(EurActiv) — Turkey’s prime minister will tell world leaders next week that Ankara can play a key role in stopping a spread of terrorism, including Islamic State, but expected understanding for its own battle against Kurdish militants.

Washington, while considering the Kurdistan Workers Party (PKK) a terrorist group, sees the affiliated YPG Kurdish militia in Syria as its chief ally in fighting Islamic State there.

The link unsettles Turkey and is likely to be raised in more explicit terms by Prime Minister Ahmet Davutoğlu when the United Nations General Assembly convenes in New York next week.

NATO member Turkey has opened its air bases to a US-led coalition against Islamic State fighters, but the focus of its own air strikes has been Kurdistan Workers Party (PKK) militants. Fighting has escalated since a truce between the PKK, seeking broader Kurdish rights, and the army broke down in July.

The fighting, in the runup to November elections, has raised suspicions among opponents of President Tayyip Erdoğan that the priority is to check Kurdish territorial ambitions rather than to rout the Islamist insurgents. The fighting, which began in 1984, has cost over 40,000 lives.

“Turkey will share its experience with world leaders to seek support to prevent the Middle East from becoming a region that exports terrorism to the world,” the senior official said.

“The Prime Minister will also highlight that certain countries and organisations should refrain from attitudes that encourage and support PKK and other groups for permanent stability in the Middle East,” the official said.

The remarks, apparently directed at Washington, were echoed by Davutoğlu before his departure for New York.

“The main emphasis here is there is no ‘good or bad terrorist,” he said. “Unfortunately sometimes, we do not see the international community reacting to PKK which has killed many civilians and security forces over the past two months with the same attitude it displays towards Islamic State.”

Syrian Kurds help Washington

Comments by US State Department spokesman John Kirby this week have highlighted the fundamental disagreement between Washington and Ankara. “We don’t consider the YPG a terrorist organisation,” Kirby said during a briefing.

“And they have proven successful against ISIL inside Syria,” he said, referring to an acronym of the Sunni hardline group Islamic State.

Turkey fears Kurdish groups in Turkey, Syria and Iraq could press for the creation of an independent Kurdish state. Ankara has been harshly criticised, not least by the EU it seeks to join, for its handling of the Kurdish conflict. Erdoğan launched a peace process three years ago but that appears now in tatters.

The other key topic in Davutoğlu’s visit will be the flow of tens of thousands of migrants trying to reach Europe, many from camps in Turkey, Jordan and Lebanon, threatening the future of the cherished passport-free Schengen zone.

Davutoğlu’s planned meeting with German Chancellor Angela Merkel will specifically focus on the refugee issue, another senior official said.

Turkey has been at the forefront of the refugee crisis since 2011, when the Syrian uprising begun and has spent $7.6 billion caring for 2.2 million Syrian refugees.

The EU is now looking for ways to persuade Turkey to do more to keep Syrian refugees on its territory and stop them moving into Europe.

“The main emphasis will be all countries particularly Europe abandoning these immigration policies based on security,” another senior official said. “There are all sorts of people among the migrants but to block the process thinking Islamic State militants might be among them is far from productive.”

“This is hardly about money,” the official said. “A comprehensive cooperation and a long-term plan is needed,” he added.

By Abhijit Singh

The steady evolution of Indian Ocean diplomacy in recent years has been a defining feature of the country’s foreign policy transformation. Since 2007, when it codified the concept of maritime diplomacy in the military maritime strategy document, the Indian Navy (IN) has not only expanded its maritime engagement with regional navies but has also built “bridges of friendship” through regular ship visits to countries along the Indian Ocean rim. The Navy’s diplomatic turn has been especially noteworthy in the expansion of naval cooperation with Arab Gulf states, offering critical support to India’s foreign policy initiatives in the Middle East.

Earlier this month, four Indian Naval Ships – Trishul, Tabar, Deepak and Delhi – departed on a month long deployment to the Arabian Gulf. After a three-day stopover at Dubai (UAE) the ships branched out into two groups. INS Delhi and INS Trishul proceeded to Al-Jubail (Saudi Arabia) and Doha (Qatar) where they engaged in coordinated drills with host navies. Meanwhile, INS Tabar and INS Deepak reached Doha after a brief visit to Kuwait, whereupon the combined contingent of four ships proceeded to Muscat for a final stop-over before returning to Mumbai.

Since 2008, the Navy has consciously nurtured its relationships in the Arabian Sea. Apart from partnering regional navies in anti-piracy duties, it has played an important role in supporting and training Gulf Cooperation Council (GCC) maritime forces. Through defence cooperation MoUs and joint committees on defence cooperation, India has substantially enhanced its exchanges in maritime training, operational exercises, and information sharing with Arab Gulf navies – many of them members of the Indian Ocean Naval Symposium (IONS), an initiative pioneered by the Indian Navy .

The naval engagement with Oman has been most notable. While India and Oman entered into a “strategic partnership” in 2008, naval cooperation has been on since 1993 in the form of a biennial exercise, Naseem Al-Bahr. India has provided naval training and hydrographic support to Oman, while Omani ships have been regular visitors at Indian ports. More significantly, Oman has played a key role in sustaining India’s security efforts in the Gulf of Aden by offering berthing and replenishment facilities to naval ships, and hosting a crucial listening post in the Western Indian Ocean. With a new super-port project at Duqm nearing completion, Oman is poised to transform the maritime geopolitics of the Arabian Sea. An appreciation of its strategic potential has led New Delhi to cultivate stronger maritime ties with Muscat.

Importantly for India, the ongoing engagement with Arab navies has not been to the exclusion of a maritime relationship with Iran. A week prior to the ongoing tour of GCC countries, two Indian naval ships, Betwa and Beas, visited Bandar-e-Abbas. The Iranian Navy, which has long suffered from a ‘siege’ mind-set in the Arabian Gulf, is in the throes of a radical psychological transformation. Having acquired critical surface and subsurface capability, it has been gaining confidence as a regional maritime power. Emboldened by the recent nuclear deal with the West, the Iranian naval leadership has also been on the look-out for new partners to support its naval agenda of establishing control over the Western approaches to the Arabian Gulf. India offers the most potential for such a partnership. As he addressed a visiting Indian delegation last month, Iranian naval chief, Rear Admiral Habibollah Sayyari, pitched for a strong India-Iran maritime relationship, saying he believed it had the potential to “end trans-regional naval presence in the Northern Indian Ocean”.

While the Indian Navy may not wish to challenge extra-regional navies in the Indian Ocean, it has taken heed of regional imperatives for a more robust Arabian Gulf reengagement. India’s ‘Look-West’ maritime strategy has been driven primarily by two considerations. The waterways of the Northern Indian Ocean are among the most important in the world, facilitating the export of large volumes of goods, oil and natural gas. India is a principal beneficiary of the trade and energy flows through the West Asian littorals. The Middle East is also home to some seven million Indians, whose remittances contribute significantly to India’s economy. The sheer weight of market interaction and commercial exchanges with the Arab Gulf region amplifies its political significance, creating an urgent need for greater Indian naval presence in the region.

The more determinative factor is the preservation of India’s strategic stakes in the Indian Ocean. With China continuing to make military inroads, the past few years have witnessed a shrinking of Indian geopolitical influence in the Indian Ocean Region (IOR). Reports of a new Chinese naval base in Djibouti, growing submarine visits, and a spurt in Beijing’s maritime military activities in the Western Indian Ocean have created concern in India’s security establishment. The nature of the PLA Navy’s recent submarine forays suggests an aspiration for a standing security presence in the IOR. For the Indian Navy, therefore, interaction with Gulf navies is a strategic measure aimed at retaining Indian influence in the IOR.

India’s Arabian Gulf diplomacy is, however, not all about own national interests. The tour by Indian naval ships to the region came only a few days after Narendra Modi’s visit to Abu Dhabi, the first by an Indian prime minister in 30 years. As India and the UAE announced a strategic partnership, many of the themes reflected upon in their joint statement were an expression of India’s solidarity with the UAE (and more broadly Arab Gulf states). Prominent among these were human security, counter-terrorism and regional defence. But the GCC’s central concern still remains the security of energy shipments through regional chokepoints. With political tensions heightening the vulnerability of the Gulf’s vital waterways, the joint statement affirmed India’s commitment to strengthening maritime security in the Northern Indian Ocean region.

The Indian Navy’s burgeoning ties with Arab Gulf navies demonstrate the utility of maritime power as a foreign policy tool. India’s Indian Ocean diplomacy has shown that the political role of sea power remains as important as its wartime uses. While “hard-power” projection remains effective as earlier, the modern exercise of “soft power” through “hardware” has no credible substitute. Through its Arabian Gulf initiatives, the Indian Navy has shown that by positioning itself as a reliable and supportive partner of regional maritime forces, a navy can shape the broader strategic environment, forge lasting relationships and effectively deter challengers.

While the Navy’s contribution to the country’s foreign policy transformation has never been in doubt, its utility as a potent political instrument has been demonstrated only recently. By engaging GCC navies through joint exercises, port calls, and training programmes, the Navy has successfully created a durable template of maritime relations in the Western Indian Ocean. More significantly, its persistent presence in the Western Indian Ocean has validated India’s strategic capability and positive intent in the Middle East. In many ways, the Indian Navy’s Arabian Gulf diplomacy has been critical in rebalancing the Indian Ocean’s emerging strategic narrative in India’s favour.

Views expressed are of the author and do not necessarily reflect the views of the IDSA or of the Government of India. Originally published by Institute for Defence Studies and Analyses (www.idsa.in) at http://www.idsa.in/idsacomments/TheIndianNavysArabianGulfDiplomacy_asingh_240915.html

Many analysts believe that German economists hold a very different view of macroeconomics. This column presents a personal view why this belief is wrong. The fact that Europe still consists of sovereign nations and that most Europeans still want to keep it that way informs much of what happens inside German economists’ heads.

