By William Chislett*

Twenty years ago this month Spain was one of the 11 EU countries that started to use the euro when the common currency was first introduced. Joining the euro and being in the vanguard of a European movement, 13 years after Spain entered the European Economic Community (EEC) and ended a long period of isolation from mainstream Europe, was very much a matter of national pride.

Yet has it been worth it? Euro zone membership deprived Spain of its former capacity to set interest rates and devalue its currency. Interest rates are set by the European Central Bank, not by member state central banks, and euro zone countries cannot devalue. The loss of independence in these areas meant that when the Spanish economy entered a long period of recession as of 2008, as part of the meltdown of the North Atlantic financial system and the subsequent Eurozone debt crisis, it could not use some of the most important macroeconomic tools –monetary policy and exchange rates– to restore competitiveness and perhaps emerge from austerity more quickly and less painfully but not necessarily on a sustained basis. The country had to rely on ‘internal devaluation’, cutting production costs, mainly wages, in order to lower unit labour costs and make the economy more international and competitive.

Preparing the country for the euro, which involved a tough wrench, mainly fell to the conservative Popular Party under José María Aznar. When he took office in 1996, Spain met none of the criteria for joining the Economic and Monetary Union (EMU) as of 1999. Inflation, interest rates, the budget deficit and public debt all breached the convergence requirements enshrined in the Maastricht Treaty of 1992 for setting up the euro zone. Many policymakers and pundits thought Spain would never be fit for the purpose.

The Spanish political establishment was determined to prove them wrong. Civil servants agreed to a wage freeze, public spending was reduced, privatisations began on a larger scale than under the Socialists, and various structural measures were taken. By the spring of 1998, Spain had met the conditions: its budget deficit was less than the maximum allowance of 3% of GDP (6.5% in 1995), public debt as a proportion of GDP was on a downward path and inflation was down to 2% from 4.5% in 1995. With it, interest rates fell. The path was also eased by Spain being the largest net recipient of EEC funds.

The macroeconomic stability required for sustained economic growth as a result of meeting the euro criteria ushered in a virtuous circle of high growth, low inflation and job creation. The country’s per capita income increased from 80% of the average of the 15 EU countries in 1996 to 87% in 2004, and thanks to the creation of 1.8 million new jobs the unemployment rate dropped from 23% to 11.5% during this period. The economy was going so well that José Luis Rodríguez Zapatero, the Socialist Prime Minister between 2004 and 2011, adopted a football metaphor and proclaimed in September 2007 that Spain ‘has joined the Champions League’.

The truth is that Spain’s decade-long boom was a false bonanza, as it was mainly propelled by the debt-fuelled property sector (construction’s share of GDP grew from 7.5% of GDP in 2000 to 10.8% in 2006), creating a massive bubble that burst as of 2008. But was that the euro’s fault? While building and consumption in general was spurred by the sharp drop in interest rates after Spain joined the euro –average short- and long-term rates fell from 13.3% and 11.7%, respectively, in 1992, to 3.0% and 2.2% in 1999 and to 2.2% and 3.4% in 2005, encouraging borrowers to go on a spending binge–, the euro itself cannot be blamed for banks’ reckless and irresponsible lending practices, particularly those of the politically-influenced cajas de ahorros (savings banks). The Bank of Spain did not do enough to discourage the orgy of borrowing, but it deserves credit for introducing macroprudential provisions. When several banks, including Bankia, the fourth-largest lender, were on the verge of collapse in 2012, euro membership enabled Spain to avail itself of the zone’s bailout fund, the European Stability Mechanism (ESM), without which the whole financial system might have gone awry.

Nor was the building of ‘ghost’ airports and other white-elephant projects scattered around the country the euro’s fault. Spain wasted more than €81 billion on ‘unnecessary, abandoned, under used or poorly planned infrastructure’ between 1995 and 2016, according to a damning report published by the Association of Spanish Geographers last year. Likewise, the euro is not to blame for Spain’s consistently high unemployment (it reached 24% in 1994, five years before the introduction of the euro, and it has never got below 8% since the euro was adopted). Today, the jobless rate stands at 15%, down from a peak of 27% in 2013.

The sharp drop in interest rates and in Spain’s risk premium (the yield spread with the German bond fell from 500bps in 1993 to below 50bps) enabled companies to borrow funds much more cheaply in order to expand abroad. The creation of a bevy of multinationals has been one of the most significant economic developments in Spain over the last 20 years (the stock of outward direct investment rose from US$129 billion in 2000 to US$597 billion in 2017). A stable currency (the peseta was devalued many times) has also been good for attracting inward foreign direct investment (it increased from US$156 billion in 2000 to US$644 billion in 2017) and keep relatively high living standards.

The strong euro did not hinder making Spain’s exports of goods and services more competitive (they rose from 26.4% of GDP in 1999 to around 34% in 2018).

Spain suffered far more than Italy during the euro crisis, but it has also reformed more and, as a result, enjoyed a much stronger recovery. The euro ‘straitjacket’ made Spain reform, to its benefit, while Italy resisted. Unlike Italy, Spain’s economic output has been above its pre-crisis peak since the middle of 2017. Italy’s GDP is still some 5% below its prior peak. There was no shortage of misguided predictions after the Spanish economy crashed that Spain might exit the euro. Whereas the populists in Italy’s government have toyed with leaving the common currency, all of Spain’s main parties support staying in.

Close to two-thirds (62%) of Spaniards believe the euro has been good for Spain, slightly down on a year ago, according to the latest Eurobarometer (see Figure 1). More than 20% of the population was not born when the euro came into force and has not known another currency. Figure 1. Having the euro is a good or a bad thing for your country? (%) (1)

(1) 2017 figures in brackets. Source: Eurobarometer, December 2018.

Three-quarters of people in the 19 euro zone countries are in favour of the euro, the highest since 2004. But that does not mean that all is well with the single currency, as even its most fervent advocates acknowledge. Its design flaws include the lack of a banking union (recognised but not fully implemented) and a system for making fiscal policy counter-cyclical. When economies are expanding, they need fiscal discipline and when in recession some freedom to borrow. Another omission is the absence of any means to ensure euro countries adopt structural reforms, which only tends to happen in times of crisis and as a last resort. Governance that is better designed for crisis management is also required.

We will never know with certainty whether Spain would have been better off not joining the euro. What we know is that in real GDP growth terms Spain has performed better than Germany, France and Italy since 1999. Were Spain to leave the single currency today and return to the peseta, the move would have huge repercussions, including skyrocketing interest rates and a currency devaluation.

*About the author: William Chislett, Associate Analyst, Elcano Royal Institute | @WilliamChislet3

Source: This article was published by Elcano Royal Institute

South Africa’s President Cyril Ramaphosa and his Zambian counterpart, Edgar Lungu, have called on the Democratic Republic of the Congo electoral commission to release election results in order to maintain the credibility of elections.

“The two Presidents underscored that the delay in releasing the results of the elections can lead to suspicions and compromise peace and stability of the country,” said the Presidency in statement.

On Wednesday, President Ramaphosa received President Lungu, who is also the Southern African Development Community (SADC) Chairperson for the Organ on Politics, Defense, and Security Cooperation, on a working visit to South Africa.

During their meeting, the two Presidents were briefed by the Foreign Minister of the Republic of Zambia, Joseph Malanj who led the SADC Electoral Observer Mission (SEOM) during elections in the Democratic Republic of Congo (DRC).

President Ramaphosa and Lungu reiterated comments made by SEOM that considering the number of voters, the vast area to be covered and the new technology implemented by the Independent National Electoral Commission (CENI), the elections were generally peaceful and the right to vote was protected.

The two Presidents called on all the political parties and the people of Congo to remain calm and exercise total restraint while waiting for CENI to release the final results.

The two Presidents commended the United Nations Organisation Stabilisation Mission in the Democratic Republic of the Congo (MONUSCO) and the DRC security forces for supporting CENI in ensuring that the people vote in a peaceful and secure environment.

The two Presidents agreed to monitor the situation in DRC and committed SADC’s support and solidarity.

Sri Lanka’s Foreign Reserves were depleted by $1 billion within the 51-day political crisis, completely upsetting the debt management plans of the country, Prime Minister Ranil Wickremesinghe said.

The Prime Minister, making a Ministerial Statement in Parliament, briefly analysed the economic impact of the political crisis and the challenges before the country in its immediate aftermath.The Prime Minister was however confident of overcoming all the challenges in the economic front, and stressed that the Government would present a “people-friendly budget” amidst the difficulties.

Prime Minister Wickremesinghe said that prime focus has now been given to stabilize the Rupee.“The rupee depreciated by 3.8 percent within the 51 days of the crisis while other currencies gained in value. From October 26 to December 16, 2018, USD 312.9 million in Treasury Guarantees, USD 29.1 million in Treasury Bills and USD 29.8 million in Treasury Bonds flowed out of the country,” the Prime Minister said. “We previously had a target of reaching USD 8 billion foreign reserves by the end of this year.

“We had USD 7,991 million Foreign Reserves as at October 26, but this had dropped to USD 6,985.4 million amidst the political crisis. As per the estimates, we need a total of USD 5,900 billion to pay for foreign loans and interests this year. Sri Lanka’s highest ever loan installment of USD 2,600 million is due on January 14. Our effort was to manage this debt in a manner that it does not burden the ordinary masses. That is why we had made far-sighted plans, but now we have to start again,” the Premier analyzed.

The Prime Minister said the Reserve Bank of India has agreed to provide USD 400 million under the SAARC swap facility. Responding to concerns raised by NFF Leader Wimal Weerawansa as to whether the Government has promised to lease out the China Bay and Kankasanturei ports, the Mattala airport and Colombo Port’s East Terminal to India in return, the Prime Minister plainly refuted any such promise, adding that only the terms and conditions of the SAARC swap facility would apply to it.

The Prime Minister also said that another USD 500 million is expected from Chinese Panda Bonds and Japanese Samurai Bonds. He said that USD 1 billion is expected to be obtained from the international monetary market, adding that Finance and Mass Media Minister Mangala Samaraweera would fly to Washington next week to discuss about it.

The Premier expressed his confidence that these would help to arrest the depreciation of the Rupee and stabilize it in the market.The Premier also said that the Government has paid urgent attention to bring down the cost of living and also to develop the tourism sector and the export market.

“All our mid-term plans stalled due to the political crisis. The political instability for 51 days was a severe blow to our economy which was gradually recovering. The economic growth stalled, the rupee further depreciated, Sri Lanka downgraded in international ratings and it failed to secure any aid or loan from any country or international monetary institution during that period. The Government projects and programmes came to a standstill. The total damage to the economy is vast and it will take time to bounce back. We need to win back the confidence of the investors and international community. The political instability occurred just after Sri Lanka was named a best tourist destination. Some countries imposed travel bans to Sri Lanka and many foreigners cancelled their trips as a result. This deprived us a lot of foreign exchange,” the Prime Minister explained.

The Prime Minister, recapping his own words in Parliament on October 27, 2016 where he urged to think about the country before personal and political motives, said that double down of effort is the need of the hour to confront the challenges before the country in the aftermath of 51 days of political instability.

“We are ready to rebuild the economy shattered by the 51-day long crisis. It is not an easy task, but as Sri Lanka upheld the people’s sovereignty and democracy overcoming all the challenges against them, we are confident that we can uplift the economy,” the Prime Minister stressed.

By Georgi Gotev

(EurActiv) — Venezuelan President Nicolás Maduro on Thursday (10 January) begins a new term that critics dismiss as illegitimate, with the economy in free fall and the country more isolated than ever.

