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Northeast India In BIMSTEC: Economic Linkages With Myanmar And Bangladesh – Analysis

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By Leonora Juergens

During the third Summit of the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) in Naypyidaw, Myanmar in March 2014, Prime Minister Manmohan Singh urged for an early conclusion of the BIMSTEC Free Trade Agreement (FTA) in goods and its extension to investment and services. He stressed the already existing economic ties among its seven member states, Bangladesh, India, Myanmar, Sri Lanka, Thailand, Bhutan and Nepal. Yet, the agreement has been postponed again until the end of 2014.

Given the geostrategic location of India’s North Eastern region (NER) in BIMSTEC, multiple expositions about its economic potential have been made in terms of trade and investment. Yet, the purported economic remedies to the NER through greater infrastructural connectivity remain low. Instead, economic development in the NER with an annual growth rate in GDP of 6.7 per cent is lagging behind the rest of the country. Ethnic insurgencies and territorial disputes are often cited as a cause for the NER’s developmental neglect. But, according to the Ministry of Development of the NER, the key reasons for its stagnant economy lie in its infrastructural deficits, regional supply-chain constraints and the imposition of artificial trade barriers onto its local border trade especially with Myanmar and Bangladesh. This results in the limited access of local businesses to cross-border markets which would buy back tangible benefits to the region.

Could the NER eventually benefit from a BIMSTEC-FTA through closer border trade especially with Myanmar and Bangladesh by enhancing greater trade creation?

Myanmar: Economic Linkages

Comprising 99 per cent of the border trade, Moreh-Tamu (Manipur) is the main land customs station (LCS) through which trade between the NER and Myanmar’s border states is conducted. These share similar economic and business structures with the NER, which are largely agrarian and dependent on the export of unprocessed primary commodities. Compared to the expansion in bilateral trade to US$ 1.92 million in 2012-13, with imports in food grains, vegetables and fruits, the NER is facing a trade deficit to Myanmar of US$ 1 million. These statistics, however, do not factor in the significant informal trade, which suggests a considerable demand in goods beyond the positive list of tradeable items under the 1995 Border Trade Agreement.

Therefore, as a first step to a deeper industrial development of the NER, these items should be revisited under the formulation of the FTA with the objective to bring the informal trade onto the formal channel. Another primary reason for the low level trade is the unfavourable trading environment at Moreh. Official trade suffers due to a lack in quality infrastructure (incomplete Kaladan project, low information technology, etc) and the spiralling of exchange rates of the inflated Kyat. Thus, unless the NER is not able to promote the Rupee as a currency for the settlement of the FTA, these remain a serious hindrance to the NER’s exports, resulting in the loss of economic revenue.

In order to promote greater export to Myanmar, the NER state governments need to prioritise the development of local industries for trade complementarities. For example, there is ample scope for the increase in manufacturing units for pharmaceuticals, rubber goods, edible oils, petroleum products, wood, iron and steel and electrical machinery, etc. While India has already given preferential tariffs on a large number of these items to Myanmar, the FTA could further reduce the NERs trade deficit with Myanmar by creating a viable industrial base that can service external demand. In turn, this could also result in the augmentation of a greater domestic demand in the NER’s industries.

Bangladesh: Economic Linkages

The bilateral trade with Bangladesh is dominated by a huge trade surplus with India. In the NER, the India-Bangladesh border trade at Meghalaya, Assam and Tripura with US$ 47 million export rate over US$ 16 million import rate mirrors this overall picture, except for Tripura, whose import rates of US$ 11 million indicates a significant trade deficit.

A look at the local trade patterns along the border reveals that the FTA bears high potential for the economic development of the NER and Bangladesh. Strong resource-industry linkages are building blocks of the present border trade and indicate the economic complementarities between both regions: the NER is rich in minerals, such as coal, limestone, iron and steel, for which there is a huge demand from the goods-processing industry in Bangladesh. However, there are three reasons why its potential has not been fully utilised.

First, the border trade between the NER and Bangladesh is still underdeveloped, although the 2010 agreement for the establishment of border haats is a first step to further economic integration. Second, the processing sector lacks foreign investment and know-how. The FTA would remedy this by expanding the resource-industry linkages to other sectors, especially the food-processing industries and the textile industry. However, this would be dependent on the strengthening of the processing industries in Bangladesh, especially on a small scale level. Therefore, it is necessary that the government of India and the states of the NER promote capital investment and the transfer of knowledge and technology to support these industries. Third, since natural resources are short-lived, the government should in the long-run utilise the gains of the export of resources for investing in processing industries in the NER as well, in order to diversify its export-basket.

Leonora Juergens
Research Intern, IPCS
Email: leonora.juergens@gmail.com

The post Northeast India In BIMSTEC: Economic Linkages With Myanmar And Bangladesh – Analysis appeared first on Eurasia Review.


Geneva Agreement On Ukraine: Can It Defuse Tensions? – Analysis

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By Rajorshi Roy

The April 17 Geneva joint statement issued by Russia, US, Europe and Ukraine has outlined steps to de-escalate the prevailing tensions. These include disbanding of illegal armed groups and vacating government buildings, amnesty for protestors and initiating a national dialogue to bring in constitutional reforms. The development comes against the backdrop of civil war spectre in Ukraine after pro-Russian Ukrainian supporters had demanded independence and occupied government buildings in several eastern Ukrainian cities. In all of this, the threat of a Russian military intervention loomed large.

While the ‘compromise’, as put forth by Russia’s Foreign Minister Sergei Lavrov, is a welcome development in so far it helps to diffuse the potential confrontation yet it does raise two pertinent questions: What made the key players arrive at such an agreement? and can this deal be implemented?
What made the key players sign the agreement?

As the events over the last few days unfolded, an agreement involving the key protagonists was expected:

Russia

Russia’s stake in the ongoing confrontation has been to retain its sphere of influence in Ukraine since this is an existential issue for it. Its support to the secessionist movement was a possible pressure tactic designed to bring other players to the negotiation table and strengthen its own position rather than use it as a pretext for military intervention. An invasion will only complicate matters. Ukraine is not Crimea and nationalist sentiments even in the pro-Russian eastern Ukrainian cities run high. An intrusion will fast-track Ukraine’s NATO membership and EU integration, will result in wide ranging western economic sanctions and possibly lead Moscow to international political isolation. As such Russia retains a number of key economic, political and cultural leverages to influence stability and major outcomes in the country.

Nevertheless, the Crimean events did not appear to deter the ‘Western’ endorsed Kiev government from curtailing its engagement with it. Therefore, Russia’s objective appears to gain maximum concessions from both the ‘West’ and Ukraine in return for a modicum of stability in its neighbourhood. This includes seeking to restore Ukraine’s status as a neutral country, establishing federal principles of governance and elections of regional governors and preserving the status of Russian language. The Geneva agreement and subsequent political statements from Kiev seem to address a majority of these core concerns. Moscow can now bide its time and let events run their course, being aware that it retains all the decisive strings in this standoff.

Ukraine

The secessionist movement had glaringly highlighted the shortcomings of Ukrainian armed forces to maintain order. The Kiev government faced an acute dilemma of using troops against fellow Ukrainians and thereby run the risk of popular backlash. It would have also given Moscow an alibi to intervene and protect pro-Russians. However, inability to contain the secessionist sentiments could threaten the unity of Ukrainian state. Faced with limited options, the only feasible action seemed to strike a deal in order to preserve the territorial integrity of the country.

United States

The de-escalation will suit the US as well since having invested so much political capital in the crisis, a Russian military intervention will force it to react in equal measure. But does it have the appetite or core interests to justify such a militarily engagement? A military standoff will also expose the fault lines within NATO. The alliance is a relic of the Cold War when there was unanimity on Russia being the principal adversary. However, many of its members do not share the present Russian threat and have expressed their uneasiness in directly confronting Moscow. The current agreement also keeps the door open for a future US-Russia collaboration on several mutually beneficial international issues.

European Union

The EU has from the beginning been averse to a military standoff with Russia. A Russian armed intervention will force it to impose varied economic sanctions. At a time when the Eurozone recovery is at a nascent stage, any disruption of ties with one of its largest trade and energy partners can be catastrophic. A confrontation will also reveal contradictions within the Union on how to deal with its biggest neighbour. A diplomatic agreement gives all parties some time to reassess the situation and work around a dangerous flashpoint which appeared to be reaching a point of non-return.

Can the Deal Work?

The first impression is that the agreement has the potential to calm down the volatile atmosphere. This has been the only occasion when Moscow and Kiev have found common meeting ground since President Yanukovich’s government was overthrown in February.

The key element that stood out in the joint statement is the omission of any reference to Crimea. This possibly heralds the de facto recognition of Crimea being a part of Russia and the West stepping aside this issue in its dealings with President Putin.

However, as always the devil lies in the details and several issues have started emerging: the refusal of pro Russian activists to vacate government buildings along with Russia and US sparring over the scope of ‘armed groups’. So on one hand, Russia has called for disarming all armed groups including Ukrainian nationalists who had helped overthrow the democratically elected government. On the other hand, the US has called for disarming only pro-Russian ‘militants’ in the east.