By Michael Burda*

Recently, I was interviewed by The Economist for a piece on the state of economics in Germany which was ultimately published on 9 May as “Of Rules and Order”. I was quite vexed about the outcome, which painted a dismal picture of how the representative economist – me – views the world. Since the newspaper is a flagship of good economic journalism and normally gets it right, I would like to try to set some points straight. This column, which is largely based on my ‘Letter from Germany’ in the Royal Economic Society Newsletter in the summer of 2015, it is part of this effort.

The Anglo-American world had been ganging up on Germany long before the financial crisis, but since the onset of the Greek troubles it has gotten notably worse. Tirades by The New York Times’ Paul Krugman and the FT‘s Martin Wolf have received support recently from Wolfgang Munchau, who wrote on ‘Wacky economics’ last year (2014), and recently our colleague Simon Wren-Lewis has posted yet again on his mainly macro blog about deranged Teutonic world views. It is an understatement to say that economics in Germany is getting a bad rap these days.

New perspectives on German bashing

For those who didn’t read The Economist leader, the tenor is that economists in this country are simply living in a different universe, harping on about non-existent problems, endorsing austerity when it is least needed, committing the fallacy of composition at every possible juncture, and more or less just getting it all wrong. In particular, the article suggested that the Sachverständigenrat (the German Council of Economic Experts) was particularly backwards in its recent pronouncements, which includes its annual report.

As someone who knows the members of the Council, I can vouch for their mainstream academic views. They publish in serious academic journals, belong to respectable international scholarly associations, and cook with the same utensils as other economists.  Council members are expected to provide independent and sometimes unwanted advice to the government in the form of an annual report. They are not partisan advocates of government policy – they are expected, however, to advise with the interest of the country at heart. In fact, it is tradition to choose some members who represent German corporatist players. It would hardly be reasonable to expect those chosen on the ‘trade union ticket’ (Peter Bofinger) to endorse lower corporate taxes, just as would be difficult to imagine the representative of ‘industry’ (Volker Wieland) endorsing increases in the minimum wage.

But this does not indict the state of economic science or research in Germany. While Lionel Robbins urged economists to refrain from normative judgements and to stick to positive economics, my German colleagues sometimes have difficulties sorting this out. Indeed, members of the Sachverständigenrat are expected to deliver normative judgements and do so, ultimately with the (unspoken) goal of furthering German national and economic interests. It is thus disingenuous to implicate the belief system of economists when one doesn’t like the policies that their government is following, policies which may even fly in the face of mainstream economics and economists. In what follows I would like to rigorously address three myths circulating in the media and the blogosphere about ‘the way German economists think’, because the input of those economists in many national policies is greatly exaggerated. A recent survey of German-speaking economists by Süddeutsche Zeitung¹ confirmed that beliefs on issues such as fiscal policy, minimum wages and other controversial policy areas are hardly distinguishable.

Myth 1: Economists in Germany fundamentally reject Keynesian ideas

This is nonsense. The importance of aggregate demand in the short-run determination of output and employment is standard, not only in the courses I teach in Berlin, but in those given by all colleagues I know who teach macro (including Peter Bofinger, who certainly knows better to claim to be the ‘last Mohican’ of Keynesian thought). People conveniently forget that not only was Germany unfortunately out front implementing Keynesian ideas before the war, but Keynes even said as much, somewhat ignominiously, in the preface to the first German edition of the General Theory. During post-war reconstruction, Karl Schiller’s central concept was Globalsteuerung (aggregate demand management). In fact, provisions of the Stabilitätsgesetz of 1967 (the Stability Law, which enabled demand management policing) explicitly address economic growth, inflation, unemployment and the current account balance as an ‘impossible square’ and even provide for off-the-shelf fiscal policy projects which could be implemented in times of recession or crisis. Germany reacted as vigorously to the Great Recession as its EU partners. One current member of the Council has contributed widely to a literature based on the premise that monetary has persistent real effects in the short to medium run – hardly unorthodox.

So why the current stubborn resistance to Globalsteuerung in most German policy circles? My take on this – which the reader can take or leave – is simply national interest.

• First, the Anglo-Saxon world has an exaggerated view of Germany’s role in the global economy (in fact, the share in world GDP is 5%), and even in the EU (only about 22%).

An all-out Keynesian pump-priming binge in Germany would surely reduce its current account surplus, but wouldn’t put much of a dent in world or even EU aggregate demand.

• Second, Germany is an open economy with the sum of exports and imports as a fraction of GDP equalling almost 90%, compared with 55-65% in other large EU members (Italy, Spain, France and the UK).

Those who can still remember the old-fashioned multiplier know that it moves inversely with the marginal propensity to import. Even a ‘Neanderthal’ or ‘hydraulic’ Keynesian would have to question the benefits to Germany of such a policy. It is disingenuous to expect individual sovereign countries to engage in aggregate demand policy for the benefit of others, if domestic voters can’t be convinced of their own welfare gains.

Finally, most modern macroeconomists have a more nuanced view of fiscal demand management and the multiplier, and would reject the hydraulic Keynesian view of the world in which prices are constant and consumers mechanically spend a constant fraction of their income. A more modern perspective holds that only income-constrained households matter for the multiplier – it would be simply silly to argue that 100% or even half of highly banked German households consume hand-to-mouth from disposable income. While remarkable consensus has emerged that fiscal policy at the zero lower bound is effective, this applies to closed economies and only as long as the good faith and credit of borrowing countries remains intact. Incidentally, a lively discussion in Germany is currently underway among mainstream economists, led by Carl Christian von Weizsäcker and Marcel Fratzscher, about taking advantage of government low interest rates and investing in infrastructure, which would have both short- and long-term gains. Hardly a position of dogmatic anti-Keynesianism.

Myth 2: German economists feed at the trough of ‘ordoliberalism’ and worship at the altar of supply-side policies.

Many of the more disparaging articles I mentioned in the introduction criticise ‘ordoliberalism’, which is defined in Wikipedia (presumably by those who know what it is) as a liberal free market regime with relatively stable rules to control the excesses of unbridled capitalism. Allegedly, it arose around the rejection of state socialism under the Nazi regime, and embodies ideas of Hayek, in particular a strong preference for decentralised market outcomes over state planning as well as an endorsement of rule of law. Going after anti-trust violators and supporting a framework for stable contractual relations (especially loan contracts) are favourite elements of Ordnungspolitik. While this sounds positively harmless, it doesn’t represent economic science based on mainstream methods of our field, and never did. While it might be interpreted as a normative analysis of regulatory regimes, Ordnungspolitik does not stem from the rigorous analysis we are accustomed to, but rather follows a typically Austrian (following Hayek) rejection of formal analysis of these questions. If anything, ordoliberalism is simply a strong policy preference, perhaps even elevated to the status of religion. I have never seen a serious analysis of the welfare effects of an ordoliberal regime. But maybe I am reading the wrong journals.

As far as the supply side is concerned, the story is different. There is very good rigorous analysis – also from Germany – on how changes in labour market regulations, welfare state, taxation, and the efficiency of job search can affect the long-term productive potential of economies. The success of the Hartz labour market reforms a decade ago proves that supply-side policies can work; it is no accident that since 2003 employment, stagnant for decades before, has risen by 13%. In the decade after unification, Germany lost enormous competitiveness and was the economist’s sick man of Europe. Post-unification inflation had raised nominal wages while European integration was putting downward pressure on prices. Paying for unification without explicit tax increases meant going through the back door of social security contributions, which in turn severely distorted labour markets. The reforms of 2003-05 addressed those problems at the expense of political careers – a decade later, Germany can celebrate its labour market successes.

It is not surprising that Germans, who may be somewhat more patient than average Europeans, have less patience for short-term views of the world and tend to think in terms of chains of Keynesian short runs which at some level need to be consistent with what policy wants to do in the long run. This may be hard to deal with, but it is not voodoo economics. And it goes pretty far in explaining Germany’s focus on reforms in the current Greek drama.

Myth 3: Economists in Germany obsess over moral hazard and austerity

Attitudes towards moral hazard and austerity are always in the eyes of the beholder. It’s hardly surprising that Germany is more interested in sustainable solutions to southern European problems (and hopefully the lending practices in the north that gave rise to them) as opposed to the recipient perspective of kicking the can down the road and hoping for a structural free lunch. In principle, governments should practice austerity in good times, not bad. After the Germans failed (along with France) to impose the stability rules and sanctions on themselves in 2003 – and after insisting throughout the Maastricht Treaty negotiations on tough membership criteria for monetary union as well as the Stability and Growth Pact – they are now forcibly wed to austerity. Otherwise they risk losing all credibility on any fiscal discipline in the monetary union.

To the extent that policymaking is the product of interactions of hard-nosed politicians and policymakers, a positive analysis of economic policy yields high returns. Economists here certainly do take a much more cynical view of policy and political economy. When I arrived in Berlin in the early 1990s, the discussion surrounding the European Monetary Union project was uniformly skeptical. The suspicion was that politicians do what they please in response to short-term political incentives, not what our models predict for policy in a vacuum. In view of current events, those skeptics were pretty much on the mark.

Germans understand intimately the pitfalls and political economy of moral hazard, and it is hardly surprising that their economists have similar views. The German Länder are jointly and severally liable for each other’s debt – predictably, smaller states have allowed their debt to soar since the 1980s in the aftermath of structural decline and despite promises to balance budgets. Bremen’s debt per capita increased from about €5,000 in 1980 to €30,000 in 2015, or 500%. In Saarland, it rose from €1,600 per capita to almost €14,000 or 775% (for the country, debt per capita increased by ‘only’ 200% over the same period). While it appears plausible and perhaps unavoidable to bail out Bremen, Saarland (or Berlin), doing the same for ten million Greeks is another question. Understandably, moral hazard becomes a categorical imperative. Oddly, the US has understood this principle since the 1840s, as Thomas Sargent has reminded us.

It is not ordoliberal religion, but a mixture of national self-interest and healthy mistrust informed by experience, that guides German economic policy today. At the core is the fact that Europe still consists of sovereign nations, and most Europeans still want to keep it that way. A monetary union imposes a one-size-fits-all monetary policy but is silent on the right substitutes for it. Should we seek an insurance policy (as in the US) or allow each nation’s self-interests to assert themselves? In the end, German economists will tend to peddle economics that serve Germany’s own self-interests, just as we’d expect of the British if and when they decide to leave the EU, or of the US when interest rates are finally raised. If it is to succeed, European monetary union needs to synchronise national and union interests, or face being dashed on the rocks of economic shocks to come.

