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Ed Webb

ANALYSIS: Egypt's military-economic empire - 0 views

  • The roots of the military’s commercial empire go back to the 1980s, when a combination of a peace dividend after Egypt’s 1979 peace treaty with Israel and a fiscal crisis led the country to pare back its defence budget. Defence spending as a proportion of GDP fell from 6.5 percent in 1988 to 1.8 percent in 2012, according to World Bank indicators. The armed forces had to find new sources of revenue.
  • forced labour, in the form of conscripts, is almost certainly used in army-run factories. Quite apart from the ethical ramifications of this, it allows the military to undercut its competitors, since conscripts don’t have to be paid full wages
  • Businesses controlled by the military are widely dispersed. Some may come under a number of umbrella organisations, including the Arab Organisation for Industrialisation, the National Services Projects Organisation (NSPO) and the Ministry of Military Production. In addition, the EAF holds majority or minority stakes in many other semi-public or private companies, especially in the fields of infrastructure and subcontracting. EAF influence also extends to “sensitive” but nominally civilian infrastructure. Senior positions at a number of airports have for some years been reserved for retired army officers, as a sort of unofficial “pension programme.”
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  • the EAF is able, through the use of land designations and other means, to control much of the public lands (desert, agricultural and urban) that comprise 94 percent of Egypt’s area, through the use of land designations, the ability to auction such lands and to receive compensation from the state treasury when military zones are rezoned to civilian purposes. The army also controls the coastline (officially classed as border territory) and is thus able to profit from tourist developments. As such, the EAF wields enormous influence over the real estate market and the country’s development structure
  • Estimates as to how much of the total economy is controlled by the EAF range from 40 percent, according to telecoms billionaire Naguib Sawiris (in comments to local media last March) to somewhere between 45 percent and 60 percent, according to Transparency International
  • the consensus among those asked by Middle East Eye as to the size of the military-economic complex is that the EAF’s reach extends into virtually every economic sector, from foodstuffs like tomato paste and olive oil, to consumer electronics to real estate, construction, transport and services
  • since the military’s budget - and by extension, its economic fiefdom – is kept secret, EAF-controlled businesses can benefit from subsidies that are kept off the books, as well as having more freedom of manoeuvre amid the lack of oversight.  One example was the decision under the Supreme Council of the Armed Forces to slash fuel subsidies for industrialists. Since the military’s budget (and therefore, its energy costs) are off the books, the rising energy prices disproportionately affected EAF competitors, but not the forces themselves
  • military involvement in the political economy generally leads to worse performance. Within the region, the examples of Iran and Algeria point to this, while China has taken steps to reduce its armed forces’ commercial exposure over the past few years precisely for this reason
  • A further effect of the EAF’s economic dominance is a lack of growth opportunities for SMEs, since only favoured insiders can win lucrative contracts and deal with the permit system. In turn, this leads to a large informal economy of insiders, leaving many Egyptians outside, in poverty
  • While patronage is nothing new in Egyptian politics, since President Abdel Fattah el-Sisi came to power the top brass has expanded intra-military patronage to the extent that they are crowding out other economic actors and failing to bring in key constituencies such as opposition groups, the private sector bourgeoisie and the urban poor. The EAF has expanded its reach so fast that now it has to defend its empire against these groups, sowing seeds of further strife in future.
Ed Webb