The 56-year-old leader was sworn in at 1400 GMT by the Supreme Court rather than the sidelined, opposition-controlled parliament. He was re-elected in May in voting boycotted by the majority of the opposition and dismissed as a fraud by the United States, European Union and Organization of American States.

With the exception of Mexico, the Lima Group — made up of 14 mostly Latin American countries — has urged Maduro to renounce his second term and deliver power to parliament, a demand Caracas blasted as incitement to stage a coup d’état.

Neither the EU nor the Lima Group — again except for Mexico — will send a representative to the inauguration. Countries that will be represented include Bolivia, Cuba, El Salvador, Nicaragua, China, Russia and Turkey.

Last May EU foreign ministers agreed new sanctions against Venezuelan officials involved in Maduro’s re-election, which they said “lacked any credibility”.

Maja Kocijancic, spokesperson to EU foreign affairs chief Federica Mogherini, said that the EU sticks to its position that the presidential elections had not been free nor fair, and that it regretted that despite calls no fresh elections took place.

“In this context, the EU and its member states will not participate in the presidential inauguration session today. The EU will however continue its diplomatic and political engagement in support of peaceful political and democratic solution to the crisis in Venezuela, keeping the channels open with relevant stakeholders”, she said.

A former bus driver and union leader, Maduro is the handpicked successor of the late leftist firebrand Hugo Chavez.

Maduro has gained control of virtually all of Venezuela’s political institutions and enjoys the support of the military.

He says he feels stronger and more legitimate than ever, but many blame him for Venezuela’s economic woes, which have left much of the population living in poverty with shortages of basic foods and medicines.

The International Monetary Fund predicts that Venezuela’s economy will shrink by five percent next year with inflation — which reached 1.35 million percent in 2018 — hitting a staggering 10 million percent.

Maduro hit out at his regional detractors on Wednesday, threatening to take “diplomatic measures” against them if they refuse to recognize his reelection.

Last week the Lima Group called on Maduro to step down and hand power to the parliament ahead of “democratic elections.”

An angry Maduro slammed the Lima Group’s “interventionist and rude policy” and vowed to “defend the national interest.”

He warned his government would “take the most immediate and crude diplomatic measures” should those governments fail to change their position “within 48 hours.”

While the opposition in Venezuela has tried every means to dislodge Maduro, it remains fractured.

In March 2016, the opposition launched a failed bid for a recall referendum aimed at removing Maduro from office before the end of his term.

Many prominent opposition figures are either in jail or exile and various factions continue to squabble over power while the National Assembly, the one institution they control, has been left impotent after Maduro created the rival Constituent Assembly and filled the Supreme Court with loyalists who annul every decision made by parliament.

Washington has sanctioned a number of individuals in Venezuela as it cranks up the pressure on the Maduro government it blames for the country’s economic meltdown.

Maduro claims the sanctions cost the country $20 billion in 2018. The opposition says the government’s control of foreign exchange, which has been in place since 2003, has generated $300 billion in illicit gains.

According to the United Nations, 2.3 million Venezuelans have fled the country since 2015 to escape economic hardship.

Anti-government riots in 2014 left 43 dead, and at least 125 people died in months of protests in 2017.

By Michael Hart

When Aung San Suu Kyi was propelled to high office via a landslide election victory in November 2015, she vowed to make ending Myanmar’s decades-old internal strife a top priority of her government. Yet three years on, the initial outpouring of hope and optimism around the world after the ascent to power of Suu Kyi’s National League for Democracy (NLD) has been replaced with rising condemnation of the brutal Rohingya crackdown and alleged army abuses in the northern states of Kachin and Shan.

While the quasi-civilian administration led by Suu Kyi has failed to condemn the actions of Myanmar’s still-dominant armed forces, known as the Tatmadaw, the former global human rights icon has pushed forward with a government peace initiative designed to end a myriad of long-running ethnic conflicts which have blighted the country’s remote borderlands for seventy years. And though talks first began under the former military regime, Suu Kyi attended the latest rounds of dialogue held in July and October 2018.

Yet despite repeated sets of negotiations, the peace process has stalled amid escalating violence on the ground. Suu Kyi’s strategy is centred on persuading more rebel groups to join the existing Nationwide Ceasefire Agreement (NCA), originally signed by eight groups the month before her election in 2015. A further two signed in February, yet the country’s most powerful militias are refusing to join the accord while talks remain deadlocked over key security matters and the central issue of devolving political powers.

Can Aung San Suu Kyi break the impasse in Myanmar’s fractured peace process? Or will the continued dominance of the military and mistrust of the army among ethnic leaders stand in the way of peace?

Myanmar’s decades-old internal ethnic conflicts

Myanmar’s raging civil conflicts date back to before the country’s independence from Britain in 1948.  Prior to independence, in February 1947 ethnic leaders from Chin, Kachin and Shan states signed the Panglong Agreement with Myanmar’s leader at the time, General Aung San – Suu Kyi’s father. The deal promised autonomy and self-determination for ethnic groups after the creation of Burma. Aung San was assassinated by political opponents later that year and his commitment was not honored by the nation’s post-independence rulers, sparking the formation of ethnic armies set on securing autonomy.

Insurgencies have persisted for much of the past seven decades in the states of Rakhine, Chin, Kachin, Shan, Kayin and Mon. Various armed insurgent groups have fought government troops, driven by core grievances centered on the political control of territory, rights for ethnic minorities and access to natural resource revenues. Most fighting has occurred in isolated and inaccessible border areas far from the center of state power in Naypyidaw. The uprisings have proven resistant to resolution, having persisted through the 26-year dictatorship of Ne Win and successive military regimes which followed. Previous ceasefires have been negotiated with individual armed groups, yet all have been broken and peace has rarely held for long. The most enduring was in Kachin state, where a 1994 ceasefire quelled fighting with the Kachin Independence Army (KIA) for 17 years until hostilities resumed six years ago.

Aung San Suu Kyi’s attempt to reboot the peace process

The government’s approach to conflict resolution widened in 2011 when reformist military ruler Thein Sein initiated a national-level peace dialogue for the first time under army rule. Negotiations led to a Nationwide Ceasefire Agreement (NCA) signed in October 2015, just a month before Suu Kyi’s historic election win. Yet only eight of 15 groups involved in discussions put pen to paper. Some of Myanmar’s largest and most influential insurgent groups – including the 10,000-strong KIA and the 25,000-strong United Wa State Army (UWSA) – refused to sign the deal due to the Tatmadaw’s exclusion of smaller allied rebel organizations, such as the Ta’ang National Liberation Army (TNLA), from the peace process.

A month later, Aung San Suu Kyi’s NLD swept to power having secured a high proportion of the ethnic minority vote. Despite being barred from the presidency by a constitutional clause, Suu Kyi, with the title of State Counsellor and as the nation’s de-facto ruler, vowed to pursue a lasting peace settlement.

Under the weight of high expectations, Suu Kyi has since sought to foster continual dialogue, reviving the spirit of her father’s peace drive of the 1940s via the holding a series of 21^st Century Panglong Peace Conferences. Yet the military – which retains decision-making control over internal security matters and for which one-third of parliamentary seats are reserved – has maintained its central role in the talks, which are designed to build upon the 2015 NCA deal. Despite two more insurgent groups signing up in February, progress has been slower than hoped and delays have occurred. Suu Kyi planned to hold Panglong conferences every six months, yet to-date only three have taken place since she took power. Loose agreements have been reached on principles covering politics, economics, the environment, and social issues, but the agenda has been vague and core drivers of the conflict have yet to be discussed.

A stalling peace process amid escalating violence on the ground

The three rounds of talks hosted by Suu Kyi so far, in August 2016, May 2017 and July 2018, have been held against a backdrop of rising violence on the ground and unchecked abuses by the Tatmadaw. In Rakhine state, the army has responded to attacks on border posts by Arakan Rohingya Salvation Army (ARSA) militants by launching a wide-ranging crackdown on Rohingya villages. The UN and a multitude of human rights organizations have accused troops of burning villages, raping women and deliberately killing civilians. Some have even gone so far as to label the military’s campaign as ‘genocide’ or ‘ethnic cleansing’, while Suu Kyi has faced strong criticism from Western leaders for her failure to speak out. Suu Kyi insists the army have only targeted ‘terrorists’ in clearing operations. Over 700,000 Rohingya have fled across the border to seek refuge in neighboring Bangladesh since violence erupted in 2017.

Meanwhile in 2018, fighting has intensified in the northeastern states of Kachin and Shan, along the border with China. In Kachin, clashes between the government and ethnic rebels have centered on the townships of Hpakant, Injangyang, Sumprabum, Tanaing and Waingmaw, while in excess of 100,000 people have been displaced in the state since 2011. Human rights groups have accused the Tatmadaw of adopting heavy-handed tactics and employing a ‘scorched earth’ policy in conflict-affected regions.

A UN report in March documented ‘credible reports of indiscriminate and disproportionate attacks, extrajudicial killings, enforced disappearances, torture, rape and other forms of sexual violence’ at the hands of the army in Kachin. Human Rights Watch has warned of a ‘dire humanitarian situation’ in the state. The Tatmadaw denies all allegations of abuses, and maintains it only targets armed insurgents.

Why is the peace process failing, and can it be revived?

Amid rising violence, the third round of the Panglong initiative in July made little meaningful progress. A group of four powerful non-signatory rebel groups from the north, including the KIA and TNLA, met with Suu Kyi on the sidelines of the summit, yet there is still little sign they are willing to join the NCA. The peace process, in its current form, appears to be stalling: talks have reached an impasse with NCA signatories, while the non-participation of other groups is blocking the path to a nationwide peace.

It will be hard for Suu Kyi to revive the fortunes of the faltering peace process in the current climate. Rebel demands for genuine autonomy and self-determination appear unlikely to be met, despite the government’s stated desire to turn Myanmar into a federal union. With the Tatmadaw still dominant and primarily concerned with preserving the territorial integrity of the state, any attempt by the NLD to cede too much ground to ethnic rebels would not go down well with the generals, and would risk the removal of Suu Kyi from power. Military leaders effectively hold a veto over all decisions made by democratically-elected politicians. The rhetoric of the generals suggests the rebels’ demands will not be met in full. Despite Tatmadaw chief Gen. Min Aung Hlaing calling for a ‘brotherly spirit’ to drive the peace process forward, he has also warned against giving too much away to ethnic minorities or local political parties. In July, Hlaing said ‘armed ethnic groups in some regions cannot represent the entire national people of 52 million, and political parties only represent a particular walk of life’. In contrast, he said ‘the people’s Tatmadaw, born of ethnic people, is an organization representing the state and the people’. In this context, Suu Kyi’s vision for a federal union with devolved powers is restricted. The army sees itself as the unifying force in Myanmar, and is averse to giving up control over defense and security matters. It is hard to imagine the Tatmadaw agreeing to withdraw its troops from ethnic areas.

A second barrier to peace is the long-standing lack of trust between the communities represented by insurgent groups and the Tatmadaw. A history of alleged army abuses in the form of disappearances, extrajudicial killings, sexual abuse and the use of slave labor will be hard to forget for deeply scarred populations, even in the event of a peace deal. Seven decades of conflict has fermented anger on both sides, with each viewing the other as the enemy. This factor serves to make the peace process fragile, and may rear its head if or when more contentious issues are discussed at a later stage of negotiations.