About the author:
*Michael Burda, Professor of Economics at Humboldt University Berlin and CEPR Research Fellow

References:
Münchau, W (2014), “The wacky economics of Germany’s parallel universe”, Financial Times, 16 November.

Wren-Lewis, S (no date), Mainly Macro blog.

Footnote:
1 For a review of the survey in English, see http://ineteconomics.org/ideas-papers/blog/how-german-economists-really-think.

FIFA has given permission for the Swiss Attorney General to examine the email correspondence of its suspended Secretary-General Jéròme Valcke, who is accused of involvement in a World Cup ticketing scam.

Valcke denies allegations that he engineered a marketing contract to sell tickets at the 2014 World Cup at inflated prices and that he stood to personally gain financially from the deal. FIFA’s second most powerful executive and number two to President Sepp Blatter was put on leave on September 16 and is now subject to an internal investigation by FIFA’s ethics committee.

The media-generated accusation resulted in the Attorney General’s office demanding access to Valcke’s emails. Permission was granted by FIFA on Thursday afternoon.

“FIFA informed the Office of the Attorney General of Switzerland (OAG) to unseal all email accounts belonging to Jéròme Valcke, suspended Secretary-General. Therewith, the OAG will have access to Mr Valcke’s email accounts as requested,” a statement from Switzerland’s top prosecutor read.

“Furthermore, the OAG is pleased to note that FIFA has handed over on its own initiative Valcke’s emails since May 2015.”

No legal procedure has been initiated against Valcke so far.

According to several media reports, FIFA had initially demanded certain conditions before Swiss prosecutors could view Valcke’s emails. But football’s world governing body reportedly backed down on Thursday afternoon under pressure from the Attorney General’s office.

Valcke, who has been secretary general at FIFA since 2007, had previously been at the centre of other corruption allegations by the media. He has never been found guilty of any wrongdoing.

The Swiss Attorney General has been investigating FIFA for several months into the 2018 and 2022 World Cup bids. In May, investigators raided FIFA’s Zurich HQ and seized documentary evidence.

In a separate case, the United States authorities earlier this year opened a criminal probe into alleged money laundering and racketeering by several football official from north and south America and the Caribbean.

INTERPOL and the US Federal Bureau of Investigation (FBI) are forging closer ties in combating organized crime and terrorism in the face of an ever-increasing number and range of global threats.

The enhanced cooperation between the two organizations follows a high-level meeting between FBI Director James Comey and INTERPOL Secretary General Jürgen Stock at the world police body’s General Secretariat headquarters in Lyon, France.

One of the main areas identified for increased information-sharing was in counter-terrorism, in particular the identification and interdiction of foreign terrorist fighters. With UN Security Council Resolution 2178 identifying INTERPOL as the ‘global law enforcement information sharing’ platform against foreign fighters, more than 50 countries including the US, have already provided information to INTERPOL on some 5,000 suspected and confirmed fighters linked to Syria and Iraq.

“International partnerships remain critical as we work to keep our nations safe from crime,” said FBI Director James Comey.

“Recent events underscore the pervasive nature of international terrorism and the increased need to share information. INTERPOL plays a crucial role by ensuring law enforcement agencies have access to real-time intelligence, which assists in identifying and countering common threats in order to protect those we serve,” added Director Comey.

Strengthening combined efforts in targeting organized crime was also a key area for discussion, especially in combating child exploitation, anti-corruption and asset recovery.

Director Comey was updated on the development of new operational tools being developed by INTERPOL to assist law enforcement in tracing and recovering criminal assets and combating corruption. These include the proposed creation of a new INTERPOL notice to assist member countries to locate, identify, obtain information about, monitor, seize, freeze and/or confiscate assets.

“As we face an ever-increasing range and scope of crime and terror threats, international cooperation between law enforcement agencies has never been so important,” said Secretary General Stock.

“INTERPOL plays a unique role in assisting police in each of our 190 member countries to identify and share intelligence leads, bridge information gaps and disrupt the organized networks behind a range of crimes which are often interlinked.

“However, this is not possible without the support and input from agencies such as the FBI, and I look forward to our working even more closely in the future to the benefit of the global law enforcement community and citizens worldwide,” concluded the INTERPOL Chief.

Connecting the FBI to the International Child Sexual Exploitation (ICSE) image database hosted at the INTERPOL General Secretariat, which helps coordinate global efforts against online child abuse, was also identified as an important area for future cooperation and to avoid duplication of effort.

The ICSE database helps identify an average of eight victims of child sexual abuse every day. More than 7,600 victims and 3,800 offenders have been identified thanks to the global collaboration of specialized law enforcement officers using the ICSE database.

As the continued expansion of access to the Internet provides organized crime networks with increased opportunities to commit cybercrime, often to fund other illegal activities, cybersecurity was also high on the agenda.

Earlier this year the FBI took part in an INTERPOL-coordinated operation targeting the ‘Simda’ botnet which had infected an estimated 700,000 computers worldwide and resulted in the seizure of servers used by cyber criminals to gain remote access to computers around the world.

The FBI also provides significant support to INTERPOL’s Chemical, Biological, Radiological, Nuclear and Explosives programme both financially and in the secondment of staff.

Sri Lanka Prime Minister Ranil Wickremesinghe said that Sri Lanka has decided to co-sponsor the US draft resolution ‘Promoting Reconciliation, Accountability and Human Rights’ in the island nation.

Along with the United States, the main sponsor of the draft resolution, Macedonia, Montenegro, United Kingdom of Great Britain and Northern Ireland have co-sponsored the resolution A/HRC/30/L.29 titled ‘Promoting reconciliation, accountability and human rights in Sri Lanka’.

Permanent representative in Geneva has already handed in the relevant documentation in this regard to the Council, the Prime Minister said.

Addressing the 50th Anniversary celebrations of CIMA Sri Lanka in Colombo last night, he announced the consensus with the United States on the draft resolution.

Prime Minister Wickremesinghe said the Government had reached a compromise with sponsors of the resolution on prosecuting allegations of serious human rights violations and potential war crimes under a Sri Lankan judicial mechanism that will include local, foreign and Commonwealth judges and lawyers instead of the international judges proposed by the OHCHR report.

Following extensive negotiations, the Government has managed to include several clauses in the document recognizing the progress made on reconciliation since January 2015 and LTTE crimes highlighted in the UN investigation report.

The PM has also announced that the Government had agreed to implement a political solution to the island’s ethnic problem and bring the necessary constitutional measures to address the issue.

“We can face the future without fear,” the Prime Minister said.

“The coup is over. Carrying out this coup was a waste of time and resources, and I assume full responsibility”, said General Gilbert Dienderé, leader of the junta of the Presidential Security Regiment, just a few hours after the interim President Michel Kafando and transitional government were reinstated in office.

“Our action was motivated by a series of reasons, which we announced during the coup, but we understood the people were not in favour of it. That is why we have given up, and now we know it is time to move ahead, toward peace and the stability of the nation”, added the General.

“What is important is that we avoided an armed confrontation, but there were however victims. I a ready to respond for what happened before justice”, explained the coup leader, dressed in the uniform of the Presidential Security Regiment (RSP) that carried out the coup.

Based on the latest update, the September 17 coup resulted in 15 dead and around a hundred dead in clashes between the RSP and demonstrators opposed to the coup.

In response to questions on the dissolution of the RSP, Dienderé responded: “It is not up to me to decide, but we have received guarantees in this sense and we will discuss this matter when the ECOWAS (Economic Community of West African States) return. My men are for the moment in military barracks and have abandoned all previously occupied posts. The disarmament modalities will in any case be decided by the military commanders over the next days”.

The fate of the RSP (which ahead of the coup the reforms commission suggested should be dissolved) is among the pending issues in the accord mediated by the ECOWAS, as well as a request for amnesty by the coup leaders. Another unresolved issue remains that of the participation of candidates of the Congress for Democracy and Progress (CDP) of former president Blaise Compaoré in the next elections.

Peace will be signed within six months at the latest: these are the words used by Colombian President Juan Manuel Santos in announcing an accord between the government of Bogota and FARC (Revolutionary Armed Forced of Colombia) guerrilla to end an over half a century conflict.

“In exactly 6 months we will be definitively ending the last and longest war fought not only in Colombia, but all of America. It is an enormous step”, added the President, after shaking hands with the second-in-command of the guerrilla group, Timoleon Jimenez, known as ‘Timochenko’, in a ceremony in Havana in the presence of Cuban President Raul Castro, who is hosting the negotiation begun three years ago. Confirmation arrived yesterday of a landmark turn in the peace process when Santos, for the first time, departed for Cuba to sit at the negotiating table.

Based on a statement released by the mediator nations, Cuba and Norway, the sides reached an accord on a delicate issue of the judiciary consequences of the conflict, one of the main aspects that has numerous times stalled the mediation.

The deal signed in fact foresees the creation of a “special jurisdiction for peace”, integrated by Colombian magistrates with the assistance of foreign jurists, with the duty of “ending impunity, obtaining the truth, establishing compensation for the victims and judging and applying sanctions for those responsible of serious crimes committed during the conflict”. These include crimes against humanity, war crimes and torture. An amnesty was instead announced for political crimes, to be defined by an apposite law.

In regard, Timoshenko stressed that the magistrates will need to address not only the activities of the guerrilla, but also other protagonists of the violent clashes, such as security forces and paramilitary groups.

Today’s accord closes a negotiation that over the past two years led to deals between the government and FARC on other delicate issues, such as land reform, the reinstatement of former rebels and an end to the production and trafficking of drugs. The sides also established regulations for mine removal throughout the conflict zones.

“This marks the first time in history that a government and armed group create a system of this sort, within their national juridical system”, added Santos, emphasizing however that the final accord will be submitted to a vote of the Colombian people.

