designed to allow retirees to maintain their standard of living after retiring from their jobs, it is common for employers to pay substantially more in payroll taxes into the system than do their employees. Just adding another 2% to the payroll tax paid by employers in the US for each worker’s salary would most of the way towards keeping Social Security adequately funded until the last Baby Boomer has departed this world (about 2064 when the last Boomers born in 1964 will be turning 100). The allowance could be made for the self-employed and for small businesses with only a few employees so they wouldn’t get hit with those increases. (Years ago, self-employed people didn’t pay the employer share, or didn’t pay it in full. That approach should be re-adopted, especially given the trend among large employers to turn their employees into “independent contractors” without benefits.)

We need to do all this so that our kids and grandkids can have confidence that when they reach retirement the Social Security program that they are currently paying taxes for will be there for them, and that it will be adequate for them to survive on.

Social Security is not the “ponzi scheme” that conservatives love to call it, nor is it an annuity where you pay in money and then get it back with interest. Rather it is and has been from day one a contract between generations in which the current working population pays for the benefits of current retirees, expecting future worker to pay for their own retirement benefits. The only problem, totally unintended but unavoidable and to some extent unanticipated, is that we’re all living longer as time goes by, partly thanks to improving medical science and increased access to medical care, and in part because we, as a people, are living better than we lived in the past. And we’re having fewer children. But we still have that contract and need to stand by it. That requires the young to keep supporting a program that is paying benefits to their parents and grandparents, and for the elderly to keep supporting a program that will be taking care of their offspring when they reach retirement age.

It’s that simple.

The only problem is a political class that cares more about the welfare of Wall Street and the rich who pay for their political campaigns and election or re-election than they do for the people they ostensibly represent: the people of the United States.

That needs to change.

Full disclosure: The author is 69 and will begin collecting his full Social Security benefit in April of next year. He has two children who are currently paying plenty in taxes for their own retirement. While he has no intention of retiring at 70, he wants to insure that his and his wife’s and his friends’ and relatives’ Social Security benefits are secure and that all our kids will also have full Social Security benefits available to them decades from now when they become eligible for them.

Oscar Wilde famously warned that one should never trust a woman who revealed her true age; anyone so inclined to do so was bound to tell you anything.  He also, in his characteristic stab at modern manners, suggested that no woman should be quite on the money about her age for another reason: “It looks so calculating.”

Emile Ratelband, from what reports suggest, is not a woman, but a distinctly insecure man on a mission of pure calculation: to secure a different age in the public domain.  While biologically impossible, despite claiming that his ageing has stopped, the Dutchman is testing the legal waters to see if he might slash off some 20 years off his birthdate, making him a more youthful 49.  The world might be slowly going to hell in a hand basket, but the monumental nature of the trivial shall have its day in court.

Ratelband’s view is that of any person feeling an identity pull crying out for legal recognition.  He is inspired by other role models – not merely the insufferable Tony Robbins of US, life coach optimism, but transgendered people, who supply him a shameless ground of comparison.  Despite being a motivational speaker himself, his optimism does not extend to the impediments of age.  “We live in a time when you can change your name and change your gender.  Why can’t I decide my own age?”

Open slather has been declared in the identity market, and to that end, he has gone so far as to subject himself to a psychiatric evaluation as to whether he was a “victim of the Peter Pan syndrome”. Another evaluation might be in order after Ratelband’s address to the court, in which he claimed that President Donald Trump was “the first person who is honest” in showing his feelings on Twitter.  “He’s a new kind of person.”

His fruit salad reasons are, like others obsessed with “the real me”, selfish, having “to do with my feeling, with respect about who I think… I am, my identity.”  Reducing his age by two decades would open doors shut to the aged and ageing.  “If I’m 49, then I can buy a new house, drive a different car.  I can take up more work.” (These are things Ratelband could probably do anyway, given his frame of mind, but lets his leave his mind to its own, curiously absorbed devices.)

There is the issue of dating, that minefield of human interaction where initial impressions, toxic, deodorised or otherwise, tend to be everything.  “When I’m on Tinder and it says I’m 69, I don’t get an answer.  When I’m 49, with the face I have, I will be in a luxurious position.”

Why Ratelband does not take a leaf out of the book of mendacity that has characterised human dating since bipedalism became vogue is hard to fathom.  Again, lie about your age; many people do so with calculation and determination. Appearance, of which he cares much about, will carry you over.  But the adventurous, if seemingly vexatious Dutchman does have a point: every liar should sport a phenomenal memory, which is a damn bother if you don’t have one. “If you lie,” he told the Washington Post, “you have to remember everything you say.”

The judges of the Arnhem District Court found little to merit this effort at jigging time, and the law.  “Mr Ratelband,” claimed the court bench with cool reserve, despite initially showing, according to the petitioner, a giggly, girly disposition, “is at liberty to feel 20 years younger than his real age and to act accordingly.”  Altering any legal documents pertaining to age, however, would lead to “undesirable legal and societal implications”.

Some of these implications centre on the issue of assigning duties and rights by the mere fact of having an age – the issue of voting, for instance, or the obligation to attend school.  (Neither apply to the applicant in this case, but courts are always distracted by the issue of floodgates and their irrepressible breach.)  “If Mr Ratelband’s request was allowed, those age requirements would become meaningless.”

The judges were also concerned about the sheer number of documents that would, quite literally, cease to have any relevance.  To amend the date of birth “would cause 20 years of records to vanish from the register of births, deaths, marriages and registered partnerships.” An administrator’s nightmare.

The field of discrimination could have supplied Ratelband his ammunition.  The judges, however, needed more convincing.  While the court bench was not immune to the possibility that discrimination might, in some cases, be open, Ratelband had failed to show that he had suffered it, suggesting that “other alternatives” were available “rather than amending a person’s date of birth.”

Ratelband, for his part, is undeterred.  His irritating positivity is both balm and encouragement. “The rejection of [the] court is great… because they give all kinds of angles where we can connect when we go on appeal.”

Ratelband sounds vain, insufferable, insecure and keen to be heard.  He is entitled to, but this is a selfish time that denies the immutable nature of death (delayed as it is) and presumes that those who age will do so noisily into the social media night.  As Ratelband is unlikely to avail himself of time dilation, a delightful consequence of Einstein’s theory of relativity, he will have to seek his change via legal processes.  That might entail moving to a different jurisdiction, and mindset, altogether.

By Sinisa Jakov Marusic

The group that coordinated last year’s mob attack on Macedonia’s parliament was stationed on the eighth floor of the VMRO DPMNE party’s headquarters, a trial heard on Thursday.

A key defendant in the trial of those involved in last year’s attack on the Macedonian parliament has claimed the ruling party organised the whole event from the eighth floor of its Skopje headquarters.

The defendant, Aleksandar Vasilevski “Ninja” said the entire event was prepared and coordinated by then high-ranking officials in the then ruling VMRO DPMNE party.

In his testimony to the Skopje Criminal Court that lasted for two hours, Vasilevski alleged that former government secretary general Kiril Bozinovski, former uniformed police chief Mitko Cavkov, former deputy justice minister Biljana Briskovska, former transport Minister Mile Janakieski and others were all part of the command structure.

Cavkov and Briskovska are also among the 30 defendants in this case, while Bozinovski and Janakieski are in detention for other, unrelated cases instigated by the Special Prosecution.

Vasilevski said that these four persons issued the commands and were coordinating activities on the ground on April 27, 2017, when supporters of VMRO DPMNE stormed the parliament building and injured some 100 people in an unsuccessful attempt to prevent the election of a new speaker and the formation of a new government.

He said they were part of the “command and operative HQ of VMRO DPMNE” and that on the day of the violence they were stationed on the eighth floor of the VMRO DPMNE building in central Skopje.

Vasilevski, who claimed to have visited this headquarters on the day of the violence to receive instructions, claimed nobody but him had the chance to directly see where the orders were coming from.

He said the drift towards violence began with the launch of a series of pro-government protests, called “For United Macedonia”, in which VMRO DPMNE supporters and right-wing associations denounced the expected formation of the new government that they deemed treacherous.

However, he said no one on the ground at that time knew what exactly was going to happen.

During the day of April 27, before the violence erupted that evening, Vasilevski said he received a telephone call from the then secret police chief, Vladimir Atanasovski.

“At 12.30 I received a call from Atanasovski. He told me to be in Skopje because there was information that the SDSM [the then opposition Social Democratic Union] was preparing something…

“The info I got was that the SDSM would elect a new speaker. [VMRO DPMNE official and former Labour Minister] Spiro Ristovski called me and told me to go to the HQ. I also had a contact with [then secret police chief] Saso Mijalkov who called me and told me, Ccome to the HQ.’ The HQ was the Hotel Marriott [in Skopje] and the VMRO DPMNE headquarters,” Vasilevski said.

Former VMRO DPMNE strongman Mijalov was also recently detained in relation to another case, codenamed “Empire”.

Vasilevski said that he arrived at the party headquarters at 6.10pm and that, “by habit”, he immediately took the elevator and went to the eighth floor.

“I arrived on the eighth floor. The toilet is on the left and the small kitchen is at the end [presumably of the corridor]. I left my cell phone on the chair and entered the hall. Mijalkov was not inside but there were other people. I noticed the command-operative of VMRO DPMNE HQ, Biljana Briskovska, Kiril Bozinovski, Spiro Ristovski, Mitko Cavkov, Mile Janakieski. The TV was on and they were watching what was happening in parliament on TV Nova [a then pro-government TV station],” Vasilevski said.

“I sat at one table while they were talking on their cell phones. Briskovska was communicating with [then outgoing parliament speaker] Trajko Veljanoski and he was giving her input about what was going on inside [the parliament]”.

“Janakieski and Ristovski were communicating with Batman [the codename for Bogdan Ilievski, a leader of the protests], while Bozinovski was calling all the municipal [party] committees to come to Skopje under VMRO DPMNE’s directive.”

The defendant said the then uniformed police chief Cavkov, who was criticized for not sending police to deal with the crowd immediately, had been on the phone at that time, communicating with his police subordinates and added that after a while, secret police chief Vladimir Atanasovski also arrived in the room.

After describing these details, Vasilevski said that, “everything that happened in April 27 was coordinated, and, as the crowd moved towards the parliament, the orders were becoming more and more direct”.

