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Ed Webb

The Coronavirus Oil Shock Is Just Getting Started - 0 views

  • People in the West tend to think about oil shocks from the perspective of the consumer. They notice when prices go up. The price spikes in 1973 and 1979 triggered by boycotts by oil producers are etched in their collective consciousness, as price controls left Americans lining up for gas and European governments imposed weekend driving bans. This was more than an economic shock. The balance of power in the world economy seemed to be shifting from the developed to the developing world.
  • If a surge in fossil fuel prices rearranges the world economy, the effect also operates in reverse. For the vast majority of countries in the world, the decline in oil prices is a boon. Among emerging markets, Indonesia, Philippines, India, Argentina, Turkey, and South Africa all benefit, as imported fuel is a big part of their import bill. Cheaper energy will cushion the pain of the COVID-19 recession. But at the same time, and by the same token, plunging oil prices deliver a concentrated and devastating shock to the producers. By comparison with the diffuse benefit enjoyed by consumers, the producers suffer immediate immiseration.
  • In inflation-adjusted terms, oil prices are similar to those last seen in the 1950s, when the Persian Gulf states were little more than clients of the oil majors, the United States and the British Empire
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  • In February, even before the coronavirus hit, the International Monetary Fund was warning Saudi Arabia and the United Arab Emirates that by 2034 they would be net debtors to the rest of the world. That prediction was based on a 2020 price of $55 per barrel. At a price of $30, that timeline will shorten. And even in the Gulf there are weak links. Bahrain avoids financial crisis only through the financial patronage of Saudi Arabia. Oman is in even worse shape. Its government debt is so heavily discounted that it may soon slip into the distressed debt category
  • The economic profile of the Gulf states is not, however, typical of most oil-producing states. Most have a much lower ratio of oil reserves to population. Many large oil exporters have large and rapidly growing populations that are hungry for consumption, social spending, subsidies, and investment
  • Fiscal crises caused by falling prices limit governments’ room for domestic maneuver and force painful political choices
  • Ecuador is the second Latin American country after Argentina to enter technical default this year.
  • Populous middle-income countries that depend critically on oil are uniquely vulnerable. Iran is a special case because of the punitive sanctions regime imposed by the United States. But its neighbor Iraq, with a population of 38 million and a government budget that is 90 percent dependent on oil, will struggle to keep civil servants paid.
  • Algeria—with a population of 44 million and an official unemployment rate of 15 percent—depends on oil and gas imports for 85 percent of its foreign exchange revenue
  • The oil and gas boom of the early 2000s provided the financial foundation for the subsequent pacification of Algerian society under National Liberation Front President Abdelaziz Bouteflika. Algeria’s giant military, the basic pillar of the regime, was the chief beneficiaries of this largesse, along with its Russian arms suppliers. The country’s foreign currency reserves peaked at $200 billion in 2012. Spending this windfall on assistance programs and subsidies allowed Bouteflika’s government to survive the initial wave of protests during the Arab Spring. But with oil prices trending down, this was not a sustainable long-run course. By 2018 the government’s oil stabilization fund, which once held reserves worth more than one-third of GDP, had been depleted. Given Algeria’s yawning trade deficit, the IMF expects reserves to fall below $13 billion in 2021. A strict COVID-19 lockdown is containing popular protest for now, but given that the fragile government in Algiers is now bracing for budget cuts of 30 percent, do not expect that calm to last.
  • Before last month’s price collapse, Angola was already spending between one fifth and one third of its export revenues on debt service. That burden is now bound to increase significantly. Ten-year Angolan bonds were this week trading at 44 cents on the dollar. Having been downgraded to a lowly CCC+, it is now widely considered to be at imminent risk of default. Because servicing its debts requires a share of public spending six times larger than that which Angola spends on the health of its citizens, the case for doing so in the face of the COVID-19 crisis is unarguable.
  • Faced with the price collapse of 2020, Finance Minister Zainab Ahmed has declared that Nigeria is now in “crisis.” In March, the rating agency Standard & Poor’s lowered Nigeria’s sovereign debt rating to B-. This will raise the cost of borrowing and slow economic growth in a country in which more than 86 million people, 47 percent of the population, live in extreme poverty—the largest number in the world. Furthermore, with 65 percent of government revenues devoted to servicing existing debt, the government may have to resort to printing money to pay civil servants, further spurring an already high inflation rate caused by food supply shortages
  • The price surge of the 1970s and the nationalization of the Middle East oil industry announced the definitive end of the imperial era. The 1980s saw the creation of a market-based global energy economy. The early 2000s seemed to open the door on a new age of state capitalism, in which China was the main driver of demand and titans like Saudi Aramco and Rosneft managed supply
  • The giants such as Saudi Arabia and Russia will exploit their muscle to survive the crisis. But the same cannot so easily be said for the weaker producers. For states such as Iraq, Algeria, and Angola, the threat is nothing short of existential.
  • Beijing has so far shown little interest in exploiting the crisis for debt-book diplomacy. It has signaled its willingness to cooperate with the other members of the G-20 in supporting a debt moratorium.
  • In a century that will be marked by climate change, how useful is it to restore profits and prosperity based on fossil fuel extraction?
  • The shock of the coronavirus is offering a glimpse of the future and it is harsh. The COVID-19 crisis drives home that high-cost producers are on a dangerously unsustainable path that can’t be resolved by states propping up their uncompetitive oil sectors. Even more important is the need to diversify the economies of the truly vulnerable producers in the Middle East, North Africa, sub-Saharan Africa, and Latin America.
Ed Webb

Neither Public nor Private: Egypt Without a Viable Engine for Growth - The Tahrir Insti... - 0 views

  • The program has the ambitious objective of reducing the role of state-owned enterprises—in which the IMF includes military-owned companies—and encouraging their replacement with “inclusive private sector led growth.” Indeed, Egypt’s Prime Minister Mostafa Madbouly called for just that last year, saying he is aiming for the share of private investment in Egypt’s economy to rise from 30 percent to 65 percent in the coming three years. However, when one examines the market conditions in Egypt and globally, it becomes clear that such an expansion of private investment is clearly unrealistic.
  • a massive parallel market for hard currency emerged, with its own exchange rate. The parallel market even operated internationally, with Egyptian expatriate workers paying their Saudi rials or Kuwaiti dinars to dealers in the countries where they worked, who then had partners in Egypt who would disburse Egyptian pounds to awaiting relatives at the black-market rate. In 2015, before new reforms were introduced, the central bank governor at the time Hisham Ramez estimated that as much as 90 percent of Egypt’s remittances were being lost to the parallel market, circumventing the country’s official banking system and starving banks of much needed hard currency liquidity. For perspective on the seriousness of this issue, remittances in recent years have brought more dollars to Egypt than Suez Canal revenue, Foreign Direct Investment (FDI), and tourism combined.
  • Inflation already pushed past 20 percent last month and this is only the beginning of a year or more of price corrections as markets absorb the latest dramatic devaluation of the country’s currency. While in 2016 and 2017 consumers cut back on beef and chicken, replacing them with eggs as a source of protein and fats, eggs today are too expensive for many, leading the government to encourage the consumption of chicken legs.
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  • The new IMF program requires 20 million vulnerable Egyptians to receive cash transfers by the end of January, but three years ago when things were far less precarious, there were already 30 million Egyptians in poverty and the World Bank estimated 60 million Egyptians were near or below the poverty line. Today, poverty levels are almost certainly higher and despite a modest increase in social protection coverage, domestic demand in the coming year will likely weaken even further
  • the IMF appears unrealistic about the coming pain, estimating just 14 percent inflation in the coming year. They are also likely to be unrealistic about how quickly growth can be achieved. It is not just the private sector that will not grow in the near term due to the many deterrents facing Egypt’s business community. 
  • Egypt’s GDP growth for the past several years was buoyed by enormous levels of public spending on roads, bridges, new cities (including a new capital city), massive rail projects including the world’s longest monorail line, and even a number of presidential palaces.  Now that the state is being required by the IMF to cut unnecessary large project stimulus and its ability to borrow is heavily constricted, the country’s growth model is at risk of decelerating.
  • The IMF has finally started to seriously engage with Egypt’s sizable governance issues and calls for reducing the size of the military’s economic empire which has done enormous damage to the country’s economy and private sector
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

Cash and contradictions: On the limits of Middle Eastern influence in Sudan - African A... - 0 views