Meanwhile, sabre-rattling has continued on both sides of the ‘East’ vs. ‘West’ divide. NATO Secretary General’s ‘Doorstep Statement’ of deploying additional troops in the ex-Warsaw Pact member states is a strong provocation. Similarly, President Putin has reminded the world of State Duma’s authorisation to deploy troops in Ukraine. His use of the term ‘Novorossiya’ or New Russia, which denotes Russia’s expansion of territories after its war with the Ottoman Empire, while referring to eastern and southern Ukraine apart from the call for stepping up the dialogue on the future of Transnistria can have its own implications.

The Geneva agreement can be the first step towards de-escalating tensions, though there are innumerable complexities and challenges at work. While all protagonists have shown a willingness to come to the negotiation table, the challenge lies in balancing Russia’s core interests with that of geopolitical calculations of the ‘West’. At the end of the day, this is not just an existential but also an emotive issue for the Kremlin. The recent killing of pro-Russian supporters in Slovyansk during the Easter reveals the fragile nature of this agreement.

Originally published by Institute for Defence Studies and Analyses (www.idsa.in) at http://www.idsa.in/idsacomments/GenevaagreementonUkraine_rajorshiroy_240414

The post Geneva Agreement On Ukraine: Can It Defuse Tensions? – Analysis appeared first on Eurasia Review.

How To Talk And Listen To Iran – OpEd

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By William O. Beeman

Current negotiations with Iran over its nuclear programme in Geneva have raised hopes that there may be rapprochement between Iran and the West. This recalls an earlier potential ‘thaw’ in US-Iran relations on 7 January 1998 when some US officials reacted to the then Iranian President Mohammad Khatami’s call for better relations between the United States and Iran in an interview with CNN correspondent Christiane Amanpour. But American analysts have apparently not learned from that event. The ‘thaw’ failed, largely because the Americans at that time focused narrowly on what they mistakenly thought to be the substance of President Khatami’s pronouncements, namely that Iran was willing to capitulate to a whole list of American demands for ‘better behaviour’. In so doing, they missed the real message that Khatami wished to send. His was a message outlining how rapprochement could proceed in terms of salutary communication dynamics between the two nations. The United States has largely repeated these misunderstandings in cross-cultural communication in the current negotiations, making them exceptionally difficult. The situation is complicated further by the fact that the United States is not acting alone in the current negotiations. The other P5+1 nations are also involved, and with so many parties with so many cultural communication dynamics, it is not surprising that these negotiations have been tortured and difficult.

The multicultural basis for the current negotiations is overshadowed by the insistence on the part of the United States that Washington’s representatives take the lead in the talks. This is problematic in and of itself, since, to put it charitably, Americans tend to be tone deaf when dealing with intercultural communication dynamics, a point made bluntly by the late Margaret Mead in assessing American prospects for world leadership following World War II. Briefly, and particularly with regard to Iran, Americans often miss subtleties of communication in dealing with other nations for two important reasons. First, they do not appreciate the importance of status differences. Second, they believe that contrition is honourable and a precondition of improving personal relations.

Americans despise status differences, and repress the overt expression of status even when it is clearly present in interpersonal communication. The boss tells his or her employees, ‘Call me Chris’ and the employees obey, though they know that the boss has the real power in the organization. Iranians are dramatically different. Status is of enormous importance in Iranian life, and individuals spend their careers in an elaborate dance balancing status differences, sometimes emphasizing their lower relative status, sometimes their higher relative status in order to advance their interests. ‘Getting something off your chest’ is a well-advised American strategy in interpersonal relations, requiring clear evidence of contrition in court cases in order to obtain mercy in meting out punishment or in obtaining parole or pardon. If anything, such expressions of regret for past deeds enhance an individual’s standing in the opinion of others. Iranians may admit guilt or become contrite but only as a conscious decision to accept a decisive lower status position vis-a-vis another person or group. Contrition is Iran only a method that is used when an Iranian accepts a lower status position. It is often insincere, as it provides for an advantage in dealing with a person known to have much more power and authority. This can be advantageous as a way of escaping responsibility and garnering favours, but it is unseemly for a leader, or group of leaders, who need to protect their status – and in Iran’s case, by extension, the status of the nation they represent. Consequently, Iran’s leaders are never going to show contrition for acts and policies they believe to be justified.

In the interview with Amanpour in 1998, President Khatami told the United States in no uncertain terms that, although Iran was more than willing to enter into negotiations as an equal partner, Iran would not enter into communication with the American government as a lower-status partner. In 2013 newly-elected Iranian President Hassan Rouhani and his Foreign Minister, Javad Zarif told the United States the same thing – not just once, but over and over. Iranians have a long history of dealing with this perceived status inequality on the part of the United States. The Iranian perception of the relationship between the two nations before the revolution of 1978-79 is one where the United States assumed the status of patron (US) to client (Iran), all engineered by the Shah without any Iranian public input. This status relationship has been vehemently rejected by Iranian leaders since the revolution.

President Khatami, his successor President Mahmoud Ahmadinejad and current President Rouhani had to defend this position to retain their own power. This means that Iran has not and will not respond to accusations of perceived wrongdoing from the United States with anything but denial and counter-accusations, because to accept the American accusations, even as a topic for discussion, places the United States in the higher status position. On the other hand, back in his interview in 1998, President Khatami did provide a way to talk about things of mutual concern without invoking the hot-button of status difference. In talking about the past, he was able to provide analogies in US history for all of the bad behaviour of which the Iranians have been accused. In effect, he was saying: ‘We can discuss our mutual pasts in a common framework without needing to determine who was the wrongdoer’.

With regard to terrorism and weapons of mass destruction, President Khatami provided statements that indicated that Iran found these to be general problems that faced the region, and indeed the world. These problems, he claimed, required broad dialogue for progress to be made. His call for people-to-people contacts was similarly a way of opening discussion between Americans and Iranians without confronting the status-guilt problems that loom in the government-to-government contacts favoured by Washington officials. Thus, eschewing the need to make Iran admit guilt and place it in a lower status position is what President Khatami desires for renewed dialogue with the United States. President Ahmadinejad adopted a far more confrontational stance vis-à-vis the United States. His style and rhetoric was irritating to Americans and other nations, but if one focuses solely on his style, one misses the fact that he was essentially sending the same message as President Khatami – that Iran was not going to submit to accepting the humiliating status of subordinate to the United States. President Rouhani and Foreign Minister Zarif, both Western-educated, have returned to President Khatami’s more accommodating approach to communication with the United States, but once again, the message is still the same: Iran will not be subordinated to the United States.

Americans are not without precedent for non-status marked dialogue. The business world provides continual examples where companies sued for liability quietly fix the problems ‘out of court’ without admitting guilt. This has been the standing model for dealing with banking and financial violations over the past decade. Lawyers are often effective mediators in such situations. This model clearly shows the way to make progress with Iran. A mediated dialogue as equal status partners, without any requirements for admission of guilt, and a commitment to fix global problems of mutual interest will establish the two nations on the road to healthy communication. Tentatively the current Geneva negotiations may be inching toward this model. We cannot know precisely what is taking place behind closed doors, but it would be reasonable to assume that the presence of the other P5+1nations may have resulted in mediation in the problematic US-Iran relationship. Unfortunately, congressional legislators in the United States have not evolved in terms of communication with Iran. They entertain the belief that harsh economic sanctions have forced Iran into a lower status position at the negotiating table. The US Senate recently tried to pass a new bill that would actually put new sanctions in place if negotiations with Iran did not result, essentially, in the dismantling of its nuclear programme. This bill was clearly designed to humiliate and subordinate Iran even further. Foreign Minister Zarif was clear that if this bill were passed, it would result in the abandonment of negotiations. Many US legislators completely misread this statement, opining that this showed just how insistent Iranians were on making progress toward building a nuclear weapon. In fact the real objection on Iran’s part was once again the prospect of being forced into a subordinate position. One hopes that the sophistication of President Rouhani and Foreign Minister Zarif will allow them to accommodate the historic blind spots and deficiencies in American cross-cultural communication abilities. Secretary of State John Kerry is multi-lingual with a lot of foreign experience. He seems to be confident in his ability to talk to foreign leaders. However, it is clear that most of the accommodating is currently being done by the Iranian diplomats. The unsophisticated American leaders at home only make this job more difficult.

Since people-to-people communications cannot actually be controlled by either government, the United States would be wise to graciously endorse the suggestions of Iranian leaders to widen them. President Khatami clearly made a strong opening to Washington in 1998. President Rouhani has repeated these suggestions and has shown the way for further productive communication at informal levels. Ironically the whole world travels to Iran regularly – except US citizens (who can travel there, but largely believe they cannot). Sadly, here again, the United States presents an obstacle.

The US Treasury Department, citing currency transfer restrictions, throws up financial roadblocks for cultural and intellectual exchange at every opportunity – some-times violating their own regulations. We can only hope that US national leaders have the sensitivity and wisdom to transcend narrow US cultural models to carry the dialogue forward both in official and unofficial settings.

William O. Beeman
Professor of Anthropology at the University of Minnesota

Source: Anthropology Today
http://anthropologytoday.ning.com/

The post How To Talk And Listen To Iran – OpEd appeared first on Eurasia Review.