Vasilevski also said that, according to his information, the rampage should have resulted in President Gjorge Ivanov declaring a state of emergency later that night and bringing the army on the streets, thus preventing the formation of the new government. This allegedly did not happened because of strong international pressure on Ivanov not to do so.

Vasilevski said that he got this information from the former senior secret police employee Goran Grujevski, whom he met in the park opposite the parliament later the same night. Grujevski fled the country in July 2018 after a court ordered his arrest in relation to the wiretapping scandal. He was shortly arrested in Greece but was not extradited to Macedonia.

President Ivanov has denied any allegations about his cabinet’s involvement in the parliament rampage.

Vasilevski is a known figure from the Macedonian criminal underground who in the past had connections with the police. He was detained in June after he turned himself in, after several months in hiding.

His brother, Blagoja, was one of former PM Nikola Gruevski’s bodyguards who, on the day of the violence, accompanied Gruevski on his visit to Vienna.

Like the other defendants, he is also accused of “terrorist endangering of national security” for his participation in the events.

The State Prosecution is still investigating the events and has yet to file charges against any possible masterminds behind them.

Since the 2007-2008 Global Finance Crisis (GFC), the global economy has experienced a decade-long “economic stimulus” which can be likened to a steroid in human health. Could this possibly create a highly resistant “economic superbug” which might be impervious to existing economic solutions?

By Christopher H. Lim and Victor R Savage*

As a collective response to the Global Financial Crisis (GFC) of 2007-2008, the United States Federal Reserve (Fed), the European Central Bank (ECB) and the Bank of Japan have over the past 10 years issued a combined stimulus package of more than US$13 trillion.

In addition, during this same period, many other central banks had pursued short-term low interest regimes (close to zero or even below zero) as part of the economic global effort to avert the GFC.

Mixed Outcomes

Since the GFC, we have noted the following developments:

• Global stocks were up in positive territory and even the Junk-rated sovereign debt bonds from the emerging markets were able to rise to US$75 billion.
• The bumper harvest at Wall Street, where the borrowing spree by governments and corporate entities reached $6.8 trillion in 2017, has set a record high far exceeding all past annual levels since 1995.
• Observations from the index of US stock market (S&P 500) over US$ per troy ounce of gold (stock market when priced in gold) and US homebuilding stocks have both bottomed out in the third quarter of 2011.
• The last US unemployment figure in August 2018 based on the Bureau of US labour Statistics was 3.9% which was at record low since Jan 2008.

Beneath the glowing façade, we observe the worsening global “debt-fever”, marked by a further increase of $30 trillion from end  2016 to a record high total debt of $247 trillion (first quarter 2018) in spite of the strong global economic growth in 2017.

Yet, the real wage percentage change increase for the US is below the OECD average of 8.4% from 2008 to 2017. Studies of the US Federal Reserve System found that 40% of US adults were unable to pay emergency expense of even $400.

Unintended Economic/Fiscal Developments

Following the GFC and quantitative easing (QE) measures, central banks and policymakers had no alternative but to ensure the enhancement of bank capitalisation under their jurisdiction.

Given the active role of governments during the GFC decade, a lot of attention was focused on the debt liability of governments but not on other actors in the global economy.

Total debt continued to climb between 2007 to the first half of 2017 with the incremental debt of $72 trillion, of which government debt accounts for 43% of this increase and nonfinancial corporate debt is responsible for 41%.

Between 2007 and mid-2017, as commercial bank lending tightened many corporations particularly from the emerging markets moved to bond financing. This shift pushed the global value of nonfinancial corporate bonds outstanding to US$1.7 trillion. Such developments indirectly attracted the emergence of many speculative-grade bonds, with their increasing attendant risks.

Withdrawal Symptoms

At the third quarter of 2017, the chair of the Fed indicated the end of US quantitative easing, which means the end of expansionary monetary policy, and the rise in interest rates in 2018. Similarly, ECB intends to taper off its stimulus package within 2018 or by 2019 followed by a gradual increase of interest rates.

The immediate concern is whether the global economy will suffer ‘withdrawal symptoms’, since it has been addicted to a decade of constant and generous supply of ‘stimulus drugs’ (i.e. QEs and low interest rates) – adopted initially by the US, EU and Japanese markets and then quickly spreading beyond. The question is whether the global economy can sustain and grow without additional “stimulus drugs” as a catalyst?

Challenges Ahead

There is a disconnect between the Wall Street Economy (WSE) and the Main Street Economy (MSE). This stems from differences in basic application. These involve differences when one compares the high-frequency trading in the financial sector where time is measured in nanoseconds or even smaller units, whereas the real economy application is calculated in days, months or even years.

Yet, both the WSE and MSE are using the identical currency for transactions despite their distinct value and concept in wealth creation.

Due to the footloose capital and the “efficient market hypothesis”, at the launch of QE measures over the past decade, huge quantum of funds were channelled to real estate, stock and bond markets in emerging economies and some developed economies that were less affected by the GFC.

Additionally, with the fungibility and velocity of money coupled with the dynamic power and influence of the “money-elite” over the past decade and the short-term memory arbitrage culture of high-frequency traders, governments have been unable to design good policies to filter and deter speculators without discouraging investment. This results in many economies facing “boom and bust” volatilities in their economies within a day.

Without the long-term memory mindset, the daily economic activities in the real economy will grind to a halt, as economic and commercial agreements will not be safeguarded. As evidenced in recent months, the reversal of QE measures has led to funds leaving the emerging economies and triggering an immediate risk of an exchange-rate crisis in national economies.

Indications of Market Failure?

There are strong indications of market failure in the emerging economies as a result of market distortions in prices created by the “money-elite” capitalising on arbitrage policy changes of QE measures.

These developments are leading to a bifurcation phenomenon in three ways:

• Widening of individual wealth distribution – in a single year (2017) alone, the fortunes of billionaires have grown by $762 billion, that is more than times of resources to overcome global extreme poverty.
• Uneven corporate wealth distribution – the top 600 global companies control 80% of economic profit and the top 1% grabs 36% of the pie.
• Increasingly, in the US, there is a geographical bifurcation where 10% counties contribute 90% of the GDP.

Unintended “Economic Superbug”

The long term stimulus (QEs and extreme low interest rates) have inadvertently created a distorted perception of risk and risk appetite. This has unintentionally induced structural changes and vulnerabilities in the global economic “DNA” (free market principle).

One wonders if the decade-long QE measures, disruptive business models and technologies plus the bifurcation phenomenon have accelerated mutations in the global economic structure. Has this created an “economic superbug” in our global economy especially without any political and/or regulatory changes in the operating environment?

Finally, will this unintentionally-created “economic superbug” result in an untreatable condition (as in the case of antimicrobial resistance) for following global recessions? This means that the existing “drug protocol” (QEs and low interest rate) administered at the last GFC will no longer be effective. Hence the world urgently needs to develop new economic tools/theories to tackle future global crises.

*Christopher H. Lim is a Senior Fellow in the Office of the Executive Deputy Chairman, S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University (NTU), Singapore. Victor R Savage is a visiting Senior Fellow at RSIS.

New estimates of disability among India’s elderly population, based on the ability to carry out three basic living activities – walking, dressing, and toileting – show that the scale of the problem is much larger than suggested by the Indian national census.

A new paper coauthored by IIASA researcher Nandita Saikia found that 17.91% of males and 26.21% of females aged 60 and above, experience disability in these areas, equating to 9m elderly men and 14m elderly women. The most recent census, from 2011, suggests that just 5% of the elderly population suffer from a disability. The prevalence of disability is much higher among widowed women, and among the poor and illiterate.

Saikia and Mukesh Parmar from Jawaharlal Nehru University also found a statistically significant connection between chronic morbidity, or long-term health conditions, and disability. They studied three such conditions – diabetes, high blood pressure, and heart disease. Diabetes had the highest correlation to disability, followed by high blood pressure and heart disease.

“We found that the likelihood of disability is always the highest among diabetes patients, whereas the disability rate is the lowest among elderly persons with heart disease. This may be due to high mortality among heart patients,” says Saikia. “Diabetes patients, on the other hand, may live for longer periods with disability. These results are helpful for both patients and healthcare providers in terms of taking preventive measures at the onset of morbidities.”

Previous studies of morbidity and disability in India were carried out using primary sample surveys, limiting them to small areas of India with a small sample size. They can therefore not be used to gain a generalized picture across the whole nation, as India is so large and varied. In addition, they tend to focus on the association between a specific type of morbidity and a specific disability, so cannot give a broader picture.

Saikia and Parmar took a different approach to cover the whole country and give a broad picture for the first time. They used data from the second round of the Indian Human Development Survey which was carried out by the University of Maryland, US, and the National Council of Applied Economic Research, India. This was a survey covering more than 42,000 households across India, selected using a stratified random sampling technique, and covered various topics including health, employment, economy, and education. The second round of the survey also included questions about chronic morbidity and disability.

The researchers defined disability as difficulty or inability to perform three specific activities of daily living- walking 1 km, going to the toilet without help, and dressing without help, and looked at the data for people aged over 60. In the survey, respondents could answer “no difficulty”, “can do with difficulty”, and “unable to do it”. Each answer was assigned a score, which allowed Saikia and Parmar to calculate what is known as the Katz Index of Independence, which takes into account multiple disabilities. As the survey also asked questions about long-term health conditions, the researchers were able to connect the disabilities to specific conditions.

The researchers say that acting in a timely way to address chronic morbidity will help to minimize the huge associated burden of disability.

“Due to improved socioeconomic conditions, there is a steady increase in life expectancy and consequently aging among Indians. However, this may not translate into a healthy aging, particularly when they suffer chronic diseases like diabetes. In order to prepare for a healthy old age, a social environment should be created for early detection and postponing the onset of morbidity as the later stages of life approaches, by focusing on a healthy lifestyle from the beginning of adulthood,” says Saikia.

She adds that policymakers should look at ways to promote healthy lifestyles among India’s adult population, such as providing sufficient transport and infrastructure, increasing taxes on tobacco and alcohol, and raising awareness of the benefits of healthy diets and physical activity. The government should also consider offering more assistance to families with elderly members, particularly as family structures and society values change. All stakeholders, including the government, community health workers, and society as a whole must be involved.

In recent years, most efforts to expand New York City’s tree canopy — and thus strengthen the urban environment — have focused on planting new street trees or replacing non-native species with native trees in the city’s remaining forests. Yet citywide assessments have found that non-native trees have come to co-dominate the city landscape, calling into question these management strategies and the very value of urban forests.

