Just days after the tragic crash of a Malaysian Airlines flight over eastern Ukraine, Western politicians and media joined together to gain the maximum propaganda value from the disaster. It had to be Russia; it had to be Putin, they said. President Obama held a press conference to claim – even before an investigation – that it was pro-Russian rebels in the region who were responsible. His ambassador to the UN, Samantha Power, did the same at the UN Security Council – just one day after the crash!

While western media outlets rush to repeat government propaganda on the event, there are a few things they will not report.

They will not report that the crisis in Ukraine started late last year, when EU and US-supported protesters plotted the overthrow of the elected Ukrainian president, Viktor Yanukovych. Without US-sponsored “regime change,” it is unlikely that hundreds would have been killed in the unrest that followed. Nor would the Malaysian Airlines crash have happened.

The media has reported that the plane must have been shot down by Russian forces or Russian-backed separatists, because the missile that reportedly brought down the plane was Russian made. But they will not report that the Ukrainian government also uses the exact same Russian-made weapons.

They will not report that the post-coup government in Kiev has, according to OSCE monitors, killed 250 people in the breakaway Lugansk region since June, including 20 killed as government forces bombed the city center the day after the plane crash! Most of these are civilians and together they roughly equal the number killed in the plane crash. By contrast, Russia has killed no one in Ukraine, and the separatists have struck largely military, not civilian, targets.

They will not report that the US has strongly backed the Ukrainian government in these attacks on civilians, which a State Department spokeswoman called “measured and moderate.”

They will not report that neither Russia nor the separatists in eastern Ukraine have anything to gain but everything to lose by shooting down a passenger liner full of civilians.

They will not report that the Ukrainian government has much to gain by pinning the attack on Russia, and that the Ukrainian prime minister has already expressed his pleasure that Russia is being blamed for the attack.

They will not report that the missile that apparently shot down the plane was from a sophisticated surface-to-air missile system that requires a good deal of training that the separatists do not have.

They will not report that the separatists in eastern Ukraine have inflicted considerable losses on the Ukrainian government in the week before the plane was downed.

They will not report how similar this is to last summer’s US claim that the Assad government in Syria had used poison gas against civilians in Ghouta. Assad was also gaining the upper hand in his struggle with US-backed rebels and the US claimed that the attack came from Syrian government positions. Then, US claims led us to the brink of another war in the Middle East. At the last minute public opposition forced Obama to back down – and we have learned since then that US claims about the gas attack were false.

Of course it is entirely possible that the Obama administration and the US media has it right this time, and Russia or the separatists in eastern Ukraine either purposely or inadvertently shot down this aircraft. The real point is, it’s very difficult to get accurate information so everybody engages in propaganda. At this point it would be unwise to say the Russians did it, the Ukrainian government did it, or the rebels did it. Is it so hard to simply demand a real investigation?

Source: Ron Paul Institute for Peace and Prosperity.

The post Ron Paul: What The Media Won’t Report About Malaysian Airlines Flight MH17 – OpEd appeared first on Eurasia Review.

By Ivana Jovanovic

With the decision by Bulgaria to suspend construction of the South Stream natural gas pipeline, there is more pressure on Serbia, which is balancing its longstanding ties with Russia against its desire to join the European Union.

“The Serbian situation is the most difficult because it ‘paid ‘ the entrance to the pipeline by giving to Gazprom low prices for NIS (Naftna Industrija Serbia – Oil Company of Serbia) and Banatski Dvor (and underground gas storage in Vojvodina),” Jelena Milic, director of the Centre for Euro-Atlantic Studies for Belgrade, told SETimes.

“It is not regulated by the energy agreement with Russia what will happen if Russia gives up the project or if it will not be able to realise its obligations. Serbia counts on incomes of transit and to pay back its debts to Russia,” Milic said.

Following the instructions of the European Commission (EC), Bulgaria froze construction plans for South Stream, a 2,380-kilometre long pipeline that would transport Russian gas to Eastern Europe and beyond, bypassing Ukraine and putting additional financial pressure on Kiev in its dispute with the Kremlin.

Bulgaria ended its participation after the EU said the project does not comply with its competition and energy legislation. But Serbia still plans to participate in the project.

Prime Minister Aleksandar Vucic, who met with Russia Prime Minister Dimitry Medvedev in Moscow on July 7th, said the two countries plan to sign a South Stream agreement soon.

“South Stream is a priority project for Russia, and this has become evident in the context of developments in Ukraine,” Medvedev said.

Milic told SETimes that it is important for Serbia to sync its legislation with the EU as well as implement its Third Energy Package, with which South Stream is in conflict.

“The Third Energy Package requires separate ownership of transporter and producer (in this case Gazprom is both) which protects from the monopoly and, overall, which is good for citizens,” Milic said.

“Serbia should follow EU instructions and manage the issue in co-ordination with the Union. The less bad scenario for Serbia is agreement between the EU and Russia in which it should participate at the side of the EU,” Milic said.

Vucic said that Serbia would like to become a member of the European Union.

“I have never concealed that Serbia wants to become a part of the EU, but at the difficult moment Serbia does not want to damage good, friendly relations with Russia,” he said.

Russia is also attempting to restore its agreement with Bulgaria, which was signed in 2008.

Ilian Vassilev, managing partner at Innovative Energy, a professional consultancy firm, and former ambassador to the Russian Federation, said the suspension is a natural development in a process that is primarily driven at the EU-Russia level.

“Until the larger frame of energy and political (Ukrainian crisis) is cleared there is little to no chance for bilateral arrangements between an EU member state and Russia. Attempts to circumvent the EC primacy in the process and focus on the bilateral format, playing on nationalist and sovereignty sensitive public tunes in the South Stream route countries, as the Russians are trying, are doomed,” Vassilev told SETimes.

The post South Stream Puts Serbia In Conflict With EU appeared first on Eurasia Review.

By Joshua Pringle

As Israel continued its ground offensive on Sunday, the Gaza Strip saw its deadliest fighting so far, with more than 60 Palestinians and 13 Israeli soldiers killed. In reading Western media reports of the recent escalation of violence in the Gaza Strip, one might get the impression that the conflict involves two sides that are equally engaged in and equally responsible for the fighting. Or, depending on the news outlet, one might get the impression that Hamas is primarily responsible and that Israel is merely defending itself. Such accounts gravely distort realities on the ground.

This is an asymmetric conflict. To begin, look at the death count. More than 430 Palestinians have been killed since July 8, about 80 percent of them civilians. On the Israeli side, 18 soldiers and two civilians have been killed. Since 2005, 23 out of every 24 deaths in this ongoing conflict have been Palestinian. Then consider the difference in weaponry. The rockets being fired into Israel are small, short-range and inaccurate, and of those that aren’t intercepted by Israel’s Iron Dome, most land in unpopulated areas. Israel, on the other hand, is equipped with the most advanced weaponry in the world, sponsored by the United States. Israel has invaded a people with no army, crippled water and electricity supplies, and no place to run.

One narrative that has been echoed by various media outlets is that Hamas rejected a ceasefire agreement proposed by Israel and Egypt, and that that is why the violence is continuing. It is true that Hamas rejected a ceasefire agreement, but for good reason. The proposed ceasefire, which Hamas was not consulted on, would have merely restored the 2012 ceasefire agreement, which Israel has repeatedly violated, thus perpetuating the status quo. Hamas has given its conditions for a ceasefire, which include a stoppage of airstrikes; a lifting of the siege on Gaza, opening the passage of goods and people; non-interference with the Palestinian unity government; and release of the Palestinian prisoners who were released during the Shalit prisoner exchange and then recently re-arrested. “In contrast,” says human rights attorney Noura Erakat, “it is not clear what Israel’s endgame is. It seems willing to accept a ceasefire on condition of Hamas’ unconditional capitulation.”

What is often missing in Western accounts of this conflict is a sense of context. When four Palestinian children were killed by Israeli bombs while playing at the seashore, an Israeli official said this was another example of Hamas using civilians as human shields, and CNN printed it, along with the repeated false claim by Israeli officials that the Israeli military doesn’t target civilians. What CNN and many other outlets omit is that Palestinians, in both Gaza and the West Bank, are living under an illegal occupation, “which is characterized by a discriminatory apartheid legal regime and brutal repression,” Erakat tells the Institute for Middle East Understanding. “When the rockets stop flying and the aerial strikes cease, Palestinians will continue to die a slow and protracted death under the boot of Israel’s occupation. In particular, the population in the Gaza Strip faces a horrific future. By 2020, it is predicted that Gaza’s one source of clean water will be unusable and the World Health Organization says the 150-square-mile Strip will be unlivable.”

What is happening in Gaza right now is a repeat of what happened in 2008-2009 and November 2012. Over this six-year period, Gazans have had to live under the shadow of terror and abject poverty, and large numbers have been displaced. At the moment, more than 50,000 Gazans are seeking shelter in U.N. schools. The U.N. Palestinian refugee agency says it is running out of food and medicine. The United Nations describes the blockade as “collective punishment.” Israel has systematically attacked homes, schools, hospital and mosques in Gaza, then blocked the import of supplies needed to rebuild. Meanwhile in the West Bank, settlements continue to expand. Look up a map of Palestinian territory in 1948, and then compare it to a current map. It’s been swallowed up. None of this is to say that members of Hamas or anyone else in Gaza have the right to launch rockets over the wall, but when the media portrays “the occupier as the victim and the occupied as the aggressor” — as the Palestine Solidarity Campaign described such bias in an open letter to the BBC, criticizing BBC’s recent coverage — they are effectively conspiring in the perpetuation of a narrative that allows the United States to continue to pursue a blindly pro-Israel policy, at the expense of human rights.

Recent tensions began to boil after three Israeli teenagers were abducted and killed on June 12, a crime for which Israel blames Hamas. And Israeli Prime Minister Benjamin Netanyahu would like you to believe that that is the root of the current war. What is likely driving Netanyahu’s action, however, is an effort to stoke nationalism and bolster support while distracting from recent developments for which he was getting heat, such as the failure of peace negotiations, the forming of the Palestinian Authority’s national unity government, and rapprochement between the United States and Iran. Unfortunately, beating the war drums does have the effect of renewing support. It also has the effect of intensifying hatreds that seem to have no bottom in their origin and no limit to how hot they can burn.

Joshua Pringle is a political journalist with a master’s degree in international relations from New York University. He is the senior editor of the international affairs publication Worldpress.org.

The post Gaza: Israel’s Asymmetric Aggression – OpEd appeared first on Eurasia Review.

All fighting within cities and all bombardments of urban spaces, even the most “precise and surgical”, is a potential death trap for civilians. Consequently, the permeation of war into cities inevitably transforms their inhabitants into potential human shields.

For Palestinians living in Gaza today, simply spending time in their own homes, frequenting a mosque, going to a hospital or to school has become a dangerous enterprise since any one of these architectural edifices can become at any moment a target. One can no longer safely assume that the existence of masses of human bodies – even the bodies of children – in civilian spaces can serve as defence of the weak against the lethal capacity of the hi-tech states.

But since hi-tech states can and do kill hundreds or thousands of civilians, they have to provide moral justification for their action in order to preserve their standing in the international arena; they have to demonstrate that they are protecting the principles of liberal democracy. It is precisely within this context that we should understand the series of posters recently disseminated by the Israeli military through its Twitter account, Facebook and blogs.

“Where do Gaza terrorists hide their weapons?” Source IDF

The poster “Where do Gaza Terrorists Hide Their Weapons” is a paradigmatic example, where the subtext does the speaking: Houses, mosques, schools, and hospitals are legitimate targets because they are presumed to be weapon depositories.

“When is a house a home?” Source IDF

This is also the message in “When Is A House a Home?” which simply zooms in on one of the images in the previous poster, showing how Palestinians presumably hide rockets in civilian homes.

The logic is straightforward: insofar as Hamas hides weapons in houses (illegitimate), Israel can bomb them as if they were military targets (legitimate). Within this framework, a single function (hiding weapons) out of many existing functions (home, shelter, intimacy, etc) determines the status of an urban site (in our case the house), so that the edifice’s form loses its traditional signification.

The question “when does it become a legitimate military target?” is merely rhetorical. Its real meaning is: “All houses in Gaza are legitimate targets” since all houses are potentially non-homes.