Towards A Common Intercultural Civilization – Analysis

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By Hugo Novotny

The US, Japan and the European Union nations are gradually losing their dominant positions in the world. At the same time, powerful countries like Brazil, India and China do not try to impose their political and cultural values on less developed countries, but rather they intend to base their relations on a mutually beneficial cooperation.

Thus, the new system of international relations taking shape due to the growth of Asian, Latin American and African nations is erasing the fragile dependency and colonial servility inherited from the history of the last few centuries by means of the power of common agreements and convergence of interests. There is hope that this will turn the current global crisis into a true opportunity for positive global change.

For international affairs, the new paradigm that is been configured could be defined as the power of agreement, reciprocity and convergence in diversity as opposed to the failure of hegemonies and homogenization. The success of this model depends on whether the participants in the game seek to impose their will – economically or culturally – on others.

But the global crisis we are going through requires a deep change in the model of growth. Asia, Africa and Latin America could not follow the path trod by the US and the EU, with its promotion of false freedoms at the cost of social fractures, consumption for all, indebtedness for the majority but accumulation by only a few.

A radically different vision must be defined. In other words, the global change crisis must generate an entire new social paradigm in which the idea of development does not only mean economic growth as it is the case nowadays from the standpoint of central powers, but also includes the integral growth of all human beings grounded on the essential understanding that “progress for a few ends up being progress for nobody” (Silo, 2004).

On the Latin American continent, the rise to power of Evo Morales as Bolivia´s first president of native origins marked a watershed in the history of the Americas, a sure signal of new times beginning for the whole continent. The creation of the Union of South American Nations (UNASUR) and the Community of Latin American and Caribbean Countries (CELAC) demonstrates a resolution to move towards a real integration of the continent, and points to the decisive departure of Latin America from the orbit of the political, economic and military influence of the USA.

In our opinion, this phenomenon is closely related to the spiritual renewal of native cultures all through Latin America, reaching particular strength in Bolivia, Ecuador, Guatemala and Mexico; although in the latter country, this process is developing in open confrontation with the government and US interests in the region. In the case of Brazil, we can appreciate also the renewal of a highly diverse native spirituality with Afro-American roots, yet suffering persecution by the Christian churches, which are deeply engaged with the important economic and media powers of the country.

Crucible of cultures

This crucible of cultures is immersed in a common spiritual atmosphere, in a sensibility that highly values the bond with the ground (the PachaMama), an ecologically harmonious and reciprocal coexistence between human beings and nature; a convergence in the diversity of cultures (inter-culturalism); the right of ethnic and social communities to their self-determination; the public and qualified health and education for everybody with an inter-cultural approach; and the integrality of body, soul and spirit for the Well Living (Suma Qamaña – Buen Vivir) of individuals and communities.

We find a strong resonance between this Latin American sensibility and Asia’s millennium cultures and spiritualities. Particularly with those spiritual currents that developed great philosophical schools and highly inspiring mystical practices, like the multiple branches of Shivaism, Buddhism and Taoism. Schools that also promoted a harmonious and reciprocal coexistence between human beings and nature; the wholeness of body, soul and spirit for the well-being and self-development of each one; and access to the experience of the Absolute. Schools that have been spread throughout the ages in all of the Asian continent and beyond, and nowadays are renewing and attempting to open new ways in the critical transition of the XXI century towards a new evolutionary spiral of human being.

Rich and mightily diverse cultural traditions in Africa, cradle of humankind, are also called to be relevant to overcome the global crisis, contributing to the necessary transition process with progressive elements that will be a basis for the next evolutionary stage. It’s the case of the concept – the belief in a universal bond of sharing that connects all humanity – as well as many other components of the African ancestral sensibility.

At this point, the world community should realize that the expansion of one country or culture at the expense of the others must come to an end. Horizontal expansion will not work any more. We should take the vertical way – to develop the space and ocean depths through joint efforts towards common benefits. And only using the same approach, instead of competition, can we solve the problems of poverty, starvation, illnesses, and provide the peoples of the world healthcare and education for all at a worthy level.

This root envisages not only new international agreements concentrated on disarmament but a real change of mentality from the habitual philosophy of violence and confrontation, to a new culture of nonviolence; from the “clash of civilizations” concept to the dialogue of civilizations, to the unity in diversity of cultures and interests.

One more question specially deserves our attention. As soon as the human being went outside the limits of the Earth and saw ‘with own eyes’ our fragile world as if wandering among billions of stars and galaxies, there was an awakening to the vision that there are no real frontiers separating people; feeling, deeply in the heart, an ineffable love toward human life and to every creature existing in the Universe. This feeling we see is capable of inspiring people to move toward a real change of worldview and behaviour, with deep changes going toward the humanization of the Earth (The Overview Effect).

In the same sense, human conscience is at this very moment striving to get rid of the corset of linear temporality and is discovering simultaneity, resonance, synchrony, new laws and phenomena of nonlinear complex systems and quantum physics which are radically modifying the way of structuring reality.

It is fundamental to think about the consequences of the human conscience breaking free from the ties imposed by the natural, spatial and temporal determinations of its physical prosthesis. We are not talking only about the experience of living in weightlessness, or some undeniable and subtle technological accomplishments such as virtual reality or telepresence. We are talking also about the real possibility that, in a brave and intentional act, the human conscience would decide to break with its internal contradictions, to yield its heart to love and compassion towards all living creatures and fly… so as to gain enough inner unity allowing projection of itself beyond the body and time.

A new spirituality

In our opinion, this is a new spirituality that would be able to include in a kind way the most progressive of the extremely diverse cultures and traditions worldwide, without limiting, but highlighting the identity of each such nation; a spirituality that, at the same time, includes the technological language and the experiences of a human being flying across cosmic space, that appears as the most fitting incubator of the new human civilization. Unrestricted access to the experience of the Profound, contact with the fountain of the Sacred from the interiority of everyone without intermediation; and the possibility of sharing this fundamental experience among people belonging to different cultures and confessions, as meaningful elements for the spirituality of a new human nation worldwide.

Latin American (Argentine) philosopher and writer Silo (Mario Rodríguez Cobos, 1938-2010), founder of the current of thought termed Universalistic Humanism, tells in his Message about the need of a spirituality where “the non-meaning of life can be converted into meaning and fulfillment” for everyone without external limitations or conditions; a spirituality that emphasizes “joy, love of the body, of nature, of humanity, and of the spirit”, where “the worldly is not opposed to the eternal”. Silo’s Message tells about the possibility of “the inner revelation at which all arrive who carefully meditate in humble search” and shows how to forge “mastering the Force in order to achieve unity and continuity” beyond physical existence; it tells about the essential priority to “learn to surpass pain and suffering in yourself, in those close to you, and in human society”, to “learn to resist the violence that is within you and outside of you”, to “learn to recognize the signs of the sacred within you and around you”. Silo suggests: “do not imagine that you are alone in your village, in your city, on the Earth, or among the infinite worlds”, “do not imagine that you are enchained to this time and this space”.

The fully interconnected world where we are living today makes possible and necessary that we move towards a common intercultural civilization. Horizontal and reciprocal interaction between cultures and nations, non-violent methods of social transformation, and real participation of people when making key socio-political decisions will allow the integration of the diverse communities as an avant-garde of the human nation in development. In our vision, the previously mentioned experience of the Profound is really capable of opening a new spiritual horizon, indispensable for the realization of this paradigm.

Hugo Novotny of Argentina represents the Universalistic Humanism school of thought. This is the text of his address at ‘The India International Centre’, New Delhi, at an event titled ’The Relevance of Traditional Cultures for the Present and the Future’ on March 24-26, 2014. The author can be contacted at hugonov@gmail.com.

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Philippines: Obama Should Press Aquino On Killings, Says HRW

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US President Barack Obama should use his visit to Manila on April 28-29, 2014, to press the Philippines government to fulfill pledges to improve respect for human rights and accountability for serious abuses, Human Rights Watch said today.

The administration of President Benigno Aquino III has undertaken reform efforts in some areas but failed to match rhetoric with meaningful action to end impunity for extrajudicial killings, torture, and enforced disappearances, Human Rights Watch said. While abuses overall have decreased since the previous Arroyo administration, killings of political activists, environmental advocates, and local politicians continue with alarming frequency and have begun to rise again, in many cases with apparent involvement by local authorities and the security forces.

“The Philippines remains a risky place to be an outspoken activist or muckraking journalist,” said John Sifton, Asia advocacy director at Human Rights Watch. “People taking on powerful local interests all too frequently make the news as victims, and those responsible for killings are almost never prosecuted.”

In a letter sent to Obama last month, Human Rights Watch urged the president to raise human rights issues during his visit to Manila.

The last year featured a major surge in killings of journalists in the Philippines: 12 were killed in 2013, bringing to 26 the total number of media workers killed since Aquino took office in 2010. In only six of those cases have police even arrested suspects.

Local authorities in a number of urban areas have also been implicated in “death squads,” which have executed dozens of suspected petty criminals, drug dealers, and street children.

The Philippines military and various insurgent groups, including the communist New People’s Army and Moro (Muslim) rebel groups, have also been implicated in serious abuses in the context of armed conflict. During fighting in September 2013 between Moro rebels and government forces in the southern city of Zamboanga, Human Rights Watch documented violations by both sides, including the use of human shields by the rebels. Detainees in government custody, including several children, told Human Rights Watch of torture and other abuse by government security forces.