Theresa May Takes Her Darkest, Most Desperate Turn Yet | Vanity Fair - 0 views

  • the United Kingdom’s messy divorce from Europe, sold as an effort to reclaim parliamentary sovereignty, has instead delivered its opposite. Last Monday, the House of Commons voted in the early stages of the European Union Withdrawal Bill to give the government sweeping powers to make laws without parliamentary scrutin
  • If the withdrawal bill is passed as it stands, May will be able to make laws by decree and reverse and adapt primary legislation without consulting Parliament. It is the greatest attack on the British constitution in at least a century. Parliamentary sovereignty—the very thing that Brexiteers said they were voting for in leaving the E.U.—may be about to be vastly reduced by a cabal of right-wing Conservatives who say they are obeying the people’s will. Such power grabs, of course, are always done in the name of the people.
  • even more alarming is that there is so little concern expressed by the majority of the press and the generally acquiescent BBC. The point is that after the referendum last year, and despite the poor result in the General Election, the right-wing of the Conservative Party has continued traveling in an increasingly undemocratic direction and has, so far, swept all before it. The normally rather sober Hansard Society, an organization dedicated to promoting and strengthening democracy, has called the “broad scope of the powers in the Bill, the inadequate constraints placed on them, and the shortcoming in the proposed parliamentary control of them” a “toxic mix” that will undermine Parliament’s ability to hold May to account or to meliorate the most damaging policies arising from Brexit.
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  • included seven members of the Labor opposition, who astonishingly defied their party, which has just begun to soften its line on Brexit so as to accommodate increasing worries about the economy, employment and workers’ rights. These seven Labor members—Ronnie Campbell (age 74), Frank Field (75), Kate Hoey (71), Kelvin Hopkins (76), John Mann (57), Dennis Skinner (85) and Graham Stringer (67) have an average age of 72, which underlines a truth about the Brexit vote and the lurch to the right in Britain. They are the product of something profound going on among an older generation, even among some left-wingers. These people yearn for a past that does not exist and they do not give one solitary damn for the future of young people who will be forced to inherit the economic mess.
  • Naturally, there are older politicians on both sides of the House who warn about the dangers to democracy contained in the bill, one being the veteran Conservative Kenneth Clark, but at base the great divide in Britain is between generations.
  • question is how much damage the older generation does before being replaced by younger people who are generally more accepting of immigration, do not revere Britain’s “heroic” past, and are part of a connected world that views national borders as less and less important
  • MPs mutter about waiting for the right moment to oppose the government, but the truth is that the energy is all with the anti-democratic side, the one that keeps citing the People’s will but wants to remove power from the People’s representatives. The whole of the Executive is now focused on diminishing the role of MPs and taking the country out of the European Union, come what may, in 18 months’ time. There is literally nothing else of note being debated in Parliament. Brexit sits like a massive weather system over the United Kingdom, draining energy from its national life and politics.
  • Britain already has control of its borders, while the myths about Britain being overrun by foreigners are slowly being exposed by leaks. Two weeks ago, a leaked report showed that the vast majority of students (97 percent) and those who visit Britain on work and visitor visas return home when their time is up. It is shameful that this was not published before the referendum and probably gives as good a reading of May’s true political instincts as anything else. Her government is sitting on 50 separate Brexit impact studies, which it refuses to allow the public to see before Britain leaves the E.U.
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    Authoritarianism can erode democratic institutions even where they are erroneously believed to be strong.
Ed Webb

How Western Urban Planning Fueled War in the Middle East | The American Conservative - 0 views

