Credit ratings agencies have enormous power over countries in dire straits. But whether prevailing global economic conditions affect their assessments is rarely asked. This column suggests that credit ratings agencies overreact in downgrading countries credit ratings during times of economic crisis and instability, and underreact when upgrading during calmer times. This is bad news for policymakers who think that strong economic performance will get them back the credit rating they once took for granted.

By Carmen Broto and Luis Molina*

Rating agencies have played a prominent role during the on-going Global Crisis. In principle, agencies constantly update their sovereign credit ratings on the basis of new economic information, and changes in ratings offer investors valuable information (Masciandaro 2011). This constant updating is one of the reasons why financial markets rely on agencies (Cantor and Packer 1994). Needless to say, understanding the performance of agencies is crucial given the important economic implications of sovereign ratings. For instance, ratings strongly influence capital flows and are a main driver of sovereign bond spreads (Cantor and Packer 1996), which in turn determine the financing costs of the public sector. But despite their importance, the agencies do not provide enough details on how they determine their ratings (Mora 2006), although some recent regulatory initiatives are intended to enhance the agencies’ transparency (EU Commission 2013).

In practice, the evolution of sovereign ratings seems to be strongly asymmetric (Koopman et al. 2008), in the sense that downgrade periods tend to be shorter and deeper than upgrade periods. In other words, a country can be abruptly downgraded but it takes a long time for it to recover its rating. Moreover, the initial status may not ever be fully regained.

One explanation of this evolution could be that the information the credit ratings agencies use to update their ratings also exhibits the same different pattern during recessionary and recovery periods. An alternative explanation could be – simply – the particular way in which a rating agency incorporates its understanding of a country’s fundamental aspects and financial market conditions into its rating revision. There is no consensus as to which is the most convincing explanation for the asymmetries.

A less widely-held view implicitly maintains that rating agencies use a ‘point-in-time’ strategy (Hu et al. 2002), adapting to borrower countries’ current conditions in a manner that is constantly updated. However, most papers state that rating agencies do not adjust accurately to domestic indicators. The interpretation of this is that, having failed to predict a economic and financial downturn, agencies have reputational incentives to downgrade countries during crisis periods by more than the fundamentals would justify (Ferri et al. 1999).

Having confirmed the existence of this asymmetric pattern, our research provides an explanation based on the different reaction of ratings to domestic fundamentals during upgrade and downgrade periods (Broto and Molina 2014).

What do rating cycles look like?

As with economic variables, we can call the evolution of a country’s credit rating during consecutive downgrade and upgrade periods a ‘rating cycle’. Thus, a complete ‘cycle’ encompasses the period in which the rating goes from peak to trough and from trough to peak. Although these cycles are not directly linked to the business cycle, their duration (the number of days from peak to trough and vice versa) and amplitude (the number of notches gained or lost in each period) can be computed. As an illustration, the evolution of the sovereign rating of South Korea (see Figure 1) exhibits precisely these assumptions for the ratings path: the duration of the downgrade period is shorter than that of the upgrade period and the rating had not regained its initial level by the end of the cycle.

Figure 1. Sovereign rating of South Korea

Figure 1. Sovereign rating of South Korea. Source: Standard and Poor’s.

It is important to note that we focus on just one agency, Standard & Poor’s, in order to not mix data sources. Standard & Poor’s tends to be less dependent on other agencies and, of the three major ones, it provides the lowest and most volatile ratings (Alsakka and ap Gwilym 2010).

First, we check whether Standard & Poor’s ratings exhibit an asymmetric pattern. Table 1 shows the mean duration, amplitude and number of rating cycles for a representative set of countries (the G20 and the countries that were most distressed during the Eurozone crisis). These descriptive statistics confirm the existence of an asymmetric pattern. In those countries with at least one complete cycle, its duration is clearly asymmetric as, with very few exceptions, upgrade phases have a longer duration than downgrade ones. Amplitudes are also asymmetric, because for most countries the number of notches from peak to trough tends to be higher than from trough to peak. To put it another way, once downgraded by the agency, very few countries recover their previous status.

Table 1. Descriptive statistics of upward and downward rating phases

Table 1. Descriptive statistics of upward and downward rating phases. Source: Standard and Poor’s and own calculations.

Finally, the countries with at least one complete cycle (from trough to peak and from peak to trough) are mainly emerging market economies and non-core Eurozone economies. The scarcity of upgrade and downgrade periods illustrates the persistence of ratings and their strong inertia, as once the first downgrade (or upgrade) takes place it tends to be followed by more downgrades (and vice versa). Figure 2, which represents the weighted averages of ratings for the complete sample of countries rated by Standard & Poor’s, shows that there was at least one complete cycle in most emerging market economies, whereas developed countries are on average still in the downward period.

Figure 2. GDP-weighted average sovereign rating

Figure 2. GDP-weighted average sovereign rating. Source: Standard and Poor’s and own calculations.

Rating determinants

Our next step is to use panel data to analyse the main determinants of ratings during downgrade and upgrade periods, so as to provide an interpretation of the ratings’ asymmetries based on the reaction of the agency to domestic fundamentals. Our dependent variable is a non-linear transformation of the sovereign credit rating by Standard & Poor’s that allows us to consider different rating dynamics in the intermediate categories around investment grade.¹

Our study suggests that previous downgrades have a strong influence in determining future rating downgrades while past upgrades do not encourage future improvements in the agency’s evaluations.² This is in line with previous literature (see Ferri et al. 1999) which finds that for reputational reasons rating agencies may overreact once the downgrading phase starts.

To fit sovereign ratings, we also use the explanatory variables typically used in previous empirical papers that represent economic fundamentals, financial markets, domestic conditions and global shocks. Our estimates for these variables are in line with previous work on the subject.

Can authorities do anything to influence the ratings’ path?

Our study also considers the possibility of a country having a previous upgrade or downgrade and how this will affect its rating. Our results are striking. A favourable economic performance seems to be useful to soften the downgrading path.³ But once the agency starts upgrading a country, positive fundamentals do not necessarily entail an acceleration of the upgrading process.⁴

This result emphasises that domestic authorities are unable to speed up future upgrades by means of a good economic performance. This is bad news for those developed economies that have already lost their initial rating status during the crisis.

All in all, our findings support the view that during downgrade periods rating agencies exhibit an excess sensitivity to fundamentals, which can even exacerbate the downturn in the business cycle. During upgrade phases, authorities have little room for manoeuvre in accelerating the rating improvements, as agencies’ ratings remain steady.

Conclusions

Sovereign ratings seem to follow a strongly asymmetric path. Based on previous empirical work and using Standard & Poor’s ratings, we find that these asymmetries are the result of an overreaction to deteriorated economic performance during downgrade periods and an under-reaction to better economic conditions during the recovery phases.

On a more positive note, during downgrade periods, good domestic fundamentals can influence the rating agency so that national authorities are capable of smoothing out downgrades. However, the nature of upgrades is rather different. Previously downgraded countries have little ability to accelerate future upgrades through enhanced economic fundamental performance.

These results are useful for drawing some lessons about what the rating cycle will be like in those advanced countries that have been downgraded during the Global Crisis.

Disclaimer: The views in this column are the authors’ and should not be reported as those of the Bank of Spain or any official organisation affiliated with the Eurozone.

*About the authors:
Carmen Broto
Senior Economist in the International Affairs Directorate, Bank of Spain

Luis Molina
Senior Economist in the International Affairs Directorate, Bank of Spain

References:
Alsakka and ap Gwilym (2010), “Leads and lags in sovereign credit ratings”, Journal of Banking & Finance 34: 2614-2626.

Broto, C, and L Molina (2014), “Sovereign ratings and their asymmetric response to fundamentals”, Banco de España, Working Paper 1428.

Cantor, R, F Packer (1994), “The credit rating industry”, Federal Reserve Bank of New York, Quarterly Review Summer-Fall, 1-26.

Cantor, R, F Packer (1996), “Determinants and impact of sovereign credit ratings”, Federal Reserve Bank of New York Economic Policy Review, October, 1-15.

Hu, YT, R Kiesel, W Perraudin (2002), “The estimation of transition matrices for sovereign credit ratings”, Journal of Banking & Finance 26: 1383-1406.

Koopman, SJ, R Krussl, A Lucas, AB Monteiro (2009), “Credit cycles and macro fundamentals”, Journal of Empirical Finance 16, 42-54.

Mora, N (2006), “Sovereign credit ratings: Guilty beyond reasonable doubt?”, Journal of Banking & Finance 30, 2041-2062.

Masciandaro, D (2011), “What If Credit Rating Agencies Were Downgraded? Ratings, Sovereign Debt and Financial Market Volatility”, SSRN Electronic Journal 09/2011, DOI: 10.2139/ssrn.1924859.

Footnotes:
1. We transform the rating scale by means of a log function, which has a higher slope in the intermediate categories. For instance, this feature allows us to identify the difference between the impact of losing one notch from AAA to AA+ and the impact of losing the investment grade category (from BBB- to BB+) which triggers huge capital outflows as many pension funds limit the percentage of their portfolio that could be invested in the so called junk bond categories.

2. Our main variables of interest in this analysis are two dummy variables. The first one takes the value 1 if the country has been downgraded in the previous quarter and 0 otherwise, whereas the second dummy is 1 if the country has been upgraded in the previous quarter and 0 otherwise. The coefficient of the dummy for previous downgrades is negative and significant whereas that of previous upgrades is non-significant.

3. Our estimates also consider the interactions of the domestic variables with the two dummies that represent the existence of a previous upgrade or downgrade as rating determinants. The estimated coefficients of these interactions can be interpreted as the capacity of domestic fundamentals to influence the downgrading and upgrading path by smoothing or amplifying both phases. Our results are striking. First, the interactions of the domestic variables with the dummy that represents the existence of previous downgrades are significant for several cases (namely, GDP growth, GDP per capita and the reserves-to-GDP ratio).

4. In contrast, the interactions with the dummy that corresponds to previous upgrades are barely significant.

The post Sovereign Ratings’ Response To Fundamentals During Upgrade And Downgrade Periods – Analysis appeared first on Eurasia Review.

This week I found myself in rare agreement with Janet Yellen when she admitted that her economic predictions are likely to be wrong. Sadly, Yellen did not follow up her admission by handing in her resignation and joining efforts to end the Fed. An honest examination of the Federal Reserve’s record over the past seven years clearly shows that the American people would be better off without it.

Following the bursting of the Federal Reserve-created housing bubble, the Fed embarked on an unprecedented program of bailouts and money creation via quantitative easing (QE) 1, 2, 3, etc. Not only has QE failed to revive the economy, it has further damaged the average American’s standard of living while benefiting the financial elites. None other than Donald Trump has called QE “a great deal for guys like me.”

The failure of quantitative easing to improve the economy has left the Fed reluctant to raise interest rates. Yet the Fed does not want to appear oblivious to the dangers posed by keeping rates artificially low. This is why the Fed regularly announces that the economy will soon be strong enough to handle a rate increase.

There are signs that investors are beginning to realize that the Fed’s constant talk of raising rates is just talk, so they are looking for investments that will protect them from a Fed-caused collapse in the dollar’s value. For example, the price of gold recently increased following reports of stagnant retail sales. An increased gold price in response to economic sluggishness may appear counterintuitive, but it is a sign that investors are realizing quantitative easing is not ending anytime soon.

The increase in the gold price is not the only sign that investors are interested in hard assets to protect themselves from inflation. Recently a Picasso painting sold for a record 180 million dollars. This record may not last long, as an additional two billion dollars worth of art is expected to go on the market in the next few weeks.

Another sign of the increasing concerns about the dollar’s stability is the growing interest in alternative currencies. Investing and using alternative currencies can help average Americans, who do not have millions to spend on Picasso paintings, protect themselves from a currency crisis.

Congress should ensure that all Americans can protect themselves from a dollar crisis by repealing the legal tender laws.

Congress should also take the first step toward monetary reform by passing the Audit the Fed bill. Unfortunately, Audit the Fed is not a part of the Federal Reserve “reform” bill that was passed by the Senate Banking Committee. Instead, the bill makes some minor changes in the Fed’s governance structure. These “reforms” are the equivalent of rearranging deck chairs as the Titanic crashes into the iceberg. Hopefully, the Senate will vote on, and pass, Audit the Fed this year.

The skyrocketing federal debt is also a major factor in the coming economic collapse. The Federal Reserve facilitates deficit spending by monetizing debt. Congress should make real cuts, not just reductions in the “rate of growth,” in all areas. But it should prioritize cutting the billions spent on the military-industrial complex.

Some say that eliminating the welfare-warfare state and the fiat currency system that props it up will cause the people pain. The truth is the only people who will feel any long-term pain from returning to limited, constitutional government are the special interests that profit from the current system. A return to a true free-market economy will greatly improve the lives of the vast majority of Americans.

This article was published by the RonPaul Institute.

The post Ron Paul: Janet Yellen Is Right, She Can’t Predict The Future – OpEd appeared first on Eurasia Review.

China’s Communist Party is planning to purge members who secretly follow a faith in Wenzhou, dubbed ‘Jerusalem of the East’ due to the city’s substantial Christian population.

The latest anti-Christian campaign in the city will see the party probe its own ranks, the state-run Global Times reported, following 18 months in which authorities have removed crosses and destroyed churches across Zhejiang province.

“Whoever loses loyalty in the party will be expelled,” it said. “The daily performance of potential members and the possibility that they practice a religion will be examined.”

The planned purge follows a visit late last year by the inspection team of the Communist Party’s Central Disciplinary Committee, which reported that “individual party members in some places participate in religious activities and believe religion”.

Catholics in Zhejiang have told ucanews.com it is a relatively common for party members to practise their faith in secret in a bid to find a sense of “peace”.

“The central inspection team’s report cannot stop officials from believing in religion,” said one Church source who declined to be named for security reasons. “If you believe in Buddhism, you don’t need a particular inception or sign, and you don’t have to go to church every week.”

In June last year, Zhejiang government websites posted a “commitment letter” for party members to sign, vowing that they would not believe in any religion.

Those who sign up have to make a public commitment to following the Marxist view on religion and are required to further their study of atheist education.

In 2013, the head of the religious committee of the Chinese People’s Political Consultative Conference, Zhu Weiqun, warned that party members who follow certain religions would likely become internal agents of their faith.

In turn, that would cause them to be biased when dealing with different religions in China, he added.

The post China: Communist Party To Purge Officials Of Faith In ‘Jerusalem Of The East’ appeared first on Eurasia Review.

As readers will know, 22nd May marked the 1st anniversary of Thailand’s most recent military coup d’etat.

To mark this anniversary, groups of Thai students around the country engaged in civil disobedience and protest against the military regime.

In typical fashion the Thai military reacted with draconian brutality, beating and arresting 38 students.

At present these students are held in various locations with some local reports indicating several of them are being moved to military bases.

We would like to extend our solidarity with these students and also publish a statement by the Thai Lawyers for Human Rights, who are engaged in building a legal solidarity campaign against military rule.

We would also like to state that we demand the immediate and unconditional release of all student pro-democracy activists arrested by the Thai Army today.

Statement follows:

Cease the exercise of arbitrary power

Immediately and unconditionally release the students

Today many students groups gathered to express their political views and opposition to the coup. This led to the detention of a large number of students and activists, including the following:

1.      11 members of Young People for Social-Democracy Movement, Thailand (YPD), who organized a seminar on the topic of “22-22: Community Rights, Liberty, Education,” on the one-year anniversary of the coup, who are detained at Chana Songkhram police station.

2.      7 students from the “Dao Din” group from Khon Kaen University were first detained at the Sripatcharin Army Camp (23rd Military Circle) and then taken for further detention at the Khon Kaen police station from 3 pm continuing until the present (10 pm). They have been charged with violating Head of NCPOorder 3/2558 (2015) forbidding political demonstrations.

3.      34 students have been detained at the Pathumwan police station from 6:30 pm until the present (10 pm) following participation in a symbolic art event entitled “1 year in which …” in front of the Bangkok Art and Culture Center in  order to express their feelings and thoughts from the year that has passed since the events of 22 May 2014.

The view of Thai Lawyers for Human Rights is that the aforementioned detention is arbitrary and derives from the unlawful use of power for the following reasons:

1.      News reports indicate that many students were assasulted by state officials[1] and state officials used unnecessary force in carrying out arrests, to the degree that some had to go to the hospital for treatment.[2]These actions constitute the use of injurious force against peaceful, unarmed protestors. The arrests and detention are arbitrary.

2.      Officials refused to allow lawyers or those trusted  (by the detained) to meet with those detained, which is a right of  arrested individuals per Article 7/1 of the Criminal Procedure Code. They claimed that they had to wait for the order from their commander, but they photocopied the legal licences of the lawyers who asked to be allowed to enter to provide legal assistance. These actions constitute a threat to the lawyers’ carrying out of their duties. Further, to exercise power solely on the basis of the order of the commander is a denial of the durability of the law.

The aforementioned exercise of power by the police and military constitutes a lack of respect for the rule of law and the legal system. To take actions which rely solely on a commander’s orders or the junta’s authority creates terror among the people, as it is the use of power without consideration for the law.

Thai Lawyers for Human Rights therefore calls on the authorities to reveal the names ofthose detained and the immediate and unconditional release of the students and activists being detained. We call for the immediate provision of remedies for these actions, including holding the police and military to account under the law.

With respect for the rights and liberties of the people

Thai Lawyers for Human Rights

109 Soi Sitthichon Suthisarnwinichai Rd. Samsennok Huaykwang Bangkok 10310

Thailand / โทร(Tel) : 096-7893172 หรือ 096-7893173 e-mail : tlhr2014@gmail.com

[1] See “Officials detain more than 30 students following activities in front of the BACC for the one-year anniversary of the 22 May coup” [“จนท.ควบคุมตัวนักศึกษากว่า 30 คน หลังจัดกิจกรรม 1 ปี รปห. 22 พ.ค. หน้าหอศิลป์กทม.”], Matichon, 22 May 2015, Available online here.

[2] See “Police arrest more than 20 students and activists after they conduct activities for the coup anniversary in front of the BACC” [“ตร.รวบ น.ศ.-นักกิจกรรมกว่า 20 คน หลังทำกิจกรรม 1 ปีรัฐประหารหน้าหอศิลป์ฯ”], Prachatai, 22 May 2015, Available online here.