Those assessments might have been looking in the wrong place, according to a new study by Yale scientists and the Natural Areas Conservancy.

In a comprehensive inventory of the city’s expansive yet overlooked “forested natural areas,” the team of researchers found that native species still comprise about 82 percent of New York City’s forest stands. And it is in these natural areas where the majority of the city’s trees are located: more than 5 million in these landscapes compared with about 666,000 street trees.

Forested natural areas are essentially places that look and feel like “the woods” or “forests” as they are more traditionally known, as opposed to urban forest areas typified by street trees and park trees in addition to natural areas. Natural areas exist in stands, or groups of stands, often growing together in patches across the landscape.

Of the 57 unique forest types in the city, the researchers found 81 percent are native forest types that bear a closer resemblance to forests you might find in the Catskills or other rural parts of the state than the urban canopy described in those other recent assessments.

These findings, published in the journal Ecological Applications, confirm that native, healthy, and productive forests still exist in the nation’s largest city, providing valuable ecosystem services and local recreational opportunities for millions of city-dwellers, said Clara Pregitzer, a doctoral candidate at the Yale School of Forestry & Environmental Studies (F&ES) and lead author of the paper.

They also suggest the urgency of conservation policies and management strategies that focus on these natural spaces beyond just planting individual trees.

“You can create and design spaces that increase biodiversity or tree canopy by planting a lot of different trees,” Pregitzer said. “But it’s not the same as having these natural spaces. And if you don’t have information on them, if you don’t collect the data, then you can’t properly value or care for them.”

“New York City has been managing these forests for more than 35 years but we’ve never fully known the different types, or quantified the structure and proportion of native species,” she added. “Until you do that you can be distracted by counter-narratives or conceptions that urban forests are degraded or designed.”

“What we’ve found is that there is a huge opportunity for conservation in urban forests. And now that we know what we have we can begin to manage them with a new perspective.”

The paper was co-authored by Mark Bradford, a professor of soils and ecosystem ecology at Yale F&ES, and researchers from the New York-based Natural Areas Conservancy, the U.S. Forest Service, and the New York City Department of Parks and Recreation.

Natural areas provide a wide range of benefits, offering recreation opportunities, strengthen biodiversity, and deliver key ecosystem services such as stormwater mitigation, improved air quality, and reduction of the so-called “heat island effect,” a phenomenon in which urban areas are significantly warmer than the surrounding regions.

While 40 percent of the city is considered “green space,” much of that includes parks, cemeteries, and back yards. About an eighth of this green space is considered forested natural areas. That accounts for over 10,000 acres of natural lands, a significant proportion for a densely populated city otherwise dominated by human-made structures and crisscrossed by a dizzying network of roadways, bridges, and railroad tracks.

For their study, the research team spent two years collecting data from designated forested natural areas, located across 53 parks, measuring forest structure and composition in more than 1,200 plots, where they measured more than 40,000 individual trees.

As they note, the city contains a variety of forests, due to the rich geologic history and proximity to water bodies in New York City — from the oak- and hickory-dominated forests along the terminal moraine that stretches from the southern end of Staten Island to the Bronx, to the maritime coastal forests, located at the confluence of the Hudson River and the Atlantic, where shrubby northern bayberries, black cherry, and sumac dominate.

Although they found that 82 percent of the average forest stand in these natural areas contained native species, that proportion fell to 75 percent and 53 percent in the mid-story and understory, respectively, suggesting that this dominance of native species could decline in coming decades without investing more in an active forest-management program.

According to the authors, previous research on New York City’s tree canopy has paid outsized attention to its carefully manicured parks and street trees because they are more evenly distributed across the landscape, a decision which has undervalued the diversity and benefits provided by the thousands of acres of natural forests.

“For me, the work points to the fallacy of one of the most famous quotes in science: ‘To measure is to know,'” said Bradford. “It gives you the idea that if you have data you have the right knowledge to act on. But we’ve been measuring urban forests for more than two decades and up until our work thought they were co-dominated by invasive trees. They’re not; land managers knew this but we were frustrating their efforts by painting a different picture. I’d like to see the quote updated: ‘To measure correctly is to know.'”

“When we know correctly, by instead measuring urban forests at the scale at which they are managed, we show an entirely different picture of native canopies with the need to manage for emerging threats below and not in the canopy.”

While New York City has actively managed its forests for decades, this new information provides a benchmark for communicating the value and resources needed for long-term protection and care of these natural areas, Pregitzer said.

“Otherwise, it can be difficult to convey if you haven’t visited all of them, or if the goals of the administration or communities change,” she said. “In Staten Island, for instance, some forested natural areas have been turned into ball fields and parking lots because the community decided that’s what it wanted. I’m not saying that’s wrong, but once you do it it’s done forever.”

“Having this information you can begin to say, ‘OK, if we do want to build a ball field, where should we do it? This other piece of property might be better and let us protect some of our original forest.'”

In a calculated move, President Vladimir Putin intervened to lessen the impact of an anti-extremism piece of legislation. He is not getting soft against extremism. The main consideration is his ability to stay popular and remain in power.

By Chris Cheang*

The Russian State Duma approved on 15 November 2018, the first reading of amendments to a controversial anti-extremism law. President Putin had personally proposed amendments to the law (Article 282 of the Criminal Code), underlying the significance to him of this domestic political issue.

The proposed amendments will decriminalise first-time extremism offences. When in effect, only those who already faced administrative repercussions (non-imprisonment punitive measures) over the past year will be criminally liable. It introduces administrative liability for extremist speech. First-time offenders will face fines up to 20,000 roubles (US$300), up to 100 hours of community work, or an administrative arrest for 15 days. Organisations, however, will face much bigger fines − up to 500,000 roubles (about US$7,500).

Perceived Abuse of Law

The Carnegie Moscow Centre published in October 2018 an article by Lincoln Pigman of the University of Oxford on Article 282 and its domestic political implications. Pigman claims that the siloviki, or representatives of the security organs, are waging a war on Internet users they consider “extremists”.

He adds that the crackdown dates back to 2014, when Article 282 was amended, enabling the prosecution of Internet users who “incite hatred against individuals or groups on the basis of gender, race, nationality, language, origin, religion, or membership in a social group”.

Pigman further argues that this law has been abused by the siloviki to rein in the perceived growth of anti-Putin sentiment in the country, including youth and that “the law’s most egregious abuses have occurred in places far from Moscow, such as Barnaul, a city that has been dubbed Russia’s ‘extremism capital’ because of the proliferation of online extremism cases there”.

According to Pigman, opinion polls show that “by a margin of 43 to 36 percent, Russians now consider the majority of online extremism cases to be unfounded. Many feel that the law must be either amended or repealed”.

Factors Behind Putin’s Intervention

His intervention in the matter illustrates his political pragmatism and willingness to confront the siloviki, despite the fact that they have been and remains the backbone of his support structure, and their perceived attempt to use this law to further suppress political dissent and strengthen his hold on power.

After the recent introduction of unpopular pension reform which raised the retirement age, President Putin must be concerned about his standing in the eyes of his people. According to Chris Weafer, a long-standing observer of Russia’s economy, Putin’s “approval rating was 66% in October, down from 67% in September, and the lowest level this year. It is also the lowest level of approval since the Crimea referendum”.

This point must be kept in mind – his popularity has been consistently high but various factors have led to a downward trend, major ones being the abovementioned unpopular pension reform and the state of the economy. President Putin is obviously not going to allow the controversy over Article 282 to further add fuel to fire. It is also a manifestation of his practical approach in trying to resolve a domestic political matter and his recognition of the challenges posed to his power by the Internet.

Second, recent electoral losses of Kremlin-backed gubernatorial candidates in four regions are another factor he has had to deal with. In the past, candidates who enjoyed the Kremlin’s support would normally course through the electoral process without much ado.

Recent Lone-wolf Attacks

Third, two violent incidents must also have played a role in President Putin’s decision to intervene.

On 17 October 2018, Russia was stunned by a deadly attack by college student in Kerch, in the Crimea, on his fellow students; in the process, 21 lay dead with 70 suffering injuries from the student’s use of a shotgun and improvised explosive device he legally owned.

Significantly, President Putin was quoted by a BBC News report dated 18 October 2018 as saying that the tragedy “appears to be a result of globalisation”; he added that “on social media, on the internet, we see the creation of entire communities. Everything started with the tragic events in schools in the US”. As a consequence, he called for tougher gun control legislation, another display of his realism.

The second incident took place on 31 October 2018, when a teen ignited a bomb in the FSB (Federal Security Service) office in Arkhangelsk in Russia’s northwest; he died in the attack which also injured some FSB personnel. The attackers in the Kerch and Arkhangelsk incidents were not linked to any terrorist organisations. The first attack was labelled a mass murder while the second was described as a terrorist act.

Both men were in their teens and ethnic Slavs; terrorism in Russia in the public mind has thus far been unfortunately associated more with the non-Slavic population from the Caucasus and Central Asia.

Securing Position as Primus Inter Pares?

Finally, President Putin must have also taken into account media reports that stated that the Kerch attacker had made social media posts suggesting he was inspired by the 1999 massacre at Columbine High School outside Denver, in the United States. In the case of the Arkhangelsk incident, according to Stratfor, the geopolitical global intelligence platform, a message posted seven minutes before the attack to a Russian anarchist community on the social media messaging app, Telegram, claimed responsibility for the bombing.

President Putin must be aware that the Internet and social media space cannot be totally controlled and hence, one would be more politically prudent to show some restraint in reacting to its perceived excesses.

By decriminalising this law, President Putin seeks to remove the sting from an issue which has the potential to become a larger political hot potato and might have a destabilising effect on his popularity. He has shown his mastery of the situation and political savoir-faire to his voters as well as critics and his siloviki supporters.

To his voters and especially his critics, he has signalled political magnanimity while to the siloviki, he has confirmed once again that he is primus inter pares in the system. If anything, his intervention only serves to strengthen, not weaken his overall political standing.

*Chris Cheang is a Senior Fellow at the S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University (NTU), Singapore.  A former diplomat, he had served three tours of duty in the Singapore Embassy in Moscow.