A large number of those displaced last year by the fighting in Zamboanga remain today in poor conditions, living in evacuation camps, “transitional sites,” or shelters. According to government health officials, in the past seven months more than 100 of the displaced have died, mostly children and infants, largely from preventable, sanitation-related illnesses.

The US Congress has placed conditions on assistance to the Philippines military since 2008, withholding portions of yearly funding until the Philippines government demonstrates a better record on prosecuting extrajudicial killing cases.

Human Rights Watch urged Obama to raise concerns about rights issues during his meeting with Aquino, and to use future US military cooperation as an incentive for the government to investigate and prosecute abuse cases.

“President Obama should make clear that US assistance to the Philippines military is linked to abusive personnel being held to account,” Sifton said. “A strong US position on rights can only strengthen Aquino’s hand in combating abuses.”

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Swiss Citizens Told To Leave Parts Of Ukraine

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The Swiss foreign ministry has recommended that all Swiss citizens “temporarily” leave regions of Ukraine facing separatist tensions, including Donetsk, Odessa, Kharkiv and Dnipropetrovsk. Ministry officials fear more violence or even outright conflict.

The decision to leave those regions is up to individuals themselves and to the extent that is safe to do so the ministry said in a statement on Friday. Citizens were also asked to inform the Swiss embassy in Kiev if they chose to leave their place of residence.

The foreign ministry warned that if the situation deteriorates further in eastern Ukraine, its means of helping citizens still there would be at best limited if non-existent.

Travel to elsewhere in Ukraine for tourism or other purposes is not currently recommended either given the tense and uncertain situation throughout the country. Further instability, violence or open conflict cannot be ruled according to the foreign ministry, and supplies, communications as well as freedom of movement could be restricted.

Ukrainian forces killed up to five pro-Russian rebels on Thursday as they closed in on the separatists’ military stronghold in the east, and Russia launched army exercises near the border in response, raising fears its troops would invade.

The Ukrainian offensive amounts to the first time Kiev’s troops have used lethal force to recapture territory from rebels who have seized swathes of eastern Ukraine since April 6 and proclaimed an independent “People’s Republic of Donetsk”.

The Kremlin, which says it has the right to invade its neighbour to protect Russian speakers, has built up forces – estimated by NATO at up to 40,000 troops – on Ukraine’s border.

Seven observers of the Organization for Security and Co-operation in Europe (OSCE) were also taken prisoner along with five Ukrainian soldiers and their bus driver by separatists on Friday in the town of Slaviansk according to the Ukrainian interior ministry. However the OSCE has yet to confirm this.

The Slaviansk separatist leader Viatcheslav Ponomarev claimed that one those being held works for the Ukrainian military chief-of-staff, stating he was a “spy”.

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Iran Urges Practical Support For Iraq In Anti-Terrorism Campaign

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Foreign Ministry spokeswoman Marzieh Afkham condemned terrorist blasts in Bagdad, calling on the international community to take practical support for the Iraqi nation and government in the fight against terrorism, IRNA reported.

According to Foreign Ministry Diplomacy Media Department, she strongly denounced terrorist explosions which left a large number of innocent civilians killed and injured.

ˈTerrorists misuse certain countriesˈ double-standard policies vis-à-vis the phenomenon of terrorism and extremism and expand their inhumane measures in Iraq. They are seeking to disrupt the upcoming parliamentary elections in Iraq,ˈ Afkham said.

She hoped that stability, security and development of the country would continue without disruption through national solidarity.

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Ukraine Cuts Off Drinking Water Supply To Crimea

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Ukraine have closed the sluices of the North Crimean Canal, halting water supply from the Dnieper River to the peninsula, Ukraine’s Unian news agency reported. Supplying water to Crimea can be carried out through a backup plan, the Prime Minister of Crimea, Sergey Aksyonov, said Saturday.

“Crimea will not be left without water! There is a backup plan. There are no problems with drinking water. Agricultural producers will be compensated for the losses,” Aksyonov said on his Twitter page.

Crimea had received 85 percent of its fresh water through the canal, which stretches from the Khakhovka Reservoir towards the city of Kerch on the east coast of Crimea terminating just short of the city.

Earlier there were reports that Ukraine had suspended the water supply to Crimea, but the state department of water services denied these reports.

Crimea voted to break away from Ukraine and become part of Russia following the coup in Kiev in February.

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Alic Aida Alert At US Airports

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A French woman intending to vacation in New York with her husband and two children was reportedly banned from boarding her flight because of her name–which sounds, if pronounced incorrectly, just like the terrorist organization Al-Qaeda.

The holidaymakers, Aida Alic and her family, were on their way for a 10-day trip to the USA last Wednesday when their plans suddenly got ruined.

“Madam, you’re blacklisted,” Alic was told at the Swiss International Air Lines check-in desk at the Geneva airport. The company’s official explained that they received a notice from American Immigration Service saying that the woman was banned from entering the territory of the United States, French daily Le Dauphiné Libéré reported.

“At first I thought it was a joke, but then I realized that our trip was fizzled out,” said Alic, a resident of the Savoie region in south-eastern France. “To be on a blacklist like a terrorist, you become paranoid,” the 33-year-old added.

Alic called the American Consulate in Lyon, but got no explanation over the ban, according to Europe 1.

She could only think of one reason – her name. In her French passport it is written with Alic being on the first line and Aida on the second, which altogether makes it sound almost like the terrorist organization founded by Osama Bin Laden.

“Alic Aida, Al Qaeda,” she said, adding that in fact, her name – which is of Yugoslav origin – should be pronounced as “Alitch” rather than “Alik”.

Anyway, the holiday plan was ruined and Alic – having her French manicure with the American flag painted on her nails – had nothing to do but postpone seeing the Statue of Liberty for an indefinite time.

As a result of the incident, the French family lost 2,700 euros that they paid for the tickets as such cases are not covered by insurance, noted French media.

It’s been reported the United States has nearly a million Americans and foreigners on its terrorist watchlist system, however the true number is unknown. Those secretly blacklisted have no realistic path to challenge their status. However, there is one known case when a Malaysian woman had been able to clear her name after a short nine years legal fighting with the US Department of Homeland Security.

Needless to say, this is bad news for Dr. Albert Qaeda who insists everyone calls him Albert.

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The Impossibility Of Being Released From Guantánamo – OpEd

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wrote the following article for the “Close Guantánamo” website, which I established in January 2012 with US attorney Tom Wilner. Please join us — just an email address is required to be counted amongst those opposed to the ongoing existence of Guantánamo, and to receive updates of our activities by email.

For Ali Ahmad al-Razihi, a Yemeni prisoner at Guantánamo, a wish he has cherished for the last 12 years was granted on Wednesday, when a Periodic Review Board, made up of representatives of the Departments of State, Defense, Justice and Homeland Security, as well as the office of the Director of National Intelligence and the Office of the Joint Chiefs of Staff, recommended his release from the prison. The unclassified summary of the board’s final determination states, “The Periodic Review Board, by consensus, determined continued law of war detention of the detainee is no longer necessary to protect against a continuing significant threat to the security of the United States.”

However, in a vivid demonstration that the prison at Guantánamo Bay remains a profoundly unjust place, over 12 years since it first opened, it is not known when — if ever — he will actually be released.

Of the remaining 154 prisoners, almost half — 71 men in total — are undergoing Periodic Review Boards to assess whether they should continue to be held without charge or trial or whether they should be released. 46 of these men were recommended for ongoing imprisonment without charge or trial by President Obama’s high-level, inter-agency Guantánamo Review Task Force in January 2010, on the basis that they are too dangerous to release, but that insufficient evidence existed to put them on trial, and President Obama endorsed these recommendations in March 2011, when he issued an executive order authorizing their ongoing imprisonment without charge or trial.

This alarming example of the Obama administration claiming a right to hold people without having to prove why they should be held was only begrudgingly accepted by the human rights community because the president promised to establish a system to review the men’s cases on a regular basis. Disgracefully, that system — the Periodic Review Boards — did not start reviewing the men’s cases for two years and eight months, holding their first hearing on November 20, 2013, when, from Guantánamo, Mahmoud al-Mujahid, a Yemeni prisoner, spent six hours testifying by video link to the board members, who were gathered in a facility in Virginia.

In January this year, the board approved al-Mujahid’s release, using the same language as in the final determination regarding Ali Ahmad al-Razihi, but he remains held because the board’s recommendation meant only that he joined a list of 55 other Yemenis who were cleared for release in January 2010 by the Guantánamo Review Task Force, but who are still held because officials with power and responsibility in the US, up to and including the president, regard Yemen as a security risk, and prefer to continue to hold indefinitely men they said they no longer wanted to hold indefinitely, rather than releasing them.

This mockery of justice is unacceptable, and, with Ali Ahmad al-Razihi now added to the list of Yemeni prisoners cleared for release who continue to languish at Guantánamo, it is imperative that everyone who wants to see Guantánamo closed contacts the White House to call for President Obama to take action.