The post Thai Lawyers Demand Justice Following Arrests Of Protesters – OpEd appeared first on Eurasia Review.

Last week’s settlement between the Justice Department and five giant banks reveals the appalling weakness of modern antitrust.

The banks had engaged in the biggest price-fixing conspiracy in modern history. Their self-described “cartel” used an exclusive electronic chat room and coded language to manipulate the $5.3 trillion-a-day currency exchange market. It was a “brazen display of collusion” that went on for years, said Attorney General Loretta Lynch.

But there will be no trial, no executive will go to jail, the banks can continue to gamble in the same currency markets, and the fines – although large – are a fraction of the banks’ potential gains and will be treated by the banks as costs of doing business.

America used to have antitrust laws that permanently stopped corporations from monopolizing markets, and often broke up the biggest culprits.

No longer. Now, giant corporations are taking over the economy – and they’re busily weakening antitrust enforcement.

The result has been higher prices for the many, and higher profits for the few. It’s a hidden upward redistribution from the majority of Americans to corporate executives and wealthy shareholders.

Wall Street’s five largest banks now account for 44 percent of America’s banking assets – up from about 25 percent before the crash of 2008 and 10 percent in 1990. That means higher fees and interest rates on loans, as well as a greater risk of another “too-big-to-fail” bailout.

But politicians don’t dare bust them up because Wall Street pays part of their campaign expenses.

Similar upward distributions are occurring elsewhere in the economy.

Americans spend far more on medications per person than do citizens in any other developed country, even though the typical American takes fewer prescription drugs. A big reason is the power of pharmaceutical companies to keep their patents going way beyond the twenty years they’re supposed to run.

Drug companies pay the makers of generic drugs to delay cheaper versions. Such “pay-for-delay” agreements are illegal in other advanced economies, but antitrust enforcement hasn’t laid a finger on them in America. They cost you and me an estimated $3.5 billion a year.

Or consider health insurance. Decades ago health insurers wangled from Congress an exemption to the antitrust laws that allowed them to fix prices, allocate markets, and collude over the terms of coverage, on the assumption they’d be regulated by state insurance commissioners.

But America’s giant insurers outgrew state regulation. Consolidating into a few large national firms and operating across many different states, they’ve gained considerable economic and political power.

Why does the United States have the highest broadband prices among advanced nations and the slowest speeds?

Because more than 80 percent of Americans have no choice but to rely on their local cable company for high capacity wired data connections to the Internet – usually Comcast, AT&T, Verizon, or Time-Warner. And these corporations are among the most politically potent in America (although, thankfully, not powerful enough to grease the merger of Comcast with Time-Warner).

Have you wondered why your airline ticket prices have remained so high even though the cost of jet fuel has plummeted 40 percent?

Because U.S. airlines have consolidated into a handful of giant carriers that divide up routes and collude on fares. In 2005 the U.S. had nine major airlines. Now we have just four. And all are politically well-connected.

Why does food cost so much? Because the four largest food companies control 82 percent of beef packing, 85 percent of soybean processing, 63 percent of pork packing, and 53 percent of chicken processing.

Monsanto alone owns the key genetic traits to more than 90 percent of the soybeans planted by farmers in the United States, and 80 percent of the corn.

Big Agribusiness wants to keep it this way.

Google’s search engine is so dominant “google” has become a verb. Three years ago the staff of the Federal Trade Commission recommended suing Google for “conduct [that] has resulted – and will result – in real harm to consumers and to innovation.”

The commissioners decided against the lawsuit, perhaps because Google is also the biggest lobbyist in Washington.

The list goes on, industry after industry, across the economy.

Antitrust has been ambushed by the giant companies it was designed to contain.

Congress has squeezed the budgets of the antitrust division of the Justice Department and the bureau of competition of the Federal Trade Commission. Politically-powerful interests have squelched major investigations and lawsuits. Right-wing judges have stopped or shrunk the few cases that get through.

We’re now in a new gilded age of wealth and power similar to the first gilded age when the nation’s antitrust laws were enacted. But unlike then, today’s biggest corporations have enough political clout to neuter antitrust.

Conservatives rhapsodize about the “free market” and condemn government intrusion. Yet the market is rigged. And unless government unrigs it through bold antitrust action to restore competition, the upward distributions hidden inside the “free market” will become even larger.

The post Whatever Happened To Antitrust? – OpEd appeared first on Eurasia Review.

By Abdulrahman Al-Rashed

Hezbollah Secretary-General Hassan Nasrallah recently slammed his critics saying, “Anyone who says other that what is said here is a moron, is blind and a traitor.” He described Shiites working for the Americans as traitors, agents and morons.

However this time, Nasrallah’s angry and threatening statements were not directed against his usual rivals. They are directed against Shiites in Lebanon. These statements reveal the extent of internal disputes and expose the increasing criticism against him, after a prolonged Syrian war and after the expansion of battlefields, which Lebanon’s Shiites are required to fight in order to meet the demands of Iran’s warlords. A few days before this angry speech, Ali Akbar Velayati, a senior adviser to Iran’s supreme leader, had visited Beirut to deliver a message to Nasrallah.

This message was probably behind the Hezbollah chief’s frustration and the call to further mobilize his party’s ranks. It’s also probably why he made these threats to those who oppose him.

Nasrallah’s speech reveals divisions and disputes within the Shiite community, which had previously stood as a symbol of obedience where there was a majority in support of him and an opposing silent minority. However, now after the party’s increased human losses in Syria and Iraq, objections seem to be threatening his status — unlike in the past when no one dared to question his actions or decisions.

Some may say Hezbollah is not the only party drowning in the moving sands, as there are struggles in the entire region. This is true. However, the difference is that other parties were destined to fight because the war is happening in their own territories; Hezbollah is fighting in Syria alongside the Assad regime on behalf of Iran. Hezbollah members have thus been turned into mercenaries who are brought from various countries to fight far away from home just to appease Iran and uphold its commitments.

As time passed and as more Hezbollah members died — although most casualties are not announced — Hezbollah exhausted its excuses with the first of them being that it is fighting in Syria to “defend sacred shrines.”

When it was later revealed that most of its members were falling in areas, which are far from those shrines, the Shiite party came up with the excuse that it has launched a preemptive war to defend Lebanon. “If we hadn’t fought in Aleppo, Homs and Damascus, we would have fought in (Lebanon’s) Baalbek, Hermel, Ghaziyeh and other areas,” Nasrallah said. Of course, it’s illogical to go to war in a large country to prevent a war in your own country.

Hezbollah’s participation in the war in Syria with his extremist Shiite members brought thousands of extremist Sunnis to the frontline. The war in Syria thus turned into a Shiite-Sunni-Alawite battle.

Hezbollah’s war in Syria is an Iranian war, and a lost one too. Hezbollah’s fighters will later see that Tehran will have to sell them. I mean Iran will make compromises at their expense to take either of two paths: Provide a safe exit from Syria, i.e. a complete defeat, or accept a solution in which the Syrian regime’s head exits power — a solution which both Iranian and Syrian regimes rejected resulting in the death of thousands of people. Therefore, Hezbollah does not have a compelling excuse to fight in Syria. The Iranians are fighting there for the sake of gaining influence and due to their obsession to rule the region. Hezbollah’s participation alongside the Iranians in the war will bring about two disasters. The first is that Hezbollah will suffer human losses, which will be much more than the combined losses suffered during its wars with Israel in the past 30 years. The second is that this participation alongside Iran will attract extremist groups to Lebanon — groups that threaten all parties and ignite war there.

The defeats, the corpses, the wounds, the broken promises and the ongoing war all show that the Hezbollah command’s only choice is to respond to Tehran’s demands until its last fighter. In his speech, Nasrallah called on his followers to support him amid the criticism, doubts and objections. “Now it’s time for mobilization. Everyone can participate even by just speaking out. Whoever has credibility among people (must speak out) and contribute to this mobilization. Scholars must speak out. Those who have a martyred child must also speak out.”

Dangerously, Nasrallah did not conceal his future plan. “In the next phase, we may announce general mobilization (that applies) to all people. I am saying we may fight everywhere.”

“Everywhere” means sending more men to fight in Iraq and Yemen! And since he knows the Shiite community is increasingly rejecting him, he threatened those who oppose him.

The post Hezbollah Fast Losing Popularity – OpEd appeared first on Eurasia Review.

Every year on May 9^th millions of people throughout Russia and the former Soviet republics commemorate their victory over Germany in World War II. Foreign leaders attend the ceremonies in Red Square, as George W. Bush did in 2005. This year western leaders did not but the significance of their absence is not what corporate media would have us believe. Barack Obama and David Cameron and Francois Hollande weren’t in Red Square in 2015, but Chinese president Xi Jinping was and he never left Vladimir Putin’s side. While Americans suffer from government and media propaganda telling them that Russia is isolated, their country is isolated too because it insists on being the world’s biggest bully.

The United States has woven a tangled web with its continued commitment to the imperial project. Barack Obama may not have been in Red Square but just three days later secretary of state John Kerry met with Vladimir Putin in Sochi. That meeting is proof of at least a partial defeat for the United States.

In 2014 Washington used Ukraine’s internal crisis as an attempt to kill two birds with one stone. The western backed coup not only put a pro NATO president in office but sanctions enacted after Russia annexed Crimea were a blow to its position as a leading energy producer.

The United States behaved like the schoolyard bully accustomed to stealing lunch money from the weaker kids. The sanctions and the removal of Russia from the G8 were meant to neuter the gas producing giant. Russia not only stood in the way of American energy producing supremacy but also speaks out against Washington’s mischief carried out around the world.

Russia used its status as a permanent member of the United Nations Security Council to prevent a “no fly zone” over Syria that could have meant defeat for president Assad. Western wishful thinking would have a compliant Russia doing their bidding and giving up its sovereignty and prerogatives. To quote an old saying, “Dream on.”

The dream of an easy Russian smack down is at least partly over. Kerry and foreign secretary Lavrov have met and spoken repeatedly since the Ukraine crisis began, but there haven’t been any high level meetings with president Putin. The fact that Kerry wanted to speak with the president and that Putin agreed indicates that both sides know they need the other.

Washington hasn’t completely surrendered, as its attempted rapprochement with Iran proves. Obama is pushing to end sanctions with Iran in order to make it an energy supplier to Europe, supplanting Russia in the process. But Putin has not been wringing his hands in the Kremlin, hoping for mercy from the United States. He has been forging new economic and military alliances with leaders all over the world.

The Chinese haven’t been passive either while Washington tries to make the whole world bend to its will. They have forged ahead with their Asian Infrastructure Investment Bank to compete with the World Bank and IMF. Washington has to watch as allies such as France and the United Kingdom are among the 57 founding members.

Xi Jingping and Putin were literally cheek to cheek during the Victory Day parade. While American media made fun of the paucity of people they considered important, Russia and China strengthen their alliance. The two nations are holding war games in the Mediterranean Sea and have announced energy partnerships while the United States props up the failed state of Ukraine with billions of dollars. Russia has also announced pipeline deals with Turkey, another U.S. ally. Turkey may have joined in the effort to defeat Bashir al-Assad in Syria, but that doesn’t mean it will be an American puppet in every circumstance.

The United States has worn out its welcome even among its friends. Angela Merkel may have missed the parade but she met Putin the day after and repeated her belief that the only solution to the Ukraine crisis is a diplomatic one. America’s bullying may have gotten the Europeans to agree to sanctions but they have harmed their own economies by doing so. Merkel and other Europeans are facing pressure to stand up to the Americans and stop cutting their own throats.

President Obama is like a circus juggler with many balls in the air. He wants to hurt Russia by helping Iran but Israel and the Arab gulf states were all committed to regime change, something they could count on Washington to uphold. Now that Obama wants to make nice with Iran its other enemies are very unhappy. Of course King Salman of Saudi Arabia wouldn’t show up for a meeting at Camp David. He sees no reason to go along with Washington’s attempt to have its cake and eat it too.

So while friends are angered about the move toward Iran, nations like Russia and China act in their own interest and watch the United States with wary curiosity. America will always turn friends to enemies and suddenly declare that enemies are friends because it is not a true friend to anyone else. One day destroying Iran is the top priority, then propping up the failed Ukrainian state, then destroying Syria, then making friends with Cuba but still imposing sanctions on Venezuela. It is a litany of deceit and dishonor among thieves.

Putin and Xi prove that it is possible to stand up to the United States. Even though Obama succeeded in keeping other leaders away from Moscow’s celebration it didn’t really matter. When it counted they had to come and show their respect and that is a victory for the entire world.

The post Russia Wins – OpEd appeared first on Eurasia Review.

By Siddharth Ramana*

Revelations by WikiLeaks that the US is critical of Gulf states in their approach against terrorist financing of South Asian groups, including the Taliban and LeT, shed light on an observation which has been documented by counterterrorism officials. While countries such as Saudi Arabia have long featured in assessment reports by counter-terrorism officials of being a key player in terrorism financing, the WikiLeaks disclosures provide insight into the problem of terrorism financing which is pervasive in the region, and its relevance to India.

There are two key observations made in these assessments. Firstly, there is a widespread belief in not cracking down substantially on terrorist members and conduits operating in their countries, for fear that it would lead to reprisal attacks and greater domestic stability. In other words, the countries seek to turn the other way as long as terrorism is directed outside their immediate region. The disclosures make this point in reference to Kuwait and Qatar, but its effect is most significantly seen in Saudi Arabia.

In Saudi Arabia, for example, a serious crackdown on terrorism only began in the aftermath of the May 2004 bombings which targeted expatriate housing compounds in Riyadh. The measures included curtailing radical speeches in local mosques and ensuring greater transparency in previously opaque financial dealings of charities and mosques. However, as documented by the embassy cables, there is a perceptible difference in the Saudi dealing with groups affiliated to al Qaeda and al Qaeda itself. The report states that it remains a key challenge in persuading Saudi officials in “treating terrorist financing emanating from Saudi Arabia as a strategic priority.”

The Saudi financial link to terrorism directed against India is not merely limited to donations made to charitable organizations that have scrupulous backgrounds. The country has long been held as a major source of fundraising for Islamist groups, including proxies for the Lashkar-e-Taiba, such as the Student Islamic Movement of India. For example, following the 2006 serial commuter train blasts in Mumbai, Mumbai’s Anti-Terrorist Squad seized approximately 3,7000 Saudi Riyals from the residences of the LeT’s Mumbai cell chief, Faizal Ataur Rehman Sheikh, which was wired from Saudi Arabia via Hawala channels.

The second observation made from the cables is the Gulf states’ limited counterterrorism intent, even when information on terrorism suspects and fundraisers is shared with them. The report, for example, makes critical observations about the United Arab Emirates and Qatar in their counterterrorism cooperation. The disclosures reveal that the United Arab Emirates is seen as a key fundraising state for groups such as al Qaeda, Hamas and the Lashkar-e-Taiba. In the backdrop of the two Emirati citizens who were involved in hijacking during the September 11 attacks, the country’s counterterrorism credentials need deeper scrutiny.

UAE has been a favorite haunt of terrorist members, including those evading red corner notices issued by Interpol, an example being Dawood Ibrahim. The country has especially been known to have turned a blind eye to anti-Indian terror financing. For example, it is widely reported the UAE’s lax Hawala laws have been used to divert funds to anti-Indian terror outfits. Indian investigators linked UAE to the August 2003 twin blasts in Mumbai, and also to the December 2010 bombing at Varanasi. Disturbingly, the WikiLeaks disclosures report that oversight regulations continue to be found wanting, and that information on the identity of Taliban and LeT donors and facilitators in the UAE remains inconclusive.

In an added concern for India, Qatar is described as being largely passive in its approach to cooperating with the U.S. against terrorist financing, with its counterterrorism cooperation being labelled the worst in the region. In 2009, Indian authorities had arrested Mohammad Omar Madani, a key financier of the Lashkar-e-Taiba, who had, preceding his visit, widely travelled in the Gulf states. Madani’s brother, Hafiz Mohammad Zubair, also a Lashkar operative, is known to be operating in Qatar. Qatar has also figured in investigations into the serial bomb blasts in Bengaluru as being a conduit point for funds provided by senior Pakistani Intelligence officials for its operations in south India. What is particularly disturbing to note is that the report reveals that “Qatar’s security services have the capability to deal with direct threats and while they occasionally have put that capability to use they have been hesitant to act against known terrorists out of concern for appearing to be aligned with the U.S. and provoking reprisals.”

The disclosures are illustrative of the domestic problems of legitimacy the governments in the Gulf states face. For India, these disclosures indicate that despite the words of strong support which India receives from the Gulf states in its fight against terrorism, there is a dichotomy in how these states choose to respond to terrorism affecting themselves and others. It is this dichotomy which has led to many a terror plot being traced back to the Gulf region, and points to a fear that the outfits such as the LeT may move their operational and logistics to the Middle East to further elude investigators.

With a combination of a large number of migrant Indian workers and Indian individuals linked to terrorism fundraising, the importance of stepping up India’s intelligence activities in the region has not been lost to the government. The success of the purported Indian intelligence operation in deporting Sarfaraz Nawaz, a suspected Lashkar financier from Muscat, is an indication that the government is actively bolstering much needed intelligence capabilities in the region.

*Siddharth Ramana
Research Officer, IPCS
siddharth13@gmail.com

The post WikiWrecks: An Analysis Of Terrorism Financing appeared first on Eurasia Review.

The right-wing candidate Andrzej Duda has won Poland’s runoff election. Two weeks ago, the 62-year-old incumbent Bronislaw Komoworwski had seemed a shoo-in for a second five-year term.

According to exit polls, Andrzej Duda, running for the euroskeptic Law and Justice Party, won 53.5 percent of Sunday’s presidential vote. That leaves the 62-year-old Civic Platform incumbent Bronislaw Komorowski out of a job two weeks after he surprisingly found himself neck and neck with Duda, who had edged him into second place in the election’s first round.

Duda, a 43-year-old lawyer and member of the European Parliament, had scored a one-point victory by winning over disillusioned voters with populist promises of generous social spending, an earlier retirement age and lower taxes. In contrast, Komorowski, the head of state since 2010, had campaigned as a seasoned defense specialist who had the support of the US Government and Polish-born former US national security advisor Zbigniew Brzezinski as well as celebrities.

Korowski conceded defeat shortly after the initial results were released on Sunday.

Poland’s president commands the military, picks the central bank chief, and may introduce and veto legislation in the country of 38 million people.

