(Civil.Ge) — The Georgian economy is expected to grow 2-2.5% in 2015 instead of initially forecasted 5%, Economy Minister Giorgi Kvirikashvili said on Sunday.

“I think real economic growth should be expected within about 2-2.5% in 2015,” Kvirikashvili, who is also deputy prime minister, told Rustavi 2 TV.

PM Irakli Garibashvili said on Saturday that the government intends to revise downward existing 5% economic growth forecast amid depreciation of national currency lari and “very difficult situation” in the region. He also said that government is also considering cutting administrative spending.

Economy Minister Kvirikashvili declined at this stage to discuss specifics of planned administrative spending cut; he said that the issue is being discussed within the government. In separate remarks also on Sunday, Kvirikashvili told Imedi TV that a detailed planned will be presented this week.

Georgia’s economy grew 4.7% last year, short of government’s 5% forecast, according to preliminary data. Preliminary figures for January, 2015 growth will be released on February 27.

The Georgian currency lari (GEL) further fell to 2.1771 on Friday per U.S. dollar from 2.1472 a day earlier.

Since early November, when GEL started depreciation, the Georgian currency lost 24.1% of its value against U.S. dollar and 11.9 % against euro.

Annual inflation stood at 1.4% in January.

Georgian exports continued downward trend in January, declining 30% year-on-year. The government has attributed decline mainly to decreasing exports to Russia and Ukraine.

Remittances also continued declining in January to USD 75.5 million, down by 23.3% compared to the same period of last year, caused by falling transfers from Russia.

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Recent oil train accidents raise serious concerns about newer rail cars that carry crude oil in Oregon and across the country, Sen. Ron Wyden, D-Ore., recently said. Wyden has urged the Obama administration to take into account a series of accidents involving new cars as it finalizes oil train safety rules, in a letter to the US White House budget office.

Wyden called on the Office of Management and Budget to consult with the National Transportation Safety Board and Department of Transportation about whether newer rail cars, called CPC-1232 cars, are providing adequate protection for communities. Two trains carrying crude oil in the newer rail cars derailed and burst into flames this week in West Virginia and rural Ontario, forcing more than 100 residents in Mount Carbon, West Virginia to evacuate. Three other accidents since January, 2014 have involved trains hauling the newer train cars.

The OMB is evaluating a proposed oil train safety rule sent to it by the Transportation Department in February that addresses the transportation of crude oil and ethanol by rail.

“This week’s disastrous oil train accidents raise red flags about whether the newer, supposedly safer, rail cars are doing the best job protecting our communities,” Wyden said. “I’m going to continue pressing the administration to finish its rule as quickly as possible given the dangers faced by people in Oregon and across the country and looking for other ways to ensure the highest possible safety standards are used when it comes to transporting oil by rail.”

Wyden has repeatedly called for increased notification of railroad shipments of oil and other hazardous materials to give first responders much-needed information to allow them to respond to potential accidents.

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The Greek government is currently locked in a life and death struggle with the elite which dominate the banks and political decision-making centers of the European Union. What are at stake are the livelihoods of 11 million Greek workers, employees and small business people and the viability of the European Union.

If the ruling Syriza government capitulates to the demands of the EU bankers and agrees to continue the austerity programs, Greece will be condemned to decades of regression, destitution and colonial rule. If Greece decides to resist, and is forced to exit the EU, it will need to repudiate its 270 billion Euro foreign debts, sending the international financial markets crashing and causing the EU to collapse.

The leadership of the EU is counting on Syriza leaders abandoning their commitments to the Greek electorate, which as of early February 2015, is overwhelmingly (over 70%) in favor of ending austerity and debt payments and moving forward toward state investment in national economic and social development (Financial Times 7-8/2/15, p. 3). The choices are stark; the consequences have world-historical significance. The issues go far beyond local or even regional, time-bound, impacts. The entire global financial system will be affected (FT 10/2/15, p. 2).

The default will ripple to all creditors and debtors, far beyond Europe; investor confidence in the entire western financial empire will be shaken. First and foremost all western banks have direct and indirect ties to the Greek banks (FT 2/6/15, p. 3). When the latter collapse, they will be profoundly affected beyond what their governments can sustain. Massive state intervention will be the order of the day. The Greek government will have no choice but to take over the entire financial system . . . the domino effect will first and foremost effect Southern Europe and spread to the ‘dominant regions’ in the North and then across to England and North America (FT 9/2/15, p. 2).

To understand the origins of this crises and alternatives facing Greece and the EU, it is necessary to briefly survey the political and economic developments of the past three decades. We will proceed by examining Greek and EU relations between 1980 – 2000 and then proceed to the current collapse and EU intervention in the Greek economy. In the final section we will discuss the rise and election of Syriza, and its growing submissiveness in the context of EU dominance, and intransigence, highlighting the need for a radical break with the past relationship of ‘lord and vassal’.

Ancient History: The Making of the European Empire

In 1980 Greece was admitted to the European Economic Council as a vassal state of the emerging Franco-German Empire. With the election of Andreas Papandreou, leader of the Pan-Hellenic Socialist Party, with an absolute majority in Parliament, hope arose that radical changes in domestic and foreign policy would ensue.1/ In particular, during the election campaign, Papandreou promised a break with NATO and the EEC, the revoking of the US military base agreement and an economy based on ‘social ownership’ of the means of production. After being elected, Papandreou immediately assured the EEC and Washington that his regime would remain within the EEC and NATO, and renewed the US military base agreement. Studies in the early 1980’s commissioned by the government which documented the medium and long-term adverse results of Greece remaining in the EEU, especially the loss of control of trade, budgets and markets, were ignored by Papandreou who chose to sacrifice political independence and economic autonomy in favor of large scale transfers of funds, loans and credit from the EEC. Papandreou spoke from the balcony to the masses of independence and social justice while retaining ties to the European bankers and Greek shipping and banking oligarchs. The European elite in Brussels and Greek oligarchs in Athens retained a stranglehold on the commanding heights of the Greek political and economic system.

Papandreou retained the clientelistic political practices put in place by the previous right-wing regimes – only replacing the rightist functionaries with PASOK party loyalists.

The EEC brushed off Papandreou’ phony radical rhetoric and focused on the the fact they were buying control and subservience of the Greek state by financing a corrupt, clientelistic regime which was deflecting funds for development projects to upgrade Greek economic competitiveness into building a patronage machine based on increased consumption.

The EEC elite ultimately knew that its financial stranglehold over the economy would enable it to dictate Greek policy and keep it within the boundaries of the emerging European empire.

Papandreou’s demagogic “third world” rhetoric notwithstanding, Greece was deeply ensconced in the EU and NATO. Between 1981-85, Papandreou discarded his socialist rhetoric in favor of increased social spending for welfare reforms, raising wages, pensions and health coverage, while refinancing bankrupt economic firms run into the ground by kleptocratic capitalists. As a result while living standards rose, Greece’s economic structure still resembled a vassal state heavily dependent on EEC finance, European tourists and a rentier economy based on real estate, finance and tourism.

Papandreou solidified Greece’s role as a vassal outpost of NATO; a military platform for US military intervention in the Middle East and the eastern Mediterranean; and market for German and northern European manufactured goods.

From October 1981 to July 1989 Greek consumption rose while productivity stagnated; Papandreou won elections in 1985 using EEC funds. Meanwhile Greek debt to Europe took off … EEC leaders chastised the misallocation of funds by Papandreou’s vast army of kleptocrats but not too loudly. Brussels recognized that Papandreou and PASOK were the most effective forces in muzzling the radical Greek electorate and keeping Greece under EEC tutelage and as a loyal vassal of NATO.

Lessons for Syriza: PASOK’s Short-term Reforms and Strategic Vassalage

Whether in government or out, PASOK followed in the footsteps of its rightwing adversary (New Democracy) by embracing the NATO-EEC strait-jacket.
Greece continued to maintain the highest per capita military expenditure of any European NATO member. As a result, it received loans and credits to finance short-term social reforms and large scale, long-term corruption, while enlarging the party-state political apparatus.

With the ascent of the openly neoliberal Prime Minister Costas Simitis in 2002, the PASOK regime “cooked the books”, fabricated government data on its budget deficit, with the aid of Wall Street investment banks, and became a member of the European Monetary Union. By adopting the euro, Simitis furthered deepened Greece’s financial subordination to the non-elected European officials in Brussels, dominated by the German finance ministry and banks.

The oligarchs in Greece made room at the top for a new breed of PASOK kleptocratic elite, which skimmed millions of military purchases, committed bank frauds and engaged in massive tax evasion.

The Brussels elite allowed the Greek middle class to live their illusions of being ‘prosperous Europeans’ because they retained decisive leverage through loans and accumulating debts.

Large scale bank fraud involving three hundred million euros even reached ex-Prime Minister Papandreou’s office.

The clientele relations within Greece were matched by the clientele relations between Brussels and Athens.

Even prior to the crash of 2008 the EU creditors, private bankers and official lenders, set the parameters of Greek politics. The global crash revealed the fragile foundations of the Greek state – and led directly to the crude, direct interventions of the European Central Bank, the International Monetary Fund and the European Commission – the infamous “Troika”. The latter dictated the ‘austerity’ policies as a condition for the “bail-out” which devastated the economy, provoking a major depression; impoverishing over forty percent of the population, reducing incomes by 25% and resulting in 28% unemployment.

Greece: Captivity by Invitation

Greece as a political and economic captive of the EU had no political party response. Apart from the trade unions which launched thirty general strikes between 2009 – 2014, the two major parties, PASOK and New Democracy, invited the EU takeover. The degeneration of PASOK into an appendage of oligarchs and vassal collaborator of the EU emptied the ‘socialist’ rhetoric of any meaning. The right wing New Democracy Party reinforced and deepened the stranglehold of the EU over the Greek economy. The troika lent the Greek vassal state funds(“bail-out”) which was used to pay back German, French and English financial oligarchs and to buttress private Greek banks. The Greek population was ‘starved’ by ‘austerity’ policies to keep the debt payments flowing-outward and upward.

Europe: Union or Empire?

The European economic crash of 2008/09 resounded worst on its weakest links – Southern Europe and Ireland. The true nature of the European Union as a hierarchical empire, in which the powerful states – Germany and France – could openly and directly control investment, trade, monetary and financial policy was revealed. The much vaunted EU “bailout” of Greece was in fact the pretext for the imposition of deep structural changes. These included the denationalization and privatization of all strategic economic sectors; perpetual debt payments; foreign dictates of incomes and investment policy. Greece ceased to be an independent state: it was totally and absolutely colonized.

Greece’s Perpetual Crises: The End of the “European Illusion”

The Greek elite and, for at least 5 years, most of the electorate, believed that the regressive (“austerity”) measures adopted – the firings, the budget cuts, the privatizations etc. were short-term harsh medicine, that would soon lead to debt reduction, balanced budgets, new investments, growth and recovery. At least that is what they were told by the economic experts and leaders in Brussels.

In fact the debt increased, the downward economic spiral continued, unemployment multiplied, the depression deepened. ‘Austerity’ was a class based policy designed by Brussels to enrich overseas bankers and to plunder the Greek public sector.

The key to EU pillage and plunder was the loss of Greek sovereignty. The two major parties ,New Democracy and PASOK, were willing accomplices. Despite a 55% youth (16 – 30 years old) unemployment rate, the cut-off of electricity to 300,000 households and large scale out-migration (over 175,000), the EU (as was to be expected) refused to concede that the ‘austerity’ formula was a failure in recovering the Greek economy. The reason the EU dogmatically stuck to a ‘failed policy’ was because the EU benefited from the power, privilege and profits of pillage and imperial primacy.

Moreover, for the Brussels elite to acknowledge failure in Greece would likely result in the demand to recognize failure in the rest of Southern Europe and beyond, including in France Italy and other key members of the EU (Economist 1/17/15, p. 53). The ruling financial and business elites in Europe and the US prospered through the crises and depression, by imposing cuts in social budgets and wages and salaries. To concede failure in Greece, would reverberate throughout North America and Europe, calling into question their economic policies, ideology and the legitimacy of the ruling powers. The reason that all the EU regimes back the EU insistence that Greece must continue to abide by an obviously perverse and regressive ‘austerity’ policy and impose reactionary “structural reforms” is because these very same rulers have sacrificed the living standards of their own labor force during the economic crises (FT 2/13/15, p. 2).

The economic crises spanning 2008/9 to the present (2015), still requires harsh sacrifices to perpetuate ruling class profits and to finance state subsidies to the private banks. Every major financial institution – the European Central Bank, the European Commission and the IMF – toes the line: no dissent or deviation is allowed. Greece must accept EU dictates or face major financial reprisals. “Economic strangulation or perpetual debt peonage” is the lesson which Brussels tends to all member states of the EU. While ostensibly speaking to Greece – it is a message directed to all states, opposition movements and trade unions who call into question the dictates of the Brussels oligarchy and its Berlin overlords.

All the major media and leading economic pundits have served as megaphones for the Brussel oligarchs. The message, which is repeated countless times, by liberals, conservatives and social democrats to the victimized nations and downwardly mobile wage and salaried workers, and small businesspeople, is that they have no choice but to accept regressive measure, slashing living conditions (“reforms”) if they hope for ‘economic recovery’ – which, of course, has not happened after five years!

Greece has become the central target of the economic elites in Europe because, the Greek people have gone from inconsequential protests to political powers. The election of Syriza on a platform of recovering sovereignty, discarding austerity and redefining its relations with creditors to favor national development has set the stage for a possible continent-wide confrontation.

The Rise of Syriza: Dubious Legacies, Mass Struggles and Radical (Broken) Promises

The growth of Syriza from an alliance of small Marxist sects into a mass electoral party is largely because of the incorporation of millions of lower middle class public employees, pensioners and small businesspeople. Many previously supported PASOK. They voted Syriza in order to recover the living conditions and job security of the earlier period of “prosperity” (2000-2007) which they achieved within the EU. Their radical rejection of PASOK and New Democracy came after 5 years of acute suffering which might have provoked a revolution in some other country. Their radicalism began with protests, marches and strikes were attempts to pressure the rightwing regimes to alter the EU’s course, to end the austerity while retaining membership in the EU.

This sector of SYRIZA is ‘radical’ in what it opposes today and conformist with its nostalgia for the past. –the time of euro funded vacation trips to London and Paris, easy credit to purchase imported cars and foodstuffs, to ‘feel modern’ and ‘European’ and speak English!