Wednesday evening, we suggested that Vladimir Putin’s explicit promise to go ahead with airstrikes against terrorist targets in Syria with or without the help of the US effectively marks the end of Washington’s years-old effort to destabilize and ultimately remove the Assad regime.

The Kremlin’s pronouncement came just a day after the mainstream media began reporting that Moscow and Tehran are coordinating their efforts on the ground (something which should come as no surprise to anyone) meaning any Sunni extremists and/or CIA-trained “freedom fighters” intent on seizing control of the country will now need to go through Russia and Iran, with the latter now seemingly willing to make the badly kept secret of its military support for Assad no secret at all.

Of course the thing about irreparably bad situations is that although they cannot, by definition, get better, they can always get worse and for the US in Syria, that would mean China showing up. Beijing has made a concerted effort this year to project the growing power and influence of the PLA navy. That effort has so far involved an unprecedented land reclamation effort in the Spratlys, a “rescue” operation in the Yemeni port of Aden, and a surprise appearance off the coast of Alaska.

Given that, and given what we know about Beijing’s support for Moscow and Tehran, the following from pro-Assad Al-Masdar news shouldn’t come as a complete surprise:

The recent arrival of the Russian Marines and Air Force to the Syrian port-city of Tartous has generated a significant amount of interest around the world, as the possibility of Russia’s direct military intervention becomes the focal point of the war on ISIS (Islamic State of Iraq and Al-Sham).

Should the Russians begin military operations in Syria, what role with the U.S. led “Anti-ISIS Coalition” play in combatting the terrorist group? Will they coordinate with one another? Will they avoid one another?

Russia seems poised to take a similar approach to the U.S. led Coalition; however, they are not seeking the assistance of the neighboring Arab countries to combat the terrorist group.

Instead, the Russians appear to have a contingency that involves another world power that was absent from the U.S. led Anti-ISIS Coalition: China.

On Tuesday morning, a Chinese naval vessel reportedly traveled through Egypt’s Suez Canal to enter the Mediterranean Sea; its destination was not confirmed.

However, according to a senior officer in the Syrian Arab Army (SAA) that is stationed inside the Syrian coastal city of Latakia, Chinese military personnel and aerial assets are scheduled to arrive in the coming weeks (6 weeks) to the port-city of Tartus – he could not provide anymore detail.

This comes two years after China warned that turmoil in Syria could have negative implications for the global economy and 18 months after Beijing, along with Moscow, used their security council vetoes to undercut a UN resolution calling for the crisis in Syria to be referred to the Hague.

By Louisa Reynolds

Comedian Jimmy Morales secured a surprising victory in the Guatemalan elections on Sept. 6, after he managed to portray himself as a political outsider in the midst of a deep political crisis that has led to widespread rejection of the political establishment.

With 100 percent of the ballots counted, Morales won 24 percent of the vote, while the second place was a tight race between UNE (National Unity of Hope) candidate Sandra Torres, with 19.8 percent and Manuel Baldizón, of the Lider (Renewed Democratic Liberty) party with 19.4 percent. Since none of the candidates secured more than 50 percent of the vote, Morales and Torres will face off on Oct. 25.

The extremely close race for the second place between Torres, former first lady to Álvaro Colom (2008-2012) and Baldizón, a right-wing populist, is likely to lead to a partial recount.

Over the past 17 years, Morales has become a well-known face on Guatemalan television. With a thick moustache, cowboy boots and hat, Jimmy and Sammy Morales play the roles of “Nito and Neto” in the comedy sketch “Moralejas” (Morals).

The characters embodied by the two brothers exploit the stereotype of the eastern Guatemala cowboy that has become engrained in the country’s popular culture.

In their latest movie, released in 2007, Nito and Neto run for office in a parody of Guatemalan politicians’ demagoguery and corruption. As if their on-screen role had presaged what the future had in store for them, Jimmy Morales, who plays “Neto,” could really become the country’s next president.

A protest vote

Baldizón, who promised to re-instate the death penalty and impose a flat tax, was the favorite to win the elections. But five months before the general elections, a series of scandals uncovered by the International Commission Against Impunity in Guatemala (CICIG), a United Nations funded investigatory body, shook up the political scene.

The storm began on Apr. 16, when CICIG revealed that top government officials were involved in a huge customs fraud network known as “La Línea” (The Line), including President Otto Pérez Molina and Vice President Roxana Baldetti.

In a dramatic sequence of events, thousands of Guatemalans took to the streets week after week demanding Pérez Molina’s and Baldetti’s resignation. Two women went as far as going on hunger strike outside Guatemala City’s cathedral and a man mock crucified himself outside the national palace.

On May 8, Baldetti was forced to step down and was charged with corruption. The protests continued, most of Pérez Molina’s cabinet members resigned, leaving his government in a state of disarray, and the business elite, which had previously supported Pérez Molina, made a quick U-turn and joined the voices demanding that he should step down.

An attempt to impeach Pérez Molina in Congress floundered in the middle of August after his party, the Patriot Party (PP), secured an alliance with Lider and the minimum number of votes required to strip the president of his prosecutorial immunity was not reached. Guatemalans were enraged by Lider’s collusion with the PP and protestors burnt effigies of Baldizón during anti-corruption protests. Baldizón’s campaign slogan “Le Toca” (It’s his turn) was morphed into “No te toca Baldizón” (It’s not your turn, Baldizón) and went viral on social media.

Then CICIG uncovered another major corruption scandal. This time, it was Baldizón’s running mate, Edgar Barquín, who was tainted. Barquín, a former president of Guatemala’s central bank, is accused of involvement in laundering US$937 million — proceeds from drug trafficking activities — that was later used to finance the presidential campaign of the Lider and GANA (Grand National Alliance) parties in 2011. Several of Lider’s congressional candidates, including Edgar Barquín’s brother, Manuel, were also allegedly involved.

The scandal, known as the “Politics and Money Laundering” case, sealed Baldizón’s fate. While his popularity plummeted, Morales, who was running with the minuscule and underfunded FCN (National Convergence Front) party, was rising steadily.

A poll published by Contrapoder magazine and Canal Antigua TV channel in June showed 35 percent of those surveyed would vote for Baldizón. He was trailed by Torres, with 12.9 percent and Morales, with 10.4 percent.

The next poll, published on Aug. 10 by Prensa Libre newspaper, showed the number of respondents willing to vote for Baldizón had fallen to 24.9 percent. And Morales had managed to overtake Torres and was now in second place with 16.2 percent. Torres lagged behind with 14.7 percent.

A week before the elections, a recording in which Baldizón urged his mayoral candidates to mortgage their properties and cars to shuttle voters to the polls and said his party would use votes to “kick his opponents’ asses,” was leaked to the press. Angry protestors took to the streets with banners urging voters to reject “Baldinarco.”

On Sept. 1, Congress stripped Pérez Molina of his prosecutorial immunity so that he could be investigated for corruption charges. Shortly after a criminal court issued a warrant for his arrest, he resigned. He was replaced by Vice President Alejandro Maldonado Aguirre who will lead the country until January 14, 2016, when the new president is sworn in.

Morales is no “outsider”

The last poll, published by Prensa Libre 48 hours before the elections, revealed a dramatic shift: 25 percent of those surveyed said they would vote for Morales, who displaced Baldizón as the frontrunner in the race, 22.9 percent said they would vote for Baldizón, and 18.4 percent opted for Torres. With Morales as the surprise winner of the first round, Prensa Libre’s prediction proved to be correct.

“Voters identified him [Morales] as an anti-systemic candidate who could embody their discontent with the traditional political establishment,” says political analist Edgar Gutiérrez to Latinamerica Press.

But Guatemala heads for the second round, Morales has come under greater scrutiny and for many voters the fact that the FCN party was founded by right-wing army veterans has set alarm bells ringing.

Morales has described himself as a “Christian nationalist” and at times his discourse veers towards the far-right. He denies that genocide was perpetrated against Guatemala’s indigenous population during the armed conflict and he advocates re-instating the death penalty.

“What stands out about Jimmy Morales is the contradiction in adopting a discourse in which you portray yourself as anti-systemic whilst running for a very conservative party,” says political analyst Javier Brolo to Latinamerica Press.

Critics have also warned that the FCN lacks a coherent set of policy proposals and that the private sector appears all too eager to fill that void, creating a military-business alliance that looks startlingly similar to Pérez Molina’s PP.

“The party is like an empty shell. Since Morales doesn’t have a shadow cabinet behind him, the business elite will try to fill that void; it’s a similar alliance to the one that was made with Pérez Molina,” says Sandino Asturias, director of the Center for Guatemalan Studies (CEG), to Latinamerica Press.

By Terence Corrigan*

South Africa has seldom approached Heritage Day with a more fractured sense of what constitutes our heritage and what should be celebrated. Angry exchanges over the character of our universities, language policy, public memorials and so on have exposed the divides that run through our society and have even called into question whether we are one nation.

We are not alone in this. ‘Heritage’ describes peoples’ communal inheritance: their mythical and historical memories, symbols, religions, music and food. Heritage is intrinsic to peoples’ cultures. It helps provide a sense of identity and belonging. Across the world, growing societal pluralism and accelerating information flows are straining longstanding assumptions about it.

Heritage — and its role in underwriting identity — is immensely important to Africa. As the African Peer Review Mechanism has consistently found, a cardinal concern for the continent is managing diversity or forging what we South Africans call social cohesion.

The challenges are well known. African states were largely created for the convenience of the colonial powers; few are ethnically homogenous. Following independence, the focus was on creating ‘new’ societies.

The sociocultural landscapes new African leaders inherited were often alien to their citizens. Administration and higher education depended on foreign languages, and sometimes evidence of Africa’s past had been eliminated. Benin City, for example, was sacked in 1897, and its artefacts (not least the magnificent bronze statuary) sold or removed to foreign museums.