The post Poland: Duda Wins Presidential Elections appeared first on Eurasia Review.

By Giovanni Grevi*

Introduction

Ocean basins are not just vast surfaces separating landmasses, or transit routes for various flows of goods or people. They are also platforms for the potential convergence of littoral regions around shared political and socio-economic agendas or, conversely, arenas for geopolitical competition. Indeed, many international relations experts are increasingly devoting attention to maritime spaces – both their strategic value and their political-cultural and socio-economic connections –, whether in the Mediterranean Sea, over the Arctic Circle, along the Indian Ocean or across the ‘Indo-Pacific’ region.

The Atlantic Basin receives less attention than other maritime spaces around the world.1 This vast geopolitical area – encompassing 81 countries from North America, Central America and the Caribbean, Western and Central Europe (including all European Union – EU – member states), as well as littoral countries in South America and Africa – features such heterogeneity as to make it difficult to pinpoint any overarching common feature or predominant trend. As a result, it remains very unclear whether the Atlantic Basin would (or could) evolve into a politically more cohesive, economically more interdependent and socially more connected macro-region. For example, in Europe and the United States (US), ‘Atlanticism’ usually refers exclusively to North Atlantic links, in particular through the North Atlantic Treaty Organisation (NATO). There is no inter-governmental institution or political identity for the Atlantic Basin as a whole.

However, the vast majority of the countries that form the Atlantic Basin are democracies, and collectively they account for the majority of global trade and foreign investment as well as a very large and growing proportion of energy resources. In addition, the absence of entrenched rivalry among the main powers of the Atlantic Basin is notable compared to the hardening geopolitics of other regions. Trans-national threats, such as organised crime and terrorism, and the risks associated with state fragility, therefore, feature much higher on the intra-Atlantic security agenda than the dangers of inter-state conflicts or tensions that are found in other maritime regions (consider for example territorial water disputes in North-East or South-East Asia).

This paper not only maps the sprawling and growing connections across the region; it also asks whether the Atlantic Basin fits the paradigm of ‘inter-polarity’.2 An inter-polar system, whether at the regional or global level, is one where deep interdependence and ongoing power shifts intersect, increasing the costs of competition or confrontation and creating demands or incentives for cooperation. It is a context where the opportunities and vulnerabilities associated with interdependence are a critical factor in shaping relations between large and middle powers.

This paper highlights some of the principal dimensions of interdependence within the Atlantic Basin – such as trade, investment and energy – as well as the main political and security trends therein. In so doing, it points to growing intra-Atlantic links and common challenges, but also to the fast expanding connections between Atlantic countries and Asia, notably China. On that basis, the paper assesses the prospects for future cooperation across this vast maritime space.

Trade

The countries of the Atlantic Basin account for a large share of respective trade volumes, with the EU and the US featuring as the top trade partners of most littoral countries in Africa and Latin America, sometimes by a wide margin. However, their market share is being eroded by some Asian competitors, in particular China. Furthermore, the growth of South-South trade across the Atlantic – in particular between Brazil and Africa – is a notable dimension of a global trend that goes beyond the Atlantic Basin, broadly driven by the deepening ties of developing countries with Asian economies. China, India and other Asian economic powerhouses increasingly import commodities from Atlantic Africa (in particular Angola and Nigeria) and Latin American Atlantic countries (such as Brazil and Venezuela), while China exports manufactured products to these regions. In what follows, the trade links between the largest economies and the sub-regions of the Atlantic Basin, as well as between those and other important countries, are reviewed.3

In the case of the EU, four of its top ten trade partners are in the Atlantic Basin, even if two of them (Switzerland 7% and Norway 4%) are non-EU countries located in Europe. These two countries together with the US (15.2%) and Brazil (2%) account for 28.2% of the EU’s global trade.4 China is the second-largest trade partner of the EU (13.8%) and the largest source of EU imports (18%), while the US is by far the EU’s main export destination (18.3%). At global level, EU trade with the BRICS (Brazil, Russia, India, China and South Africa – 27.5%) is larger than its trade with regional groupings such as the North America Free Trade Agreement (NAFTA – 18.3%) or the Southern Common Market (MERCOSUR – 2.9%).

Five of the US’s top ten trade partners are in the Atlantic Basin, covering together 49.7% of US trade. The EU is America’s main partner (16.9%), followed by Canada (16.5%). Other top-ten US trade partners in the Atlantic Basin include Mexico (13.2%), Brazil (1.9%) and Switzerland (1.4%). China is America’s third-largest trade partner with 14.6% of the flows.5 Overall, US trade with the BRICS stands at about 19.6%.6

The US accounts for over 63% of Canada and Mexico’s total trade. In particular, the US receives about 76% of Canadian exports, and 79% of those of Mexico. The EU (7.9%) and Mexico (3.5%) are other significant trade partners for Canada in the Atlantic Basin, while trade with China represents almost 8%. China (9.2%) takes a larger share of Mexico’s trade than the EU (7.9%), while Canada stands at 2.7%.

The EU is the largest trade partner of Brazil with 20.5% of the total and China comes second with 17.2%. Three other Atlantic countries rank among the top ten trade partners of Brazil, namely the US (12.8%), Argentina (7.5%) and Mexico (2.1%).7 Brazil’s trade with the BRICS overtook trade with the EU in 2013. Trade between Brazil and Africa jumped from $4bn in 2000 to $20bn in 2010 and $28.5bn in 20138 or just over 5% of total Brazilian trade. Brazil is also Argentina’s largest trade partner (23.7%), followed by the EU (15.7%), the US (8.1%) and Mexico (2.1%) in the Atlantic Basin. Beyond that, China is the third trade partner of Argentina (11.4%) and Chile the fifth (3.2%).

The US is by far the largest individual trade partner of Venezuela (31.9%), although its share has been declining in recent years. Six of Venezuela’s top ten trade partners are in the Atlantic Basin, namely the EU (7.8%), the islands formerly part of the Dutch Antilles, Brazil, Cuba and Colombia. China is the second-largest trade partner (13.6%) and trade with the BRICS amounted to over 27% of the total in 2012, while exchanges with NAFTA stood at 38.2% and those with other members of the MERCOSUR at 6.2%.9

In the case of Latin America as a whole, trade in goods between the EU and the region grew from about €100bn in 2002 to €225bn in 2012.10 Between 2000 and 2013, China’s overall trade with Latin America multiplied by a factor of 24, rising from $12bn to $289bn.11 Over the same period, US trade in goods with South and Central America (excluding Mexico) expanded from $132bn to $342bn.12 However, US trade with Mexico alone amounted to $506bn in 2013. By other estimates, China will overtake the EU to become the second-largest trade partner of Latin America, after the US, by 2016.13

Looking to the African part of the Atlantic Basin, well over half of Morocco’s trade takes place with the EU (53.6%).The US (6.4%) and Brazil (3.1%) are the only other Atlantic countries among Morocco’s top ten trade partners. In comparison, trade with the BRICS accounted for 12.8% of the total in 2012, flows with NAFTA for 6.2% and flows with MERCOSUR for 4.1%.14

The EU (29.9%) and the US (11.1%) are also the two-largest trade partners of Nigeria, with Brazil (6.7%) and South Africa (3%) in the Atlantic Basin also featuring among the country’s top ten trade partners. It is notable that the EU’s share of Nigeria’s imports fell from 30% in 2008 to about 20% in 2012. China (9.2%) and India (9.1%) are Nigeria’s third and fourth largest trade partners overall. In 2012, the BRICS accounted for 21% of Nigeria’s trade flows as opposed to 14.6% for NAFTA.15

On a regional level, the EU (37.8%) and India (11.4%) are the biggest export destinations for West African countries (including Nigeria). In the space of only a few years, the US share of West African exports has dropped drastically to 10.2%, while the EU’s and India’s have risen rapidly, largely due to shifting patterns in the energy trade. Brazil ranks fourth with 8.2%. When it comes to West Africa’s imports, the EU’s share is 24.2%, China’s 21% and the US’s 7.6%.16

China is by far the largest trade partner of Angola (about 39%), followed by the EU (22.9%) and the US (11.2%). From within the Atlantic Basin, South Africa (3.8%), Canada (1.9%) and Brazil (2.5%) also rank among the top ten trade partners of Angola, whose exchanges with the BRICS amounted to 55% of total trade in 2012.17

With the exception of the EU (25.4%), which is its largest trade partner, Atlantic countries account for a limited share of South Africa’s trade. Only the US (7.3%), Nigeria (2.5%) and Angola (1.7%) feature in the top ten. China is South Africa’s second trade partner (14.7%) and other countries in Asia account for sizeable shares of the country’s commerce: Japan (5.1%), India (4.5%) and Saudi Arabia (4.6%).18

Overall, the EU has tripled trade flows with Africa (meaning the entire continent) since the start of the century, from $66.6bn in 2000 to $200.5bn in 2013. US trade with Africa doubled over the same timeframe from $29.4bn to $63bn.19 Between 2000 and 2012, China’s trade with Africa expanded from around $10bn to $180bn (the biggest export markets being South Africa, Nigeria and, outside the Atlantic Basin, Egypt) and India’s from $5bn to $63bn, achieving roughly the same level as the US.20

Exports (Top 10 trade partners)

Imports (Top 10 trade partners)

Total Trade (Top 10 trade partners)

Investment

The Atlantic Basin is extremely intertwined in terms of foreign direct investment (FDI), with the EU being by far the largest source of FDI in all other sub-regions. The scope and depth of investment between North America, chiefly the US, and Europe is striking, whereas South-South investment between South America and Africa remains rather modest, albeit growing. Like in trade matters, investment ties between large Asian economies and Atlantic regions, notably Africa and South America, are increasingly relevant, but still small compared to North-South investment flows within the Atlantic.21

The EU FDI stock in North America amounted to about $2.5tr in 2012 – around 2.6 times Europe’s investment in Asia. North American investment stock in Europe was almost as large, and 3.5 times North American investment stock in Asia.22

Over half of the FDI stock of South and Central America (SC America) came from Europe in 2012 and the EU was also the origin of half of Africa’s FDI stock. Conversely, in 2012 the EU held about 80% of the investment from SC American countries outside their own region, and ranked second as recipient of FDI stock from Africa (African FDI being primarily directed to Asia).23

Over time, investment links between Asia and the Southern Atlantic have been strengthening, in parallel to the massive expansion of China and India’s global outward FDI stock. In the case of China, the latter grew from $28bn in 2000 to $509bn in 2012, while India’s multiplied by a factor of 68 over the same timeframe to achieve $118bn. Most Chinese FDI to SC America has gone to Brazil, Peru and Venezuela, but figures remain rather small.24 For example, Chinese FDI stock in Brazil amounted to $27.7bn in 2012.25 To put things in perspective, the EU’s FDI stock in Brazil amounted to around €247bn in 2012.26

The main drivers of Chinese and Indian investment in Africa are the quest for resources and the access to growing markets. It is estimated that between 2000 and 2010, 75% of Chinese investment in Africa was directed to oil exporting countries.27

The place of Africa and South America in global investment flows has been growing in parallel to the vast expansion of FDI directed to the developing world, which grew from 19% of the total in 2000 to over 44% in 2011 and 54% in 2013.28 However, their share remains relatively modest, with South America accounting for 8% of global FDI flows in 2011 (4% in 2000) and Africa for only 2.9% (0.7% in 2000).29

European investment in Africa is far larger than that coming from the US. However, despite growing volumes of inward FDI, the position of Africa relative to other destinations of European and American FDI flows actually shrunk between 2004 and 2011, while that of South America has considerably improved.30 In the case of Africa, the EU’s investment stock in the continent is almost three times larger than that of the US, and the investment stock by both the EU and the US to Africa grew almost four- fold between 2001 and 2012. However, Africa accounts for only 0.7% of the US global FDI stock, and 0.8% of that of the EU.31 Most of the US FDI is directed to Nigeria, South Africa and, beyond the Atlantic Basin, Mauritius. Two-thirds of EU FDI to the continent goes to South Africa, followed by Nigeria and Angola. As in the case of China and India, the majority of US and European investment is directed to countries rich in natural resources.32

Investment links between South America and Africa are tenuous. Africa received between 2% and 4% of annual South American FDI flows between 2000 and 2011, whereas on most years over the same period South America received less than 1% of African FDI flows.33

Energy

The Atlantic energy landscape is facing considerable change. Taken together, the Atlantic holds 40% of proven oil reserves and accounts for 44% of daily global oil production, with much of the future growth in oil production expected to take place in this region.34 In particular, the Atlantic has driven exploration and investment in offshore oil. The area accounts for about 60% of offshore oil discoveries in the last 20 years and for an equivalent amount of global off-shore oil production – a share that jumps to 95% when considering ‘deep’ offshore only (much of that localised in the Southern Atlantic).

This matters because offshore oil production has accounted for all the net increase of oil production at the global level since the 1980s.35 About half of global gas reserves (70% of shale gas) are also located in the Atlantic.

Asia’s share of global energy demand is expected to rise considerably, while that of the Atlantic is projected to continue to decrease.36 This points to an important emerging trend, with the Atlantic region’s contribution to meeting Asia’s demand potentially growing from one third today to about half by 2030.37 In other words, the relevance of the Atlantic in the global energy landscape is set to increase. It is, however, unclear whether that will lead to more energy cooperation within the Atlantic, not least given the different policies and requirements of major economies there.

The two major importers of energy in the North Atlantic – the US and the EU – are following different trajectories. The so-called ‘shale’ revolution has entailed a steep growth in oil and gas production in the US. The US dependency on oil imports fell accordingly from 60% in 2005 to about 40% in 2012. That year, over half of US oil imports came from the Western Hemisphere, 29% from the Persian Gulf and 16% from Africa. The top sources of oil and petroleum products for the US were Canada (28%), Saudi Arabia (13%), Mexico (10%), Venezuela (9%) and Russia (5%).38

In 2014, the US overtook Saudi Arabia to become the largest global oil producer. It is also the largest producer of natural gas, ahead of Russia.39 Estimates concerning US energy self- sufficiency vary widely. According to British Petroleum (BP), the US might achieve this status as early as 2021.40 The growth in US natural gas exports has compressed net imports to only 6% of consumption – and neighbouring Canada and Mexico provide 94% of those imports. The US Energy Information Administration (EIA) estimates that the US may become a net exporter of natural gas as soon as 2018.41 North America and littoral countries on both sides of the South Atlantic play therefore a critical role to US energy supplies. This role is likely to grow in the future, further lowering the salience of the Middle East to America’s energy needs (albeit that region will remain crucial for global energy markets).

The EU depends on energy imports for about 53% of its domestic energy consumption.42 Earlier estimates anticipated that this share would rise to 65% in 2030. By then, imports may cover as much as 94% of oil demand (84% in 2008) and imports will account for 83% of gas (62% in 2008).43 Overall, it is today much less reliant than the US on imports from the Atlantic Basin at large, except for hard coal (but the US is much less reliant than the EU on energy imports as such). However, as observed below, Europe is the main Atlantic destination of oil exports from Nigeria and Angola.

In 2012, aside from the important, but declining, role of Norway (11%), Nigeria was the only major oil supplier from the Atlantic region, covering 9% of EU imports. Russia accounted for 33.7% of EU oil imports and Saudi Arabia for almost 9%.44

Russia plays a predominant role as a supplier of natural gas to Europe too, providing 32% of imports in 2012 (with a steep fall from 45% in 2002), while Norway accounted for over 31%.45 In the rest of the Atlantic Basin, Nigeria with 3.6% stood out as the only other important gas supplier to Europe.46 The EU depends on imports for about 40% of its coal consumption. Five of the top nine coal suppliers of the EU in 2012 were in the Atlantic Basin, namely Colombia (accounting for over 51,363 kilotons – kton of imports), the US (49,712), South Africa (13,702), Canada (3,610) and Norway (600). The largest provider of coal to the EU was, however, Russia (55,481).47

South Africa, the largest economy on the African continent, exports hard coal but is dependent on imports of natural gas (from Mozambique) for about 70% of its consumption and needs to import about two-thirds of its oil consumption, mainly from Saudi Arabia (50% in 2013), Nigeria (24%) and Angola (14%).48 Following the entry into force of sanctions against Iran, South Africa has phased out imports from the country and replaced those flows with oil from Saudi Arabia and Angola. The EIA reports that South Africa holds considerable shale gas resources, which might enable it over time to decrease its reliance on coal (covering more than 70% of its primary energy consumption according to British Petroleum).49 South Africa is in the early stages of developing a shale industry, but regulatory uncertainty and environmental concerns have delayed exploration activity.

Major proven oil reserves in the Atlantic Basin in 2013 include those of Venezuela (297.6, billion barrels), Canada (173.1bn barrels), Brazil (13.2bn barrels) and Mexico (10.3bn barrels).50 However, the discovery in the last few years of recoverable pre-salt oil deposits off the coast of Brazil may considerably alter the Atlantic energy landscape. While serious technological obstacles and associated high costs hinder the large-scale exploitation of these resources in the short term, estimates of Brazilian pre-salt reserves range from 50 to as much as 100bn barrels (by way of comparison, Kuwait holds 101bn barrels of proven reserves and Libya 48bn).51 In 2013, Brazil produced 2 million barrels per day (mb/d). The Brazilian national oil agency reports that Brazil’s production from pre-salt offshore fields grew from an average of about 300,000 mb/d in 2013 to over 600,000 by October 2014.52 Brazil announced in September 2014 that it expects to produce 4 mb/d of crude oil by 2020/22, out of which between 1.5 and 2 mb/d would be exported.53 On the West coast of Africa, Nigeria (37bn barrels) and Angola (9bn barrels) hold the largest proven oil reserves.