  • Architecture has been part of that work. The unspoken assumption was that houses should fit together along alleys and streets, that no private house should be so ostentatious as to stand higher than the mosque or the church, and that the city should be a compact and unified place, built with local materials according to a shared vocabulary of forms. Thick walls of stone created interiors that would be cool in summer and warm in winter with the minimum use of energy. The souk was conceived as a public place, embellished appropriately so as to represent the heart of the city, the place where the free trade of goods expressed the free mingling of the communities.
  • The old souk of Aleppo, tragically destroyed in the current Syrian conflict, was a perfect example of this, the delicate and life-affirming center of a city that has been in continuous habitation for a longer time than any other. That city rose to eminence as the final station on the Silk Road, the place where treasures were unloaded from the backs of camels coming from Mesopotamia onto the carts that would take them to the Mediterranean ports. The fate of this city, which has, in the 21st century, faced destruction for the first time in 5,000 years, is a fitting emblem of what is happening to the Middle East today.
  • it is not only civil conflict that has threatened the ancient cities of the Middle East. Long before the current crisis there arrived new ways of building, which showed scant respect for the old experience of settlement and disregarded the unwritten law of the Arab city that no building should reach higher than the mosque, it being the first need of the visitor to spy out the minaret, and so to find the place of prayer. These new ways of building came, like so much else, from the West, first through colonial administration and then through foreign “advisors,” often taking advantage of the insecure land-law of the region, introduced by the Ottoman land code of 1858. By the time France had been granted the mandate to govern Syria in 1923, modernist building types, the mania for roads and motorized “circulation,” the idea that cities should be disaggregated into “zones”—residential, commercial, industrial, and so on—and the obsession with hygiene had all made their destructive mark on the urban fabric
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  • new ways of building came, like so much else, from the West, first through colonial administration and then through foreign “advisors,” often taking advantage of the insecure land-law of the region, introduced by the Ottoman land code of 1858. By the time France had been granted the mandate to govern Syria in 1923, modernist building types, the mania for roads and motorized “circulation,” the idea that cities should be disaggregated into “zones”—residential, commercial, industrial, and so on—and the obsession with hygiene had all made their destructive mark on the urban fabric
  • As in Russia and Germany, the arrival of the totalitarian state was prefaced by the arrival of totalitarian architecture
  • a modern city, another piece of anywhere
  • Architectural modernism fed into the Arab inferiority complex: concrete high rises, plazas, geometrical patterns, energy-intensive fenestration, sometimes with a mihrab or a dome stuck on in deference to a history that is no longer really believed in—all these have become part of the new vernacular of a hasty urbanization. The basic idea has been to abandon the great tradition of the Ottoman city, with its many communities in their tents of stone, and to “catch up” with the West
  • Rarely, in any of this, however, has provision been made for the migrants from the villages, who have been compelled to survive in unplanned and unregulated structures, heaped up around the cities with no thought for how they look or for the character of the public spaces beneath them
  • The old rabbit-warren city of the Middle East was a conflict-defusing device, a continuous affirmation of neighborhood and settlement. The new city of jerry-built concrete towers is a conflict-enhancing device, a continuous “stand-off” between competing communities on the edge of a place that does not belong to them and to which they in turn cannot belong.
  • architect Marwa al-Sabouni, whose book, The Battle for Home, tells the story of how the conflict in Syria has overwhelmed her own city of Homs. She shows that you cannot destroy the serene and unostentatious forms of the Levantine city without also jeopardizing the peace that they symbolized and which to a measure they also protected
  • We should remember that the idea of replacing the organic city of customary styles with cleared spaces and blocks of concrete, while it originated among European intellectuals, was first tried out in the Arab world. Le Corbusier, who had attempted in vain to persuade the city council of Paris to adopt his plan to tear down the entire city north of the Seine and replace it with an assemblage of glass towers, turned his attention to the North African city of Algiers instead, which was at the time under French colonial administration. As architectural advisor to the French Vichy government during the war he was able to overrule the elected mayor of Algiers and impose his will upon the city—though the Allied victory abruptly put an end to his plans.
  • Le Corbusier’s scheme is still studied and even treated with reverence in modern schools of architecture. It involved erasing the old city from the map, replacing it with great square blocks that negate the Mediterranean coastline and the contours of the landscape, and surmounting the whole with streets along which automobiles fly above the population. No church or mosque has a part in the plan; there are no alleyways or secret corners. All is blank, expressionless, and cold. It is an act of vengeance by the new world against the old: not a project for settling a place, but a project for destroying it, so that nothing of the place remains
  • the glitzy restaurant style of Dubai, in which vast gadgets, belonging to no known architectural language but looking like kitchen tools discarded by some gigantic celebrity chef, lie scattered among ribbons of motorway
  • Care for one’s place is the first move towards accepting the others who reside there. The thoughts “this is our home,” and “we belong here” are peacemaking thoughts. If the “we” is underpinned only by religious faith, and faith defined so as to exclude its historical rivals, then we have a problem. If, however, a resident of Homs can identify himself by the place that he shares with his fellow residents, rather than the faith that distinguishes him, then we are already on the path away from civil war.
  • decisions are made by officials, and officials belong to the great system of Mafia-like corruption that is the true cause of the Syrian conflict, and which has encouraged the Syrian political elite in recent times to look to Russia as its natural ally
  • Capitalism’s “creative destruction” is the anti-conservative claim that nothing that exists could not be improved easily in a short time by fast, profitable and “efficient” total replacement.
  • in the 1990s there were many popular Syrian TV drama series about how people lived and interacted with each other in the neighborhoods of the old cities in Syria during the late 19th and early 20th century. They depicted the days when the Levant society as it existed in its centuries-old Ottoman era make-up, just prior to the transition into colonial and post-colonial modernity and showed how rich and poor lived together in the same neighborhood, it showed the old houses, the shops & the markets.
  • Roger Scruton is romanticizing. He therefore completely misunderstands the expressive functional reality of ordinary homes and security by focusing on public architecture, which everywhere expresses elite ideals instead of common ones. Take Florence and the Italian Republics. Frequent wars and not infrequently with Muslim empires meant homes had to be defensible and closed off from streets. Only later, briefly, and elsewhere later like in Britain and the US were isolated farm villages open to welcome trade, or US farm homes isolated away from the necessity of group protections because genuine threats had become to rare to proactively defend against them. Similarly, the divide in the Muslim world is between open plans in port cities secured through trade by larger powers that could ensure protection, versus homes way from ports, deliberately closed off against strangers so as to be defensible against frequent invaders. Most of the Islamic world remains like unstable and insecure early Florence. And homes throughout MENA reflect their isolation and insecurity through closed plans, just as much as Spanish ones from Moorish times do, even in the New World.
Ed Webb

The impact of the global energy transition on MENA oil and gas producers - ScienceDirect - 0 views

  • MENA hydrocarbon producers' socio-economic structures continue to heavily rely on oil rent.•The low-carbon transition may imply sustained pressure on their development models.•Since the 2014 oil price drop, they adopted new, ambitious, economic diversification plans.•Such diversification plans never worked in the past, due to a lack of real incentives.•Job creation needs and low-carbon transition could foster diversification plans' implementation.
Ed Webb

Will Saudi Arabia's private sector be able to hold up during a pandemic? - Atlantic Cou... - 0 views