“Isreal uses weapons to protect its civilians”. Source IDF

Not unlike colonial as well as other vastly asymmetrical wars, Israel’s legitimisation for its indiscriminate bombing is premised upon a profound moral disjuncture between Israelis and Palestinians. In the poster “Israel uses weapon to protect its civilians. Hamas uses civilians to protect its weapons”, Palestinians are depicted as barbarians who ignore the elementary grammar of international law.

Israel’s warfare is, however, not only about the re-signification of architectural structures, but also about the transformation of human beings into collateral damage, subjects who can be killed without violating international law. This is the subtext of the poster featuring Israel’s Chief of Staff saying: “Even as we carry out strikes, we remember that there are civilians in Gaza. Hamas has turned them into hostages.”

“We remember that there are civilians in Gaza”. Source IDF

Again, the logic is clear. All civilians in Gaza are being held hostage by Hamas, which is considered a war crime and a gross violation of international law governing armed conflict. This, then, provides legal and moral justification against the accusation that Israel is the one killing civilians. Presumed human rights violations carried out by Palestinians against Palestinians – taking hostages and human shielding – thus become the legitimisation of lethal and indiscriminate violence on the part of the occupying force.

Hence, the use of human shields is not only a violation. In contemporary asymmetric urban wars, accusing the enemy of using human shields helps validate the claim that the death of “untargeted civilians” is merely collateral damage. When all civilians are potential human shields, when each and every civilian can become a hostage of the enemy, then all enemy civilians become killable.

“Some bomb shelters shelter people…” Source IDF

In order for all this to be convincing, the Israeli military depicts the asymmetric context in which it unleashes its violence against a whole population as symmetric. This is carried out, for instance, through the poster “Some bomb shelters shelter people, some shelter bombs”. Here a radically disproportionate situation is presented as if it were balanced.

The residents of Gaza are bombed by cutting edge F-16 fighter jets and drones, yet they do not have bomb shelters, and they have nowhere to flee. Israel’s residents are bombed mostly by makeshift rockets, many of which have been intercepted by Iron Dome missiles. The majority of the population in Israel has access to shelters and can flee out of the rocket’s range.

These powerful images, spread by the Israeli military through social media, attempt to transform the very presence of civilians as suspect in the areas it bombards, regardless of the fact that the areas it bombs are urban centres.

The crux of the matter is that in the context of contemporary asymmetric warfare, the weak do not have many options. When there are no bomb shelters, people remain at home during extensive bombardment. And if, like in the case of the Palestinians in Gaza, fleeing is not an option – because all exits from the strip have been closed, or because the neighbour’s house is under the exact same threat as one’s own, or because one is already a refugee and does not want to become a refugee anew – staying put, which the high-tech states term “illegal human shields,” constitutes a form of resistance.

Neve Gordon is the author of Israel’s Occupation.

Nicola Perugini is Mellon Postdoctoral Fellow in Italian Studies and Middle East Studies at Brown University. His forthcoming book is entitled The Human Right to Dominate. Follow Nicola on Twitter: @PeruginiNic

This article appeared at Aljazeera.com and is reprinted with permission.

The post On ‘Human Shielding’ In Gaza – OpEd appeared first on Eurasia Review.

Through Operation Phakisa government aims to implement its policies and programmes better, faster and more effectively.

This is according to President Jacob, who said the project was designed to answer fundamental implementation questions and find solutions, as the country tries to address poverty, inequality and unemployment, among other challenges, as stipulated in the National Development Plan (NDP) 2030.

Malaysian Big Fast Results approach

President Zuma first announced Operation Phakisa during his reply to the State of the Nation Address debate, last month.

Operation Phakisa is an adaptation of the Big Fast Results methodology that was first applied by the Malaysian Government, successfully, in the delivery of its economic transformation programme.

The operation addressed their national key priority areas such as, poverty, crime and unemployment.

It involves setting up clear targets and follows up with on-going monitoring process which makes the results public.

Through this initiative, the Malaysian government was able to register impressive results within a short period.

President Zuma said South Africa has renamed the Malaysian Big Fast Results approach as Operation Phakisa – from a Sesotho word, which means “Hurry Up”, to highlight the urgency with which government wants to deliver on some of the priorities encompassed in the NDP.

The initiative will initially be implemented in two sectors, the ocean economy and health sector, especially clinics.

First Phase of Operation Phakisa

The first phase of the implementation will focus on unlocking the economic potential of South Africa’s oceans.

This will be done together with representatives from government, industry, labour, civil society and academia to collaborate in unlocking the economic potential.

Speaking at the launch of the initiative at the Inkosi Albert Luthuli International Convention Centre, in Durban, on Saturday, President Zuma said government chose the ocean economy with good reason.

“South Africa is uniquely bordered by the ocean on three sides – east, south and west. With the inclusion of Prince Edward and Marion Islands in the southern ocean, the coastline is approximately 3 924km long,” he told the delegates, which included industry, labour, civil society and academia. But despite this, the vast ocean space is relatively unexplored in terms of its economic potential.

“The ocean has a potential to contribute to the Gross Domestic Product (GDP) up to R177 billion. The ocean also has a potential to contribute between eight hundred and one million direct jobs,” President Zuma said.

In 2010, the oceans contributed approximately R54 billion to South Africa’s GDP and accounted for approximately 316 000 jobs.

Also speaking at the launch, Environmental Affairs Minister Edna Molwea said there is a realisation and acknowledgement of the invaluable contribution of oceans and coasts to the development from throughout the continent.

“The long term developmental programmes of the world can no longer be based on land resources only; it must also include the coast and ocean resources.”

To tap into the ocean, government has identified four priority sectors, in which Operation Phakisa will focus on. These are marine transport and manufacturing activities, such as coastal shipping, trans-shipment, boat building, repair and refurbishment; offshore oil and gas exploration; aquaculture and marine protection services and ocean governance.

Marine transport, manufacturing

In marine transport and manufacturing – government will explore the country’s natural advantage in maritime transport and manufacturing by capturing the benefits of growing volumes of cargo handling, sea and coastal shipping and supporting transport activities such as storage and warehousing.

In addition, South Africa can utilise its location and expertise to increase its share of the global marine manufacturing market, including ship-building and repair, rig repair and refurbishment or boat-building.

“Against this backdrop, the aspiration of this workstream is to grow the marine transport and manufacturing sector over the next five years, to increase the contribution to GDP and multiply the number of jobs in South Africa.”

Offshore oil, gas exploration

On offshore oil and gas exploration – government is looking at further enhancing the enabling environment for exploration of oil and gas wells, resulting in an increased number of exploration wells drilled, while simultaneously maximising the value captured for South Africa.

Mechanisms for achieving this will include providing an enabling policy and legislative environment; promoting inclusive economic growth; addressing the skills gaps and overcoming infrastructure challenges.

Aquaculture

With regards to aquaculture – government will be looking at enhancing growth in the sector through increasing the value contribution of all segments across the aquaculture value chain, while creating jobs especially in fish processing and marketing.

Aquaculture is relatively an underdeveloped area in South Africa despite it being an increasingly important contribution to food security globally.

Despite its relatively small size, aquaculture in South Africa has shown strong growth of 6.5 percent per annum.

Marine protection services, governance

While on marine protection services and governance – the aspiration is to develop an incremental and integrated approach to planning, monitoring and execution of ocean governance and enforcement in the next few years

Government has recognised the need to continuously balance the economic opportunities which the ocean space affords, while maintaining its environmental integrity.

This will be achieved by developing an institutional framework for the management of South Africa’s ocean space, improving the protection of South Africa’s oceans particularly around critically endangered ecosystems, and addressing the skills gap, among others.

Second Phase of Operation Phakisa

The second implementation of Operation Phakisa will be to pilot the health sector’s Ideal Clinic Initiative to improve service delivery in the country’s clinics nationwide, which will commence later in 2014.

The health sector laboratory will be undertaken in collaboration with provinces, districts and clinic managers with the aim of producing a detailed plan for improving service delivery in public sector clinics in all provinces, including indicators, targets and timeframes; and a guideline for clinic managers to develop and sustain these improvements.

Success of Operation Phakisa

The key step in Operation Phakisa’s approach, according to the President, will be the intensive work sessions that will need to deliver complete and signed-off action plans for presentation to Cabinet.

“These work sessions will help create transparency and help to remove bottlenecks and resolve the most critical challenges facing a sector.”

The teams, which are made up of over 180 delegates from national sand provincial government departments; civil society, private sector, labour and academia, began their work, last week, and will continue working until 15 August 2014.

Despite the introduction of the initiative – the President said there is still a lot of work to be done.

“It is still early days for Operation Phakisa on the ocean economy. The teams will devote the next few weeks to further develop these aspirations and ideas, setting ambitious targets and formulating detailed delivery plans for accelerating delivery.”

Once the detailed delivery plans have been completed, President Zuma said government will then move into the implementation phase of Operation Phakisa – with him taking a personal interest in monitoring the progress and implementing the project.

“The people of South Africa deserve much better from all of us. Through Operation Phakisa and all our other key strategic interventions to achieve the goals of the National Development Plan, we must work tirelessly to move our country forward and build a better life for all, especially the poor and the working class,” he said, urging key role players to commit fully to the success of this programme.

The post Operation Phakisa To Move South Africa Forward appeared first on Eurasia Review.

By Manish Vaid and Tushar Shah

It’s just been a month and Narendra Modi led NDA government is already confronting impediments on almost all crucial fronts. With the 80 per cent India facing monsoon deficit, terrains ahead seems to provide no relief to pro-development government, in various sectors, including one of the most important oil and gas sector.

Only when Ministry of Petroleum and Natural gas, led by Dharmendra Pradhan, was contemplating a change in a gas price regime as one of the resolve for bettering India’s investment climate, helping increase in its domestic production, Iraq crisis jeopardised such move, though not directly, but through an inflationary pressure resulting from an increase in the prices of global crude oil and railway passenger fares and freight rates. Natural gas, which is been viewed as one of the important means to curb crude imports, is instrumental in dealing with such geopolitical turbulence to an extent.

Given India’s vulnerability to a rise in global crude oil prices as a result of its 75-80 per cent of its crude import dependency, the sudden and rather steep rise in the same has the potential to displace the economic recovery process of the country in the current fiscal.

CARE ratings, suggests that Iraq crisis could widen India’s current account deficit, while putting pressure on exchange rate, impeding government’s fiscal consolidation goal and putting off any nudge on interest rates by the Reserve Bank of India. Keeping fiscal deficit to 4.1 per cent level, as pegged during interim budget would seemingly impossible to be managed by India’s Finance Minister in upcoming budget.

Iraq, which accounts for four per cent of global crude oil production, making it OPEC’s second largest producer after Saudi Arabia, would further add woes to India’s oil subsidy calculus. As with each dollar rise in the price of Indian crude basket results in an increase of petroleum subsidy by around Rs. 4500 crore and with expected global crude price of $110-111 a barrel through the current fiscal, could shoot up this subsidy to Rs. 7,000-8,000 crores.

But the Indian crude oil basket which remained stable from during July 2013 to May 2014 has suddenly started moving towards the north and expectedly crossing $120 a barrel, owing to recent Iraq disruptions, posing serious threats to India’s imports pay out and local currency’s financial strength. Barclays have already estimated that a rise of $10 a barrel would likely shave 0.5 per cent off India’s GDP, which is already reeling below historic 5 per cent for two consecutive years.

According to Vandana Hari from Platts, though current supply from Iraq’s Basrah Oil Terminal is not been disrupted largely due to violence been restricted to the northern and western parts, any disruption in its supply would be mostly borne by India’s oil marketing companies, as their under-recoveries on subsidised oil products would worsen further.

But how far would India’s contingency plan for Iraq sustains, remains to be seen. Iraq, which fulfils India’s 13 per cent of total crude oil requirement, is expected to touch 20 per cent in current fiscal to the tune of 19.4 million metric tonnes.

Before India fall prey to such geo-political ambushes emanating largely from the Middle East, it should besides aptly diversity its crude oil sourcing trends, also take proactive measures to stir up investments in its domestic energy sector, with a clear objective of consistently reducing are oil import dependencies.