Turning to major producers and their exports in the Atlantic Basin, Canada’s large oil and gas exports are almost entirely directed to the US. Canada is a net exporter of most energy commodities and is an especially significant producer of conventional and unconventional oil, natural gas, and hydroelectricity. It stands out as the largest foreign supplier of energy to the United States.54 In 2011, the US was by far the largest destination of Venezuela’s oil exports (40%), followed by the Caribbean region (31%), China (10%), other Asian countries (9%) and Europe (only 4%). However, US oil imports from Venezuela dropped by half between 2003 and 2013. In 2013, Asia overtook North America as the largest destination of Venezuela’s oil exports, accounting for 41% of the total. The US remained the single largest recipient but by a narrowing margin only.55

In 2012, Nigeria’s oil exports were principally directed to the US (18%), Europe (Spain 8%, the Netherlands 7% and other Europe 29%), India (12%), Brazil (8%), and Africa (9%). Europe was, therefore, by far the largest regional importer of Nigerian oil, receiving 44% of total exports in 2012.56 On the other hand, it is notable that Nigerian oil exports to the US dropped from covering 10% of US oil imports in 2010 to around 4% in 2012 and a mere 1% in 2014.57 Within only two years (from 2012 to 2014), therefore, Nigerian oil exports to the US dropped to 3% of the total, while India accounts for 18% of them – the largest individual importer – and Europe’s share remains steady at 45%.58

With 46% of the country’s exports, China was the largest customer of Angola’s oil in 2012,59 followed by the US (13%), Europe (11%), India (10%), Canada (3%) and South Africa (4%). Two years later, in 2014, the picture had significantly changed – China’s share had grown to 49% and Europe’s to 19%, while the US accounted for only 8% of Angola’s oil exports.60

Security challenges

Security threats in the Atlantic Basin stem less from geopolitical rivalries than from trans-national security challenges, notably organised crime and drug flows, terrorism as well as from the challenge of state fragility.

Fragile states are commonly defined as those having weak authority, capacity or legitimacy, and suffering from poor state-society relations and inadequate governance.61 Of the 51 fragile states listed by the Organisation for Economic Cooperation and Development (OECD), 12 are situated in the Atlantic Basin and all but one (Haiti) in Africa.62 However, high levels of societal violence and poor governance in some countries in Central America, such as Guatemala and Honduras, raise questions on the viability of some other states in the Atlantic region too. To take another example, 85,000 people are estimated to have been killed in drug-related incidents in Mexico since 2007.63

While the challenge of state fragility is mainly concentrated in Africa, its origins and ramifications extend well beyond, across the Atlantic. For one, the drivers of fragility are not only domestic but regional and global too, including marginal inclusion in trade and investment flows, natural resources’ exploitation with no or little wealth-redistribution, the impact of climate change and the proliferation of violent non-state actors.64 For another, fragile states offer fertile ground for the spread of illicit flows and activities that further erode not only domestic security and welfare but also regional stability.

The conflation of these challenges poses a particular threat for the West Africa-Sahel region, where growing levels of disorder have catalysed attention and triggered the engagement of the US as well as EU member states such as France and the UK.65 Illicit traffic compounds state fragility in the Central and Southern Atlantic, but engulf the entire Atlantic Basin. Much of the demand for illicit drugs comes from the North and criminal and terrorist activities pose a threat to the security of all Atlantic regions, although more directly so to the South.

Cocaine consumption has decreased in the US in recent years but it has risen in Europe, with each now accounting for about 30% of global consumption. Brazil remains the second-largest country by cocaine consumption after the US. Shifting consumption patterns have therefore led over the last decade to growing Europe-bound drug trafficking from Latin America to Africa, with Guinea Bissau in particular considered as a major hub.66 Furthermore, the ‘convergence’ of illicit traffics is a trend of particular concern, as the same routes can be used by criminal cartels and terrorist networks, while the latter engage in criminal activities as a key source of financing.67

Links between illicit flows and state fragility go beyond drugs or arms trafficking. Illicit financial outflows stemming from corruption, tax evasion and avoidance on top of other criminal activities reportedly cost Sub-Saharan Africa almost 6% of its GDP on average. Mexico, Brazil, Nigeria and South Africa are among the most affected countries in the Atlantic Basin.68
Cooperation across the Atlantic on trans-national threats and the risk posed by state fragility has grown since the turn of the century, albeit in a relatively piecemeal and fragmented way. In particular, Europe and the US have engaged in Africa with a wide range of policy tools, from development aid in support of governance reforms to crisis management and counter-terrorism operations.

Aside from its strategic partnership with the African Union (AU) on a continental level, in 2011 the EU adopted a comprehensive strategy for security and development in the Sahel and has deployed three security sector reform (SSR) missions in Niger and Mali since 2012.69 The EU has also deployed five missions to the Democratic Republic of the Congo since 2003. Two of them (Artemis in 2003 and EUFOR DRC in 2006) were military operations with quite circumscribed mandates; the others focused on the reform of the army and the police and one of them – EUSEC DRC – is still active.70 Beyond individual missions, the EU set up in 2004 the African Peace Facility (APF), a funding instrument to support Africa-led peacekeeping operations and the African Peace and Security Architecture (APSA) at large. At the national level, the 2013 French intervention in Mali and current counter-terrorism activities in the Sahel further highlight the focus on security challenges in this unstable theatre.

The US created the Africa Command (AFRICOM, based in Stuttgart, Germany) in 2007 and carries out a variety of large training and capacity-building programmes in support of African countries. There have also been instances of South-South cooperation, including for example Brazil’s support to SSR in Guinea Bissau, and trilateral cooperation, mostly involving the United Nations Office on Drugs and Crime (UNODC) together with partners from the North and South Atlantic in programmes to counter drug trafficking.71

Maritime security in the South Atlantic is both a subject of growing geopolitical salience and a field of expanding South-South cooperation. This is due to the need to counter illicit flows, the discoveries of large off-shore energy reserves in South America and Africa, the increasing volumes of trade between these two regions and the challenge of piracy in the Gulf of Guinea. Piracy in that region mainly targets the oil and gas industry and takes a heavy toll on the economies of affected countries. Between 2002 and 2012, 108 attacks have taken place in international waters, 173 in territorial waters and 270 in port areas.72 By mid-2012, the Nigerian government estimated that attacks cost it $1bn per month in lost revenues and the activity of various ports in the region has been severely affected.73 Among other regional and international initiatives to counter piracy, which are beginning to curb the rise in the number of attacks, the EU has recently adopted a Gulf of Guinea Action plan 2015-2020 to support countries in the region to improve maritime security and counter organised crime.

Maritime issues have climbed the list of security priorities of littoral states on both sides of the South Atlantic. Brazil in particular has identified the South Atlantic as a top security priority both in its 2008 national defence strategy and in the 2012 White Paper on Defence. In practice, Brazil has concluded eight defence cooperation agreements with African countries in the Atlantic Basin and has provided training to African officers, for example those of the Namibian navy.74

Brazil has also provided a strong impulse to the development of frameworks for inter-regional security cooperation between South America and Africa. The largest of these is ZOPACAS (Zone of Peace and Cooperation of the South Atlantic), which today includes 24 countries and has extended its original nuclear non-proliferation remit to discussing shared trans-national security challenges including piracy.75 In addition, Brazil has promoted the ATLASUR naval exercises involving Argentina, South Africa and Uruguay and takes part in naval exercises with the Indian and South African navies (known as IBSAMAR). The common denominator of these and other frameworks is the tentative emergence of a South Atlantic security debate and agenda that deliberately does not involve the US and Europe. At the same time, the prospects for effective South-South cooperation remain uncertain, not least given the very uneven capabilities and commitment of participating states.

Partnerships and regional cooperation

The Atlantic Basin is not fraught with major geopolitical fault lines (albeit it neighbours some regions with such fault lines, such as Eastern Europe), but features very diverse geopolitical dynamics across different regions. A common denominator to otherwise disparate trends may be the effort on the part of all key emerging actors in the Atlantic – such as Brazil, Nigeria and South Africa – to diversify their portfolio of economic and political partners worldwide in order to accentuate their political autonomy and enhance their influence. The US and the EU have also pursued a ‘partnering’ approach within and well beyond the Atlantic Basin, seeking to shift the paradigm of their relationship with South America and Africa from the traditional North-South narrative to a new ‘joint’ approach to common challenges.

Broadly speaking, this effort has met so far with some ambivalence in the South Atlantic, where suspicion of ‘Western’ interference in regional and/or domestic affairs often lingers. That said, the debate tends to be on the terms of engagement and not on whether to pursue further engagement among the main countries and regions of the Atlantic Basin. Even among the members of the Bolivarian Alliance of the Americas (ALBA), a grouping vocally opposed to perceived American ‘imperialism’, the recent progress in relations between the US and Cuba opens new, if uncertain, prospects for dialogue and cooperation.

The web of bilateral ‘strategic partnerships’ or equivalent high-level political relations (‘strategic dialogues’ etc.) has been thickening over the last decade across the Atlantic. For example, five of the ten so-called strategic partners of the EU are in the Atlantic Basin, namely Brazil, Canada, Mexico, South Africa and the US. Aside from the long-standing strategic relationship with the US, the EU has established or upgraded partnerships with other Atlantic powers in recent years. The strategic partnerships with Brazil and South Africa were set up in 2007 and that with Mexico in 2010 (dialogue is ongoing to deepen it further). The EU and Canada concluded negotiations on a Comprehensive Economic and Trade Agreement (CETA) in 2013, even if ratification is facing some opposition in France and Germany. The EU and Nigeria also launched a partnership for a ‘joint way forward’ in 2009 which, however, has not yet made much progress.

Brazil has established strategic partnerships or comprehensive cooperative relations within the Atlantic Basin with Angola, Argentina, the EU (as well as seven of its member states), Peru, South Africa, the US and Venezuela. Aside from older ones with Argentina and Germany, most of these partnerships have been established or upgraded over the last ten years or so, which reflects Brazil’s diplomatic dynamism under former President Lula (2003-2010).76

As to the US, the broad range of strategic relationships or dialogues that it has established over time with key global and regional partners includes of course NATO allies as well as Angola, Argentina, Brazil, the EU, Mexico, Morocco, Nigeria and South Africa.77 Most of these relationships do not necessarily entail alignment among the partners on regional or multilateral affairs, but they signal awareness of the growing degree of interdependence and of the need to deepen ties and build confidence within the Atlantic Basin.

Alongside broad-based strategic partnerships or dialogues, trade in the Atlantic Basin is underpinned by a large and growing set of free trade agreements (FTAs), many of which connect the US and the EU to emerging economies in Latin America. Aside from NAFTA including Canada and Mexico, the US has concluded FTAs with Colombia, Panama, five Central American countries and the Dominican Republic (CAFTA-DR) and Morocco (as well as Chile and Peru, beyond the Atlantic Basin). The EU and the US are negotiating the ambitious Transatlantic Trade and Investment Partnership (TTIP). As to the EU, it has established FTAs of different scope, sometimes included within broader association agreements, with Colombia, Honduras, Mexico, Morocco, Nicaragua, Panama and South Africa (on top of FTAs with Chile and Peru in Latin America). In addition, it has negotiated a CETA with Canada, and is negotiating a free trade agreement with MERCOSUR (whose prospects remain highly uncertain) and a Deep and Comprehensive Free Trade Area (DCFTA) with Morocco.

Canada, Colombia and Mexico in particular have entered a variety of FTAs with Central and South American countries, including among each other.

The North Atlantic is a very integrated macro-region whether from a political, economic or security standpoint. It harbours the strongest and deepest alliance in the world – NATO – as well as the US-EU strategic partnership and solid bilateral relations between countries in Europe, and the US and Canada. Together, they form a ‘security community’ (a region where war has become unthinkable), which could be boosted by the EU-US transatlantic trade and investment pact (known as TTIP) currently under negotiation. The geostrategic implications of this deal are potentially far-reaching and subject to growing debate. Many argue that it would bring large benefits to Europe and the US by placing them at the core of global economic rule-making, renewing the cohesion of their alliance and better equipping them to face turbulence and competition in a multi-polar world.78

Other regions in the Atlantic Basin are undergoing rapid change and feature countervailing trends when it comes to regional or inter-regional cooperation. In South America, for example, the Atlantic tradition and orientation of the region is increasingly complemented by growing economic ties with Asia and by the quest for new frameworks of regional cooperation, often reflecting the geopolitical priorities of lead powers. Overlapping regional frameworks reflect this evolution, with the US-backed Free Trade Agreement of the Americas (FTAA) project stalled since 2005, because of the opposition of Brazil and Venezuela among others; the Organisation of American States (OAS) playing a less prominent role; the Brazil-driven Union of South American Nations (UNASUR) gaining strength in South America; and the Community of Latin American and Caribbean States (CELAC) remaining a form of relatively light and informal political coordination among its members. On top of these and a variety of other sub-regional organisations, the ALBA initiative led by Venezuela and Cuba aims to present an ideological alternative to American influence in Central and South America.

Regional economic integration seems to take different trajectories too. MERCOSUR (including Venezuela since 2012) struggles to engage on the global stage given strong protectionist tendencies. Four other countries (two of which are also part of the Atlantic Basin) – Chile, Colombia, Mexico and Peru – have launched the Pacific Alliance (now including Costa Rica too). The Alliance aims to introduce the free movement of goods, services and people among members and strengthen links with thriving economies in the Asia-Pacific. Chile, Mexico and Peru as well as Canada are also negotiating the Trans- Pacific Partnership (TPP) with the US and a range of partners in East Asia.

Within the Atlantic Basin, on the other hand, progress towards a free trade agreement between the EU and MERCOSUR has stagnated for many years. Beyond trade and economic issues, Europe-Latin America relations are based on EU-LAC summits every two years, the latest of which in 2013 marked the first EU-CELAC summit. The biannual Ibero-American Summits including Spanish and Portuguese speaking countries from Europe and the Americas are another significant level of inter-regional engagement.

Inter-regional frameworks between the two Southern shores of the Atlantic are quite shallow, with the potential exception of ZOPACAS. For example, the Africa-South America summit bringing together leaders from the two regions lacks concrete output.79

Because of its sheer size, resource endowments and diplomatic potential, Brazil stands out as the third-largest actor in the Atlantic Basin after the US and the EU. Its foreign policy direction and strategic posture will be decisive to enhance cooperation in this broad region (and beyond). Brazil sees the South Atlantic as an area of priority concern, not least due to the discovery of vast off-shore fossil fuel reserves and to the fact that 85% of Brazil’s trade goes through its ports.80 The defence of sovereignty and territorial integrity are key security priorities, while the country’s foreign policy is directed towards enhancing the position of Brazil in key global institutions such as the UN Security Council (UNSC), international financial institutions and the G20.

Like South Africa, Brazil leverages its membership of the BRICS grouping to gain clout in other fora and advocate the reform of multilateral institutions. On the other hand, Brazil is not always aligned with other BRICS countries (such as on currency issues with China). While taking a critical stance towards the ‘North’, it has aimed to help bridge different positions and advance new agendas, such as on climate change or the debate on ‘Responsibility while protecting’ following the much contested NATO operation in Libya in 2011.81

The Atlantic dimension is therefore one of the various vectors of Brazil’s foreign policy and international projection. While commercial exchanges with China and Asia have been skyrocketing in recent years, in political and security terms the Atlantic Basin is gaining relevance for Brazil in two ways. First, for all the debate about rising and declining powers, engagement with Europe and the US is critical for Brazil’s economic modernisation and diversification as well as for its political ambitions, including membership of the UNSC.

Second, Brazil has very much expanded its diplomatic outreach across the Atlantic towards Africa. Former President Lula visited Africa 12 times during his time in office and the number of Brazilian embassies in the continent jumped from 17 in 2002 to 37 in 2010, while the number of African embassies in Brazil expanded over the same period from 16 to 34. Sub-Saharan Africa is a priority region for Brazil’s development cooperation. Almost half of Brazil’s technical cooperation projects take place there.82 Beyond Africa, Brazil provides an important contribution to UN peacekeeping in the Atlantic Basin through its leadership of the United Nations Stabilisation Mission in Haiti (MINUSTAH).

An inter-polar region?

The rapid review of interdependence and political-security dynamics within the Atlantic Basin outlined here provides some insights into the main features of the Atlantic political space. The question is whether the concept of inter-polarity can help frame the prevalent nature of international relations within this emerging landscape.

In an inter-polar system, interdependence and connectivity at large do not replace power calculations but become a primary variable in the strategic calculus of states. Managing interdependence becomes a defining feature of relations among large and middle powers. Power does not disappear but is exercised through a different policy mix than one based on balancing or competition only and includes partnering, convening, coalition-building and agenda-setting.

An inter-polar system is not necessarily a stable one. The inherent demand of cooperation within the system may or may not translate into collective action and tangible achievements. If properly managed, interdependence offers opportunities for win-win cooperation. If not, it exposes vulnerabilities that could pave the way to zero-sum behaviour, whether on purpose or by default. As actors with different worldviews or a different ranking of priorities from those of established powers such as the US and the EU gain strength and influence, an inter-polar system is also a contested and intensely negotiated one. Whether inter-polarity or zero-sum multi-polarity prevails also depends on confidence building among key actors and their ability to shape shared agendas. An inter-polar system is an important enabling condition for political convergence, but not a definitive pathway to it.

The Atlantic Basin contains many of the features of an inter-polar region. Accompanying deep and in some respects growing economic interdependence, political engagement is by far the prevalent mode of relations among powers therein, while no country or bloc of countries can be considered an enemy or outright rival to others. The ideological antagonism expressed by the ALBA alliance towards American or Western ‘imperialism’ might be considered an exception to this paradigm. Even so, the logic of interdependence applies in that, for example, the US is the largest trade partner of Venezuela, followed by China and India. Besides, as noted above, the US and Cuba are seeking to improve mutual relations. Other important countries such as Brazil and South Africa practice a mixed strategy of engagement and soft-balancing vis-à-vis the US and Europe, with the mix changing depending on policy issues.83

The growing influence of these two regional heavyweights is also converted into deep engagement in regional institutions such as UNASUR and the AU. Some of these frameworks reflect distinct geopolitical priorities. Political tensions among main regional powers such as Brazil and Venezuela or South Africa and Nigeria have not disappeared and can affect the proceedings of regional bodies. However, it is notable that emerging powers in the Atlantic Basin seek to enhance their influence through more or less institutionalised and rather inclusive cooperative mechanisms. Other middle powers such as Morocco and Nigeria act mainly in similar ways and, in the case of Morocco, have deepened political relations with Europe and the US, while Nigeria plays a central role in the critical West Africa region through the Economic Community of West African States (ECOWAS).

The main countries in the Atlantic Basin carry broadly compatible threat perceptions even if they differ in ranking their priorities and above all in their assessment of adequate responses. However, challenges such as organised crime spreading from Latin America to West Africa and related illicit traffics, piracy in the Gulf of Guinea and state fragility across parts of West Africa and the Sahel can be considered as common concerns in the Atlantic region. This could provide the basis for new forms of cooperation to support, for example, capacity- and institution-building in relevant countries.