Future forecast: looking beyond Myanmar’s current political climate

Withstanding international criticism over her handling of the Rohingya situation, away from the global media spotlight Aung San Suu Kyi has made considerable efforts to resolve conflicts outside Rakhine state, making internal peace-making elsewhere a political priority. Yet it appears on the battlefield, the army has different ideas, and things have continued much the same as before. In fact, violence on several fronts has worsened since the NLD’s victory, mainly due to conflict dynamics at the local level.

While Suu Kyi’s personal view on the Rohingya is shrouded in mystery, it is clear that her government is not able to act independently of the Tatmadaw, which still maintains a stranglehold over Myanmar’s politics and security. To what extent Suu Kyi is willingly allowing the army’s abuses to go unchecked, or not opting to speak out for fear of losing power, is unclear. In the domestic political context, it may suit Suu Kyi to remain silent, as many in the Bamar ethnic majority support the crackdown in Rakhine.

Yet in other areas where conflicts are raging, the story is different. Suu Kyi rode to power in 2015 with widespread support from ethnic minority voters, hopeful the NLD-led government would be able to reduce violence in their communities. If the stalling peace process cannot be revived, Suu Kyi risks losing a proportion of this vote at the ballot box in 2020, risking the military once again firming up its grip on power. These complex electoral dynamics and the increasingly volatile events of recent years demonstrate how the situation in Myanmar is far more nuanced than outside interpretations suggest.

Even beyond the present political era of quasi-civilian part-democratic governance, Myanmar’s ethnic insurgencies will remain highly resistant to resolution. Rather than vague ceasefires and half-hearted peace initiatives, it will take generational shifts and years of trust-building to lend dialogue a chance.

This article was published by Geopolitical Monitor.com

These days in Afghanistan and the region everybody is talking about a ‘peace’ which ‘doesn’t exist’. Just over the last week, 24 Afghan security forces lost their lives in battles in northwestern and western region of Afghanistan and the week before a Taliban group attack took the lives of over 45 civil servants and contractors who worked for the Afghan Ministry of Public Works in downtown Kabul. Meanwhile – President Ghani reshuffled his security ministers with prominent anti- Taliban figures in the hope to send a strong message to the Taliban that come next summer his government will be ready for another fighting season.

Meanwhile – US State Department especial envoy for the Afghan peace, veteran diplomat, Zalmay Khalilzad, has been shuttling around the region in the hope to forge a regional consensus on peace and translate that into diplomatic, financial and military pressure on the Afghan Taliban to come to the negotiation table with the Afghan government but to no avail yet.

Former President Karzai during the recent Raisina 2019 dialogue, India’s landmark foreign policy annual conference, accused the US of talking to the Taliban about its bases and not peace in the country. In addition – President Trump in a gross misrepresentation of the Afghan and cold war history, blamed the disintegration of former Soviet Union on Afghanistan and claimed it came to fight terrorists in the country but affirmed that his administration is talking to all sides in the country to wrap up America’s longest war. All of these indicators point to yet another grand game in the name of peace with an uncertain future and in the absence of Afghan leadership and ownership.

Furthermore – a marathon is underway by countries in the region including Iran, United Arab Emirates, Saudi Arabia, Russia, Uzbekistan among others for hosting the Taliban to maintain leverage and influence over the group. Taliban representatives have gone to every regional capital except the Afghan capital Kabul to talk about a post US peace settlement with the Afghan government.

In fact – Taliban representatives refused to meet the Afghan negotiation team in Abu Dhabi which left the Afghan team members stuck in their hotel rooms. Afghans can not afford yet another peace adventure, they have seen such episodes before during President Karzai’s era wherein every new initiative with Pakistan, Turkey and Saudi Arabia with facilitation of the United States on any potential peace process made the Afghan public and political leaders excited and hopeful only to vanish in the next fighting season. Within the Afghan security circles there is a famous saying, ‘every winter Taliban and their sponsors come up with peace initiatives and every summer those initiatives vanish. Summers are for fighting and winters are for empty peace talks.’

Too many Roadmaps without a Road

The Afghan peace process suffers from a multiplicity of peace roadmaps,work plans and programs.During President Karzai era at least three different roadmaps and work plans were developed for the Afghan peace process. Almost two months ago President Ashraf Ghani unveiled his peace roadmap to the Afghan public and the region. He clearly laid out his government’s vision and conditions for any potential peace talks with the Taliban.

Local TV station, TOLONEWS, leaked a peace roadmap developed by RAND Corp, a US security think tank, for the US government in which the Americans proposed an interim administration plus an Ulema Council for the Afghan Taliban in exchange for a ceasefire and negotiations with the Afghan government among other offers including a partial or full US troop withdrawal from the country. The Afghan government together with US, Pakistan and China developed a quadrilateral peace workplan and road in the early days of the formation of the National Unity Government and the list goes on without any tangible result or a genuine peace process.The truth of the matter is that both the Afghan government and its US allies have been developing too many roadmaps in the absence of a road to peace.

Talks for the sake of Talks

President Karzai traveled to Pakistan over twenty times, President Ghani twice and officials of both administrations held over hundreds of meetings on the Afghan peace process with the Taliban but with no tangible results. Meetings and talks in luxurious hotels in the region and Gulf countries in the absence of genuine intentions for peace is a waste of time.

The problem is not lack of meetings and shuttle diplomacy; the problem is a lack of will and genuine follow up mechanism.Peace talks have only worsened the battle field intensity and casualties. Talks not back up with clear demonstrable actions are only empty words.

The Battle of Envoys

President Ghani recently appointed former Interior Minister, Umar Daudzai, a veteran politician and diplomat as his special envoy for peace and regional consensus building for peace. This move served him well both in the domestic politics but also highlighted his differences with the American special envoy for peace, Zalmay Khalilzad, both of whom have known each other from their days in the American University of Beirut that he is not happy with his peace talks in the absence of Afghan government representatives.

Furthermore, there are speculations of a rift between the US position on peace and President Ghani’s views on peace and the American presence in the country. In the midst, the Russian President envoy, Zamir Kabulov, has been hosting Taliban representatives in Moscow on Afghan peace. Iranian Deputy Foreign Minister, Sayed Abbas Iraqchi, has also held talks with Taliban representatives over a week ago in Tehran on the future of Afghanistan and the necessity for intr-Afghan dialogue. Unfortunately – none of these envoys share a common language, common program or pursue common objectives. This only shows that ‘peace’ and ‘peace making’ in Afghanistan has turned into a geopolitical tournament and marathon for leverage and influence.

A Divided Region

Russians and Iranians pursue one set of goals and objectives when it comes to the Afghan peace while the Americans, Pakistanis and Arab states ie UAE and Saudi Arabia pursue another set of goals and objectives whereas countries such as India and Turkey have only been active in the background without a clearly formulated view for the Afghan peace process.

The region lacks a consensus on ‘peace’ and ‘peace making’ just like the lack one for ‘war’ and ‘war waging’ in the country. Peace should not be viewed as means to achieving geopolitical goals but rather an end by itself.

What is Different this time?

Some diplomats, policy makers and politicians argue that since President Trump has an election to win in 2020 he wants to wrap up the Afghan war and/or at least show to the American people that US has started withdrawing from Afghanistan therefore there is a genuine desire by the Americans to use all of its political, military and diplomatic might to forge a consensus on peace in the region and within Afghanistan.

Meanwhile, countries in the region especially Pakistan and Iran can no longer afford long term support to the Taliban given their new geopolitical and security priorities. More so, if US withdraws from Afghanistan in the absence of any peace deal then a choatic and unstable Afghanistan at the door steps of Islamabad, Tehran and Moscow will only endanger their national security.Therefore a combination of an unusual US President and the real possibility of the collapse of the Afghan state post US withdrawal with security and economic spill over effects to its neighbors makes both the threats and opportunities for a peace deal in Afghanistan all the more genuine this time.

An uncertain Future

There is a fear within the Washington security and military circles that President Trump who never owned up to the Afghan war will pull the plug and call for a complete drawdown from Afghanistan.

Meanwhile – the Afghan people are also tired of a liberating force whose continued presence has only intensified the war and deteriorated the security situation in the country. Any political settlement in the country made in a rush and under political deadlines will be temporary and push the country towards yet another war only this time it would be a destructive and bloody civil war. Afghans are very cognizant of Red Army withdrawal from the country and the Geneva peace accords which pushed the country to a civil war.

Any hasty peace deal will be fragile, unsustainble and a long term recipe for another war.

*Tamim Asey is the former Afghan Deputy Minister of Defense and Director General at the Afghan National Security Council. He is currently pursuing a Ph.D in Security studies in London. He can be reached via twitter @tamimasey and Facebook @Tamim Asey.

Most speak of floods in the age of climate change, when the cooked and the roasted take precedence over the snowed in and the freezing, and the parliaments of lost islands shall be convened in the sea. Comparatively cruel fates should never be entertained, but the difference here is worth noting. Flooded islands lost to the rise of sea levels; submerged hopes done by the relentless pounding of storms and water; destroyed civilisations drowned by the supposed folly of the human species. These take a privileged if morbid position in the discussion on environmental catastrophe and climate change.

The more neglected aspect of modern discussion is the ice factor, and with that, its attendant literature. The chill produces its own mental states, a specific way of seeing. Away from the humidity and the heat, from the tropical sighs and the going-troppo sense of the heat lies another form of threat, beauty and appreciation. Call it ice, cold, the freeze.

History is replete with its minor and major ice ages, its cold snaps that do last beyond the minor calculations of a meteorologist. Cold, in short, makes history, altering the course of wars and civilisations. The Little Ice Age (sometime between the 16th to 19th centuries) features as political weaponry and historical debate, a period that managed to fill diaries and scripts with concern and speculation about glacial doom or imminent redemption for the human species.

Predictions and assessments become matters of concern and conjecture. Martin Mlynczak of NASA’s Langley Research Centre suggested last September that the sun’s inactivity could lead to the lowering of temperatures of the thermosphere (a layering of the earth’s atmosphere at some 300 miles above the surface). “High above the Earth’s surface, near the edge of space, our atmosphere is losing heat energy. If current trends continue, it could soon set a Space Age record for cold.” This led, erroneously, to the suggestion that a “grim ‘mini Ice Age’,” would make its presence felt. “The ‘imminent mini ice age’ myth,” writes environmental scientist Dana Nuccitelli with tired resignation for the Bulletin of Atomic Scientists, “rears its ugly head in the conservative media like clockwork every year or two.”

From the solidity of ice, its image of hardened bodies, snow bitten parts and paralysis, comes that poetic, if overly sentimentalised spin-off: snow. Snow remains a source of poetic reflection, a linguistic and cultural house of richness. The Danish author, Peter Høeg, delved into the theme of snow as the backdrop to understanding a crime in Smilla’s Sense of Snow. Snow acts as the illustrative vehicle and device. “I think more highly of snow and ice than love,” reflects the protagonist, Smilla Jaspersen. “I have a good relationship with ice.” Ice is a measure of existence: it comes in the form of field ice, frazil ice, pancake and porridge. Inuit terms for snow become a matter of interest: qanik covers large flakes; apuhiniq frozen drifts. To understand snow and its forms is to understand life.

Today, in the southern Balkans, a captured miniature of the Ottoman Empire past, the scene is replete with soft colours on the horizon, a glazed blue reminiscent of porcelain and pale eyed beauties, as the light gradually fails. The distant blue itself has layers: tenderly soft to the eye to heavy dark; the paleness fades to solemn colours on the lower horizon. The sun has been banished, but its rays remain stubborn reminders, coming through to play and tease out the last light of the day.