Companies like Reliance Industries and Essar, sensing the danger, have already started to reduce crude imports from the Middle East, while balancing the same from Africa, Latin America and Canada. This has helped Reliance to cut its crude costs that would result in decline in its refining margins that hit a four-year low of $8.1 a barrel in 2013-14. Other Indian refineries should also follow a similar suit, proactively, as most of the modern Indian refineries are now in a position to process different quality crudes.

Therefore, while India can place hope for situation in Iraq not getting out of control, it should simultaneously seek for more viable and sustainable solution. One such resolve could be to develop other alternative energy resources like non-conventional fuels including shale gas and renewable energy resources like wind and power, by fine-tuning policies in a manner that it could attract investments in both energy resources and technologies allied with them, as also intended by Petroleum Minister, Dharmendra Pradhan at the 21st World Petroleum Congress.

Another urgent step could be to revisit existing Strategic Petroleum Reserves (SPR) plans, which continues to linger to see the light of day, due to some reasons or the other resulting in further delays.

While government, sensing the significant supply disruption around the corner has asked oil companies to draw emergency import plans, fearing the rise in oil subsidies and upsetting India’s fiscal calculation, this could best, can be a short term solution. Accelerating the existing SPR plans would certainly offer a long term answer to such disruption in the future.
Other relevant measures to deal with supply disruptions could include demand-side management, through inculcating energy discipline and efficiency across industries and common folks.

Equally important would be to pursue result oriented energy diplomacy, which till date has been found wanting during previous regimes and in this regard India should try to clinch a natural gas pipeline deal with Russians during upcoming Modi’s visit in BRIC summit.

Only when all these measures, including others, witnesses a light of day, India could move ahead decisively in its endeavour to achieve energy independence in its true sense, which could safeguard its national interest, while pursuing energy security goals.

Manish Vaid is a Junior Fellow with Observer Research Foundation, New Delhi, having research interest in energy policy and geopolitics.

Tushar Shah is a Consultant, Risk Advisory Services – Oil and Gas, Ernst and Young LLP, Mumbai.

Views expressed are of the author and do not necessarily reflect the views of the IDSA or of the Government of India

Originally published by Institute for Defence Studies and Analyses (www.idsa.in) at http://www.idsa.in/idsacomments/IraqcrisisLessonsforIndia_ManishTushar_160714.html

The post Iraq Crisis: Lessons For India – Analysis appeared first on Eurasia Review.

Timor-Leste’s current stability could be undermined by a sharp decline in oil revenues and leadership challenges if the country’s first president and current prime minister Xanana Gusmão steps down later this year as announced.

After independence in 2002, the country experienced riots and conflict in 2006 due to dissent within the army, which displaced 150,000 people and resulted in international military intervention, but since then there has been a period of relative stability.

According to a paper by World Bank analysts, the root causes of the 2006 violence were: “Failure to meet high post-independence expectations, particularly for veterans of the independence struggle, high rates of poverty and poor service delivery and frustration, and perceived favouritism in the distribution of sought-after posts.”

To quell the 2006 crisis, the government used money from the Timor-Leste Petroleum Fund to pay the displaced to return home, buy off army deserters who had sparked the 2006 violence, fund pensions for disgruntled veterans of the independence struggle, and assign construction contracts to potential political spoilers.

“There is a sense among observers that buying off peace is not a reputable way of creating stability in a country – and that can be argued, particularly in terms of sustainability,” said Cillian Nolan, deputy director of the Institute for Policy Analysis of Conflict (IPAC) in Jakarta. “But in some ways this has worked quite well, not only because peace has been maintained but also because it signalled a strong independence from foreign influence because this was Timorese money going to Timorese people.”

Timor-Leste, home to 1.1 million people, was a Portuguese colony before it was occupied by Indonesia in 1975, prompting a decades-long violent struggle during which hundreds of thousands of people perished due to conflict and famine.

Oil running out

Researchers caution that while stability has been maintained in recent years, the central steadying factors are not permanent.

“Timor-Leste has about seven years before its remaining petroleum wealth – the only ship which can take the nation away from poverty – will have sailed,” said Charles Scheiner, a researcher at Lao Hamutuk, a Dili-based policy analysis organization.

According to Lao Hamutuk’s analysis of government data, 90 percent of Timor-Leste’s state revenues are provided by oil and gas. The Petroleum Fund contains nearly US$16 billion today. But, Scheiner warns, the oil and gas could be depleted within seven years and the fund empty by 2025.

In a 2013 report titled Stability at What Cost? the International Crisis Group explained that Timor-Leste’s purchased peace rested on three anchors: “the authority of the current prime minister; the deferral of institutional reforms in the security sector; and the flow of oil and gas revenues from the Timor Sea.”

These anchors are connected in political and financial decision-making. As Scheiner argued: “The elite and some constituencies proclaim their entitlement to public funds, a pattern [which was] set by `buying peace’ to neutralize possibly troublesome groups or political opponents.”

And that elite, whose grip on political power is bolstered by their history as independence fighters, will probably this year undergo a major change, analysts warn. In a July 2014 report, IPAC explained: “When Xanana Gusmão steps down as Timor-Leste’s prime minister, his successor will face the challenge of how to address potential sources of social and political unrest without Gusmão’s unparallelled authority.”

Veterans’ pensions over-funded?

One result of that authority has been favouritism towards certain groups.

According to the Asian Development Bank (ADB), the government enrolls more than 100,000 people in three fund transfer programmes – to veterans, to the disabled and elderly, and to single mothers who keep their children in school. But the difference in payments to the three groups is huge: “Conditional cash transfers are limited to $240 per year, elderly pensions are $360 per year, and annual veterans’ pensions range from $2,760 to $9,000.”

As of 2011, “although the veteran pensions consumed half of the total budget, it was targeted to 1 percent of Timor-Leste’s population”, World Bank analysts explained. They argued that “these are high value benefits that are received by too few beneficiaries to allow for any sizeable national impact on poverty.”

Noting that the “government believes it is important to reward those citizens who have served Timor-Leste in the past,” the $1.5 billion 2014 budget allocates $335 million to “Public Transfers”.

In January 2014, Lao Hamutuk warned that “one of the outcomes of the parliament’s closed-door budget discussions is $64 million in increased Public Transfers in the 2014 state budget, which will reduce transparency, accountability and good governance.”

According to IPAC, Timor-Leste’s “wealth distribution remains markedly uneven, particularly between rural areas and Dili, and is probably getting worse, given that so much of government spending, which makes up the bulk of the non-oil economy, is centred in the capital.”

In a 2011 report the UN special rapporteur on extreme poverty and human rights noted stark differences in living standards: “The richest segment of Timorese society enjoys almost 180 times the wealth of the poorest of the poor.” Poverty, food security, and unemployment are all higher in rural areas, where 75 percent of Timor-Leste’s population lives.

Explained IPAC: “The elite that decides how to spend this wealth is small: the finance minister and the natural resources minister are siblings, for example.”

Projects to rebuild the country’s infrastructure – 70 percent of which was destroyed as Indonesia departed in 1999 – have been controversial, and often unfinished. The country’s development indicators (such as one of the world’s highest rates of stunting in children) continue to lag. Half the population lives in poverty today.

Gusmão’s quick fix

“Part of the story of the UN in Timor after the 2006 crisis was one of frustration with the international expert advisers telling the Timorese politicians to wait, take time – that stability will come slowly,” IPAC’s Nolan told IRIN, noting that Gusmão instead took pragmatic action in an effort “to show that the country was going somewhere”.

While he was successful in the short-term, he carried with him is own legacy as a leader of Falintil, the armed liberation front he headed in the 1980s and 90s. Issues such as formalizing discipline and selecting non-political leaders for security forces remain unresolved.

Critics say he failed to implement the necessary security sector reforms post-2006, engaged in cronyism, and allowed distrust to fester.

In 2007 Gusmão launched and led the Ministry of Defence and Security by merging the defence and interior ministries under one roof. “In doing so he succeeded in tempering inter-service rivalries and restoring stability but at the cost of reinforcing the old Falintil chain of command rather than allowing the development of independent civilian control,” said the IPAC report.

For example, 650 ex-Falintil fighters remain in the army, and many have passed the retirement age of 55. “Political sensitivities have been more important than procedural questions in delaying their retirement,” said IPAC.

Citizen-security force interactions are complicated by a history of occupation and violence.

A 2014 Overseas Development Institute (ODI) and The Asia Foundation (TAF) joint report explained: “During the period of occupation… the Timorese were subjected to a military-style police force. The model of control through placing a military police officer in each village to monitor and collect intelligence on the population would leave a legacy of distrust.”

Fundasaun Mahein (FM), a Dili-based NGO, in June 2014 said two incidents of security force discipline decay were a “great leap backwards for the security of Timor-Leste”. In one incident, a violent perpetrator was released from custody because he was the son of a police commander; in the other, junior officers of a special police battalion attacked senior officers in what FM called a “very serious breakdown of military discipline and hierarchy”.

According to Nolan, “looking at a system that has in part built stability by handing out cash – as the architect of that system [Gusmão] steps away, we have to remember that he has papered over some really big issues during his tenure.”

The post Why Timor-Leste’s Stability Could Be Deceptive – Analysis appeared first on Eurasia Review.

By Radhakrishna Rao

The May 2014 change in the Indian leadership where the National Democratic Alliance (NDA) government led by Prime Minister Narendra Modi took charge signalled a vastly stepped-up commitment to India’s crisis prone defence sector with particular reference to attaining self reliance in the defence manufacturing. In fact, the Bharatiya Janata Party’s (BJP) election manifesto had made a strong and specific commitment to end

India’s dependence imported arms and ammunition by boosting domestic production of high performance fighting equipment. Foreign Direct Investment (FDI) is already considered one of the ‘game changers’ for boosting India’s home-grown capability in the production of state-of-the art combat systems. In fact, the 26% FDI cap on defence sector that former Prime Minister Manmohan Singh-led United Progressive Alliance (UPA) government had failed to upwardly revise was considered far from an attractive proposition for the global defence and aerospace conglomerates to invest in India’s defence production sector. But then whether hiking the FDI cap to 49% by the NDA government in its maiden budget presented in the Indian parliament on 10 July would prod foreign investors to pass on their latest genre technologies to Indian partners is not an easy guess at this moment.

Far from being a magic wand to help India build a home-grown defence industry based on indigenous expertise, an increased FDI could be considered no more than a catalyst for the Indian defence producers to face the challenges of designing and developing high-end, complex fighting equipment with domestic resources. In this context, Rahul Gangal, Principal, Roland Berger Strategy Consultants says, “I think this is a positive step though it may not be as much of a move forward as everyone was hoping. The treatment of the balance 51% will be critical .The earlier policy at 26% FDI required 51% to be held by one resident Indian entity. It would be interesting to note what the change in that is, if any.”

Indian Finance Minister and Defence Minister Arun Jaitley, while presenting the budget for 2014-15, did admit to the ignominious distinction India has achieved as the ‘largest importer’ of arms and fighting systems. That a country which has sent probes to Moon and Mars continues to meet 2/3rd of its defence requirements via imports stands out as a far from edifying testimony to its “poor state of defence industrial infrastructure,” said Jaitely. “We are buying a substantial portion of our defence requirements directly from foreign players. Companies controlled by foreign governments and foreign private sectors are supplying our defence requirements to us at a considerable outflow of foreign exchange,” he added.

Significantly, it has also been decided to continue with the policy of permitting higher FDI cap beyond the stipulated 49% in the event of a foreign investor willing to part with the latest genre technologies at his command. This, however, would be subject to approval by the Cabinet Committee on Security on a case-to-case basis. For quite some time now, industry and trade bodies in India have been lobbying for facilitating an increased FDI inflow in the defence production sector. It was in 2001 that India opened its defence production sector to private participation. However, the view of the Indian industrial sector active in defence production is that it would be naïve to expect high technology to flow into Indian industry simply because foreign firms can invest more and repatriate profits. One would therefore need to wait and watch.

India should go about building a military-industrial complex based on its long term strategic needs. At present, much of the defence production activities in India are centred on the facilities of the Defence Public Sector Undertakings and Ordnance Factories Board (OFB). Lack of direction and motivation as well as interference meant that they could come out with very few new and innovative products featuring state of the art technologies. Conversely, private sector companies, that have made a modest foray into the defence production sector, are not enthusiastic about investing in research and development to build high-end fighting systems. As such, the private sector in India’s defence manufacturing would need to be encouraged and incentivised to invest in research and development through a slew of proactive measures.