  • In Sudan, the revolutionaries who overthrew President Omar al-Bashir and who continue to organise are well aware of the threat posed by neighbouring Arab countries. Protesters’ murals show the people rejecting the interfering hands of Saudi Arabia and the United Arab Emirates (UAE). One of the most popular chants is “Victory or Egypt”, voicing activists’ determination not to succumb to a military counter-revolution as happened in their northern neighbour.
  • many Sudanese believe that the 3 June crackdown in which scores of protesters were killed only came after the green light from Saudi Arabia, the UAE and Egypt
  • In this struggle between the “Pax Africana” and Arab authoritarians, there’s no doubt that the democrats have the weaker hand. But not everything is going the Arab troika’s way.
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  • Sudan wasn’t following the script of Bahrain, where the demonstrators dispersed after a single crackdown, or Egypt, where the army took control through co-option and repression.
  • A major split between Saudi Arabia and the UAE was on show in July when the latter abruptly withdrew most of its forces from Yemen. No official explanation was given, but the decision was evidently not coordinated with Saudi Arabia, which remains bogged down in an intractable war. The UAE’s decision also shows it can be mercurial and that its policies towards the Horn of Africa may be less strategic and more opportunistic than commentators have assumed.
  • Egypt prides itself on understanding Sudan and sees Saudi Arabia and UAE as newcomers seeking influence solely by dispensing money. Egypt limited its demands on Sudan to handing over Egyptian Islamists in exile, suspending the deal for Turkey to develop a naval base, and ceding its territorial claim to the Halaib Triangle.
  • As Arab countries find themselves pulled in to the internal negotiations among the Sudanese, they will face another potential point of contention. Sudan doesn’t just need democracy, but peace. This means a role for the Islamists both in Khartoum and the provinces. For a decade, the custodian of the Darfur peace process has been Qatar, the troika’s arch rival, and it will be impossible to ignore Qatar’s role or that of Sudan’s diverse constituency of Islamists. Some of these dynamics are already playing out and reveal the lack of a common strategy among the Arab troika
  • After the secession of South Sudan in 2011, Sudan lost 75% of its oilfields and an even greater proportion of its hard currency earnings. The following year, it literally struck gold and within a few years, gold was providing 40% of Sudan’s exports. As much as a third of it, however, came to be smuggled to Libya, Chad or directly by plane to the region’s biggest gold market in Dubai. The government in Khartoum, desperate to control the commodity, responded by using the Central Bank of Sudan as its sole buying agent, paying above the market price to gold traders and printing money to cover this outlay. Buying gold to convert to hard currency became the engine of Sudan’s inflation, which skyrocketed. By 2018, the price of essential commodities such as bread and fuel was so high relative to stagnant wages that the people across the country took to the streets to protest.
  • Hemedti. His RSF militia controls the gold mines and he personally owns a number of concessions. Through Sudan’s monetary policy, vast resources were transferred from wage earners in the centre of the country to militiamen and gold traders in the peripheries
  • Hemedti has also benefited massively from providing mercenaries, which may be Sudan’s second biggest source of foreign exchange today. A few months after the Saudis launched their war in Yemen in March 2015, Sudan volunteered to send troops. The first contingent was a battalion of the regular army, but then Hemedti struck a parallel deal to dispatch several brigades of RSF fighters. Within a year, the RSF comprised by far the biggest foreign contingent fighting in Yemen with at least 7,000 militiamen. Hemedti was paid directly by Saudi Arabia and the UAE for this service. He says he deposited $350 million in the Central Bank, but has not said how much he kept to himself for his own enrichment or political spending.
  • the Central Bank of Sudan has become an instrument for Hemedti’s political finance. And since becoming the central actor in Sudan’s ruling cabal in April, he has exerted an even tighter grip on gold production and exports while moving aggressively into other commercial areas. He has increased the RSF’s deployment in Yemen and sent a brigade to fight in Libya alongside General Khalifa Haftar, who is backed by Egypt and the UAE, almost certainly in return for Emirati financial rewards. Hemedti is also expanding his family business conglomerate, the Al-Junaid companies, and running his political business on the basis of personally handing out cash to key constituents such as tribal chiefs, the police, and electricity workers.
  • none of this addresses Sudan’s macroeconomic crisis: its rampant inflation, rapidly increasing arrears on international debt, and ostracism from the dollar-based international financial system
  • Sudan’s Gulf patrons are bailing out the country with a $200 million monthly subsidy in cash and commodities, but the bailout amounts needed will quickly become too big even for the oil-rich Gulf States’ deep pockets
  • a clash between Hemedti’s political market logic and Sudan’s macroeconomy is looming.  The Sudanese technocrats associated with the FFC are well aware of this, which is why the economists called upon to put themselves forward for cabinet positions have been reluctant to agree. There is a race between Hemedti’s consolidation of power and a re-run of the economic crisis and protests that led to al-Bashir’s downfall.
  • as Sudan’s economic crisis deepens, they will have to turn to the IMF and western creditors for assistance
Ed Webb

Mohammed bin Salman Isn't Wonky Enough - Foreign Policy - 0 views

  • Like Western investors, the kingdom’s elites are uncertain about what the new order means for the country’s economy. The new Saudi leadership has indeed created new opportunities, but many of the deep structural barriers to diversification remain unchanged. The bulk of the public sector remains bloated by patronage employment, the private sector is still dominated by cheap foreign labor, and private economic activity remains deeply dependent on state spending. Addressing these challenges could take a generation — and it will require patience, creativity, and a clearer sense of priorities.
  • While a band of Al Saud brothers used to rule collectively with the king as a figurehead, decision-making has now become centralized under one man
  • ruthlessness and willingness to take risks radically at odds with the cautious and consensual political culture of the Al Saud clan
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  • New policies and programs are announced constantly, while the delivery capacity of the sluggish Saudi bureaucracy continues to lag. Below the upper echelons, the Saudi state remains the deeply fragmented, bloated, and slow-moving machine that I described in my 2010 book. The government seems to have no clear strategy for reforming this bureaucracy
  • While space for political opposition arguably has narrowed, women will soon be allowed to drive and the religious police force that once harassed them has been almost entirely neutered. By relaxing religious controls over the public sphere, the crown prince is seeking to attract more foreign investment and facilitate diversification into tourism and entertainment
  • Saudi Arabia has tackled fiscal reforms more vigorously than most local and international observers expected, introducing unprecedented tax and energy price measures, including the introduction of a 5 percent value added tax, new levies on foreign workers, and increases in electricity and transport fuel prices. The government is now experimenting with new non-oil sectors with an increased sense of urgency, including information technology and defense manufacturing.
  • As limits on government employment kick in, young Saudis will increasingly have no choice but to seek private jobs. But they will face tough competition on the private labor market where employers have become accustomed to recruiting low-wage workers from poorer Arab and Asian countries
  • public sector employment remains the key means of providing income to Saudi nationals. Cheap foreign labor dominates private sector employment, thereby keeping consumer inflation at bay and business owners happy. Citizens, however, are parked in the overstaffed public sector. Out of every three jobs held by Saudis, roughly two are in government. The average ratio around the world is one in five. Public sector wages account for almost half of total government spending, among the highest shares in the world
  • Local economic advisors fear that the majority of private petrochemicals firms — the most developed part of Saudi industry — would lose money if prices of natural gas, their main input, increase to American levels.
  • Saudi wage demands will have to drop further if private job creation is to substitute for the erstwhile government employment guarantee. For the time being, private job creation has stalled as the government has pursued moderate austerity since 2015 in response to deficits and falling oil prices
  • The government has also underestimated how dependent private businesses are on state spending. The share of state spending in the non-oil economy is extremely high compared to other economies. Historically, almost all private sector growth has resulted from increases in public spending
  • As long as oil prices remain below $70 per barrel, the goal of a balanced budget will cause pain for businesses and limit private job creation. This will pose a major political challenge at a time when an estimated 200,000 Saudis are entering the labor market every year. More than 60 percent of the population is under 30, which means that the citizen labor force will grow rapidly for at least the next two decades.
  • It would be far more prudent to gently prepare citizens and businesses for a difficult and protracted adjustment period and to focus on a smaller number of priorities
  • The key structural challenge to non-oil growth is the way the Saudi government currently shares its wealth, most notably through mass public employment — an extremely expensive policy that bloats the bureaucracy, distorts labor markets, and is increasingly inequitable in an era when government jobs can no longer be guaranteed to all citizens. A stagnating economic pie that might even shrink in the coming years must be shared more equitably.
  • A basic income would not only guarantee a basic livelihood for all citizens, but also serve as a grand political gesture that could justify difficult public sector reforms. A universal wealth-sharing scheme would make it easier to freeze government hiring and send a clear signal that, from now on, Saudis need to seek and acquire the skills for private employment and entrepreneurship. The government could supplement this scheme by charging fees to firms that employ foreigners while subsidizing wages for citizens to fully close the wage gap between the two.
  • Focusing on such fundamentals might be less exciting than building new cities in the desert or launching the world’s largest-ever IPO — but they are more important for the kingdom’s economic future. No country as dependent on petroleum as Saudi Arabia has ever effectively diversified away from oil
Ed Webb

At Banque Havilland, Abu Dhabi's Crown Prince Was Known as 'The Boss' - Bloomberg - 0 views