The politics of Syriza reflects, in part, this ambiguous sector of its electorate. In contrast Syriza also secured the vote of the radical unemployed youth and workers who never were part of the consumer society and didn’t identify with “Europe”. Syriza has emerged as a mass electoral party in the course of less than five years and its supporters and leadership reflects a high degree of heterogeneity.

The most radical sector, ideologically, is drawn mostly from the Marxist groups which originally came together to form the party. The unemployed youth sector joined, following the anti-police riots, which resulted from the police assassination of a young activist during the early years of the crisis. The third wave is largely made up of thousands of public workers, who were fired, and retired employees who suffered big cuts in their pensions by order of the troika in 2012. The fourth wave is ex PASOK members who fled the sinking ship of a bankrupt party.

The Syriza Left is concentrated at the mass base and among local and middle level leaders of local movements. The top leaders of Syriza in power positions are academics, some from overseas. Many are recent members or are not even party members. Few have been involved in the mass struggles – and many have few ties with the rank and file militants. They are most eager to sign a “deal” selling out the impoverished Greeks

As Syriza moved toward electoral victory in 2015, it began to shed its original program of radical structural changes (socialism) and adopt measures aimed at accommodating Greek business interests. Tsipras talked about “negotiating an agreement” within the framework of the German dominated European Union. Tsipras and his Finance Minister proposed to re-negotiate the debt, the obligation to pay and 70% of the “reforms”! When an agreement was signed they totally capitulated!

For a brief time Syriza maintained a dual position of ‘opposing’ austerity and coming to agreement with its creditors. It’s “realist” policies reflected the positions of the new academic ministers, former PASOK members and downwardly mobile middle class. Syriza’s radical gestures and rhetoric reflected the pressure of the unemployed, the youth and the mass poor who stood to lose, if a deal to pay the creditors was negotiated.

EU – SYRIZA: Concessions before Struggle Led to Surrender and Defeat

The “Greek debt” is really not a debt of the Greek people. The institutional creditors and the Euro-banks knowingly lent money to high risk kleptocrats, oligarchs and bankers who siphoned most of the euros into overseas Swiss accounts, high end real estate in London and Paris, activity devoid of any capacity to generate income to pay back the debt. In other words, the debt, in large part, is illegitimate and was falsely foisted on the Greek people.

Syriza, from the beginning of ‘negotiations’, did not call into question the legitimacy of the debt nor identified the particular classes and enterprise who should pay it.

Secondly, while Syriza challenged “austerity” policies it did not question the Euro organizations and EU institutions who impose it.

From its beginning Syriza has accepted membership in the EU. In the name of “realism” the Syriza government accepted to pay the debt or a portion of it, as the basis of negotiation.

Structurally, Syriza has developed a highly centralized leadership in which all major decisions are taken by Alexis Tsipras. His personalistic leadership limits the influence of the radicalized rank and file. It facilitated “compromises” with the Brussels oligarchy which go contrary to the campaign promises and may lead to the perpetual dependence of Greece on EU centered policymakers and creditors.

Moreover, Tsipras has tightened party discipline in the aftermath of his election, ensuring that any dubious compromises will not lead to any public debate or extra-parliamentary revolt.

The Empire against Greece’s Democratic Outcome

The EU elite have, from the moment in which Syriza received a democratic mandate, followed the typical authoritarian course of all imperial rulers. It has demanded from Syriza (1) unconditional surrender (2) the continuation of the structures, policies and practices of the previous vassal coalition party-regimes (PASOK-New Democracy) (3) that Syriza shelve all social reforms, (raising the minimum wage, increasing pension, health, education and unemployment spending (4) that SYRIZA follow the strict economic directives and oversight formulated by the “troika” (the European Commission, the European Central Bank, and the International Monetary Fund) (5) that SYRIZA retain the current primary budget surplus target of 4.5 percent of economic output in 2015-2017.

To enforce its strategy of strangulating the new government, Brussels threatened to abruptly cut off all present and future credit facilities, call in all debt payments, end access to emergency funds and refuse to back Greek bank bonds – that provide financial loans to local businesses.

Brussels presents Syriza with the fateful “choice”, of committing political suicide by accepting its dictates and alienating its electoral supporters. By betraying its mandate, Syriza will confront angry mass demonstrations. Rejecting Brussels’ dictates and proceeding to mobilize its mass base, Syriza could seek new sources of financing, imposing capital controls and moving toward a radical “emergency economy”.

Greece’s Alexis Tsipras. Photo by Robert Crc, Subversive Festival Media, Wikipedia Commons.

Brussel has “stone-walled” and turned a deaf ear to the early concessions which Syriza offered. Instead Brussels sees concessions as ‘steps’ toward complete capitulation, instead of as efforts to reach a “compromise”.

Syriza has already dropped calls for large scale debt write-offs, in favor of extending the time frame for paying the debt. Syriza has agreed to continue debt payments, provided they are linked to the rate of economic growth. Syriza accepts European oversight, provided it is not conducted by the hated “troika”, which has poisonous connotations for most Greeks. However, semantic changes do not change the substance of “limited sovereignty”.

Syriza has already agreed to long and middle term structural dependency in order to secure time and leeway in financing its short-term popular impact programs. All that Syriza asks is minimum fiscal flexibility under supervision of the German finance minister-some “radicals”!

Syriza has temporarily suspended on-going privatization of key infrastructure (sea- ports and airport facilities) energy and telecommunication sectors. But is has not terminated them, nor revised the past privatization. But for Brussels “sell-off” of Greek lucrative strategic sectors is an essential part of its “structural reform” agenda.

Syriza’s moderate proposals and its effort to operate within the EU framework established by the previous vassal regimes was rebuffed by Germany and its 27 stooges in the EU.

The EU’s dogmatic affirmation of extremist, ultra neo-liberal policies, including the practice of dismantling Greece’s national economy and transferring the most lucrative sectors into the hands of imperial investors, is echoed in the pages of all the major print media. The Financial Times, Wall Street Journal, New York Times, Washington Post, Le Monde are propaganda arms of EU extremism. Faced with Brussel’s intransigence and confronting the ‘historic choice’ of capitulation or radicalization, Syriza tried persuasion of key regimes. Syriza held numerous meetings with EU ministers. Prime Minister Alexis Tsipras and Finance Minister Yanis Vardoulakis traveled to Paris, London, Brussels, Berlin and Rome seeking a “compromise” agreement. This was to no avail. The Brussels elite repeatedly insisted:

Debts would have to be paid in full and on time.

Greece should restrict spending to accumulate a 4.5% surplus that would ensure payments to creditors, investors, speculators and kleptocrats.

The EU’s lack of any economic flexibility or willingness to accept even a minimum compromise is a political decision: to humble and destroy the credibility of SYRIZA as an anti-austerity government in the eyes of its domestic supporters and potential overseas imitators in Spain, Italy, Portugal and Ireland (Economist 1/17/15, p. 53).

Conclusion

The strangulation of Syriza is part and parcel of the decade long process of the EU’s assassination of Greece. A savage response to a heroic attempt by an entire people, hurled into destitution, condemned to be ruled by kleptocratic conservatives and social democrats.

Empires do not surrender their colonies through reasonable arguments or by the bankruptcy of their regressive “reforms”.

Brussel’s attitude toward Greece is guided by the policy of “rule or ruin”. “Bail out” is a euphemism for recycling financing through Greece back to Euro-controlled banks, while Greek workers and employees are saddled with greater debt and continued dominance. Brussel’s “bail out” is an instrument for control by imperial institutions, whether they are called “troika” or something else.

Brussels and Germany do not want dissenting members; they may offer to make some minor concessions so that Finance Minister Vardoulakis may claim a ‘partial victory’ – a sham and hollow euphemism for a belly crawl

The “bail out” agreement will be described by Tsipras-Vardoulakis as ‘new’ and “different’ from the past or as a ‘temporary’ retreat. The Germans may ‘allow’ Greece to lower its primary budget surplus from 4.5 to 3.5 percent ‘next year’ – but it will still reduce the funds for economic stimulus and “postpone” raises in pensions, minimum wages etc.

Privatization and other regressive reforms will not be terminated, they will be “renegotiated”. The state will retain a minority “share”.

Plutocrats will be asked to pay some added taxes but not the billions of taxes evaded over the past decades.

Nor will the PASOK – New Democracy kleptocratic operatives be prosecuted for pillage and theft.

Syriza’s compromises demonstrate that the looney right’s (the Economist, Financial Times, NY Times, etc.) characterization of Syriza as the “hard left” or the ultra-left have no basis in reality. For the Greek electorate’s “hope for the future” could turn to anger in the present. Only mass pressure from below can reverse Syriza’s capitulation and Finance Minister Vardoulakis unsavory compromises. Since he lacks any mass base in the party, Tsipras can easily dismiss him, for signing off on “compromise” which sacrifices the basic interests of the people.

However, if in fact, EU dogmatism and intransigence forecloses even the most favorable deals, Tsipras and Syriza, (against their desires) may be forced to exit the Euro Empire and face the challenge of carving out a new truly radical policy and economy as a free and independent country.

A successful Greek exit from the German – Brussels empire would likely lead to the break-up of the EU, as other vassal states rebel and follow the Greek example. They may renounce not only austerity but their foreign debts and eternal interest payments. The entire financial empire – the so-called global financial system could be shaken . . .Greece could once again become the ‘cradle of democracy’.

Post-Script:Thirty years ago, I was an active participant and adviser for three years (1981-84) to Prime Minister Papandreou. He, like Tsipras, began with the promise of radical changes and ended up capitulating to Brussels and NATO and embracing the oligarchs and kleptocrats in the name of “pragmatic compromises”. Let us hope, that facing a mass revolt, Prime Minister Alexis Tsipras and Syriza will follow a different path. History need not repeat itself as tragedy or farce.

Notes:
[1] The account of the Andreas Papandreou regime draws on personal experience, interviews and observations and from my co-authored article “Greek Socialism: The Patrimonial State Revisited” in James Kurth and James Petras, Mediterranean Paradoxes: the Politics and Social Structure of Southern Europe (Oxford: Berg Press 1993/ pp. 160 -224)

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By Joanna Paraszczuk

(RFE/RL) — Intelligence sharing between Russia and the United States regarding the Islamic State (IS) group is “quite possible,” the head of the Russian Federal Security Service (FSB), Aleksandr Bortnikov, has said.

“Current events are of such a serious nature that we need to unite,” Bortnikov said, according to the Russian state news agency RIA Novosti.

Bortnikov made his comments to reporters in Washington, D.C., where he is part of a Russian delegation at the Obama administration’s antiextremism conference in Washington.

“The issue of partnership between our service [the FSB], of which I am the head, is very important for us. In the first stages of active counteroperations we must apply special measures and means to locate terrorist attacks […] knowledge of the situation is very important and, of course, intelligence sharing with our partners in this regard,” Bortnikov told reporters.

Bortnikov also told reporters that as many as 1,700 Russian nationals could be fighting alongside the IS group in Iraq. “Right now, there are around 1,700 Russian nationals in Iraq and this number has practically doubled over the past year,” he said.

The head of the FSB said that Russia must prevent its citizens from leaving to join militant groups. “We must undertake work to prevent the departure, and on the other hand [we must] do whatever is needed so that after these citizens return to their countries of origin we avoid terrorist attacks,” Bortnikov said.

It is noticeable and significant that, while Bortnikov was ready to admit that Russian nationals are fighting alongside IS militants in Iraq, he did not say that Russian nationals were fighting in Syria. Why not, given that evidence points to the presence of Russian nationals in Syria and in far greater numbers that in Iraq?

The reason for Bortnikov’s omission of Syria as the main theater for Russian nationals fighting not only with IS but with other Islamist militant factions is likely a purely political one. As Syria’s most powerful ally, Moscow has led a diplomatic campaign to paint the Syrian conflict as a battle between the legitimate government of Bashar al-Assad and illegal, armed terrorist groups sponsored by outside forces and consisting of foreign fighters.

An open admission that Russian nationals are part of that illegal, terrorist force is less than optimal for Moscow’s position. Far easier, therefore, to focus entirely on Iraq.

Bortnikov’s evasion reflects a trend that has been noticeable elsewhere in Russia’s portrayal of how its nationals are fighting in Syria. While the several court cases involving returning fighters (mainly from the North Caucasus) have accused the militants of fighting in Syria, the courts have been vague about giving details of which groups the militants allegedly belonged to. In most cases, it appears that this evasiveness is likely in order to avoid mentioning the fact some Russian nationals have been fighting with Jaish al-Muhajireen wal-Ansar (JMA), the Syrian affiliate of the main North Caucasus militant group, the Caucasus Emirate.

Beyond these issues, the presence of Russian nationals in Syria and Iraq has been a bone of contention and source of great embarrassment for the head of the pro-Kremlin Chechen Republic, Ramzan Kadyrov, who has insisted that most ethnic Chechens in Syria are from Europe.

While there is no official data that break down the exact numbers and identities of Russian nationals in Syria, analysis of social media and other Internet resources has offered some insights into participants in the armed conflict.

This evidence indicates that most of the Russian nationals in Syria (and, far more recently, Iraq) are from the Northern Caucasus republics of Daghestan, Chechnya, Karachai-Cherkessia, and Kabardino-Balkaria. A recent video published by the Caucasus Emirate affiliate JMA showed a group of militants who identified themselves as being from the Terek-Kuma Lowland or Nogai Steppe region of Stavropol Krai, Chechnya, and Daghestan.

There is also evidence, including reports of court cases against returning fighters, that there are some militants from Russia’s Tatar region, particularly Kazan.

Not all of the Russian-speaking militants in Syria are from the Russian Federation, however: others in this group include ethnic Chechens from the Chechen diaspora in Europe and Turkey, Kists from the Pankisi Gorge in Georgia, Tatars from the Crimea, and at least one Ukrainian convert to Islam.

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By Nadim Al-Hamid

Emphasizing the need to map out a strategic plan to combat terrorism, Saudi Arabia’s Custodian of the Two Holy Mosques King Salman stated on Sunday that Saudi Arabia will not wait idly by while extremists tarnish the image of Islam.

“Saudi Arabia has left no stone unturned in the fight against terrorism,” King Salman said at the opening of an international conference on counterterrorism organized by the Muslim World League.