There is a need for in depth evaluation of the possible long term political, geostrategic and security fallouts of an increased FDI cap in the defence production sector.

Specifically, the trade sanction and technological embargo emanating from the US and its western allies could deal a paralysing blow to a joint venture involving a partnership of a US-based defence company. Sufficient strategic safeguards should need to be built into joint ventures involving foreign participation. Otherwise the entire exercise of enhancing FDI cap in India’s defence production sector could prove counterproductive, with serious consequences for the combat-readiness of the Indian defence forces. Self reliance in defence production should revolve round a long-term vision of the security threat perception faced by the country.

Radhakrishna Rao
Freelancer, Bangalore
E-mail: rkrao01@rediffmail.com

The post FDI In Indian Defence: Implications Of Raise In The Cap – Analysis appeared first on Eurasia Review.

By Mohan Guruswamy

The recently held BRICS Summit in Brazil has announced the setting up of a BRICS development bank, on the lines of existing multilateral institutions like the World Bank and the Asian Development Bank, to be headquartered at Shanghai. The BRICS bank envisages an equity base of $50 billion shared equally by the five founders. It also envisages a further $100 billion initially as advances by member countries. These advances will be in the shape of subscribed bonds with countries subscribing them according to their capabilities. Thus, if China even subscribes to the most of the bond issues, it will not make a difference to how the funds are administered, as that will be managed by the banks management vested according to their equity. This is unlike the World Bank, where some are more equal than others. For instance, the Indian nominated director has absolutely no say on critical policies that are set by the US appointed President and Western European directors.

The announcement of the formation of the BRICS development bank will have as much an impact about how the non-G7 countries manage their economies and their foreign reserves, as it does on the intellectual discourse. The development priorities and agenda which was hitherto set by western experts responding mostly to western priorities and notions will now have to compete with an intellectual tradition that is and can be very different. For instance western theorists have for long rejected state owned companies as wasteful and inefficient, but China has proved that SOE’s can be economic drivers and major exporters, and also very profitable. Similarly the co-operative sector, largely rejected as Marxist idealism, might now find a new relevance. Again industrial investment, now entirely left to the western dominated private sector, might find support.

Economists are as prone to herd behavior as any other animals. They veer towards the money and by the generally prevalent economic policy consensus, right now the Washington Consensus. This has as its main priority the maintenance of the status quo now tilted wholly in favor of North America and Western European interests. By encouraging a different way of thinking and exploring different intellectual possibilities, we might see the beginning of a global intellectual churn that will expose the prevalent casino capitalism for what it is and how vulnerable it has made global economic and financial order to the predations of western merchant banking. Clearly, the impact of the BRICS bank is going to be more than economic and financial.

The BRICS bank is the first step towards reforming the world system. It has to be read against the decision of the BRICS nations to do trade more with each other on the basis of currency swaps. To understand the importance of this, it would be necessary to understand the flaws and inherent weaknesses in the existing international system, which is in a shambles.

The world barely escaped a melt down when bank after bank either failed or were on the verge of failing in the USA. The US Administration of President Barack Obama fashioned out a rescue by pumping in almost a trillion dollars to shore up the banks and save the giant US automobile industry, which is still that country’s major industrial driver. This money was made available by putting the printing presses of the various US Federal Reserve Bank’s on overdrive. Little wonder then that the UD dollar is devaluing against most world currencies. But the problem is that the US dollar is the world’s preferred currency. Today almost 61% of the world’s reserves are held in US currency. Another 24.5% is held in Euros. This clearly indicates that the USA is the world’s preferred banker. On the other hand if the USA continues with its profligate ways and keeps adding to the supply of dollars, they value of dollar reserves will keep dwindling.

Now lets turn to see the system actually works. Countries like China and India produce goods and services at low cost for consumption in the USA, which in turn pays them in dollars, which they in turn deposit in US banks. Give or take a little. Since money cannot sit still, this money in US banks is then lent to Americans, who today have the highest per capita indebtedness in the world, to splurge on houses, cars, plasma TV’s, computers and play stations which they can often ill-afford. This was well understood, but like the people who kept investing with Bernard Madoff, countries like China, Russia, Japan, Kuwait, India and others keep investing in US securities at interest rates mostly between 0.5-2%. Thus, in effect the rest of the world was plying the USA with cheap credit, encouraging it to splurge even more. Unfortunately there was and is no global regulator to caution the US on its profligacy or force it to mend its ways.

The Breton Woods Conference of July 1944 took place under the fast receding shadow of the World War-II and when the US was literally the last man standing. Lord Keynes had in mind a more elaborate scheme that called for the establishment of an international reserve currency but this had to be shelved in the face of American obduracy. Keynes’ proposals would have established a world reserve currency (he proposed it be called “bancor”) to be administered by a World Central Bank. This Central Bank would have been vested with the possibility of creating money and with the authority to take actions on a much larger scale.

But the United States, as a likely creditor nation, and eager to take on the role of the world’s economic powerhouse, baulked at Keynes’ plan and did not pay serious attention to it. As a result, the IMF was born with an economic approach and political ideology that stressed controlling inflation and introducing austerity plans over fighting poverty. But the fact that the US has been the world’s biggest deficit country for several decades and seemingly least concerned about it seems to have eluded the IMF. This and the fact that the US dollar is the world’s preferred reserve currency is now the root of the world’s economic problem.

This international system was unilaterally abrogated when in 1971 US President Richard Nixon US delinked the dollar from the gold standard. Consequently the US and its even more profligate citizens have an apparently endless access to easy credit to satiate their sundry appetites. In this way the ever growing annual US trade deficit becomes the de facto engine of growth for very many economies, such as China and the ASEAN countries.

In the past few decades the GWP has been growing at a much faster rate. In 1985 it was growing at 2.76%. In 2005 it grew by 3.56%. Much of this is due to the changing of gear in countries like China and India that began their great leaps forward. China’s growth in particular has been truly astounding. The growth trajectory of these countries has made people to review long held notions about how this century is going to shape up. It seems that in 2050 it will indeed be a very different world economic order.

The economic balance of power is shifting towards Asia. Like Communism the ideology of the Washington Consensus rammed down the world’ throat has been proved to be a failure. It is time we begin to think differently. Many think that the world’s four fastest growing economies Brazil, Russia, India, China and South Africa (BRICS) must now become the basic building bricks of the new order.

With the IMF failing to play its role, it devolves upon these five growth engines to bring more order into the world system. Casino capitalism can no longer be the guiding ideology. It must be swiftly discarded and a more responsive and intelligent system best suited to all and not just the USA is the need of the day. It is time we revisited Lord Keynes’ proposal for a global reserve currency and consider establishing a system to regulate and manage it.

The USA and even the Euro zone will not want to relinquish the duopoly they have established whereby 91.4% of the world foreign reserves are held in their currencies. While the dollar alone accounts for 61% of global reserves of $11864 billions, the USA’s own foreign reserves stand at a measly $ 148 billions. China’s reserves alone stand at $4009 billion while Russia’s is $467 billion. India is way behind here with only $315 billion, but this is still 50% more than that of Germany, twice as much as those of and France and Britain. Clearly the time has come when we must put to work our money for ourselves and not be vulnerable any more to the gambling and speculative predilections of the so-called and over paid professionals in Wall Street. The BRICS bank, now tentatively called the New Development Bank, is indeed a new and long overdue development.

(The writer is a Visiting Fellow at Observer Research Foundation, Delhi)

The post BRICS Bank: A Long Overdue Development – Analysis appeared first on Eurasia Review.

By Grace Kranstover and Ragini Chatterjee

Nestled on the northeastern coast of Central America, Belize is often named one of Central America’s most beautiful vacation destinations. With its ornate coral reefs and rainforest, the small English-speaking country has plenty to offer for tourists looking for tropical adventures. Yet, Belize is rapidly becoming known to the international community for attracting many drug trafficking organizations known for transporting marijuana and cocaine into North America. Since the country’s currency is conveniently pegged to the U.S. dollar, Belize also offers nonresidents the opportunity to run offshore accounts. Money laundering has become a prime form of funding for many criminal organizations. As a result, the United States Department of State has recently named Belize one of the world’s “major money laundering countries.”[1]

One might ask, “Are all poor countries more open to private investment?” No. However, in nations like Belize, there is a greater problem of overall government mismanagement, which can lead to illegal private investments typically going unnoticed or unpunished by government officials. According to the U.S. State Department, Belize has a complete catalogue of rules and regulations that should be serving the purpose of monitoring various government investments. These regulations include such measures as the Fiscal Incentives Act, Export Incentives Act, the Export Processing Zone Act, Commercial Free Zone Act, International Business Companies Act, the Trusts Act, Offshore Banking Act, and theGaming Act and Companies Act, which “offer some attractive incentives to investors, but in practice these incentives are often not realized.”[2] This means that while Belize has taken measures to prevent underground ventures from happening, its constituents are failing to realize the power of the current laws and the potential negative consequences of not adhering to them. Hence, this shows the vulnerability of the state and highlights the money laundering issues facing Belize.

As previously cited, Belize is a hot spot for these illegal activities of creating, storing, and disguising offshore accounts. While it is not a country that is rich in resources, Belize does have high mineral production in clay, limestone, marble, sand, and gravel, all of which form the greater part of its construction industry. According to the Ministry of Tourism and Culture (MTC), Belize’s thriving mineral industry is one of the nation’s biggest attractions for overseas’ investors, along with the country’s beaches and resorts. The MTC also states that “the government supports joint venture[s] and partnership investments as a preferred mechanism; however it also allows 100% foreign ownership of an enterprise,” which is a power that is currently being abused by commercial businesses looking over Belize.[3]

These resources, along with the country’s natural allure and fairly remote locations, draw visitors from near and far, adding to the appeal of illegal fund transfers. While private investment does not necessarily mean corruption, in the absence of an effective power structure, corruption is imminent. Therefore, the total number of private investments allowed within the country needs to be monitored and controlled by the government.

Since 2001, the United States has become more involved with regions of the world where these types of financial crimes are carried out. The U.S. government’s concern is driven by the fact that financial crimes have been known to fund terrorist organizations. In a report released earlier this year concerning money laundering and other financial crimes, the U.S. Department of State named Belize one of the world’s top locations in which financial crimes can occur [4].The report dives deeper, explaining that Belize’s government hasencouraged the growth of offshore financial banking while attempting to diversify its economy. However, due to the country’s weak government and ineffectual control of its financial sector, these monetary activities soon became vulnerable to financial crimes.

Several news teams, courtesy of Al Jazeera, have found the source of the problem to be offshore businesses and lenders in Caribbean nations and remote islands. Due to the countries’ lack of resources, trade, and capital, these smaller nations are often willing to host, promote, and disguise questionable incoming funds in an effort to diversify their economies.

Caribbean and island nations elsewhere in the world, in the past, have been hotspots for international corruption and money laundering among corrupt politicians, fugitives, and the like. More than 32 trillion USD “in private financial wealth is hidden in offshore havens — roughly equivalent to the annual output of the U.S., Chinese and Japanese economies combined.”[5] The Investing.com article suggests that a company could be based in Seychelles, for instance, and the identity of the owner could remain completely hidden due to the concept of “putting ‘a company inside a company inside a company.’”[6] Many offshore lenders are known to use this tactic. Such a structure allows businesses to hide in multiple places, such as in Belize, without a trace of their pre-existing businesses or professional ties. These nations are notorious for having shell corporations, which make accounts untraceable. Such industries have been extremely beneficial for politicians worldwide, and have been attributed to finance pirates, terrorist organizations, and other fugitives.

International organizations have begun to pressure Belize to take more serious steps towards preventing money laundering. The Caribbean Financial Action Task Force (CFATF), an organization dedicated to implementing “common countermeasures” to prevent money laundering, has argued that Belize has not made sufficient progress in creating preventative measures.[7] The CFATF also claims that Belize has refused to comply or act fast enough. The group has gone as far as to call upon its member states to consider imposing countermeasures to protect their financial assets from financial risks in Belize.