  • A trove of emails, documents and legal filings reviewed by Bloomberg News, as well as interviews with former insiders, reveal the extent of the services Rowland and his private bank provided to one of its biggest customers, Mohammed bin Zayed, better known as MBZ, the crown prince of Abu Dhabi and de facto ruler of the United Arab Emirates. Some of the work went beyond financial advice. It included scouting for deals in Zimbabwe, setting up a company to buy the image rights of players on the Abu Dhabi-owned Manchester City Football Club and helping place the bank’s chairman at the time on the board of Human Rights Watch after it published reports critical of the Persian Gulf country.
  • a 2017 plan devised by the bank for an assault on the financial markets of Qatar, a country that had just been blockaded by the UAE, Saudi Arabia, Egypt and Bahrain for allegedly sponsoring terrorism
  • a coordinated attack to deplete Qatar’s foreign-exchange reserves and pauperize its government
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  • One of Rowland’s sons, a senior executive at the Luxembourg-based bank, emailed the plan to Will Tricks, who had swapped a career in the U.K.’s foreign intelligence service MI6 for a job advising MBZ. Tricks, who acted as a go-between for the Rowlands, was paid as a contractor by Banque Havilland. The presentation found its way to the UAE’s ambassador to the U.S., who stored it on his computer under “Rowland Banque Havilland.”
  • Last year, Qatar sued Banque Havilland in London, accusing it of orchestrating a campaign that cost the country more than $40 billion to shore up its banks and defend its currency peg against the U.S. dollar. While the lawsuit has received attention in the media, the extent of other work Banque Havilland did on behalf of MBZ hasn’t been previously reported. Nor has the role of Tricks.
  • Havilland is facing a criminal investigation in Luxembourg for, among other things, its dealings with the family of another head of state, Azerbaijan’s President Ilham Aliyev. It has also had communications with regulators in Luxembourg and the U.K. about the Qatar plan
  • Devising a plan for economic sabotage, whether implemented or not, is beyond the remit of most private banks. But Banque Havilland is no ordinary financial institution. The firm specialized in doing things others might balk at, the documents and emails show. Its clients included kleptocrats and alleged criminals in corruption hotspots including Nigeria and Azerbaijan. Its owners solicited business in sanctioned countries such as North Korea and Zimbabwe.
  • Not all of its clients were pariahs, and none was as important as MBZ, people with knowledge of the matter say. The crown prince, 59, is one of the Arab world’s most powerful leaders. A graduate of Britain’s Royal Military Academy Sandhurst, he commands one of the best-equipped armies in the region and has waged wars in Yemen, Libya and Somalia. He’s not as well-known as his protégé and neighbor Mohammed bin Salman, Saudi Arabia’s crown prince. And he isn’t president of the UAE, a title held by a half-brother.
  • When MBZ wanted to develop a foothold in southern Africa’s commodities market in 2011, Tricks worked with the Rowlands on sourcing potential investments, documents and emails show. They picked Zimbabwe as a hub for the region, but there was a problem. The country was subject to U.S. and European Union sanctions that banned dealings with President Robert Mugabe’s inner circle and many of its state-owned companies. Tricks passed on advice about setting up a trust in Abu Dhabi for any Zimbabwe deals to hide the identities of investors from the U.S. Treasury Department, which oversees sanctions enforcement
  • the UAE is now a major trading partner with the country despite continuing U.S. sanctions, and it opened an embassy there in 2019
  • Robeson, the foundation’s chairman, was elected to the Human Rights Watch board a few months later, in April 2012. He was named to the advocacy group’s Middle East and North Africa advisory committee. “We have been given the complete list of projects currently being undertaken by Human Rights Watch in the Middle East and North Africa,” Robeson wrote soon after joining the board, in a memo he emailed to Jonathan Rowland that he asked him to share with his father. Robeson also said he’d been given detailed notes of a meeting between the group and Britain’s then-Secretary of State for International Development Andrew Mitchell, along with other private briefings.
  • The foundation appears to have had no other purpose than making the Human Rights Watch donations. It was registered in Guernsey after the first gift and wound down when Robeson left the board in 2016.
  • Emma Daly, a spokeswoman for Human Rights Watch in New York, said the organization vetted Robeson at the time he was being considered for the board and couldn’t find any conflicts. She said the group didn’t know about Rowland’s or the bank’s connections to MBZ. Its most recent report on the country noted that, “Despite declaring 2019 the ‘Year of Tolerance,’ United Arab Emirates rulers showed no tolerance for any manner of peaceful dissent.”
  • The presentation is now a key part of the case in which Qatar accuses the bank of orchestrating an illegal UAE-backed campaign to create false impressions about the country’s stability. The UAE is not a defendant. The plan called for setting up an offshore vehicle into which the UAE would transfer its holdings of Qatari debt before buying more of the securities. The fund would also purchase foreign-exchange derivatives linked to the Qatari riyal and buy enough insurance on its bonds—a barometer of a country’s creditworthiness—to “move the price sufficiently to make it newsworthy.” Working with an affiliated party, it would then flood the market with the bonds to create the impression of panicked selling. The presentation also described a public relations drive to “add more fuel to the fire” and suggest Qatar might be struggling to access U.S. dollars.
  • Within weeks of the plan being sent to Tricks, the riyal—under pressure since the beginning of the blockade in June 2017—went into freefall and hit a record low. The yield on Qatar’s 10-year bonds also soared, as did the cost of insuring the country’s debt against default. The currency didn’t recover until November of that year, after the Intercept reported on the Banque Havilland plan.
Ed Webb

Egypt bakeries protest planned reduction of flour subsidies - Economy - Business - Ahra... - 0 views

  • Hundreds of Egyptian bakery owners on Saturday blocked Cairo's Qasr Al-Aini Street near the Ministry of Supply and Internal Trade to protest government plans to reduce flour subsidies.  On Thursday, the supply ministry announced that it would continue to subsidise bread loaves, but not flour – which would henceforth be sold to bakeries at market prices. The move means that prices paid by bakeries for a 100-kilogram bag of flour would rise from LE16 to LE286.
  • The government will then purchase loaves of bread from bakeries for 34 piastres each before selling them on to consumers at 5 piastres each. 
  • "We have long called for the liberalisation of flour prices and the entire system of bread production," Ghorab added. "But with its latest decision, the government is setting an unrealistic production cost."
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  • The government has often accused bakeries of selling subsidised flour on to the black market rather than using it to produce bread. "Some bakery owners are calling strikes and sit-ins in hopes of seeing the new system fail, so that the old system – which allowed them to sell large amounts of flour on the black market – would be maintained," Nasser El-Farrash, advisor to the supply minister, said recently.
  • The Egyptian government has traditionally kept local bread prices down by both importing and purchasing massive amounts of locally-produced wheat and supplying state-sponsored bakeries with flour to produce needed quantities of bread.  Local bread prices have remained unchanged since the 1980s due to a policy of frequent government intervention to stabilise subsidised bread prices. Until now, the local price for a loaf of bread remains about 5 piastres. 
Ed Webb

Picking up the pieces - 0 views

  • Syrians have shown relentless ingenuity in adapting to every stage of a horrendous conflict, salvaging remnants of dignity, solidarity and vitality amid nightmarish circumstances
  • The decimation of Syria’s male population represents, arguably, the most fundamental shift in the country’s social fabric. As a generation of men has been pared down by death, disability, forced displacement and disappearance, those who remain have largely been sucked into a violent and corrupting system centered around armed factions
  • 80 of the village’s men have been killed and 130 wounded—amounting to a third of the male population aged 18-50. The remaining two-thirds have overwhelmingly been absorbed into the army or militias
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  • “If you want to protect yourself and your family, you join a militia,” remarked a middle-aged man in the Jazmati neighborhood. “The area is infested with crime associated with the National Defense militias. Each group has control over a certain quarter, and they sometimes fight each other over the distribution of spoils. Shop owners must pay these militias protection. One owner refused, and they torched his store.”
  • Another resident of the same area explained that he and his family could scrape by thanks to his two sons’ positioning in the Iran-backed Baqir Brigade—which provides not only monthly salaries, but also opportunities to procure household items through looting.
  • This cannibalistic economy, which encompasses all those who have come to rely on extortion for their own livelihoods, extends to the cohort of lawyers, security officials and civil servants who have positioned themselves as “brokers” in the market for official documents such as birth, marriage and death certificates
  • An industrialist in Aleppo put it simply: “I talk with factory owners and they say they want to reopen their factories, but they can’t find male workers. When they do find them, security services or militiamen come and arrest those workers and extort money from the owners for having hired them in the first place.” With no large scale returns on the horizon for local industries, this economic impasse will take years to resolve.
  • Although virtually every problem that sparked Syria’s 2011 uprising has been exacerbated, society has been beaten down to the point of almost ensuring that no broad-based reformist movement will be able to coalesce for a generation to come
  • the unraveling of Syria’s productive economy, and its replacement by an economy of systematic cannibalization in which impoverished segments of Syrian society increasingly survive by preying upon one another
  • a new term—taafeesh—to describe a practice that goes far beyond stealing furniture to include extremes such as stripping houses, streets and factories of plumbing and electrical wiring
  • “I watched uniformed soldiers using a Syrian army tank to rip out electrical cables from six meters underground,” remarked a fighter with a loyalist Palestinian faction, who was scrambling to retrieve belongings from his apartment before it could be pillaged. “I saw soldiers from elite units looting private hospitals and government offices. This isn’t just looting—it’s sabotage of essential infrastructure.”
  • I returned to my apartment just to retrieve official documents and some hidden pieces of gold. I did so, and then destroyed my own furniture and appliances because I don’t want these people making money at my expense. I was ready to burn down my own apartment, but my wife stopped me—she didn’t want me to cause harm to other apartments in the building.
  • micro-economies in their own right—from the recycling of rubble to the proliferation of taafeesh markets, where people buy second-hand goods stolen from fellow Syrians. Many have no choice but to use these markets in order to replace their own stolen belongings
  • Syrians also dip into precious resources to pay officials for information, for instance on disappeared relatives or their own status on Syria’s sprawling lists of “wanted” individuals. For those wishing to confirm that they won’t be detained upon crossing the border to Lebanon, the going rate is about 10 dollars—most often paid to an employee in the Department of Migration and Passports.
  • Just as Syrians are forced to be more self-reliant, they have also come to depend evermore on vital social support structures. Indeed, extreme circumstances have created a paradox: Even as society has splintered in countless ways, the scale of deprivation arguably renders Syrians more closely interdependent than ever before.
  • Today, even the most senior lawyers in our practice are working as document brokers. A well-connected broker makes 30 to 40,000 pounds [60 to 80 dollars] per day; this roughly equals the monthly salary of a university-educated civil servant. As a result, many government employees resign and work as brokers to make more money.And this truly is a business, not a charity: Every broker takes money, even from his own brothers and sisters. Last week a colleague brought me his brother-in-law. I asked him why he needed me, when he could make all the papers himself. He explained that he can’t take money from his own brother-in-law, but I can do so and then give him half.
  • Most who can afford to leave the country do so; others benefit from an exemption afforded to university students, while another subset enjoys a reprieve due to their status as the sole male of their generation in their nuclear family. Others may pay exorbitant bribes to skirt the draft, or confine themselves within their homes to avoid being detected—making them invisible both to the army and to broader society. Some endure multiple such ordeals, only to remain in an indefinite state of limbo due to the contingent and precarious nature of these solutions
  • Syria’s predatory wartime economy is slowly but surely turning into a predatory economy of peace
  • As some Syrians put it, Damascus has been particularly effective in reconstructing one thing amidst the immeasurable destruction: the “wall of fear” which characterized the regime before 2011 and which momentarily broke down at the outset of the uprising
  • active surveillance, intimidation and repression are not the only contributors to this leaden atmosphere. A pervasive exhaustion has settled over Syrians ground down and immiserated by war, disillusioned with all those who purport to lead or protect them, and largely reduced to striving for day-to-day subsistence
  • At one level, the war has wrenched open social and economic fractures that existed long before the conflict. The city of Homs stands as perhaps the starkest microcosm of this trend. A Sunni majority city with sizable Christian and Alawi minorities, Homs was the first major urban center to rise up and the first to devolve into bitter sectarian bloodletting
  • While vast swathes of Syria’s Sunni population feel silenced and brutalized, Alawi communities often carry their own narrative of victimhood, which blends legitimate grievances with vindictive impulses vis-à-vis Sunnis whom they regard as having betrayed the country
  • crude divisions based on sect or class fail to describe a complex and fluid landscape. Some fault lines are less dramatic, all but imperceptible except to those who experience them first-hand. Neighbors, colleagues, friends and kin may have come down on opposing sides, despite having every social marker in common. Each part of the country has its own web of tragic events to untangle.
  • Many Islamic State fighters swapped clothes and joined the [Kurdish-led] Syrian Democratic Forces to protect themselves and their families. But they haven’t changed; those people are bad, and will always be bad. There will be vengeance. Not now, while everyone is busy putting their lives together. But eventually, everyone who suffered under ISIS, whose brother was killed by ISIS, will take revenge.
  • A native of a Damascus suburb remarked: “Charities typically want to help those who fled from elsewhere. So, when I go to a charity, I say I’m displaced.”
  • The divide between conservative and more secular Sunnis has calcified, manifesting itself even in differential treatment at checkpoints. “I have an easier time driving around because I don’t wear the hijab,” remarked a woman from the Damascus suburbs. “If you veil, security assumes you’re with the opposition.”
  • While dialogue is sorely needed, some Syrians warn against emphasising dialogue for its own sake—even at the cost of burying the most substantive issues at stake. A businessman from Damascus described his own abortive experience with talks proposing to link disparate elements of Syria’s private sector: “There’s this whole industry around ‘mediation,’ including between sides that don’t actually disagree on anything. Meanwhile, all the problems that caused the uprising have gotten worse.”
  • Multiplying forms of predation have accelerated the outflow of Syria’s financial and human capital, leaving behind a country largely populated by an underclass that can aspire to little more than subsistence
  • remittances from relatives who live abroad
  • The country’s middle and upper classes have long extended vital forms of solidarity to their needier compatriots, with Syria’s merchant and religious networks playing a leading role. What is unique, today, is the scale of hardship across the country, which is so vast as to have changed the way that Syrians conceptualize the act of receiving charity. A businessman from central Syria noted the extent to which dependency, which once demanded some degree of discretion, has become a straightforward fact of life. “People used to hide it when they were reliant on charity. Not anymore. Today you might hear workers in a factory wondering, ‘Where is the manager?’ And someone will say that he’s out waiting for his food basket. The whole country is living on handouts.”
  • People still do charity the Islamic way, based on the premise that you must assist those closest to you. If there’s someone you should help—say, a neighbor—but you’re unable, then it’s your responsibility to find someone else who can. These circles remain very much intact, and the entire society lives on this. Seven years of war didn’t destroy that aspect of Syrian culture, and that’s something Syrians are proud of.
  • There will be no nationwide recovery, no serious reform, no meaningful reconciliation for the foreseeable future.
Ed Webb