In his keynote speech, which was read out by Makkah Gov. Prince Khaled Al-Faisal, King Salman lauded Saudi security forces for their courageous efforts in fighting terrorism.

“At the national level, our security forces have confronted terrorists without showing any leniency and having even sacrificed their lives in that mission, while our air forces have joined the international coalition to combat terror,” the king said.

The king denounced terrorism and radicals, terming them as “threatening Muslims” who are tainting and vilifying the image of Islam among non-Muslims across the world.

He stated that Muslim countries are threatened by the infiltration of terrorists who kill, oppress and pillage in the name of Islam, “fueling the international opinion against Muslims,” King Salman pointed out.

According to the king, Muslims are now seen as “culprits and as a source of fear and concern,” with ties between Muslim countries and non-Muslim states shaken and weakened by terrorists.

“In addition to the catastrophic loss of people and infrastructure, and the shattering and division of nations, the greatest danger to our nations are these misguided and misled terrorists, who have given an opportunity to those waiting for a chance to hurt Islam and vilify its followers, estimated at more than 1.5 billion,” said King Salman.

Calling out for moderation and forgiveness, King Salman highlighted these traits as characteristic of Islam and reminded the audience of the Kingdom’s efforts to curb extremism. In recent years, Saudi Arabia has established centers and organized conferences to further dialogue, not only between Muslim groups, but also between Muslims and people of other faiths.

However, and despite the fact that these strategies have had a significant outcome in the region, King Salman pointed out that terrorism is still present in the Middle East, “especially in Arab and Muslim countries that are still experiencing disturbances.”

According to King Salman, Muslims should increase awareness of the dangers and risks stemming from terrorism and “individuals and organizations should double their efforts” to fight it.

Another keynote speaker, Ahmed Al-Tayib, head of Al-Azhar, called for educational reforms in Muslim countries to contain the spread of religious extremism. He linked extremism to “bad interpretations of the Qur’an and the Sunnah, the teachings of the Prophet Muhammad (peace be upon him).” (See related: Saudi Arabia: Grand Mufti Says Fighting Terror Is Islamic Duty)

Al-Tayib blamed an accumulation of extreme trends in Islam as the culprit for terrorism that has led some people to embrace a misguided form of Islam.

“The only hope for the Muslim nation to recover unity is to tackle in our schools and universities this tendency to accuse Muslims of being unbelievers,” he said.

Meanwhile, the Interior Ministry said it would mobilize 1,500 security officers on the Kingdom’s northern border to combat terrorists. Different sectors of security agencies will take part in a 21-day exercise beginning Wednesday.

The post King Salman Says Saudi Arabia Won’t Let Terrorists Tarnish Islam’s Image appeared first on Eurasia Review.

By Abdulateef Al-Mulhim

In Saudi Arabia, we always jokingly say that American diplomats stationed in the Kingdom are so patriotic that they celebrate their country’s Independence Day four times each year — thrice in Saudi Arabia early during the year and once with everybody else in the United States on 4th of July.

On Feb. 16, I was one of the many people invited to a reception held at the US Consulate in Dhahran to celebrate US’ 239th Independence Day. The US Embassy in Riyadh and US Consulate in Jeddah had also organized similar events. For the information of readers, the celebration is held few months before July 4 for various reasons such as Saudi social and family engagements during the summer and due to the hot and sultry weather during the month of July in the Kingdom.

This year’s celebration was held in February to mark not only US’ independence but it also marked the 70th anniversary of a meeting between two giants in the histories of their respective nations, King Abdul Aziz, the founder of modern day Saudi Arabia and US President Franklin Roosevelt aboard US Navy cruiser USS Quincy in the Great Bitter Lake along the Suez Canal.

At the reception, I really enjoyed the brief speeches by US Ambassador to the Kingdom Joseph W. Westphal and Consul General in Dhahran Mike Hankey. They shed light on the historical meeting between the two great leaders. But it is important to many people to note the importance of the meeting that took place 70 years ago. The world was witnessing the end of WWII and the Saudis were suffering from global economic recession. During the war many of the Saudi oil wells were capped for protection and the Haj season was very slow at a time when many relied on the income from the Haj season. At the time of the meeting, the world was concentrating on Europe after the war but it was clear to many that Saudi Arabia was to become the next regional power.

As time passed, Saudi and American relations went to new levels of strategic importance. The diplomatic representation between the two countries was taken to higher levels and more diplomats were assigned to both countries’ diplomatic missions. And as time passed Saudi Arabia and the US became very close trade partners. The Saudi-American relations became one of the longest standing relations between any two countries. As time passed Saudi Arabia became a very important economic and political player in the area that helped in implementing post-war stability.

After the 1945 meeting, the end of WWII and the establishment of the United Nations, Saudi Arabia became more open to the world and major mega projects transformed Saudi Arabia into a modern state. After the death of Roosevelt short time after the meeting and the death of King Abdul Aziz in 1953, the relations between the two countries expanded and more meetings took place between the Saudi and American leaders with transparent discussions.

And most important, both Saudis and Americans have learned how to work and manage any issue with each other in spite of the many differences between the two countries. And it is true that many differences would be seen now and then, but, as we know it, there are different interests among countries around the world.

But the Saudi-American relations are not only confined to government and official levels. Many Americans came and worked in the Kingdom and developed life-long relations with many Saudis and the land. And there are hundreds of thousands of Saudis who visited or studied in the US. The relations between the two countries were able to ride any political turbulence due to difference of opinion over different issues in the area but leaderships of both countries had been able to navigate through turbulent waters.

The post Time-Tested Saudi Arabia-US Ties – OpEd appeared first on Eurasia Review.

By William Chislett*

The Spanish economy is gaining momentum at a faster pace than expected, as evidenced by the constant upgrading of the GDP growth forecasts for the country by the International Monetary Fund and the European Commission.

This month the Commission put growth at 2.3% in 2015 and 2.5% in 2016, higher than the euro zone average (see Figure 1). The previous forecasts, made last autumn, were 1.7% and 2.2%, respectively. The research department of BBVA, Spain’s second-largest bank, puts growth even higher this year at 2.7%.

The IMF has been even slower to recognise Spain’s recovery: its upgrading last month to 2% growth this year from a previous 1.8% was the sixth consecutive improvement. Together with the US, Spain (the euro zone’s fourth-largest economy) was the only economy of significance whose growth forecast was not downgraded. A year ago, the IMF projected growth of just 0.8% for Spain.

These institutions, which always tend to err on the side of caution, do seem to have underestimated the incipient recovery in domestic demand, which after several years has replaced external demand (ie, exports) as the engine of GDP growth.

Domestic demand is forecast to contribute 2.6 percentage points to this year’s GDP growth, while net exports’ contribution will be 0.3 points negative (leaving overall growth at 2.3%). In 2013, when the economy was still in recession, domestic demand’s contribution was 2.7 points negative and net exports 1.4 points positive, leaving growth at -1.3%. Imports (+5.7%) grew faster than exports (+2.5%) in 2014 for the first time since 2006.

The upturn in domestic demand, traditionally the engine of growth in Spain, reflects the easier financing conditions resulting from the European Central Bank’s monetary policy interventions, greater investor confidence, labour market reforms and lower oil prices, all of which is spurring growth after three years of recession (which ended in the fourth quarter of 2013) and seven years of adjustments since the bursting of the massive property bubble in 2008.

Two indicators, in particular, show the timid recovery in domestic consumption. Car sales rose 18.4% in 2014 to 855,308, the highest level since 2010, but still far from the average of 1.6 million between 2004 and 2008. Growth continued in January (+27.5% year-on-year, the highest rise for that month in 20 years).

Figure 2. Spanish house prices (annual % change)
Source: Thomson Reuters Datastream

And property sales were slightly higher in 2014 (+2.2%) for the first time in four years, suggesting that the corner has finally been turned in the housing market, although most of the homes sold were second hand and not new. The number of housing starts plummeted from 750,000 in 2006 to an estimated 38,000 in 2014. House prices began to rise last year for the first time since 2008 (see Figure 2).

The tourism industry, a cornerstone of the Spanish economy (it generates more than 10% of GDP and a larger share of jobs), also enjoyed a record year in 2014 with around 65 million visitors (+7% and 18.4 million more than Spain’s population). Hotel prices have been held down and the 15 million British tourists benefited from the stronger pound.

The recovery is also no longer being held back so much by banks’ reluctance to lend, particularly to small and medium-sized companies (the backbone of corporate Spain), some of which were so starved of working capital that they went out of business.

Lending fell by close to 6% in 2014 (-1.5% across the whole euro zone), according to EY, the accountancy and consulting firm, which projects growth of 1.8% this year and 5.4% in 2016.

All but one Spanish bank, and a minor one at that, sailed through the European Central Bank’s stress tests last year. This followed the restructuring linked to a €41 billion bailout from the EU in 2012 of several banks, most notably Bankia, whose collapse threatened to bring down the whole financial system.

No bank needed to raise new capital after the exercise. In the case of Santander, the euro-zone’s largest bank by market capitalisation, it was one of the banks in the baseline scenario that generates the most capital in the three-year period and in the adverse scenario (plausible but most unlikely to occur), it is the bank with the least negative impact among the big banks.

The victory of the left-wing anti-establishment party Syriza in Greece’s general election last month has hardly affected Spain, although it has a similar party, Podemos, that is riding high in the polls and is forecast to win the general election due to be held by December.

Podemos, like Syriza, is pushing for an easing of austerity measures and debt relief. The comparisons between Greece and Spain are tenuous; the medicine that Spain has swallowed, bitter though it has been, is beginning to work. This has not been the case in Greece, whose much tougher medicine has kept the country in intensive care.

The risk premium on Spain’s 10-year government bonds over Germany’s equivalent, an indicator of international investor confidence, has risen since Syriza’s victory on 25 January by only 17 basis points to 1.17 percentage points, lower than Italy. Greece’s risk premium has increased from 9.10 to 9.69 percentage points.

Spain may be winning the war, but the battle is far from over. The unemployment rate has dropped from a peak of 26.9% at the end of 2013 but is still above 23%, despite the creation of more than 430,000 jobs (many of them precarious) in 2014. The pool of unemployed (5.4 million) is so big (almost two-thirds of whom have been without work for more than two years) that even with the economy growing at more than 2%, the jobless rate will remain above 20% until 2017. The workforce, however, is increasing and suggests that those without work who gave up hope of finding a job are looking for work again.

Thanks to the labour market reforms in 2012, the GDP growth threshold for job creation has been lowered.

There is no doubt that Spain is firmly recovering, although it is yet to recover the pre-crisis GDP level, and the reality for many is harsh. The number of people at risk of poverty and/or social exclusion rose by 1.9 million between 2009 and 2013 (latest figure) to 12.86 million (27% of the population), according to the Spanish chapter of the European Anti Poverty Network (EAPN, see Figure 3).

Prime Minister Mariano Rajoy believes the recovery vindicates his policies, as does the fiscally-conservative Angela Merkel, Germany’s Chancellor, for whom Rajoy has become something of a poster boy. Only time will tell, but some analysts believe the gathering pace of the Spanish economy could see Rajoy’s Popular Party, contrary to what the opinion polls say today, very narrowly squeeze back into office after the next election.

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

Source:
This article was published by Elcano Royal Institute.

The post Why Is Spain Recovering Faster Than Expected? – Analysis appeared first on Eurasia Review.

By Katya Kumkova

The failure of a ceasefire to take hold in eastern Ukraine is stoking concerns about a potential revival of trouble elsewhere.

An area of particular concern is the Ukrainian portion of Bessarabia, an oblong stretch of land southwest of Odessa, bound by the Black Sea to the east, Moldova to the west, and Romania to the south. Ranging along the north bank of the Danube River, the region features still-prosperous farms and abundant fishing. But it is also a region in the grip of a general economic malaise, where factories keep closing, even as local oligarchs keep profiteering.

“This is not the Donbas, with its economic problems and a disaffected population,” commented Anatoliy Baronin, an analyst who tracks developments in the region. “Here we should expect political moves. … A [military or financial] crisis scenario would supply the possibility for destabilization.”

Talk of a “People’s Republic” of Bessarabia began circulating last spring amid a spike in separatist sentiment after the Euromaidan Revolution installed a European-oriented government in Kyiv. While separatism in the Lugansk and Donetsk regions in eastern Ukraine quickly coalesced into an armed insurrection backed by Russia, Ukrainian authorities managed to keep discontent under control in other restive cities and regions, including Bessarabia, Kharkiv and Odessa.

Back in November, however, an Odessa-based risk analysis firm called Da Vinci Consulting published a report, titled On the Danger of the Formation of a Bessarabian People’s Republic. The report asserted that Bessarabia, given its large percentage of ethnic minorities, including Bulgarians (21 percent), Moldovans (13 percent), and Gagauz, a Turkic minority (about 4 percent), posed a special threat to Ukrainian stability. Ukrainians and Russian comprise the bulk of the rest of Ukrainian Bessarabia’s population.

The report paid particular attention to what some have called the “center-periphery problem” of discord between regions and Kyiv, as well as the potential for unrest among Ukraine’s Gagauz community. In neighboring Moldova, the Gagauz secured broad cultural autonomy in the mid-1990s. The report suggested that the Kremlin had the means to induce Gagauz politicians on both sides of the Ukrainian-Moldovan border to join forces and stir up trouble.

“Today Gagauzia is the main center of activity for the Kremlin in the region,” the report stated, noting that 98 percent of Gagauz in Moldova expressed support in a referendum held in early 2014 for seceding from Moldova, if the country went ahead with plans for European integration. Moldova signed an association agreement with the European Union last summer.

The Da Vinci report profiled four local political actors to keep an eye on: Mikhail Formuzal, the current governor of Moldovan Gagauzia; Nikolay Dudoglo, the mayor of Komrat, the Gagauz capital; Yuriy Dimchoglo, a Ukrainian Gagauz member of the Odessa regional council; and Anton Kisse, an ethnic Bulgarian and long-time member of the Ukrainian Rada who lauded Gagauz voters for voting against EU integration in early 2014. All four are considered to be allied with pro-Russia interests, and both Ukrainian representatives were previously part of former president Victor Yanukovych’s Party of Regions.

“The one thing I am convinced of right now is that destabilization will be impossible without the active participation from … those who represent Russia,” Baronin, who heads the Da Vinci Group, told EurasiaNet.org. He assailed the four politicians as “agents.”