The International Monetary Fund (IMF) has also taken measures to ensure that another crisis in the form of money laundering doesn’t occur in the future. This initiative is known as the Dodd-Frank Wall Street Reform and Consumer Protection Act, commonly known as Dodd-Frank.[8] According to researchers for the Council on Foreign Relations, this piece of legislation specifically has the purpose of “monitoring systemic risk, limiting bank proprietary trading, placing new regulations on derivatives, and protecting consumers” to prevent another financial crisis.”[9]

Belize has fired back against the allegations of inaction, citing its Domestic Banks and Financial Institutions Act (DBFIA) of 2012 as a serious step towards preventing financial crimes within its borders.[10] On a positive note, the DBFIA did help strengthen the Money Laundering and Terrorism Prevention Act of 2008, which was passed by Belize’s Parliament.[11] The DBFIA helped to improve provisions to govern domestic banks and financial institutions and strengthened Belize’s Central Bank’s powers to oversee and regulate the financial sector.[12] However, as a result of weak governance and rampant corruption among elected officials, the act has not actually deterred criminals from carrying out their illegal financial activities.

Overall, smaller nations like Belize are commonly used by foreign authorities, among other officials, to hide suspicious activities. With a weak central government, Belize has become especially vulnerable to financial crimes. In order to fix this issue, the International Monetary Fund (IMF), will need to enforce the Dodd-Frank legislation in order to prevent these types of situations from occurring in the future; and through the continued monitoring of countries like Belize, progress is expected to follow. If this legislation is not properly enforced or there isn’t any improvement, training should be provided to the respective government officials. In extreme cases, where there is knowledge of illegal activities occurring, international consequences should be set forth by the main governing entity and be enforced. That being said, change also must come from within. Though Belize has taken some steps in recent years towards ending money laundering, more must be done for the sake of protecting financial investments. For one, corruption within the government that allows these financial crimes to occur must be tackled first as one of the main roots of the problem. Oversight of the financial sector can also be increased through stricter regulations that can help deter financial institutions from promoting and hiding illegal fund transfers. However, due to the nature of international money laundering, it is also imperative that states continue to work together to abolish international financial crimes by establishing international laws and norms that can deter illegal investments from occurring.

Grace Kranstover and Ragini Chatterjee, Research Associates at the Council on Hemispheric Affairs

References:

[1] U.S Department of State. “International Narcotics Control Strategy Report, Volume II: Money Laundering and Financial Crimes.” http://www.state.gov/documents/organization/222880.pdf (accessed June 16, 2014)

[2] U.S. Department of State. “2013 Investment Climate Statement – Belize.” U.S. Department of State. http://www.state.gov/e/eb/rls/othr/ics/2013/204602.htm (accessed June 20, 2014).

[3] “Invest in Belize | Belize Investments | Property Investment Belize.” Invest in Belize . http://internationalliving.com/Countries/Belize/Invest/ (accessed June 26, 2014).

[4] U.S Department of State. “International Narcotics Control Strategy Report, Volume II: Money Laundering and Financial Crimes.”

[5] Hudson, Michael, and Matthew Shaer. “Sun and Shadows: How an Island Paradise Became a Haven for Dirty Money.” investing.com (accessed June23, 2014).

[6] Ibid.

[7] U.S Department of State. “International Narcotics Control Strategy Report, Volume II: Money Laundering and Financial Crimes.”

[8] Moyers, Bill. “Bill Moyers | Wall Street’s Secret Weapon: Congress.” Truthout. http://www.truth-out.org/news/item/24395-wall-streets-secret-weapon-congress (accessed June 16, 2014).

[9] Markovich, Steven J.. “The Dodd-Frank Act.” Council on Foreign Relations. http://www.cfr.org/united-states/dodd-frank-act/p28735 (accessed June 17, 2014).

[10] “Domestic Banks & Financial Institutions Act.” Domestic Banks. https://www.centralbank.org.bz/laws-regulations/domestic-banks-financial-institutions-act (accessed June 17, 2014).

[11] “Money Laundering & Terrorism (Prevention) Act.” Money Laundering. https://www.centralbank.org.bz/laws-regulations/money-laundering-terrorism-(prevention)-act (accessed June 17, 2014).

[12] U.S Department of State. “International Narcotics Control Strategy Report, Volume II: Money Laundering and Financial Crimes.”

The post The State’s Secret: Belize’s Money Laundering Regime – Analysis appeared first on Eurasia Review.

By Abhijit Singh

In recent days, China’s proposal for a Maritime Silk Route (MSR) has been a subject of speculation and debate. Beijing’s plan for a maritime infrastructure corridor in the broader Indo-Pacific region, first proposed by President Xi Jinping’s during his trip to Southeast Asia in October 2013, has attracted attention because of its potential to establish a Chinese foothold in the Indian Ocean. Needless to say, China’s outreach to India – inviting it to join the project – has generated much analytical curiosity.

The first thing of interest about the MSR is that it was initially mooted as an ASEAN-centered project. The intention then was to enhance connectivity and cultural links in China’s strategic backyard – the South China Sea. Beijing later expanded the scope of the project to include the Indian Ocean, but in reaching out to Colombo and New Delhi, it found a willing partner only in the former. India has been ambivalent about the MSR and is yet to make up its mind on joining the project.

During Indian Vice President’s Hamid Ansari’s visit to Beijing in end-June, China made another unsuccessful attempt at getting India to sign-up. Beijing’s renewed pitch for the construction of ports, logistical stations, storage facilities and free-trade zones in the Indian Ocean was again met with a passive response. While acknowledging Beijing’s sincere approach, the Indian side requested for more details on the project to help reach an early decision.

This is the second time running that India has successfully skirted the controversial MSR project. The last occasion was in Feb 2014 during the Special Representatives Talks in New Delhi, when the Indian representative had declined any comment or opinion on the issue. India, however, is not alone in inquiring about the project’s commercial viability – many ASEAN countries have been equally probing about is intended benefits. This raises fundamental questions about the project, the principal one being: Why, despite its scale and scope of the planned investment, does the MSR not inspire any confidence?

The problem with the MSR, essentially, is the ‘opaque’ nature of its proposal. Outwardly, the project is about the development of massive maritime infrastructure and connectivity in the Indian Ocean and the Western Pacific. Beijing has been careful to project the MSR as an exclusively commercial venture, trying hard to dispel any impressions of it being a cover for maritime military bases. Surprisingly, however, China has released no details about the project, and this makes many countries doubt Beijing’s strategic intentions. The lack of specifics not only makes it hard to decipher the MSR’s real purpose, it gives credence to suspicions of geopolitical game play by China. Indeed, for a project being touted as a critical enabler of regional sea-connectivity, Chinese planners would have spent much time and effort developing the fine-print. The lack of firm plans, proposals and timelines then does lead to a suspicion that there may be something about the MSR that Beijing is hesitant to reveal quickly.

Even on the few specifics that China has released, claims appear doubtful. According to Beijing, the MSR involves the development of maritime nodes that will help enhance trade and sea-connectivity and assist substantially in the development of local economies. Beijing has been promoting the project as an economic game-changer and an enormously beneficial enterprise for all host nations. Even so, it is hard to disregard the fact that China is the source of much of the maritime turbulence in South East Asia. China’s positioning of an exploration rig in the Vietnam’s EEZ, its skirmishes with Philippines over the Scarborough reef, and the aggressive patrols off the Senkaku islands clearly shows Chinese intensions in the Western Pacific are anything but benign. With unsettled issues of sovereignty and sovereign jurisdiction over disputed Islands in the South China Sea and the East Sea, Beijing’s expectation of a free-pass to create an entire infrastructure corridor in a contested maritime space, appears seriously doubtful.

Since it has already shown its approval for China’s BCIM (Bangladesh-China-India-Myanmar) development plan, chances are New Delhi will be favourably inclined to consider the MSR. It is, however, certain to go over the details carefully before agreeing to the development of Chinese infrastructure in Indian waters. Even though it will be keen to start-off with Beijing on a positive note, the new NDA government in New Delhi would be wary of displaying undue haste in giving the MSR its full approval.

It is felt that India, like some other Indian Ocean states, is so overwhelmed by the scale and scope of the MSR that even in the face of misgivings it will go ahead and sign-up to the project. According to MSR observers, the fear of being left out of its commercial benefits would lead many nations to uncritically accept the project as an economic and strategic enabler. Since the project proposal comes coupled with the “New Silk Road” – a land infrastructure project that envisages the development an ancient route connecting Western China with South and Central Asia – it will be hard for national policy-makers to desist from signing-up.

The Chinese state-owned Xinhua News Agency’s recently revealed some information about the Maritime Silk Route. A map attached to the news report showed Kolkata and Colombo (and not the Pakistani port-city of Gwadar) as possible venues of infrastructure development. The omission of Gwadar from the plan appears to be an overt incentive for India to join-up. Saying ‘yes’ to the MSR will, however, serve as an Indian endorsement of China’s supposed ‘benign’ motivations in the IOR. Worse, as informed voices point out, joining the project will not in any way serve to allay India’s original concerns about a ‘string of pearls’ in the Indian Ocean.

This is not to deny the MSR its short-term benefits, which could – by some accounts – be substantial. China’s announcement of a 10 billion Yuan ($1.6 billion) fund to finance the “maritime silk road plan” is a clear sign that it is serious about moving ahead with its stated plans. These supposedly include port-building and connectivity-enhancing projects within Southeast Asian and Indian Ocean littoral countries that could help local economies enormously. The financial payoffs, however, will likely come at a price and entail long-term strategic implications – especially for regional maritime security.

The MSR’s essential rationale is the leveraging of Chinese soft-power. The aim apparently is to shore-up China’s image as a benevolent state. Beijing’s would also conceivably use the project’s commercial investments to establish its legitimate interests in the Indian Ocean. And while China can be expected to do everything in its power to force region states to join the project – including offering economic aid to potential partners – the bottom-line for it will be to make an offer to India that is hard to refuse.

For India, it is instructive that the sales pitch of shared economic gains does not conceal the MSR’s real purpose: ensuring the security of sea lines of communications (SLOCs) in the Indian and Pacific oceans. Since African resources are China’s focus right now, the project could well be a surrogate for a giant Chinese SLOC running all the way from the East African coast, to the Southern coast of China – created, maintained and controlled by Beijing. In its ultimate form, therefore, the MSR could end up setting up Chinese logistical hubs in the Indian Ocean, linking up already existing string of pearls.

India’s appreciation of the MSR must be based on an objective appraisal of these new realities. Even assuming the project delivers on its economic promise, it could well turn out to be detrimental to India’s geopolitical interests in the IOR. As Beijing becomes more involved in building infrastructure in the Indian Ocean, it will play a larger part in the security and governance of the IOR, which could pose a challenge to India’s stature as a ‘security provider’ in the region and also adversely affecting New Delhi’s strategic purchase in its primary area of interest.

Views expressed are of the author and do not necessarily reflect the views of the IDSA or of the Government of India

Originally published by Institute for Defence Studies and Analyses (www.idsa.in) at http://www.idsa.in/idsacomments/ChinasMaritimeSilkRoute_AbhijitSingh_160714.html

The post China’s Maritime Silk Route: Implications For India – Analysis appeared first on Eurasia Review.

By Nandan Unnikrishnan

The shooting down of the Malaysian Airlines Boeing 777, while a major new challenge to finding a solution to the crisis in Ukraine, could also be a wake-up call that will lead to a ceasefire and negotiated settlement.

On the surface, the tragedy appears to exacerbate the differences between Western-backed Ukraine and Russia. The downing of the aircraft has, naturally, sparked off international outrage and condemnation. The West and Ukraine were quick to blame Russia for the incident, providing what appears to them as irrefutable proof that the separatists backed by Moscow were responsible for shooting down the plane with a missile.

Russia’s Deputy Defence Minister Anatoly Antonov was quick to refute the charges. “Some Western states and Kiev … try to show to the whole world that we are responsible for the crash. It is very strange that without any evidence my colleagues from western media would like to find somebody who is responsible for the crash,” Antonov said. “It seems to me that this is part of information warfare which has been started against the Russian Federation and (its) armed forces,” he added voicing a long-held grievance.

The tragic incident makes it that much more difficult to get all parties involved in the Ukrainian conflict together in one room to seek a negotiated settlement. The differing versions of the events that led to the tragedy underscore the difficulties, which may eventually be insurmountable, in the path of finding a solution that will satisfy everyone.