The snow has been caking, posting its presence on window sills, pavements, cars. Dirt and mud has been blissfully hidden, ugliness brushed and layered like a model’s makeup. Snow’s softness belies an utter terror; its crystal dimension hiding the fundamentally dangerous nature of its accumulation. Cars must be dug out of the clutch of the freeze. Ditches are hidden, drains covered. Public transport has been affected; the passengers await for buses that may arrive, at some point. (The emphasis here is on some, rather than point.) Time assertions are an irrelevance here, in the land where Romani, Serb and Albanian meet, and the domain of the freeze takes precedence over all.

The snow that falls today suggests, paradoxically, comfort and warmth. Provided the body has a suitable layering of warmth for the body, the flakes, falling vertically, is at a stalemate. It does not steal warmth, but nor does the body necessarily win out against it. It cannot get through to the skin; it acts as a soft cover, falling and sliding off effortlessly. There is none of the savage biting that comes with a skin searing blizzard, nor a deep, bone chill that comes with the brittle inducing conditions of a shock freeze. This is snow on the slow kill, a seductive crystallising blanketing that seduces the walker into grand exhibitions of dancing ritual, of gallivanting in feathery ice and attempting to puncture layers of immaculate, cream coverage.

Animals must cope, and so they do. Sparrows gather together in strings of feathers and flesh across branches iced and weighed down by snow. Chaffinches seem to bleed their colours into the bare vegetation now carpeted by white. Stray cats seek shelter; dogs, the same. These snow levels do not necessarily kill in the same way as certain freezing conditions do, and can create layers of protection for the more enterprising. Nature, being nature, deals a blow to the rest, and the retreating cold reveals the bodies of those failing to find suitable shelter.

Humans must also cope. Rounds are made to homes isolated, their occupants caged – in Bujanovac, favours are done, though these are self-serving. Bills must still be paid, even in the midst of catastrophe, and men make their rounds to gather payment. (How helpful.) The elderly must not be forgotten as units of payment for the state craving its pennies – the utilities providers shall have their pound of flesh. For some, reserves are running out, and humanitarian assistance is sought. Snow kisses the young who play in it but condemns the aged who would prefer a warmer fate. The craving for spring is palpable.

By José Niño*

Children working in factories with hazardous working conditions in pollution ridden cities are some of the images historians enjoy using when covering the Gilded Age of American history — the period following the American Civil War up until the early 20th century.

If we took court historians’ interpretations at face value, we’d be under the impression that the Gilded Age was a precarious hellscape. To them, government intervention was the savior that swooped in and rescued the United States from the horrors of capitalism during this period.

Objective analysis of this period, however, proves otherwise. In fact, the so-called Gilded Age was an era of unprecedented prosperity. The US went from an agrarian country to an industrialized country in a matter of decades. This growth was achieved with little to no government intervention.

But why do historians insist on demonizing this era and putting forward portrayals that belong in a page of a Marvel comic, rather than a serious history textbook?

A Common Myth

Conventional history has done the Gilded Age a historical injustice. For starters, this term originates from Mark Twain and Charles Dudley Warner’s novel The Gilded Age: A Tale of Today which satirized the post-Civil War economic expansion. This novel portrayed the economic expansion as a thin gilding that masked pervasive social problems. But when scrutinized properly, the “Belle Époque” would be a more apt description for this era.

Many of the present-day wonders we currently enjoy came from innovations that emerged during the Gilded Age — electric lighting, public sanitation, railways, and telecommunications; just to name a few. Contrary to what the history books say, a gargantuan administrative state was not necessary to achieve all of this.

But to the average court historian, state control is the main driver of progress. According to them, private interests do not care about the “common good” and must be subject to government control. The idea of a United States with a small bureaucracy and few laws on the books seems unfathomable.

However, this was the case throughout most of the latter half of the 19th century, where the absence of several governmental institutions stood out in particular.

Central Banking

The Gilded Age was noted for the US government’s adherence to the gold standard. Derided by Keynesian critics “as obsolete as the horse and buggy,” the gold standard served America and the rest of the West well throughout the Gilded Age. Ludwig von Mises was one of the champions of sound money and understood the indispensable role it played in developing the West:

The gold standard has one tremendous virtue: the quantity of the money supply, under the gold standard, is independent of the policies of governments and political parties. This is its advantage. It is a form of protection against spendthrift governments.

The gold standard was an engine for economic growth that also doubled as a check against the government’s ability to go on massive spending binges. With central banking making a fierce comeback in the early years of the 20th century, governments could then turn to the printing presses to help finance unsustainable warfare and welfare programs.

No Income Tax

For many, the idea of no alphabet soup of government agencies would be a disaster waiting to happen. Wouldn’t society collapse without an income tax?

“Taxes are the price we pay for civilized society” has become a cliché expression statists use to justify their universalist agendas. Most of the population has taken the income tax as a universal constant. What most don’t know is that the US didn’t have an income tax throughout most of its history up until the height of the Progressive Era.

The sole exceptions were the passage of the Revenue Act of 1861 during the American Civil War and Wilson-Gorman Tariff Act of 1894, which had income tax provisions in it. However, Civil War era income taxes expired by the early 1870s and the Supreme Court struck down the income stipulations of the Wilson-Gorman Act in the Pollock v. Farmers’ Loan Trust Co. decision.

Before the income tax became the norm, basic government infrastructure was financed through user fees and relatively high tariffs. That being said, the overall tax and spending burden were much lower compared to present times. Currently, the American taxpayers must bear with a convoluted tax code of income, payroll, and corporate taxes. These are the political class’s go-to tools in financing their sweetheart government programs.

Foreign Policy

Once a country that did its best to follow George Washington’s advice of avoiding entangling alliances, the US rapidly became the world’s policeman after World War I.

This was in stark contrast to Gilded Age era government like Grover Cleveland’s administration. Throughout Cleveland’s administration, the question of Hawaiian annexation was at the forefront of foreign policy discussions. The previous administration of Benjamin Harrison crafted a treaty paving the way for Hawaiian annexation despite the questionable manner in which the treaty was procured. All the treaty needed was the Senate’s stamp of approval. Cleveland, however, courageously stood in the way of this treaty.

In Recarving Rushmore, Ivan Eland expands on President Cleveland’s prudence regarding the question of Hawaiian colonization:

But Cleveland, from an older anticolonial generation, knew that most Hawaiians didn’t agree with the U.S.-assisted coup there and didn’t want to be part of the United States. He believed the treaty was unscrupulously obtained and contravened the right of true self-determination as explicated in the Declaration of Independence.

This was in stark contrast to the modern-day Democrat Party which has started major conflicts such as World War I, World War II, and the Vietnam War. The Republican Party is no better, with George H.W. Bush capping off intervention in Iraq, with his son, George W. Bush later returning to further destabilize the country.

Enormous permanent military programs, just like their domestic program counterparts, have become a baseline feature of the ever-expanding government apparatus. Any suggestion of a non-interventionist foreign policy is met with scorn and derision from DC think-tanks.

The absence of these policies is only the tip of the iceberg. Plenty of other agencies and laws that seems like permanent features of American politics like Medicare and Social Security did not exist during the Gilded Age. In industrious fashion, however, Americans still found ways to provide for the needy through mutual aid societies. During this period of limited government intervention, government spending only accounted for less than 3 percent of total economic output, a far cry from today’s fiscal time bomb in Washington.

Regardless, US economic growth did not miss a beat. Economist Robert Higgs recounts how from 1869 to 1908 the US capital stock grew from $27 billion to $165 billion. Such increases in the capital stock allowed for improved worker productivity, thus making society wealthier. With time, the US would join countries like the United Kingdom as economic powerhouses and lead the way as an innovator during the Industrial Revolution.

Regardless of its flaws and shortcomings, the Gilded Age’s enormous gains in incomes and standards of living showed what individuals were capable of creating when the government was shackled.

*About the author: Jose Nino is a Venezuelan-American political activist based in Fort Collins, Colorado. Contact: twitter or email him here.

Source: This article was published by the MISES Institute

As a landlocked country, Afghanistan has not benefited from sea routes and has never had reliable roads or railroads. At the same time, the harsh policies of neighboring countries, combined with dysfunctional public organizations and inefficient bureaucratic procedures, have further hampered the trade and transit in the country.

To overcome these challenges, Afghanistan has taken several significant measures. These include regulatory reform, infrastructural improvement, and the restructuring of public organizations. Hence, it is expected that these initiatives will solve the problems of transit and trade in the long run.

Regulatory Reform and Process Simplification

Reforms in the regulatory framework and the simplification of business processes have reduced the overall costs of doing business in Afghanistan. These changes have made the country one of the top 10 improvers of business climates. As a result, Afghanistan has soared in the Doing Business Ranking, progressing from 183 in 2017 to 167 in 2018. Based on new initiatives by the Afghan government, it now takes less time to register a business, pay taxes, and receive services from the government.

Historically, Afghanistan has ranked poorly in the Doing Business rankings. This is the first time that the country stands on the edge of the top performers’ lists. These achievements are expected to enhance the economy and improve trade across borders. The World Bank research shows that countries that have abolished trade barriers perform better in terms of trade than those who do not. For example, experiences of other countries around the world show that a one-day delay in the shipment of goods caused by dysfunctional public organizations or lengthy bureaucratic procedures reduces the overall trade by 1%. Therefore, these improvements in the regulatory framework, including the reform of unnecessary administrative procedures, will enhance trade in Afghanistan.

Autonomy from Neighbors and Single Transit Routes

For consecutive years, Afghanistan’s trade and transit have been dependent on its borders with Pakistan and Iran. The country has had no alternative routes. At the same time, these borders, particularly the borders with Pakistan, have often been closed, especially when the relationship between the two countries had deteriorated. Pakistan has used its borders as a bargaining chip to influence the Afghan government in the political sphere.

The border closure by Pakistan has decreased Afghanistan’s exports and caused the wastage of export goods, such as fruits and vegetables. And this has led to the increase in the prices of basic items in Afghan markets.

For example, in 2008, Pakistan restricted the importation of wheat and flour into Afghanistan. The restriction caused a tremendous increase in the prices of wheat and flour because there was no major alternative. At that time, almost half the flour consumed in Afghanistan was imported from Pakistan. Worst of all, the Afghan merchants had difficulties with the quality control of the products that they bought from Pakistan. In several cases in 2007, Pakistani merchants sold Afghan partners low-quality flour at high prices, but the Afghan partners did not have control over the quality or price because they were totally dependent on imports from Pakistan.

However, the recent reforms and initiatives have changed the game. Afghanistan has opened several Commercial Air and Land Corridors as well as a Sea port that has given the country a much-improved position to trade. For example, in June 2017, Afghanistan launched its Commercial Air Corridor with India.

In November 2018 Afghanistan launched another Commercial Air corridor with China. The first shipment dispatched 20 tons of pine nuts to Shanghai. It is expected that Afghanistan, in addition to the pine nuts, will export to China other items, including as vegetables, rugs, minerals, handicrafts, and animal products.

Afghanistan launched its third Air Corridor to expand its trade with Europe. In January 2019, the first cargo flew from Mazar-I-Sharif carrying 5 tonnes of dried fruit to London. Though the initial amounts of transported goods are small, the strategic importance and long-run view are critically important for Afghanistan.

In addition to Air corridors, Afghanistan also established a Sea rout. In coordination with India and Iran, Afghanistan has established a sea route through the Chabahar Port. In the long run, this port enables Afghanistan to expand its trade to India and other parts of the world.