Late Populism: State Distributional Regimes and Economic Conflict after the Arab Uprisi... - 0 views

  • This note will briefly outline the notion of an Arab “variety of capitalism” characterized by the central role of a distributive state whose interventions lead to a deep, and at least in parts unintended, segmentation of business and labour markets into insiders and outsiders. It will explain how this model has led to economic stagnation and contributed to the uprisings of 2011 as well as how it has hobbled economic adjustment after the uprisings, both under anciens and new regimes. Its pessimistic conclusion is that distributional institutions in most Arab countries remain very sticky, having created powerful vested interests not only in business but also in society at large that undermine the negotiation of a new “social contract” – a concept that many are talking about but no one seems to be able to map out in any detail.
  • Authoritarian-populist republics like Algeria, Egypt, (pre-war) Syria and Tunisia have achieved particularly good human development scores considering their modest levels of wealth (figure 3).
  • While Arab governments’ ambition to provide might have led to solid coverage of basic services, most Arab states have pledged much wider material guarantees to their citizens – typically beyond their fiscal and administrative capacity, especially once economic growth started stalling in the 1970s. The result has been a rigid insider-outsider division in which some benefit from Arab governments’ relative generosity while others remain excluded.
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  • The shares of public in total employment across core Arab countries in Maghreb and Mashreq mostly lie between 20 and 40 percent, far above those in richer Latin America, where they range from 4 to 15 percent (OECD 2014, 61), sub-Saharan Africa, where they range from 2 to 9 percent (Monga and Lin 2015, 138), or East Asia and Pacific, where they mostly lie below 5 percent (Packard and Van Nguyen 2014, 16).
  • A majority of citizens, however, remains excluded from state employment, which is often seen to be allocated in intransparent ways. As formal employment in the private sector remains miniscule, the default option for most remains the badly paid, precarious informal sector.
  • A large informal sector also exists in other developing countries. But different from most other developing economies, the “insider” group on the labor market mostly consists of public employees (figure 5). This setup makes for a relatively large and protected insider group, but also crowds out state resources for more inclusive and growth-oriented policies.
  • Insider-outsider dynamics are also at play in Arab business, the top tiers of which are typically state-dependent cronies, protected through layers of heavy regulation as well as discretionary subsidies and credit allocation – themselves often distorted legacies of earlier periods of statist development
  • On labor markets, informality typically lasts longer, labor turnover is lower, and exits from public employment are almost unheard of
  • deep formal and informal state intervention and protection result in low mobility between segments
  • The only universal benefit on which most Arab states spend large amounts are energy subsidies, which are regressive as they disproportionately benefit richer households.
  • While Arab states have gone to great lengths to provide, popular expectations of provision in the region have also been particularly high (figure 6) – arguably a legacy of populist policies that have promised universal public services and employment to the masses since the age of Nasser.
  • Given these high expectations, material exclusion and inequality and the highly visible “winner takes all” business cronyism in the 2000s has been grating for many ordinary citizens – even if average levels of inequality in the region remain on a middling level in global comparison
  • While the elites leading the revolutions cared deeply about questions of political freedom, it is clear that material issues played an important role in the mass mobilization that tipped the balance in cases like Egypt or Tunisia.
  • Since 2011, some energy subsidies have been cut in a piecemeal fashion, but only under enormous fiscal pressure and without building a comprehensive social safety system to compensate. In the absence of such systems, public resistance to subsidy reforms has been strong. No ruler has yet dared to substantially change public employment policies.
  • This anti-development equilibrium of low capacity and vested interests has led Arab states even further down the route of unequal and exclusive distribution after 2011. In Tunisia, the most powerful interest group is the national union UGTT, which represents mostly middle aged, middle class government employees – not the informal sector whose rage fuelled the revolution. The UGGT has contributed to elite-level political pacts that have prevented Tunisia from backsliding into autocracy. In the economic field, however, it has mostly focused on defending insider privileges, investing much of its energy in fighting successfully for fiscally unsustainable civil service salary raises. In the meantime, little has been done for improving the lot of informal workers. They themselves remain fixated on the public sector: protesters from marginalized communities have been asking for the provision of one government job per family, and unrest has been triggered by the removal of individuals from an official list promising government employment.
  • Even “fierce” states embroiled in civil wars have deepened their old-style distributional commitments: Post-Saddam patronage policies under rival prime ministers have resulted in a state that now reportedly employs 7 million individuals, about half the total adult population (More than 55 percent of the population of about 36 million is under 20). Including in ISIS-occupied areas, 8 million individuals rely on a government salary or pension. Iraq competes with much richer GCC countries for the highest share of government employees anywhere in the world
  • Tunisian and Egyptian attempts to prosecute old regime cronies have been half-hearted at best and many cronies remain well connected to the new ruling elites. In the absence of an independent business class, both governments have made attempts to lure temporarily marginalized old-school business tycoons back into their countries to invest.
Ed Webb

Three Decades After his Death, Kahane's Message of Hate is More Popular Than Ever - MERIP - 0 views