Physical monuments from the colonial era could be dealt with relatively easily. Some were removed (statues of Cecil John Rhodes in Harare and Bulawayo succumbed to this fate), while others survived unnoticed. Indeed, the city of Lokoja in Nigeria is now touted as a tourist destination precisely because it of its colonial architecture and its role in that era. A headline in a Nigerian magazine recently declaimed: ‘Lokoja: Colonial Town, Rich History’.

More pertinently, Africa has had to grapple with the challenges of finding appropriate governance and developmental approaches that speak to indigenous cultures, but contribute to modernity. Tanzania’s Julius Nyerere invoked Africa’s past in his collectivist Ujamaa programme, arguing that Africans were inherent socialists.

Africa has, in other words, tried to integrate its heritage and its present. To emphasise neglected indigenous systems has a sound rationale, attempting to root governance and belonging in the experiences of Africa’s people. But this has proved to be frustratingly difficult.

African heritage is a complex, diverse and contested amalgam of experiences, defined by history, geography, religion, politics and language. Africa pays politically for these divides. In an environment of poverty and bitter rivalry, populist communal mobilisation is appealing. Appeals to mythical identities are powerful. Political opportunists have all too often manipulated diversity.

More recently, after decades of independence, questions are increasingly asked about the myths that have legitimised post-colonial orders. Thus in Kenya, the Mau Mau movement — once dismissed by Kenya’s elite as ‘political hooliganism’ — is now accorded a place of honour. A museum commemorating it is being established in Nyeri County.

In the more restricted environments of Angola and Zimbabwe, troubling questions remain about the violent crushing of dissent at the hands of the ruling liberation movements during the 1970s and 1980s.

In more pacific Tanzania, visitors are struck by the omnipresence of the image of the late president Nyerere. Some years back, in Dar es Salaam, I asked my host how Nyerere was regarded. He sighed: ‘He was our father. He created Tanzania. But he also hurt many people.’

Indeed. Nyerere directed a remarkable feat of nation building (including the development of Kiswahili as a modern language), but he pushed through ruinous economic policies and incarcerated opponents.

Anthropologist Dr Lotte Hughes argues that, ‘postcolonial states are now at a crossroads in history and heritage as they strive to forge a national identity’.

Signposts adorning these crossroads abound. Is the Swazi Reed Dance a valuable part of Swazi identity, or a patriarchal throwback with no place in today’s world? Are coming-of-age rituals a necessity for social integration or a social and medical menace? Can governance based on religious traditions — as in the Sharia states of northern Nigeria — be condoned within Africa’s multi-ethnic polities? Can minorities demand official recognition and support for their cultural development?

These are not easy questions. The answers are equally difficult, since any policy response is likely to be buffeted by politics. They demand choices that may offend some to placate others.

One of the key lessons of all this — one demonstrated by SA’s experience — is that heritage is not necessarily a unifying asset. In deeply divided societies, it might easily have the opposite effect. Heritage policies must be sensitive to this fact.

Scholarship into Africa’s heritage should be encouraged, along with open debate about it. Heritage can only benefit from interrogation and introspection.

Finally, ordinary people must take control of their heritage. While this has the well-known danger of positioning heritage as a tool for exclusionary mobilisation, it also offers the possibility of rejuvenating and mobilising it for social inclusion. Indeed, a phenomenon gaining ground in Africa is that of community museums where local experiences are showcased.

Meanwhile, perhaps we should consider renaming 24 September Heritages Day?

*Terence Corrigan is a Research Fellow with SAIIA’s Governance and APRM Programme. This article was originally published by Business Day.

Much of the media buzz surrounding Chinese leader Xi Jinping’s regal visit to the United States centered around a limited agreement to prevent cyber hacking. Although that pact is needed, perhaps more attention in U.S.-China relations should be given to dangerous flashpoints in the South and East China Seas. In these places, the two nuclear-armed powers could be dragged into a conflict that could escalate perilously.

In both seas, China is engaged in territorial disputes with other countries in the region. Because of President Barack Obama’s “pivot to Asia,” the United States has been strengthening its Cold War-era alliances with some of these nations to contain the rising China. Because the Cold War is so yesterday, the U.S. government no longer calls its policy of encirclement “containment,” but that’s still what it is. Major U.S. formal allies in the area of these seas include Japan, South Korea, the Philippines, and Australia, and a major informal ally is Taiwan. Also, the United States, with China in mind, has improved relations with other non-allied nations in the region that are uneasy about China, such as the former U.S. enemy and still communist Vietnam.

As part of the “pivot,” the United States has transferred more of its military forces to the East Asian region. And there is talk of reestablishing a U.S. military presence at Subic Bay naval base in the Philippines, from which Filipinos expelled the United States in 1992. Even worse, Admiral Harry B. Harris, Jr., the top U.S. commander in the Pacific, has said the U.S. plans to get more directly involved by increasing U.S. naval patrols in the South China Sea.

Instead, Obama and Xi should usefully discuss how to tame the competition in these two seas among the local countries of the region, which has taken the form of building artificial islands and reefs and repeated confrontations at sea between the parties. With a $19 trillion national debt, however, the United States should consider staying out of such local disputes over mostly tiny, uninhabited islands. A shooting war in either sea between China and a U.S. ally over barren rocks could drag the U.S. into a major conflict through these repurposed Cold War alliances. Although the American foreign policy and military elites, with a vested interest in the far forward U.S. East Asian “defense” perimeter, speak of strategic shipping lanes and potential natural resources, such as oil and gas, the closure of those shipping lanes or prevention of development of those resources because of a local conflict should hardly concern the faraway United States.

What the United States really needs is a radical rethinking of its costly global security arrangements and alliances. As President, and former General, Dwight D. Eisenhower surprisingly realized, military and all other indices of national power are based on a sound economy; he cut the military budget to help renew the American economy, which boomed during the 1950s. Such national renewal, through the cutting of defense spending–the opposite of what many of the Republican and Democratic presidential candidates are advocating–is what’s again needed. (And let’s throw in a taming of the even larger and more out of control social entitlement programs too.)

Furthermore, unlike the early part of the Cold War, in all regions of the world, U.S. allies are much wealthier in per capita terms than their enemies. These allies should do more for their own defense, but why should they do so when they can free ride off the U.S. taxpayer? In East Asia, Japan, Taiwan, South Korea, and Australia all need to do more, but they have no incentive to do so. Even the less affluent Philippines, which squawks about the Chinese threat and is suing China over an island dispute in an international tribunal in The Hague, has a decrepit and corrupt military that needs to be reformed and upgraded. Although kicking the United States out of Subic Bay Naval Base and Clark Air Force Base in 1992, Filipinos still have outrageously counted on the mutual defense treaty with the United States to protect them.

Such free riding needs to end. If countries in the region want to conduct skirmishes or even wars over desolate, worthless rock outcroppings in their local areas, the United States should let them without participating. Who wants to have a nuclear war with China over such nonsensical trouble spots. Ideally, the United States should abrogate all such outdated and expensive alliances and retract its now far-forward defense perimeter back to Hawaii, Guam, and Wake Island in the mid-Pacific Ocean, still thousands of miles in front of the U.S. west coast. Alliances are not ends in themselves; they are a means to national security. George Washington wisely warned against the United States becoming involved in “permanent alliances,” and Thomas Jefferson astutely cautioned against the country being bogged down by “entangling alliances.” Obama is taking the opposite course by strengthening alliances that have become both permanent and entangling.

The United States should allow China to naturally rise as a world power, just as Britain allowed the United States to peacefully ascend in the 19th century. Unlike the European powers of the day, Britain and the United States had thousands of miles of ocean between them, so that they posed less of a threat to each other. China and the United States have the same advantage. Also, the recent slowing of China’s economic growth and stock market plunges have exposed China’s many hidden weaknesses, which inaccurate economic data have long concealed. At the time of President Xi’s visit to America, the United States is not insecure vis-à-vis China and should not act like it.

This article was also published at The Huffington Post and is reprinted with permission.

The Hong Kong government should drop charges against peaceful protesters and launch a thorough investigation into its handling of the “Umbrella Movement” pro-democracy protests between September 28 and December 15, 2014, Human Rights Watch said Thursday.

It should also restart the reform process to realize the equal right of Hong Kong people to elect and to be elected in the selection of top leaders.

“A year after Hong Kong people staged an unprecedented protest for democracy, the government continues to deny this fundamental right, while pressing charges against student leaders for organizing the peaceful movement,” said Sophie Richardson, China director at Human Rights Watch. “This raises real concerns about adherence to international human rights standards.”

The Umbrella Movement protests were Hong Kong’s longest-running demonstration, during which peaceful protesters blocked major thoroughfares in Mongkok, Admiralty and Causeway Bay. The protests, which ended peacefully, called for genuine universal suffrage for Hong Kong people, a right guaranteed in the city’s functioning constitution, the Basic Law.

Although Hong Kong enjoys an independent judiciary and a professional police force, there are growing concerns over Beijing’s encroachment on these institutions, and on the rights to political participation, expression, and assembly. In July, China enacted a new State Security Law which for the first time stipulates “responsibilities” for people in Hong Kong to protect national security, raising concerns in Hong Kong as the territory’s inhabitants have long resisted calls for enacting such legislation domestically.

In September, chief of the central government’s liaison office in Hong Kong, Zhang Xiaoming, delivered a lengthy speech that caused considerable alarm in Hong Kong. Zhang said that the Chief Executive, as a pivotal position appointed by and accountable to the central government as well as to Hong Kong, “transcends the executive, legislature and judiciary.” He further stated that Hong Kong did not have “separation of powers” and that “the separation of powers political system… cannot be applied to the HKSAR in its entirety.”

The central government’s liaison office has been taking an increasingly prominent role in commenting on local affairs, and these remarks have been widely interpreted as a signal that Beijing intends to increasingly assert authority over Hong Kong through the chief executive, even in matters reserved to local determination.