In another strategic move, Afghanistan celebrated the opening of the Lapis Lazuli corridor in December 2018. This corridor connects Afghanistan with Turkmenistan, Azerbaijan, and Georgia before crossing the Black Sea to Turkey and, eventually, to Europe.

These infrastructural initiatives have not only connected Afghanistan with the world’s markets but have also bestowed strategic advantages over the neighboring countries. For example, Pakistan, who once closed its border to Afghanistan, is now experiencing a reduction in its trade volume with Afghanistan. Based on a BBC report, the volume of trade between Afghanistan and Pakistan has decreased $3 billion from $500 million in 2017.

In opposite, Afghanistan has exported more than $100 million worth of goods since opening its air corridors in 2017. In the same vein, Iran benefits from Afghanistan now. In a recent sanction, the US exempted Chabahar port because of Afghanistan. As a result of these infrastructural initiatives, Afghanistan is no longer dependent on a single transit route, and none of its neighbors can threaten to close its borders for the sake of political influence.

Structural Reform

Recently, the Afghan government restructured its transport sector. In a decree, President Ghani ordered the merging of five public organizations: the ministries of transport and public works, the civil aviation authority, the railway authority, and the interior ministry’s traffic department. This decree formed a single organization under the name of the “Ministry of Transport.” It is expected that merging these organizations will reduce government redundancies and costs of administration, as well as increase performance within each department.

Further, the structural reform in the transportation sectors is supposed to facilitate the easy coordination of activities across different entities and increase the efficiency of public services. After the fall of the Taliban from Kabul in 2001, the international community donated a large amount of funds to rebuild the country and enhance service delivery. However, the result was not satisfactory. And the causes were many. Among them were complex and lengthy bureaucratic procedures, undefined chains of command, hidden unemployment, dysfunctional organizational structures, and an overall inability of the government to serve the needs of the population.

In recent years, Afghanistan has performed well in reforming its trade and transit sector. The regulatory reforms, combined with structural changes and infrastructural connectivity, are expected to enhance trade still further in the future.

*About the author: Musa Shafiq, Associate Professor of Economics at Kabul University, currently pursuing Ph.D. in Economic at Strasbourg University, France. His research interest is political economy with focus on the institution. Shafiq believes that institutions are the fundamental agents of change in a society that drive sustainability and growth.

As the West-Russia tensions have grown over the past years, one theater of Russian foreign policy, namely management of breakaway regions, has largely fallen out of analysts’ works. Where, in the first years following the collapse of the Soviet Union, Russia had to manage breakaway conflicts in small and poor Georgia and Moldova, by early 2019, Moscow’s responsibilities have increased exponentially. In a way Nagorno-Karabakh was also under the Russian geopolitical influence, although the Russians were not directly involved.

Following the Ukraine crisis, Crimea, Donetsk and Luhansk were added to Russia’s “Breakaway Empire”. This means that at a time when economic problems are looming large within Russia, Moscow has to spend more on multiple actors across the former Soviet space. This means that Russia’s broader strategy of managing breakaway conflicts, though not very much visible, could be coming under increasing stress. Where Russia previously used the conflicts in Moldova, Georgia and Ukraine to limit the ability of those countries to enter the EU/NATO, now Moscow is losing its ability to maneuver in so many diverse conflicts simultaneously. At times, various players are trying to play their own game independently from Moscow. In Transnistria, the geopolitical situation is troublesome for Moscow as Kiev and Chisinau at times consider constraining the breakaway territory, and Moscow can do little as it has no direct land or air route. In Abkhazia and South Ossetia, Russian forces watch as NATO exercises take place on Georgian soil, which suggests that, despite the Russian military footprint in the region, Western countries are continuing to expand their support for Georgia.

Without doubt, Russia will remain a dominant military power in the region and the breakaway territories will stay dependent on Moscow’s support. Yet, it will be increasingly difficult for Moscow to successfully pull the strings in several different theaters at once, particularly as the Russia is facing its own financial problems, increased Western efforts to confront its foreign policy, and “disobedience” from various separatist leaders.

Bad, but Still a Strategy

If Russia has any notion of a grand strategy in its recent foreign policy, it is certainly the purposeful creation of conflict zones and their management across the post-Soviet space. The fall of the Soviet Union was indeed a colossal geopolitical setback for Moscow as the country instantly lost portions of land on a scale rarely, if ever, seen in recorded history. But maintaining 11 buffer states (except for the Baltic states of Estonia, Latvia and Lithuania) around Russia has remained a cornerstone of the Kremlin’s foreign policy against Western military and economic encroachment. Russians knew that because of their own country’s low economic potential, the South Caucasus states would inevitably turn to Europe. The same would happen on Russia’s western frontier with Moldova and Ukraine, which have been more susceptible to Western economic and military potential because of geographic proximity and historical interconnections with Europe.

In a way, geopolitical trends also point towards the conclusion that Russia’s usage of breakaway territories to stop Western expansion in the former Soviet space is not working. True that Moscow needed, be it Abkhazia or Donetsk, to stop the countries in its “immediate neighborhood” from joining the EU/NATO. And to the Russians’ credit, it has worked: the West is hesitant to quickly make Georgia, Ukraine and Moldova the members of the EU/NATO groupings. But there are also signs that the Russian gambit that those very breakaway regions would undermine the integrity of Georgia and Ukraine has largely failed. Only Moldova might be regarded as a success for the Russians, as the country has still failed to unite around its geopolitical choice.

The point here is that although there are breakaway territories, Western expansion into Georgia and Ukraine continues through various means, importing a much “deadlier” weapon – economic influence – against that of traditional Russian military and religious influence.

This article was published at Georgia Today

The State Bank of Pakistan (SBP) has been declared the best central bank for promoting Islamic finance for the year 2018. The coveted award has been conferred by Islamic Finance News (IFN), an arm of REDmoney Group, Malaysia.

The IFN Award is the global endorsement of SBP’s initiatives for the promotion of Islamic banking in Pakistan. The award reflects an international recognition of the strategic measures undertaken by SBP to put in place the most conducive policy environment for Islamic banking to prosper.

The category of the Best Central Bank in Promoting Islamic Finance is always one of the most closely fought contests with regulators battling for the supremacy through exceptional advances made, during the year, in the field of regulation and standardization. SBP is honored to have won this award for the third time in last four years. Previously, SBP was bestowed with this coveted award in 2015 and 2017.

Islamic banking industry in Pakistan has posted an impressive growth in 2018 with its assets reaching almost 13% of banking sector and deposits accounting for nearly 15% of the total banking industry deposits. “The support of Pakistan’s central bank is driving progress in the wider Islamic banking sector, and the country’s Shariah compliant institutions are posting impressive results”, IFN quoted.

It is worth noting that during the year Pakistan witnessed growing interest of the players thereby enabling the industry to expand its footprint, with two new institutions getting license to offer Islamic banking products and services.

SBP also introduced Shariah compliant version of Long Term Financing Facility (LTFF) enabling Islamic banking customers to avail subsidized financing from Islamic banks for setting up export oriented projects.

Different measures were also undertaken to augment the regulatory framework for Islamic banking industry besides taking initiatives for capacity building to facilitate development of human resource for this ever growing market.

A heavy soup made of pulled noodles, meat, and vegetables symbolizes Central Asia’s close cultural and/or ethnic ties with China’s repressed Turkic and Hui Muslims. It also explains growing Central Asian unease with China’s re-education campaign in its north-western province of Xinjiang and its signature infrastructure and energy driven-Belt and Road initiative.

Named Ashlan Fu and introduced to Kyrgyzstan in the late 19^th century by Dungans, exiled Chinese Hui Muslims who fled over the Tien Shan Mountains after a failed rebellion in 1877, the soup has become a staple of Kyrgyz cuisine.

Made of Laghman noodles, starch preserves, onion, garlic, chilli, dark vinegar, and egg, Ashlan Fu is “the best cure for a hangover,” says Aman Janserkeev, a Kyrgyz student.

It’s also indicative of the potential fallout of China’s crackdown on Turkic and increasingly Hui Muslims that amounts to the most frontal assault on Islam in post-World War Two history and of commercial terms underlying Belt and Road-related Chinese investments in Kyrgyzstan and Central Asia.

Some 150 members of Kyrgyzstan’s far right Kyrk Choro (Forty Nights) group last month protested outside the Chinese embassy in the Kyrgyz capital of Bishkek against the inclusion of ethnic Kyrgyz in the up to one million Muslims detained in re-education camps in Xinjiang as part of the Chinese crackdown.

In a sign of the times, Kyrk Choro, a nationalist group that has gained popularity and is believed to have the support of the Kyrgyz ministries of interior and labour, migration and youth, and the National Security Committee (GKNB), focused in its protest exclusively on ethnic Kyrgyz in Chinese detention.

Acting as vigilantes, Kyrk Choro four years ago raided clubs in Bishkek in a campaign against prostitution and accused Chinese nationals of promoting vice. In a video of an attack on a karaoke club, a Kyrk Choro leader showed a receipt that featured a girl as one of the consumed items.

Yet, while standing up for the rights of ethnic Kyrgyz and Kyrgyz nationals, Kyrk Choro has also called for Uighurs, the Turkic Muslims that populate Xinjiang, to be booted out of Bishkek’s most popular clothing bazaar and replaced by ethnic Kyrgyz.

During December’s protest, Kyrk Choro also demanded the expulsion of illegal Chinese migrants. It further insisted that the government check the documents of migrants, including those who had obtained Kyrgyz citizenship over the last decade, including 268 Chinese nationals who are in majority of Kyrgyz descent.

Kyrk Choro’s contradictory demands and claims reflect not only a global trend towards ethnic and religious nationalism with undertones of xenophobia but also concern that Belt and Road-related projects serve Chinese rather than Kyrgyz and Central Asian interests.

The Kyrgyz government recently reported that 35,215 Chinese citizens had arrived in the country in 2018, many of them as construction workers on Chinese-funded projects.

Political scientist Colleen Wood noted that social media activists were linking criticism of Chinese commercial practices with China’s crackdown in Xinjiang.

“One widely-shared image, which declares “Don’t let anyone take your land,” depicts a strong fist — adorned with a Kyrgyz flag — stopping a spindly hand — marked by a Chinese flag — from snatching factories and a field,” Ms. Wood wrote in The Diplomat.

Ms. Wood said some activists compared Chinese practice to the demarcation in 2002 of the Chinese-Kyrgyz border during which the Central Asian nation handed over 1,250 square kilometres of land to China.

Another Facebook page, Kytai baskynchylygyna karshybyz (We’re against Chinese aggression) posted articles about Chinese mining companies operating in Kyrgyzstan, a target of Kyrgyz protesters, alongside articles depicting the intrusiveness of the crackdown in Xinjiang, according to Ms. Wood.

Ashlan Fu, the popular Dungan soup, could prove to be a litmus test of the depth of mounting anti-Chinese sentiment.  

An Instagram account with a Stop China feed publishes xenophobic content about Chinese culinary habits as well as regular updates on the crackdown that is expanding into the autonomous region of Ningxia Hui.

Ningxia Hui recently signed a cooperation agreement on anti-terrorism with Xinjiang in a bid to learn from the crackdown on the Turkic Muslims or in the words of the Global Times, a Communist Party organ, “to learn from Xinjiang’s experiences in promoting social stability.”