By Syed Qamar Afzal Rizvi

On November 25, two small Ukrainian artillery ships and a tugboat were prevented by Russian vessels from crossing the narrow Kerch Strait and reaching the Ukrainian port of Mariupol on the Sea of Azov, which both countries share. Ukraine accuses Russia of open aggression and released what it calls intercepted communications from the Russian ships’ captains and military aircraft in the area that appear to support its case. In his most fiery rhetoric of the crisis, the Ukrainian president Poroshenko accused Putin of wanting to annex Ukraine, telling the German newspaper Bild on last Thursday: “Don’t believe Putin’s lies. Putin wants the old Russian empire back.”

Moscow says the Ukrainian ships ignored the normal procedure for crossing the Kerch Strait and so were treated as hostile craft. The Kremlin claims Ukrainian president Petro Poroshenko planned the “provocation” to boost his ratings before elections next March, but it has not adequately explained why Russian forces needed to chase, disable, and impound the ships as they sailed away from the Kerch Strait.

NATO Secretary General Jens Stoltenberg, following a meeting of the NATO-Ukraine Commission on November 26, said: “What we saw yesterday was very serious, because we saw actually that Russia used military force against Ukraine, in an open and direct way. We saw that they fired at Ukrainian ships; that they actually seized and captured ships and personnel, and we have seen reports that several of the personnel that were seized or captured, are wounded. So, this is escalating the situation in the region and it confirms a pattern of behavior that we have seen over several years, where Russia illegally annexed Crimea, continued to destabilize Eastern Ukraine, and now also uses a military force in a very direct way, in the Sea of Azov or the Kerch Strait. So of course, this is serious.”

But a fair answer to the question regarding the Russia-Ukraine conflagration rests with NATO’s eastward expansion trajectory, a US policy move that is not welcomed by the Russian policymakers since they apprehend that behind the expansion trajectory, NATO reserves much potential to bracket the Russian periphery that ultimately underpins the Russian security architecture. It is on the record that many officials in former Democratic US president Bill Clinton’s administration were not in favor of NATO’s eastward expansion and rightly now the present Republican president Donald Trump also holds his reservations over NATO’s expansion trajectory toward the east.

Ukraine has shifted its view of NATO and its security policy. Eastern European countries which wanted to join NATO regarded Partnership for Peace (PfP) as the first step to NATO membership. The Ukraine issue has the potential of causing a neo-Cold War between the West and Russia. Though Ukraine did not oppose NATO’s expansion, it claimed this process must be evolutionary, and it was necessary to harmonize with neighboring countries such as Russia. From Kiev’s viewpoint, Ukraine would develop her security through the PfP framework.

At this point, Ukraine advocated building pan-European security institutions, especially the OSCE, the main pillar of the new European security architecture. This was similar to the Russian vision. Ukraine saw that NATO would be a promotive but secondary factor for this institution.

However, soon Ukraine realized that NATO would expand in the near future. Ukraine changed its view of NATO from an expediency orientation to an exigency perspective. Russian politicians have on several occasions called into question Ukraine’s sovereignty over Sevastopol. Furthermore, some Russian government officials implied using economic pressure to boost its integration policy within the CIS.

Given the changing geopolitical circumstances, Ukraine reoriented NATO as the center of its security policy. Ukraine noticed that NATO was changing from a defense organization to a political-military institute, as well as the guardian of democracy and human rights. Nevertheless, Ukraine still pursued its intention of playing an intermediary role in European security issues. In the Kosovo crisis, Ukraine again showed its intention to mediate between NATO and Serbia, but this initiative found little support from both sides, and as a result ended in failure.

Under the current international environment, there is little room for Ukraine to implement its bridge-diplomacy. Ukraine demanded more security assurances from NATO, but its proposals were rejected. Every Ukrainian leader would have to consider this very situation. Ukraine’s economic slump continues and Russia does not provide energy at a cheap price anymore.  On the other hand, keeping a distance from NATO and pursuing a neutral policy has little prospects over the short and medium term. If the above-mentioned international conditions continue, then there is no alternative for Ukraine but to maintain the current policy: an IMF-oriented, pro-NATO but neutral status.

Put comparatively, for the last four years Ukraine seems to have jettisoned the old pragmatism that, if it shares a border with a powerful Russian state, it must behave with extreme caution. Yet not surprisingly, Kiev’s anti-communists are leaning toward NATO – with US encouragement – at a time when Georgia is also flirting and the Baltic states have had already joined the club. And moreover, President Poroshenko’s reactive policy posture seems to be causing some discomfort for Moscow. President Poroshenko has called on NATO to deploy naval ships to the Sea of Azov to provide security amid a deepening crisis with Russia. But this Ukrainian call for help seems to have only divided NATO’s European partners.

The problem facing Western countries is two-fold: Moscow prioritizes its objectives in Ukraine over relations with the West, and it retains vast capacity to inflict damage on Ukraine by stoking conflict and strangling its economy. The Kremlin has become used to Western sanctions and other instruments of pressure, concluding that it can live with them despite their inconvenience. The Western response to Russian aggression against Ukraine since 2014 has been to pursue a policy with three elements: political and practical support to Ukraine to resist Russian pressure, sanctions targeted at Russian individuals and sectors of the Russian economy, and the re-building of NATO’s badly neglected collective defence capabilities. As for the European perspective, the Kremlin’s vision of European security is based on a right to control its neighbours and veto NATO decision-making. Russia’s actions against Ukrainian naval forces last week were designed to underline its influence over Ukraine.

Though the Trump administration has expediently provided Ukraine with anti-tank missiles, a move beyond the “non-lethal” goods that the former US president Barack Obama was willing to supply, analysts feel that the current US delay in reacting to the latest crisis is telling. But still there is growing worry that if the current situation is not rightly controlled via proactive peace diplomacy, any new instance of military confrontation between Kiev and Moscow could expands the jaws of conflict toward a costly or consequential war scenario.

The opinions, beliefs, and viewpoints expressed by the authors are theirs alone and don’t reflect the official position of Geopoliticalmonitor.com or any other institution.

A new drug can help people diagnosed with cannabis use disorder reduce withdrawal symptoms and marijuana use, a new Yale-led study published Dec. 6 in the journal Lancet Psychiatry shows.

The double-blind, placebo-controlled study shows marijuana use declined among subjects who were administered the new drug — a fatty acid inhibitor that acts upon endocannabinoid metabolic receptors in the brain — compared to those receiving a placebo. Subjects who took the drug also reported fewer withdrawal symptoms and exhibited better sleep patterns, which are disrupted in cannabis-dependent individuals attempting to quit.

“With an increase of marijuana legalization efforts, it is reasonable to expect an increase in demand for treatment, and right now we don’t have any medications to help individuals trying to quit,” said Deepak Cyril D’Souza, professor of psychiatry at Yale and corresponding author of the study.

Cannabis use becomes a disorder when the person cannot stop using the drug even though it interferes with many aspects of his or her life. Cannabis use disorder (CUD) is marked by social and functional impairment, risky use, tolerance, and withdrawal symptoms, according to DSM-5, the statistical manual of mental health disorders developed by the American Psychiatric Association. Withdrawal symptoms are marked by craving for marijuana, irritability, anger, depression, insomnia, and decrease in appetite and weight. In 2015, about 4 million people in the United States met the diagnostic criteria for a cannabis use disorder, and almost 150,000 voluntarily sought treatment for their cannabis use.

According to recent national data, approximately one-third of all current cannabis users meet diagnostic criteria for CUD.

For the new study, D’Souza and colleagues recruited male daily cannabis users. Seventy subjects completed the trial, with 46 receiving the drug and the remainder receiving placebo. All subjects in the study underwent forced withdrawal on the inpatient research unit for the first week and continued receiving treatment for three weeks as outpatients after release from the hospital.

A reduction in cannabis use was confirmed by both self-report and urine drug testing.

Researchers have tried many different drugs in an attempt to reduce cannabis withdrawal symptoms and increase abstinence in those trying to quit, but none have been consistently successful or well tolerated, D’Souza said.

The new drug works by inhibiting fatty acid amide hydrolase (FAAH), the enzyme that degrades anandamide, a brain chemical that acts on brain cannabis receptors. Anandamide is an endocannabinoid present in the human body that is produced naturally by the brain.

“Anandamide is to cannabis as endorphins are to heroin,” D’Souza said.

A larger multicenter trial of the new drug funded by the U.S. National Institute of Drug Abuse is currently underway.

From iPhones on Earth to rovers on Mars, most electronics only function within a certain temperature range. By blending two organic materials together, researchers at Purdue University could create electronics that withstand extreme heat.

This new plastic material could reliably conduct electricity in up to 220 degrees Celsius (428 F), according to a paper published Thursday in the journal Science.

“Commercial electronics operate between minus 40 and 85 degrees Celsius. Beyond this range, they’re going to malfunction,” said Jianguo Mei, a professor of organic chemistry at Purdue University. “We created a material that can operate at high temperatures by blending two polymers together.”

One of these is a semiconductor, which can conduct electricity, and the other is a conventional insulating polymer, which is what you might picture when you think of regular plastic. To make this technology work for electronics, the researchers couldn’t just meld the two together – they had to tinker with ratios.

“One of the plastics transports the charge, and the other can withstand high temperatures,” said Aristide Gumyusenge, lead author of the paper and graduate researcher at Purdue. “When you blend them together, you have to find the right ratio so that they merge nicely and one doesn’t dominate the other.”

The researchers discovered a few properties that are essential to make this work. The two materials need to be compatible to mixing and should each be present in roughly the same ratio. This results in an organized, interpenetrating network that allows the electrical charge to flow evenly throughout while holding its shape in extreme temperatures.

Most impressive about this new material isn’t its ability to conduct electricity in extreme temperatures, but that its performance doesn’t seem to change. Usually, the performance of electronics depends on temperature – think about how fast your laptop would work in your climate-controlled office versus the Arizona desert. The performance of these new polymer blend remains stable across a wide temperature range.

Extreme-temperature electronics might be useful for scientists in Antarctica or travelers wandering the Sahara, but they’re also critical to the functioning of cars and planes everywhere. In a moving vehicle, the exhaust is so hot that sensors can’t be too close and fuel consumption must be monitored remotely. If sensors could be directly attached to the exhaust, operators would get a more accurate reading. This is especially important for aircraft, which have hundreds of thousands of sensors.

“A lot of applications are limited by the fact that these plastics will break down at high temperatures, and this could be a way to change that,” said Brett Savoie, a professor of chemical engineering at Purdue. “Solar cells, transistors and sensors all need to tolerate large temperature changes in many applications, so dealing with stability issues at high temperatures is really critical for polymer-based electronics.”