The only facts on which all agree are that MH17 crashed over a part of Ukraine which is a warzone between the Ukrainian government and the so-called ‘self defence forces’, allegedly supported by Russia and that the plane was flying too high to be destroyed by the portable or light vehicle mounted surface-to-air systems (SAMs) so far openly used by the separatists..

However, from the clamour created by the charges, counter charges and pure speculation about the incident, some elements can be discerned.

The missile that brought down the aircraft was probably a “Buk”, what NATO calls “Gadfly”. A Buk system is vehicle-mounted and fires missiles that can reach much higher than the reported altitude — 33,000 feet — of the Malaysian passenger jet. The Buk is a radar-guided missile, which could be fired without physical sighting of the target.

There are conflicting reports on whether the (Ukrainian rebels) anti-government forces possess these SAM batteries. Some separatists had recently claimed to have captured one from the Ukrainian Army, but other leaders have disputed this. What makes the allegation that the separatists fired the missile more credible is that a trained SAM battery military crew should have been able to distinguish the radar signature of a passenger plane from a military troop carrier. But the relatively inexperienced separatists, lacking extensive radar support, would lack the skills to make that distinction. Of course, the 2001 inexplicable downing of a Russian civilian plane by the Ukrainian military over the Black Sea makes such judgements difficult to make.

Another important piece of evidence supporting the allegation that the separatists shot down the plane are the recordings of conversations between military leaders of the ‘self defence forces’ released by the Ukrainian authorities. There is little doubt that the speakers recorded on the tape are aware that a plane has been shot down, but appear shocked to discover that it is a civilian aircraft. There are, however, claims on the internet that question the authenticity of these recordings, claiming that the time stamp of the uploaded You Tube file suggests that the recording was made a day before the disaster.

There is also confusion about why the MH17 took this particular flight path given that Russian authorities had notified, well before the flight took off from Amsterdam, the closure of their airspace in the region. Although it is possible that the path may have been open at the altitude that the Malaysian aircraft was flying. It is also not clear why the airspace was not closed earlier over Ukrainian territory where several aircraft, albeit military, have been shot down recently.

These questions should be addressed by an authoritative investigation into the crash, to which all sides should provide whatever related evidence they possess. It would not help perceptions of impartiality of the investigation if the black boxes are handed over to Ukrainian or Russian authorities without some international oversight. This would only promote speculation about possible tampering.

Undoubtedly, the shooting down of MH17 with 295 passengers on board will widen the gulf separating the various parties in the Ukrainian conflict. But, a peaceful resolution of the conflict is the only way to prevent this conflict in the middle of Europe from spinning out of control.

The settlement will have to take into account the interests of all parties involved not only Ukraine, but Russia, the EU and the United States. If the Western states insist on settling the crisis without Russia’s involvement it appears unlikely that there will be an early resolution to this conflict. Russia should also understand that promoting separatists in Ukraine could lead to catastrophic consequences. On the other hand, further Western sanctions against the Kremlin will only exacerbate the situation and probably push Russia closer to China. Not an outcome India will relish.

India will have to tread very carefully in this imbroglio. It has in the past and continues to acknowledge that Russia has legitimate interests in Ukraine. However, at the same time Delhi will have to make sure that this position is not seen as endorsement of Russian support for the separatists in Eastern Ukraine.

Moreover, if efforts to dilute tensions between the West and Russia fail, Delhi will have to intensify its engagement with Moscow to develop the relationship as leverage against what is perceived to be India’s primary strategic challenge – the rise of China. India and Russia will have to creatively use forums like the Russia-India-China trilateral, the Shanghai Cooperation Organisation and others to circumscribe Chinese power within a framework of internationally acceptable rules.

(Nandan Unnikrishnan is a Senior Fellow with Observer Research Foundation, New Delhi. A version of this article appeared in The Telegraph, Kolkata on July 20, 2014.)

The post MH-17 Shooting Down: A ‘Wake-Up Call’ To Work For Truce – Analysis appeared first on Eurasia Review.

By Mackubin Thomas Owens

“Reputation of power is power, because it draweth with it the adherence of those that need protection,” writes Thomas Hobbes, in Leviathan.

Does American “credibility” in foreign policy matter? Many commentators answer in the negative. For instance, Peter Beinart, of The Atlantic, has contended that what he calls the “credibility fallacy” is an excuse to avoid complex discussions of America’s global interests. It is all too true that foreign policy posturing is unhelpful, but as recent global event have illustrated, both America’s adversaries and friends pay attention to what the United States says and does. The perception of American weakness emboldens the former and disheartens the latter.

Russia, China, Syria, and Iran all seem to act in accordance with their perceptions of U.S. resolve. Our adversaries are always probing for weakness, timidity, and uncertainty. When they encounter strength, they tend to be deterred. When they encounter weakness, they often push harder. This behavior is a logical form of geopolitical net assessment.

For instance, during the Cold War, the Soviets based their policy on an assessment of the “correlation of forces” (COF). When Soviet leaders believed that the COF was shifting in favor of the USSR, they tended to act more aggressively.

During the 1970s, the usually cautious Soviet Union began to pursue an uncharacteristically aggressive foreign policy. The Soviets sought nuclear superiority at both the strategic and theater levels, in the first case deploying the SS-18 inter-continental ballistic missile and in the second, deploying the SS-20 intermediate range ballistic missile. The Soviets also invaded Afghanistan and pursued an increasingly activist policy in Africa and Central America.

A number of analysts attributed this adventurism to the apparent belief that the trends during this decade indicated a favorable shift in the COF. Indeed, the Soviet military press during this decade was filled with numerous references to the COF. For instance in 1975, General Yevdokim Yeogovich Mal’Tsev wrote that “the correlation of world forces has changed fundamentally in favor of socialism and to the detriment of capitalism.”

Soviet analysts have long disagreed about the importance of COF as a practical guide to action. In 1951 Raymond Garthoff, a prominent Soviet policy observer, summarized the concept: “The calculation of the relation of forces is a most convenient means for internally and externally rationalizing the interpretation of Marxian ideology in pure power terms.” As “scientific socialists,” the Soviets believed that history led inexorably to a revolutionary communist future. But following the lead of Vladimir Lenin, they believed that the Party was necessary to sustain the momentum of revolution by orchestrating actions appropriate to the historical situation. COF was an attempt to assess correctly the historical situation.

Many of those Soviet observers, who took COF seriously, attributed Soviet adventurism in the 1970s to Soviet perceptions of U.S. weaknesses—perceptions that mirror the situation today. According to this analysis, the Watergate crisis that ended the presidency of Richard Nixon, the U.S. defeat in Vietnam, the incredibly weak administration of Jimmy Carter, the decline of the U.S. defense budget, the contraction of U.S. naval force structure and the reduction of land force readiness, the abandonment of Taiwan, negotiations intended to give up control of the Panama Canal, and the Iran hostage crisis, indicated to Soviet leaders that the position of the United States relative to the USSR was weakening and that an assessment of the COF indicated that the time had come to exploit the situation. One result was the articulation of the Brezhnev Doctrine, which essentially declared that no country could leave the socialist camp—there would be no counterrevolution permitted here—limiting the struggle with capitalism to the zone of the latter. The Soviet Union seemed poised to win the Cold War.

Yet a decade later, the Soviet Union was in retreat: This retreat initially may have been the sort of tactical retrenchment that characterized, say, the Brest Litovsk treaty, understood as a temporary defensive measure making it possible for the Soviet Union to fight another day. But the setbacks soon constituted a strategic retreat of a kind that Lenin or Joseph Stalin never could have imagined, culminating in the collapse of the Soviet Union itself.

What was the cause of this reversal? The short answer is the rejection by the American people in 1980 of President Jimmy Carter’s politics of malaise and the election of Ronald Reagan. The Reagan Administration abandoned Carter’s policy of playing the game of Cold War geopolitics according to the rules of the Brezhnev Doctrine. Indeed, Reagan attacked it, both directly and indirectly. An example of the former was the cost-incurring strategy of supporting anti-Soviet insurgents in Afghanistan.

But for symbolism, nothing quite matched Grenada—a small operation that nonetheless had a major impact by calling into question the viability of the Brezhnev Doctrine. Those who have ridiculed this operation have missed its impact on Soviet planners.

These explicit attempts at “roll-back” complemented an aggressive defense buildup that negated the Soviet Union’s bold bid for military superiority. The defense buildup, in turn, constituted part of the most important element of the Reagan strategy: the deliberate targeting of the weak Soviet economy. Indeed, the great accomplishment of the Reagan grand strategy was to identify the Soviet economy as the “strategic center of gravity” upon which to focus its efforts. The Reagan Administration adopted an asymmetric and cost-incurring strategy to exploit the mismatch between the large and growing U.S. economy and the much smaller Soviet economy. This economic strategy included such measures as trade sanctions against the USSR and the deregulation of oil prices in the United States, which caused the OPEC cartel to crumble and the price of oil to plummet. As a result, the Soviet Union was deprived of a major source of hard currency.

At the peak of the Reagan buildup (FY1985), the United States spent 6.3 percent of its Gross Domestic Product (GDP) on defense. Part of the reason for the declining U.S. national security burden was the continued growth of the U.S. economy during the Cold War, enabling the United States to maintain a relatively constant and robust level of defense spending during the period.

The cost of the Cold War to the USSR was substantially higher than for the United States. From the 1950s through the mid-1970s, the CIA estimated that the burden of Soviet defense spending was consistent with, or even lower than, that of the United States. For example, it was about six percent of GNP and declining. But in 1975, the CIA concluded that its earlier estimates had been in error: the ruble prices of Soviet weaponry were twice as high as previously estimated—the USSR was spending 11-13 percent of its output on defense. Some analysts argued that the figure was even higher—14-17 percent and rising.

Even the lower estimates meant that the burden of defense for the USSR was three to four times that of the United States since analysts believed that the Soviet economy was only one-half to two-thirds the size of the U.S. economy. Subsequent research has indicated that these intelligence analysts consistently overestimated the size of the Soviet economy, meaning that the relative burden of defense to the USSR was even higher than previously believed.

That the Reagan Administration stressed the economic component of grand strategy to cause the Soviet Union to collapse is suggested by a revealing passage from the first edition of the National Security Strategy of the United States, issued by President Reagan in 1987. According to this document, a major objective of U.S. strategy was “to force the Soviet Union to bear the brunt of its domestic economic shortcomings in order to discourage excessive Soviet military expenditures and global adventurism.”

The Reagan Administration’s cost-incurring strategy forced the USSR to expend resources the Soviet economy could not afford. The combination of the U.S. defense buildup, support for anti-Soviet forces in Afghanistan, and other pressure on the Soviet economy was more than it could withstand. The collapse of the Soviet Union was the result of a strategy that targeted the economy.

Of course, no two cases are alike and there are many differences between the 1980s and today. But the late-Cold War era does illustrate an enduring truth of international relations. One doesn’t need to adopt the Marxist pseudo-science that underlay the COF to understand that resolve can reverse decline as it did during the Reagan presidency.

But will President Obama take the steps necessary to reverse American decline? The prospects are not auspicious. For instance, the president seems to believe that he can shame Vladimir Putin into abandoning his aggressive policies against his neighbors by lecturing him on the niceties of international norms and the importance of international institutions. But this is Immanuel Kant lecturing Niccolo Machiavelli. As the latter observed, “it is better to be feared than to be loved.” American power is a good thing, not only for the United States but for the world. But to be credible it must be exercised when necessary.

As in the 1970s, we are beginning to see the consequences of America’s abdication of power. The late Samuel Huntington described a world without America: “…a world with more violence and disorder and less democracy and economic growth than a world where the United States continues to have more influence than any other country in shaping global affairs. The sustained international primacy of the United States is central to the welfare and security of Americans and to the future of freedom, democracy, open economies, and international order in the world.”

Without a reversal of U.S. foreign policy, it is an ugly world indeed that awaits us.

About the author:
Mackubin “Mac” Owens is Editor of Orbis, FPRI’s quarterly journal of international affairs, and Senior Fellow at its Program on National Security. He is also Professor of National Security Affairs at the Naval War College in Newport, Rhode Island. He served as a Marine infantry platoon commander in Vietnam (1968-69), where he was twice wounded and awarded the Silver Star medal. He retired from the Marine Corps Reserve as a Colonel in 1994. This E-Note is excerpted from his editorial column in the Summer 2014 issue of Orbis

Source:
This article was published at FPRI, and may be accessed here.