  • on November 5, 1990, Rabbi Meir Kahane was assassinated in New York City, a seminal event in the annals of American and Israeli history. Years after his death, Kahane’s killing is considered the first terror attack of the group that would later coalesce into al-Qaeda.
  • Kahane had spent the previous 22 years calling for Israel’s parliament to be dissolved and replaced with rabbinic rule over a Jewish theocracy, based on the strictest interpretations of the Torah and Talmud. He openly incited the ethnic cleansing of Palestinians—and all other non-Jews who refused to accept unvarnished apartheid—from Israel and the territories it occupied. He outdid all other Israeli eliminationists with his insistence that killing those he identified as Israel’s enemies was not only a strategic necessity, but an act of worship.[1] His ideology continues to resonate: In the September 2019 elections to Israel’s parliament the explicitly Kahanist Jewish Power Party (Otzma Yehudit) got 83,609 votes, putting it in tenth place in a crowded field of over 30 parties.
  • The victims of JDL-linked terrorist attacks in the United States were usually innocent bystanders: the drummer in a rock band who lost a leg when a bomb blew up the Long Island home of an alleged Nazi war criminal; the Boston cop who was seriously injured during his attempt to dispose of another bomb intended for the American-Arab Anti-Discrimination Committee; the elderly lady who died of smoke inhalation in her Brooklyn flat above a Lebanese restaurant torched after its owners were accused of sympathies with the Palestine Liberation Organization (PLO); the young Jewish secretary who was asphyxiated when another fire burned through the Manhattan office of a talent agency that promoted performances of Soviet ballet troupes.
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  • Kahanists are the FBI’s prime suspects in the 1985 assassination of popular Palestinian-American activist Alex Odeh who died in a bombing outside Los Angeles because he called for a two-state solution (which became the official policy of the US government less than a decade later).[2] Odeh’s murder had far-reaching implications, scaring off a generation of Arab-American activists from advocating on behalf of Palestinians.
  • even many sectors of the Israeli right were embarrassed by Kahane’s shameless racism, and by the end of his first term in 1988 he was banned from running again.
  • Six years later, in 1994, the Israeli government, then led by the Labor Party, declared his Kach party a terrorist organization. But by that point, the Kahane movement had already been active for over a quarter of a century, leaving a wake of destruction. To date it has produced more than 20 killers and taken the lives of over 60 people, most of them Palestinians.[3] Credible allegations put the death toll at well over double that number, but even the lower confirmed figure yields a higher body count than any other Jewish faction in the modern era.
  • For decades, Kahanists—as followers of Kahane are called in Israel—have repeatedly attempted to leverage their violence to trigger a wider war and bog Israel down in perpetual armed conflict with its neighbors. And once Israel’s military might is truly unassailable, Kahanists say, Jewish armies must march across the Middle East and beyond, destroying churches and mosques and forcing their Christian and Muslim worshippers to abandon their beliefs or die at the sword.
  • Just months after the Oslo Accords were signed in Washington, DC on the White House lawn, a former candidate for Knesset in Kahane’s Kach party, Baruch Goldstein, committed the largest mass murder by a single person in Israeli history, shooting dead 29 Palestinians and wounding over 100 more at a mosque in Hebron. During the protests that followed, the Israeli Defense Forces killed perhaps two dozen more Palestinians. Exactly 40 days later, at the end of the traditional Muslim mourning period, Hamas began its retaliatory campaign of suicide bombings. Over the next three years this campaign would claim over 100 Israeli lives and harden many Jewish hearts against the prospect of peace with Palestinians. Today, Kahanists can convincingly claim credit for crippling the fragile peace process while it was still in its infancy.
  • In Hebron in 1983, on the Jewish holiday of Purim, Kahanist Israel Fuchs sprayed a passing Palestinian car with bullets. In response, Israel’s defense minister ordered Fuchs’s Kahanist settlement razed to the ground. A decade later in 1994, when Goldstein carried out his massacre, also on Purim, Israel’s defense minister put Hebron’s Palestinian residents under curfew and ordered the local Palestinian commercial district locked and bolted. The market has been shuttered ever since. Last year, Israel’s defense minister announced that the market would be refurbished and repopulated—by Jewish residents. On the same day, the state renovated nearby Kahane Park, where Goldstein is entombed, and where Kahanists gather every year to celebrate Purim and the carnage Goldstein wrought.
  • Many of Kahane’s American acolytes followed him to Israel, including top JDL fundraiser and Yeshiva University provost Emanuel Rackman, who took over as rector, and then chancellor, of Israel’s Bar Ilan University. Under Rackman’s tutelage, Bar Ilan’s Law School became an incubator for the Israeli far-right. The most infamous of these students was Yigal Amir. Inspired by the Goldstein massacre, Amir assassinated Prime Minister Yitzhak Rabin in 1995, dealing a death blow to Israel’s liberal Zionist camp. Amir carried out the murder on the five-year anniversary of Kahane’s killing.
  • Both American-born followers of Kahane, Leitner and Ben Yosef went from armed attacks against Palestinians to court room advocates for their fellow religious extremists. Both enlisted at Bar Ilan Law School after serving short prison sentences. Together with his wife Nitzana Darshan, who he met there, Leitner established the highly profitable Israel-based lawfare group Shurat HaDin or Israel Law Center (ILC). After Ben Yosef earned his law degree at Bar Ilan, his American allies founded the Association Center for Civil Justice (ACCJ), a US-based lawfare group that has earned millions of dollars and has for years funneled significant sums to Fuchs, Ben Yosef and other Kahanists.
  • After Israeli Prime Minister Yitzhak Rabin was assassinated in 1995, his Labor-led government was replaced by the secular right-wing Likud party, led by Benjamin Netanyahu, who promptly appointed ex-Kahanists Tzahi HaNegbi and Avigdor Liberman to cabinet positions. But that did not satisfy the appetite of the Kahanists, who resolved to coax the Likud even further to the right. Founded by longtime Kahane supporter Shmuel Sackett, the Likud’s Jewish Leadership faction succeeded in catapulting its candidate Moshe Feiglin into the role of deputy speaker of the Knesset where he called on the government to “concentrate” the civilian population of Gaza into “tent camps” until they could be forcefully relocated.
  • Today, prior membership in the Kahanist camp no longer carries any stigma within the Likud.
  • the original Kach core group has rebranded itself to sidestep Israeli law, now calling itself Jewish Power, and are consistently courted by the rest of the Israeli right
  • Kahanists have had even greater success penetrating the halls of power at the local level where their representatives on Jerusalem city council have been included in the governing coalition since 2013. In 2014, Kahanist Councillor Aryeh King—now deputy mayor—used widely-understood religious references to incite an assembly of religious Jews to kill Palestinians. Later that very night, a group of religious Jews did exactly that, kidnapping and beating Palestinian teen Mohammad Abu Khdeir, forcing gasoline down his throat and torching him to death from the inside out.
  • After Kahane’s death, top Chabad rabbi Yitzchak Ginsburgh, also an American immigrant to Israel, inherited Kahane’s position as the most unapologetically racist rabbi in the country. In 2010 Ginsburgh helped publish an influential and vicious religious tract authored by one of his leading disciples called The King’s Torah, which sanctions organ harvesting from non-Jews and infanticide (if a Jew suspects that the child will one day constitute a threat).[9] Ginsburgh’s frequent tributes to Kahane’s memory, including repeated proclamations that “Kahane was right” have cemented the loyalty of third-generation Kahanists, including the latter’s namesake grandson, settler youth leader Meir Ettinger.
  • Thirty years ago, even if Israeli rabbis thought like Kahane and Ginsburgh they would not dare to speak these sentiments out loud, much less publish and promote them. Under Netanyahu’s rule, however, such sentiments are routinely supported financially and politically by the institutions of the Israeli state. In 2019, Israel’s education minister presented Ginsburgh with the Torah Creativity award at an annual event sponsored by his ministry.
  • The principles that Rabbi Meir Kahane popularized—that liberal democracy is an undesirable alien idea and that non-Jews must be driven down, and preferably out of Greater Israel altogether—have seeped deep into mainstream Israeli society.
Ed Webb