The researchers will conduct further experiments to figure out what the true temperature limits are (high and low) for their new material. Making organic electronics work in the freezing cold is even more difficult than making them work in extreme heat, Mei said.

On November 4, there was a front-page story in the Boston Globe alleging that more than 130 bishops, or about a third of those still living,  have been accused of “failing to adequately respond to sexual misconduct in their dioceses.”

The news story, which was based on a study by reporters from the Globe and the Philadelphia Inquirer, garnered national headlines; it was released prior to a conference of U.S. bishops who were meeting in Baltimore to discuss the sexual abuse scandal.

How accurate was the study? We will never know. Why not? Because the Boston Globe is keeping it a secret: it denied me the right to examine its data.

That’s right, the same newspaper that insists on total transparency on the part of the bishops—they must allow full disclosure of their internal data—will not make public its data on the bishops.

What data are we talking about? The Boston Globe said the reporters from the two newspapers examined “court records, media reports, and interviews with church officials, victims, and attorneys.”

On November 16, I emailed Brian McGrory, editor of the Boston Globe, asking if he would allow someone to verify the study. He did not respond. On November 20, I made the same request in a letter mailed to him at the newspaper. On November 28, I received the first in a series of email exchanges with Scott Allen, Assistant Managing Editor for Projects.

“A group of seven reporters in Boston and Philadelphia reviewed public records of all living bishops, including media reports, court records and interviews with sources all over the country,” Allen said. The information was then entered into a spreadsheet.

“We chose not to publish the spreadsheet because the point of our exercise was not to fault individual bishops,” Allen wrote. “Instead, we were demonstrating the widespread lack of accountability in the church hierarchy.”

This is pure rubbish. If the point was not to “fault individual bishops,” why did the news story feature the photos of four bishops on the front page (three of whom were arguably innocent). And even if the point was to show lack of accountability, what does that have to do with my request to see the raw data?

My next request was to get permission to at least read the transcripts of the interviews that were conducted “with sources all over the country.” Again, I was turned down. Allen said, “We don’t circulate our interviews unless we plan to publish them.” That’s a nice Catch-22: I can’t read the transcripts because they won’t publish them.

I then asked why they wouldn’t publish the transcripts on their website. Allen told me that they do lots of interviews every week and don’t publish them. “But this is different,” I told him. This is not a news story—it is a study.

As a sociologist, I said, I have an interest in seeing “the raw data of a research project whose conclusions have been made public. It is common practice in professional research undertakings to make public the data upon which the conclusions have been made.”

This was the end of our exchange.

What is the Boston Globe hiding? Are they afraid that if people like me found out who they interviewed that it might blow up in their face?

A few years ago, Terence McKiernan of BishopAccountability told an audience of Church haters that Cardinal Timothy Dolan, Archbishop of New York, was concealing the names of 55 predator priests. This is an obscene lie. I have asked McKiernan several times for him to release the names and he never does.

Remember, the two newspapers are not saying that over 130 current bishops have been found guilty of covering up sexual misconduct. No, they said they have been accused of failing to adequately respond to sexual misconduct.

Accused by whom? The likes of McKiernan? Over the years, the Catholic League has shown many of the Church-suing lawyers and professional victims’ advocates to be liars. Moreover, who determines whether the bishop’s response was “adequate”? The same newspapers that have been at war with the Catholic Church for decades?

The study by the Boston Globe and the Philadelphia Inquirer cannot be taken seriously by any objective observer. By any professional standard, it is a sham.

I have notified every bishop who heads a diocese about this issue. To read my exchanges with the Boston Globe, click here.

By Alessandro D’Autillio

One week after the European Commission’s veto on Italy’s 2019 economic plan and the infringement procedure is becoming a reality. The new “yellow-green” Italian government, namely the Five Stars Movement and Northern League, is starting to take a step back, even if only with one leg. Despite the tough talk up until now, Italy fears the European Union and the possibility of receiving severe penalties. Thus, negotiations have been opened up once again between the leading parties.

The dissent first started inside the Italian government itself, when Minister of Economy and Finance Giovanni Tria suggested setting the deficit-to-GDP ratio at 1.6%, in line with the decreasing trend of the last few years. But setting the ratio to 1.6% clashed with promises made by the leading parties during the campaign, thus there was urgency to find more financial resources. Ultimately, after trying to compromise with Minister Tria, the far-right populist government moved toward a new ratio of 2.4%.

According to EU rules, the deficit-to-GDP ratio must be under 3% (according to the Maastricht Treaty), after which an infringement procedure might be invoked. When evaluating the sustainability of an economic plan with high levels of deficit, the European Commission also considers the country’s economic stability, growth, and its public debt. Other countries have presented an economic plan with a higher ratio without having their economic plan rejected. But in Italy, the growth prevision is not in line with the one provided by the European Commission; moreover, the country has a public debt of 131% of its GDP, placing it among the three worst in the euro zone. Therefore, despite higher deficits in France (2.8% deficit-to-GDP ratio) and Romania (3.8%), these countries aren’t at risk of falling into the infringement procedure due to their different growth and public debt outlooks.

Upon receiving the request from the European Commission to reduce the ratio to 1.8%, the Italian government immediately declared its unwillingness to make any changes. But less than a week later, the tough talk is starting to fade away. Now, the government is trying to obtain more time to negotiate with the European Union to avoid the infringement procedure, which is scheduled to commence in January 2019. Some measures are already being discussed in Italy, such as the “Quota 100,” certain pension reforms, and the “Citizenship Salary,” which might be postponed in order to reduce the deficit. Either way, the Rome Government, through its Minister of the Interior Matteo Salvini, signaled that it is not considering cutting the budget deficit target to below 2.2% of gross domestic product.

The Italian Prime Minister, Giuseppe Conte, finds himself stuck under the pressure coming from the two Deputy Prime Ministers, Di Maio and Salvini, with no room for independent maneuver. After the G20, the prime minister declared his willingness to cooperate with the European Union, and that “we trust in the coming days we will be able to discuss a technical solution.” This created unprecedented tensions between the ministers, driving a wedge between the one willing to cooperate with the EU and the more committed eurosceptic.

Between the bond market, intra-coalition politics, and the Brussels-Rome relations, it’s going to be an interesting parliamentary term in Rome.

The opinions, beliefs, and viewpoints expressed by the authors are theirs alone and don’t reflect the official position of Geopoliticalmonitor.com or any other institution.

Small drones are seeing an explosion in its popular use, from state troops to non-state actors such as militants. Indeed, the non-state actors are threatening to match conventional forces in offensive weaponry by acquiring drones that can even drop bombs. How will the future look like?

By Henrik Paulsson*

Large aerial drones have become ubiquitous in any air force discussion on modernisation. Indeed, having gone from being rare and only operated by a handful of countries, they are now more common than ever. Yet, and perhaps even more importantly, small drones are seeing their own revolution in availability and spread. Small drones – both commercially available and home-made – are now widely proliferated and found globally among both state and non-state actors. Increasingly groups of non-state actors are obtaining, producing, and modifying small drones for their own needs.

However, the creativity has not been limited to non-state actors. Government forces around the world are finding both uses for these drones in their operations, and in their organisations. The utility of these have been recognised by both sides – a recognition that will require significant changes for militaries in the times to come. The lesson is clear: states cannot surrender this capability and opportunity to militants, and must keep up in the future.

Operational Presence

The most famous, or infamous, use of small drones have been ISIS in Syria and Iraq. Inspired by American drone footage, ISIS started deploying cheap and commercially available drones across the territory they controlled. Initially these were seen in propaganda roles, filming suicide bombers for online videos.

Their use evolved quickly, with command centres appearing, coordinating intelligence, surveillance, and reconnaissance operations of these small drones. The supply chain for their budding drone-force stretched from Turkey to Bangladesh, highlighting the global nature of accessibility to drones today – and of ISIS’s reach.

However, the creativity and innovation of ISIS did not stop there. News of Kurdish Peshmerga and French special forces being killed and wounded by a downed drone carrying explosives highlighted what was a new reality for the forces facing ISIS: the tactical use of drones is not just limited to their utility as camera-bearing reconnaissance tools, also having an improvised capability to act as bombers.

While surprisingly accurate, these were small and functioned mostly as a form of psychological warfare, creating stress and interrupting the Iraqi offensive against Mosul. Regardless of the effectiveness of the bombs, it essentially gave ISIS – a non-state insurgent organisation besieged by opponents all around – access to tactical airpower. ISIS had built a Jihadi air force.

On the battlefield in the eastern Ukraine we find clear parallels to the usage of drones in Syria. Both the Ukrainian separatists and government forces have used a large number of drones effectively, primarily for reconnaissance. With the war having bogged down into trench-warfare, the drones have started to play a significant role in where they act as spotters for artillery, both for identifying targets but also adjusting the fire.

While overall these drones have been of the cheaper commercial variety, the rebels have also been using more advanced ones operated by Russian forces. These have included everything from cell-phone tower spoofers for psychological operations, to electronic warfare equipment to jam enemy communications.

Inspired by ISIS, some drones have even been used to drop bombs and assassinate rivals. It would be a mistake to not take lessons from these groups just because they are militants and rebels – the lessons are no less true.

Keeping Up with Militants

Distinctly so, some states have been taking these lessons and are learning from them. While the Ukrainian separatists have a large drone presence – in much thanks to Russian support – the government side has also seen an evolving process of its drones. Because of an initial lack of funding, most early drones were provided by crowd-sourced commercial drones purchased by civilian support groups.

This would lead to a cottage-industry of sorts, with drones being designed by engineers and university students in their workshops and dormitory rooms. But the simplicity should not mislead either: The Ukrainian forces prefer the homemade ones over the advanced ones donated by the Americans, whose drones are too easily jammed.

The same students and engineers have now formed companies producing small drones, including one model that carries a rocket-launcher. While the Ukrainian Air Force has been forced to sit out the war because of Russian anti-aircraft missiles, it does not entail a complete loss of air power.

These developments have been mirrored in the Asia Pacific region. Lacking their own, the Philippine government forces had to borrow American drones during the fighting in Marawi. In the aftermath, they have redoubled their efforts to obtain more, which is already increasing their operational capabilities in their fight against ISIS-affiliated groups in Mindanao.

Further south, in Indonesia, there is also a large push for drones throughout the military. The Army has found themselves acquiring small drones at an exponential rate – and being very happy of the result. Faced with the need to surveil huge areas, they have already been deploying small drones at the tactical level. These have now been used in both Papua and Sulawesi in active missions.