The post Lessons From The Cold War – Analysis appeared first on Eurasia Review.

By Miguel Otero-Iglesias

Following two years of intense negotiations, the BRICS leaders agreed on 15 July 2014 in Fortaleza (Brazil) to launch the New Development Bank (NDB). This is a significant (and therefore not to be underestimated) step in their efforts to build a less crisis-prone international financial system. If the bank succeeds in its goal to provide development funding for its member states and for the rest of developing nations, it has the potential to become a game-changer in the evolution of the international economic order. The creation of the NDB is already a historic landmark. It is the most significant institutional innovation in international development funding since the creation of the Inter-American Development Bank (IDB) in 1959, the Asian Development Bank (ADB) in 1966 and the European Bank for Reconstruction and Development (EBRD) in 1991.

The birth of the NDB is unique for a number of reasons. Unlike the development banks mentioned above, which have a predominantly regional focus, the NDB’s founder countries are from four different continents and its potential reach is thus truly global. Furthermore, this will be the first time since the Bretton Woods conference in 1944 (which created the IMF and the World Bank) that the US has no influence in the governance structures of an international development bank (it is important to remember that the US is a founder-member of the IDB, the ADB and the EBRD). Finally, its creation is historically significant because this is the first time in modern history that China is actively involved in the creation of a multilateral institution. In fact, after knowing the first details of the bank’s governance structures, it might safely be argued that China is the leading country behind the NDB project.

Despite strong opposition from India and Brazil, two other emerging heavyweights, China has been able to convince its partners to locate the NDB’s headquarters in Shanghai. It has also pushed through the creation of the first NDB regional centre in Johannesburg, which means that most of the funding that will not go to the BRICS will probably go to infrastructure projects in Africa, one of Beijing’s priorities. China therefore has the potential to function similarly to the US in the Washington-based Bretton Woods institutions. With a GDP of US$9.2 trillion, one and a half times the combined GDPs of Brazil (US$2.2 trillion), Russia (US$2.1 trillion), India (US$1.8 trillion) and South Africa (US$350 billion), China will have a de facto veto power in most of the NDB’s key decisions, even though voting powers are theoretically equal since all five members will contribute US$10 billion to the bank’s US$50 billion initial subscribed capital.

China’s financial might is already acknowledged in the contributions to the BRICS Contingent Reserve Arrangement (CRA), which was dubbed a ‘mini-IMF’ by the Russian Finance Minister Anton Siluanov. There China will provide US$41 billion (a tiny 1% of its US$4 trillion mountain of foreign reserves), while Russia, Brazil and India will only contribute US$18 billion each, with South Africa, the smallest economy, adding another US$5 billion.

Given China’s apparently overwhelming influence in the NDB, it will be interesting too see how much autonomy and freedom non-Chinese officials (both at the senior and junior levels) will have. The BRICS leaders have agreed that the institution’s first president will be Indian (a Russian will chair the board of governors and a Brazilian the board of directors), and that his or her mandate will last five years. After that, there will be a rotating presidency with Brazil, Russia and South Africa next in line for appointing the president, so that China will not be presiding the bank in two decades. This could be seen as a major concession. The question is whether the non-Chinese presidents will have room for manoeuvre, and whether (and this is not a minor issue) junior officials, say from Brazil or South Africa, will be able to freely access their otherwise censored Google, Twitter and Facebook accounts. If China allows this level of autonomy and freedom both at the top and the bottom of the NDB’s operational structure, it will prove its commitment to multilateralism and show that it acts differently from the US.

The BRICS have diverse cultural heritages, political systems and economic fundamentals. These disparities will be the source of discrepancies and tensions in the governance structures of the BRICS group as a whole and of the NDB in particular. However, Western policymakers and pundits should not make the mistake of dismissing these initiatives as unworkable and therefore irrelevant. Now that the devastating effects of the Global Financial Crisis (2007-09) are starting to be overcome –with signs that the US and Europe are growing again (the former more than the latter)– many in Washington and the European capitals think that we can return to business as usual. They are failing to accept the fact that the US-led international financial system, based on US dollar hegemony and unfettered financial markets, has lost its legitimacy among a large number of financial and political elites in the emerging markets.

We are witnessing a historic power shift from the West to the Rest, and the NDB is thus far the phenomenon’s most symbolic institutional representation. In order to manage the transition smoothly it would be wise for Europe not to be seen as constantly siding with the US in trying to obstruct any attempt to reform the international monetary and financial system. This will only increase tensions and foster the likelihood of a power game between competing blocs in which the US and Europe are on one side and the BRICS on the other. Europe will remain the US’s junior partner, but this should not preclude it from becoming a useful power broker between the US and the BRICS.

About the author:
Miguel Otero-Iglesias is Senior Analyst for European Economy and Emerging Markets at the Elcano Royal Institute| @miotei

Source:
This article was published by Elcano Royal Institute and may be accessed here.

The post The BRICS New Development Bank: A Historic Game-Changer? – Analysis appeared first on Eurasia Review.

On Sunday morning, in coordination with the UN Access Coordination Unit, the Spanish Consulate General in Jerusalem organised the voluntary departure from Gaza of 51 Spanish nationals and 14 direct Palestinian relatives, according to the Spanish government.

Two coaches chartered by the Consulate General relocated the group from the Erez Crossing between Israel and Gaza to the border with Jordan, from where staff from the Spanish Embassy in Amman took them to a safe location in the Jordanian capital.

They will remain in the city until the fighting ends and safety conditions allow them to return to Gaza. The NGO, Messengers of Peace, founded by Father Ángel García Rodríguez, has offered its assistance to take care of this group of 65 people in Amman, over half of which are children.

The post Spain Organises Voluntary Departure Of 51 Spanish Nationals From Gaza appeared first on Eurasia Review.

By Sushant Sareen

For someone whose understanding of politics is limited to drawing banal cricketing analogies, the phrase ‘it’s not cricket’ aptly describes the sort of politics Imran Khan is indulging in these days. His threat of leading a ‘Long March’ (how Mao must be twisting in his grave over the Pakistani mutilation of the original Long March) to Islamabad to shake up the political system – he is himself isn’t clear on what he actually wants – is not cricket because it brazenly violates the basic rules of the political game set in the constitution. It is also not cricket in the sense that a five year term in government is not the same as a five-day test match in which the two contending sides get to play two innings each.

That Khan isn’t clear on what he hopes to get out of the ‘Long March’ (or is it Tsunami March or Azadi March?) is evident because he keeps shifting the goalposts depending on what catches his fancy at a particular time. He started with demanding a vote verification in four constituencies, went on to demand a mid-term election, retracted to demanding an audit of the entire election (inspired by Afghanistan). The end-game – how he hopes to get his demand met, what he will do if the government continues to stonewall, and what the consequences of any widespread disturbance in Islamabad could be, including the outside chance of a derailment of the democratic process – has obviously not been thought through by him. Not only is his timing wrong (barely a year after the general election he is demanding a mid-term poll), he has also not factored in the possibility that even if he managed to grab power, he would then be faced with similar efforts to overthrow him. In other words, it will be back to the sordid politics of the 1990s.

Imran Khan suddenly became hyperactive against the government after the military establishment seemed to get into a tussle with incumbent Prime Minister Nawaz Sharif’s government leading many analysts to suspect that he had been put up to the task by the powers that be. Despite being seen as riding on the back of the military to queer the pitch for the Nawaz Sharif government, Imran Khan was careful to keep parroting his commitment to democracy, even though he is doing everything to undermine it. Even if he can’t force the Pakistan Muslim League – Nawaz (PMLN) out of office through his agitation, he would have weakened the civilian dispensation to a point where it would be forced to lean on the crutches of the military, or at least remain extremely diffident, before the military. That the PMLN government has come to such a pass with just about a year in office is a sorry statement on the fragility of the democratic process in Pakistan.

It is not just Imran Khan who is on the march against the government. The somewhat comical cleric from Canada, Tahirul Qadri, has also been on the warpath, selling an instant revolution to his acolytes as if it were some kind of instant coffee. Politically, Qadri is a non-entity. But like many other God-men, and such like in the subcontinent, Qadri has his following which probably runs into a million or more. His game is even less nuanced than Khan’s because he makes no bones about completely overthrowing the system. Ironically, he calls his ‘revolution’ legal and constitutional! Qadri has been given a leg up by the horribly botched strong-arm used by the PMLN government against Qadri’s Lahore headquarters, killing around a dozen people and injuring some 100 in police firing.

Individually, however, neither Qadri nor Khan can oust the government. Hence, efforts by quintessential establishment flunkies and Tonga politicians (whose support base can fit on a horse-driven Tonga) like the Chaudaries of Gujarat and Sheikh Rasheed of Rawalpindi to bring them together. But this appears to be an uphill task because while Khan has some kind of a stake in the system, Qadri is a misguided missile seeking to destroy everything without any clear idea of how and what to replace it with. What is more, they have their problems on who will lead and their suspicions on who will retreat first leaving the other in the lurch. Meanwhile, the Pakistan People’s Party (PPP) which was fast becoming irrelevant and leaderless, with Asif Zardari in his bunker, Bilawal active only on twitter and the party is disarray, disunited (especially in Punjab) and directionless, has also started making noises against the government and in support of Khan. But even if the PPP joined the opposition ranks, unless the army casts its lot with the forces arraigned against the government, it is unlikely that Sharif would lose power anytime soon.

Despite its problems with the government, the army doesn’t seem quite ready to either force mid-term elections, or usher in a medium-term interim government of technocrats, or even take over power directly. Even the praetorian Pakistan army knows that doing any such thing would tantamount to jumping from the frying pan into the fire. It would rather put up with a weak government that subordinates itself to the military than tempt fate or worse by destabilising the government or ousting it. Of course, if massive disturbances break out as a result of the agitations being planned by Khan, Qadri and Co. then all bets are off. If things come to such a pass, then Imran Khan will have to cool his heels in the pavilion, his dreams and delusions of leading Pakistan shattered.

The most remarkable thing in the unfolding political drama in Pakistan is the swiftness with which Nawaz Sharif has lost political capital and managed to box himself into a corner because of wrong political decisions. He could still recover lost ground, but that will require political cunning, coolness and compromise, none of the things he is known for.

Sushant Sareen
Senior Fellow, Vivekananda International Foundation

The post Domestic Politicking In Pakistan: It’s Not Cricket – Analysis appeared first on Eurasia Review.

By Neil Thompson

Argentina recently succeeded in persuading the UN Special Committee on Decolonization to call for further negotiations with the United Kingdom over the status of the Falkland Islands. In doing so, Buenos Aires has succeeded in persuading committee members to ignore the results of a referendum conducted by the local Falklands population in 2013 that voted overwhelmingly to remain an overseas UK territory. Argentina maintains that the issue is one of UK occupation of sovereign Argentine territory, so the islanders’ opinions are moot under international law.

Since neither Argentina nor Britain are economically or militarily strong enough to afford a war over the Islands, the risk of formal interstate conflict remains low. However, this does not guarantee the Islands’ future as a British overseas territory. The UK’s geopolitical position vis-à-vis many other states has dramatically weakened since 1982, leaving Argentina in a better position to further its policy goals. In this respect, Buenos Aires might choose to launch an aggressive postmodern “lawfare” campaign of economic, legal and diplomatic sabotage to delegitimize the UK’s administration of the islands. Like Russia’s current involvement in the Ukraine crisis, Argentina’s attempts to destabilize the Falkland Islands would occur below the level of open war.

Rule Britannia?

But would this ‘campaign’ ultimately result in the end of the Islands’ status as a British overseas territory? The UK certainly does not command the same level of hard and soft power that it had back in 1982. Indeed, the 2008 financial crisis merely completed what the ‘war on terror’ begun, debilitating the country’s military machine and the economic engine any modern state needs to project power and influence over others. Britain is also going through a period of tense relations with its European Union partners and faces an uncertain future as a united political entity. Consequently, London’s ability to shield the Islands from their giant neighbor is correspondingly diminished.