  • Due to the lockdown and curfew implemented since March 25, most businesses in Saudi Arabia are either suspended or have reduced their activities. As a result, employees have become a heavy burden for companies, as most cannot afford to pay them wages while they stay home. Several companies announced the closure of their branches, entirely, including Taiba Investments, Saudi Airlines Catering, and Al-Andalus Property Company SJSC.
  • The Saudi government announced the consequences of coronavirus as a force majeure. And, on April 3, the government issued a royal decree allocating $2.4 billion to compensate Saudi citizens who work in the private sector in facilities affected by the pandemic. However, such bounteous support might only reduce the problem, not solve it.
  • the question is how long this generous support from the Saudi government will continue. Oil prices are still lower than what the Saudis need to support Vision 2030, which is expected to have a budget of no less than $54 billion. Oil prices are currently affected because of the decline in demand due to the pandemic and the oil war with Russia, which ended on April 12, after OPEC agreed to an output cut of 9.7 million barrels per day.
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  • analysts expect oil prices to remain below $40 for the foreseeable future, while the national budget balance requires $80-85 a barrel. The future of the oil market is getting worse, since the June contracts collapsed by more than 45 percent.
  • oil war is urging the Saudi government to limit or, even, cancel its excess spending and yet, the government chooses to increase public spending to support its citizens and residences.
  • the coronavirus might serve as a vehicle of legitimacy for the absolute monarchy that takes responsibility for its citizens as democracies are struggling to help their own.
Ed Webb

Thirsty crops, leaky infrastructure drive Tunisia's water crisis | PLACE - 0 views

  • "We used to grow much more wheat, we used to plant tomatoes, but we don't have (enough) water,"
  • Poor planning, sparse water resources and the worsening impacts of climate change have combined to create a crippling water crisis in Tunisia, say civil society groups.
  • Due to random cuts to water supplies, debt and management issues with the GDAs and the poor quality of water that runs from the taps, Marzougui said about three-quarters of the population have problems accessing clean water.
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  • The country's irregular rainfall patterns are accentuated by climate change, with periods of droughts and record high temperatures oscillating between torrential rain and floods, according to the agriculture ministry.
  • latest government figures also reveal that poor infrastructure means in some regions about half of water is lost before it even reaches the tap
  • It is mostly women who carry the burden of fetching water
  • "It costs a lot of money and there is still (more) water lost through the network (than desalination stations are projected to produce)."
  • "We need a lot of water during Eid - for cooking, showering, for washing the intestines of the sheep," she said, referring to the traditional method for preparing meat during the holiday. "The infrastructure is bad, we lose water in the distribution network. The summer months are peak tourist season, so there is a lot of water consumption," said Louati of the OTE. "And because of climate change, the availability of water varies more than before."
  • Even for houses on the grid, water is not guaranteed. Nomad08 recorded 3,000 cuts between 2016 and 2018 across the country, lasting up to 60 days at a time.
  • Tunisia's new Water Code, which was approved by ministers in September and is waiting to be debated by parliament, includes climate change as a factor to be considered in water policy decisions, unlike the original 1975 code.
  • In addition to repairing the water network, Aini told the Thomson Reuters Foundation that the government's 2050 strategy for water will involve desalination projects powered by renewable energy.
  • In 2017, the minister of agriculture created a committee dedicated to prioritising climate change in the management of agriculture and water. "We are in front of a fait accompli - we need to do with what we have and it is only going to become less (water)," said Rafik Aini, coordinator of the committee and senior negotiator in climate change at the agriculture ministry.
  • In January, a study by the U.N. University Institute for Water, Environment and Health (UNU-INWEH) warned that the global levels of surplus salty brine produced by this method were 50% higher than previous estimates.
  • Desalination would also have "profound impacts" on the sea ecosystem, where this waste is mostly dumped, the report found.
  • the "politics of agriculture needs to change," said Gafrej. "With precious and rare water, we do not have the right to produce certain cultures like watermelons."
  • about 80% of Tunisia's natural water resources are used for agriculture, according to last year's government figures. Thirsty crops like oranges, watermelons and tomatoes are grown for export abroad, mostly to Europe.
  • In intensive farming regions, like Kairouan, groundwater is being extracted at a faster rate than the underground supply is renewed, as well as from non-renewable groundwater sources. A government report noted that these resources are exploited up to 400% in certain regions.
Ed Webb

US tech firm turns Dubai desert air into bottled water - Arabianbusiness - 0 views