In advance of another protest at the Chinese embassy in Bishkek scheduled for January 17, Kyrgyz First Deputy Prime Minister Kubatbek Boronov called this week on the public not to believe anti-Chinese postings on social media.

In an acknowledgement of Kyrk Choro’s appeal, Mr. Boronov asserted that the group had denied participating in the December protest.

The government, much like Turkey and the vast majority of Muslim countries, has so far evaded taking China to task on its crackdown for fear of jeopardizing its relations with the People’s Republic.

Kyrgyz President Sooronbay Jeenbekov insisted last month that “the ethnic Kyrgyz of China are citizens of China, who obey the laws of their country. How can we intervene in their domestic matters? We can’t.”

If Kazakhstan where the issue of ethnic Kazakhs detained in China has flared up is anything to go by, the Kyrgyz government is walking a tightrope.

Asyla Alymkulova,  a Kyrgyz national recently established  the Committee to Protect the Kyrgyz People in China after her husband, Shairbek Doolotkhan, a Chinese-born Muslim, vanished in October on a business trip to Xinjiang.

Mr. Doolotkhan’s company subsequently advised Ms. Alymkulova that her husband had been “sent away to study” in a camp.

A Kyrgyz diplomat was among representatives of 12 non-Western countries whom China in the last week invited to Xinjiang to counter criticism of the crackdown and showcase economic and social progress. A group of foreign journalists was invited separately.

Short of a reunion with her husband, there is little that is likely convince Ms. Alymkulova or the relatives of thousands of other Central Asians, including at least 2,500 Kazakhs, that Chinese policy towards Muslims is benign and benefitting the community and the region’s progress.

That in turn will not make things easier for the Kyrgyz and other Muslim governments at a time that ethnic and cultural identities in a nationalistic and at times xenophobic environment are becoming prevalent. Kyrgyz attitudes towards Ashlan Fu may be the barometer.

In December NATO allies agreed the civil and military budgets for 2019. At a meeting of the North Atlantic Council allies agreed a civil budget of €250.5 million and a military budget of €1.395 billion for 2019.

NATO Secretary General Jens Stoltenberg welcomed the agreement of the budgets, saying: “The world is changing, and NATO is adapting. Allies are investing in NATO to address the challenges of our time, including cyber and hybrid threats, a more assertive Russia, and instability across the Middle East and North Africa.

Thus, according to the NATO Secretary General, Russia remains one of the main threats the Alliance will face in 2019.

The message that NATO is eager to negotiate with Russia is not always proved by the Alliance’s actions. The more so  NATO high-ranking officials even contradict such message by their statements. It has become obvious that NATO as well as Russia is not always aboveboard.

General Philip Breedlove, former supreme allied commander Europe, and Ambassador Alexander Vershbow, former NATO deputy secretary general made a report “Permanent Deterrence: Enhancements to the US Military Presence in North Central Europe” that assesses the adequacy of current US deployments, with a focus on North Central Europe. A full report will be completed in January 2019.  But there is a short summary of the task force’s conclusions and recommendations. (https://www.atlanticcouncil.org/images/publications/Permanent-Deterrence-Enhancements-to-the-US-Military-Presence-in-North-Central-Europe.pdf)

All recommendations are made in order to bolster NATO deterrence and political cohesion. The authors say that “military build-up in Russia’s Western Military District and Kaliningrad, and its “hybrid” warfare against Western societies have heightened instability in the region, and have made collective defense and deterrence an urgent mission for the United States and NATO. ”

They innumerate significant steps taken by the United States and NATO to enhance their force posture and respond to provocative Russian behavior.

The Alliance adopted the Readiness Action Plan, which called for the creation of a Very High Readiness Joint Task Force (VJTF) and expansion of the NATO Response Force (NRF) to increase the Alliance’s capacity to reinforce any ally under threat.

At the 2016 Warsaw Summit, the Alliance took the next step in building deterrence by agreeing to deploy four multinational NATO battle groups of about 1,200 troops in each of the Baltic states and Poland.

The NATO Readiness Initiative, the so-called “Four 30s” plan, would designate thirty ground battalions, thirty air squadrons, and thirty major naval combatants to be ready to deploy and engage an adversary within thirty days.

Other steps were taken to bolster the NATO Command Structure and reduce mobility problems through Europe.

Among others the main report’s reccomendations are:

• enhance the United States’ and NATO’s deterrent posture for the broader region, not just for the nation hosting the US deployment, including strengthening readiness and capacity for reinforcement;
• reinforce NATO cohesion;
• include increased naval and air deployments in the region, alongside additional ground forces and enablers;
• promote training and operational readiness of US deployed forces and interoperability with host-nation and other allied forces;
• ensure maximum operational flexibility to employ US deployed forces to other regions of the Alliance and globally;
• expand opportunities for allied burden-sharing, including multilateral deployments in the region and beyond;
• and  ensure adequate host-nation support for US deployments

All these steps do not look like a diplomatic compromise or an intention to decrese the tension between NATO and Russia.

In its turn Russia flexes its military muscle. Moscow is to hold 4,000 military exercises in 2019. Russian defense minister said that Russia will increase combat capabilities in response to the U.S. intention to withdraw from the Intermediate-Range Nuclear Forces (INF) treaty.

The two super powers increase their military capabilities and put Europe at risk of war. The only way out is to negotiate, to show goodwill to change the situation, to stop plotting war hiding behind mutual accusations.

By Alexandra Brzozowski, Jorge Valero and Samuel Stolton

(EurActiv) — The European Commission will seek information from Poland after national authorities arrested this week a Chinese Huawei employee and a Polish national over espionage allegations.

The arrests came amid growing concerns shared by EU institutions and governments across the world about the activities of Huawei on their territory.

Poland’s domestic counterintelligence agency (ABW) arrested a Huawei employee, who worked for the Chinese government in the past, and a former Polish agent of the internal security agency on Tuesday (8 January).

The detainees were charged with Article 130 paragraph 1 of espionage against the Republic of Poland. The ABW materials show that they both acted for the benefit of the Chinese special services. The suspect is being threatened with up to 10 years in prison.

“We will be in touch with Polish authorities for further information”, said spokeswoman Maja Kocijancic.

National cases of cybersecurity are primarily a matter for member states and it is in their hands to share the information or warn other national authorities.

But EU officials explained that given the importance of cybersecurity as a threat, which is growing “exponentially”, and past concerns related to Huwaei, the Commission decided to get involved following internal discussions on Friday morning.

Another senior Huawei employee, Vice-President Meng Wanzhou, who is the daughter of the founder of the company, was also arrested in Canada last month. China reacted by detaining thirteen Canadian nationals in its territory.

The Commission spokesperson did not want to respond on whether the EU executive was concerned about the possibility of Polish or EU nationals being arrested in China.

Last month, the EU condemned the detention of the Canadian nationals Michael Kovrig and Michael Spavor.

Polish espionage scandal

The Chinese national arrested is Weijing W., who according to Polish authorities also used the names Stanisław, Staszek, and was Huawei’s sales director in Poland. According to information reported by Polish television TVP Info, he is a graduate of the Peking University of Foreign Studies, which is considered to be a breeding ground for the Chinese diplomacy and intelligence service officials

Previously, he had an official position as attaché at the consulate of China in the port city of Gdansk. According to information from social media, he has been working in Poland since 2006.

The Polish national, Piotr D., was a former high-ranking officer of the Internal Security Agency until 2011. He was the deputy head of the Department of Teleinformatic Security and adviser to the then head of this special service, General Krzysztof Bondaryk.

His departure was associated with the so-called infoafera – a case related to corruption in government IT tenders. However, no charges have been raised against him.

He had access to key information, including the functioning of SŁR, the Polish Government Communication Network which essentially allows secret transmission of information to high-ranking state officials. According to national media reports, after his departure from the agency, he was involved in IT security at the Military University of Technology and the Office of Electronic Communications and Orange.

“Both men carried out espionage activities against Poland. On January 8, they were detained, the Internal Security Agency carried out procedural acts, and searches were carried out in many places related to their activities,” deputy minister of the special services coordinator Maciej Wąsik told Polsat News.

According to Wąsik, the operation is seen as a success for the ABW. “The case has been conducted for a long time and carefully,” he told Polish press agency PAP.

Last Tuesday (8 January), ABW counterintelligence officers entered the homes of both suspects and secured documents and electronic data at the premises of Huawei Poland, the Office of Electronic Communications and Orange Poland.

Due to the fact that the Huawei sales director is not protected by diplomatic immunity, he will remain in detention for at least three months, as the Polish detainee.

The Chinese foreign ministry said it was “greatly concerned” by the reports, and urged Poland to handle the case “justly.”

“We are aware of the situation, and we are looking into it. We have no comment for the time being,” Huawei said in a statement.

“Huawei complies with all applicable laws and regulations in the countries where it operates, and we require every employee to abide by the laws and regulations in the countries where they are based,” it added.

The case broke as a number of countries are limiting Huawei’s activities in their territory as they fear it would give access to Chinese authorities to critical information and networks. The US, Australia, New Zealand, Japan and Norway are among them.

Huawei is one of the ‘tech’ champions in China, and one of the more popular Chinese companies abroad.

It is the leading telecommunications infrastructure company in the world and its smartphones are second only to Samsung in terms of global sales.

Norway came out against Huawei on Wednesday (9 December), as Justice Minister Tor Mikkel Wara disclosed that the country is considering excluding the Chinese firm from investing in the next generation of mobile communications (5G).

Wara said that Norway shares “the same concerns as the United States and Britain” with regards to espionage projects contracted on “private and state actors in Norway.”

Norway’s comments come at a time in the country is seeking to stamp out vulnerabilities in its telecoms networks. State-controlled telecoms firm Telenor signed a partnership with Huawei in 2009, that gave the Chinese company a foundation to expand further on the continent.

Telenor is currently testing 5G networks with the use of Chinese equipment supplied by Huawei, but with Friday’s arrests, pressure will only mount on the firm, who sought to substantiate their presence on the continent with the establishment of an EU headquarters in Brussels in 2018.

The Yemeni Army and Popular Committee forces flew a combat drone to strike Saudi military camps in the border region of Asir.

The Arabic-language al-Masirah TV reported that a Yemeni ‘Qasif K-2’ strike drone attacked the Saudi strongholds in Asir.

A number of Saudi military commanders also came under attack in the operation, it added.

A Yemeni military source said the drone attack was carried out after a precise reconnaissance mission to locate the targets, adding that the Saudi enemies have suffered casualties in the operation.

People of Yemen have been under attacks by a Saudi-led military coalition for almost four years.

Since March 2015, Saudi Arabia and some of its Arab allies have been carrying out airstrikes against the Houthi Ansarullah movement in an attempt to restore power to fugitive former president Abd Rabbuh Mansour Hadi.

Over 15,000 Yemenis, including hundreds of women and children, have died in the deadly military campaign.

By Sinisa Jakov Marusic

Macedonia’s parliament has passed all four constitutional amendments to allow the country’s name to be changed – as required under the historic agreement with Greece.

Macedonia’s parliament backed all four of the government-proposed amendments on changing the country’s constitution on Friday night, allowing the country’s name to be changed to the Republic of North Macedonia.

All present 81 MPs from the ruling parties and from several opposition parties backed the amendments, securing the much needed two-thirds majority.

Most of the MPs from the opposition right-wing VMRO DPMNE party, which opposes the name agreement, were absent from the session.

The constitutional changes mark the finalisation of Macedonia’s side of the name agreement with Greece, and mean that the country’s name will now become the Republic of North Macedonia for international and domestic use.