This is particularly significant given that many South American states not only sympathize with Argentina’s point of view but have also become far more important actors on the world stage. The UK has no real remaining regional allies in South America, a continent with dim views of the former European colonial powers. There is also a generational issue. Many key figures in contemporary Latin American politics, such as current Brazilian President Dilma Rousseff, remember when Britain provided support to the repressive dictatorships that they grew up in. London’s relations with the Pinochet regime in Chile, for example, were particularly close until the return of democracy there in 1990. Now, Latin America is run by self-confident democracies, not pliable dictatorships in need of outside support to bolster their rule. Britain is therefore kept isolated in South America by its past associations for many Latin Americans.

Malvinas Argentina’s?

However Buenos Aires is by no means in the best shape to capitalize upon British weaknesses.Argentina’s government remains preoccupied by economic difficulties, rising inflation and foreign litigation. For instance, a recent ruling by an American court determined that the country must pay a group of “vulture funds” the full amount of their defaulted loans – an order that threatens already scarce foreign currency reserves.

Yet, parlous economic conditions and popular unrest did not stop Argentina’s last military junta from invading the Falkland Islands in 1982. Instead, reclaiming the Malvinas helped to distract the Argentine public from its disastrous economic policies. Consequently, if Argentinean politics were once again to become destabilized by economic difficulties, it is not hard to see a case where a populist government comes to power with a nationalist worldview that is once again committed to “recovering” the Falklands. Coercive gestures towards the Islands could easily become a substitute for hard economic reforms or their “price”. For instance, Argentina could easily unilaterally escalate the crisis on the ground by sending an exploratory oil rig with a naval escort to drill inside the Falklands maritime boundary. Alternatively, it could try to undermine the Islands economically with a blockade.

Which undoubtedly begs the question, what kind of military threat does Argentina pose to the Falkland Islands today? The Global Firepower website ranks Argentina in lowly 55th place, behind the likes of the Netherlands, Belarus and Ukraine. And despite its ongoing economic travails, the UK remains among the world’s leading military powers thanks to the $53.6 billion its spends on defense, compared to Argentina’s $4.3 billion. Moreover, the UK’s helicopters, aircraft and submarine capabilities significantly outnumber and outclass their Argentine equivalents. To further compound matters, Argentina’s armed forces are still equipped with outdated technology from the 1970s and 80s, whereas the UK has significantly improved its quality and capabilities since 1982. UK forces are also significantly battle-hardened from recent conflicts in the Middle East and Asia.

The only major vulnerability facing the UK’s armed forces is its current lack of aircraft carriers. Currently, Britain only has one carrier in active service which, in the context of the Falklands conflict, would be especially vulnerable to advances in anti-ship missile technology since 1982. Yet, with a significant military presence on the Islands since the end of the conflict, coupled with advances in surveillance and satellite technology, London can nevertheless rest assured that a surprise Argentine invasion remains highly unlikely.

But would this be enough to stop a populist government in Buenos Aires from capitalizing upon nationalist sentiment? Many analysts hold Argentina’s special-forces in high-regard and believe that they are capable of launching covert strikes against the Islands. Yet, even if such strikes were to succeed, it would still be extremely difficult for Argentina’s armed forces to hold the Islands and, indeed, reinforce and resupply them. Given the parlous state of Argentina’s navy especially, this idea makes no military sense. But as a public relations gesture to rally regional support for itself against Britain, a clash could easily be spun as a moral victory.

Around the World

So while Buenos Aires could make life very difficult for the Falkland Islands, its bid to return them to Argentinian legal jurisdiction nevertheless remains reliant upon the support of fellow Latin American states and international patronage for the foreseeable future. At present, these parties are happy to make sympathetic noises. However, genuine Latin American support does not extend much beyond symbolic gestures like supporting the UN vote or blocking Falklands-flagged ships from docking at ports. This could change, for example, if Brazil resumed its campaign for a permanent seat on the Security Council and used the issue to put pressure on the UK.

In addition, the UN Decolonisation Committee remains a deeply unsympathetic forum for British interests. With Russia, China and non-aligned states such as India and Brazil as members, the UK has no natural allies within this forum. While London remains free to ignore or veto its resolutions, by repeatedly doing so it nevertheless provides Buenos Aires with a useful and highly symbolic pretext for any actions short of war that it chooses to take to “enforce its sovereignty” over the Falkland Islands, such as sending over a flotilla of unarmed ships full of civilians to “reclaim” them.

Back to the Future?

Indeed, emphasizing ‘actions short of war’ to break the Falklands stand-off is particularly important given the current political climate in Argentina. It’s the only option Buenos Aires has in the absence of a superior local military presence, a friendly local populace and a disorganized opponent of the type that allowed Russia to “peacefully” occupy and subsequently annex Crimea earlier this year. Yet, the legal and moral threat that Argentina could pose might prove effective – if it is accompanied by a propaganda campaign that resonates with all the right sections of the international community. “Delegitimization” could make the economic and political costs so prohibitive that the UK determines that it no longer makes sense to maintain its sovereignty over the Islands.

Under this worst case scenario, a “Diego Garcia” situation could occur where, under the aegis of the UN, the “implanted” British population is removed and evacuated back to the UK. The administration of the Falkland Islands would then pass to Buenos Aires, a move that is unlikely to sit comfortably with most of the British public. Yet, with tact and sound diplomatic skills, the transfer might acquire the veneer of legalism that state conductors of “lawfare” rely upon to win international acquiescence for their actions.

There are plausible modern precedents for the surrender of overseas territories with large citizen populations. In 1962 then-President Charles De Gaulle gave up the three French overseas territorial “départements” in what is now Algeria. These had been regarded as an integral part of France up to that moment. Almost a million European Algerians (Pied Noirs) fled to mainland France afterwards, and today there is no significant French population in Algeria. The Falkland Islands had no indigenous population for Britain to mistreat the way the French did native Algerians, so the parallels here are not exact. Yet, from a legal standpoint it could be argued there are similarities between the two situations. When France retreated from Algeria, it did so because it was widely seen as having lost the “battle of ideas” against nationalist opponents, not the military conflict. Britain must not rest on its laurels and allow the same to happen with Argentina.

Neil Thompson is a freelance writer and member of Atlantic Community’s editorial team. He has lived and travelled extensively through East Asia and the Middle East. He holds an MA in the International Relations of East Asia from Durham University, and is now based in Berlin.

The post What Threat Does Argentina Currently Pose To The Falklands? – Analysis appeared first on Eurasia Review.

(CORDIS) — Scientists have developed a material so dark that when you look at it, it’s like staring into a black hole. The material, made of carbon nanotubes, is another step in the scientific quest which began in the 1990s to create the blackest of blacks.

However don’t expect Vantablack, as it’s known, to appear on a catwalk near you. This material is destined for use in the military and astronautical sectors. Perhaps that’s actually not such a bad thing for fashion lovers – a Vantablack dress might not be so flattering according to The Guardian: ‘If you were to wear a Little Vantablack Dress, people would see your hands poking out the ends of the sleeves, your legs below the hem, your neck and head – and the rest of you would appear two-dimensional.’

So what’s the use of ‘the new black’? Well, as The Guardian notes, it absorbs all but 0.035% of light (in technical terms, it has a Total Hemispherical Reflectance or THR of 0.035%) which is a new record. And what makes the latest black particularly special is the fact that it can grow at temperatures as low as 400C. This means it can be grown on lighter materials, such as aluminium, increasing its practical applications.

Extremetech.com predicts that the material will be used to make a variety of stealth craft and weaponry. The website adds, ‘It will also be used on the inside of telescopes and other imaging devices, where absorbing stray radiation can significantly reduce the amount of noise – and thus increase the effective range and resolution’.

io9.com elaborates on the composition of Vantablack: ‘It’s made of carbon nanohair that is 1 000 times thinner than the average human hair. The tubes are small enough to prevent light from entering them and packed so tightly that the light which makes it between the tubes bounces between them until it’s absorbed’.

Ben Jensen, the Chief Technical Officer of the Vantablack developers, Surrey NanoSystems, has dubbed the material ‘super black’. He tells the Guardian, ‘We grow the tubes like a field of carbon grass. The tubes are spaced apart. When a light particle hits the material, it gets between the tubes and bounces around, is absorbed and converted to heat. Light goes in, but it can’t get back out’.

Even when you bend or crumple the material, it looks completely flat. Speaking to the Independent, Jensen, attempted to describe the effect: ‘You expect to see the hills [of the bends and crumples] and all you can see … it’s like black, like a hole, like there’s nothing there. It just looks so strange’.

Vantablack is the result of applying Surrey NanoSystems’ patented low-temperature carbon nanotube growth process to the UK Technology Strategy Board’s ‘Space for Growth’ programme, working alongside the National Physical Laboratory and Enersys’ ABSL Space Products division.

The post Researchers Unveil ‘Super Black’ Material appeared first on Eurasia Review.

Mixed genes appear to drive hybrid birds to select more difficult routes than their parent species, according to new research from University of British Columbia zoologists.

“Instead of taking well-trodden paths through fertile areas, these birds choose to scale mountains and cross deserts,” says UBC researcher Kira Delmore.

Delmore harnessed a flock of Canadian Swainson’s thrushes with tiny geolocating backpacks to map their routes as they migrated south through the U.S. to Central and South America.

Many of the hybrid thrushes chose intermediary migration routes situated between the paths of their parent populations, regardless of how challenging the route may be. It’s the first time researchers have gathered detailed data mapping the routes of free-flying hybrids and their parent populations.

“The association between mixed genetic background and mixed migratory routes implies that there is strong genetic control of migratory behaviour,” says Darren Irwin, a professor in UBC’s Dept. of Zoology and senior author of the study. “These thrushes will allow us to actually look for the genes responsible for migratory behaviour.”

In many cases, hybridization can cause populations that are separated to collapse into a single form.

“In this case, where hybrids might well be surviving at lower rates, this may not happen,” says Delmore. “The self-destructive behavior of hybrids could be helping to maintain the great diversity of songbirds we enjoy.”

Researcher Kira Delmore attached geolocation devices – which record sunrise and sunset times – on the birds with harnesses. She collected the data a year later, downloading the information and inferring latitude and longitude from the recorded sunrise and sunset times.

Swainson’s thrushes – with olive-brown feathers, lighter mottled undersides, and distinct light eye-rings – are typically 16 to 20 centimetres in length with a wingspan of 30 cm. They are not endangered. The geolocators weighed 0.9 g with attachment materials, approximately 4 per cent of the body weight of a thrush.

The research was funded by the Natural Sciences and Engineering Research Council of Canada, Environment Canada, Society of Canadian Ornithologists, Animal Behavior Society, and the American Ornithologists Union. The research was conducted under permits from Environment Canada and UBC Animal Care.

The post Mixed Genes Mix Up Migrations Of Hybrid Birds appeared first on Eurasia Review.

In Alzheimer’s disease, accumulation of amyloid plaque in the brain is believed to play an important role in many characteristic disease symptoms, including memory loss and other mental state changes.

But how these plaque deposits affect brain function is not well understood. Important new study results showing that plaque buildup in one area of the brain can negatively affect metabolism in a more distant brain region have been published in Brain Connectivity, a peer-reviewed journal from Mary Ann Liebert, Inc., publishers. The article is available free on the Brain Connectivity website at http://online.liebertpub.com/doi/full/10.1089/brain.2013.0212 until August 21, 2014.

As part of a special issue focused on Alzheimer’s disease, Elisabeth Klupp and coauthors, Technische Universtät München (Munich and Garching, Germany) and University Hospital of Cologne, Germany, present the results of an imaging-based study demonstrating that
amyloid buildup in one brain region can impair brain cell metabolism and activity another in remote brain region not affected by amyloid plaque accumulation.

The regions studied were part of the same functional network but are located remotely from each other in the brain. The authors suggest this long-distance effect may be the result of diminished neuronal signals originating from the amyloid-affected brain region to the remote amyloid-unaffected brain region. The findings are discussed in the article “In Alzheimer’s Disease, Hypometabolism in Low-Amyloid Brain Regions May Be a Functional Consequence of Pathologies in Connected Brain Regions.”

“This research may be an important new discovery that links two important hypotheses in Alzheimer’s disease research: the amyloid buildup hypothesis and the network degenerating hypothesis,” says Christopher Pawela, PhD, Co-Editor-in-Chief and Assistant Professor, Medical College of Wisconsin.

The post Can Amyloid Plaque In Alzheimer’s Disease Affect Remote Regions Of Brain? appeared first on Eurasia Review.