  • Instead of drilling wells or purifying seawater, it will wring moisture from the air to create bottled water at a plant 20 kilometres (12 miles) from Dubai
  • Zero Mass Water, will use renewable energy instead of the fossil fuels that power the many desalination facilities in Dubai and the rest of the United Arab Emirates
  • The bottling plant is run on solar, the bottles we use are recyclable and the caps are sustainable,” said Samiullah Khan, general manager at IBV, an Emirati firm that will buy the water. The caps will be made from bamboo
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  • Zero Mass isn’t going to rival bulk water processors any time soon. It will initially only be able to produce up to 2.3 million litres annually - about the volume of a typical Olympic swimming pool. The technology is still much more expensive than desalination for the same output of water. So Zero Mass’s will be in the same bracket as imported, high-end brands such as Evian and Fiji
  • The rectangular boxes - measuring around 2.4 meters (8 feet) by 1.2 meters - absorb water vapour and extract it using solar energy. Although they can operate almost anywhere the sun shines, Dubai’s hot and humid climate makes the emirate a prime location, according to Cody Friesen, founder of Zero Mass
  • The panels have dust filters and use a chemical compound that only captures water molecules, ensuring the water is purified even when the air is polluted.
  • Gulf nations want to reduce their heavy dependence on food imports, especially with the coronavirus pandemic disrupting global supply chains. This month the UAE imported 4,500 dairy cows from Uruguay to boost milk production. It’s also trying to farm rice locally, the success of which will largely depend on using sustainable amounts of water.
  • Water-from-air is only suitable for farming in enclosed environments such as warehouses
  • “With hydroponics, it’s a huge advantage to be using very pure water to begin with,” said Wahlgren. “If you’re using desalinated water, there’s still quite a large salt component, which can be harmful to the plants.”
Ed Webb

There will be pain - With oil cheap, Arab states cannot balance their books | Leaders |... - 0 views

  • Peak demand for oil may still be years away, but covid-19 has given the Middle East and north Africa a taste of the future. Prices of the black stuff plummeted as countries went into lockdown. The region’s energy exporters are expected to earn about half as much oil revenue this year as they did in 2019; the IMF reckons their economies will shrink by 7.3%. Even when the virus recedes, a glut of supply will probably keep prices down. Faced with budgets that no longer add up, Arab states must adapt.
  • Around a third of exports from Jordan and Lebanon go to oil-rich states, which send back wealthy tourists. Kuwaitis, Saudis and Emiratis account for about a third of tourist spending in Lebanon.
  • Egypt exports little oil, but over 2.5m of its citizens work in oil-rich countries. Remittances are worth 9% of its GDP. As oil revenues fall and some of those jobs disappear, Egypt will suffer, too. The same is true of Jordan, Lebanon and the Palestinian territories, which have long relied on the Gulf to absorb their jobless masses.
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  • in May the Algerian government said it would cut its budget by half. Things are no better in Iraq, a big oil exporter, which is nearly broke. Even stable producers such as Oman and Kuwait are living beyond their means. Saudi Arabia, the world’s biggest oil exporter, has been burning through its cash reserves for months. Money that was meant to smooth the kingdom’s transition to a less oily economy is now propping up the old petrostate.
  • The bad news is that these states are moving too slowly. Some have cut their bloated bureaucracies and pared back subsidies. Saudi Arabia recently tripled its value-added tax. But the public sector is still the region’s main employer. Despite talk of diversification, the Gulf’s economies continue to revolve around oil
  • these reforms will be painful and are harder in bad times
  • The plans put forward by leaders like Saudi Arabia’s Muhammad bin Salman are tearing up the social contract. Saudis wonder why he doesn’t sell his $550m yacht instead of raising taxes. Anger is growing across the region. For the past century Arabs have been ruled by abusive leaders who hoarded their country’s wealth. Now these leaders are asking their people to make sacrifices and giving them little say in the matter. That is a recipe for continuing unrest and brutal suppression. If Arab rulers want citizens to pay their way, they will need to start earning their consent.
Ed Webb

Will Tunisia, Algeria relations recover through land border reopening? - Al-Monitor: In... - 0 views

  • Tebboune announced that land borders between the two countries would reopen July 15. The announcement represented a breakthrough in the silent crisis between the two countries as the closure of the land borders has heavily affected Tunisia in particular.
  • disputes between the two countries have pushed Algeria to pressure Tunisia on several issues, including in delaying the reopening of the border.  Among the files that may have contributed to the silent tensions is Tunisia's position on the Western Sahara dispute pitting Morocco against the Algerian-backed Polisario Front.
  • Tunisia has in the past tried to distance itself from the Western Sahara conflict, amid reports of Algeria’s attempts, in vain, to lure Tunisia to its side.
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  • on May 26 Tebboune stated from the Italian capital, Rome, that Tunisia is facing a political impasse and needs support in reinstating democracy
  • Tunisia has valid concerns about Algeria raising gas prices in light of the global energy crisis.
  • Algeria sells gas to Tunisia at preferential prices, and the latter earns a right of passage of 5.25% on the total of Algeria gas transported through Tunisian territory to Italy.
  • Algeria has expressed concerns over potential Tunisian normalization with Israel despite the fact that Saied had stated during his electoral campaign in 2019 that “normalization with Israel is tantamount to treason.”
  • Taboubi leads the UGTT, a historically strong and popular union in Tunisia with more than 1 million workers. In an explicit reference to Morocco's normalization with Israel, Taboubi said in his June statements that a campaign to push Arab normalization with Israel aims to pressure Algeria, which leads a campaign to boycott Tel Aviv in the North African region.
  • Although the opening of the land borders appears to be an indication of the beginning of the recovery of Tunisian-Algerian relations, other measures will need to be in place to guarantee this recovery
Ed Webb