In less than a month, on May 23, it will be a year since President Obama promised, in a major speech on national security issues prompted by a prison-wide hunger strike at Guantánamo, to resume releasing prisoners, after a three-year period in which the release of prisoners had almost ground to a halt because of obstacles raised by Congress. Since that speech, 12 men have been released, but that number does not include a single Yemeni, even though, in his speech last May, President Obama explicitly dropped a ban on releasing Yemenis that he had imposed in January 2010, after it was revealed that a failed airline bomb plot on Christmas Day 2009 had been hatched in Yemen.

Please phone the White House on 202-456-1111 or 202-456-1414 or submit a comment online, and tell President Obama that he must release the cleared Yemeni prisoners NOW!

The review board’s conclusions about Ali Ahmad al-Razihi

At his hearing on March 20, as I explained in an article on my website on Thursday, Ali Ahmad al-Razihi did not speak personally, or through his civilian lawyer, but, instead, allowed two US military officials — his personal representatives appointed as part of the PRB process — to make the case of this release, countering long-standing, but fundamentally untrustworthy allegations that he was “possibly” a bodyguard for Osama bin Laden in Afghanistan in 2001, when he was just 21 years old. They did this by pointing out that he has been “a compliant detainee” at Guantánamo, and wishes only to return home to a marriage arranged by his his father, and, as they explained in a Power Point presentation, to assume an important role in his family by expanding his father’s fruit and vegetable business.

The board was evidently assured by Ali’s plans, stating, in their final determination, that, in approving an end to his “continued law of war detention,” they “considered the detainee’s plans for the future and commitment not to repeat past mistakes,” and “found the detainee credible on both issues and also noted that he had a well-established, educated family with the willingness and ability to support him upon his return.”

The board also “considered the detainee’s level of involvement with al-Qa’ida, including his lack of ties to at-large extremists, and the fact that he is expected to reside in Ta’izz [Taiz], one of the more stable regions of Yemen, upon any return to Yemen,” and also noted his “behavior in detention, including his largely peaceful, nonviolent approach to detention and his positive attitude toward future potential participation in a rehabilitation program.”

As noted above, however, all this means nothing unless Ali is actually freed, along with the 56 other Yemenis cleared for release. In its final determination, the board recommended that he should be “transferred with the standard security assurances, as negotiated by the Guantánamo Detainee Transfer Working Group, and the conditions normally associated with conditional detention.”

Documents relating to this working group have not been made publicly available, but the board explained that three options were possible for these conditions to be satisfied: “specifically: 1) the security situation improves in Yemen; 2) an appropriate rehabilitation program becomes available; or 3) an appropriate third country resettlement option becomes available.”

On this latter point, the board “strongly” recommended Ali’s return to Yemen “due to [his] desire to return to his family, the integral role [he] will play in his family, and the support the family can provide upon his return.”

Like Ali, we would not complain if a rehabilitation program in Yemen were to be established, but it has not happened, despite being discussed for many years, and, in any case, it appears to be nothing more than another hurdle placed in the way of men whose path to freedom is strewn with obstacles that make a mockery of justice and fairness.

Far better, in our opinion, would be for President Obama and defense secretary Chuck Hagel to accept that the search for perfect security conditions in Yemen is elusive, at best, and, at worst, an excuse for endless prevarication, and to release Ali and all the other Yemenis cleared for release as soon as possible.

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20 Years Of Freedom In South Africa: A Reason To Celebrate

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By  Bathandwa Mbola

As we pause and reflect on South Africa’s 20 years of freedom this coming Sunday, let’s raise a glass to ourselves, writes Bathandwa Mbola.

After many years of white minority rule, on 27 April 1994 South Africans queued for hours to choose a new leadership.

Although I was a lot younger when we had our first democratic elections, even back then I was politically aware and fully understood and appreciated what a major event the 1994 election was, I was privileged enough to witness it.

While I was not yet old enough to vote, I remember my late father and his friends – who were politically active – overcome with emotion, many of them in tears from casting their votes.

For me, 1994, marked the end of apartheid rule and an introduction of a new Constitutional order, wherein all worked towards a united, non-racial, non-sexist, democratic and prosperous society.

It was described as a miracle. Doomsayers and those who wanted us to fail had predicted chaos and civil war. However, none of these things came to pass and the values of democracy and freedom of our birth still endure today.

Two decades later, I pause to reflect on how far we have come as a country in realising the ambitions of this young democracy and its constitution.

The release of the 20 year review report shows a definitive picture of a country that is rapidly changing, a country which has a good story to tell.

The report says the country has made significant strides in consolidating democracy, rolling out basic service delivery and improving the lives of many particular those deliberately excluded through apartheid.

In the South Africa of today, elections are common place. There is a democratic spirit: we have an active citizenry, an amazing civil society movement, a press that is independent and strong opposition parties.

Since 1994, almost 3000 new schools have been built, access to clean water has increased to 95% and access to electricity has increased from just over 50% of households to 86%. Government has also introduced no-fee schools and the National Nutrition Programme.

South Africans are now living longer healthier lives due to better access to healthcare facilities, an increase in health professionals, and the country’s internationally acclaimed HIV programme.

Today this is a country that can truly boast that it is a gateway of the continent to the rest of the world.

But unfortunately our country in some places still remains stuck in their racial laagers, still unable to see through the eyes of others. It sometimes feels like a country struggling to shake off its past.

We seem to go backwards and downwards, but I believe there is hope and we are on the right track although there are still those who question the progress South Africa had made since 1994. I still believe that the “rainbow nation” that Archbishop Desmond Tutu’s dreamt of will become a reality one day.

We are indeed a country that is better off since our first democratic elections.

The South African democracy is still under construction, but its foundations are sound. The national debate is about the edifice we are building on it. From our dying past, our future is becoming.

And that for me is reason enough to celebrate – regardless of which political party you follow, and what political ideology one believes in.

While celebrating our achievements we must also look forward to the next 20 years.

If Nelson Mandela’s vision needs to be achieved, I am of the firm view that we simply need to work harder, especially in closing the gap between the rich and poor. This is because inequality pillories the society where it creates child and women abuse, violent service protests and inflated expectations.

We need to come as business, labour and state, as South Africans and decide what needs to be traded to achieve that.

I believe the National Development Plan (NDP) is our roadmap. The plan outlines the type of society we are striving for in 2030, where no one is hungry, where everyone is able to go to school and further their studies if they wish, where work is available, where everyone is making a contribution because each person has been provided with what they need to reach their full potential.

We are a nation, and yes, among us we may fight, argue, criticise, complain and want what we don’t have, but I know of another social structure that also had those things happen within it – a family.

I put it to you that we are more like a family than a nation. We have different beliefs, expectations, goals and aspirations, but at the heart of it all, we love each other and we would be fiercely protective of each other should anyone wish to bully us.

This comes shining through in situations where we have the most to lose; just think back to the 1995 Rugby World Cup, the 2010 Soccer World Cup, and , the passing of our beloved Madiba. Good or bad, as a nation, as a family we come together.

On Sunday, I personally will be celebrating being part of this big, vibrant and colourful family called South Africa.

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The Social Capital Benefits Of Ethical Leadership

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Ethics has gained prominence in debates around social capital creation. According to social learning theory, employees learn standards of appropriate behavior by observing the behavior of role models.

To explore these behavioral links, IESE’s Miguel A. Ariño and David Pastoriza of HEC Montreal surveyed 408 Spanish, French and Portuguese MBA students who were working while studying part-time. They were asked to rate their supervisors on ethical leadership and their firms on internal social capital.

Using structural equation modeling, the authors found that the ethical leadership of supervisors does indeed exert a significant influence on the creation of social capital in the organization, particularly in three areas.

Ethical leadership means higher willingness of employees to share. This extends not only to employees’ one-on-one relationships with their supervisors but also to their relationships with the rest of the organization.

Employees are more likely to share information and resources when supervisors show ethical leadership, partly because they are not afraid that their supervisors will misappropriate the information or use it opportunistically.

Ethical leadership increases employee trust. Faith is increased not only in the supervisor but also in the moral authority of the organization, because they perceive the organization respects their rights.

Concern for the well-being of employees increases their identification with the firm. This is because the employees perceive that the organization values and respects them. When supervisors display integrity and demonstrate concern, they are in a better position to provide a meaningful interpretation of the firm’s goals, increasing the chances that employees will identify with and accept these goals.

Does Ethical Behavior Start at the Top?

While the results indicate that the influence of ethical leadership on internal social capital is significant, the authors note that it is uneven, making its influence felt among organizational members in a generalized way.

What remains to be explored is whether those people at different hierarchical levels, such as the top managers, are better able to influence the ethical context through the reward systems and decision-making processes that they set in place.

It would also be worth replicating this study with more cultures to see how different cultural frameworks perceived ethical leadership. Especially in cultures where managers are expected to behave in a more authoritarian manner, demonstrating concern for employees’ well-being could be perceived as weakness, and the effects on social capital could look quite different.

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Canadian Economy Headed For A Wake-Up Call? – Analysis

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By Ronan Keenan

The Canadian dollar, commonly known as the loonie, derives its nickname from the North American loon, an aquatic bird known for diving to great depths. Similarly, the currency has taken a plunge since the start of 2013, falling 10 percent against its American counterpart from parity to C$ 1.1.