Similar to Ukraine, the Indonesian domestic industry has been growing to meet this demand. Today, a growing number of small companies are now producing drones, both licensed from others and self-designed.

Tactical Necessity

The widespread usage of small drones highlights their fundamental role in modern combat. The commercial availability and low pricing gives any military – or rebel group – the ability to have, in effect, a tactical air force. Indeed, their utility is undeniable, be it for propaganda, cheap reconnaissance, or having an advantage that is hard to counter at best.

The bombs dropped by ISIS drones in Mosul were not overly deadly, yet they provided a lopsided weapon that caused outsized psychological and logistical strains. This leads to a necessity of speeding up the development and deployment of counter-drone tools, as any opponent regardless of size can gain advantages over established militaries.

Militaries need to obtain the same capabilities as their non-state opponents. Within the US Marine Corps there is an ongoing project to reorganise the lowest level fighting unit by including small drones and an operator in all their rifle squads.

A similar project is taking place in the Australian Army, with drones having become accepted as not just a nice thing to have, but a necessity. Fundamentally, all militaries must now start acquiring, training with, and figuring out how to use drones tactically. Vitally, if a military does not do this now, they will be left behind.

*Henrik Paulsson is a Research Analyst at the S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University (NTU), Singapore.

Spain’s Prime Minister Pedro Sánchez recently held a round of talks with regional leaders by meeting with the President of Ceuta, Juan Jesús Vivas, and with the President of Melilla, Juan José Imbroda, at Moncloa Palace.

​Pedro Sánchez expressed the Government of Spain’s commitment to the two autonomous cities and told them about the government’s projects in their territories, which include actions in the fields of infrastructure, healthcare, education, social services, justice, defense and security.

As regards the situation at the border with Morocco, Sánchez told them about the global reinforcement and modernization project focused on improving border post installations and increasing human resources. The project involves replacing the current razor wire with non-harmful measures, although it will first be necessary to come up with other complementary security measures. Once efforts to modernize the land border protection system begin, a decision will be reached on the human resources needed to implement them. Work is also under way on a specific plan to strengthen controls to prevent money laundering.

As regards the unilateral decision by Morocco to close trade at the Beni-Ensar border crossing this summer, leading to many problems in Melilla, Pedro Sánchez stressed that diplomatic measures are ongoing and accompanied by a bilateral working group that was set up in September comprising official customs staff from both countries in order to try and remedy the situation. The next meeting will take place on December 11.

On the issue of immigration, the Government of Spain has allocated 40 million euros to the autonomous regions and cities for services provided to unaccompanied foreign minors (UFM) arriving in 2018, regardless of the fact that this is an exclusively regional issue. Of that amount, it is expected that 1.2 million euros will be allocated to Ceuta and 1.3 million euros to Melilla.

Furthermore, Ceuta and Melilla already received 2.3 million euros and 4.1 million euros, respectively, in August for improving the services provided at UFM reception centres.

An inter-regional coordination council has also been set up, the first session of which was held in September, to facilitate interaction between all institutions and public authorities involved in this issue. The Working Group on Child Migrants of the Childhood Watchdog met on 5 November to define a new model for supporting UFM. Pedro Sánchez responded to the matter of returning these minors during his visit to Morocco on 19 November on the basis of two key principles: the interests of the minor in question; and respect for national legislation.

Back in the year 2000, Blockbuster rejected various offers to buy up Netflix for $50 million. Bad decision. The video-rental giant filed for bankruptcy eight years later, while the market value of Netflix has since topped $150 billion — 3,000 times higher than that year-2000 offering price.

What explains the demise of Blockbuster and rise of Netflix? One key has been the capacity to perceive and attend to what customers really want. This is one of the five forces that Josep Valor, holder of the Indra Chair of Digital Strategy at IESE, considers fundamental in the new digital economy.

In addition to analyzing these five concepts, the professor poses questions for reflection, to help evaluate how each presents risks or opportunities for your company.

1. The Power of Platforms

Many successful companies in the new economy — like Amazon, Airbnb, Facebook and TripAdvisor — are platforms. The simplest platforms facilitate communications and business transactions between two distinct groups of customers and capture value by charging one or both of these populations.

A large part of the perceived value for users lies in a platform’s complementary offerings. That’s why its operators have to ensure that a sufficient number of providers are investing their time and money to make the platform truly valuable to its user bases.

Which is what Blackberry, for example, overlooked. Once the iPhone and Android-based handsets were able to manage email and calendars as well as a Blackberry, the latter’s decline was inevitable. Users grew more interested in iPhone and Android apps.

“In some circumstances, network externalities are so strong that large platforms become the winners who take all, capturing most of the value in an industry,” Valor writes. A platform like Airbnb has many more places to stay than a small competitor, which makes it more useful for travelers. As such, it continues to attract more guests and more hosts, with the potential to dominate its industry.

Q: Have you considered if a platform-based business model could disrupt your industry?

2. The Viability of Long-Tail Business Models

Digital technologies have made possible a large number of niche — or “long-tail” — businesses. This is thanks to a drastic reduction in transaction costs, including cheaper search and information gathering, bargaining, as well as policing and enforcement.

Before, it was not profitable to advertise certain niche or low-demand products in newspaper classifieds. Most likely, they would have to be announced several times in order to find a buyer, which was expensive and time-consuming. But internet ads are extremely efficient in terms of money and time. This efficiency moved many advertisers online, greatly reducing the income of print newspapers.

Q: Do you believe your firm is prepared to serve long-tail markets?

3. The Need to Capture Value When It’s Created

Digital technologies increase the danger of breaking down a value chain, which makes it essential to capture value just as soon as it is created.

Consider the 1990s stockbrokers and wealth managers, who would offer free financial advice and charge more than $100 per trade. When online brokerages appeared and offered $10 a trade, clients could game the system by getting free advice and then carrying out their transactions online, paying a tenth of the old price. As a result, professional brokers began charging for their advice, capturing value in the moment it was added, and lowering trading fees — in some cases even eliminating them.

Bear in mind that if you lose control of your bundled value-adding activities, you run the risk of going out of business.

Q: What can you do to capture value as soon as it’s produced?

4. The Threat of Envelopment Strategies

When a company with a limited product line shares its customers with another that could offer the same products for less (thanks to lower fixed costs), that first company is at risk of falling prey to an aggressive envelopment strategy.

Here we have the case of Snapchat, challenged by Instagram, who had many users in common. When Facebook (Instagram’s owner) saw Snapchat as a threat, it launched a copycat version of Snapchat’s core offering as a supplement: Instagram Stories. Thanks to their deep pool of resources, Instagram Stories quickly surpassed Snapchat’s volume of daily users.

Something similar may be happening with Spotify, which shares many of its customers with Apple (Music) and Amazon (Prime). Clearly, those bigger players could offer music to Spotify’s paid customers and do it for less. This could undermine Spotify’s model, unless it can offer something Apple and Amazon are unable to replicate.

Q: Have you thought of which companies share customers with you — and could undercut you, thanks to lower fixed costs? Could you use the envelopment strategy on another company?

5. Attention to What Customers Really Want

A firm must understand what the customers really want and work to alleviate any pain points while also, if possible, increasing the perceived gain. In this sense, digital technologies offer new and expanded opportunities to serve customers creatively, as demonstrated by Netflix, which beat out the incumbent giant Blockbuster.

Blockbuster customers had to go to a store, pay a fixed fee to rent a DVD and, if they didn’t return it on time, pay a penalty, to the consternation of many. Netflix came along and charged a fixed monthly fee for two DVDs to be sent by mail. When a DVD was returned to Netflix via a prepaid envelope, the next DVD on the customer’s wish-list was sent within 24 hours. Customers could keep DVDs for as long as they wanted, with no penalties applied.

Netflix understood very well that customers ultimately wanted to watch movies at home, so they started experimenting with and investing in a streaming service — even as they continued to invest in classification centers for their mail-based service.

Q: Does your company have processes in place to analyze what customers do to get what they want — and to look for innovative ways to reduce their pain points and increase perceived value?

Maybe that’s the key to preventing your company from becoming the next Blockbuster.

This paper looks at the situation in Sri Lanka and the impact of the new Chinese Belt and Road Initiative. It further analyses the effects of great-power competition on Sri Lanka and the other countries in the Indo-Pacific region.

By Mario Esteban*

Over the past decade Sri Lanka has become an object of interest to great powers such as China, India, Japan and the US, essentially due to its unique Indo-Pacific location. Of the great powers, China has been the one to most increase its presence there, as the island-state is very important to its Belt and Road Initiative. This paper analyses China’s involvement in Sri Lanka in order to identify why it has become a key economic and strategic partner. It also identifies areas of improvement in its relationship with local governmental and civil society actors.

Analysis

Sri Lanka has not attracted this much attention from the international press since the civil war between the government in Colombo and the Tamil Tigers ended in 2009.¹ The renewed attention is due to the fact that the island has become the epicentre of great power competition in the Indo-Pacific region. China’s growing and significant presence in the country has attracted special attention, as it offers a valuable insight into the effects of its Belt and Road Initiative. Most of the literature on the topic has not focused sufficiently on the local players, presenting them as mere pawns in the hands of China and other great powers. This paper will attempt to make up for these shortcomings by looking at how the priorities of the Sri Lankan government explain the nature of foreign involvement in the country.

China is an attractive partner for Sri Lanka

China has granted Sri Lanka US$10,000 million worth of loans, making it the third largest recipient of Chinese funds of the Belt and Road Initiative countries after Pakistan and Russia. Both the substantial increase in the amount of debt owed to China by Sri Lanka and the leasing of Hambantota port to a Chinese-led consortium have sparked a heated debate on the effects of Chinese financial involvement in Silk-Road countries. Opponents have seen this financial involvement as a Chinese attempt to increase its political and military influence in the area through its so-called ‘debt-trap diplomacy’. Although this point of view has been defended by many international news outlets and think tanks,² and even by the US Vice-President Mike Pence, it lacks a solid foundation.