Since the appearance of the report, Formuzal, Dudoglo, Dimchoglo and Kisse each have made repeated statements in support of peace and Ukrainian sovereignty. Even so, here, as elsewhere in Ukraine where pro-Russian sentiment dominates, a desire for peace does not automatically mean a rejection of Russia.

“People are living under the motto ‘as long as there’s no war,’” said Svetlana Gud, an activist in Izmail, Ukrainian Bessarabia’s administrative center, who is affiliated with the Committee of Voters, a national monitoring organization. ”They just believe that if Putin comes, he’ll protect them, and there’ll be no war. That the war is being kept warm by this aggressor, they don’t think about that.”

Observers worry that many residents of Bessarabia, especially Russian-speakers, are susceptible to Kremlin propaganda.

“For many people who never learned the Ukrainian language … they kept automatically listening and watching Russian [television] channels,” Valeriy Peykov, a commentator for the BessarabiaInfo news website, noted in a recent interview. “Everything that they know about what’s going on in the world, in Russia, in Ukraine, they saw it there.”

In Izmail, those who openly support the government in Kyiv can face hostility. One such individual, Larisa Marar, a homemaker, said she encountered lots of derision recently when she tried to solicit donations for Ukrainian troops fighting in the Donbas region. Marar admitted that her support for the Euromaidan cause has cost her some friendships, but she added that it was a price she was willing to pay.

“Yes, [Russia] is the land of our forefathers, but what we have to think about is what will we pass on to our children.” she said.

The post Can Southwestern Ukraine Become A Trouble-Spot? appeared first on Eurasia Review.

The Syrian government has said a Turkish incursion into the north of the country was an act of “flagrant aggression.” Damascus said it would hold Ankara responsible after they went into Syria to evacuate personnel and relics from a holy tomb.

Syria said the Turkish government had informed the Syrian consulate in Istanbul about its plans regarding the tomb of Suleyman Shah in northern Syria. Shah was the grandfather of the founder of the Ottoman Empire.

However, Turkey didn’t wait for permission from Damascus and mounted a rescue operation to the tomb, to salvage its relics and evacuate 40 Turkish soldiers who had been guarding it.

Damascus says the maneuver was in violation of an agreement signed in 1921. Syria also stated that Anakara would be responsible for any repercussions that could take place as a result of the incursion.

The military operation launched to rescue the holy place was coordinated with the Kurds. The only casualty was a Turkish soldier.

The task force of approximately 100 military vehicles, including 39 tanks, crossed the Syrian border to a territory controlled by Kurdish People’s Protection Unit (YPG) fighters and passed through the city of Kobani, recaptured by the YPG from the Islamic State in January.

Turkish Prime Minister Ahmet Davutoglu held a media briefing in the capital, Ankara, reporting that 38 soldiers had been brought back safely to Turkey.

Syria accuses Turkey of supporting insurgent groups that have seized control of wide areas of northern and eastern Syria, including the Islamic State militant group.

The Syrian government statement said the fact that the Islamic State had not attacked the tomb “confirmed the depth of the ties between the Turkish government and this terrorist organization,” according to Reuters.

The post Syria Livid After Turkey Sends Tanks To Evacuate Holy Tomb Of Suleyman Shah appeared first on Eurasia Review.

At least 22 Shias were killed and another 50 were injured when a three member suicide squad attacked an Imambargah (Shia place of worship) in the Phase-5 locality of the Hayatabad area in Peshawar, the provincial capital of Khyber Pakhtunkhwa (KP), on February 13, 2015. As the entrance of the Imambargah is heavily guarded, the terrorists dressed in Police uniforms entered the Imambargah from the other side of the mosque, cutting through barbed wire, and carried out the attack when around 800 worshippers were offering Friday prayers. Of the three suicide bombers who entered the mosque, only one was able to blow himself up. A second was killed by Security Force (SF) personnel, while the third was arrested in an injured condition.

Tehreek-e-Taliban Pakistan (TTP) ‘spokesperson’ Muhammad Khorasani claimed responsibility for the attack declaring, “It is the revenge of Dr. Usman who was hanged for attack on the Army’s headquarters.” Earlier, on August 19, 2013, Asmatullah Muavia, Ameer (chief) of the Punjabi Taliban, had warned, “Aqeel alias Dr. Usman is our Mujahid and we would never let our Mujahid be hanged”. Mohammed Aqeel aka Dr. Usman was among the two convicted terrorists who were hanged at the Faisalabad District Jail in the night of December 19, 2014. After the December 16, 2014, Peshawar Army Public School (APS) carnage, in which 134 school children, ten school staff members, including the Principal, and three soldiers were killed, the Government on December 17, 2014, decided to end the moratorium on executions in the country, which had been in place since 2008, when then President Asif Ali Zardari imposed the unofficial moratorium. Since the end of the moratorium, at least 24 prisoners have been executed, including at least two with no connection to terrorism.

At least 55 persons, including 36 civilians, 15 terrorists and four SF personnel, have already been killed in KP in terrorism-related violence in 2015 (till February 15), according to partial data compiled by the South Asia Terrorism Portal (SATP). During the corresponding period of 2014, terrorism-linked fatalities stood at 156, including 103 civilians, 41 SF personnel and 12 terrorists, indicating a decline of 66 per cent.

KP has recorded a continuous decline in fatalities, year on year, since 2010, with the exception of 2013. Fatalities through 2014 stood at 617, including 406 civilians, 108 SF personnel and 103 terrorists; as compared to 936, including 603 civilians, 172 SF personnel and 161 terrorists in 2013.

Other parameters of violence, such as major incidents, suicide attacks and explosions also remained low through 2014. The Province accounted for 49 major incidents of violence (each involving three or more fatalities) resulting in 436 deaths in 2014, as against 65 such incidents, accounting for 694 fatalities in 2013. As against 21 suicide attacks in 2013, in which 350 persons were killed and another 635 were injured, 2014 registered nine attacks resulting in 196 deaths and 260 persons injured. Similarly, there was a considerable decrease in incidents of explosion. In comparison to 189 blasts resulting in 598 fatalities in 2013, 2014 recorded 109 blasts resulting in 354 fatalities. Though the number of incidents of sectarian attack in 2014 was the same, at nine, as in 2013, the resultant fatalities decreased from 51 in 2013 to 18 in 2014. The number of such incidents and resultant fatalities stood at 10 and 58 respectively in 2012; one incident and 11 fatalities in 2011; and 12 incidents and 139 fatalities in 2010.

Violence was recorded in 22 of KP’s 25 Districts in 2014, an improvement over 2013, when violence was reported from all 25 Districts. As in 2013, Peshawar, the provincial capital, remained the worst affected District through 2014, recording 169 terrorism-related incidents, in which 348 people were killed and another 482 were injured.

The Investigation Wing of KP Police confirmed, on November 25, 2014, that terrorist attacks had recorded a decrease in 2014, as compared to 2013. According to the Police, the total number of terrorist attacks declined to 438, as against 468 reported during the corresponding period in 2013. 10 incidents of suicide attack were recorded in 2014, down from 18 such attacks in 2013.

While these numbers alone suggest an improvement in this lawless region of Pakistan, a range of compounding factors indicate that stability and state control remain as elusive as they were in earlier years. Indeed, as against 210 incidents of killing in 2013, there were 358 such incidents in 2014. More worryingly, 2014 witnessed the Peshawar carnage, one of the worst and most “barbaric act of terror” in Pakistan. This single attack demonstrated that though the fatalities in the Province had declined due to various reasons, the terrorists retained the motivation and wherewithal to execute devastating attacks and, indeed, that they were willing to cross over into levels of viciousness that they had not employed before.

Reacting to the December 16 Peshawar attack, the KP Government enacted three special laws: the KP Restriction of Rented Buildings Act (2014) is to provide mechanism for monitoring the business of rented buildings for the purposes of counter-terrorism and effectively combating crime in the Province; KP Restriction of Hotel Businesses Act (2014), to provide mechanisms for monitoring the business of hotels and guests staying in the hotels for the purposes of counter-terrorism and effectively combating crime; and the KP Sensitive and Vulnerable Establishments and Places (Security) Bill (2014), to curb the terrorist activities and to provide for the security of sensitive and other vulnerable establishments and places. The passages of these three Bills had been pending since February 2014.

On January 14, 2015, in a bizarre response to the Peshawar massacre, the KP Government granted male teachers permission to carry licensed weapons in school. Acknowledging the Government’s inability to station Police at all of KP’s more than 30,000 schools, Chief Minister Pervez Khattak, asked the schools to make some security arrangements on their own.

Earlier, on January 5, 2015, the KP Government announced a PKR 10 million reward for information leading to the arrest or death of TTP ‘chief’ Mullah Fazlullah. Inter-Services Public Relations (ISPR) Major General Asim Bajwa, at a media briefing at the General Headquarters on February 12, 2015, had asserted that Mullah Fazlullah was the ‘mastermind’ of the December 16 attack.

These steps are no more than notional, given the capacities and morale of the Police Force in the province. According to SATP, at least 664 Policemen have been killed in KP since 2006. KP Police Chief Nasir Khan Durrani on December 10, 2014, observed, “More than 1,100 KP Police officers and men have sacrificed their lives in this war against terror [during the last one decade]. It is, therefore, impelling that the preparedness and capacity of Police Department is enhanced to enable it in dealing with the challenges of terrorism in a more professional and effective manner”.

Through 2014, 66 Policemen were killed in 48 incidents, in addition to 91 Policemen killed in 89 incidents in 2013. In the worst attack on Policemen in 2014, a suicide bomber in the Sarband area of Peshawar blew himself up, killing 11 Policemen and injuring another 45. In the latest of series of such attacks, on February 3, 2015, unidentified terrorists shot dead five Customs officials patrolling overnight in the Kohat District, KP. A day earlier, two Policemen, including an Additional Station House Officer (SHO), were killed in an explosion near the Lorry Adda area of Mansehra District. The explosion took place when a convoy of vehicles escorted by a Police van set off for Gilgit Baltistan.

Little can be expected from the Federal Government as well, given the steps that were taken in the aftermath of the Peshawar attack. Islamabad has chosen to intensify selective operations against domestically oriented terrorist formations, even as it continues to support a range of terrorist groups operating against Afghanistan and India, or who support ‘global jihad’. Unfortunately, these distinctions are far from sustainable, as most state sponsored groups in Pakistan maintain some contact with the anti-state formations and, crucially, share a common ideology with these. Eventually, as long as any such groups are allowed to flourish – and, indeed, are supported by state institutions – at least some of them will break away from their masters in the establishment and target state institutions. Incipient evidence of the entry of the even more radical Islamist State (IS) ideology and networks in the region can only constitute an even greater danger for Pakistan. Indeed, the Government of the neighbouring province, Balochistan, in a ‘secret information report’ dated October 31, 2014, conveyed to the Federal Government and law enforcement agencies a warning of increased footprints of IS. The report disclosed that IS had claimed to have recruited 10,000 to 12,000 followers from the Hangu District of KP and Kurram Agency of the Federally Administered Tribal Areas (FATA). According to a September 23, 2014, report, moreover, terrorists supporting IS distributed hundreds of pamphlets in Afghan refugee camps and madrassas (seminaries) in Peshawar and other regions of KP. The pamphlets read, “Every Muslim must follow the orders of Caliph and should contribute in whichever capacity he or she can to assist the Islamic State against Taghoot (those who transgress limits of Islam).”

Unfortunately, however, Pakistan’s duplicity on the issues of Islamist radicalization and terrorism continues.

The post Pakistan: Khyber Pakhtunkhwa Assessment 2015 – Analysis appeared first on Eurasia Review.

In the night of February 12, 2014, some 15 armed cadres of the Communist Party of India-Maoist (CPI-Maoist) hacked a tribal, identified as Samuel Badra (50), to death in the tribal-dominated Pattamunda village under Pallahara Police Station limits of Angul District. Maoists left some posters at the incident site claiming he was punished for being a ‘police informer’.

On February 3, 2014, Maoists shot dead a contractor, Laxmi Narayan Patnaik (23), in broad daylight at the weekly market in Trilochanpur under Lanjigarh Police Station limits in Kalahandi District. Again, posters left behind claimed that Patnaik was a ‘police informer’. The Maoists had killed the victim’s brother Ajit Patnaik on July 27, 2011, in the same area.

Since the beginning of 2015 the Maoists have killed five civilians in Odisha.

On January 8, 2015, Odisha Chief Minister Naveen Patnaik complimented the Odisha Police for achieving ‘zero casualties’ among the Police and Security Forces (SFs) in 2014 in dealing with Left Wing Extremist (LWE) violence, while killing at least six Maoists in the year during exchanges of gunfire between the Police and extremists. The Chief Minister also noted that, in 2014, Maoist activities had been brought ‘under control’ across most of the State, with the exception of nine Districts: Malkangiri, Koraput, Nuapada, Raygada, Nabarangpur, Kalahandi, Kandhamal, Balangir and Baragarh. “These Districts should be in our focus. All possible steps should be taken to counter the Leftwing extremist activities in these areas,” Naveen Patnaik declared, adding that there had been progressive improvement in the overall Naxal (LWE) scenario in the State with respect to frequency of violence, organisational activities, recruitment and mass mobilisation by the extremists.

According to partial data compiled by South Asia Terrorism Portal (SATP), Odisha recorded 41 fatalities in LWE-related incidents in 2014, including 31 civilians, one belonging to SFs and nine LWEs, in comparison to 54 fatalities in 2013, including 22 civilians, seven SF personnel and 25 LWEs.

While the Chief Minister drew satisfaction in the claim that the State Police suffered no casualty, media reports indicated that one Special Police Officer (SPO), identified as N. Munda, was killed by the Maoists at Bandhugaon near Rourkela in Sundargarh District on August 15, 2014. This does not, however, detract from the fact that the SFs deserve credit for sharply reducing fatalities among personnel from 19 in 2012, to seven in 2013, to just one in 2014. Significantly, the fatalities suffered by Maoists in Odisha also reduced to nine in 2014, from 25 in the previous year (2013), even as civilian fatalities increased from 22 to 31, indicating that both sides were trying to avoid direct armed engagement.

The increase in civilian fatalities in 2014 over the preceding two years is clearly a cause for worry. This trend suggests that, even while the Maoists are exercising extreme caution to avoid confrontation with the SFs, their efforts at political consolidation and the quiet elimination of opposition on the ground continue.