The Oil for Security Myth and Middle East Insecurity - MERIP - 0 views

  • Guided by the twin logics of energy security and energy independence, American actions and alliances in region became a self-fulfilling prophecy. The very thing the United States sought to eliminate in the Middle East—insecurity—became a major consequence of America’s growing and increasingly militarized entanglement.
  • In effect, the essential relationship of dependency between the United States and the Middle East has never been “oil for security.” It has in fact been oil for insecurity, a dynamic in which war, militarization and autocracy in the region have been entangled with the economic dominance of North Atlantic oil companies, US hegemony and discourses of energy security.
  • Oil’s violent geopolitics is often assumed to result from the immense power its natural scarcity affords to those who can control it. Recent developments in global hydrocarbon markets, which saw negative prices on April 20, 2020 have once again put this scarcity myth to bed
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  • Although the destabilizing contradictions of this dependency have now undercut both American hegemony and the power of the North Atlantic hydrocarbon industries, the oil-for-insecurity entanglement has nonetheless created dangerously strong incentives for more conflict ahead.
  • In a series of studies that began in late 1980s, economists Jonathan Nitzan and Shimshon Bichler charted the extent to which the world’s leading oil companies enjoyed comparatively handsome rates of returns on equity—well ahead of other dominant sectors within North Atlantic capitalism—when major wars or sustained unrest occurred in the Middle East.
  • When oil prices began to collapse in the mid-1980s, the major oil companies witnessed a 14-year downturn that was only briefly interrupted once, during the 1990-1991 Gulf War.
  • The events of September 11, 2001, the launching of the global war on terror and the 2003 Anglo-American invasion of Iraq reversed the fiscal misfortunes of the North Atlantic oil companies in the previous decade. Collectively, they achieved relative returns on equity several orders of magnitude greater than the heyday of 1979 to 1981. As oil prices soared, new methods of extraction reinvigorated oil production in Texas, North Dakota, Pennsylvania and elsewhere. In effect, war in Iraq made the shale oil revolution possible
  • fracking—not only benefitted from sky-high oil prices, generous US government subsidies and lax regulation, but also the massive amounts of cheap credit on offer to revive the economy after 2008
  • In response to the Soviet invasion of Afghanistan and the Iran hostage crisis, the Carter Doctrine declared America’s intent to use military force to protect its interests in the Gulf. In so doing, Carter not only denounced “the overwhelming dependence of the Western democracies on oil supplies from the Middle East,” but he also proposed new efforts to restrict oil imports, to impose price controls and to incentivize more fossil fuel extraction in the United States, all in conjunction with solidifying key alliances (Egypt, Israel and Pakistan) and reinforcing the US military presence in the region.[5] In effect, America would now extract geopolitical power from the Middle East by seeking to secure it.
  • What helps make energy security discourse real and powerful is the amount of industry money that goes into it. In a normal year, the oil industry devotes some $125 million to lobbying, carried out by an army of over 700 registered lobbyists. This annual commitment is on par with the defense industry. And like US arms makers,[9] the revolving door between government, industry and lobbying is wide open and constantly turning. Over two-thirds of oil lobbyists have spent time in both government and the private sector.[10]
  • A 2015 report by the Public Accountability Initiative highlights the extent to which the leading liberal and conservative foreign policy think tanks in Washington—the American Enterprise Institute, Atlantic Council, Brookings, Cato, Center for Strategic and International Studies (CSIS), Council on Foreign Relations and Heritage Foundation—have all received oil industry funding, wrote reports sympathetic to industry interests or usually both
  • For some 50 years, the United States has been able to extract geopolitical power from Middle Eastern oil by posing as the protector of global energy security. The invention of the concept of energy security in the 1970s helped to legitimate the efforts of the Nixon, Ford and Carter administrations to forge new foundations for American hegemony amid the political, economic and social crises of that decade. In the wake of the disastrous US war efforts in Korea and Southeast Asia, Henry Kissinger infamously attempted to re-forge American hegemony by outsourcing US security to proxies like Iran under what is referred to as the Nixon Doctrine. At the same time, regional hegemons would be kept in check by “balancing” competing states against each other.
  • The realization of Middle Eastern insecurity was also made possible by the rapid and intensive arms build-up across the region in the 1970s. As oil prices skyrocketed into the 1980s, billions of so-called petrodollars went to purchase arms, primarily from North Atlantic and Soviet manufacturers. Today, the Middle East remains one of the most militarized regions in the world. Beyond the dominance of the security sector in most Middle Eastern governments, it also boasts the world’s highest rates of military spending. Since 2010, Middle Eastern arms imports have gone from almost a quarter of the world’s share to nearly half in 2016, mainly from North Atlantic armorers.
  • For half a century, American policy toward the Middle East has effectively reinforced these dynamics of insecurity by promoting conflict and authoritarianism, often in the name of energy security. High profile US military interventions—Lebanon in 1983, Libya in 1986 and 2011, the Tanker Wars in the late 1980s, the wars on Iraq in 1991 and 2003, Somalia in 1993, Afghanistan since 2001, the anti-Islamic State campaign since 2014 and the Saudi-Emirati war on Yemen since 2015—have received the most scrutiny in this respect, alongside the post-2001 “low intensity” counterterrorism efforts worldwide
  • cases abound where American policy had the effect of preventing conflicts from being resolved peacefully: Trump’s shredding of the 2015 Joint Comprehensive Plan of Action (JCPOA) nuclear agreement with Iran comes to mind; the case of the Israeli-occupied Palestinian territories and the Moroccan-occupied Western Sahara have likewise become quintessential “peace processes” that have largely functioned to prevent peace.
  • the myth of authoritarian stability
  • A year after the unexpected 2011 uprisings, the IMF’s former director Christine Lagarde admitted that the Fund had basically ignored “how the fruits of economic growth were being shared” in the region
  • In denouncing certain governments as “pariahs” or “rogue states,” and in calling for regime change, American policy has allowed those leaders to institute permanent states of emergency that have reinforced their grip on power, in some cases aided by expanded oil rents due to heightened global prices
  • From 2012 to 2018, organized violence in the Middle East accounted for two-thirds of the world’s total conflict related fatalities. Today, three wars in the region—Syria, Iraq and Afghanistan—now rank among the five deadliest since the end of the Cold War. Excluding Pakistan, the Middle East’s share of the worldwide refugee burden as of 2017 was nearly 40 percent at over 27 million, almost double what it was two decades prior.
  • profound political and financial incentives are accumulating to address the existing glut of oil on the market and America’s declining supremacy. A major war in the Middle East would likely fit that bill. The Trump administration’s temptation to wage war with Iran, change Venezuela’s regime and to increase tensions with Russia and China should be interpreted with these incentives in mind.
  • While nationalizing the North Atlantic’s petroleum industries is not only an imperative in the fight against climate change, it would also remove much of the profit motive from making war in the Middle East. Nationalizing the oil industry would also help to defund those institutions most responsible for both disseminating the myths of energy security and promoting insecurity in the Middle East.
Ed Webb

The Ouarzazate Solar Plant in Morocco: Triumphal 'Green' Capitalism and the Privatizati... - 0 views

  • a solar mega-project that is supposedly going to end Morocco's dependency on energy imports, provide electricity to more than a million Moroccans, and put the country on a “green path.”
  • The land, sold at a cheap one Moroccan dirham per square meter was clearly worth a lot more. As if things were not bad enough, the duped local population were surprised to find out that the money from the sale was not going to be handed to them, but that it would be deposited into the tribe's account at the Ministry of Interior. Additionally, the money would be used to finance development projects for the whole area. They discovered that their land sale was not a sale at all: it was simply a transfer of funds from one government agency to another.
  • What seems to unite all the reports and articles written about the solar plant is a deeply erroneous assumption that any move toward renewable energy is to be welcomed. And that any shift from fossil fuels, regardless of how it is carried out, will help us to avert climate chaos. One needs to say it clearly from the start: the climate crisis we are currently facing is not attributable to fossil fuels per se, but rather to their unsustainable and destructive use in order to fuel the capitalist machine. In other words, capitalism is the culprit, and if we are serious in our endeavors to tackle the climate crisis (only one facet of the multi-dimensional crisis of capitalism), we cannot elude questions of radically changing our ways of producing and distributing things, our consumption patterns and fundamental issues of equity and justice. It follows from this that a mere shift from fossil fuels to renewable energy, while remaining in the capitalist framework of commodifying and privatizing nature for the profits of the few, will not solve the problem. In fact, if we continue down this path we will only end up exacerbating, or creating another set of problems, around issues of ownership of land and natural resources.
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  • the acquisition of 3000 hectares of communally owned land to produce energy
  • "green grabbing"
  • the transfer of ownership, use rights and control over resources that were once publicly or privately owned –or not even the subject of ownership– from the poor (or everyone including the poor) into the hands of the powerful
  • This productivist creation of marginality and degradation has a long history that goes back to French colonial times. It was then that degradation narratives were constructed to justify both outright expropriation of land and the establishment of institutional arrangements based on the premise that extensive pastoralism was unproductive at best, and destructive at worst.
  • the discursive framework rendered it "marginal" and open to new "green" market uses: the production of solar power in this case at the expense of an alternative land use - pastoralism - that is deemed unproductive by the decision-makers. This is evident in the land sale that was carried out at a very low price.
  • various deceptive laws with colonial origins that have functioned to concentrate collective land ownership within the hands of an individual land representative, who tends to be under the influence of powerful regional nobles
  • meetings masquerading as a "consultation with the people" were only designed to inform the local communities about a fait accompli rather than seeking their approval
  • This analysis examines the project through the lens of the creation of a new commodity chain, revealing its effects as no different from the destructive mining activities taking place in southern Morocco.
  • privatizations in the renewable energy sector are not new as of 2005, when a royal holding company called Nareva was created specifically to monopolize markets in the energy and environment sectors and ended up taking the lion's share in wind energy production in the country
  • he government had effectively privatized and confiscated historical popular sovereignty over land and transformed the people into mere recipients of development; development they are literally paying for, provided it would one day materialize, of course
  • There is no surprise regarding the international financial institutions' (IFIs) strong support for this high-cost and capital-intensive project, as Morocco boasts one of the most neoliberal(ized) economies in the region. It is extremely open to foreign capital at the expense of labor rights, and very advanced in its ambition to be fully integrated into the global marketplace (in a subordinate position, that is).
  • The World Bank’s disbursement levels to Morocco reached record levels in 2011 and 2012, with a major emphasis of these loans placed on promoting the use of Public Private Partnerships (PPPs) within key sectors
  • It seems that production of energy from the sun will not be different and will be controlled by multinationals only interested in making huge profits at the expense of sovereignty and a decent life for Moroccans.
  • The idea that Morocco is taking out billions of dollars in loans to produce energy, some of which will be exported to Europe when the economic viability of the initiative is hardly assured, raises questions about externalizing the risk of Europe's renewable energy strategy to Morocco and other struggling economies around the region. It ignores entirely what has come to be called "climate debt" or "ecological debt" that is owed by the industrialised North to countries of the Global South, given the historical responsibility of the West in causing climate change
  • The biggest issue with this technology is the extensive use of water that comes with the wet cooling stage. Unlike photovoltaic (PV) technology, CSP needs cooling. This is done either by air cooled condensers (dry cooling) or high water-consumption (wet cooling). Phase I of the project will be using the wet cooling option and is estimated to consume from two to three million cubed meters of water annually (Kouz 2011). Water consumption will be much less in the case of a dry cooling (planned for phase II): between 0.73 and 0.88 million cubed meters. PV technologies require water only for cleaning solar panels. They consume about 200 times less water than CSP technology with wet cooling and forty times less water than CSP with dry cooling.
  • Even if the solar plant is only using one percent of the average dam capacity, the water consumption is still significant and can become a thorny problem at times of extreme drought when the dam contains only fifty-four million cubed meter. At such times, the dam waters will not be sufficient to cover the needs of irrigation and drinking water,  making the water usage for the solar plant deeply problematic and contentious.
  • in an arid region like Ouarzazate, this appropriation of water for a supposedly green agenda constitutes another green grab, which will play into and intensify ongoing agrarian dynamics and livelihood struggles in the region.
  • If the Moroccan state was really serious about its green credentials, why is it then building a coal-fired power plant at the same time, which represents an ecocide in-waiting for the already-polluted town of Safi? Why is it also ignoring the devastating environmental and social effects of the mining industry in the country? One notable example is the long-standing community struggle in Imider (140 kilometres east of Ouarzazate) against the royal holding silver mine (Africa's most productive silver mine), which is polluting their environment, grabbing their water, and pillaging their wealth.
Ed Webb

Torture in Bahrain Becomes Routine With Help From Nokia Siemens - Bloomberg - 0 views