Charges against Protesters, Police and Counter-Protesters

About one thousand people, mostly pro-democracy protestors, were arrested in connection with the “Umbrella Movement.” They were arrested for crimes including “unlawful assembly,” “obstructing police,” “assaulting officers,” and/or “contempt of court.” Most were quickly released and only 160 have been charged so far; among them, about 30 percent have been convicted for “assaulting officers,” “criminal damage,” “unlawful assembly” and other crimes. In a number of cases, magistrates threw out the charges because officers’ statements against the protesters were “contradictory” or “unreliable.” In September 2014, at the start of the Occupy protests, the court ordered the release of three student leaders, including Joshua Wong, who were held on charges including “unlawful assembly,” stating that their detention was “unreasonably long.”

In August 2015 authorities announced charges against student leaders Joshua Wong, Alex Chow and Nathan Law for “unlawful assembly” and “inciting others to take part in an unlawful assembly,” which could result in sentences of up to five years.

Some of the charges against protestors stem from alleged violations of Hong Kong’s Public Order Ordinance, which requires organizers to notify police of demonstrations involving more than 30 people seven days in advance, and requires organizers to get a “notice of no objection” from the government before proceeding. The UN Human Rights Committee has criticized the law, saying that “it may facilitate excessive restriction” to basic rights, and Human Rights Watch has urged the Hong Kong government to amend the law, as it is incompatible with international standards on the freedom of assembly.

The police’s internal review board, the Complaints Against Police Office (CAPO), is mandated to “oversee[s] the investigation and successful resolution of all complaints made both externally and internally against members of the force.” CAPO has said it has received 2,427 complaints against police related to the Umbrella Movement between September 2014 and March 2015; it submitted only 150 cases to its supervisory body, the Independent Police Complaints Council (IPCC). The number was reduced because some cases were duplicative, while others were not deemed to stem from “first-hand reports.” These included alleged assaults by police and abuse of power. Among these 150 cases, IPCC is only investigating 16, because complainants have either withdrawn the complaints or cannot be reached. To date, only those officers caught on film beating protester Ken Tsang have been arrested. As a result of disagreements between the CAPO and IPCC, no criminal proceedings have yet been taken against officer Franklin Chu, whose beating of a non-resisting protester in Mongkok was also filmed. That case may have to go to Chief Executive C.Y. Leung for a decision if the two bodies continue to disagree.

At least six individuals have been convicted of wounding or assaulting pro-democracy protestors and a journalist in five incidents in Mongkok and Admiralty.

But none of those convicted appear to have been involved in the assault of peaceful protesters in Mongkok and Causeway Bay on October 3, during which groups of unidentified, some masked, men assaulted protesters while police failed to assist the protesters for hours. Protesters and video footage also showed that officers let suspected assailants leave without having taken down their details or arresting them. Although police announced on October 4 that 19 suspected assailants with organized crime backgrounds were arrested, none of those people appear to have been prosecuted or convicted.

Lack of Thorough Investigation into Handling of Protests

Hong Kong’s chief of security has stated that investigations into individual cases of police misconduct and violent attacks on protesters through existing mechanisms are adequate. The IPCC, as noted by the UN Human Rights Committee in its Concluding Observations in 2013, has limited powers and lacks independence. It only has “advisory and oversight functions to monitor and review the activities of the CAPO” and its members are political appointees chosen by the Chief Executive. The HRC has recommended that the Hong Kong government “take necessary measures to establish a fully independent mechanism” to conduct investigations about police abuse and to empower it to “formulate binding decisions.”

Absent a fully independent body to check police abuse, Human Rights Watch reiterates its earlier call for an independent and thorough investigation into the government’s handling of the Umbrella Movement protests. Human Rights Watch documented the police’s use of excessive force in a number of occasions, at times without warning, leading to injuries of protesters. It also noted reports of police officers’ apparent toleration of attacks on protesters in Mongkok and Admiralty on October 3.

A March public opinion survey conducted by Hong Kong University showed public confidence in the IPCC has sunk to a historic low, largely due to public perception that the body failed to act effectively in response to complaints about police behavior during the Occupy protests. Satisfaction with the Hong Kong police has also seemed to have slipped in 2014 and 2015 according to another survey.

“Unless the government orders a thorough investigation into the handling of the protests, the police’s reputation will be stained for many years to come,” Richardson said.

Prospect for Democracy Dimmed

The political impasse stemming from Beijing’s refusal to grant Hong Kong people genuine universal suffrage continues. In June 2015, Hong Kong’s semi-democratic legislature rejected the electoral reform package for the selection of the Chief Executive proposed by the Hong Kong government and backed by Beijing. Since then, the central government has insisted that this framework for the selection of the Chief Executive — which would expand the franchise but allow a Beijing-dominated nominating committee to screen out candidates it did not like—is its only proposal.

In its August 31, 2014 decision, China’s top legislative body, which announced the framework for screening candidates, also ruled against electoral reforms for the selection of members to the Legislative Council elections in 2016. The same decision also predicated reforms to the Legislative Council on the framework for the election for Chief Executive, meaning that until the latter issue is first resolved, the Legislative Council is also unlikely to be democratized.

In order to restart the electoral reform process in Hong Kong, the Chief Executive needs to first submit a report to Beijing justifying the need for further democratization. The Legislative Council can also introduce a new bill reflecting the ongoing demand for full political rights.

“Hong Kong people went onto the streets not only for their rights to democracy but also to express alarm over erosion of their treasured autonomy,” Richardson said. “The Hong Kong government has the power to push back against Beijing’s overreach, and to ensure that the institutions that protect human rights continue to uphold the law, not succumb to political pressure.”

By Neil Berry

British people are remembering the “Battle of Britain,” the great drama that unfolded in the sky over southern England 75 years ago when Royal Air Force fighter pilots faced down the German Luftwaffe.

The heroism of the “few,” who included volunteers from the British Empire and occupied Europe, deterred Adolph Hitler from invading Britain. This was a moment when Britain faced an all too tangible “existential threat,” with the prospect looming of total European capitulation to Nazi totalitarianism. Indeed, viewed from the perspective of 1940, the assertion of UK Prime Minister David Cameron that Britain confronts a current existential threat in the shape of Daesh appears preposterous.

There has been an alarming loss of proportion in British political discussion. It was former UK Prime Minister Tony Blair’s hyped-up portrayal of Saddam Hussein as a new Hitler with the capacity to mobilize weapons of mass destruction against British targets that precipitated Britain’s calamitous military intervention in Iraq.

Loss of proportion has marked the demonization by politicians and commentators of the new leader of the Labour Party, Jeremy Corbyn. You could be forgiven for thinking that Corbyn, a pacifist republican and a vastly different Labour leader from Tony Blair, was an existential threat to Britain in his own person. During the recent Battle of Britain memorial service held at St Paul’s Cathedral, Corbyn stood in respectful silence, declining to sing the national anthem with its opening line “God save our gracious Queen.”

This was portrayed as proof that he is utterly unfit to hold public office, with no effort spared to fix an image of him as a politician who despises his own country. Yet the truth is that the Battle of Britain was fought in the name of democracy, of the right to free thinking and free speech.

No small part of the reason for the vilification of Corbyn is that he has been an implacable enemy of British foreign policy in the post-9/11 era. Prominent among his political allies are Muslim activists who opposed war in Iraq and who support the Palestinian cause. Indeed, no British politician has had been more consistent in his excoriation of Israeli human rights abuses. Small wonder that the general demonization of Corbyn has been supplemented by the particular demonization of him by Zionists.

“Friends of Israel’ stop short of accusing him of anti-Semitism but insinuate that he has compromised himself by association with holocaust-deniers and Judaeophobes dedicated to the destruction of the Jewish state. These are smears — but potentially damaging smears and Corbyn will have to demonstrate that he is none of the things his Zionist detractors allege.

Opposed to direct UK military intervention in Syria, Corbyn faces a major test in November when parliament is expected to debate the question of possible air strikes there, with David Cameron and most of his Conservative Party, plus not a few Labour MPs, favoring such action.

What sets Corbyn’s leadership apart is that he was elected by a new and wider voting system that has resulted in the recruitment of many new young party members enthused by his pledge to make the Labour Party properly democratic and transform the conduct of politics.

In his first parliamentary confrontation as party leader with David Cameron, Corbyn put “crowd-sourced” questions to the prime minister, in acknowledgment of a widespread hunger for a fresh inclusive style of political debate.

Nobody has done more to stimulate this hunger than Tony Blair, a purported democrat with the mentality of an autocrat. The most discredited leader in the history of the Labour Party, Blair cautioned that those who voted for Corbyn were condemning the party to unending unelectability. It was a warning that backfired in spectacular fashion, serving only to swell support for Corbyn’s leadership campaign. Many who voted for Corbyn were plainly seeking a leader committed to rehabilitating the Labour Party as a moral force; some may positively prefer an unelectable but ethical Labour Party to one defined by Blair’s bellicosity and Realpolitik.

It is a rich irony that Blair effectively enrolled himself as a Corbyn lobbyist. Jeremy Corbyn and his supporters are entitled to wonder: With enemies like Tony Blair, who needs friends?

The resounding endorsement by global leaders on 27 September in New York of the groundbreaking and transformational 2030 Agenda for Sustainable Development, more than two years in the making, sparks new hope and optimism for multilateralism. Crafted to be universal, people-centered and inclusive, the 2030 Agenda will promote peace and prosperity, touching all lives – young and old, poor and affluent, men and women – through its holistic, rigorous and integrated approach to ending poverty everywhere, in all of its dimensions.

Not only has the design and formulation of the 2030 Agenda been managed through an inclusive, global process on an unprecedented scale, incorporating the priorities and voices of more than 3.5 million people from Asia and the Pacific alone, but in forging the new agenda there has also been a shared recognition by global leaders of the need to save our planet from calamitous challenges such as climate change, caused by an unchecked rise in greenhouse gas emissions which have, for years, disrupted and reversed economic and social progress.

The 2030 Agenda, based on 17 goals and 169 targets, may seem overly ambitious to some, but poverty eradication cannot be sustained without comprehensive progress in economic growth, social justice and ecological sustainability. This is a bold and inspirational new roadmap that will guide us to more sustainable growth, which is resource-efficient and respects planetary boundaries – meeting our present needs without mortgaging the wellbeing of future generations.