According to the Central Bank of Sri Lanka,³ 14% of the US$55,000 million Sri Lanka owes in foreign debt are owed to the ADB, while 12% are owed to Japan, 11% to the World Bank and 10.6% to China. The country will have to pay back US$17,000 million worth of debt between 2019 and 2022, mainly to commercial banks and to traditional multilateral donors. Its currency reserves of US$9.100 million seem insufficient to meet the payments in the medium term, especially given that the country’s balance of payments in the last four years has barely reached a surplus of US$150 million. Furthermore, Sri Lankan public debt stands at 77% of its GDP, making it the most indebted among other neighbouring countries such as India, Malaysia, Pakistan and Thailand. This all suggests that Sri Lanka has a debt problem that extends beyond its commitments to China. Indeed, China’s latest loan to Sri Lanka is intended to service some of the debt owed to other creditors.⁴

This is not to say that there have not been important changes in the ownership of Sri Lankan debt since the civil war ended in 2009. Sri Lanka received a substantial amount of development aid from the West during the Cold War, yet this was no longer the case in the last decade. Three main factors eroded the weight of multilateral development banks and Western powers as creditors during the period: the international financial crisis, Sri Lanka’s transition from a low-income to a lower-middle income country⁵ and the distancing of Western powers from the government of Mahinda Rajapaksa. In this context, the Sri Lankan state was forced to rely much more heavily for funding on international financial markets and on Beijing. The latter offered larger sums than the Western powers were willing to provide and at more favourable conditions than those proposed by commercial banks.

Thus, China became an attractive new source of funding, especially to a government that wanted to prove to its population that it could boost the country’s socioeconomic development in the aftermath of the civil war. To this end, President Rajapaksa adopted an economic programme that was fully in line with Beijing’s vision, focusing on the construction of adequate infrastructure as a first step to attracting foreign investment and fostering local socioeconomic development.

In order to implement the programme, Rajapaksa needed both the external funding and the technical expertise required to build infrastructures in critical areas such as transport, energy and telecommunications. Since Western countries and companies had lost interest in Sri Lanka, China was in a unique position to fulfil the role. The example of China Merchants Port Holdings is a perfect illustration. As a state-owned Chinese company, it had access to cheaper funding than that available to Western private companies. Thus, it was freer to become involved in longer-term projects than its market-driven opponents.

In 2011 there was a public tender to grant construction and management rights for the container terminal of the Port of Colombo for a period of 35 years. The only offer came from a Chinese-Sri Lankan consortium consisting of China Merchants and Aitken Spence. China Merchants initially controlled 55% of the consortium, while Aitken Spence controlled 30% and Sri Lanka Ports Authority the remaining 15%. The following year, China Merchants bought out Aitken Spence’s share, meaning it now controlled 85% of the partnership. The venture increased the Port of Colombo’s capacity in record time thanks to the rapid construction of the terminal (which took only 28 months) and the introduction of new management techniques. Since then, the Port of Colombo has risen in every international ranking and the number of TEUs it handles per year has increased from 2.3 million in 2011 to 2.5 million in 2015 and 6.2 million in 2017. This makes it the world’s 23rd largest port in terms of volume of cargo handled, and the largest in South Asia.

This outstanding performance encouraged current President Maithripala Sirisena –who had originally been much more reluctant than his predecessor to strengthen ties with Beijing– to suggest that China should implement similar management methods at the Port of Hambantota.⁶ The result was a 99-year lease agreement that came into force in December 2017. The agreement specified the creation of two public-private partnerships between China Merchants and the Sri Lanka Ports Authority, which would manage the Port’s administrative and commercial operations. In exchange for its participation, China Merchants agreed to pay US$1.120 million and to invest a further US$400-600 million in expanding the port. China Merchants currently owns a 70% share of the partnerships, but in a decade’s time its share will start to be gradually reduced until the two parties own 50% each.

Since it opened in November 2010, the port has been notable for its lack of activity, yet there are signs that this is beginning to change. While only 183 boats entered the port in the whole of 2017, 2018 has seen 132 boats enter in only the first quarter. The port has a perfect location on the route between the Malacca Straits and the Suez Canal, which joins Asia to Europe. It will help ease the pressure on the Port of Colombo and provide services to the 36,000 boats that complete the route each year, since they currently have to veer significantly off-route to refuel and carry out other necessary activities.

Another advantage of Chinese investment is the speed with which companies manage and implement projects. The Port of Hambantota is again a good example. Rajapaksa’s government presented the project to the Chinese in 2006, the agreement was signed in 2007, construction work started in 2008 and the port was opened in October 2010. Indeed, the Sri Lanka Ports Authority cites expeditiousness as the official reason why it chose to grant the project to China.⁷ Chinese promptness certainly contrasts with the long and complex negotiation and implementation processes that characterise agreements with the traditional great powers. The example of Sri Lanka’s funding agreement with the Japan International Cooperation Agency to build Colombo’s light rail is an apt illustration. After more than three years of field studies, it is expected that the agreement will finally be signed at the end of 2018, while construction will not begin until 2020 and it will not enter into operation until 2024.

Indeed, it is significant that both of the Presidents that have ruled Sri Lanka since the end of the war have seen their key projects materialise thanks to Chinese capital. The Exim Bank of China financed 85% of the construction of the Port of Hambantota, developed during the Rajapaksa presidency. The state-owned China Communication Construction Company is investing US$1.400 million on the construction of Colombo International Financial Centre, which has finally been approved by President Sirisena. This latest project is particularly significant, as Sirisena had originally been critical of his predecessor’s close ties to Beijing, to the extent that he initially suspended the project for a year. It also shows that China is not only a key lender to Sri Lanka but is also emerging as a key investor.

The Chinese modus operandi China in Sri Lanka

All Sri Lankan Ministries are obliged to present all projects that require international funding to the Ministry of Finance.⁸ Guided by the President, the Ministry of Finance then chooses what projects to promote and who is to fund them, an important point as the Ministry sometimes selects the funding based on a competitive tender while on other occasions it directly selects a specific government or institution. The latter practice does not exclusively benefit China since other traditional donors can be included as well.

The procedure used to prioritise projects is different for loans and for investments. For projects that require a loan, Chinese lenders usually accept the viability studies and risk analyses provided by local authorities at face value. Thus, many of the due diligence issues attributed to China when selecting and managing their projects can in fact be traced back to the priorities of local authorities. President Rajapaksa, for instance, is originally from the south of the island and was interested in developing an area where resentment towards the Colombo elites and the large amount of development aid they have received is strong. He therefore took out Chinese loans to rapidly develop ambitious infrastructure projects such as the Mattala Rajapaksa International Airport, the Port of Hambantota and the MRCI Stadium at Hambantota. All of these have so far been underutilised and the level of investment they required seems hard to justify. Nevertheless, it is too early to draw conclusions on some of the projects, as the government is currently planning a programme to develop the entire region through the infrastructures’ reactivation, the expansion of the road network and the creation of a large-scale industrial park.⁹

When considering an investment, however, Chinese players draw up their own viability analyses. While the Chinese Embassy lobbies for and coordinates Chinese projects in the country, it is the banks and companies themselves who make use of their solid presence on the ground to launch the initiatives.¹⁰ They write up their own project status and project evaluation reports, although only for internal use. After all, they do not feel obliged to keep their citizens or the international community informed and believe it is the local government’s obligation to keep its own people informed.

Controversial aspects of China’s economic presence

There can be no doubt that China is an attractive partner to the Sri Lankan government. However, its involvement in the country has also attracted controversy. China’s undercutting of Sri Lankan sovereignty, as well as the lack of transparency of its operations and its lack of consideration for the environmental and social impact of its projects, have all been a source of criticism. Land leases to Chinese companies and Chinese-led consortiums in Hambantota and Colombo have been especially controversial, and have given rise to protests in these areas.

The controversies were such that they even led President Sirisena to suspend the development of Colombo’s financial city so as to make some changes to the original project.¹¹ In the new agreement, China Communication Construction Company will no longer own whatever land it reclaims from the sea but will only enjoy a 99-year lease. The land, which had an undetermined status in the previous agreement, will now officially become a part of Colombo District and of the Sri Lankan state. Similarly, a detailed report on the project’s environmental impact was carried out that listed 70 measures needed to mitigate any negative effects, where only 42 were outlined in the original agreement. In addition, the agreement forced China Communications Company to contribute LKR500 million to a compensation fund established by the Sri Lankan government for local fishermen. These alterations to the original project, which were motivated by a change of government, prove once again that local authorities and their priorities play a crucial role in the process of negotiating agreements with China.

Sirisena’s government is also more transparent than his predecessor’s, as proved by the Right to Information Act that was introduced in February 2017. Despite this, Sri Lankan civil servants and politicians have a long habit of opacity. Their country has traditionally been an ‘aid darling’, a state accustomed to receiving aid despite its deficiencies in transparency and good governance. China has not exerted any pressure to improve transparency in the country either. The Chinese government considers that this is the local authorities’ choice. Indeed, they themselves do not feel that they have to be accountable to Chinese citizens for whatever agreements they sign internationally, and so they do not feel compelled to make their content public.

Finally, there are frequent complaints that Chinese companies operating in Sri Lanka hire very few local workers and make investments that do not generate business opportunities for locals. Although the activities of Chinese companies in Sri Lanka create little local economic spill-overs, the presence of Chinese workers is not especially controversial, as the shortage of local construction workers frequently attracts foreign labour. Similarly, Chinese projects do not usually require the participation of other foreign companies, though they do occasionally bring one in if they need specific technical expertise or want to improve their own reputation. The latter point limits the incentives for the involvement of foreign governments in the development of the Belt and Road Initiative.

The strategic dimension

The close ties that are developing between China and Sri Lanka are also the result of geostrategic motivations, as Sri Lanka has a privileged location on the Indian Ocean’s maritime trade routes and is very close to India.

The US, China, India and Japan are competing for influence in the Indo-Pacific region. This has led to frequent visits by high-level officials and civil servants to Sri Lanka seeking to address matters of security and defence. On 18 August 2018, for instance, Itsunori Odera became the first Japanese Minister of Defence to ever visit Sri Lanka. During the visit, Japan donated two patrol boats to the Sri Lankan government. This came only two weeks after China had announced that it would strengthen its defence ties with Colombo and donated a frigate to the Sri Lankan navy, and a week after the US State Department had announced a donation of US$39 million to increase the navy’s capabilities.