The period marks a sharp reversal for the Canadian dollar, which enjoyed a strong rally in the aftermath of the global financial crisis. Last month the loonie declined to its weakest in nearly five years, reflecting an increasingly fragile economy.

Canada proved an attractive safe haven for investors in the post-crisis years, with the currency being viewed as a reliable alternative to the uncertainty surrounding the US dollar and euro. A stable environment underscored by relatively robust banks and a global commodity boom allowed the central bank maintain higher interest rates than the US for much of the past five years, meaning that holders of Canadian assets could obtain a greater yield.

However, in recent years the commodity rally has stalled and despite a pickup over the last few months, prices remain far from the lofty levels of 2010. While a focus on commodities once gave Canada an advantage over other nations, it could now prove a detriment. Too much reliance on exporting its natural resources has resulted in reduced investment in the manufacturing sector.

Over the past decade the number of Canadian manufacturing firms has fallen by 20% and the sector’s share of GDP has shrunk from 16% to 12%. It is a worry trend, possibly indicating that the commodity boom has masked vulnerabilities in the core economy; something that could be painfully highlighted if food and energy prices tumble.

Improving US growth should boost demand for Canadian goods (it takes in about 70% of Canada’s exports) but the central bank recently warned that Canada’s non-commodity exports were becoming uncompetitive, even at C$1.1. The country’s growth outlook isn’t particularly encouraging either, with real GDP expected to increase 2.4% this year after rising 2% in 2013, marking a third straight year of slowing growth.

Canadian policymakers face a difficult challenge in supporting the economy while trying to manage an overheating housing sector. House values have ballooned, with the average price of a home more than doubling since 2002. Moreover, household debt has climbed to record levels of about 100% of GDP, on par with the US at the peak of its housing bubble. Similarly, at 7% of GDP, residential investment has become an unhealthily large part of the economy, outdoing the pre-crash US and rising much faster than population growth. The sector is undoubtedly on an unsustainable trajectory.

While interest rates were kept at 1% last year, the central bank had a tightening bias, intimating that it would raise rates in the near future to cool excessive spending. But new governor Stephen Poloz adopted a neutral stance in October, recognizing weakness in the broader economy. His dilemma is that low rates could add fuel to the housing boom, encouraging indebted households to increase borrowing, while higher rates could strangle business activity.

Inflation pressures are minimal at present, with the consumer price index rising 1.1% in February from a year earlier, well below the central bank’s 3% upper target. This has built up expectations that rates will be maintained at 1% until at least mid-2015. The prospect of no rate hikes should keep the Canadian dollar at relatively weak levels, helping boost the competitiveness of exporters.

This will help with a necessary longer-term goal of shifting the economy’s growth drivers, which have been imbalanced over the past decade. A transition is needed from reliance on debt-driven household consumption and residential construction to an export-led economy boosted by strong manufacturing investment.

Such a goal involves discouraging housing speculation through tighter mortgage conditions and limits on residential investment, hopefully resulting in a gradual stabilization of house prices. Policies targeted at revamping the much-neglected manufacturing sector will also help provide sustainable growth, effectively sheltering the economy from fluctuating commodity prices.

The deleveraging from an excessively indebted economy will take time and be somewhat painful, but that is the consequence of years of largess. Action now can prevent a severe hemorrhage later. For inspiration, policymakers just need to remember what happened to the housing market south of the border.

Ronan Keenan is a contributor to Geopoliticalmonitor.com, where this article first appeared.

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Closing US-EU Productivity Gap: Knowledge Assets, Absorptive Capacity And Institutional Reforms – Analysis

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The importance of innovation activities for productivity growth has long been recognised. However, there are significant differences in the level of intangible investments across developed economies. This column describes how the EU can enhance its productivity growth and close the gap with the US. One such main channel is through investing in intangible assets and absorptive capacity. A second one is increasing production efficiency. Relevant policy recommendations are also discussed.

By Ana Rincon Aznar, Anastasios Saraidaris, Michela Vecchi and Francesco Venturini

Investment in knowledge-based (intangible) assets – such as software, R&D, skills, organisational change, managerial practices, branding, etc. – has risen globally in recent decades. However, there are still significant differences in the level of intangible investment undertaken across developed economies. As the essence of innovation-based growth, intangible assets have been considered particularly important to boost growth in countries closer to the technological frontier, but the importance of investing in intangible assets is broadening.

A key issue in the current European policy debate is the extent to which policies and institutions are able to facilitate the reallocation of resources to promote new sources of growth based on knowledge-based capital (Andrews and Criscuolo 2013). Prior evidence has found that low levels of competition and strict employment laws prevent optimal adjustments to factor allocation and hamper the successful diffusion of new technologies (Arnold et al. 2011). Well-functioning product, labour, and capital markets are expected to improve the efficiency of resource allocation leading to an increase in the returns to knowledge-based capital.

This column draws on empirical research carried out for the European Competitiveness Report 2013 (European Commission 2013)  and the underlying background study (Foster et al. 2013). The research focuses on two main channels through which it is possible to raise the potential for productivity growth in the EU and close the gap with technology leaders.

  • The first is through investing in intangible assets and absorptive capacity.
  • The second is through increasing production efficiency.

These are crucial for countries further away from the technological frontier. The study provides a comprehensive cross-country analysis of such determinants of productivity growth, focusing on the influence of ICTs, R&D, skills and the regulatory environment.

Closing the EU-US productivity gap

Prior to the start of the financial and economic crisis, the slowdown in labour productivity growth in the EU was linked to a delay in the adoption of ICT technologies. It was thought that productivity in the EU would eventually catch up with the US. Several years after the ‘ICT revolution’, the EU not only continues to lag behind the US, but the productivity gap has recently widened. The EU has not been able to materialise the benefits of the ICT revolution to the same extent as the US. Moreover, differences in total factor productivity (TFP) growth, which aims to capture the efficiency with which inputs are used, have recently widened (see Figures 1 and 2).1

Figure 1. Decomposition of the EU labour productivity growth, 1995-2012  Source: EUKLEMS, The Conference Board and own calculations.

Figure 1. Decomposition of the EU labour productivity growth, 1995-2012
Source: EUKLEMS, The Conference Board and own calculations.

Figure 2. Decomposition of the US labour productivity growth, 1995-2012  Source: EUKLEMS, The Conference Board and own calculations.

Figure 2. Decomposition of the US labour productivity growth, 1995-2012
Source: EUKLEMS, The Conference Board and own calculations.

Two key factors that have been put forward to explain the poor productivity performance of EU countries are:

  • the lack of investments in knowledge based (intangible) assets; and
  • a rigid regulatory framework.

Empirical research has shown that in the EU there have been insufficient investment in skills and organisational changes which are necessary to reap the benefits of ICT technologies (Brynjolfsson and Hitt 2000, O’Mahony and Vecchi 2005). The rigidity of the regulatory framework in the EU compared to the US has recently been identified as a cause of lower TFP growth (Bourlés et al. 2012). It has become apparent that high levels of investment alone do not necessarily lead to better productivity performance and faster economic growth.

Despite the fact that most of the leading technologies available worldwide are developed by a few frontier countries, technological laggards can still benefit from these through international trade. In this context, investing in intangible assets, such as R&D and human capital, can increase countries’ absorptive capacity and the effectiveness of international technology transfers (Griffith et al. 2004).

  • Our study finds evidence of a positive role for intangible assets – i.e. R&D and human capital – and absorptive capacity in facilitating international technology transfers.

The foreign R&D content of intermediate goods is found to be positively associated with productivity growth, with the magnitude of these spillover effects depending on the level of absorptive capacity, which is measured by variables such as average years of secondary schooling of workers and R&D spending of domestic firms. Stricter labour market regulation and greater union density are also linked to smaller spillovers from foreign R&D.

  • We do not find convincing evidence that restrictive regulation in product and financial markets hampers the capacity of a country to reap the benefits of knowledge developed elsewhere.
  • However, using a stochastic frontier analysis framework, we do find evidence that the regulatory environment determines the efficiency with which inputs are used in production (technical efficiency).
  • Concerning the role of the set of rules governing the functioning of the labour market, we find that production efficiency is higher in countries with less restrictive employment protection laws for regular contracts, while the ease with which firms can use temporary contracts is likely to hamper their production efficiency.
  • Interestingly, investment in ICT assets is found to increase productivity growth by raising efficiency levels in production.

Overall, these results put emphasis on the ability of mature economies to exploit existing resources as one of the most important sources of productivity gains (van Ark et al. 2012).

Policy recommendations

From a policymaking perspective, policies that reduce R&D costs, for example via the provision of tax incentives, can support R&D investment. Policy initiatives promoting firms’ hiring of highly qualified workers and workforce training should also be encouraged. Other complementary policies should be directed towards raising investments in ICTs and the reorganisation of production. These measures should be accessible for SMEs, which do not always have appropriate resources to embark on formal R&D activities and rely on alternative ways of increasing their competitiveness. Reducing the strictness of product market regulations, in particular in key service-providing industries, is likely to be conducive to higher levels of technical efficiency, by allowing input re-allocation, outsourcing of marginal tasks, and the adoption of the best production and managerial practices. Changes in the regulatory settings affecting the labour market should be tailored to restore an optimal mix of regular and temporary workers, bearing in mind that an excessive liberalisation of temporary workers’ contracts may hinder productivity and efficiency performance.