Non-conflicting threat assessments are, however, a necessary but not sufficient condition for meaningful cooperation, in particular in security affairs. Building trust and confidence across the Atlantic Basin will be critical to overcome normative divides between established and rising powers. Perceptions and positions significantly differ, in particular on sensitive issues related to sovereignty, non-interference in domestic affairs and the adoption of coercive measures to deal with security crises.

A recent review of the voting patterns of Atlantic countries in UN bodies concerning large-scale human rights violations or conflicts in Haiti, Iran, Côte d’Ivoire and Syria reveals different alignments depending on the case at hand.84 Voting coincidence across the Atlantic has been high in dealing with crises in Haiti and Côte d’Ivoire, which have also seen tangible contributions to peacekeeping operations by countries from the North and the South. In both cases, despite the opposition of the members of ALBA, countries have converged to deal with state fragility or failure and humanitarian emergencies.

Coping with massive human rights violations in Iran and Syria, not least in the context of the ongoing conflict in the latter country, has however exposed a clear rift across the Atlantic. Most countries from the South opposed the sanctions that the US and Europe adopted towards both regimes and often voted against resolutions condemning them at the Human Rights Council. In these two cases, broader geopolitical considerations and concerns with intrusion in the domestic affairs of third countries overshadowed any shared agenda in support of human rights or human security. The 2011 military intervention in Libya by NATO further deepened suspicions within the Atlantic as to the motives driving the operation (with South Africa and other African countries amongst the most vocal critics of it) and reservations on the broader principle of responsibility to protect.

More recently, the vote in March 2014 on UN General Assembly resolution 69/262 expressing commitment to the territorial integrity of Ukraine following Russia’s annexation of Crimea further exposed political differences within the Atlantic Basin (but not a stark North-South divide). In this case, the majority of the countries within the region (including all of North America, most of Central America, all EU member states and various countries in West Africa such as Nigeria) supported the non-binding resolution but many abstained (including Angola, Argentina, Brazil and South Africa), while Cuba, Nicaragua and Venezuela opposed the resolution.

Conclusion

The Atlantic Basin is a region of deep interdependence, broadly shared challenges, fragmented cooperation and loose political convergence. Partnerships have been proliferating among many countries in the region and a jigsaw of regional cooperative frameworks is emerging. However, the Basin still features a highly integrated security community including North America and Europe and a much more diverse range of actors in the south, often suspicious of interference from the US and Europe, and of each other. While progressing, South-South cooperation within the Atlantic falls short of rhetoric. However, it is becoming ever more significant when taking into account links with Asia and notably China.

China is currently Africa’s largest individual trading partner, having overtaken the US in 2009, and it might shortly overtake the EU as a whole as the second-largest trading partner of Latin America, after the US. Emerging countries in the Atlantic have more options in their diplomatic portfolio than used to be the case, and they appear more confident in using them. However, the quality of their growth models and economic partnerships will prove over time a more important variable than sheer trade volumes or commodity exports to sustain their development and prosperity.

Besides, while trade in goods between China (and other large Asian economies) and all regions of the Atlantic Basin, in particular Africa and Latin America, has skyrocketed in recent years, the picture looks very different when it comes to FDI. Investment is critical to lasting economic growth and the investment positions of Europe and the US in the Atlantic Basin remain vastly larger than those of others.

The absence of deep geopolitical fault lines fracturing the Atlantic Basin has not engendered so far significant levels of multilateral cooperation at the Atlantic level. Aside from a variety of regional and inter-regional dialogue and cooperation initiatives, it is still difficult to discern a pattern of political convergence between the four main regions of the Atlantic Basin. Broadly shared values do not necessarily translate into joint efforts. Instances of cooperation are growing, for example to tackle state fragility, but take place alongside visible political divides on a number of issues on the international agenda, from development to military interventions.

On balance, the Atlantic Basin can be considered an inter-polar region – one where all the main actors see each other as crucial or important partners, although often on selected issues only. Atlantic powers by and large seek ways to foster mutual links and to avoid overt diplomatic clashes. Prospects for conflict between Atlantic countries range from non-existent to very low, whereas challenges related to, for example, illicit flows, are largely common.

The potential for cooperation within the Atlantic is vast. One important condition to unlock this potential is trust. Different historical experiences and normative reflexes continue to hinder joint approaches. Mutual confidence is an issue not only between North and South but also in relations between large and small countries in the South Atlantic regions, or when it comes to competition between regional heavyweights there. Confidence building seems to work best from the bottom up, through concrete achievements. Initiatives fostering tangible cooperation and the emergence of pan- Atlantic issues-based networks of experts and professionals can surely help pave the way towards more cooperation. But it is likely that ties across the Atlantic will deepen alongside sprawling links between the Atlantic and other regions. These trends will perhaps make the Atlantic Basin, in time, a more cooperative but still politically and economically eclectic region.

*The author wishes to thank Alejandro Baron, former Junior Researcher at FRIDE, and Elisa Lledó, Junior Researcher at FRIDE, for their important contribution in collecting much of the data backing this paper.

About the author:
*Giovanni Grevi is Director of FRIDE.

Source:
This article was published by FRIDE as Working Paper Number 127 May 2015 (PDF).

Notes:
1. Recent initiatives have focused on the Atlantic as such, such as the Atlantic Basin Initiative of the Center for Transatlantic Relations of Johns Hopkins University; the Wider Atlantic programme of the German Marshall Fund of the US and the OCP Policy Center; and the Atlantic Future project supported by the European Commission.
2. G. Grevi, ‘The interpolar world: a new scenario’, Occasional Paper 79, Paris: EU Institute for Security Studies, June 2009.
3. Data for the EU refer to 2014. Where not otherwise indicated in the text or footnote, trade data for other countries refer to 2013, total goods. Data for the EU exclude intra-EU trade.
4. European Commission, ‘Client and Supplier Countries of the EU28 in Merchandise Trade (value %)’, Brussels: Directorate General for Trade, available at: http://trade.ec.europa.eu/doclib/docs/2006/september/tradoc_122530.pdf (Data concerning the EU refer to 2014).
5. European Commission, ‘European Union, Trade in goods with USA’, Brussels: Directorate General for Trade, available at: http://trade.ec.europa. eu/doclib/docs/2006/september/tradoc_113465.pdf
6. US Census Bureau, ‘Top trading partners’, available at: http://www.census.gov/foreign-trade/statistics/highlights/top/top1312yr.html and The Observatory of Economic Complexity, http://atlas.media.mit.edu/
7. European Commission, ‘European Union, Trade in goods with Brazil’, Brussels: Directorate-General for Trade, available at: http://trade.ec.europa. eu/doclib/docs/2006/september/tradoc_113359.pdf
8. African Business Magazine, 10 December 2012, and R. Muggah, ‘What is Brazil really doing in Africa?’, Huffington Post, January 2015.
9. European Commission, ‘European Union, Trade in goods with Venezuela’, Brussels: Directorate-General for Trade, available at: http://trade.ec.europa.eu/doclib/docs/2006/september/tradoc_113462.pdf
10. European Commission, ‘European Union, Trade in goods with Latin American Countries’, Brussels: Directorate-General for Trade, available at: http://trade.ec.europa.eu/doclib/docs/2006/september/tradoc_113483.pdf
11. A. Elson, ‘Dragon among the Iguanas’, Washington, D.C.: International Monetary Fund, Finance and Development, December 2014.
12. US Census Bureau, ‘Trade in Goods with South and Central America’, available at: https://www.census.gov/foreign-trade/balance/c0009.html and ‘Trade in Goods with Mexico’, available at: https://www.census.gov/foreign-trade/balance/c2010.html
13. T. Han Shih, ‘China’s trade with Latin America set to outpace EU within two years’, South China Morning Post, 17 March 2014.
14. European Commission, ‘European Union, Trade in goods with Morocco’, Brussels: Directorate General for Trade, available at: http://trade.ec.europa.eu/doclib/docs/2006/september/tradoc_113421.pdf
15. European Commission, ‘European Union, Trade in goods with Nigeria’, Brussels: Directorate General for Trade, available at: http://trade.ec.europa.eu/doclib/docs/2006/september/tradoc_113427.pdf
16. European Commission, ‘European Union, Trade in goods with ACP — West Africa’, Brussels: Directorate General for Trade, available at: http://trade.ec.europa.eu/doclib/docs/2013/november/tradoc_151898.pdf
17. European Commission, ‘European Union, Trade in goods with Angola’, Brussels: Directorate General for Trade, available at: http://trade.ec.europa.eu/doclib/docs/2006/september/tradoc_122456.pdf
18. European Commission, ‘European Union, Trade in goods with South Africa’, Brussels: Directorate General for Trade, available at: http://trade. ec.europa.eu/doclib/docs/2006/september/tradoc_113447.pdf
19. A. Sy, ‘US and EU strategies for engaging with Africa’, in ‘Atlantic currents. An annual report on wider Atlantic perspectives and patterns’, Washington, D.C. and Rabat: The German Marshall Fund of the United States and OCP Policy Center, October 2014.
20. D. S. Hamilton and J.P. Quinlan, ‘Commercial Ties in the Atlantic Basin: The Evolving Role of Services and Investment’, Atlantic Future scientific paper 2, September 2014.
21. Measures of foreign direct investment (FDI) vary across different sources, depending on what flows are included in the definition of FDI. The data reported here might therefore not be entirely consistent with each other, but they offer a clear sense of the magnitude of different flows and stocks. Information on what flows are accounted for in these statistics can be retrieved in the respective sources reported in the footnotes. It should also be noted that, where not otherwise indicated, investment figures in this section refer to entire continents, such as Africa, and not just Atlantic littoral countries.
22. Hamilton and Quinlan, op.cit.
23. Ibid.
24. Ibid.
25. Data sourced from The Heritage Foundation China Global Investment Tracker, as reported in A. Hearn, ‘China and Brazil: searching for sustainable complementarity’, ECRAN Short Term Policy Brief 72, April 2013.
26. European Commission, DG Trade, Bilateral relations, Statistics (2012), FDI inward stocks from the partners to the EU and FDI outward stocks from the EU to the partners. Reported in the ESPO database, available at: http://strategicpartnerships.eu/database/
27. K. Pereira da Costa, ‘Continuities and changes in patterns of direct investment flows between South America and Africa’, Atlantic Future scientific paper 1, September 2013.
28. UNCTAD, ‘World Investment Report 2014’, Geneva: UNCTAD, June 2014. FDI flows to developed countries dropped from $888bn in 2011 to $566bn in 2013. Conversely, flows to developing countries grew from $725bn in 2011 to $778bn in 2013.
29. Ibid.
30. Ibid. It should be noted, however, that the volumes of annual FDI flows may change very much year on year.
31. Sy, op. cit.
32. Ibid.
33. Pereira da Costa, op.cit.
34. P. Isbell, ‘An Atlantic energy renaissance’, Atlantic future scientific paper 17, September 2014. Figures drawn from this source refer to entire continents and not just to the littoral states of South America and Africa.
35. The author is grateful to Paul Isbell for having provided consolidated data on offshore oil, based on his own elaboration.
36. BP Energy Outlook 2035, Country and regional insights, London: BP, February 2015.
37. Isbell, op.cit.
38. Energy Information Administration, ‘How dependent are we on foreign oil?’, Washington, D.C.: US Department of Energy, available at: http://www.eia.gov/energy_in_brief/article/foreign_oil_dependence.cfm#ftnote
39. G. Smith, ‘US seen as biggest oil producer after overtaking Saudi’, Bloomberg, 4 July 2014.
40. BP Energy Outlook 2035, op. cit.
41. International Energy Agency (IEA), Energy supply security 2014, ‘Emergency response systems of individual IEA country’, Paris: IEA, p. 6, available at: http://www.iea.org/media/freepublications/security/EnergySupplySecurity2014_US.pdf
42. Eurostat, Energy Production and Imports, 2014, available at: http://ec.europa.eu/eurostat/statistics-explained/index.php/Energy_production_and_imports
43. European Commission, Background on Energy in Europe, Information prepared for the European Council, Brussels: European Commission, February 2011, available at: http://ec.europa.eu/europe2020/pdf/energy_background_en.pdf. The difference between different import dependency ratios (total, oil and gas) is due to the fact that oil and gas represent about 57% of the EU energy mix, the rest including coal, nuclear and renewable sources.
44. Eurostat, Main origin of primary energy imports, EU 28, 2002-2012, available at: http://ec.europa.eu/eurostat/statistics-explained/index.php/ File:Main_origin_of_primary_energy_imports,_EU-28,_2002%E2%80%9312_(%25_of_extra_EU-28_imports)_YB14.png
45. It should be noted, however, that these shares may float considerably year-on-year. For example, Russia accounted for 39% of natural gas imports to Europe in 2013. See Eurostat, Extra-EU28 imports of natural gas (liquefied, gaseous state), main trading partners, 2013, available at: http://ec.europa.eu/eurostat/statistics-explained/index.php/File:Extra-EU28_imports_of_natural_gas_(liquefied,_gaseous_state),_main_trading_ partners,_2013.png
46. European Commission, EU energy in figures (2014), Statistical Pocketbook 2014, Part 1, Overview, EU-28 imports by country of origin, Luxembourg: Publications Office of the European Union, p. 26, available at: http://ec.europa.eu/energy/sites/ener/files/documents/2014_pocketbook.pdf
47. Ibid.
48. Energy Information Administration, Country analysis, South Africa, Washington, D.C.: US Department of Energy, available at: http://www.eia.gov/countries/cab.cfm?fips=sf
49. Ibid., and BP Statistical Review of World Energy 2013, London: BP, available at: http://www.bp.com/content/dam/bp/pdf/statistical-review/statistical_review_of_world_energy_2013.pdf
50. Energy Information Administration, Countries, Washington, D.C.: US Department of Energy, available at: http://www.eia.gov/countries/index.cfm?view=reserves
51. Energy Information Administration, Country analysis, Brazil, Washington, D.C.: US Department of Energy, available at: http://www.eia.gov/ countries/cab.cfm?fips=br
52.Agência Nacional do Petróleo, Gás Natural e Biocombustíveis, available at: http://www.anp.gov.br/?pg=73213&m=&t1=&t2=&t3= &t4=&ar=&ps=&cachebust=1418163326605
53. Energy Information Administration, Country analysis, Brazil, op. cit.
54. Energy Information Administration, Country analysis, Canada, Washington, D.C.: US Department of Energy, available at: http://www.eia.gov/countries/cab.cfm?fips=CA
55. Energy information Administration, Country analysis, Venezuela, Washington, D.C.: US Department of Energy, available at: http://www.eia.gov/countries/cab.cfm?fips=VE, and Reuters, ‘Asia overtakes US as top destination for Venezuelan oil – PDVSA’, 10 April 2014.
56. Energy Information Administration, Country analysis, Nigeria, Washington, D.C.: US Department of Energy, available at: http://www.eia.gov/countries/cab.cfm?fips=NI
57. Energy Information Administration, US Imports of Nigerian Crude Oil, Washington, D.C.: US Department of Energy, available at: http://www.eia.gov/countries/analysisbriefs/Nigeria/images/crude_oil_imports.png
58. Energy Information Administration, Country analysis, Nigeria, op. cit.
59. Energy Information Administration, Angola’s Crude Oil Exports, including Lease Condensate, by Destination, 2014, Washington, D.C.: US Department of Energy, available at: http://www.eia.gov/countries/analysisbriefs/Angola/images/oil_exports.png
60. Energy Information Administration, Country analysis, Angola, Washington, D.C.: US Department of Energy, available at: http://www.eia.gov/countries/cab.cfm?fips=AO
61. C. Castillejo, ‘Fragile states: an urgent challenge for EU foreign policy’, FRIDE Working Paper 126, Madrid: FRIDE, February 2015.
62. F. Faria, ‘Fragile States: Challenges and Opportunities for Atlantic Relations’, Atlantic Future scientific paper 9, September 2014.
63. M.R. Jacobson and M. Daurora, ‘Significant Trends in Illicit Trafficking: A Macro View of the Problem and Potential Means to Address It’, Atlantic Future scientific paper 8, September 2014.
64. Castillejo, op. cit.
65. A. Boukhars, ‘Rethinking security across the Sahara and the Sahel’, FRIDE Policy Brief 199, Madrid: FRIDE, April 2015. 66. Jacobson and Daurora, op. cit.
67. Ibid.
68. Faria, op.cit.
69. EUCAP (capacity building) Sahel Niger, since 2012; EUTM (training mission) Mali, since 2013; and EUCAP Sahel Mali, since 2014. More information available at: http://eeas.europa.eu/csdp/missions-and-operations/index_en.htm
70. Artemis (military operation), 2003; EUSEC (security sector reform) DRC, since 2005; EUPOL (police mission) Kinshasa DRC, 2005 to 2007; EUFOR (military operation) DRC, 2006; and EUPOL DRC, 2007 to 2014. More information available at: http://eeas.europa.eu/csdp/missions-and-operations/index_en.htm
71. Faria, op. cit.
72. International Maritime Organisation data reported in ‘Maritime Security in the Gulf of Guinea’, Chatham House, Conference Report, London: Chatham House, March 2013.
73. Ibid.
74. P. Seabra, ‘Dinamicas de seguridad en el Atlantico Sur: Brasil y Estados Unidos en Africa’, Revista CIDOB d’Afers Internacionals 102-103,Barcelona: Cidob, September 2013.
75. A. Erthal Abdenur, ‘Security and Cooperation in the South Atlantic; the Role of Regional Organizations’ in ‘Atlantic currents. An annual report onwider Atlantic perspectives and patters’, Washington, D.C. and Rabat: The German Marshall Fund of the United States and OCP Policy Center, October 2014.
76. A. Costa Vaz, ‘Brazil’s strategic partnerships: origins, agendas and outcomes’, ESPO working paper 9, Madrid/Brussels: FRIDE and Egmont Institute, July 2014.
77. D.S. Hamilton, ‘The American Way of Partnership’, ESPO working paper 6, Madrid/Brussels: FRIDE and Egmont Institute, June 2014.
78. D.S. Hamilton (ed.), ‘The Geopolitics of the TTIP: Repositioning the Transatlantic Relationship for a Changing World’, Washington, DC: CTR-SAIS, Johns Hopkins University, 2014; and R. Korteweg, ‘It’s the geopolitics, stupid: Why TTIP matters’, London: Centre for European Reform, 2 April 2015.
79. Erthal Abdenur, op. cit.
80. Seabra, op. cit.
81. S. Gratius and G. Grevi, ‘Brazil and the EU: partnering on security and human rights?’, FRIDE Policy Brief 153, Madrid: FRIDE, April 2013.
82. L. Cabral, ‘The EU-Brazil partnership on development: a lukewarm affair’, in C. Castillejo (ed.), ‘New donors, new partners? EU strategic partnerships and development’, ESPO Report 3, Madrid/Brussels: FRIDE and Egmont Institute, December 2014.
83. For case-studies on climate and development negotiations, respectively, see G. Grevi and T. Renard (eds.), ‘Hot issues, cold shoulders, lukewarm partnerships: EU strategic partnerships and climate change’, ESPO Report 2, Madrid/Brussels: FRIDE and Egmont Institute, November 2012; and Castillejo, op. cit.
84. S. Gratius, ‘Atlantic countries’ voting patterns on human rights and human security at the United Nations: the cases of Côte d’Ivoire, Haiti, Iran and Syria’, Atlantic Future scientific paper 12, September 2014.