Like many other countries that are geographically close to India, Sri Lanka is taking advantage of China’s increasing presence in South Asia to counterbalance New Delhi’s influence. These offsetting tactics were particularly obvious under the Rajapaksa government. Sirisena’s current government is more focused on diversifying its foreign alliances to avoid excessive dependence on a single country. However, this does not mean that Sri Lanka is hostile towards New Delhi. In fact, the Sri Lankan authorities have claimed that they have India’s strategic interests in mind in their day-to-day management of Hambantota Port and refused to allow a Chinese submarine to dock in the Port of Colombo in May 2017. They have also asked the Indian government to become involved in many important projects. These include the management of Mattala airport, the development of both the Port of Colombo’s Eastern Terminal and of Trincomalee Port, and the construction of the country’s first liquefied natural gas plant.

Many of these projects are the result of joint efforts between Japan and India. The two countries and the US are launching common initiatives in the region that compete with the Belt and Road Initiative, such as the Free and Open Indo-Pacific Strategy. The Sri Lankan government wants both India and Japan to build infrastructures that help develop the disadvantaged north and eastern regions of the country, just as China did in the south. President Sirisena is also strengthening defence ties with Tokyo, as illustrated by Minister Itsunory Odera’s visit and that of the Akebono, a Japanese destroyer, to Hambantota Port this year.

It is becoming increasingly obvious that the US and Japan have very different conceptions of the Free and Open Indo-Pacific Strategy. Washington’s approach is confrontational towards China and is focused on preserving the traditional balance of power in the region. This is favourable to India and its role in South Asia. Japan, on the other hand, has a more ambivalent relationship with Beijing and interprets the Strategy in a more inclusive way, believing it should be open to any other law-abiding state, and that could apply to China. In this regard, Japan is becoming more amenable to the Belt and Road Initiative as long as it remains transparent and sustainable and respects International Law. These developments are playing out on Sri Lankan soil, where the Japanese and Chinese Embassies host bilateral meetings to coordinate their involvement in local projects. Similarly, Japan has proposed some joint ventures with Chinese companies in West Africa. This collaborative approach embeds itself within a wider process of détente that was initiated by the two countries last spring, reached a new level last October with a state visit to China by Prime Minister Shinzo Abe and is expected to reach its culmination next year when Xi might reciprocate.

The EU and South Korea, for their part, share a common stance on Sri Lanka. Neither of them have significant strategic interests in the country that go beyond ensuring freedom of navigation in the area, nor do they particularly favour one of the regional integration schemes at the expense of another. Their shared priorities in the country consist of contributing to its socioeconomic development and seeking out business opportunities for their companies.

Conclusions

The Indo-Pacific region has emerged as an epicentre of competition between the great powers, especially China, the US, Japan and India. Sri Lanka has become very important to these countries due to its strategic location in the region. To the concern of the other great powers, China has spectacularly increased its presence over the island-state during the past 10 years. This is due to the mutually beneficial relationship that has developed between the two countries: Sri Lanka is key to China’s Belt and Road Initiative while China has proved to be a very attractive economic partner to the Sri Lankan government. Not only has it financed and developed projects at great speed but it has also willingly participated in local strategic initiatives. Nevertheless, there is room for improvement in China’s relationship with Sri Lanka. Its projects have lacked transparency and sometimes have failed to take into account financial, environmental and social sustainability concerns. This has been a source of controversy and has resulted in certain key initiatives having to be renegotiated. China will have to become more sensitive to local expectations if it wishes to consolidate its position as a fundamental partner to the Sri Lankan government and increase the appeal of the Belt and Road Initiative to other states.

About the author:
*Mario Esteban, Senior Analyst at the Elcano Royal Institute and Professor at the Autonomous University of Madrid | @wizma9<

Source:
This article was published by FPRI

Notes:

Barak Ravid reports (Hebrew and English here) that Hungary, like Poland, is now seeking to engage in Holocaust revisionism.  Just as the Poles passed a law that offered a prison sentence to anyone who blamed Poles for the Holocaust, Hungary is now getting into the act.  If you asked any of the leaders of the far-right parties running these countries, not a single Pole or Hungarian was responsible for the Holocaust.   Well, maybe one or two, at most.

That got the Poles in trouble with legitimate Holocaust historians, including some who are Polish, and leading international academics who pointed out that this was a falsification of history.  Though Bibi Netanyahu at first endorsed the Polish legislation, he was taken aback by the fierceness of the response it elicited.  He backed off and then hustled off a Yad Vashem researcher to Poland to “negotiate” with the Polish rightists over a joint statement that would mollify those horrified by the bill.  As a result, a milquetoast statement was released by the Poles, Yad Vashem renounced it, and the very person who purportedly negotiated on behalf of Netanyahu appeared to renounce her own efforts, saying she had little input into the process, and didn’t officially represent Yad Vashem.

It was a perfect exemplar of Netanyahu’s modus operandi.  Stick your foot in the mud thinking it’s oil, then tell the world an oil expert told you this was just the place to look for oil.  Then summon an aide to give you a new pair of shoes and tell him to blow the place up after you leave so that no one will ever know you were there.

Hungary’s anti-Semitic leader, Viktor Orban, has tasked one of his billionaire followers with creating a Holocaust museum in Budapest.  To be called the House of Fates, it will supposedly explain to the Hungarian people how and why the Holocaust happened.  We know there are shady machinations regarding this effort because the woman heading the project, Maria Schmidt, is one of Orban’s wealthy toadies.  A professor of history and self-styled expert on the Holocaust, she’s also founded an earlier institution, the House of Terror Museum.  This wretched example of historical revisionism is dedicated to exposing the horrors of totalitarianism–by which they mean Communism.  It exploited the Holocaust by likening Communism to it.

Here is a sample of an English translation from Schmidt’s latest learned tome on history and something or other.  If you can make head or tails of it, you’re doing far better than I:

Language: now, as always, it all started with language. The expropritation, the agressive [sic] seizure of language has swept us frighteningly far from reality. The crisis could not be more serious. Anyone trying to break free from the strangehold [sic] of half-truths and contrived thought experiments risks nothing less than expulsion from the „paradise” of lies. True, in a few decades from now – or a few centuries – such people could become icons; but the prisoners of the putrefying present are doing their utmost to mercilessly annihilate them here and now. With this volume Mária Schmidt is again taking a risk. According to her iroinic [sic] profession of faith, however, she has no choice: what is at stake is liberty.

Schmidt was party to such a maneuver involving the purchase of the struggling independent business and economics magazine, Figyelő.  The machinations which led to its demise are described in the linked article.  What’s especially relevant here is last month’s cover story, which purported to accuse the leader of the Hungarian Jewish community (and opponent of Orban), Andras Heisler, of financial irregularities.  The cover image is yet another one of those repulsive veiled anti-Semitic cheap-shots for which Orban is well-known.  It features a picture of Heisler surrounded by Hungarian banknotes dropping like manna from heaven.  If it reminds you of the sickening smear the Hungarian anti-Semite engaged in against George Soros, it should. It’s the same MO.

So Schmidt, who’s revised the history of 20th century Hungarian Communism, will now revise the history of Hungary’s involvement in the Holocaust.  Keep in mind that there were 400,000 Jews there until 1944, when most were shipped to the camps.  Less than half survived.  Overall, more than 500,000 Hungarian Jews died.

The wartime fascist Iron Cross government enthusiastically collaborated with the Nazis in betraying the Jews.  Orban has gone so far as to blame the country’s leadership for this crime. But it could not have succeeded with the enthusiastic support of the many Hungarians joined in the effort to make their country Judenrein.  Now Schmidt gets her chance to rectify all that bad PR Hungary has suffered and she’s relishing the opportunity.

Another curious element of this Holocaust project is that Orban has found an obedient Jewish toady to partner with him in it.  The Chabad rabbi, Shimon Koves, is now the Jewish fig leaf for the project.  His synagogue will own the new museum.  In effect, he’s the mashgiach you go to to turn a pig into a nice cut of kosher beef.  It’s a shameful bit of opportunism reminiscent of the acts of Jews who betrayed their own in World War II Europe.  Though they did so under terrible duress.  Rabbi Koves has no excuse, except for the benefits that the Hungarian anti-Semites will rain down on him and his various projects in the country.

Enter into this mess, Bibi Netanyahu, who wants to do a favor for his new BFF, Orban.  Just as Koves will kasher the museum inside Hungary, Orban needs Netanyahu to kasher it for world Jewry.  So he’s sent two of his advisors to Israel to meet with Bibi’s political advisor, Reuven Ezer.  Mind you, Orban’s emissaries won’t meet with any Holocaust scholars, any Hungarian Holocaust survivors or any figure who could shed light on what a Hungarian Holocaust museum should look like.  For Orban and Bibi, this is purely a political transaction to be worked out for the benefit of both parties–and to the detriment of history.

In fact, this Hungarian blog post notes that Yad Vashem itself opposes her museum.  It’s also ominous to note that an official within the Israeli museum who opposed the Hungarian project has, according to Schmidt, been fired:

At the end the reporter brought up the fact that the Yad Vashem Institute no longer supports Mária Schmidt’s project, the House of Fates. Moreover, one of the associates of the Institute apparently said at one point that “it is time to get rid of this institute and this woman.” Schmidt assured her interlocutor that this woman no longer works at Yad Vashem. As if her alleged departure had anything to do with her less than polite words about Mária Schmidt. As for her next project, the House of Fates, she is still trying to convince people to work with her. A few more interviews like the ones she has been giving and I can assure her that no one will be willing to do anything with her that is connected to the Hungarian Holocaust.

Heisler is also in Israel desperately seeking to blunt the effort to turn this museum into a Nuremberg-like showpiece for the Fidesz Party’s historical revisionism.  Unlike Orban’s representatives, Heisler is meeting with Yad Vashem officials, along with other members of Israel’s exceedingly weak political opposition: Jewish Agency chair, Isaac Herzog and Yesh Atid leader, Yair Lapid.

Finally, Ravid’s story originated with disgruntled officials in the foreign ministry, of which Netanyahu himself is nominally the cabinet minister.  They have been entirely shut out of this process, in which they normally would be deeply involved.  This is yet another example of Netanyahu running the government as if it was his own personal fief designed to advance his own interests.

Here we see Netanyahu’s enveloping embrace of the worst elements of intolerance, hate, and even anti-Semitism in both Europe and the U.S.  In return for their support, he’s abandoned all his former allies even in the world Jewish community.  Instead, he’s made common cause with a miasmatic stew of neo-Nazis, zenophobes, Islamophobes, Christian fundamentalists, and raging anti-Semites.  He excuses their Jew hatred, while embracing their mutual hatred of Islam, Arabs and leftists.  It’s a bargain with the Devil.

This article was published at Tikun Olam