The nationality of the majority population will remain Macedonian.

The UN provisional reference, the Former Yugoslav Republic of Macedonia, FYROM, will be scrapped.

With the amendments passed, Greece is expected to lift its veto on Macedonia’s hopes of starting EU membership negotiations and joining NATO.

In their joint reaction, European foreign policy chief Federica Mogherini and Enlargement Commissioner Johannes Hahn expressed “wholehearted congratulations” to the parliament on its decision.

“Political leaders and citizens alike have shown their determination to seize this unique and historic opportunity in solving one of the oldest disputes in the region, and decisively move forward on the European Union path,” they said in a press statement.

NATO chief Jens Stoltenberg also tweeted his congratulations.

“NATO strongly supports the full implementation of the agreement, which is an important contribution to a stable and prosperous region,” he wrote.

During Friday night’s vote, several hundred opponents of the name deal protested in front of the parliament building, accusing the MPs who endorsed it of committing national treason.

The passage of the vote came as a boost to Zoran Zaev’s Social Democratic-led government, which has struggled to ensure the required two-thirds majority for the changes, meaning at least 80 of the 120 MPs in parliament.

The vote took place after three days of inter-party deliberations marked by high uncertainty over whether and how many opposition MPs would endorse the deal over Macedonia’s name reached with Greece this summer.

The biggest challenge for Prime Minister Zaev in the past few days was to convince four MPs from two small ethnic Albanian opposition parties, the Alliance for Albanians and BESA [Oath] to support the amendments.

They conditioned their support with a set of demands designed, they said, to affirm the multi-ethnic character of the country. One of the most controversial was the demand to scrap the term “Macedonian citizenship” from the constitution.

A compromise was found and the government has agreed to address some of these demands through additional laws, and to put some directly into the constitution.

The final act of implementing the agreement will now fall to Athens, where the parliament will have to ratify it.

Unlike Macedonia, only a simple majority is needed in the Greek parliament. This means that at least 151 MPs in the 300-seat parliament must vote for it.

On Wednesday, Greek Prime Minister Alexis Tsipras said the agreement would be put forward for ratification in parliament by the end of the month.

If the agreement is implemented, it will end a decades-long dispute over Macedonia’s name, to which Greece objected.

Greece long insisted that the term “Macedonian” was Hellenic property. But it has modified its stance, now that Macedonia has agreed to add the geographical qualifier “North”.

(RFE/RL) — Moscow has condemned Britain’s plans to build new military bases in Southeast Asia and the Caribbean, saying Russia is prepared to take retaliatory measures if its own interests or those of its allies are threatened.

British Defense Minister Gavin Williamson told the Sunday Telegraph in December that Britain could establish the new military bases “within the next couple of years” after the country leaves the European Union.

Williamson said the expansion would be part of a strategy for Britain to become a “true global player” after Brexit.

He did not specify where the bases might be built. But the newspaper reported that options included Singapore or Brunei near the South China Sea and Montserrat or Guyana in the Caribbean.

Speaking on January 11, Russian Foreign Ministry spokeswomen Maria Zakharova said Williamson’s comments were baffling and warned that such plans could destabilize world affairs.

“Of course, Britain like any other country is independent when it comes to its military construction plans. But against the backdrop of overall rising military and political tensions in the world…statements about the desire to build up its military presence in third countries are counterproductive, destabilizing, and possibly of a provocational nature,” she was quoted as saying by TASS.

Russia has military bases in several former Soviet countries. It also operates military facilities in Syria and Vietnam.

By Dennis Jay Santos and Kamran Reza Chowdhury

One day after a former Filipina banker was convicted and sentenced for her role in an $81 million theft three years ago from Bangladesh’s central bank, Bangladeshi officials on Friday urged their Philippine counterparts to speed up filing cases against others implicated in the world’s largest cyber heist.

Asad Alam Siam, Dhaka’s ambassador to the Philippines, made the appeal following a Metro Manila court’s ruling against defendant Maia Santos Deguito, a former branch manager of the Rizal Commercial Banking Corp. (RCBC), a Philippine bank.

Deguito was sentenced to four to seven years in prison for each of eight counts of money laundering – the equivalent of 32 and 56 years in prison – and ordered to pay a fine of $109 million (5.68 billion Philippine pesos or 9.1 billion Bangladesh taka). Her conviction by the Makati City Regional Trial Court Branch 149 was the first handed down in connection with the theft that targeted Bangladesh’s central bank and was pulled off through electronic transactions spanning three Asian countries and the United States.

“There is another case being handled by DOJ against six other RCBC officials. We hope that this case could be expedited and could go to trial soon,” Siam said in a statement, referring to the Philippine Department of Justice.

In Dhaka, Serajul Islam, a central bank executive director and spokesman, said Thursday’s verdict and sentencing did not end the case.

“The court has punished the RCBC manager – we have nothing to say about the punishment. But punishing an individual is not enough,” he told BenarNews. “We have been trying our best to recover the stolen money.”

“A team from the central bank has gone to the United States to file a lawsuit against the Federal Reserve. I cannot exactly tell you the date, but the suit should be filed before Feb. 5.”

In the heist, about $101 million (8.45 billion taka) was stolen from the Bangladesh Bank – the country’s central bank – on Feb. 4, 2016, with $81 million (4.2 billion pesos or 6.77 billion taka) sent to the RCBC bank in the Philippines, while the remaining $20 million (1 billion pesos or 1.6 billion taka) went to a bank in Sri Lanka, authorities said.

The Sri Lanka funds were recovered along with a little less than $10 million surrendered by casino junket operator Kim Wong to the Philippines Anti-Money Laundering Council on three separate occasions in March and April 2016.

Bangladesh central bank officials said thieves hacked its cyber system and placed payment orders through its account at the New York Federal Reserve using an exclusive SWIFT code allowing international wire transfers between banks. The thieves had placed 35 payment orders in an effort to steal up to $1 billion (83.6 billion taka), but only five cleared because a spelling error froze the others.

The robbery came to light in a report in a Philippine newspaper on Feb. 29, more than three weeks after it occurred.

International investigation

On Friday, a Bangladeshi police official told BenarNews that investigators had sought information from 11 countries regarding the cyber heist and were investigating whether North Korea was involved.

“We have had meetings with the [U.S.] FBI, which handed over evidence of North Korea’s involvement in the heist. We are still examining the evidence,” said the official who requested anonymity. “We are not certain whether the North Korean hackers were involved, but what I can say is the spyware used in the hacking was used by the hackers in China, Korea and Hong Kong.”

The IP address of the computer used in the hacking was from Egypt, the official said.

“We wrote to Egypt through the Interpol several times. The Egyptian government informed us that the IP address was of a commercial computer. We do not have the necessary information to track the computer,” the official said.

Meanwhile, Mohammed Farashuddin, a former governor of Bangladesh’s central bank who headed the government probe on the heist, blamed RCBC.

“The Philippines court jailed the RCBC manager and handed down financial punishment for the heist. The RCBC’s chief executive stepped down over the incident. So, the involvement of the RCBC is clearly proved, but they have yet to file any other cases though three years have elapsed,” Farashuddin told Benar News.

He said he submitted a report that pinned the blame on RCBC.

“On the morning of Feb. 8, (2016), both Bangladesh Bank and the Federal Reserve Bank sent instructions to the RCBC not to disburse the money. But the RCBC made the payment at noon the same day,” he said.

“We should sue the RCBC,” Farashuddin said.

He also blamed the U.S. for its role.

“The Federal Reserve Bank has some faults, too. It will not be a bad decision if Bangladesh Bank sues the Federal Reserve, but it would be better if we sue the RCBC with the support from the Federal Reserve Bank,” he said.

Appeal planned

In the Philippines, defense attorney Demetrio Custodio accused Filipino financial regulators and the courts of using Deguito as a scapegoat.

“She could not have done this on her own. A bank the size of RCBC could not have allowed a lowly bank officer to have planned this, so there are others involved,” Custodio said, adding that his client would appeal the case and remains free pending the appeal.

RCBC spokeswoman Thea Daep, on the other hand, said the verdict proved that the bank was not involved.

“The conviction is consistent with the bank’s position that it is the victim in this situation and that Ms. Deguito is a rogue employee,” Daep said in a statement.

Jeoffrey Maitem in Cotabato City, Philippines, contributed to this report.

Pakistan is traversing minefields as it concludes agreements on investment, balance of payments support and delayed payment oil deliveries with Saudi Arabia and the United Arab Emirates worth USD$13 billion that are likely to fawn growing distrust in its relations with neighbouring Iran.

Pakistani prime minister Imran Khan expects to next month sign a memorandum of understanding with Saudi Arabia on a framework for US$ 10 billion in Saudi investments, primarily in oil refining, petrochemicals, renewable energy and mining. The signing would take place during a planned visit to Pakistan by Saudi crown prince Mohammed bin Salman.

The memorandum follows the kingdom’s rewarding of Mr. Khan for his attendance of a foreign investors summit in Riyadh in October that was shunned by numerous CEOs of Western financial institutions, tech entrepreneurs and media moguls as well as senior Western government officials because of the killing of journalist Jamal Khashoggi in the Saudi consulate in Istanbul.

Mr. Khan walked away from the summit with a US$3 billion deposit in Pakistan’s central bank as balance of payments support and a promise to defer up to US$3 billion in payments for oil imports for a year.

The United Arab Emirates is expected to conclude similar agreements with Pakistan in the coming weeks.

Perhaps the most sensitive investment is likely to be a plan by Saudi national oil company Aramco to build a refinery in the Chinese-backed Baloch port of Gwadar close to both Pakistan’s border with Iran and the Indian-backed Iranian 486-hectar port of Chabahar. Both Pakistan and Saudi Arabia are monitoring progress in Chabahar with Argus eyes.

A potential Saudi investment in troubled Balochistan’s Reko Diq copper and gold mine would further enhance the kingdom’s foothold in the strategic province.

As always, the devil could be in the details of the Pakistani-Saudi investment agreement. Haroon Sharif, the chairman of Pakistan’s Board of Investment, cautioned that foreign investment would require a “better law and order situation and ease-of-doing-business opportunities.”

Pakistan’s security situation has somewhat improved in the last year, but the country continues to risk blacklisting by the Financial Action Task Force (FATF), an international anti-money laundering and terrorism finance watchdog because of the Pakistani military’s selective support of militants and close ties between militants and political parties, including Mr. Khan’s Pakistan Tehreek-e-Insaf (PTI).

Adding an additional layer of complexity is the fact that funds from the kingdom have been flowing into the coffers of ultra-conservative anti-Shiite, anti-Iranian Sunni Muslim madrassahs or religious seminars in Balochistan. It was unclear whether the funds originated with the Saudi government or Saudi nationals of Baloch descent and members of the two million-strong Pakistani Diaspora in the kingdom. 

Saudi Arabia sees the Pakistani region as a launching pad of a potential effort by the kingdom and/or the United States to destabilize the Islamic republic by stirring unrest among its ethnic minorities, including the Baluch. While Saudi Arabia has put the building blocks in place for possible covert action, it has to date given no indication that it intends to act on proposals to support irredentist action.

The flow of funds coincided with the publication in November 2017 of a study by the International Institute for Iranian Studies, formerly known as the Arabian Gulf Centre for Iranian Studies, a Saudi government-backed think tank, that argued that Chabahar posed “a direct threat to the Arab Gulf states” that called for “immediate counter measures.”