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By Terri Moon Cronk

Islamic State of Iraq and the Levant extremists took control of Ramadi last week when Iraqi forces failed to fight for the city and instead withdrew, Defense Secretary Ash Carter said in an interview broadcast on CNN’s “State of the Union” program this morning.

“What apparently happened is the Iraqi forces just showed no will to fight,” Carter told Barbara Starr, CNN’s Pentagon correspondent. Iraqi security forces must have the will to fight and defend themselves against ISIL extremists, he added.

Iraqi Forces Vastly Outnumbered ISIL Fighters

Iraq’s forces were not outnumbered in the fight for Ramadi when ISIL gained control of the city, the secretary said. “[They] vastly outnumbered the opposing force, and yet they failed to fight,” the secretary said. “They withdrew from the site, and that says to me — and I think most of us — that we have an issue with the will of Iraqis to fight ISIL and defend themselves.”

U.S. military forces can provide the Iraqis with equipment and training, but “we obviously can’t give them the will to fight,” Carter said. With equipment, training, coalition support and some time, the secretary added, he hopes the Iraqis will develop that will.

Only Iraqis can defeat ISIL in their own country, the secretary told Starr. “If there comes a time where we need to change the kind of support we’re giving to the Iraqi forces, we’ll make that recommendation,” he said.

Airstrikes Work, But Iraqi Forces Are Necessary

U.S. military and coalition forces have made regular airstrikes against ISIL and its facilities in Iraq since August, but those airstrikes have limitations, the secretary noted. “Airstrikes are effective, but neither they nor anything we do can substitute for the Iraqi forces’ will to fight,” Carter said.

U.S. forces can participate in ISIL’s defeat, the secretary said. “But we can’t make Iraq run as a decent place where people live,” he added. “We can’t sustain the victory.”

No Plans for U.S. Controllers

Carter denied that the Defense Department has recommended putting U.S. forward air controllers –- military personnel who direct fighter pilots to targets — on the ground in Iraq.

“What happened in Ramadi was a failure of the Iraqi forces to fight,” Carter said. DoD’s efforts, he added, are devoted to providing Iraqi ground forces with equipment, training, “and to try to encourage their will to fight so that our campaign enabling them can be successful, both in defeating ISIL and keeping ISIL defeated in a sustained way.”

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It is now 20 years since the NPT Review Conference adopted a resolution that called for “the establishment of an effectively verifiable Middle East zone free of weapons of mass destruction, nuclear, chemical and biological, and their delivery systems.” Yet, despite extensive international support and a litany of resolutions and related initiatives by the regional states, progress on this issue has been stymied by the United States and a few other Western powers, who have time and again rushed to protect the rogue nuclear state of Israel, which opposes an international conference that would inevitably throw the limelight on its clandestine nuclear arsenal.

Thus, just as in 2012, when the U.S. unilaterally cancelled a Helsinki conference on Middle East nuclear weapons-free zone following Israel’s objections, the 2015 NPT Review Conference has now ended with Washington, backed by Canada and England, torpedoing the global efforts to reinstate the conference in March, 2016. Incredibly, the U.S. officials have added a new meaning to the term hypocrisy by at the same time going on verbal offensive and blaming Egypt and other members of the Non-Aligned Movement for the failure to reach a consensus on this important conference. U.S. Under Secretary of State Rose Gottemoeller announced there was “no agreement” and accused some countries of undermining the negotiations, thus standing the facts on their head and ignoring that only U.S. and two other countries from a long list of 190 signatories stood opposed to the final resolution and, in fact, it was them not Egypt and others who “wrecked the negotiations.”

The lame excuse that the 2016 proposed conference was “too early” and Israel would be “unprepared” for it does not wash, and the Western officials parroting Tel Aviv’s line ought to know better that in reality Israel will never be up to participating in such a conference without a fair amount of collective international pressure. By appeasing Israel again for the second time in three years, U.S. government has exposed itself to the legitimate criticism of the world community that it has adopted a double standard on nuclear proliferation, in effect exempting Israel from non-proliferation concerns.

At a crucial time when the Iran nuclear talks are progressing toward a final resolution, it is doubly difficult for the U.S. and other Western governments to defend and rationalize the above-mentioned double standard — that is also an affront to the NPT norms, which must be extended to Israel sooner or later, otherwise the NPT regime will suffer an erosion of global confidence. Already, the NPT regime is in serious trouble as a result of the growing chasm between the nuclear weapon-haves and have-nots, in light of the absence of practical progress on nuclear disarmament and the nuclear modernization and aggressive nuclear doctrines of the former.

The U.S.-led blocking of a Mideast nuclear weapons-free conference is inevitably another stab at the NPT as the cornerstone of the non-proliferation regime and will have long-term adverse consequences. In a word, it sends the wrong message about the universal application of NPT norms and the balanced commitment of Western signatories, who consistently fail to pressure Israel to join the NPT and to open its nuclear facilities to outside inspections.

As a result, no amount of verbal shenanigan by U.S. and other Western officials is going to hide the fact that they have once again prioritized (rogue) Israel’s interests over the global community’s interests reflected in the NPT Review resolution that was torpedoed by them. One of the goals of the proposed conference has been to “identify specific and practical confidence-building measures.” The current stalemate cannot be broken without the manifestation of good intentions as a first step toward this rather lofty objective. And yet, the only thing that the vast majority of NPT member states participating in the month-long review conference in New York can take back with them is the irrefutable evidence of lack of good intentions and confidence-building steps by U.S. and a few of its Western allies. Acting as Israel’s proxies at the review conference, these Western powers have caused serious disappointment on the part of other NPT member states, some of whom are Israel’s Arab neighbors and naturally concerned about Israel’s monopoly of nuclear weapons in the region.

By torpedoing the nuclear conference, the real message sent by U.S. is that Israel’s nuclear blackmail of its Arab neighbors will continue for the foreseeable future and the latter should not count on the U.S. for any change in the nuclear status quo. This is hardly reassuring about the future prospects of NPT.

This article appeared at Iranian Diplomacy.

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By Mrinal Kanta Das*

A top ranking woman Communist Party of India-Maoist (CPI-Maoist) cadre, identified as Sarita aka Urmila Ganjoo, was killed and another cadre was injured in an encounter with Security Forces (SFs) in the Gaya District of Bihar on May 17, 2015. Sarita was a member of the erstwhile Bihar-Jharkhand ‘special area committee’, which was replaced by the East Bihar Eastern Jharkhand Special Area Committee (EBEJSAC), and carried a reward of INR 1.5 million on her head. Acting on a tip-off that some Maoists had gathered near the Tiletand locality to collect INR 20 million as ‘levy’ from a construction company on the night of May 16, four companies of the Commando Battalion for Resolute Action (CoBRA) reached the place. In the ensuing encounter, which continued throughout the night, Sarita was killed and another Maoist was injured, Central Reserve Police Force (CRPF) Inspector General (IG), Bihar, Arun Kumar disclosed. A walkie talkie, an INSAS rifle and a haul of ammunition were recovered from the spot. The SFs also arrested 10 Maoists, including CPI-Maoist’s Magadh Zone Secretary, Upendra Baitha alias Sanjeevan, and ‘Treasurer’ of the ‘Magadh Zone’, Gorelal Ramani. Ramani carried a reward of INR 300,000 on his head; while Baitha had a bounty of INR 25,000.

Protesting against the killing of Sarita Ganjoo, the Maoists set ablaze at least 30 trucks on the busy Grand Trunk road in Gaya District in the intervening night of May 24-25, 2015.

Earlier, on May 10, 2015, during an anti-Maoist operation, Bihar’s Jamui District Police Special Task Force (STF) and CRPF troopers seized a huge cache of explosives that included 26 bags of ammonium nitrate, each containing 25 kilograms, and nine printed cloth banners appealing to people to boycott the forthcoming State Assembly elections.

On April 3, 2015, SFs had seized another cache of arms and ammunition from a Maoist hideout in the Rohtas District of Bihar. The weapons’ cache included three single bore guns, a country-made pistol, 12 rounds of ammunition, 50 kilograms of ammonium nitrate, 50 kilograms of other explosives, and 2,350 detonators. The SFs also defused an improvised explosive device (IED) that the Maoists had planted on the road of Chunhatta village (Rohtas District) to prevent security men from reaching there.

On March 14, 2015, SFs had recovered over 7,000 detonators, 3,000 gelatin sticks, 2,000 kilograms of ammonium nitrate and a carbine during an anti-Maoist operation in Rohtas District.

There has, nevertheless, been a sharp drop in Maoist related incidents in Bihar. According to partial data compiled by South Asia Terrorism Portal (SATP), there have been five fatalities, including one civilian, two SF personnel, and two Maoists, in Left Wing Extremist (LWE)-related incidents in the first four and half months of 2015, as compared to 13 killed, including six civilians, five SF personnel and two militants, in the same period of 2014. Further, a total of 49 Maoists have been arrested in Bihar this year, as of May 24, 2015.

Meanwhile, in Jharkhand, CPI-Maoist cadres attacked a Central Coalfields Limited [CCL, a subsidiary of Coal India Limited (CIL)] office, in the Latehar District of Jharkhand, killing one civilian and injuring several others on May 13, 2015. The Maoists fired around 10 rounds and beat up workers who were present at the office. During the firing, a driver was hit, and later succumbed to his injuries.

On May 6, 2015, a Maoist squad killed a villager, identified as Ravindra Ganjhu, at Lakarmanda village under the Kunda Police Station limits, in the Chatra District of Jharkhand, after branding him a Police ‘informer’ and Tritiya Prastuti Committee (TPC) member. TPC is a CPI-Maoist splinter group and is engaged in a bloody turf war with its parent organization in Jharkhand.

Despite these incidents, Maoist activities remained roughly at the same subdued level as the past year in Jharkhand, with the current focus principally on Chhattisgarh. According to partial data compiled by SATP, in the first four and half months of 2015, 31 persons, including 11 civilians, two SF personnel and 18 LWEs have been killed in the State, in comparison to 31 persons, including 18 civilians, six SFs and seven LWEs in the same period in 2014. While civilian and SF fatalities declined, LWE casualties have increased. It is useful to recall that Jharkhand recorded 217 fatalities in 2009, and 157 in 2011.

Significantly, among the 18 LWEs killed in Jharkhand in 2015, at least 10 belonged to CPI-Maoist, the highest number of cadres the group has lost in any single State this year. This has occurred at a time when the Maoists appear to be concentrating their activities in the Bastar Division of Chhattisgarh, while seeking to maintain their presence in other areas, with an emphasis on preserving strength.

Interestingly, a couple identified as Deepeshwar Mehta and Dhaneshwari Devi, allegedly involved in illegal trade and supply of explosives to the CPI-Maoist, were blown to pieces in a forest under the Padma Police Station area in the Hazaribagh District of Jharkhand on May 5, 2015, while carrying explosives and other inflammable items.

Acting on a tip off, the Bokaro District Police of Jharkhand and CRPF personnel arrested a CPI-Maoist ‘sub-zonal commander’ of the erstwhile ‘Bihar-Jharkhand special area committee’, identified as Rohit Marandi alias Rohit Manjhi, carrying INR 500,000 reward on his head, from Kashitand Forest under the Gomia block in Bokaro District, on May 18, 2015. Following his interrogation, a Light Machine Gun (LMG) that was looted from the CRPF in 2001, was also recovered and other explosives were seized in another forest at Ulanz village under the Katkamsandi Block near the Hazaribagh-Chatra District borders.

On February 14, 2015, acting on a tip-off, SFs seized some 6,000 kilograms of ammonium nitrate and 20,000 detonators from Lohardaga District of Jharkhand.

Meanwhile, according to a May 14, 2015, report, some 300 villagers in the Gumla District of Jharkhand were meeting day and night, to protest Maoist efforts to recruit school children into their camps. No further detail about such meetings is available in open sources. Further, on May 19, 2015, villages around Dalma Wildlife Sanctuary in the West Singhbhum District of Jharkhand sought paramilitary cover against Maoist atrocities and demanded compensation for those killed by the Maoists since 2009. Close to 1,100 people from hamlets under Patamda and Nimdih Police Stations in West Singhbhum and Saraikela-Kharsawan Districts took out a rally in Ranchi, the State capital. The protestors attempted to gherao the Chief Minister’s residence on Kanke Road. Asit Singh Patra, the President of Dalma Anchalik Samiti (Dalma Regional Forum), noted, “They (the Maoists) have been threatening, beating and killing us for over six years. We want government protection.” Armed with bows and arrows, axes and bamboos, the protestors held banners that read “No atrocities in the name of Marx, Engels and revolution. Get out of Jharkhand.”

Shedding some light on Maoist activities in Bihar and Jharkhand, CRPF IG RK Mishra stated, on May 12, 2015, “Maoists don’t demarcate their field of activities in Jharkhand and Bihar by State borders. Instead, the areas have been divided into various zones being controlled by separate teams such as Jharkhand Regional Committee (JRC) and Bihar Regional Committee (BRC), where Districts of both States are listed. So, both Jharkhand and Bihar are affected by rebel presence in the whole region.” Districts of Bihar such as Banka, Munger, Bhagalpur, Jamui and Nawada come under JRC. Jharkhand’s Godda, Sahebganj, Deoghar, Dumka, Jamtara, Giridih, Bokaro, Dhanbad, Hazaribagh, Ramgarh, Ranchi, Khunti, Saraikela-Kharsawan, West Singhbhum and East Singhbhum are also part of the JRC’s area of operation. BRC also operates in Jharkhand Districts like Palamau, Chatra, Latehar, Gumla, Lohardaga, Gumla and Simdega. Jehanabad, Gaya, Aurangabad, Rohtas and Kaimur in Bihar fall under BRC’s jurisdiction.

Interestingly, the People’s Liberation Front of India (PLFI), a Jharkhand based LWE group, claimed responsibility for the March 30, 2015, blast at the Bahadurpur Housing Colony flat in Patna. Patna Senior Superintendent of Police (SSP) Jitendra Rana claimed that the interrogation of Kundan Rai, one of the main accused in the case, who was staying in the flat on rent, revealed that PLFI wanted to extend its operations into Bihar. Meanwhile, a media interview of PLFI chief, Dinesh Gope, published on May 12, 2015, claimed that PLFI had 7,000 to 8,000 cadres across five States, including Jharkhand, Bihar, Odisha, West Bengal and Chhattisgarh. Gope added that PLFI was talking to tea garden labourers to extend its base into Assam, after having spread into Uttarakhand and Haryana. He also claimed that his cadres were in Sri Lanka, Mauritius, China and Nepal, for talks with “like-minded organizations.”

The Maoist leadership is aware that their movement in India is passing through a difficult time. They nevertheless continue to believe that the ‘revolutionary situation in India is excellent’ and that the current reverses they have suffered are an integral part of the dynamics of protracted warfare, and that a turnaround is imminent. While their networks and organisational structures across their areas of past dominance have suffered tremendous damage, their determination to persist with their ‘people’s war’ shows little diminution. As in the past, Assembly elections in Bihar and Panchayat elections in Jharkhand towards the end of 2015 could provide some opportunity to the Maoists to increase violence.

* Mrinal Kanta Das
Research Assistant, Institute for Conflict Management

The post India: Subdued Disturbances In Bihar And Jharkhand – Analysis appeared first on Eurasia Review.

By Ajit Kumar Singh*

After nearly six months of investigation in a case related to the Islamic State of Iraq and Levant [ISIL, later, the Islamic State (IS)], the National Investigation Agency (NIA), filed a charge sheet on May 20, 2015, before the NIA Special Court in Mumbai. According to the Agency,

…the arrested accused Areeb Majeed along with his three co-conspirators, Saheem Tanki, Fahad Shaikh and Aman Tandel and few others entered into a criminal conspiracy, hatched by them between January 2014 to November 2014, to commit terrorist acts in the name of jihad in Middle East countries, more specifically in Iraq and Syria, and aided and abetted each other by agreeing to commit terrorist acts to strike terror in the minds of the people by joining a banned international terrorist organisation, ISIL, with an intent to threaten the Unity, Integrity, Security and Sovereignty of India… in furtherance of the aforesaid criminal conspiracy underwent various trainings including training in arms and explosives and actively took part in various terrorist acts including fidayeen attacks as a member of ISIL against Iraqi, Syrian and Kurdish forces and thereby committed offences punishable under section 16, section 18 and section 20 of The Unlawful Activities (Prevention) Act, 1967 as amended, read with section 125 of Indian Penal Code.

During the course of the investigation it was found that the four accused, all residents of Kalyan in Thane District,, Maharashtra, under the guise of performing pilgrimage, travelled to Syria and joined IS. After joining the IS camp in Jazira (Syria), Areeb Majeed, Saheem Tanki, Fahad Shaikh and Aman Tandel, were named Abu Ali Al Hindi, Abu Uthman Al Hindi, Abu Bakr Al Hindi, and Abu Umar Al Hindi, respectively. After their training, three of them, Areeb Majeed, Fahad Shaikh, and Saheem Tanki were chosen to be fidayeen (suicide bombers). Areeb Majeed, subsequently, took part in several battles on behalf of the IS, and was injured thrice. After an injury in October 2014, he decided to return to India to spread the so-called ‘holy jihad’ in India.