In terms of geographical spread in 2014, fatalities were recorded in just five Districts – Koraput (14, including 10 civilians and four Maoists); Malkangiri (21, including 19 civilians and two Maoists); Nuapada (one Maoist), Rayagada (one civilian) and Sundargarh (four, including one civilian, one SF trooper and two extremists). In 2013, fatalities had been recorded in seven Districts – Malkangiri (35, including 18 civilians, one SF trooper, 16 Maoists); Koraput (seven, including two civilians, four SF personnel and one Maoist); Nuapada (four, including two civilians and two SF personnel); Rayagada (four LWEs); Balangir (two LWEs); Bargarh (one LWE); Gajapati (one LWE). However, in terms of civilian and SF personnel fatalities caused by Maoists, Malkangiri and Koraput continued to dominate the scene. Balangir, Bargarh and Gajapati, which recorded fatalities in 2013, were free from such killings in 2014; while Sundargarh was added to the 2014 list.

There was just one major incident (resulting in three or more fatalities) in 2014. On April 27, 2014, Maoists killed three villagers within the Mathili Police Station limits in Malkangiri District. 2013 had seen three major incidents. Nevertheless, the 2014 total of civilians killed by Maoists was significantly higher, as the rebels killed civilians at fairly regular intervals in 24 incidents, suggesting relatively poor levels of general security.

In 2014, LWEs engaged in exchange of fire with SFs in 25 incidents in 13 Districts: Koraput four; Malkangiri three; Ganjam three, of which two were with the breakaway Odisha Maobadi Party (OMP); Sundargarh three, all of which were with the People’s Liberation Front of India (PLFI); Sambalpur two; Kandhamal, two; Balangir, two; Nabarangpur, Nuapada, Boudh, Angul, Deogarh, and Kalahandi, one each. In 2013, LWEs engaged in exchanges of fire with SFs in 21 incidents in 10 Districts: Malkangiri six; Balangir, three; Rayagada, three; Bargarh and Sundargarh, two each; Koraput, Kandhamal, Gajapati, Sonepur and Nuapada, one each. Exchange of fire incidents were thus reported in three more Districts in 2014, over 2013; moreover, seven of these Districts (Boudh, Angul, Deogarh, Kalahandi, Nabarangpur, Sambalpur and Ganjam) had not recorded any such incidents in the previous year.

Among other activities, Maoists were involved in six explosions (five in Malkangiri and one in Nuapada), six incidents of arson (Nuapada and Rayagada, two each; Bargarh and Koraput, one each) and gave calls for bandhs (general shutdown strikes) on two occasions in 2014. In 2013, Maoists had been involved in four incidents of explosion (three in Malkangiri and one in Koraput); seven incidents of arson (Malkangiri, two; Koraput, Nuapada, Kalahandi, Sundargarh and Rayagada, one each); and gave calls for bandhs on nine occasions.

A Maoist camp was discovered at Golluru in Koraput District along the border with Vizianagaram District of Andhra Pradesh in November 2014. Located being in a valley where little previous activity had been noticed, neither the Vizianagaram nor the Koraput Police had envisaged the possibility of a Maoist camp at Golluru.

An analysis of over ground and underground activities indicates that two Districts – Malkangiri and Koraput – remain highly affected; Nuapada and Sundargarh Districts are now moderately affected; while Gajapati, Ganjam, Sambalpur, Bargarh, Kandhamal, Balangir, Nabarangpur, Boudh, Angul, Deogarh, Kalahandi, Keonjhar and Rayagada remain marginally affected. In 2013, three Districts (Koraput, Malkangiri and Nuapada) were highly affected, five were moderately affected and seven were marginally affected.

2014 was marked by several significant achievements in the fight against LWEs. One was the arrest of Sabyasachi Panda on July 17, 2014. Panda had broken away and been expelled from CPI-Maoist in August 2012, and had created his own outfit, the OMP immediately thereafter. He made efforts to consolidate the anti-Maoist LWE space in the State with the subsequent formation of the Communist Party of India – Marxist-Leninist-Maoist (CPI-MLM) in May 2014, but his marginal group was quickly decimated.

Another crucial arrest was that of Tella Anil Kumar alias Chandu (40), who carried a reward of INR 4 million [INR two million announced by the Odisha Government and INR two million by the Andhra Pradesh Government], in Koraput District on February 1, 2014. He was part of the nine-member ‘core committee’ of the Andhra Odisha Border State Zonal Committee (AOBSZC) of the CPI-Maoist, headed by Central Committee (CC) member Akkiraju Haragopal alias Ramakrishna alias (RK). Chandu was next in importance only to RK in the AOBSZC and was heading the Maoist ‘intelligence wing’ in the Malkangiri, Koraput-Srikakulam and East Visakha ‘divisions’. He was operating in Koraput, Malkangiri, Visakhapatnam rural and Vizainagaram Districts of Andhra Pradesh and Odisha.

Other significant arrests in Odisha during 2014 included: ‘assistant commander’ Sumitra Kunwar [reward money: INR 400,000]; Singa Kattami alias Mahesh, who was in charge of protection of Maoist leader Udaya, the ‘divisional secretary’ of the Malkangiri division [reward money: INR 100,000]; Tulasi Mangingi [reward money: INR 100,000]; Palu Wadeka [reward money: INR 100,000]; ‘area commander’ Mino Hikoka alias Bikas; and ‘commander’ Katru Tadingi. According to SATP data a total of 49 LWE-related arrests were made in 2014.

In a major breakthrough, Nachika Linga, president of the Narayanpatna-based Maoist front organisation Chasi Mulia Adivasi Sangha (CMAS), surrendered on October 28, 2014. His surrender was preceded by that of over 2,400 CMAS cadres in 2013, leaving the organisation virtually dysfunctional. Other significant surrenders in 2014 included Deva Padiami alias Sandhya (30), who surrendered on March 8 and carried a cash reward of INR 500,000 on her head. She surrendered after the arrest of her husband Tella Anil Kumar alias Chandu. Padiami was a ‘divisional committee member’ heading the Boipariguda area committee and Gupteswar local squad. She was instrumental in setting up base at Ramagiri, Gupteswar and Boipariguda in Koraput and in areas, bordering Malkangiri. Other significant surrenders included Bhima alias Rushi Sodhi [reward money: INR 400,000]; Jambo Mandingi alias Walsi [reward money: INR 200,000], and Sandhaya alias Shivabati, Jakrius Munda, Harun Munda and Jeetan Bari, each carrying a reward of INR 100,000. Another four Maoists, including ‘area committee’ member Krishna Praska, along with Kosai Wateka alias Nirmala, Raju Hikoka alias Kiran and Durjan Mandingi carrying rewards of INR 100,000 each also surrendered in the State. According to SATP data, a total of at least 94 Maoists surrendered in Odisha in 2014.

To deal with the LWE challenge more effectively, the Odisha Police have proposed the establishment of an additional two Special Armed Police (SAP) battalions in the State. At present there are 13 OSAPs and eight India Reserve Battalions (IRBs) in Odisha. Further, 17 Central Armed Police Force (CAPF) battalions – eight of the Border Security Force (BSF); eight of the Central Reserve Police Force (CRPF); and one of the Commando Battalion for Resolute Action (COBRA) – are currently deployed in Odisha. On February 2, 2015, Chief Minister Patnaik demanded another two CAPF battalions from the Centre, to check the possible influx of Maoists from Chhattisgarh, as pressure on them was likely to increase due to anticipated increases in Force concentration in Chhattisgarh. However, on February 4, 2015, Arun Kumar Ray, Additional Director General (ADG) of the Odisha Police in charge of OSAP, stated that the deployment of CAPFs for anti-Maoist operations and law and order maintenance was a major financial burden on the State Government. The Centre had demanded INR 13 billion from the Odisha Government towards cost of deployment of CAPFs. Odisha has a Police-population ratio of 124 per 100,000, as of December 31, 2013, according to National Crime Records Bureau (NCRB) data, significantly below the national average of 141.

Bridging the ‘development gap’ has long been a critical component of the State’s anti-Moist strategy, but Odisha’s performance on this parameter has largely been found wanting. Koraput District spent only 13 per cent of the INR 300 million sanctioned to it under “Additional Central Assistance (ACA) for LWE Affected Districts” [previously the Integrated Action Plan (IAP)] for 2014-15, till December 31, 2014. During the ongoing financial year, the Administration took up 555 projects, of which only 51 projects worth INR 38.8 million were completed. Further, on November 21, 2014, the Minister of State for Health and Family Welfare, Atanu Sabyasachi Nayak, while answering a question in the Odisha State Assembly, disclosed that there were as many as 1,647 posts of doctor, that is, 34.02 per cent of the sanctioned strength, were vacant in Odisha. This is unsurprising, considering earlier observations about civil administration in the State.

Meanwhile, BSF and CRPF have sought improvement of 18 ‘critical roads’ in LWE-affected pockets in Odisha. Of the 18 road projects, the BSF wants the Odisha Government to take up seven in Koraput District alone. Similarly, Malkangiri and Nabarangpur Districts have three and two such road projects, respectively. The CRPF has also suggested development of six road projects in Nuapada, Kalahandi, Keonjhar and Sundargarh Districts.

Reflecting a measure of callousness in the attitude of the state towards the victims of LWE violence, the Comptroller and Auditor General (CAG) in its 2014 reports on Odisha, observed that scrutiny of 41 cases of ex-gratia payment to civilians killed by LWEs in the Koraput and Rayagada Districts revealed that, in 28 (68 per cent) cases, payment of ex gratia to families was made with delays ranging between 10 months and 28 months.

With the arrest of Sabyasachi Panda and the surrender of Nachika Linga, the Maoists in Odisha have lost the services of their most violent face and their most prominent front organisation in the State. This provides a unique window of opportunity to the State to step up its efforts. However, the rising number and regularity of civilian killings makes it clear that the LWEs continue to retain considerable strength, and are making systematic efforts for their organisational revival.

The post India: Odisha Assessment 2015 – Analysis appeared first on Eurasia Review.

Embraer started as a Brazilian public sector firm, and has debunked the fiction of the developed world being the source of high tech products for the less developed. Its success can be an inspiration for ‘Make in India’ aircrafts by Hindustan Aeronautics Limited.

By R. Viswanathan*

At the 10th Biennale Aero India held in Bangalore this week, among the many global defence giants was Brazil’s Embraer (Empresa Brasileira de Aeronautica) selling both defence and executive aircraft.

Embraer’s story is one that India’s own Hindustan Aeronauticals Ltd (HAL) should emulate. Embraer was created in 1969 by the Brazilian government, just a few years after HAL was established. HAL had a head start over Embraer: it began as privately-owned Hindustan Aircraft in 1940 and made its first aircraft (PC 5 A) as early as 1941. But HAL then fell behind from lack of ambition and vision.

Embraer in comparison, was nurtured by its government, and is now the third largest aircraft manufacturer in the world. At $6.2 billion its revenues are over twice that of HAL’s. Its biggest customers are the airline companies of the U.S. and Europe. It has sold executive jets to the Indian government and private individuals, and has a $2.9 billion order for 50 aircrafts from the new Indian regional carrier Air Costa, whose fleet of four is entirely Embraer aircraft. The company also makes military aircraft, planes for agricultural spraying and is a global pioneer in the use of ethanol as aircraft fuel. In addition to a Sao Paulo listing, Embraer shares are listed on the New York Stock Exchange. Embraer is now a role model for companies from the developing world seeking to debunk the fiction that high-tech products originate only from the developed world.

It took years and nimble innovation and strategic vision for Embraer to get to this position. When it first began marketing its aircraft, the company had a credibility problem vis-a-vis established US and European brands. Even within Brazil, there was skepticism whether Embraer could successfully make a high-tech, high-risk product. Embraer proved them wrong, despite Brazilian manufacturers complaining of high cost of production, high wages and a shortage of skilled people which makes exports less competitive. Embraer has bucked the trend by getting 90% of its revenue from exports and is a national role model and a global player

How did a public sector firm from a developing country transform itself into a competitive, international, high tech manufacturer?

The credit goes to the Brazilian government’s vision and strategy for a national aircraft industry. Although it set up Embraer, it did not control the firm with the usual bureaucratic red tape. Embraer’s management had full autonomy and was free to collaborate with any Brazilian and foreign private sector companies. In 1994, during the neo-liberal wave of privatisations in Brazil, Embraer too was privatized and sold to a consortium of Brazilian and foreign investors – 20% of Embraer shares were sold to a French consortium lead by Aerospatiale Matra, Dassault and Thomson. But the Brazilian government retained its valuable shares and veto power.

Embraer initially benefitted from the captive business of the Brazilian air force. It was provided incentives and tax breaks for production, imports and exports. The state-run bank BNDES (Brazilian Industrial Development Bank) not only gave concessional credit to Embraer, but stayed an important share holder with a significant stake.

Brasila also painstakingly developed an ecosystem of educational institutions and research centers to nourish the aircraft industry in and around Embraer’s headquarters in the city of Sao Jose do Campos (in Sao Paulo State) known as Brazil’s Technology Valley, similar to Bengaluru. There, it set up the Aeronautics Technology Centre (CTA), the Institute of Research and Development (IPD), the ITA ( Aeronautical Technology Institute) and Space Research Centre INPE (Instituto de Pesquisas Espaciais). To attract students, these Institutes offered scholarships, boarding and lodging. Embraer began production in 1970 with 150 staff recruited from CTA. Even now, it absorbs many graduates of these institutes with attractive salaries, and outsources work to the technical institutes.

Embraer, the Brazil government and the Association of the Brazilian Aerospace Industries (AIAB) worked together to develop a cluster of suppliers and to incubate tech companies. The company has a substantial budget for research and development and 300 PhDs on its pay roll, resulting in proprietary technologies. Embraer’s own ex-employees are encouraged to set up units for parts and services.

The company did not attempt self-sufficiency in components or technology. Embraer mastered the basic technologies, design and integration of the more than 28,000 parts and components that make up an aircraft, but it chose to import many of these from foreign and domestic suppliers. Brazil actually facilitated the establishment of production centers by foreign suppliers, close to the Embraer plant. To offset the risks in developing and producing some of the most costly and technologically challenging components, Embraer formed risk-sharing partnerships with those suppliers which make major components such as wings, flaps and engines. This gave the world a stake in Embraer’s success.