  • Western-produced surveillance technology sold to one authoritarian government became an investigative tool of choice to gather information about political dissidents -- and silence them
  • “The technology is becoming very sophisticated, and the only thing limiting it is how deeply governments want to snoop into lives,” says Rob Faris, research director of the Berkman Center for Internet and Society at Harvard University in Cambridge, Massachusetts. “Surveillance is typically a state secret, and we only get bits and pieces that leak out.” Some industry insiders now say their own products have become dangerous in the hands of regimes where law enforcement crosses the line to repression.
  • Across the Middle East in recent years, sales teams at Siemens, Nokia Siemens, Munich-based Trovicor and other companies have worked their connections among spy masters, police chiefs and military officers to provide country after country with monitoring gear, industry executives say. Their story is a window into a secretive world of surveillance businesses that is transforming the political and social fabric of countries from North Africa to the Persian Gulf. Monitoring centers, as the systems are called, are sold around the globe by these companies and their competitors, such as Israel-based Nice Systems Ltd. (NICE), and Verint Systems Inc. (VRNT), headquartered in Melville, New York. They form the heart of so- called lawful interception surveillance systems. The equipment is marketed largely to law enforcement agencies tracking terrorists and other criminals. The toolbox allows more than the interception of phone calls, e-mails, text messages and Voice Over Internet Protocol calls such as those made using Skype. Some products can also secretly activate laptop webcams or microphones on mobile devices. They can change the contents of written communications in mid-transmission, use voice recognition to scan phone networks, and pinpoint people’s locations through their mobile phones. The monitoring systems can scan communications for key words or recognize voices and then feed the data and recordings to operators at government agencies.
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  • “We are very aware that communications technology can be used for good and ill,” NSN spokesman Roome says. The elevated risk of human rights abuses was a major reason for NSN’s exiting the monitoring-center business, and the company has since established a human rights policy and due diligence program, he says. “Ultimately people who use this technology to infringe human rights are responsible for their actions,” he says.
  • Besides Bahrain, several other Middle Eastern nations that cracked down on uprisings this year -- including Egypt, Syria and Yemen -- also purchased monitoring centers from the chain of businesses now known as Trovicor. Trovicor equipment plays a surveillance role in at least 12 Middle Eastern and North African nations, according to the two people familiar with the installations.
  • Uprisings from Tunisia to Bahrain have drawn strength from technologies such as social-networking sites and mobile-phone videos. Yet, the flip side of the technology that played a part in this year’s “Facebook revolutions” may be far more forceful. Rulers fought back, exploiting their citizens’ digital connections with increasingly intrusive tools. They’ve tapped a market that’s worth more than $3 billion a year, according to Jerry Lucas, president of McLean, Virginia- based TeleStrategies Inc., organizer of the ISS World trade shows for intelligence and lawful interception businesses. He derives that estimate by applying per-employee revenue figures from publicly traded Verint’s lawful intercept business across the mostly privately held industry.
  • The Iranian Nobel Peace Prize winner Shirin Ebadi and other human rights activists have blamed Nokia Siemens for aiding government repression. In 2009, the company disclosed that it sold a monitoring center to Iran, prompting hearings in the European Parliament, proposals for tighter restrictions on U.S. trade with Iran, and an international “No to Nokia” boycott campaign. While there have been credible reports the gear may have been used to crack down on Iranian dissidents, those claims have never been substantiated, NSN spokesman Roome says. In Bahrain, officials routinely use surveillance in the arrest and torture of political opponents, according to Nabeel Rajab, president of the Bahrain Center for Human Rights. He says he has evidence of this from former detainees, including Al Khanjar, and their lawyers and family members.
  • During the Arab spring, it was easy to spot the company’s fingerprints, says Gyamlani. Tuning in to Germany’s N24 news channel at his home in Munich, he immediately suspected that governments were abusing systems he’d installed. Failed uprisings stood out to him because of the way the authorities quashed unrest before it spread
  • Schaake says surveillance systems involving information and communications technology should join military items such as missile parts on lists of restricted exports. Schaake helped to sponsor a parliamentary resolution in February 2010 that called for the EU’s executive body, the European Commission, to ban exports of such technology to regimes that could abuse it. The commission hasn’t implemented the nonbinding resolution. The U.S. Congress passed a law in 2010 barring federal contracts with any businesses that sold monitoring gear to Iran. An investigation ordered by Congress and completed in June by the Government Accountability Office was unable to identify any companies supplying the technology to Iran, partly because the business is so secretive, the agency reported.
Ed Webb

Oman jobs protest spreads to other cities as arrests reported | Middle East Eye - 0 views

  • Protests over unemployment spread from Oman's capital to provincial cities Salalah and Sur on Monday with a number of arrests reported.Facing growing unrest over high unemployment among young Omanis, the government moved on Sunday to pledge job creation plans and to restrict employment of expat labour in a country where the vast majority of private sector jobs go to foreign workers.
  • The protests followed a government statement on Sunday reaffirming plans to increase job creation for nationals by 25,000 over the next six months.A separate announcement by the minister of manpower, Abdullah bin Nasser al-Bakri, stated that the recruitment of expatriate labour to certain professions would be restricted for the next six months to encourage recruitment of local jobseekers
  • unemployment in 2016 stood at 18 percent
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  • the challenge facing Oman's economy was "the regularisation of the labour market, which the government is working hard to achieve so that the market can handle the needs of each stage of development."
  • just 237,900 Omanis working in the sector compared to 1.87 million expats, according to government figures
Ed Webb

Debt is No Way For Non-Oil Arab States to Grow - Bloomberg - 0 views

  • many of the non-oil exporting nations in the Middle East and North Africa are undergoing a process of redefinition of how they are linked with the global economy. It is not going well.
  • Egypt, Tunisia, Morocco and Jordan are becoming more dependent on external borrowing than on foreign direct investments compared to the pre-2008 period. This is visible with declining ratios of FDIs to GDP, in contrast with increasing ratios of foreign debt to GDP and total exports
  • The relative political stabilization in all four countries as of 2014/2015 did not allow them much room for full-fledged recovery due to the global economic slowdown. This made it harder for all of them to achieve export-led growth and attract FDI, leaving them with foreign borrowing as the only viable option. Foreign debt accounts for much of the apparent recovery, as expressed in growth rates.
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  • The ratio of external debt to total exports of goods, services and primary incomes was even more dramatic for all four countries. This is a proxy of the capacity of these economies to service their growing external obligations. Between 2010 and 2017, the ratio increased from 75%, 99.6%, 97.6% and 125% for Egypt, Tunisia, Morocco and Jordan re2spectively, to 190%, 178%, 125% and 198% in 2017. All the figures exceed the 77% limit that, in the World Bank’s reckoning, foreign debt has a negative impact on growth.
  • In Egypt, the ratio of external debt to GNI more than doubled from 17% in 2010 to 36% in 2017. The change was as pronounced in Tunisia, were the ratio jumped from 54% to 83%. In Morocco and Jordan, the ratios changed as well from 65% and 29.6%, to 47% and 75%.
  • International capital markets are unstable and global trade is contracting. Governments should instead target local investment in brick-and-mortar sectors that can deliver real growth, create jobs and possibly reduce the dependency on some imports
  • better use of the net inflows of capital they have received for years in the form of remittances. Instead of channeling them into non-tradable sectors like real-estate, as has been often the case, they should be used to finance investment in more productive sectors
  • trade-oriented regional integration, opening markets in oil-rich countries. There might be room also for adding a regional dimension to plans for industrial diversification by Saudi Arabia and the United Arab Emirates, by coordinating flows of investment and technology and skill transfers in sectors like petrochemicals and hi-tech services.  Such measures would generate growth and employment for poorer allies and cement regional geopolitical arrangements
Ed Webb

Saudi 'instant visa' and the challenges of open labor markets - Al Arabiya English - 0 views

  • The Saudi government’s new “instant visa” fast tracks the process of hiring foreign workers for nascent firms, and is accompanied by a one-year grace period on Saudization requirements. Coming in the wake of aggressive moves to limit job opportunities for migrants, including sector-wide bans on the employment of migrant workers, the new policy highlights the challenges of striking the right balance between creating jobs for Saudis and supporting Saudi businesses. The debate is hindered by fundamental analytical errors that proponents of each side make when arguing their case.
  • Decades of providing Saudi businesses with an inexhaustible supply of low-cost workers has made them into primitive enterprises: their business model scarcely develops beyond importing foreign goods, putting low-cost foreign hands to work, having a couple of Saudi overseers—usually the establishment’s proprietors—and reselling the imported goods domestically with minimal value added.
  • Counterintuitively, a key flaw in this commercial model is its ability to effortlessly adapt to changes in the economic climate. When business is booming, new workers can be hired instantly at exactly the same wage as before. And when the economy contracts, such as when oil prices fall, the migrant workers on the company’s books are made redundant at the stroke of a pen, stabilizing the firm’s finances. In both cases, managers fixate on migrant workers as the primary control variable, at the expense of considerations relating to productivity and innovation.
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  • in western economies, low-cost migrant workers are largely unavailable. When the economy booms, wages rise, forcing managers to think judiciously about hiring. During a recession, employment protections for citizens mean that redundancies are complicated and sometimes impossible. Consequently, managers focus a lot more on maximizing worker productivity through investments and employee training; and on developing new technologies that are commercially valuable.
  • the Gulf countries rank below every region in the world in terms of R&D spending as a percentage of GDP, and the limited spending is almost exclusively funded by the government, and occurs in governmental organizations, such as oil giants Aramco and ADNOC.
  • the fundamental error made by proponents of restrictions on migrant workers. Rather than making the case I made above, they make the erroneous claim that if Saudi Arabia bans migrant workers, Saudi businesses will hire nationals in their stead. We know that this is false empirically because all of the Gulf countries have tried this and it has failed. The failure was also expected because national and migrant workers are imperfect substitutes. It is tempting to attribute the attractiveness of migrant workers merely to their willingness to work for a lower wage, or to domestic businesses “lacking patriotism”; but this belies the genuine superiority of migrant workers in many relevant domains, including work ethic, willingness to perform jobs that locals are averse to (waiting tables, collecting refuse, etc.), and their possession of skills that nationals often lack.
  • Saudis are too often educated in the areas that help one get a cushy public sector job, and not in those that serve the private sector needs. This is most starkly seen in the limited success of vocational training, especially when compared to advanced economies such as Germany or Switzerland.
  • for crude restrictions on the employment of migrant workers to create jobs for Saudi citizens, they must be accompanied by upgrades to the human capital of Saudis that attend to the needs of the private sector
  • while the new system makes hiring foreign workers “instant”, the results of these comprehensive reforms will be anything but “instant”, requiring many years to bear fruit
Ed Webb