'We Misled You': How the Saudis Are Coming Clean on Funding Terrorism - POLITICO Magazine - 0 views

  • one top Saudi official admitted to me, “We misled you.” He explained that Saudi support for Islamic extremism started in the early 1960s as a counter to Nasserism—the socialist political ideology that came out of the thinking of Egypt’s Gamal Abdel Nasser—which threatened Saudi Arabia and led to war between the two countries along the Yemen border. This tactic allowed them to successfully contain Nasserism, and the Saudis concluded that Islamism could be a powerful tool with broader utility.
  • their support for extremism was a way of resisting the Soviet Union, often in cooperation with the United States, in places like Afghanistan in the 1980s
  • Later it was deployed against Iranian-supported Shiite movements in the geopolitical competition between the two countries.
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  • “We did not own up to it after 9/11 because we feared you would abandon or treat us as the enemy,” the Saudi senior official conceded. “And we were in denial.”
  • as the Saudis described it to me, this new approach to grappling with their past is part of the leadership’s effort to make a new future for their country, including a broad-based economic reform program
  • The new leadership, like their predecessors, blames Iran for regional instability and the many conflicts going on.
  • it is an open question as to whether the Saudi people have been sufficiently prepared at all relevant levels in terms of education and skills to compete in the world economy, as they will need to do in a modernized economy. If not, social tensions and unrest may arise among those who are not prepared to compete.
  • For many years, I was accustomed to Saudi officials being vague and ambiguous. Now, our interlocutors were straightforward and business-like in discussing their past and their future plans. In past decades, my impression had been that the Saudis did not work hard. Now a team of highly educated, young ministers works 16- to 18-hour days on refining and implementing a plan to transform the country. The plan is the brainchild of Mohammad bin Salman and focuses both on domestic and regional fronts. Salman and his ministers exude commitment and energy.
  • Riyadh views modernization as the vehicle through which the Saudi state, at long last, can confront and defeat extremism, foster a dynamic private sector and master the looming economic challenges
  • Their Vision 2030 and National Transformation Program 2020 focus on shrinking the country's enormous bureaucracy, reducing and ultimately removing subsidies, expanding the private sector including attracting investment from abroad by becoming more transparent and accountable and by removing red tape.
  • Israel and Saudi Arabia share a similar threat perception regarding Iran and ISIL, and that old hostility need not preclude greater cooperation between the two states going forward
  • On some levels, the prospects for planned reforms are more promising in Saudi Arabia than they are in most other parts of the Middle East. Saudi Arabia has oil reserves and is not roiled in conflict: two important advantages
  • if the reform effort does work, Saudi Arabia is poised to become more powerful than before, enabling it to play a bigger role in regional dynamics including in balancing Iran and perhaps negotiating about ending the civil wars in the region. A true change in Saudi Arabia’s policy of supporting Islamist extremists would be a turning point in the effort to defeat them
Ed Webb