Authors’ note: This publication does not necessarily reflect the view or position of the European Commission.

About the authors:
Ana Rincon Aznar
Senior Research Fellow, National Institute of Economic and Social Research

Anastasios Saraidaris
Policy Analyst, European Commission

Michela Vecchi
Reader in Economics, Middlesex University; permanent visiting fellow, NIESR

Francesco Venturini

Assistant Professor in Economics, University of Perugia; permanent visiting fellow at NIESR

References

Andrews, D. and Criscuolo, C. (2013), “Knowledge-Based Capital, Innovation and Resource Allocation”, OECD Economics Department Working Papers, No. 1046, OECD Publishing.

Arnold, J., Nicoletti, G. and Scarpetta, S. (2011), “Does Anti-Competitive Regulation Matter for Productivity? Evidence from European Firms,” IZA Discussion Papers 5511, Institute for the Study of Labor (IZA).

Bourlés, R., Cette G., Lopez J., Mairesse, J. and Nicoletti, G. (2012), “Do product market regulations in upstream sectors curb productivity growth? Panel data evidence for OECD countries”, Review of Economics and Statistics, MIT Press, vol. 95(5), pages 1750-1768, December.

Brynjolfsson, E. and Hitt, L. (2000), “Beyond computation: information technology, organizational transformation and business performance”, Journal of Economic Perspectives, 14, pp.23–48.

Brynjolfsson, E. and Saunders, A., (2009), Wired for Innovation: how information technology is reshaping the economy, MIT Press.

European Commission (2013), Towards Knowledge-Driven Reindustrialisation, Chapter 3: “Reducing productivity and efficiency gaps: the role of knowledge assets, absorptive capacity and institutions”, SWD (2013)347 final, DG Enterprise and Industry, European Commission.

Foster, N., Poschl, J., Rincon-Aznar, A., Stehrer, R., Vecchi, M. and Venturini, F. (2013), “Reducing productivity and efficiency gaps: The role of knowledge assets, absorptive capacity and institutions”, Background study of chapter 3 in European Competitiveness Report, DG Enterprise and Industry, European Commission.

Griffith R., Redding S. and van Reenen J., (2004), “Mapping the Two Faces of R&D: Productivity Growth in a Panel of OECD Industries”, Review of Economics and Statistics, 86, 883–895.

O’Mahony, M., and Vecchi, M. (2009), “R&D, knowledge spillovers and company productivity performance”, Research Policy, 38(1), pp. 35-44.

Van Ark, B., Levanon, G, Chen, V. and Cheng, B. (2012), “Performance 2011: Productivity, employment and growth in the world’s economies”, Research Report R_-1475-11-RR, The Conference Board.

1. Our analysis of the firm-level EFIGE dataset also shows evidence of diverging productivity patterns within the EU showing that the most productive firms prior to the crisis are the ones that managed to show a higher resilience to the effects of the global downturn.

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Ban ‘Giving Back’– OpEd

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Christina Hoff Sommers offers a great fact check on the propaganda currently being spread to “Ban Bossy”, here. As she details, Sheryl Sandberg’s campaign is rooted in cherry-picked data and at least one extremely old study that conveniently support her premise. Girls overall are doing better than boys, and “Bossy” is irrelevant to the conversation.

I don’t favor campaigns against words. As the youngest of six children, I was the target of quite a bit of teasing growing up, and Mom well taught me, “Sticks and stones may break my bones but words will never hurt me.”

On a more serious level, Independent Institute Research Fellow Donald Downs was recently honored by the University of Wisconsin-Milwaukee, for his path-breaking work against campus speech codes.

Unfortunately, the largely liberal (now there’s a misnomer if ever there was one) attempt to control who can say what has now moved off the campus and into the mainstream, and has further expanded to witch hunts against private citizens’ private giving to causes liberals decide are verboten (e.g., Brendan Eich and the Kochs).

So I’m not really advocating for banning the term, but I would very much appreciate the enlightened disuse of the term “Giving back.”

“Giving back” is shorthand for “Giving back to the community,” the implication of which is that one’s blessings have been provided by the community.

The corollary of it is in statements such as President Obama’s, “If you’ve got a business, you didn’t build that.”

Yes, we are placed in community together, and yes, we are directed to share our blessings and bounty with our fellow creatures. But our blessings are from our creator, our relationships are as autonomous, equally loved and valued, individual creations, and our charity (from the Greek “agape:” love) is given, voluntarily, in reflection of the love our creator has given us. It is not repayment for value given, it is voluntary, and taxes are not some kind of secular alternative.

The church leaders currently crusading in Illinois for a progressive income tax apparently missed that lesson in seminary. Quoting Jesus’s “For everyone to whom much is given, much will be required,” do they think Jesus was suggesting that one should render unto Caesar for him to benevolently provide for the people?

It is a short trip from accepting the concept of “giving back” to believing that the coercive misappropriation of higher percentages of productive labor equates with “justice”.

So, please: Just say No to “Giving back.”

The post Ban ‘Giving Back’ – OpEd appeared first on Eurasia Review.


Time To Anoint Muslim Prime Minister In India – OpEd

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NARENDRA Modi, the opposition Bharatiya Janata Party’s (BJP) prime ministerial candidate for the 2014 general election in India has once again rubbed salt into Muslim wounds.

The man who presided over the 2002 Gujarat pogrom has let it known nonchalantly that he has no intention of tendering apology to the family members of the riot victims who are still longing for justice. And why would Modi not be so impudent when the hallowed justice system in India has failed to provide solace to the riot victims’ relatives who continue to seek closure through appropriate punishment after 12 years?

Modi has suggested that Muslims should enjoy the fruits of India’s economic progress — in short lead a cozy lifestyle. But is it possible for the Muslims to enjoy a laidback life under Modi who not only loves to provoke anti-minority extremism but also stereotype Islam as a violent religion inimical to Hinduism? Though the final legal word on Modi’s culpability in the 2002 riots has not been pronounced as yet, it is an open secret that the judiciary appointed fact-finding team (SIT) had dished out a sloppy exercise to bail out the high and mighty.

Is it not strange that the investigators exonerated Modi even though key players of the 2002 carnage — senior Hindutva activists Babu Bajrangi and Haresh Bhatt — have candidly acknowledged that they received Modi’s whole-hearted support in butchering innocent Muslims? Even, the advocate who represented Gujarat government in a commission of inquiry had stated that Modi gave verbal instructions to police to set the rioters free. This author understands that classified intelligence inputs were shared with the then Prime Minister Vajpayee — who failed to convince BJP about the necessity of penalyzing Modi — as Gujarat, a sensitive border state, was fast turning into a hell. But then, from the very inception the entire effort was concentrated on shielding Modi from any international scrutiny. Perhaps, the judiciary also erred in appointing a BJP loyalist ex-police official to head the SIT for probing the Gujarat pogrom.

Incidentally, this gentleman was responsible for the security lapses that led to Rajiv Gandhi’s assassination in 1991. Those who tracked the functioning of SIT minutely have unanimously criticized the lackadaisical manner in which the judiciary appointed investigators went about their business.

As a result, their report ended up subscribing Modi’s “reaction to an action” theory though no eyewitness from the fateful Sabarmati Express has ever corroborated the Gujarat administration’s claim of Hindutva activists being burnt alive by a Muslim mob therein. And the horrendous riot that erupted thereafter was supposedly triggered by this unsubstantiated incident. Thanks to the amateurishness of the investigators, who decided to keep their eyes and ears closed throughout the course of investigation, the reputation of Indian judicial system has taken a severe beating.
Otherwise, how can an independent judiciary of a civilized nation turn a blind eye to the plea of an elderly lady, who had the misfortune of witnessing her husband’s brutal execution at the hands of a Hindutva mob?

Indeed, those killed in the 2002 Gujarat riots have become victims of a blindfolded law that has fallen prey to the manipulative interpretation of the powerful perpetrators. And the judiciary has unwittingly helped consolidate a culture of impunity in India whereby the rioters and their influential patrons will get emboldened to repeat gruesome carnages. Maybe the Indian judiciary is still oblivious of the prevailing psychology of polarization in Gujarat in all spheres of life. Muslims are effectively ghettoized, as reflected in Hindu right-wing leader Praveen Togadia’s call to “evict Muslims from Hindu areas.” Moreover, a practice of unofficial economic boycott has already been initiated surreptitiously across Gujarat to victimize Muslims.

Ironically, a silent undercurrent of communalism flows in Mahatma Gandhi’s Gujarat today while communities are pitted against each other deliberately. The 2002 riots sent an ominous signal — that of religious apartheid having proliferated uniformly to urban and rural areas. And most worryingly, the tribal people are being indoctrinated by BJP’s affiliate organizations to fight Muslims. It is all the more disturbing that there is a secret design to spread such atmosphere of hatred and insecurity throughout India under Modi’s leadership. Unfortunately, some Muslim clerics and influential members of the community are openly patronizing Modi and his party despite a deep sense of distrust and fear engulfing the minds of ordinary Muslims.