Prior to leaving for India, in November 2014, Majeed had personally met Abu Hammam Iraqi, Ameer (chief) of “Tasnia” (Ministry of Defence and Development) in Syria at his office. Abu Hammam allowed him to leave, and Areeb subsequently tried to sneak into India by taking a Turkish Airlines flight on November 27, 2014, but was arrested by Indian authorities at Mumbai Airport on November 28, 2014. Majeed is presently in judicial custody. Saheem Tanki was reportedly killed in January 2015, while Majeed’s other co-conspirators are still in Iraq/ Syria fighting on behalf of the IS. Though the charge sheet used the word “few others”, it did not reveal any identities.

On November 28, 2014, the day Majeed was arrested, the NIA, Mumbai, as per the orders of the Union Ministry of Home Affairs (UMHA), had registered a case on the allegations that some Indian youths had joined the IS to wage war against ‘Asiatic Powers in alliance with the Government of India’, and were likely to commit terrorist acts in India.

In June 2014, IS released a “world dominion map” which had the Indian sub-continent shown as part of the Islamic state of Khorasan, within the ‘caliphate’ that IS fighters sought to achieve. Again, on July 1, 2014, IS chief Abu Bakr al Baghdadi, declared,

“Muslims’ rights are forcibly seized in China, India, Palestine, Somalia, the Arabian Peninsula, the Caucasus, Sham (the Levant), Egypt, Iraq, Indonesia, Afghanistan, the Philippines, Ahvaz, Iran [by the rafidah (Shia)], Pakistan, Tunisia, Libya, Algeria and Morocco, in the East and in the West… It is a khilāfah that gathered the Caucasian, Indian, Chinese, Shami, Iraqi, Yemeni, Egyptian, Maghribi (North African), American, French, German, and Australian… Therefore, rush O Muslims to your state. Yes, it is your state. Rush, because Syria is not for the Syrians, and Iraq is not for the Iraqis. The earth is Allah’s…” [Emphases added]

Soon thereafter, reports of some youth demonstrating solidarity with the IS started emerging from different quarters of India. Indeed, according to partial data compiled by the Institute for Conflict Management, a total of 27 youth were arrested/detained by the security agencies to stop them from joining the IS in Iraq/Syria, including nine youth from Bengaluru, who had arrived in Istanbul (Turkey) on December 24, 2014, but were deported by Turkish authorities after they were allegedly caught trying to cross over to Syria to join the IS. In the latest of such arrests/detentions, 14 students, who were on their way to Syria and Iraq to join IS were stopped at Hyderabad Airport on May 6, 2015. Operation Chakrayuh has been initiated by the Intelligence Bureau to counsel youth who try to join IS, and have placed vulnerable youngsters under constant surveillance. It is, however, not clear how many of these arrested/detained youth are in custody.

According to unconfirmed media reports, citing intelligence agencies a total of 10 Indians have gone to Syria. Media reports indicate that at least six of these are confirmed to have gone to Syria directly from India (the four Kalyan youth and another two youth from Chennai), another four who joined IS are of Indian origin but from different countries. The four who went from different countries, include Adil Fayaz, a student from Jammu and Kashmir, who was radicalised by Islamic fundamentalists in Australia during his stay there (he did his MBA from Australia’s Queensland University). Thereafter he left for Turkey and entered Syria via Jordan. A youth from Hyderabad and another youth from Kerala went to join Islamic State from Texas and Dubai respectively. No further details about them are available. A Tamil man, Haja Fakkurudeen Usman Ali, from Parangipettai in Cuddalore District of Tamil Nadu, had left for Syria from Singapore on January 22, 2014, to fight alongside the IS, and was reportedly the first recruit of Indian origin in IS. Usman Ali, a Singapore permanent resident, had recruited the two youth from Chennai.

Of these 10, four have died fighting in the battlefields of Iraq/Syria. A Twitter handle — @magnetgas16 — on April 7, 2015, claimed that a third Indian died fighting for the IS, while another such Twitter handle — @mukminSharia — identified the killed Indian as Abdul Rahman. “2 indian in IS Performed martyrdom operation 1 is abu Abdullah Al hindi [reference to Sultan Armar] and 2nd Abu Uthman al hindi [reference to Shaheen Tanki]. 3rd was killed. May ALLAH accept them # IS,” tweeted @magnetgas16, on the same day. The fourth Indian to die in Syria was Mohammed Atif Waseem. His family, originally from Telangana and settled in Hyderabad, received an email in Arabic purportedly from IS on April 24, 2015, informing them about Waseem’s death in the fighting.

Only one of the four deceased, Shaheen Tanki, had gone to the battle zone directly from India. Two others were of Indian origin, but had been residing in various countries for several years. These include Karnataka’s Bhatkal-born Sultan Abdul Kadir Armar alias Abu Abdullah Al Hindi, who went from Pakistan; and Mohammed Atif Waseem of Hyderabad, who went from London. No further detail about the fourth deceased, Abdul Rahman, is available in open sources.

Union Minister of State for Home Haribhai Parathibhai Chaudhary in a statement made in the Rajya Sabha (Upper House of Indian Parliament) on March 18, 2015, informed that a small number of Indian youth have joined the IS after travelling to Iraq and Syria. He further disclosed that intelligence and security agencies had thwarted some youth attempting to travel to Syria and Iraq, and that they had been placed under counseling and were being monitored. A certain number of ISIS sympathisers had also been placed under surveillance by security agencies. No numbers or identities were revealed. Earlier, on March 11, 2015, Haribhai Parathibhai Chaudhary had informed the Rajya Sabha that a total of four pro-IS activists, including two from Maharashtra and one each from Karnataka and Andhra Pradesh, had been arrested in the country since the last one year.

Meanwhile, on December 16, 2014, Union Home Minister (UHM) Rajnath Singh had informed Parliament that IS has been banned in India, as all outfits proscribed by the United Nations were automatically banned in India. Subsequently, through a notification dated February 17, 2015, UMHA banned the Islamic State as terrorist organization under Unlawful Activities (Prevention) Act (UAPA) at Serial No. 38 in the UAPA Schedule. The notification stated, “Such recruitment of youth to the outfit from India and their radicalisation is a matter of serious concern for the country especially with regard to its likely impact on national security when such youth return to India.”

Areeb’s revelation that he decided to return to India to spread ‘jihad’, underlined UMHA’s concern as it confirmed the lurking threat of IS within India. Unconfirmed reports also indicate that five persons – Imran Khan Muhammad Sharif, Wasim Khan, Mohammad Rizwan, Anwar Qureshi and Mazhar – arrested from Ratlam Town in Madhya Pradesh in April 2014, were part of an IS-linked jihad cell planning strikes in India. Joint Secretary, UMHA (Internal Security), M. Ganapathy, confirmed the neutralization of the Ratlam module on May 22, 2015.

Crucially, according to the May 20 NIA charge sheet, IS has established a strong presence in the cyberworld and has found most of its recruits/sympathizers through social media websites. The arrest of IS operative Mehdi Masroor Biswas on December 13, 2014, from his residence in Jalahalli in north Bengaluru (Karnataka), and subsequent revelations underscored the potential of such activities. Using his Twitter handle @ShamiWitness, Biswas had made 124,000 tweets. Of these, 15,000 tweets were directly in connection with the IS — defending their actions; praising their work (including the appalling mass beheadings); inspiring youth to spread IS ideology and join the war in West Asian as voluntary jihadists. Prior to this, he had tweeted on behalf of IS under a different handle @ElSaltador. At the time of his arrest, Mehdi had 17,800+ Twitter followers of which 15,000+ were from foreign countries.

The present Government has shown some awareness of the cyberthreat and, indeed, Prime Minister Narendra Modi reiterated, on May 17, 2015, “We can seize the economic opportunities of the digital world and work together to make it more secure against growing cyber threats.” Though the Government has announced several measures to eliminate such threat, current trends suggest that it will take a long time to translate these into effective action, unless the Government demonstrates a much stronger will to expedite the process.

Meanwhile, creating a new dimension to the challenge, a February 12, 2015, report claimed that nearly 35 self-radicalised jihadis were physically moving around to find recruits for the IS. Quoting an unnamed intelligence official, the report stated, “The campaign is being carried out by word of mouth, not through the internet.”

According to reports, UMHA is studying an “extremism counseling hotline” set up recently by the Austrian authorities, for possible replication in India. Such a counseling facility, if found feasible in the Indian context, would enable parents, teachers and friends of “vulnerable and indoctrinated” youth to seek professional help for their “deradicalisation”.

Union Home Minister Rajnath Singh noted, on November 29, 2014, “Even though ISIS was born in Iraq and Syria, the Indian subcontinent cannot stay untouched by it — we need to be aware of that reality.” India has found a relatively minuscule number of radicalized youth joining, or attempting to join, the IS, as compared to much higher numbers from countries with tiny Muslim populations, and this is certainly grounds for some satisfaction. This cannot, however, justify any measure of complacency. The dynamics of radical mobilization are still poorly understood, and it is not clear what triggers could spark a dramatic discontinuity in these trends. India’s vulnerabilities, moreover, remain tremendous, particularly in terms of the capacities of intelligence and enforcement agencies to detect and preempt any such discontinuities. With unremitting and drastic transformations in the global order, and growing instability, particularly in the Asian region, extraordinary efforts will be needed to ensure that the situation within India does not enter a more treacherous spiral of radicalization and terrorism.

* Ajit Kumar Singh
Research Fellow, Institute for Conflict Management

The post Islamic State: Lurking Dangers In India – Analysis appeared first on Eurasia Review.

Sri Lanka’s President Maithripala Sirisena said he has instructed the Security Council to formulate a new National Security Plan considering the current situation of the country.

The President was addressing Security Forces personnel after participating in an inspection tour at the Security Forces Headquarters in Welikanda yesterday (May 24).

The President was received by Army Commander Major General Crisantha de Silva and several high rankers.

President Sirisena said that attention will be focused on regional and the national security when preparing the new security plan. Besides, it will be prepared with a scientific background and it will be based on a technological mechanism.

He noted that no room will be left for terrorism to hamper the country’s progress again. “No room will be left for the revival of terrorism in the country,” he added.

“We are working with great confidence and respect towards the country’s War Heroes, who liberated the nation from the clutches of terrorism. The new Government places the highest concern on the country’s national security. Terrorism was eradicated mainly because of the discipline of the Security Forces personnel,” the President said.

He further said that our Security Forces are highly appreciated and highly rated internationally and therefore, they are chosen for serving in the United Nations Peacekeeping Force. He added that he will always give priority to the welfare of the Security Force personnel, who sacrificed a lot for the protection of the sovereignty and territorial integrity of the country.

President Sirisena also remarked that he is not a king but a leader who serves the people.

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Spain had a record figure of 16 million inbound tourists in the first four months of the year, an increase of 4.4% on the same period last year, according to the Spanish government.

The United Kingdom, France and Germany accounted for 53% of total inbound tourists, with increases in all three emitting markets. However, the largest year-on-year percentage increases were in smaller markets such as Italy, the United States, Ireland, Belgium and Asian countries.

All the autonomous regions posted increases, except for the Canary Islands, where the number was the same as last year. Particularly notable are the Region of Madrid – up 11.7%, the Balearic Islands – up 9.5% and Andalusia – up 6.8%.

The April figure for registered inbound tourists was also a record at 5.4 million, 2.8% up year-on-year. The result is largely due to the excellent performance of the French, Belgian and more distant markets such as Asia and Latin America.

Main emitting markets

A total of 3,276,016 tourists visited Spain from the United Kingdom, an increase of 5.5% on the first four months last year, accounting for 20.5% of all arrivals in the period. In April there were 1,160,946 tourists, accounting for 21.5% of the total and a fall of 1.1%, which affected the Canary Islands and the Region of Valencia. However, there was a rise in the number of British tourists in the Region of Madrid and Catalonia. In all, British tourists accounted for 21.5% of the April total.

France was the second biggest emitting market, at 2,638,825 tourists, up 4.7% on the first four months last year, and 16.5% of the total. A total of 990,622 French tourists visited Spain in April. The result boosted practically all the main regions, except for the Balearic Islands. This 14.9% increase represents 128,000 French tourists visiting Spain and accounted for 18.3% of the monthly total.

Germany was the emitting market for 2,521,835 tourists, representing a rise of 0.3% and 15.7% of the total for the four months. In April, the number of German tourists arriving in Spain was 870,170, a fall of 1.4%, which affected nearly all the regions, except for the Balearic Islands, the Region of Madrid and the Region of Valencia. With 16.1% of the total, Germany stood in third place for April.

The Nordic countries contributed 1,510,455 tourists, a fall of 7.9% in the four-month period, and 9.4% of the total. In April, the figure was 375,291 tourists, a fall of 12.3%, which affected the Canary Islands above all. The April figure was 6.9% of the total, the fourth highest.

Italy was the emitting market for 990,444 tourists in the four months, a rise of 12.2% and 6.2% of the total. The April figure was 351,323 Italian tourists, with a rise of 4.6%. The Region of Madrid, the Balearic Islands and the Region of Valencia were the destinations of choice for Italian tourists.

Also worth noting are the increases in the first four months of the year of tourists from the United States (10.8%), Ireland (9.5%), Switzerland (8.7%) and Belgium (8.2%).

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The Greek government’s recent decision to re-invite Chinese companies to participate in the bidding of the Piraeus port share has again caught the attention of the media to Chinese investment in Greece and Europe. Since it started in 2009, the Chinese state-owned company COSCO’s investments in Piraeus port has been growing fast. These include a 4.3 billion euro deal in 2009 to operate part of the port’s container terminal (pier II and pier III) for a period of 35 years, an extra 224 million euro in 2013 to expand the Chinese-operating part of the container terminal and follow-up investments in the railway link between its terminal and the Greek national railway system, as well as in the establishment of the Piraeus Consolidation and Distribution Center.

The enduring debt crisis in Greece surely presents an opportunity for foreign investors to buy Greek assets at a relatively low price, but the rationale of COSCO’s investment in Piraeus should also be understood against the background of China’s “One Belt One Road” (OBOR) Initiative. In the grand design of OBOR, Piraeus stands out as a major foothold for Chinese exports to enter Europe and a key hub for maritime transportation in the Mediterranean region. Therefore, Greece occupies an important position as “the European ‘bridgehead’ for the Maritime Silk Road.” This was clearly illustrated in the joint statement after Chinese premier Li Keqiang’s visit in 2006, in which the Chinese government claimed that “China attaches great importance to Greece’s unique regional advantage as the gateway to Europe, and stands ready to expand pragmatic cooperation with Greece in the field of infrastructure facilities including ports, highways and railways.”

COSCO’s investments in Piraeus have also brought significant changes to the port, which became the fastest growing container port in the world in 2012. According to Eurostat, the volumes of containers handed in Piraeus increased almost 5 times during 2009 to 2013, rising from 0.667 million twenty-foot equivalent unit (TEU) to 3.199 million TEU. Consequently, COSCO’s investment in Piraeus is considered to be “a model of Sino-Greek cooperation” and “a major example of Chinese investment in Europe”. However, in the wake of a re-opening of the bid for a majority share in the Piraeus port, it is important not to lose sight of the political risks lying at regional, national and firm level.

It might sound like something far away, but political risk at regional level is not negligible if China is to implement its Maritime Silk Road project successfully. As its investments in Greek port continue to grow, China is increasingly seen as an actor in the Eastern Mediterranean region. The traditional major plays in the region have been the US, the EU and Greece, however, with the US pivots towards Asia and the EU obsessed with the economic trouble, China’s increasing involvement is gradually changing the regional dynamics, which might be an “unintended consequence” for China and an “uncomfortable fact” for the other traditional regional players. Currently, China has been emphasizing the mutually beneficiary nature of its investment in Greece, and Greece tends to perceive the Chinese investment from a commercial perspective, which is quite understandable considering Greece is in dire need of foreign investment to get itself out of the economic plight. But at the same time, Greece is also a key member of the EU and NATO, which are more concerned with the geopolitical implications of China’s increasing involvement and presence in the region. Therefore, the currently good political climate at China-Greek bilateral level is conditioned by the longer-term regional dynamics at the multilateral level. As political risk is highly context dependent, the changing dynamic in the region would constitute a source of uncertainty and risk for China’s investments.

At the national level, Greece is generally perceived by investors to be a safe destination as it’s one of the developed member states of the EU, yet the underlying political risks in the country are worth noting, considering that the debt crisis is persisting in Greece and there seems to be no easy solution in the short term. According to a report by Euler Hermes, the risk of recession and business insolvency in Greece is expected to remain in 2015. The increasing disagreement within Syriza on the government’s policy is also putting into question the stability of current coalition government. The current financial situation has not left much options for Greece, who either has to implement the programs proposed by its creditors or proceed with a disruptive “Grexit” from the Eurozone. But both options will be painful for the Greeks who have already suffered “mental depression” from the past years of economic recession. The debt crisis in Greece has contributed to the rise of the radical Syriza party and populist media, if the current government fails to deliver its promise, it is likely to trigger new waves of nationalism and populism, under which COSCO’s investment in Piraeus is easy to become a target.

At firm level, the background of COSCO is a matter of concern in Greece. The direct investor in Piraeus is COSCO Pacific, a company listed on the Hong Kong Stock Exchange but actually controlled by the state-owned COSCO Group. This means that the company is supported by the Chinese government and governed by market standards at the same time, making it a competitive cooperation partner for the Greek government. However, for the local trade unions, COSCO’s state-owned background has been a source of suspicion and opposition. From the very beginning, the local union was against the deal, fearing that COSCO would bring in Chinese workers and take away their job. Dock workers have also been reported to repeatedly go on strike to protest against the deal on the grounds of low-payment and a lack of Corporate Social Responsibility.

The analysis of the potential risks facing Chinese investments in Greece is not meant to provide a “crystal ball” for the prediction of future events but rather a “sounding alarm” of typical political risks lying ahead of OBOR. Although the specific types of political risks might be manifested in different forms under different local contexts, the lessons learned from the Piraeus case are valuable for the other parts of this project. In fact, the greatest political risk comes from the “knowledge gap” of the local environment. It is thus imperative for China to bridge this “knowledge gap” by integrating risk analysis into the policy-making, planning and implementation of the OBOR.

*Shaohua Yan is currently a PhD candidate of European Studies at the University of Hong Kong, he did his Master of EU International Relations and Diplomacy at the College of Europe in Bruges.