Iran’s Revolutionary Guards were the target of a rare suicide bombing in December in the port city that killed two people and wounded 40 others.

Iranian officials, including Foreign Minister Mohammad Javad Zarif and Revolutionary Guards spokesman Brigadier General Ramadan Sharif suggested without providing evidence that Saudi Arabia was complicit in the attack.

The attack “underscores the anti-regime sentiment boiling under the surface in provinces such as Sistan and Baluchestan and Khuzestan, as well as security vulnerabilities in Chabahar and beyond,” said Brian M. Perkins, a risk management consultant and former US Navy signals intelligence analyst.

Khuzestan is Iran’s impoverished, oil-rich province that is home to the country’s ethnic Arab community while Chabahar is located in the Iranian province of Sistan and Baluchistan that boasts the country’s highest unemployment rate.

Saudi thinking about stoking unrest strokes with that of President Donald J. Trump’s national security advisor John Bolton, who before assuming office, publicly advocated destabilization of Iran.

Mr. Bolton, in a policy speech in Cairo, asserted this week that the United States had “joined the Iranian people in calling for freedom and accountability… America’s economic sanctions against the (Iranian) regime are the strongest in history, and will keep getting tougher until Iran starts behaving like a normal country.”

Mr. Bolton was referring to harsh US sanctions imposed after Mr. Trump last year withdrew the United States from a 2015 international agreement that curbed Iran’s nuclear program.

Desperately in need of financial support and investment, Pakistan’s agreements with Saudi Arabia and the UAE come at a moment that “Pakistan-Iran relations are at a crossroads, according to Muhammad Akbar Notezai, Dawn newspaper’s plugged in Balochistan correspondent.

A far cry from four years ago when the Pakistani parliament refused a Saudi request that Pakistani troops join the kingdom’s ill-fated military intervention in Yemen, Iran now sees Pakistan as a Saudi ally in the kingdom’s rivalry with Iran.

Similarly, Pakistan fears that Chabahar will allow India to bypass Pakistan in forging closer economic and political ties with Iran as well as Afghanistan and Central Asian nations. Pakistani analysts expect an estimated US$ 5 billion in Afghan trade to flow through Chabahar after India last month started handling the port’s operations.

Pakistan is further concerned that Iran, in response to the Saudi funding that its sees as part of an anti-Iranian US-Saudi plot, could step up support for Baloch nationalists in a bid to raise the stakes for the South Asian nation.

Pakistan is also worried that deteriorating Pakistani-Iranian relations offers India an opportunity to subvert the US$45 billion plus China Pakistan Economic Corridor (CPEC), a crown jewel of the People’s Republic’s Belt and Road initiative.

In November, the nationalist Baloch Liberation Army claimed responsibility for an attack on the Chinese consulate in Karachi, Pakistan’s commercial and industrial heartland.

Writing in the Pakistan Security Report 2018, published by the Islamabad-based Pak Institute for Peace Studies (PIPS), Mr. Notezai noted that “to many in Pakistan, such concerns were materialized with the arrest of Kulbushan Jadhav, an Indian spy in Balochistan who had come through Iran. Ever since, Pakistani intelligence agencies have been on extra-alert on its border with Iran.”

The journalist warned that “the more Pakistan slips into the Saudi orbit, the more its relations with Iran will worsen… If their borders remain troubled, anyone can fish in the troubled water. This is what is (already) happening in the border region.”

The Trump administration must be looking for breakthroughs in the peace process in Afghanistan as is evidenced by its opening up space for direct talks with the Taliban in attempt to end the American long-drawn entanglement. President Trump wants to see the number of US troops in Afghanistan reduced by half. Meanwhile, the momentum of peace talks to end the prolonged Afghan conflict has been impeded recently with the Afghan Taliban abruptly canceling a scheduled meeting with US officials in Qatar on the grounds of “agenda disagreement”. https://www.foxnews.com/world/taliban-talks-in-question-after-abrupt-cancelation

The peace process may be complicated viewed from a geopolitical perspective as it is neither Washington nor the Taliban which will be able decide the future of Afghanistan independent of other actors that have their respective geopolitical concerns in the country. Unless their concerns are mitigated, the peace process would become elusive. They may sabotage peace either by strengthening the Taliban to the point of making irreconcilable demands or they may try to destabilize Afghanistan through other measures.

Viewing from a geopolitical perspective, Afghanistan, as a gateway to the landlocked Central Asian region with abundant reserves of natural resources, witnessed a steady rise of influence among regional powers such as Russia, Iran, Pakistan, India and China later as they began to carve out independent roles for themselves in the absence of the Cold War constraints such as alliance or ideological commitments. Nevertheless, regional influence of these powers was placed very often at odds with the global influence of the US.

Russia while enjoyed overriding influence in Central Asia- its strategic backyard-due to its monopoly over oil supplies, it remained apprehensive of American efforts at forging close strategic ties with the states of the region from the beginning as part of the ‘War on Terror’. The Bush administration’s policy of diversification of oil supplies by laying down alternative pipelines and military presence in its strategic backyard in the wake of ‘War on Terror’ were viewed with suspicion in Moscow.

In response to the American military bases in different parts of Central Asia, Russia established its own bases with very limited direct contacts between them. Russia’s overriding influence due to its monopoly over oil supplies prompted the Central Asian states to agree to strengthen Collective Security Treaty Organization (CSTO) as an alternative to NATO. Kazakh President Nursultan Nazarbayev said on the 10th anniversary of the CSTO that the leaders of the organization had unanimously agreed that countries outside the regional security bloc would only be able to establish military bases on the territory of a member-state with the consent of all member-states. https://www.globalresearch.ca/nato-versus-csto-the-clash-between-competing-military-alliances/28612

Russia, although, did not object to several new transit corridors laid down by the US to deliver goods to its forces in Afghanistan (the routes are collectively termed the Northern Distribution Network) in principle, yet it viewed them skeptically and emphasized that these must not be used to transfer lethal goods. While Russia was earlier lending support to the Northern Alliance (a group led by Tajik and Uzbek warlords) to strengthen its Afghan role, as the group began to fragment Russia allegedly channelized its support towards the Taliban as hedge against growing American influence in the region – an allegation that Russia kept denying.

The US State Department officials, however, expressed their concerns over Russia’s failure to work with the US in Afghanistan and US military officials on ground have not hesitated to accuse Russia of providing arms to and sharing sensitive intelligence with the Afghan Taliban. https://www.bbc.com/news/world-asia-41842285

Contrary to US statistics on the size of ISIS fighters in Afghanistan which ranged from 1500 to 2000, Russian intelligence pointed to an enhanced presence in Afghanistan with around 10,000 fighters. https://www.voanews.com/a/russia-afghanistan-islamic-state/4176497.html

There were a series of trilateral meetings between Pakistan, Russia and China primarily aimed at combating the ISIS threat. In one of the trilateral meetings in Moscow they agreed to remove certain Taliban figures from the US sanctions list. https://economictimes.indiatimes.com/news/defence/sign-of-worry-for-india-china-russia-pakistan-joining-hands-on-afghan-problem-says-report/articleshow/57985232.cms

Meanwhile, Islamabad hosted a meeting of heads of intelligence agencies from Russia, China and Iran to beef up counter-terrorism efforts aimed at the threat posed by ISIS. https://www.voanews.com/a/pakistan-hosts-unusual-meeting-of-regional-spymasters/4478723.html

These states although have divergent geopolitical objectives, they seem to share a common interest in propping up the Taliban as a political stakeholder to undercut American influence in the region. Iran, as another regional power with significant stakes in Afghanistan, took concerted efforts at enhancing its connectivity with the Central Asian region using western Afghanistan as a bridge.  It pushed for the Iran-Pakistan-India (IPI) pipeline to supply Central Asian energy resources from the Caspian Sea region to the world market while the US pursued its plan for an alternative pipeline – Turkmenistan-Afghanistan-Pakistan (TAP) pipeline to undercut Iranian influence in the region which spurred the geopolitical struggle between the two powers. To counter American influence in the region, it was vociferous in stating its opposition from the beginning of ‘War on Terror’ to any arrangement that would allow the US to position itself firmly in Afghanistan with which it shares a 936-kilometre-long border.

Much of the Iranian aid to Afghanistan was spent on infrastructure projects mainly with the objectives of establishing transportation links between Iran, Afghanistan and Central Asian states. Apart from its support for Shiite religious groups, Iran has allegedly stepped up its efforts to train, arm and aid the Afghan Taliban in a bid to bring more instability in Afghanistan with the objective of building more pressure on the American government forcing it to roll back its policy of containment, allow it a larger role in Afghanistan and abandon its plan for laying down alternative pipeline route.

From an Indian perspective, Pakistani actions suggest that it has been pursuing proactive policies towards Afghanistan to secure a pliable government in Kabul to acquire military depth against New Delhi by overcoming the limitations of its small size as well as enabling it to forge a common strategic front. Its actions also point to its persistent interests in expanding its sway into the Central Asian region to acquire economic depth against India using Afghanistan as a bridge. Pakistan used the Afghan Trade and Transit Agreement of 1965 by denying overland route to India to supply goods to Afghanistan let alone Central Asia which has been construed as Islamabad’s attempts at gaining economic depth versus New Delhi.

Since 2015, Afghan President Ashraf Ghani reportedly continued to warn that his government would close Pakistan’s transit route to Central Asia if Afghanistan’s entrepreneurs were not allowed to trade with India through the Wagah border crossing.https://www.thehindubusinessline.com/opinion/a-game-of-trade-and-balance/article10051622.ece

Islamabad’s geopolitical interest in the Central Asian region was expressed soon after the states of the Central Asian region emerged as independent republics and the government of Benazir Bhutto, under its Interior Minister General Naseerullah Babur initiated steps at utilizing the Taliban in an effort to bring stability to southern and eastern Afghanistan and open routes and trade links to different resource rich Central Asian states. https://www.refworld.org/docid/3ae6a6c0c.html

Pakistan has been accused of lending continuous support to the Afghan Taliban to promote its own interests even while it was engaged in the Afghan peace process and assisted in the American effort of taking on terrorism so long as these did not impede Pakistani interests in Afghanistan. https://www.bbc.com/news/10302946

China has enhanced its stakes in Afghanistan by pouring investment into the development of natural resources as well as expressed its willingness to extend China-Pakistan Economic Corridor (CPEC) to the country along with Pakistan. Beijing would see American initiatives in this context.

In order to contain Pakistan’s influence in Afghanistan as well as Central Asia, India tried to strengthen relationship with each of the Central Asian states and with Iran. it supported the Northern Alliance  as an antidote to the Taliban’s influence in Afghanistan. However, with the rising influence of the Taliban, India’s dependence on the US has increased manifold. Pakistan, meanwhile, kept on alleging India’s involvement in fomenting insurgency in Baluchistan to weaken Pakistan and undercutting Pakistani influence in Afghanistan by enhancing diplomatic presence, using its intelligence agency Research and Analysis Wing (RAW) and anti-Pakistani elements to undercut Pakistani influence in Afghanistan. https://www.bbc.com/news/world-asia-32604137

India to enhance connectivity with the Central Asian region joined with the Iranian effort in developing Chabahar port and building connecting roads. The Trump administration’s decision to roll back nuclear deal with Iran led the Iranian leaders to accuse India-a strategic partner of US-of failing from its commitment to develop the Chabahar port. A geopolitical perspective on the Afghan issue points to the fact that all these countries have significant stakes in Afghanistan and the peace process in order to reap results must aim at addressing their concerns.