OPEC Is in its Death Throes | Foreign Policy - 0 views

  • In February, OPEC called for an oil production “freeze” to raise crude prices in conjunction with Russia. But this effort collapsed at a meeting in Doha, Qatar, in April when Iran refused to join any freeze in order to regain the pre-2012 production levels of close to 4 mbpd it enjoyed before U.S. and European Union nuclear sanctions were imposed, following the removal of certain sanctions after the 2015 nuclear deal. A similar proposal failed at the OPEC meeting in June, again following Iran’s refusal, despite outreach by the Qataris.
  • OPEC again called for a form of output cut on Sept. 28 at an extraordinary meeting in Algiers. Markets bit on the news, with Brent prices rising sharply by about 15 percent in the following week, from $46 to $52 per barrel.
  • Can action by the cartel sustain higher crude prices over the long term? Probably not. Like a desert mirage, the image of an OPEC resurrection vanishes when approached.
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  • The massive fall in oil prices from over $100 per barrel in early 2014 to under $30 by January 2016 was caused primarily by then-Saudi Minister of Petroleum Ali al-Naimi’s strategy to gain market share for the kingdom and hurt the U.S. tight oil (or “shale”) industry by allowing the market, not OPEC interventions, to set prices.
  • While Riyadh has cranked up its production from mid-2014 to today by over a million barrels a day (to a peak of 10.7 mbpd in August this year), its fiscal position has taken a serious blow, with the budget deficit rising from 3 percent of GDP to 16 percent in 2015
  • The resilience of U.S. shale makes the argument that OPEC has experienced a resurrection a fragile claim. The cartel can probably raise prices in the short term through an output cut, but it will only be so long, perhaps already by mid-2017, before the U.S. shale industry revives and grabs any market share conceded by OPEC in a higher price environment. This will ultimately bring prices lower again, all else being equal.
  • Within OPEC, while other Gulf Co-Operation states, namely Kuwait and the United Arab Emirates, may be prepared to make a small cut to their production, key producers like Iraq and Venezuela are in too difficult a fiscal position to agree to any major cut.
  • Outside OPEC, Russia reached a production record of 11.1 mbpd in August, eclipsing Soviet levels. Being so close to the maximum anyway, Russia has little to lose by supporting the OPEC output cut and agreeing not to raise production further. Yet the Kremlin is unlikely to impose actual cuts on the range of oil companies that operate in the country.
  • In the short term, it seems Riyadh’s fiscal position was under such pressure from low oil prices that something had to give. While the kingdom has eased the fiscal pressure by starting to issue sovereign debt, the burn rate through its foreign reserves has been relentless (from about $740 billion in mid-2014 to $550 billion today) as it has attempted to defend the currency in the face of substantial capital flight from the country since the oil price crash in 2014.
  • Climate change will plainly be a major problem of the 21st century, and the world is moving away from fossil fuels: game over for an unreformed Saudi Arabia.
  • Saudi Arabia will face hard years ahead as the oil market increasingly looks to U.S. shale, not OPEC, as a handrail to oil prices on the supply side. However, this might well be the jolt that Salman needs to push through painful but necessary reforms
Ed Webb

Texas shale oil has fought Saudi Arabia to a standstill - 0 views

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    Really important for KSA's medium term strategy and prospects.
Ed Webb

Turkey moves billions in state assets to wealth fund for megaprojects | Middle East Eye - 0 views

  • The Turkish government has ordered the transfer of billions of dollars in state assets to a sovereign wealth fund, in a huge shake-up of holdings aimed at financing ambitious infrastructure projects championed by President Recep Tayyip Erdogan.The assets being transferred to the sovereign wealth fund range from wholly state-owned Ziraat Bank, the government's minority shareholding in flag carrier Turkish Airlines, as well as smaller firms like the state tea-making company.Ozgur Altug, economist at BGC Capital in Istanbul, said in a note to clients he estimated the value of the transferred assets to be $33 billion and the wealth fund would enjoy the dividends rather than the budget.
  • When the fund was founded in August, the state-run Anadolu news agency said it would be used to finance "mega projects" such as the planned Istanbul shipping canal and a new three-level tunnel under the Bosphorus.
  • But the plan did not meet universal approval, with the spokeswoman of the opposition Republican People's Party (CHP) Selin Sayek Boke calling it a "palace mortgage fund" in reference to Erdogan's presidential complex.CHP MP Faik Oztrak meanwhile compared it to the excesses of 19th century Ottoman bureaucracy.
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  • Turkey is following in the steps of several countries in putting key national assets into a sovereign wealth fund, which can be used for major projects, maintaining pensions and national welfare programmes, or in times of crisis.But Ankara's fund is so far well behind the biggest sovereign wealth funds in energy-rich Norway and the Gulf as well as China.Norway's sovereign wealth fund is the world's largest, worth $892 billion and holding stakes in around 9,000 companies worldwide.
Ed Webb

How quarrel over tobacco sent Libya into darkness - 0 views

  • In the past, Libya generated surplus electricity, which it exported to Tunisia and Egypt. Today, it has a power generation deficit of about 75% of its domestic needs, according to some officials. It also has no central government to protect the provision of power it does generate
  • On Dec. 17, a group of young men from Zawiya were taken hostage by Warshefana militias because a cargo of shisha — smoking tobacco — belonging to a Warshefana trader was confiscated. To pressure the government and local authorities into helping free the men, another local militia from Zawiya shut down the pipeline supplying gas to almost every power station in western and southern Libya. Members of the Zawiya militia later appeared in a video explaining what had happened. This episode is not unusual in lawless Libya, where local authority does not exist and what central government there is cannot enforce law and order. In November, an incident involving the antics of a pet monkey and a girl's headscarf sparked one of the worst rounds of violence in Sabha, in southern Libya, leaving some 20 people dead and scores injured.
  • It took the mediation of numerous officials and local tribal leaders to secure the release of the hostages, ensure the return of the tobacco shipment and restore electricity generation to its previous capacity, thus reinstating the “regular” blackout hours prior to the incident — between five and nine hours a day.
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  • Every Libyan city, big and small, is by now accustomed to blackouts during certain hours almost every day of the week. The situation in recent months, however, has become unbearable, with the blackouts becoming longer and less predictable, making it difficult for hospitals and individuals with special needs to cope and carry out their daily routines. Some people have bought generators for personal use during blackouts, but the majority of people cannot afford them and access to cash through the banking system is severely restricted due to the banks' chronic liquidity problems.
  • Power cuts coupled with economic difficulties are exacerbating the fragility of the UN-backed Government of National Accord, which has little authority over the country, including Tripoli, where it is seated. It has been little more than a year since the Libyan Political Agreement was signed in Morocco on December 15, 2015, and nearly a year since the government it established installed itself in Tripoli. Little, however, has changed for the better in terms of daily life. In fact, the security situation and economic situation, including rising prices and lack of access to cash, are getting worse.
Ed Webb