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The ruling Chinese Communist Party has warned that any of its members who harbor religious beliefs or take part in religious activities could become the targets of its powerful disciplinary arm.

In an opinion article published at the weekend, the newsletter of the party’s Central Commission for Discipline Inspection (CCDI), said the problem of religious believers within party ranks is “attracting serious concern.”

“The fact that a small number of party members have forsaken the party’s world view of dialectical materialism and have turned to religion is now attracting serious concern, to the extent that it now falls within the purview of disciplinary work,” the article, published on Sunday, said.

“Marx himself stated baldly that communism, in essence, begins with atheism,” the China Discipline Inspection Report article said.

“There can be no doubt about the fact that the founding ideological principle that Communist Party members cannot be religious believers has been upheld by our party from the outset,” the paper said.

China’s Communist Party members number 86.7 million, some six percent of the country’s population, second only to the 88 million claimed by India’s Bharatiya Janata Party (BJP), according to figures released in 2014.

According to the article, party members don’t enjoy any right to religious freedom, a right which many religious believers complain is routinely violated by officials across the country.

“Chinese citizens have the freedom of religious belief, but Communist Party members aren’t the same as regular citizens; they are fighters in the vanguard for a communist consciousness,” the paper said.

“They are firm Marxists, and also atheists.”

“That’s why it has been clearly stated in party rules that Communist Party members may not hold religious beliefs, nor must they take part in religious activities,” the article warned.

Beijing Protestant house church member Xu Yonghai said the article shows growing concern among party leaders that many in the rank and file of the party have quietly ceased to believe in communism, prompted by the political violence of the Mao era and the People’s Liberation Army (PLA) crackdown that ended the 1989 pro-democracy movement.

“Since the Cultural Revolution [1966-1976] and June 4, 1989, a lot of people have lost their faith in communism,” Xu said.

“Many of them went on to find an authentic faith, and became Protestant Christians,” he said. “Back in the 1990s, a lot of people wanted to leave the party, but later on they found that they couldn’t.”

“Either they weren’t allowed to, or it was made very difficult for them, so that’s why we now have this problem,” Xu said, adding: “Genuine believers in communism are few and far between, nowadays.”

According to Beijing-based Protestant pastor Liu Fenggang, this loss of faith reaches right to the highest echelons of party leadership.

“We frequently come across this issue in our missionary work,” Liu said. “For many years now, a lot of Chinese officials and Communist Party members and their families have been turning to Jesus.”

He said the reason was a large number of “political mistakes” made by the party since it came to power more than 60 years ago.

“They have made so many mistakes, both on the left and the right,” Liu said, adding that many party members who converted had persecuted Christians in the past.

“Our churches are still the targets of atheist persecution, for example, the forced demolition of crosses,” Liu said, adding that the party seems determined to step up controls on religious practice in China.

“It is likely that the situation will get worse and worse,” he said.

In the southern city of Guangzhou, Protestant pastor Ma Zhao said his entire congregation had been held in a local police station for around four hours on Sunday after officials from the local religious affairs bureau ruled his unofficial house church gatherings illegal.

“They were very rude and said we were breaking the law,” Ma said. “They wouldn’t listen to anything we said, but they just kidnapped all of us, two to each person.”

“They took us all out, and when we tried to film or take photos, they confiscated our cameras,” he said, adding that his group has come under increasing pressure to join the government-approved Three Self Association of Chinese Protestant churches.

China has an army of officials whose job is to watch over faith-based activities, which have spread rapidly in recent decades amid sweeping economic and social change, sparking official fears that foreign ideas are increasingly gaining traction among the country’s 1.3 billion population.

Party officials are put in charge of Catholics, Buddhists, Taoists, Muslims, and Protestants. Judaism isn’t recognized, and worship in non-recognized temples, churches, or mosques is against the law.

The CCDI article comes after President Xi Jinping warned a high-level ideological conference last week that the development of religion in China should be “independent of foreign influence.”

“Christian congregations have expanded since churches began reopening after the Cultural Revolution,” the party-backed Global Times newspaper said in a recent commentary.

“Religion can be easily used by hostile external forces, especially among separatists in Tibet and Xinjiang autonomous regions, to infiltrate Chinese society, and that may impact the stability of the country,” the paper paraphrased Xi as saying.

It accused exiled Tibetan spiritual leader the Dalai Lama of “plotting” to seek independence for the Himalayan region, by urging “foreign forces” to put pressure on the Chinese governance.

“Those who hold prejudice against China’s political system often have twisted feelings toward the development of religion in the country,”
the paper said.

“But religions are not a tool for them to challenge authority,” it said.

In recent months, authorities in the eastern city of Wenzhou have carried out an ongoing demolition program targeting large and highly visible churches and crosses in the city, which is home to an estimated one million Chinese Christians.

Party leaders in the city, dubbed “China’s Jerusalem,” last week threatened to expel members who put religious beliefs ahead of ideology in a “rectification” campaign.

“Those who lack ideals and beliefs, lose party concepts, do not have the qualifications for party members (and) will resolutely be expelled,” the document, posted online last Thursday, said.

Last year, the U.S. State Department’s religious freedom report said Chinese authorities routinely restrict the activities of independent Catholics, Tibetan Buddhists, and Uyghur Muslims, as well as Protestant groups.

Reported by Xin Lin for RFA’s Mandarin Service, and by Hai Nan for the Cantonese Service. Translated and written in English by Luisetta Mudie.

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By Vahik Soghom* for Syria Comment

Is Syria headed toward some form of partition?

Recent developments in the conflict give credence to a number of fears that have been making the rounds for quite a while now. The long-accepted observation that the Syrian army is growing increasingly unable to independently engage in military confrontations against a motivated enemy is becoming eerily palpable in Idlib and Palmyra. Along with painstaking losses of strategically significant territory, this naturally unearths the fear that Syria is on the road to partition—a tripartite or even quadripartite partition. The way it might look is: the northeast of the country for the Kurds, the central to eastern portion for the IS, the northwestern portion (i.e., Idlib) for the Jaish al-Fatah, and the western stretch for the Assad regime. Aleppo is still divided among the contenders, and Daraa and Quneitra yet await their verdict.

This proto-partition has come into shape after years of intensive clashes on multiple fronts and the rise of both local and global takfiri militant movements. The belief that the Islamic State, with its global jihadi ideology, is the only significant force capable of redrawing the map has been challenged by the Jaish al-Fatah’s recent takeover of Idlib city as well as Jisr al-Shughur. Idlib province will now be the testing ground for an Islamic emirate overseen by takfiris with a more localist bent. This new reality has emerged partly as a side effect of the deaths or desertions of nearly half the regime’s soldiers, combined with the near impossibility of recruiting fighters from among the local population. Far from being capable of launching an effective assault to retake Idlib, the regime now has a number of worrying prospects to deal with. Latakia, a regime stronghold neighboring Idlib, is now under the threat of a possible Jaish al-Fatah attack, and the Islamic State has successfully seized Palmyra. The Southern front, meanwhile, has long proven to be challenging, and there is no less danger for Dara’a and Quneitra to fall into militant hands.

The question that naturally arises at this point is whether this proto-partition signals the early stage of an irreversible de facto partition. Answering in the affirmative ignores a number of important observations that indicate an indefinite prolongation of the conflict, as opposed to either a comprehensive peace settlement or a de facto partition. By extension, a gloomy forecast of events is expected, with gruesome tragedies and loss of life continuing to make their mark on the Syrian drama—unless, of course, the actors opt for peace or partition. Neither, however, seems likely.

The start of a third round of peace talks has been downplayed in the media, and rightly so. This is because the talks, which are as complicated as the conflict itself, will not achieve anything remotely close to a comprehensive peace deal. The peace plan suffers from two basic limitations. Firstly, neither side is ready to accept the most basic demand of the other, namely that Bashar stays or leaves. This alone makes it impossible for the peace process to bring about a unified Syria based on a form of consociational democracy. Secondly, the two major opposition forces controlling the largest chunks of land—the IS and Jaish al-Fatah—are not, and cannot be, invited to participate. This poses the awkward question of who exactly the regime will negotiate with. The moderate opposition is virtually dead, and any serious comprehensive agreement would thus have to include, at the least, local takfiri groups like Jaish al-Fatah. But since no one wants to talk to the takfiris, and since the takfiris, by definition, don’t want to talk to anyone else, a comprehensive peace agreement is virtually impossible. And so the second possible outcome of the peace process, namely a de jure partition of Syria recognized under international law, will not be realized either.

Well, then, what about de facto partition, i.e. one not recognized under international law but that forms naturally on the ground? It is a much more plausible scenario than peace or de jure partition, and one can point out that it has already begun. A good example of this form of partition is the case of Cyprus, where the southern portion of the Island is under the administration of the Republic of Cyprus, and the northern part under that of the self-declared Turkish Republic of Northern Cyprus. Under international law, the Republic of Cyprus has de jure authority over the island’s entirety, though, in reality, it has had no actual authority over the north since 1974. Perhaps we should expect a similar kind of partition for Syria in the near future, albeit with more divisions than just two. But this would depend on the assumption that the Syrian regime and its allies, as well as their opponents, both opt (or become unable) to continue carrying out military campaigns on the various fronts. Since this is unlikely to be the case, de facto partition would also appear an improbable outcome.

The military and human losses of the Syrian army do not signal an end to its fighting capacity. Hezbollah, the regime’s invaluable partner, is the key factor in determining whether the regime still has a fighting chance. As argued previously, a successful campaign in Qalamoun will allow Hezbollah to deploy to other fronts and create the conditions for promising assaults. Indeed, Hezbollah has so far succeeded in Qalamoun, and has shown once again that it has the resources and capabilities to secure a quick and strategic victory. This edge will surely be taken to other fronts where potential similar victories in Idlib or elsewhere would not be surprising. As for Hezbollah’s own losses in Syria, these should not be exaggerated. It should be noted, firstly, that Hezbollah’s loss of around 1,000 soldiers is an expense it expects to incur in any serious confrontation with Israel. It has thus likely shaped its strategy and planning accordingly. Secondly, a recent report suggested that the organization is in fact growing, and that in spite of heavy deployment to multiple fronts, its important units in southern Lebanon remain unfazed.

Moreover, Iran’s relentless policy of confronting takfiri militants ensures that the regime will go beyond a defensive strategy that aims to secure the western stretch of the country, from Latakia down to Quneitra. In fact, Hezbollah members are said to have already deployed to Idlib province as part of early efforts to launch an offensive. If the regime is able to reverse the tide of losses, with Qalamoun as its starting-point, the next major battles will likely take place in Idlib and perhaps the Homs countryside. The ideological nature of the largely takfiri-Shiite war currently engulfing the Middle East should not be downplayed. As long as sectarian identity plays a role in fueling the conflict, neither side will be willing to accept even minimal defeat.

The Syrian drama will continue indefinitely. A unified or de jure-partitioned Syria, brokered by the international community, are not feasible outcomes, yet with continuously shifting battle lines, neither is de facto partition. Instead, what we have now is what I would call a proto-partition—a loose partition based on moving lines that are susceptible to significant alterations. That said, two important developments should be closely followed, as they may prove vital for shifting alliances as well as prospects for a partial settlement. The more important of these is the unification of Turkish, Qatari and Saudi policies in Syria, a crucial outcome of which was the formation of Jaish al-Fatah. This unified approach is centered on offering support for local, as opposed to global, takfiri groups operating in Syria. Since the bulk of Jaish al-Fatah members are interested in jihad within Syria, with little appetite for global jihad, it may be that the Turkish-Saudi-Qatari policy aims to prop up the legitimacy of these groups in the eyes of the West. Secondly, the possibility of Jabhat al-Nusra splitting off from the general command of al-Qaeda may be part of this localist strategy. Its ultimate goal may be to present the localist jihadists as potential partners for peace once all other options are exhausted. But it should be noted that the United States remains intent on undermining takfiri groups of all shapes and forms, and this policy will likely persist even amidst efforts of highlighting the localist agenda of the Jaish al-Fatah coalition.

In a sense, then, the U.S. shares certain affinities with both the Turkish-Saudi-Qatari position and the Iranian position in this conflict. With which side will it ultimately come to perceive its interests as more compatible? That remains to be seen.

*Vahik Soghom, BA. AUB, MA. Univ of St. Andrews, Humboldt Univ of Berlin

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Modi demonstrates willingness to end border disputes, ease tensions and partner with China.

By Harsh V. Pant*

The three-day trip to China by Indian Prime Minister Narendra Modi was rich in symbolism and atmospherics, but did little to remove the basic distrust tied to decades-long border dispute and mutual suspicion about their strategic objectives. Candid talk by Modi not only suggested that, despite growing economic cooperation India remained wary of China and would carry on his policy of balancing the Chinese threat by building close ties with other powers. In a pointed allusion to the reason behind India cultivating relations with the US, Japan or Australia, Modi stressed the need to “ensure that our relationships with other countries do not become a source of concern for each other.”

India’s engagement with China has become circumscribed by intractable boundary disputes.

During Modi’s visit, a number of agreements were signed including on outer space, civil nuclear cooperation, skill development, expanding educational exchange, a new leaders’ forum at the provincial level among others. The two militaries also decided to operationalize the hotline between their two headquarters as well as increasing the number of border meeting points for their military personnel to maintain peace on the border. India also decided to grant electronic visas to Chinese visitors to India.

Despite the anodyne nature of these pacts, the relationship has shifted: Modi’s visit to China will be remembered for his plain-speaking, by no means an insignificant achievement. For years, Indian political leaders had traveled to China and said what the Chinese wanted to hear. Modi changed all that when he openly “stressed the need for China to reconsider its approach on some of the issues that hold us back from realizing full potential of our partnership” and “suggested that China should take a strategic and long-term view of our relations.”

The joint statement issued during Modi’s visit was circumspect, focusing on “the imperative of forging strategic trust.” In his speech at Tsinghua University too, Modi went beyond the rhetorical flourishes of Sino-Indian cooperation, pointing out the need to resolve the border dispute and to “ensure that our relationships with other countries do not become a source of concern for each other.” This is a shift in Indian traditional defensiveness vis-à-vis China, underscoring a recalibration in policy by squarely putting the blame for stalemate in bilateral ties on China’s doorsteps.

For all the hype about hosting Modi, China refused to yield on border issues. It refused to cease issuing stapled visas – attaching a piece of paper with a visa stamp rather than directly stamping the passport – to Indians from Arunachal Pradesh and Jammu and Kashmir traveling to China. The implication is that China refuses to acknowledge India’s sovereignty over those areas.

China resists moving forward on clarifying the Line of Actual Control – a boundary between Chinese and Indian land in the Himalayas. China maintains that the border dispute is confined to 2,000 kilometers, largely in Arunachal Pradesh, whereas for India the dispute spans more than 4,000 kilometers, including the Aksai Chin area ceded to China by Pakistan. China has bolstered its ties with Pakistan in recent weeks by promising $46 billion investment package in the China-Pakistan Economic Corridor, between Pakistan’s Gwadar Port on the Arabian Sea and China’s western Xinjiang province, as part of Beijing’s ambitious Maritime Silk Road Initiative, and this corridor will traverse through disputed territory in Kashmir, land occupied by Pakistan but claimed by India.

The Modi government, with its decisive mandate, is better positioned than its predecessors to deliver on tough foreign policy decisions, yet Beijing decided against taking risks. Instead, China has given space to Modi to follow a two-pronged approach: reaching out to China on economic and cultural issues and drawing red-lines on security matters, continuing to seek out new partners as well as military and diplomatic means to protect territory.

Modi is seeking to broaden the basis of engagement with China. During his visit, Modi reached out to the Chinese investors, asking them to take advantage of the “winds of change” in India with its more transparent regulatory regime. He views investments from China essential if the India growth story is to be fully realized. China promised to invest over $20 billion in India over the next five years, and other pacts signed during Modi’s visit are likely to yield $10 billion worth of Chinese projects in renewable energy, the financial sector, education, railways and ports.

Though India has decided to become a founding member of the China-led Asian Infrastructure Investment Bank, the limits to Sino-Indian economic cooperation are underscored by India’s reluctance to join China’s Maritime Silk Road Initiative and joint scouring of the Indian Ocean seabed for resources as proposed by China. Chinese businesses complain of Indian red-tape, largely a function of the bureaucracy’s wariness about an overdependence on China and of espionage. India’s corporate sector has failed to gain market access in China in their core competencies such as pharmaceuticals, IT and agriculture. As a consequence, the trade deficit continues to widen in China’s favour.

Indian and Chinese leaders have discussed civilizational ties for decades, but Modi is the first prime minister who engages with China on the basis of a shared cultural heritage. By emphasizing Buddhism, Modi is keen to build cultural ties involving ordinary Indians and Chinese. The decision to grant electronic visas to Chinese visitors is aimed at enhancing mutual trust with a fillip to people-to-people contacts.

This implies a new sense of purpose in India’s China policy, which has for decades focused on downplaying differences and exaggerating convergence. Starting with his inauguration, Modi invited the Tibetan government in exile to his inauguration and spoke openly of Chinese expansionism. After decades of neglect, there are signs that the Modi government is pursuing a time-bound program of infrastructure buildup in border areas. More troops are being deployed with better weaponry and support technology. Projects include six advanced landing grounds for military aircrafts, strategic railway lines, tunnels and arterial roads leading up to the Line of Actual Control.

Modi is confident of India’s ability to emerge as a significant global player, allowing him to leverage ties with China and the United States to secure Indian interests. He has followed a dynamic foreign policy, developing closer ties with the US and strengthening military cooperation with Australia, Japan and Vietnam while working to regain strategic space in the Indian Ocean region. Modi’s visits to Mongolia and South Korea after China signal that New Delhi remains keen on expanding its profile in China’s periphery. To counter Chinese presence in the Gwadar port in Pakistan, which many in India view as a potential Chinese naval hub, India is building a port in Iran’s Chabahar to gain access to Afghanistan. India has given a green light for collaborating with the US on construction of its largest warship, the 65,000-ton aircraft carrier INS Vishal.

For years, Delhi was labeled as the obstacle to normalizing Sino-Indian ties. Modi has deftly turned the tables on Beijing by signaling that he is willing to go all out in enhancing cultural and economic ties. The onus of reducing strategic distrust rests with Beijing – success or failure of the Asian century might depend on Beijing’s response.

*Harsh V. Pant is professor of international relations at King’s College London and the author of India’s Afghan Muddle (HarperCollins).

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