Embraer found a niche area for its growth. Its bet on regional passenger jets rather than the bigger aircrafts or military planes paid off. It worked with the hub and spoke aviation model in developed markets, and served emerging markets needs.

Today, Embraer’s brand is so established, it has overtaken rival regional aircraft makers such as Fairchild, Dornier, British Aerospace, De Havilland, Fokker and Saab to become the world’s No 3 player after Boeing and Airbus.

HAL can learn from Embraer. Bengaluru has even a better ecosystem than Sao Jose dos Campos, with more tech companies, research institutes, human resources and a broader range and depth in science and technology knowledge. The scientists who created history by sending the Mangalyaan mission to Mars for Rs. 7 per kilometre, can certainly give Embraer some competition. By creating a similarly conducive environment and bringing private sector participation in HAL, New Delhi can nudge it along the Embraer path so it can be part of Prime Minister Modi’s ‘ Make in India’ success.

*Ambassador Viswanathan is Distinguished Fellow, Latin America Studies, Gateway House. He is the former Indian Ambassador to Argentina, Uruguay, Paraguay and Venezuela, and Consul General in Sao Paulo. This case study was written for Gateway House: Indian Council on Global Relations.

The post Brazilian Embraer Can Inspire HAL – Analysis appeared first on Eurasia Review.

Widely heralded as a success that brought together U.S. and Indian pharma producers over a high-cost drug at affordable prices, the Gilead deal looked ideal. A closer examination shows there’s more to consider than just low costs before the deal can become a template.

By Kunal Nathwani*

In September[1], U.S. pharmaceutical company, Gilead Sciences Inc.[2] entered into a licence agreement with seven Indian pharmaceutical companies (the licensees), allowing them to manufacture their own, lower cost, generic versions of Sovaldi, the Hepatitis C (HCV) drug patented by Gilead. The Indian companies on this unique initiative are CIPLA, Ranbaxy, Cadila Healthcare, Hetero Labs, Mylan Laboratories, Sequent Scientific and Stride Arcolab.

The deal has been widely heralded as a success[3] since it has brought about collaboration between a U.S. pharmaceutical giant and Indian generic drug producers to manufacture and distribute a high-cost drug at an affordable price for citizens of a developing country. This is done at a time when Indian generic drug and U.S. branded drug companies have been in a battle over pharmaceutical patents.

But there’s a catch. While the benefit of the agreement for HCV patients in low-income countries is obvious, what has been less discussed is the possibility that such a deal may eventually help Gilead establish a global monopoly on the supply of HCV medications.

Some background on the issue. Sovaldi, first developed by Pharmasset Inc. and now marketed by Gilead, is the brand name of an HCV drug that claims a higher cure rate for HCV patients than rivals, and in a shorter treatment time span. Sovaldi is priced at $1,000 per pill[4] in the U.S., taking the total 12-week treatment cost to $84,000[5].

As per the license agreement with the Indian companies, Gilead allows those licensees to manufacture and market their own versions of the drug under their own brand names.[6] The licensees are also given the freedom to price their product as they wish as long as Gilead is paid a royalty of 7% of the total net sales of the product.[7] Gilead also plans on competing with the licensees by selling Sovaldi in India, pricing it at a significantly lower $300 per bottle (a month’s supply), taking the total 12-week treatment cost to $900[8].

The price is only 1% of the original price, indicating a clear humanitarian benefit for patients. However, over the long term, from the public policy perspective, three other aspects of the agreement should be studied before deals like Gilead’s become accepted as the norm.

1. The appropriateness of the countries selected in this agreement;
2. The impact of restricting exports to countries not included in the agreement;
3. The rationale of the pricing of Sovaldi.

As per the agreement, the Indian licensees can sell their manufactured[9] drugs in 91 “low-income” countries[10], identified by Gilead, including India. The problem with this list is that it does not include the countries with the largest problem of HCV in the world such as China, Russia, Brazil[11] and the Philippines, making the selection criteria limited and less profitable (See table below)[12].

Table 1

Source: Lavanchy, Gateway House.

First, Country appropriateness: The U.S. is not on the list but would have benefitted from lower prices had the licensees been allowed to sell there, even though the government subsidises patients through Medicare.[13] On the other hand, Pharmaceutical Benefit Managers (PBMs) in the U.S. (that generally contract to buy certain pharmaceutical drugs at discounted rates) are coercing pharmaceutical companies to actively compete by agreeing to contractually discounted prices with PBMs. This is possible because of the economies of scale of PBMs, granting them greater bargaining power. The competition in HCV medication can be glimpsed through Express Scripts (the largest U.S. PBM) opting for AbbVie’s Viekira Pak as their exclusive option for Genotype 1 patients[14] and excluding Sovaldi from their National Preferred Formulary,[15] whereas Sovaldi (and Gilead’s Harvoni) was made the exclusive prescribed drug for CVS, another large PBM.

Second, the issue of export restrictions on Indian companies—Indian licensees cannot export their generic versions to countries not included in the list of 91 countries drawn up by Gilead[16], effectively shutting them out of large prospective markets (as in Table 1). This helps Gilead sell its own product without competition in those markets, establishing a monopoly on the HCV medication market.

This restriction is more rigid than usual. Under normal circumstances, for any drug, licensees are restricted from selling to another country only if a patent is pending with the patent authority (in the host country of the licensee or the destination country of export).[17] With Sovaldi, the Indian licensees will need to wait even beyond the decision of the Indian and third-country’s patent authority, until every appeal through the judicial system of India and the importing country[18] have been exhausted by the original applicant i.e. Gilead. For instance, the Novartis patent application process in India took eight long years to be approved. In the case of the seven countries in the table above, the Indian licensees may have to wait just as long. A pre-grant opposition to Gilead’s Indian patent application is already in the Patent Office by the Indian Pharmaceutical Alliance (IPA), Natco Pharma and IMAK.[19]

Table 2^[20]

Source: Thomson Reuters

Furthermore, the pharmaceutical industry is a fast-paced industry with constant developments. Eight years is a long time, when the generic versions can become obsolete, as newer and more effective drugs will have been developed. Gilead’s own product, Harvoni, another slightly more effective HCV drug, was already being prescribed for at a faster rate than Sovaldi, one month after its launch.[22]

Last is the issue of pricing. This is usually used in favor of the deal, highlighting Gilead’s low-cost treatment, from $84,000 to $900, almost 99% lower. Gilead generally follows a tiered-pricing system.[23] However, $84,000 could also be an inflated starting price and may not reflect the low costs incurred to develop the product. Pharmaceutical companies worldwide usually cite high R&D costs as a justification for high product prices, to ensure they recover their costs. Gilead, however, did not develop Sovaldi itself but inherited it through its acquisition of U.S. based Pharmasset in 2011.[24]

The figures in the table below illustrate this point.

Table 3: Acquisition Price of Pharmasset and Total Expenditure on R&D by Pharmasset on Sovaldi v Total Income Earned by Sovaldi in First Three  Quarters

Gilead is also selling Sovaldi at a higher cost than Pharmasset had planned. In a 2011 SEC filing, Pharmasset reported that it planned to sell a 12-week course of Sovaldi for $36,000[27] (as opposed to Gilead’s $84,000) in the US.[28] The $48,000 difference in Gilead’s price, therefore, remains puzzling. Meanwhile, The United States Committee on Finance has recently commenced an investigation into Gilead’s pricing of Sovaldi.[29]

These three factors show how Gilead may end up creating a disguised monopoly on HCV medication.

The Alternative to a monopoly of course is competition in the pharmaceutical industry, which can ensure better pricing and volumes for meeting the demand, including in the US where this now appears overpriced.[30]

Competition from Indian generic players in HIV medication resulted in a price drop of 99%[31] worldwide. Thanks to Indian Pharma and its generics, prices of many drugs in the U.S., generally perceived as anti-generic drugs, have dropped dramatically. Former U.S. President George Bush initiated the PEPFAR (Presidential Emergency Plan for AIDS Relief) to increase access to HIV medication, by providing generic medicines. Had generic drugs been contractually barred, Gilead-style, from entering the U.S., such widespread access would not have been possible.

The Gilead deal is certainly a progressive step for a U.S. Pharmaceutical company wanting to do business in India. The company can now truly make history by taking its initiative to its natural conclusion: putting a time limit on the country-wide export restrictions, and allowing those infected by diseases to benefit from affordable medication.

*Kunal Nathwani was a research intern at Gateway House: Indian Council on Global Relations. This feature was written  for Gateway House: Indian Council on Global Relations

References
[1] Gilead, Gilead Announces Generic License Agreements to Increase Access to Hepatitis C Treatments in Developing Countries, <http://www.gilead.com/news/press-releases/2014/9/gilead-announces-generic-licensing-agreements-to-increase-access-to-hepatitis-c-treatments-in-developing-countries>

[2] Yahoo Finance, GILD Income Statement, <https://in.finance.yahoo.com/q/is?s=GILD&annual>

[3] Nayyar, Dhiraj, “India’s Drug War is Good News,” Bloomberg View, 19 September 2014, <http://www.bloombergview.com/articles/2014-09-19/india-s-drug-war-isgood-news>

[4] Committee on Finance, United States Senate, Letter by Ron Wyden, and Charles E. Grassley, Washington DC, 11 July 2014,  <http://www.finance.senate.gov/imo/media/doc/Wyden-Grassley%20Document%20Request%20to%20Gilead%207-11-141.pdf> pg. 1

[5] Ibid 4.

[6] Gilead, Chronic Heatitis C Treatment Expansion: Generic manufacturing for Developing Countries, <http://www.gilead.com/~/media/Files/pdfs/other/HCVGeneric
AgreementFactSheet.pdf>

[7] Ibid 6.

[8] Standard & Poors, Gilead Sciences Inc: Stock Report, 14 February 2014, <https://reports.standardandpoors.com/data/EQ/pdf/sr/3/37555810.pdf?username=161157135079194051039241133086161045215056052206075
147018076062131243198&password=12303402701020003223501616200
2250124014006089022105175025152180099112134&auth=Basic
_Ultra&tracking=WebSolutions>

[9] The Agreement requires that the product be manufactured only in India.

[10] Gilead, Gilead Sciences Licence Agreement, Clause 2.1(b)(i), <http://keionline.org/sites/default/files/GILD_Sof_License_Agmt_%28FINAL%29.pdf>

[11] Brunetta, “Hematological particularities and co-infections in injected drug users with AIDS”, Brazilian Journal of Infectious Diseases, 2013, <http://www.scielo.br/scielo.php?script=sci_arttext&pid=S1413-86702013000600005#nt.>

[12] Lavanchy, D., “Evolving Epidemiology of Hepatitis C Virus”, Clinical Microbiology and Infection, 2011, <http://www.ncbi.nlm.nih.gov/pubmed/21091831>

[13] Kaczmarek, Stephen J., “Impact of New Hepatitis C Drug Therapy on Individual Medicare Part D Spending”, Milliman Client Report, 2014, <http://www.pcmanet.org/images/stories/uploads/2014/partdpremiumstudy
milliman.pdf>

[14] Express Scripts, Express Scripts and AbbVie Make Hepatitis C Cure Available to Millions of Patients in Need,  22 December 2014<http://phx.corporate-ir.net/phoenix.zhtml?c=69641&p=irol-newsArticle&ID=2001457>

[15] Ibid 14.

[16] Gilead, Gilead Sciences Licence Agreement: Clause 10.3(c)(i), <http://keionline.org/sites/default/files/GILD_Sof_License_Agmt_%28FINAL%29.pdf>

[17] Pilman, Gilead: Caught Between A Rock And A Hard Place In India, 22 September 2014, <http://www.tapanray.in/gilead-caught-between-a-rock-and-a-hard-place-in-india/>

[18] Gilead, Gilead Sciences Licence Agreement: Clause 10.3(c)(i), <http://keionline.org/sites/default/files/GILD_Sof_License_Agmt_%28FINAL%29.pdf>

[19] Patent Application No.:3658/KOLNP/2009, In the Matter of a Representation by  an Opposition under section 25(1) and Rule 55 Thereto by Indian Pharmaceuticals Alliance, 2009,  <http://cdn.patentoppositions.org/uploads/patent_opposition/user_uploaded_
file/537f332b2df330000200002b/a9924040-c49c-0131-76cc-760475e09c01.pdf>

[20] World Health Organisation and Thomas Reuters,  Patent Situation of Key Products for Treatment of Hepatitis C, August 2014, <http://www.pcmanet.org/images/stories/uploads/2014/partdpremiumstudymilliman.pdf>

[21] Patents, Nucleoside phosphoramidate prodrugs, 15 December 2010, <http://www.google.com/patents/CN101918425A?cl=en>

[22] Lotvin, Alan, “Harvoni Utilization in the Weeks After Launch: Patterns and Implications”, CVS Health December 2014, <http://www.cvshealth.com/sites/default/files/CVS_Health_Harvoni_Utilization
_Post_Launch_FINAL.pdf >

[23] The Working Group on Intellectual Property of the Brazilian Network for the Integration of Peoples, Statement of Brazilian CSO (GTPI) on Gilead VL on Sofosbuvir: Brazil is excluded from license authorizing production of generic medicine for hepatitis C, 22 September 2014, <http://www.deolhonaspatentes.org.br/media/file/GTPI_statement_Gilead_license
_sofosbuvir.pdf>

[24] Gilead, Gilead Sciences to Acquire Pharmasset, Inc. for $11 Billion, <http://www.gilead.com/news/press-releases/2011/11/gilead-sciences-to-acquire-pharmasset-inc-for-11-billion>

[25] Ibid 24.

[26] Ibid 24.

[27] United States Security and Exchange Commission,  Schedule 14D-9, Pharmasset Inc., 6 December 2011,  <http://www.sec.gov/Archives/edgar/data/1301081/000119312511331226
/d265035dsc14d9.htm>

[28] Ibid 27.

[29] Committee on Finance, United States Senate, Letter by Ron Wyden, and Charles E. Grassley to Gilead: 20510-6200, 2014,<http://www.finance.senate.gov/imo/media/doc/Wyden-Grassley%20Document%20Request%20to%20Gilead%207-11-141.pdf

[30] United States Security and Exchange Commission, Form 10-K: Annual Report of Gilead Sciences Inc, 2013, <http://www.gilead.com/ar2013/assets/GileadSciences_2013_10K.pdf> http://www.fda.gov/NewsEvents/Newsroom/PressAnnouncements/ucm427530.htm>

[31] Haddad, William F., “Compulsory Licensing of Life-Saving Medicines,” Equilibri,<http://www.equilibri.net/nuovo/articolo/compulsory-licensing-life-saving-medicines-“-story-and-history”-“-problem-and-solution”>pg. 3.