This change is urgently needed in the countries of Asia and the Pacific. Although our region has an impressive track record of economic growth and poverty reduction, more than 1.4 billion people still live in poverty, social disparities are widening and growth remains inefficient and wasteful. Our region has a shared responsibility to lead, which is why mainstreaming the 2030 Agenda in development plans and budgets, and backing them with strong oversight will be critical for successful implementation.

Five conditions must be met to pave the way for Asia-Pacific governments to make this happen:

First, sufficient financial resources are needed. The Economic and Social Commission for Asia and the Pacific (ESCAP) estimates that the Asia-Pacific region will need to invest between $2.1 trillion and $2.5 trillion per year to fund a comprehensive agenda for sustainable development. These resources are available: regional national savings total nearly $8.9 trillion, financial assets of the wealthiest regional individuals are estimated to be about $35 trillion, and foreign exchange reserves account for more than $7 trillion. Most of these sources of savings are currently adding to liquidity, held dormant in deposits or financing third-party country deficits. We need instead to effectively harness them along with unwavering political commitment to exploit domestic resources for development. Developing economies of our region have, on an average, among the lowest tax-to-GDP ratios in the world. Leveraging the potential of strengthened tax regimes is key; public interest must override the vested interests so that governments can remove tax exemptions and tackle tax evasion practices which are obstacles to investment in better access to basic services.

Second, good governance and inclusion has to be embedded in policy execution and implementation. The capacities of governments to engage multiple interest groups with widely varying perspectives, to effectively regulate excesses, monitor policy impacts and adjust policy responses are now critical. Governments must also become more adept at dealing with the unexpected and unpredictable events – and enabling all groups in society to respond positively to environmental, economic or social shocks.

Third, innovations, new technologies and associated know-how must drive sustainable development across the region, yet innovation gaps in Asia and the Pacific remain very large. Only five Asia-Pacific countries are featured in the top 20 of the 2014 Global Innovation Index. Effective alignment and reinforcement of science, technology and innovation, through the right policies and regulatory frameworks as well as partnerships to facilitate technology transfer, will be mission-critical for successful sustainability.

Fourth, we need to pair innovation with resources, enabling countries to find and adapt the best policy options for sustainability. Partnerships and stronger, more diversified regional platforms for South-South cooperation, such as those provided by ESCAP and its Asia-Pacific Forum on Sustainable Development, provide great opportunities for our region to lead the way in ending poverty, transforming lives and protecting the planet.

Fifth, climate action must be integrated across all areas of policy and governance – social, environmental and economic. While emissions must be reduced through a focus on low-carbon energy, transportation and buildings and through energy efficiency, we must also build more resilient societies, prepared for frequent and extreme weather events and their impacts, such as changes in food production systems and migration.

*The author is an Under-Secretary-General of the United Nations and Executive Secretary of the Economic and Social Commission for Asia and the Pacific (ESCAP). She is also the UN’s Sherpa for the G20 and previously served as Governor of the Central Bank of Pakistan and Vice President of the MENA Region of the World Bank.

By Britta Schmitz

“Investing in ECD boosts economic growth, it offsets inequality and it helps eliminate crime and violence,” UNICEF Goodwill Ambassador and world famous singer Shakira said at a press conference Tuesday.

“It is, without a doubt, the most effective way to guarantee a more stable world, peaceful world and a more prosperous world. But we need more commitment and that’s why we’re here this week.”

ECD (early childhood development) is based on four pillars: safety and protection, health and nutrition, early childhood education and stimulation and care.

Shakira eagerly supports UNICEF’s ECD program because she knows about the importance of the first five years in the life of a child. She has been working on education programs since she was 18 years old and was stunned when she first learned about ECD and the effect it has on producing responsible adults. Therefore, she shifted her focus from working with children who are already in school to children under the age of five.

“If the child does not get proper nutrition, then the brain will not develop properly,” UNICEF Executive Director Anthony Lake told journalists.

Scientific findings show that brain development is most intense during the first five years when almost 1,000 neural cells connect every second.

“When a child is subjected to violence or abuse, whether in the family or from living in conflict situations, … the brain does not develop as well as it could have,” Lake said.

According to UNICEF, almost 160 million children or one-fourth of all children in the world under the age of five are cognitively and physically stunted due to malnutrition, lack of education, unstable conditions in their countries or domestic violence.

“It doesn’t cost very much for families to give children the stimulation they need so their brains will develop and the return on those investments are huge,” Lake said.

“We know that toxic stress literally creates a weak foundation,” Harvard scientist Dr. Jack Shonkoff told journalists. “It means that we have to work harder, we have to spend more money, it’s more complicated.”

To support her good cause Shakira even sang two lines of the famous John Lennon song Imagine to the journalists.

“It’s a matter of putting children at the centre of the social, economic and political debate,” Shakira said. “Children’s basic needs […] need to become a priority over any other human investment.”

Speaking on the migrant crisis, Lake said “A generation from now, those same hatreds and that same conflict can be with us unless we do more to intervene in the lives of those children, including the very youngest for the sake of their future and for the sake of Syria.”

The Syrian war rages on, its devastating civilian toll rising with no viable political solution in sight. Diplomacy is stymied by the warring parties’ uncompromising positions, reinforced by political deadlock between their external backers. The U.S. is best placed to transform the status quo. A significant but realistic policy shift focused on dissuading, deterring or otherwise preventing the regime from conducting aerial attacks within opposition-held areas could improve the odds of a political settlement. This would be important, because today they are virtually nil. Such a policy shift could begin in southern Syria, where conditions are currently most favourable.

While the White House has declared its desire for an end of President Bashar Assad’s rule, it has shied from concrete steps toward this goal, pursuing instead a strategy to “degrade and ultimately destroy” the Islamic State (IS), which it deems a more serious threat to its interests.

Yet, a year into that strategy, the overall power of Salafi-jihadi groups in Syria (as in Iraq) has risen. This is no surprise: the Assad regime’s sectarian strategy, collective punishment tactics and reliance on Iran-backed militias, among other factors, help perpetuate ideal recruitment conditions for these groups. By attacking IS while ignoring the regime’s ongoing bombardment of civilians, the U.S. inadvertently strengthens important aspects of the Salafi-jihadi narrative depicting the West as colluding with Tehran and Damascus to subjugate Sunnis.

Salafi-jihadi groups, including IS and Jabhat al-Nusra, al-Qaeda’s Syrian affiliate which fights both IS and the regime, are strongest in the north and east, where they have exploited disarray and conflicting priorities among the opposition’s external sponsors. While the U.S. has attached greatest importance to the battle against IS, for example, Turkey has pressed for a more concerted effort to topple the Assad regime, while pushing back against Kurdish groups allied with Iran. Continuing disagreement has prevented establishment of a northern no-fly zone, a key Turkish demand.

Southern Syria currently provides the best environment for a new approach. Beginning in early 2014, increased assistance from Western and Arab states and improved coordination among the southern armed opposition factions they support sparked a string of victories against regime forces, enabling these factions to gain strength relative to Salafi-jihadi groups. With these factions in the lead, by late January 2015 opposition forces had gained control over contiguous territory encompassing most of Quneitra province and the western third of Deraa province.

A major regime counter-offensive the next month south of Damascus, with unprecedented Iranian and Hizbollah support, recaptured only a small share of territory and failed to halt the momentum of opposition forces that extended their territory through much of eastern Deraa between March and June. An opposition offensive is ongoing in late summer to capture the portion of Deraa’s provincial capital still under regime control.

Some of this success can be attributed to the steady erosion of regime military capacity, which manpower constraints suggest will continue. This may force Assad to deepen reliance on Iran-backed militias in areas he fears losing, or concede these to the opposition and resort to aerial attacks (including barrel bombs) to keep them ungovernable.

In either scenario, Salafi-jihadi groups would gain further traction, lowering prospects for resolving the conflict politically. Avoiding this requires a joint strategy among the opposition’s backers to empower credible opposition elements to fill the military and civil voids on the ground by establishing effective civil administrations. The south, where Salafi-jihadi groups are weakest, is the most favourable starting ground.

As has become clear throughout Syria, however, opposition elements cannot build effective governance amid the death and destruction caused by aerial bombardment, particularly given the regime’s tendency to target precisely those facilities necessary for capacity to emerge. Diplomatic admonitions which are not backed by concrete action carry little weight with the regime’s backers, and are unlikely to halt Assad’s use of air attacks as part of a scorched-earth strategy and a way to mete out collective punishment. The U.S. needs to be ready to pursue other means at its disposal, and to signal that readiness.

The Obama administration has sought to avoid that deeper involvement in the conflict, due to scepticism about what a more robust policy could achieve and concern that the regime’s allies might retaliate against U.S. personnel and interests elsewhere. But this conflict will not end without a shift in U.S. policy. In addition to improving living conditions in the south, it could also significantly help in degrading Salafi-jihadi power and otherwise improve prospects for an eventual negotiated end of the war.

It would do so, first, by enabling opposition groups to consolidate military control and establish governance capacity in the south. This would improve their strength and credibility vis-à-vis Salafi-jihadi groups and could incentivise their development as political actors capable of governing their areas.

Secondly, achieving a zone free of aerial attacks in the south could provide a model for a different approach by the rebels’ state backers in the north, where poor coordination and divergent priorities with Ankara, Doha and Riyadh have contributed to a situation not conducive to an escalated U.S. role. A move by Washington to halt regime aerial attacks in the south could signal it would consider doing so in the north as well, if those allies would assist in bringing about a similar shift in the northern balance of power away from Salafi-jihadi groups.

Thirdly, a U.S. push to halt regime air attacks in the south would signal resolve to the regime’s most important backers, Iran and Hizbollah, and demonstrate that the returns on their investments in the status quo will further diminish. Iranian and Hiz­bollah officials play down the long-term costs of their involvement, believing they can outlast their opponents in a proxy war of attrition, and viewing the price of doing so as preferable to negotiating a resolution that includes an end to Assad’s rule. Their view appears based, in part, on the assumption that Washington’s narrow focus on IS and reluctance to confront the regime are pushing its policy toward accepting Assad’s political survival and thus, ultimately, a resolution of the conflict more favourable to them.