As the wounds of the 2002 pogrom continue to fester in the absence of proper justice, do they not share the agony of their fellow brothers and sisters who suffered immensely at the hands of Hindutva brigade? If making Manmohan Singh the premier of India was an act of atonement for the sins committed against the Sikh community in 1984, is it not time for the nation to have a Muslim premier to contain majority extremism, instill confidence in minorities and help preserve India’s composite culture?

This article appeared at Arab News and reprinted with permission.

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Romanian Military Units Moving Towards Ukrainian Border

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According to information available, in Romania military units are moving towards the eastern borders – a military echelon loaded with anti-aircraft guns, trucks and ground -to- air missile systems has moved via Bucharest towards the Black Sea port of Constanta. The military units are needed for conducting joint military exercises with the participation of the US servicemen and four American F-16 fighter jets, according to the Romanian Defense Ministry officials told newsmen.

“The maneuvers will be held in compliance with the plan on strategic partnership existing between Romania and the US,” Romanian Minister of National Defense Mircea Dusa announced.

Earlier Latvia, Lithuania, Poland, Romania, and Estonia asked NATO to strengthen its military presence in their countries because of the Ukrainian crisis. As soon as it broke out, the AWACS planes started their daily flights over the southern part of Romania, taking off from the NATO air base Gellenkirchen in Germany in order to conduct radar intelligence operations which covered the southern part of Ukraine, Moldova and Crimea.

At the same time, Romanian President Trian Basescu satisfied Washington’s request to increase the number of marines on the NATO air base in Germany from 1,000 to 1,600. In addition, the Romanian authorities asked official Washington to deploy a squadron of US fighter jets on their territory for the period until 2017.

The plans of an increase in the US military presence in Romania are being criticized by both politicians and the public in the country. An adviser to Romanian Prime Minister Ionel Blanculescu voiced his fears, saying that the US had turned Romania into a “good target” in case of military escalation in the region.

From the other hand, a number of Romanian political analysts believe that in view of the events in Ukraine, Bucharest must be well prepared for bringing its troops into the territories of the Odessa and Chernovtsy regions. “Intervention to the north of the Bukovina region, to the south of Bessarabia and Transnistria is becoming inevitable and even necessary, especially in case Ukraine is unable to maintain public order on the territories where the Romanian population lives,” an analyst of the popular Romanian newspaper “Adevarul”, Dinu Zare, wrote in his article, TASS reports.

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Gulf Experts Confront National, Regional Security Challenges

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By Mohammed al-Jayousi

High-profile diplomats and experts from Gulf Co-operation Council (GCC) states met April 23rd-24th in Bahrain for a conference that aimed to help the countries tackle current national and regional security challenges.

Organised by the Bahrain Centre for Strategic, International and Energy Studies (DERASAT), the conference held discussion sessions under the headings “Current Challenges and Future Strategies”, “Changes in the Regional Environment: Transient Developments or Strategic Shifts”, “Global Strategic Shifts and their Impact on the Security of GCC Countries”, “Youth and Women as Partners in the Formulation of National Security for GCC Countries” and “Water Security as a National Strategic Requirement”.

Gulf unity, Iran’s place in regional affairs and the involvement of Gulf citizens in the Syrian war all featured among the discussion topics, participants told Al-Shorfa.

Former UAE foreign minister Mohammed al-Shaali said no one ever foresaw a worst-case scenario in which the six GCC countries could reach their current prevailing state of disunion, at a time when hopes had been high for the achievement of full integration among GCC countries and the establishment of a strong Gulf union, along the lines of the European Union experiment.

The conference, in its purely Gulf mould, was a suitable platform for frank discussions of all issues of concern to GCC citizens, he said, and gave absolute freedom to explore the depths of all common concerns and how to find solutions for them.

The conference emphasised that there is no point in establishing a Gulf union if it is not based on sound political and economic reforms, said Dhafer al-Ajmi, CEO of independent Kuwait-based research centre the Gulf Monitoring Group.

“GCC countries adopted two matrices to protect their common security, the GCC joint security agreement and the joint defence agreement,” he told Al-Shorfa, describing these agreements as sufficient in the face all of internal and external threats and crises.

He spoke to steps taken by Gulf countries to deal with citizens who have travelled to Syria to fight alongside extremist opposition fighters.

“The steps taken by Saudi Arabia and Bahrain — punishing jihadists, providing Munasaha to returnees from hotbeds of unrest and banning further travel to Syria for the purpose of fighting — were two natural and correct moves to establish a sound legal framework [to deal] with whomever tampers with the security of homelands and exposes them to the dangers of terrorism and extremism,” he said.

The national and regional security conference comes at a sensitive time in the history of the GCC since its inception three decades ago, in view of the repercussions of the Syrian crisis and the continuing threats Iran poses to security, said Mohammed al-Salmi, a Saudi expert on Iranian affairs and assistant professor of Persian literature and history at Umm al-Qura University in the kingdom.

“Gulf countries want Iran to turn from issuing resounding statements to taking concrete and practical steps to reassure its neighbours about its political, security and nuclear intentions,” he told Al-Shorfa.

“We are weary of the Iranian statements [that are] blown into the air, to no avail,” al-Salmi added. “We see the faces of the Iranian leaders change, but its hostile policies towards its neighbours are still the same and have not budged.”

He said he hopes that Iran would work to establish closer relations and regional security through practical steps, stop its interference in Bahrain, eastern Saudi Arabia, Yemen, Iraq and Syria, and allow the Syrians to resolve their issues among themselves.

Saudi Prince Turki al-Faisal, chairman of the King Faisal Centre for Research and Islamic Studies, in a speech described the Iranian regime’s policies as “menacing to Gulf security”, adding, “Four years after the outbreak of the events of the so-called Arab spring, the region is now going through a phase of severe labour pains.”

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Iran Says Ready To Remove Legitimate Concerns Of P5+1

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Iranian Foreign Minister Mohammad Javad Zarif says the nation’s peaceful nuclear program is homegrown and no one can take it away from Iranian scientists.

The Iranian foreign minister also pointed to Tehran’s ongoing nuclear talks with six world powers, saying that Iran is ready to help remove “the legitimate concerns of the other side” regarding the country’s nuclear program.

Iran’s Foreign Minister said the country’s military activities will never be on the agenda of the ongoing talks between the Islamic Republic and six major world powers.

“We do not use defense missiles to carry unconventional weapons. This statement is baseless and emanates from fabrication. The issue of Iran’s military activities has never been and will never be the topic of nuclear negotiations,” Zarif said.

He further noted that the purpose of negotiations would be based on an interim nuclear deal signed between Iran and the six countries in Geneva last November which focuses on the peaceful nature of the Islamic Republic’s energy program.

“So, no one can claim that our missiles carry nuclear warheads when Iran’s nuclear program is peaceful. Such claims will not help resolve the issue and are rejected by the Iranian nation,” Zarif pointed out.

The Iranian foreign minister further reaffirmed that Tehran has no nuclear military program and believes that a world free of nuclear arms would be secure for all.

The Iranian Foreign Minister also said violence and extremism undermine international peace and security, and target the common heritage of mankind.

Zarif expressed regret over the growing level of violence and extremism regionally and internationally.

The top Iranian diplomat also made a reference to President Hassan Rouhani’s proposal of “World Against Violence and Extremism (WAVE)” which has been unanimously endorsed as a UN resolution.

“Following the adoption of this initiative at the UN General Assembly, we expect to see further and more concrete cooperation among countries as well as international and regional organizations against violence and extremism,” Zarif stated.

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Egypt: Court Jails Over 40 Morsi Supporters

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A court in the southern Egyptian city of Minya Sunday sentenced 42 supporters of the ousted Islamist president Mohammad Mursi to jail terms varying from three to 15 years in prison on charges of rioting, state television reported.

The Criminal Court convicted the defendants, including three former members of parliament, of inciting attacks on police stations in the wake the military’s overthrow of Mursi in August last year.

Only three of the accused appeared for the trial while the others were still on the run.

Families of the defendants gathered outside the court building, chanting slogans against the army and police, according to Egyptian TV.

Security forces dispersed the protesters and blocked all roads leading to the court building.

The verdict was announced by presiding judge Saeed Yousuf, who last month sentenced 528 Mursi supporters to death on charges of killing a police officer and attacking state institutions in Minya, some 240km south of Cairo.

The mass death sentences, the largest in one case in Egypt’s judicial history, has drawn local and international condemnation.

The court is due Monday to deliver the final verdict after receiving the opinion of the Mufti, who is Egypt’s chief Islamic authority. Under Egyptian law, cases involving death sentences should be sent to the Mufti before the final ruling is passed.

Judge Yousuf is also expected Monday to announce the verdict in another case involving 683 Islamists including chief of Mursi’s Muslim Brotherhood Mohammad Badie. The defendants face charges of killing a policeman, attacking state institutions and illegally possessing weapons during the unrest that hit Minya, a Brotherhood stronghold, following Mursi’s toppling.

Police and army troops have been deployed in the area to prevent potential violence related to the cases, media reports said.

Armoured vehicles are to be positioned early Monday in the vicinity of the court building to which only people with special permits will have access.

Thousands of Islamists have been rounded up in Egypt since Mursi’s ouster in the toughest crackdown on his Muslim Brotherhood group in years.

Original article

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