The post Examining The Gilead Deal – Analysis appeared first on Eurasia Review.

A new book on the 1963 Operation Coldstore debunks attempts by revisionist writers to portray the operation as driven by political motives rather than security grounds.

By Kumar Ramakrishna*

Fifty-two years ago this month, on 2 February 1963, a historic internal security dragnet known as Operation Coldstore was conducted in Singapore. Mainstream accounts record that the sweep, authorised by the Internal Security Council comprising British, Singaporean and Malayan governmental representatives, approved the detention – under the Preservation of Public Security Ordinance (PPSO) – of ultimately 130 leftwing politicians, unionists, and other activists – that basically destroyed the Communist United Front in Singapore.

This development helped pave the way for Singapore’s political union or merger with the Federation of Malaya to form Malaysia, in September that year. Coldstore was hence a defining moment in Singapore’s history. It is thus counterintuitive that a recent Institute of Policy Studies survey found that a paltry 16.6 percent of a sample of 1,516 Singaporeans were even aware of the operation.

Why Coldstore matters

Certainly, the survey results suggest that more can be done to improve the general historical awareness of Singaporeans. Nevertheless, the results are also intriguing: they belie the ongoing controversy about Coldstore that has been going on for more than a year. The debate in this connection is not about whether Coldstore was a defining moment in Singapore’s history, but rather what it really meant.

As noted, while mainstream writers argue that the operation destroyed the CUF that had been destabilising Singapore’s political and industrial fabric since the mid-1950s, “revisionist” historians, former detainees and their online supporters maintain the real implication of Coldstore was that it destroyed not a Communist network but rather a legitimate progressive leftwing political opposition centered on the Barisan Sosialis Singapura (BSS).

Coldstore thus paved the way for the People’s Action Party (PAP) to win the general election in September 1963. Hence Coldstore was – as one revisionist historian puts it, the PAP government’s “original sin”. It other words, the Coldstore arrests were basically driven by opportunistic political motives rather than national security grounds, and hence calls into question the “morality of how the PAP came to rule Singapore”.

The revisionist message is thus a potentially corrosive one. If it gains traction with the younger, well-educated and cosmopolitan Singaporeans who will one day become the business, civil society and even government elites of the next decade or more, the net effect could be to foster even greater levels of the general cynicism and anti-communitarian sentiments one routinely encounters on social media sites nowadays.

From a national security perspective, while diversity of views can broaden what political scientist Cass Sunstein calls a society’s “argument pools”, there are limits. Such anti-communitarian cynicism and excessive individualism would be utterly counterproductive for a society’s longer-term cohesion, stability and resilience – especially a society and polity as socially variegated and globalised as modern Singapore’s.

Little wonder that in 1979 the late former foreign minister, Mr. S. Rajaratnam, underscored the importance of what the great medieval Islamic scholar Ibn Khaldun called asabiyya – a commodity blending robust group solidarity with the gumption to surmount challenges.

Revisionist sins

What thickens the plot is that the revisionist message on Coldstore is deeply problematic for four basic reasons, as the writer attempts to argue in his new book Original Sin? Revising the Revisionist Critique of the 1963 Operation Coldstore in Singapore (Institute of Southeast Asian Studies, 2015).

Firstly, the book shows that rather than scholarly detachment, an anti-government ideological agenda seems to motivate at least some revisionist writers. Secondly, the revisionists as a whole seem to possess a very limited definition of what a threat “prejudicial” to public order was at the time of Coldstore, thereby skewing their analysis towards the notion that Coldstore was driven by politics rather than security considerations.

Thirdly, the book shows that the revisionists by and large harbour rather naïve expectations of how incumbent political leaders should behave. Revisionist expositions seem to suggest that even if the Communist United Front were employing all types of illegal stratagems to cynically exploit the constitutional route to power, the incumbent PAP government was supposed to sit back and play by the rules at all costs.

Fourthly and relatedly, the book shows that in general the revisionists as a whole do not seem to have fully grasped the Communist mindset, strategy and tactics that the PAP leaders of that era came to know only too well and were compelled to doggedly counter.

The Lim Chin Siong affair

One of the key strands in the book is its analysis of the political career of the charismatic Barisan leader Lim Chin Siong, portrayed in revisionist analyses as a potential future Singapore prime minister who was purportedly unjustly arrested under Coldstore.

The book – employing both declassified and some still-classified sources – addresses the perennial question of whether Lim was indeed a Communist and why it mattered. In doing so certain relatively obscure facts about how Communism distorted Lim’s life are addressed, with due restraint and sensitivity.

Only by shedding light on these issues can inaccurate revisionist ideas about Lim be effectively debunked. The larger takeaway from the Lim Chin Siong affair incidentally, retains relevance for the current struggle with the violent extremism of the ISIS type: able men can be led grossly astray by evil ideologies.

Reading Original Sin?

Original Sin? makes three general requests of readers. Firstly, be sceptical both ways: revisionist writers and their supporters have every bit of an agenda as they claim that mainstream writers do – hence their arguments should be dissected with equal care. Secondly, Singaporeans should go beyond surface appearances and subject the latter-day complaints of seemingly grandfatherly former CUF activists and detainees to greater critical scrutiny. The advanced age and ostensibly sagely persona of such individuals is hardly reason to lower one’s guard.

Thirdly and finally, the subtext of the book is that while Singapore is not perfect and improvements can be made across a range of policy domains, it is important to have the attitude of what Tommy Koh calls “a loving critic”. One should hence avoid throwing the baby out with the bathwater.

Instead, a more systematic national effort should go into nurturing Singapore’s asabiyya, to ensure that the next 50 years of nation-building is as progressive and productive as the previous half century. It would be unwise to be remiss in this obligation. In this 50th year of Singapore’s unexpected independence, it behooves us to remember that in the end, Marx was right about one thing: every society contains within itself the seeds of its own destruction.

*Kumar Ramakrishna is Associate Professor and Head of the Centre of Excellence for National Security at the S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University. His book, Original Sin? Revising the Revisionist Critique of the 1963 Operation Coldstore in Singapore will shortly be published by the Institute of Southeast Asian Studies.

The post Revisiting Operation Coldstore: Deconstructing The ‘Original Sin’ – Analysis appeared first on Eurasia Review.

By Sultan al-Barei

A well-known Saudi preacher who returned to the kingdom after defecting from the “Islamic State of Iraq and the Levant” (ISIL) has warned Saudi youth against joining terrorist groups in Syria.

Maneh Nasser al-Maneh shared his personal experience with ISIL on Saudi state television on February 2nd.

During an appearance on the ” Humumuna ” (Our Concerns) programme, al-Maneh explained how he fell into a trap of lies, saying what he experienced in Syria was not what he expected, based on the image the group portrayed.

The group exploits the precept of takfir, labeling people as infidel, and accuses all who oppose its views of apostasy, he said.

“What I found was other than I expected,” he said. “Instead of freedom, I found imprisonment, coercion and takfir of whoever they deemed an infidel apostate.”

“I found coercion into living in a tent in a remote part of the desert used as a triage station to treat the injured, while my aim was to preach. I was prohibited from traveling, my passport was seized and I was forced to swear allegiance,” he added.

Al-Maneh surprised his followers on Twitter when he announced his decision to travel to Syria in March 2014, only to turn himself in to the Saudi embassy in Turkey four months later.

In his television interview, al-Maneh said he had traveled to Syria “to preach for God and correct some prevalent misconceptions about the creed and sharia in Syria”.

He chose Syria “on the basis of the first statement issued by the ISIL group, in which they [claimed] that they do not practice takfir in general, and not based on suspicion or assumption”, he said.

He said he went to the combat zones in Syria at his own discretion, without consulting scholars or obtaining permission from authorities.

“My trip to Syria was out of personal diligence,” he said, noting that it had been an error in judgement. “I went in good faith and with good intentions thinking that preaching for God is an individual obligation that does not require permission, and this is the mistake I must emphasize.”

All those he met in the guesthouses were Saudis and Arabs who adhere to the takfiri line, al-Maneh said, adding that he saw disputes among Muslims during his stay in Syria.

An important testimonial

“What al-Maneh said is of great importance because it comes from a preacher with numerous followers among the Saudi, Arab and Gulf youth,” said Abdullah al-Muqrin, professor of comparative jurisprudence at Umm al-Qura University in Mecca. “What he says supports official and sharia [scholar] efforts to steer the youth away from the quagmire of dark ideology.”

ISIL’s declaration of takfir against all those who oppose its views, including Saudi rulers and citizens, is what drove al-Maneh to return to Saudi Arabia, he said.

For this same reason, others before him have quit the group and returned to the kingdom, he added.

“The Saudi citizen gives a lot of weight to the authority of his [ruler] and it is a red line that should not be crossed. Furthermore, the takfir fatwa [issued by ISIL] labels everyone in the kingdom as an apostate”, he said, and Saudis reject this.

The professor stressed the importance of al-Maneh’s testimonial.

It is an “insider’s testimonial that exposes the falsity of this terrorist group’s claims and reveals its true face, especially that al-Maneh admitted that he himself fell into the trap, and that when he tried to correct some of the popular notions among the group’s [fighters] he was punished with detention, threats and exile to the desert”, he said.

He noted that al-Maneh’s main desire was to advocate for the Syrians, saying this is what motivates many youths to travel to Syria.

“However, they are [soon] forced to pledge allegiance and fight alongside the group, otherwise they are labeled as apostates,” al-Muqrin said.

A warning to Saudi youth

“Al-Maneh’s testimonial is one of the most important messages [that can be] directed at youths who fall into ISIL’s trap, because this terrorist group deludes many into thinking it is an Islamic state and calls for jihad, while in reality the opposite is true,” said Adel al-Usaimi, the imam of al-Khair mosque in Riyadh.

Al-Maneh’s testimonial “is a call to the youth to refer to senior official scholars, who do not issue fatwas point blank, but rather after consultation and research, so as not to fall into the mistake of rushing into decisions,” he told Al-Shorfa.

“It is very good that a preacher admits to making a mistake and rushing into a decision, and saying, having experienced the reality [in Syria], that there is nothing there but conflicts between the various armed factions, and revealing that while the group claims to promote personal freedom and freedom of faith in its propaganda, the reality is imprisonment, suppression of freedoms, coercion into pledging allegiance to it and declaration of takfir against all who oppose its views,” the imam said.

ISIL’s propaganda has entrapped many young Saudis, said Naif al-Shammari, a student at King Saud University’s faculty of business administration.

“The most important aspect of al-Maneh’s testimonial is his assertion that Syria is not a jihad zone, but rather a conflict zone,” he told Al-Shorfa.

Al-Maneh’s words come as a call to Saudi youth to listen only to the Council of Senior Scholars when it comes to serious matters, as it is the supreme religious authority in the kingdom and represents the true path, he said.

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Doubts about the victory of Chavism in the 2004 presidential recall referendum, held to decide whether or not Hugo Chavez would remain in power, were the starting point for a study at Carlos III University in Madrid. The study indicates that there are irregularities which cast doubt on the fairness of the Venezuelan electoral system since the time of the referendum.

“Chavez came to power as a result of fair elections. In fact, the 1998 elections were a milestone in the quality of Venezuelan elections, but there are serious doubts as to their fairness since 2004,” said one of the authors of the study, Manuel Hidalgo Trenado, professor of Social Sciences at UC3M.

Notwithstanding, there are suspicions of hypothetical fraud in the 2004 elections, which Hidalgo, together with Raúl Jiménez, professor of Statistics at UC3M, has studied with computer forensics to detect voting irregularities at the polling stations. Data provided by the Venezuelan National Electoral Council was evaluated using these computer forensics tools and all of the results revealed abnormal statistical patterns consistent with the hypothesis of fraud from 2004 on.

The study, published in the magazine PLOS ONE, questions Jimmy Carter’s claim that “Venezuela has the best electoral system in the world,” said Hidalgo. “Our analysis challenges the reliability of the electoral register. There is an atypical positive correlation between variations in the electoral register and voting intentions” which constitutes a reason “to doubt the validity of the results of some voting centers which were decisive in the 2004 referendum and the 2012 presidential elections,” explained Manuel Hidalgo.

The controversial electoral irregularities not only “affected the percentage of votes obtained by the winner in 2004, which influenced voters’ political behavior,” but also may have been “decisive in other electoral processes,” emphasized the UC3M researcher.

“We can’t prove that the opposition would have won in 2004 and 2012 in fair elections with no irregularities,” said Manuel Hidalgo. However, he has no doubt in asserting “with great confidence” that “the difference would have been much less than the officially recognized difference if there had been free and fair elections.”

An invitation to reflection

The study also invites reflection upon the role of international observers in Venezuela from 2007 on.

“Some international observers are not thorough and unbiased, and it seems that they have become a means of legitimizing the established order,” said Manuel Hidalgo. According to Hidalgo, this research reveals the need for a complete audit of the Venezuelan electoral register, for respect for fair play during the whole electoral process, and for comprehensive inspections after the elections.

After testing this method, Manuel Hidalgo does not rule out applying these computer forensics tools to other elections such as those held in Russia, Zimbabwe or Uganda, and comparing them to electoral results which are not called into question, in countries such as in Spain, France and Austria.

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A senior US military figure has claimed that airstrikes against the Islamic State, or Daesh, have killed 8,500 extremist fighters.

US Central Command chief, General Lloyd Austin, was speaking while meeting Iraqi Defense Minister Khaled al-Obeidi on Monday.

Austin said that the Islamic State of Iraq and the Levant [Daesh] militants were killed during US-led coalition airstrikes in Iraq and Syria, in comments reported by the Iraqi defense ministry.

The US is leading an international coalition, which includes Jordan, France, Germany and Saudi Arabia, and has carried out numerous airstrikes against Daesh in Iraq and Syria.

Austin claimed that the situation in the country better than before.

Meanwhile, at least four people were killed and 10 others wounded when an explosive device blew up Monday in an industrial neighbourhood of the capital Baghdad, according to Iraqi security sources.

Iraq has suffered a security vacuum since June last year, when Daesh stormed Mosul and declared what it called a caliphate in parts of Iraq and Syria.