The U.S. initiative described here could help refute that assumption and put weight behind the White House’s assertions that the nuclear deal will not pave the way for Iranian hegemony in the region. This message of resolve should be paired with a parallel one indicating U.S. willingness to take the core interests of the regime’s backers into account in any political deal to end the war.

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Speaker of the House John Boehner has announced he would resign and give up his seat in Congress at the end of October.

Boehner, a Republican from Ohio, became Speaker in January 2011, following the midterm election that gave GOP the majority in the House of Representatives.

“I was never in the legacy business,” he said at the press conference Friday afternoon, shrugging off suggestions that the resignation was inspired by the papal visit or the rebellion in Republican ranks.

“It’s become clear to me that this prolonged leadership turmoil would do irreparable harm to the institution” of the Speaker, he told reporters.

Boehner thanked his family, staff and constituents for electing him 13 times. He spent 25 years in Washington.

“Really, it’s been wonderful,” he said.

The announcement comes as Republicans square off with with minority Democrats over funding arrangements. The impasse threatens to cause a government shutdown on October 1.

In a statement released by an aide, Boehner said he would be resigning “for the good of the Republican Conference and the institution.”

The aide told reporters that the Ohio lawmaker had originally planned to leave at the end of last year, but decided to stay on after the House Majority Leader Eric Cantor, a Virginia Republican, suffered a shocking loss in the primaries.

“He didn’t give anyone a heads up. This was a complete surprise to all of us,” said Representative Darrell Issa, a California Republican, according to the Washington Post.

Unhappy with Boehner’s leadership, more than 30 Republican lawmakers have previously threatened a no-confidence vote, which would have forced him to rely on support from Democrats to remain in charge of the House.

He appears to have decided to leave on his own terms, rather than be ousted in a rebellion.

Though his colleagues were surprised by the announcement, Boehner appears to have hinted at it to reporters. On Thursday evening, he told two reporters — one from Politico and another from the Washington Post — that he had nothing left to accomplish after he brought Pope Francis to the Capitol, Politico reported.

“We don’t simply want to move the deck chairs around,” Louisiana Republican John Fleming told the Washington Post.

Fleming added that Boehner’s move makes a government shutdown next week “highly unlikely.”

A press conference was scheduled for 10 am, but at 10:45 minutes later an aide came out and told the reporters that Boehner had left “out the back door” and that he would not be speaking to the press after all.

One of the names mentioned as Boehner’s possible successor is the current House Majority Leader Kevin McCarthy, a California Republican who has been in office for less than a decade.

California Republican Nancy Pelosi, current House Minority Leader and Boehner’s predecessor when her party held the majority, compared the Speaker’s resignation to a major earthquake.

Boehner’s resignation was applauded by the more conservative Republicans.

“Speaker Boehner was not responsive to what activists wanted, and it shows through the terrible approval ratings of Congress. We need a new speaker that represents the entire caucus, not just the special interests in Washington,” said Adam Brandon, CEO of the conservative advocacy group FreedomWorks.

Imagine your doctor put you on a daily dose of oxycontin, phenobarbital and Quaaludes for six years straight. Then he suddenly cancelled your prescription.

Do you think your behavior might become a bit erratic?

This is what’s going on with the stock market. It’s trying to shake off six years of overmedication brought on by the Fed’s zero rates and liquidity injections.

Let me explain: Until recently, stocks had been on a tear that pushed valuations into the stratosphere. Volatility stayed low because Bernanke’s easy money and QE made investors more placid, serene and mellow. They ventured further out on the risk curve and took more chances because they were convinced that the Fed “had their back” and that there was nothing to worry about.

Then things began to fall apart. The Fed ended its asset purchase program and started talking about “normalization”, an opaque term the Fed uses to avoid the harsher sounding “rate hikes.” This is what began to rouse investors from their drug-induced trance. The era of cheap money was coming to an end. The punch bowl was being taken away.

Then– just as the Fed’s surging liquidity had calmed the markets for six years– the absence of liquidity and high-frequency trading sent stocks gyrating wildly for months on end. The markets became unpredictable, convulsive, topsy-turvy. And while rates remained fixed at zero throughout, the mere anticipation of higher rates was enough to ignite a sustained period of extreme volatility unlike anything traders had ever seen before. By taking its foot off the gas pedal and trying to restore traditional market dynamics, the Fed had slammed the vehicle into reverse unleashing pandemonium across global markets.

Naturally, the pundits tried to blame the mayhem on China or emerging markets or droopy commodities prices or even deflation. But it’s all baloney. The source of the problem is the Fed’s easy money policies, that’s what created the disconnect between valuations and fundamentals, that’s what sent stock prices to the moon, and that’s what inflated this ginormous stock-and-bond bubble that is just now beginning to unwind. China might have been the trigger, but it’s certainly not the cause.

Last Thursday, the unthinkable finally happened: The FOMC issued a statement that the interest rates would not be raised after all, but that ultra-accommodative policies would remain in place for the foreseeable future. On similar occasions, the markets have always rallied in gratitude for more-of-the-same easing. But not this time. This time, the Dow Jones surged 100 points before cratering 299 into the next session.

“Ah, the Fed has lost its magic touch”, the analysts opined. The promise of zero rates was no longer enough to push stocks higher. What does this mean? If the Fed does not have supernatural powers, then who will keep the markets from plunging? Who will keep the bubble intact? Who will save us from a painful correction?

Nobody knows.

What we do know is that stocks are currently rising on the back of cheap credit that is being diverted into Mergers and Acquisitions (M&A) and stock buybacks. Corporate debt continues to grow even while earnings and revenues shrink. In other words, the Fed’s perverse incentives (zero rates) have seduced corporations into piling on record debt for financial engineering and asset stripping, while investment in building up their companies for future growth (Capex) has fallen to post war lows. That’s the kind of shenanigans that’s driving the markets.

Corporations have been riding the crest for the last three years, refinancing more than $1 trillion per year from 2012 to 2015. But tighter credit conditions and mounting debt servicing is expected to curb their appetite for more borrowing dampening the prospects for higher stock prices. The same rule applies to stock buybacks. When equities prices flatten out or drift lower, and debt gets more pricey, share repurchases no longer make sense. So, you can see that –even if rates stay low– tighter credit and extra debt servicing is going to pull the rug out from under the market and put stocks into a deep freeze.

The point is, the Fed knows what’s going on but just looks the other way. They know their easy money isn’t building a strong, sustainable recovery. They know it’s being used to beef up leverage on risky bets so dodgy speculators can make a killing. They know it all, but they don’t give a rip. They just want to keep the game going a little bit longer, that’s all that matters to them. Heck, maybe Yellen has convinced herself that she can pull a rabbit out of her hat at the last minute and save us all from disaster? It’s possible, but I doubt it. I think she knows we’re goners. The economy is soft, the markets are zig-zagging wildly, and the whole bloody contraption looks like it’s ready to blow. She must know that the game is just about over.

By H.K. Dua*

Apparently, editors of the Oxford Dictionary could not come to an agreement on how to describe the nature of the current European crisis. They just picked two words from European headlines as an easy way out: Grexit and Brexit. Grexit is about Greece’s inability to repay its financial debt and its threat to quit the eurozone if Europe doesn’t pay its bills. Brexit is about Britain’s perennial dilemma on whether to remain within the European Union. Both questions remain unresolved. Actually, Europe’s crisis is much more serious than what a journalistic coinage can describe. The Oxford Dictionary cannot translate what the body of a little Syrian boy, in a red t-shirt, washed ashore the Turkish coast conveys. Aylan Kurdi, in his silence, has certainly shaken the world’s conscience.

Europe, however, seems to be fairly divided on whether to admit more immigrants from West Asia and northern Africa. The immigration debate in most of Europe is more serious than realised at the moment, and its ramification can threaten the liberal and democratic values that post-war Europe has been trying to evolve.

In many European countries, rightwing groups have sprung up to oppose immigration, particularly the entry of Muslims into predominantly Christian Europe. Many in Europe are worried that immigrants will bring down wages or that local people will lose jobs to them. Even if governments succeed in tackling the flow of immigrants, their settlement will take a long time and the resultant social tensions might upset political stability in vulnerable European countries.

Over the years, as the EU has evolved, Germany has undoubtedly emerged as its leader. This is mainly because of the size of the country and its economy. It is on German Chancellor Angela Merkel’s word that many other countries have agreed to admit some refugees, even with trepidation about tensions developing among their people.

At another plane, the emergence of Germany as the EU’s leader scares Britain more than a continental embrace. What Britain wants is a leadership role in the EU, which France and Germany will never agree to let it have. Britain, on the other hand, doesn’t want to get submerged in Europe simply as a voting member. If the present trend of immigration to Europe continues, Britain could, by referendum in a couple of years, decide to remain outside, thus closing the doors to incoming refugees. Few people in Europe will shed a tear, though, if Britain leaves the EU. Most Europeans feel that Britain’s heart is in the US and can never think European.

Will Jean Monnet’s dream for creating one Europe without borders survive? Greece’s exit from the eurozone is not of great consequence, but Britain opting out will have wide repercussions. One reason will be the re-emergence of Germany as the sole leader of the EU or Europe, a prospect that Britain has never relished. A silent watcher of the European scene is Russia, which, under President Vladimir Putin’s leadership, is making efforts to revive its image. The message of Putin’s recent foray into the Ukraine cannot be lost on European nations, big or small.

The US overtook Europe after the latter went through two world wars. Now, Europe has to contend with a rising China as well as an upcoming India. Europe, as a continent, has to worry that its place in world affairs is not as prominent as it used to be. Is Europe a declining power? This is the question many have been asking in world capitals lately.

Its civilisational impulses are still intact, but for Europe to matter more in the 21st century, it needs more than a vision. It needs leadership and political will.

*The writer, a former editor in chief of ‘The Indian Express’, is an MP and an Advisor, Observer Research Foundation, Delhi

Courtesy : The Indian Express, September 23, 2015