What to make of these elections? - Blog - The Arabist - 0 views

  • The story has flipped suddenly fropm being about a repeat of the January uprising to being about splits in the Egyptian political spectrum and then about elections. Even from yesterday to today, the narrative has changed from a high level of concern about elections taking place in the middle of this mess to a recognition of strong voter enthusiasm in what may be the highest participation rate Egypt has experienced in decades.
  • Egyptian people are eager to participate in the democratic process that may have real meaning for the first time in their lives
  • It's a sign of support for the democratic process and hope for its improvement. That is a testimony of the Egyptian people's seriousness. But it does not change the fact that these elections were prepared with staggering, perhaps even malicious, incompetence and on that basis alone should not have been held, and that the transition blueprint in general is a bad one.
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  • The problem is that the Egyptian political class, and the protestors in Tahrir, was split on the question of elections and could never form a united boycott front to push SCAF to take the elections seriously (or push for a better transition plan). There was never a credible alternative presented to SCAF's transition plan, and Islamists in particular, by endorsing the flawed referendum process, made it impossible to call SCAF's incompetence. Over the summer it was because secular-Islamist arguments squandered the attention and energy of the political class. More recently it was was in part because of the MB (although the argument that liberals wanted to postpone elections because they were afraid of the MB does not hold: the MB will do well now or in three months' time), which saw in the elections a chance to consolidate their newfound political legitimacy as well as a better source of legitimacy then Tahrir with which, should it choose to, it can confront the SCAF (assuming it does well in the elections.)
  • Remember that in the last 20 years most Egyptian parliaments were seen as invalid, with the state preferring to gloss over the results of lawsuits contesting results (even by the Supreme Constitutional Court) rather than accept the invalidity of successive parliaments (and hence the laws they passed.) The next parliament may be on shaky legal ground, although this will probably (as under Mubarak) be ignored for convenience's sake. Except this parliament will produce the next constitution. 
  • The year ahead may be full of decisions regarding the elections, and the government and parties will probably want to ignore them, subverting the rule of law for stability's sake. All because they did not spend enough time thinking their decisions through.
  • the degradation of the state's institution, its ability to implement (or defend) the rule of law, and the very little legitimacy the state enjoys. In global surveys, I remember seeing Egypt ranked alongside Congo in terms of "legitimacy of the state".
  • Egyptians deserved better than the process they got today, and they should work to get the people who put them in this position out of power as soon as possible.
Ed Webb

CAIRO: Demonstration highlights how Egypt has changed | Egypt | McClatchy DC - 0 views

  • Demonstrators called for the end of an Egypt controlled by the three institutions that have governed this nation for the past six decades – the military, the so-called remnants of the former regime represented by another toppled president, Hosni Mubarak, and the Muslim Brotherhood, the secretive organization through which Morsi ascended to the presidency. But once again, the democracy advocates offered no one as an alternative to lead Egypt.
  • The ability of those who call for change to spell out only what they don’t want is one reason many Egyptians have turned to the military, the only institution that has a history bringing stability, albeit with brute force. The constant change and instability that characterized Egypt after Mubarak’s resignation in early 2011 has been worse, many feel.
  • The revolutionaries acknowledged that they have lost the public support they once enjoyed. Egyptians, they acknowledged, are weary of protests, elections and grand calls for reforms that revolutionaries have failed to deliver. The top revolutionary leader, former International Atomic Energy Agency head Mohammed ElBaradei, fled the country shortly after Morsi’s demise.
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  • State television used the occasion to suggest that the Muslim Brotherhood, rather than the security forces, was responsible for the deaths of protesters two years ago, announcing that the bullets found in the dead were the same kind as those used by Brotherhood members Aug. 14, when the military broke up a sit-in by Morsi supporters. At least 1,100 people were killed, including about 40 government troops.
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