The US and partner nations have carried out more than 1,300 air strikes against Daesh in Iraq and Syria since operations began in August, according to the force.

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U.S. and Iranian negotiators have ended another round of intense bilateral negotiations in Geneva and the initial reports indicate some tangible progress toward inking an agreement in the near future.

Although the details of the negotiations remain confidential, the impression given to the media by the U.S. sources indicate a growing optimism that by late March there will be an agreement on the “general principles” that can then act as the springboard for a final comprehensive deal by the set deadline of June 30, 2015.

According to a February 23 report in the New York Times, the U.S. insists on a ten-year agreement in order to verify Iran’s peaceful nuclear intentions, before Iran’s full NPT right to a nuclear fuel cycle can be restored and the full spectrum of sanctions imposed on Iran lifted.

From Iran’s vantage point, there is a growing realization that their demand for the immediate removal of all the (financial, energy and other) sanctions on Iran is unrealistic and there needs to be a gradual timetable, one that operates in tandem with the reciprocal implementation of the terms of the final agreement. Of course, Iran will reserve the right to reverse any of its “nuclear concessions” if the other side fails to implement its part of the bargain, and vice-versa.

One of the lingering Iranian concern, however, pertains to the nature of Western, mainly American, guarantees under the terms of a final agreement, in light of the White House-Congress dualism and the departing Obama administration, which will soon descend the slippery slope of “lame duck” presidency. Chances are that despite the Congressional pressure, Obama will use his “executive privilege” in opting for a final nuclear deal with Iran in the form of an “executive agreement” that would obviate the need for congressional approval.

As is well-known, the problem with this option is that the next occupant of the Oval Office can easily distance himself/herself from Obama’s executive orders and rescind them without encountering much difficulty, thus raising anew the Iran nuclear standoff — to Iran’s detriment since any nuclear concession by Iran, such as with respect to decommissioning some centrifuges and or foregoing 20 percent enrichment, are not easy to reverse and involve both time and technical and financial commitments.

On the other hand, if the final deal is submitted to the US Congress for approval, with the next presidential elections approaching, we can safely assume a new level of politicization of the issue that may backfire on Obama and the Democratic Party and its presidential candidates. An intermediate solution, signifying some involvement on the side by the U.S. Senate (e.g., the foreign relations committee) may be necessary, otherwise the risk of a congressional backlash in the form of tough new anti-Iran sanctions looms large, in light of a pending bipartisan legislation presently put on hold until the end of March by its sponsors.

A potential solution to the absence of a firm guarantee on US’ part is to bolster the legal bona fide of the final agreement, by framing it as an international agreement, whereby it would be very difficult if not impossible for the U.S. to revoke it unilaterally at any time in the future during the timeline of the said agreement. As a multilateral international document that would be registered at the United Nations, such a final agreement would have the benefit of quasi-treaty legal demeanor, in contrast to a mere “political agreement” and or a mere “pledge” by the contracting parties, thus providing Tehran with a cushion of comfort, otherwise Iran will be at the pure mercy of the next president. Rather, the tightening of the legal knots and bolts around the final agreement would make sure that the next U.S. president would not have a free hand on this matter and, instead, would have to reckon with the negative legal and political ramifications of any move against the final agreement.

Of course, a full congressional approval would be ideal, thus putting any Iranian concern to rest for all practical purposes, but even that is not a one hundred percent guarantee — that the next U.S. president would remain loyal to the commitments made by his or her previous predecessor under the terms and provisions of an Iran deal. There are, in other words, ‘gradations’ of U.S. guarantee that altogether form a spectrum and, therefore, it is better to have a spectral view of the subject matter, instead of interpreting it as a binary, either or, issue.

In a scenario where a final deal is materialized in the form of a “soft” treaty and or ‘soft international agreement,” U.S. would be fettered by the built-in mechanisms of the agreement as well, e.g., a joint, multilateral dispute-resolution commission, similar to the one set up by the Geneva “Joint Plan of Action” that has been consumed over the past year and half with the complaints regarding the implementation aspect of the interim agreement.

With the help of certain derogatory clauses inserted in the final agreement, Iran would reserve its right to reciprocate vis-à-vis any non-implementation behavior by the other side, and even to withdraw from the agreement, while simultaneously fettering the U.S. by the multilateral web highlighted by the joint commission. In other words, some of the guarantees, not all of course, sought by Iran can be built into the terms of the final agreement, with respect to the implementation aspect, in addition to the legal framework mentioned above, that needs to be more robust than the interim agreement, in order to put the accent on the “irreversibility” and binding nature of the agreement on all its signatories.

Needless to say, the political and geostrategic considerations can trump even the firmest agreements and, indeed, so much can happen in the span of ten years that can potentially undermine the terms of a final nuclear agreement between the powers and Iran. This, in turn, points the need to bolster any nuclear agreement with comprehensive dialogue on non-nuclear diplomatic and regional dialogue, in order to build confidence between Tehran and Washington and increase the chances for a diplomatic normalization. After all, the current nuclear talks do not transpire in a political vacuum and the heightened security climate in the region has fostered the need for a broader U.S.-Iran dialogue. For now, however, such a dialogue has been held in limbo by the uncertainties of the nuclear negotiations.

The post Iran Needs Firm US Guarantee – OpEd appeared first on Eurasia Review.

Dealing a lasting defeat to the Islamic State of Iraq and the Levant will require “a combined diplomatic and military effort,” Defense Secretary Ash Carter told reporters today at Camp Arifjan, Kuwait, after he concluded a conference there with ambassadors and senior U.S. and regional military leaders.

Earlier in the day during a troop talk at Camp Arifjan, Carter said he convened the conference to “begin to make my own assessment of the campaign to counter ISIL.”

Carter thanked the conference participants, noting that “many traveled a significant distance on short notice to be here, and I sincerely appreciate it.”

Wide-ranging Discussion

He added, “We had an incisive, candid, wide-ranging discussion.”

There were no briefings during the conference, said Carter, noting it featured participants’ sharing “of experience and ideas and expertise, and it made me very proud of the American team here in this region working on this problem of ISIL.”

Conference participants reflected on the “seriousness and the complexity of the threat posed by ISIL, especially in an interconnected and networked world,” the secretary said.

“Lasting defeat of this brutal group can and will be accomplished,” he said. “But I learned some things that we’ll need to guide our effort to do so.

“First, doing so, that is achieving the lasting defeat of ISIL, will require a combined diplomatic and military effort,” Carter continued. “That was abundantly confirmed by our discussion, and was affirmed or rather affirms the bringing together of this unique grouping of political and military leaders.”

Second, although he’s cognizant “of the great strength of the coalition the United States has assembled and leads in this struggle,” Carter said there’s a need “to leverage further the individual contributions of each.”

Third, he added, while the center of gravity of the anti-ISIL campaign is in Iraq and Syria, “it has ramifications in other regions of the world that need to be taken into account also in our approach.”

Fourth, ISIL’s “use of social media will be pressing us to be more creative in combating it in the information dimension as well as the physical dimension,” Carter said.

The secretary also said that discussion among conference participants indicated to him that ISIL “is hardly invincible.”

Anti-ISIL Efforts ‘Having Some Important Impacts’

Coalition anti-ISIL efforts to date “have already been having some important impacts,” Carter said.

He added, “Our global coalition is up to the task, and so is American leadership, which has shone through — throughout the course of this campaign.”

Carter described today’s conference as “very productive and very valuable, and you should expect to see more consultations like this by me in the future, convening senior leaders from across our government and sometimes experts from outside of it to ensure that our nation’s defense is as dynamic as the challenges before it.”

At the conclusion of his remarks, Carter took questions from the press. One reporter asked him about the importance of a political-military balance in the fight against ISIL.

Political-Military Dimensions ‘Closely Interconnected’

Carter acknowledged that the anti-ISIL campaign in Syria does have both political and military dimensions.

“They’re closely interconnected,” the secretary said. “We had an opportunity to review today the train and equip effort that is beginning in Syria, but I need to remind you and very much in the spirit of your question that — and as the discussion certainly indicated there, our campaign in Syria, like our campaign in Iraq, has an important political dimension to it. And we discussed that also: they’re both important, they’re both essential, both the political and the military dimension.”

Another reporter asked Carter if there would be any fundamental changes to the anti-ISIL strategy.

The secretary replied that the coalition recognizes the need to employ a combined political and military effort against ISIL.

“I think that’s crucial, and I think that’s understood by all, and it’s reflected in what we’re trying to do,” Carter explained. “I think that we have clearly in focus the idea that this can’t be a purely American thing, that it truly is a coalition effort and needs to be a coalition effort to succeed. I think it was clear to us that we can’t neatly partition it geographically, that it has global evocations.”

Conference participants’ discussions “reinforced the idea of the need to stitch all of the different aspects of this together, and that the leaders that I met with today are to a remarkable degree doing that,” Carter said.

‘Working Closely Together’

He added, “And this bringing them together was a further effort to work across geographies and work across functions to make sure that we are in fact all working closely together. And to a large extent, these folks have been doing that already. But I think today’s meeting reinforced that and gave them yet [another] opportunity to do that, and me to do that with them.”

Carter was also asked about his confidence level of building an anti-ISIL force. The secretary responded that providing good military training to people from other lands is a core skill of the U.S. military.

“It’s become a skill of many of our coalition partners, knowing how to train others, how to work with and through others, how to enable and use U.S. capabilities to enable the capabilities of others and to make sure that –… we conduct all these activities in a way that’s consistent with American values,” the secretary said. “We’re good at all that. We’ve been doing that in many contexts for quite awhile.”

Providing training is “one of the key lessons that we learned in Iraq and Afghanistan,” Carter said. “It’s one of the key skills we honed in Iraq and Afghanistan, and I don’t think there’s any military that does it better.”

The post Defeating Islamic State Takes Diplomatic, Military Effort, Carter Says appeared first on Eurasia Review.

By Saurabh Kaushik*

During the 18th SAARC Summit held in November 2014, Prime Minister Modi remarked that regional integration in South Asia would go ahead “through SAARC or outside it, among all of us or some of us.” It is evident that SAARC as a regional arrangement has been unable to act as a ‘consensus-building’ forum, largely due to the intractable nature of problems between India and Pakistan. With Modi indicating that an alternative could be forged by taking the initiative at the sub-regional level, it is imperative to analyse the reasons for the lack of progress in this regard. Also, what do the recent trends indicate? Is sub-regional cooperation gaining momentum in South Asia and does it hold promise?

It is obvious that bilateral relationships act both as the bedrock as well as a roadblock in achieving regional cooperation. The effort to engage simultaneously in addressing bilateral irritants and bringing about deeper economic cooperation has the potential to pave the way for sub-regional cooperation in South Asia.

There are multiple sub-regional forums in the region such as the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC), South Asia Sub-regional Economic Cooperation (SASEC) and India Bangladesh Myanmar Sub-Regional Cooperation (IBM-SRC). Their failure in achieving any meaningful outcome or significant progress stems from a combination of domestic political, foreign policy, and economic factors.

Being the fulcrum of the sub-region and its window to Southeast Asia, IBM countries, i.e. India, Bangladesh and Myanmar occupy primary importance in the efforts to integrate the region. Therefore, it is important to throw some light on India-Bangladesh and Bangladesh-Myanmar bilateral relations and their changing dynamics in order to understand which way sub-regional cooperation in South Asia is headed.

The Myanmar-Bangladesh-India gas pipeline project proposed after the discovery of the Shwe gas fields in Myanmar’s Rakhine state failed to take off. This was because Bangladesh wanted India to reduce the huge bilateral trade deficit, allow transit to Nepal and Bhutan, and facilitate the sale of electricity from these countries to Bangladesh through Indian territory in exchange for providing transit for the pipeline. Domestic compulsions in both India and Bangladesh with regard to the settlement of the Teesta Water Sharing Agreement and Land Boundary Agreement (LBA) have further delayed their economic integration.

However, with a strong leadership at the helm in India and its resolve to reenergise the ‘Look East’ policy, things are starting to look up. PM Modi assured his Bangladeshi counterpart of a speedy resolution to LBA and Teesta waters dispute on the sidelines of the SAARC Summit. In fact, the bill to give effect to the India-Bangladesh Land Boundary Agreement (LBA) was approved by a parliamentary panel in December 2014, not even a month after the Summit. Among other things, the positive reception of the India-Bangladesh Maritime Arbitration Award announced in July 2014 on both sides also signals a reinvigorated push in the right direction.

In the case of the Bangladesh-Myanmar bilateral relationship, the Rohingya issue has been a significant challenge in the context of assuaging domestic political sentiments and has a direct bearing on foreign policy decisions. Yet, it would not be unwise to suggest that given the growing importance of the Bay of Bengal and the Indo-Pacific, both countries are well poised to intensify their cooperation. In fact, delinking the Rohingya issue and IBM-SRC to allow progress to be made on the latter could act as an incentive to resolve the former.

There are also several economic and technical factors that have impeded sub-regional economic integration. Apart from tariffs, non-tariff barriers to trade such as export subsidies, prohibitions, quotas, import licensing, and custom procedures act as obstacles to intra-regional trade. Intra-regional trade in South Asia is a mere 5 per cent as compared to 58 per cent in the EU, 52 per cent in the NAFTA region, and 26 per cent in the ASEAN zone. The silver lining, however, is that India is playing a proactive role in revising its tariff and non-tariff regime vis-à-visits neighbours, especially Bangladesh, which should inspire some optimism.

Inadequate infrastructure and lack of border trade facilities on the ground are other major impediments that affect all countries in the region. The importance of these can be gauged by the fact that if the existing border infrastructure between Bangladesh and India’s Northeast is upgraded, trade volume can potentially go up by five to six times the current level.

Needless to say, there are serious roadblocks to enhanced cooperation, both political as well as economic. But it is worth considering some recent developments apart from those mentioned above. A total of 73 projects, including five in 2014, have been commissioned by the ADB, amounting to US$ 6.56 billion under SASEC. There have already been meetings between Power and Transport Secretaries of Bangladesh, Bhutan, India and Nepal (BBIN) on Hydropower and Regional Road Transport Connectivity this year. A series of similar dialogues will be set in motion through the course of the year. There is good reason to be hopeful. Sub-regional cooperation may finally have gotten a new lease of life, and we will be witness to its promise.

* Saurabh Kaushik
Research Intern, IPCS

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