Is Oman's model of governance about to shift? - 0 views

  • Like other Gulf states, Oman does not grant citizens freedom of expression or the right to choose their leader, but it does provide citizens a range of material advantages: public sector jobs, subsidies, free health care and education, a free plot of land, a pension and no income tax.
  • Oman’s public debt has skyrocketed since oil prices declined in 2014, going from less than 5% of Oman's gross domestic product to nearly 60% last year. Until 2023, annual budgets were already expected to be in the red. But the 2020 fiscal deficit is expected to be four times higher than previously forecasted because of the double shock of the COVID-19 pandemic and plunging oil prices, credit rating agency Fitch estimated.
  • the cash-strapped Omani government is expected to cut down on public expenditures and impose austerity measures. But such a move would revamp the model of governance that has prevailed since the late Qaboos bin Said ascended to the throne in 1970
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  • Public taxation is also increasing. A sin tax was implemented in June 2019 on products like sugary carbonated drinks and tobacco, and a serially delayed 5% value-added tax is expected in 2021. According to Salmi, electricity and water subsidies could soon be slashed and, in the long term, Omanis could see an income tax.
  • Above all, reforming the labor market — an unpopular move — would be the cornerstone of a post-Qaboos welfare state. About 43% of Omanis work for public entities. Abousleiman recommended economic diversification to foster private sector job creation and to further "relieve the expectations on the government to provide employment."
  • Following a field visit to Oman in 2019, the International Monetary Fund (IMF) suggested that the wages and benefits of the private sector need to align more closely with the public sector to make employment in the former more appealing.
  • Omanis who talked to Al-Monitor, as well as Mukhaini, believe any upcoming austerity measures "should not make the poor poorer and the rich richer," Mukhaini said.
  • According to rating firm S&P, the new ruler will face “a difficult trade-off” in the coming months to address high unemployment among youths, weak growth, and fiscal and funding pressures
  • Defense and security expenses account for over a quarter of Oman's annual budge
  • Oman — rated junk by the three major rating agencies — has several other options to fund its short-term ballooning deficit: Go further into debt; deplete its sovereign wealth fund; sell state assets; devalue its currency; and seek assistance from neighboring countries or international organizations.
  • Analysts believe Oman should build a model of governance tailored to the post-oil era. Along with a more stringent budget environment, the new leadership pledged to implement structural reforms to diversify the rentier economy and foster private sector-led growth.
  • To ensure political and social stability, Sultan Qaboos avoided controversial measures that could have triggered short-term political unrest
  • In 2011, at the height of the Arab uprisings, Sultan Qaboos promised to create 50,000 jobs and institute unemployment benefits in an attempt to defuse unprecedented nationwide protests.
  • the lack of economic reforms did not stop Omanis from loving the monarch, who built a modern state out of a medieval-like society he inherited in the early 1970s
  • Sultan Haitham bin Tariq "is already planting the seeds by cutting the royal expenditures tremendously,"
  • The relationship between state and society that Omanis have known for decades will likely never be the same
Ed Webb

Tunisia and the authoritarian upgrading and democratization paradigms - 1 views

  • thisarticle highlights three distinct mythologies (economic miracle, democraticgradualism and secularism) about Tunisia that prevented a clearer understandingof the political and socio-economic situation
  • studies of Arab politics haveswung between the democratization paradigm and the authoritarian resilience one.Both certainly captured important aspects of the political developments taking placein the Arab world over the last two decades and to an extent still do, but, at the sametime, missed equally significant changes that, if identified earlier, might havecontributed to lessen the surprise of the Arab Spring. Specifically, the contentionhere is that both paradigms tended to focus too strongly on what was visible andreadily identifiable at the level of the state and state – society relations, but did notaccount for important unintended consequences that were occurring and diffusing inwider society as well as for less visible socio-political phenomena because they werepartially trapped in the mythology served up by the Ben Ali regime. What this meansis that both paradigms operated from similar mythologies about Tunisia, while, atthe same time, drawing very different conclusions about them
  • unintended consequences have animpact on the regime because the reforms it initiates have surprising effects that itneeds to deal with, but, interestingly, they also have an impact on scholars whosetheoretical tools might need sharpening in light of the occurrence of events thatcontradict what seemed to be valid theoretical assumptions
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  • When one looks in detail at the data provided by the World Bank theimpression is certainly positive and some notable achievements have been realizedby the Tunisian regime in the social sphere as well. Poverty rates declined from 7.7per cent in 1984, three years before Ben Ali came to power, to 3.8 per cent in 2005.Literacy rates went up from a low 48 per cent in 1984 to 78 per cent in 2008 andwomen were included in this literacy drive
  • the Tunisian regime wasable to increase its spending on education and health, apparently confirming thevalidity of the model of ‘social liberalism’ given that in 2011 its Index of HumanDevelopment was still higher than its North African neighbours
  • While the fundamentals of the economymight indeed have been good enough for global markets and international investorsand trading partners, the economic miracle of Tunisia had a very dark side whereunder-employment, unemployment, difficult access to the labour market, incomeinequalities and wide regional gaps were the main features
  • if the figures published by the interimgovernment after the revolution are accurate, ‘the unemployment rate among youngpeople from 18 to 19 almost rose to 30 per cent in 2009, and soared to 45 per cent inthe case of higher education graduates’.
  • thecomplexity of the Ben Ali period and how to ‘read’ it increases if one looks at thefact that between 1995 and 1998 the Caisse 26 – 26 (a national solidarity fund)implemented a number of development projects in the area of Sidi Bouzid and inpoorer regions such as the one around Gafsa, but after 2000 no further projects werelaunched in that region partly because from that moment the funds in the Caissewere used by Ben Ali’s inner circle to sustain their economic activities
  • a predatory economicsystem with members of the president’s family and close collaborators takingadvantage of these networks of patronage to acquire an increasingly larger slice ofthe economy
  • there was very littlethat was predictable about the uprising and the fall of the regime, and even withthe benefit of hindsight it remains quite difficult to find a causal mechanism toaccount for the success of the Tunisian uprising because events could have turnedout very differently
  • the same corrupt practicesalienated many working-class youth who, rather than becoming fully de-politicized,chose ‘below-the-radar’ social activism based around loosely structured socialnetworks and developed a particular dislike for state authorities, a factor that wouldbe useful when fighting running battles with the police during the uprising
  • the regime monitored Publinets veryclosely and periodically blocked access to a number of websites, but the point here isthat the regime also inadvertently improved not only the skills necessary foreconomic growth, but also those necessary for anti-regime online mobilization
  • For the supporters of the democratization paradigm, there was no doubt that theBen Ali regime seemed to keep the promises of democratic gradualism. Initially, itsslow pace was explained as necessary in order to avoid the problems that Algeria hadencountered in the same period when the country liberalized the political systemquite abruptly and, in hindsight, with catastrophic consequences
  • Ultimately the authoritarian resilience paradigm has been more fruitful inexplaining that the regime survived thanks to a mix of co-optation and repressionwhere rhetorical commitment to democracy and human rights was far from genuine,but does not capture the whole story because it does not pay sufficient attention tohow society reacted to sustained repression of dissent
  • there was an almost hidden, but very significant increase inIslamization based on the adoption of personal pious behaviour that was overtlya-political, but had quite clear anti-regime overtones
  • the increasing disconnect between thevalues of the ruling elites together with an urban-based, French-speaking milieu anda large part of the population which both lived by and wished society to be moreattuned to Arab-Muslim values
  • such behaviour was also a personalact of defiance against an authoritarian regime that did not perform its duties and wasmired in what many saw as decadence and corruption
  • The events of 2008 in themining district of Gafsa (Allal, 2010) is probably the best known episode ofanti-regime social mobilization in Tunisia during the Ben Ali years, as the wholedistrict took to the streets and faced down the security services in order to protestagainst the hiring policies and working conditions in the local mines. What issignificant about the protest is that it was not simply the workers taking to the streets.The whole population of the area was on board with this protest, which was brutallyput down. There are however other smaller incidents that occurred throughout thecountry (Chomiak & Entelis, 2011) and that indicated that social peace wasa fabrication of the regime
  • Upgradedauthoritarianism (Heydemann, 2007) was the notion that many scholars utilized toargue that authoritarian ruling elites were, paradoxically, strengthening their grip onthe different countries through the adoption of political and economic liberalreforms that were subsequently deprived of any substance and meaning and hijackedfor the elites’ own benefit. One of the masters of such authoritarian upgrading wascertainly Ben Ali, who in the process also managed to project an international imageof a secular and liberal modernizer bent on slowly constructing a democraticpolitical system
  • liberaleconomic reforms of the late 2000s resulted in growth in the economy while at thesame time rewarding social groups and clan members most loyal to the president,but also generated an economically and culturally globally connected middle class,which developed its own mechanisms to voice political dissent, but had benefited inthe 1990s from the liberalization of the economy that Ben Ali had implemented toget the country out of stagnation
  • the promulgation of secularlegislation out of kilter with the values of the majority of the population and theespousal of a rhetoric of modernization that clashed with the everyday reality ofhuman rights abuses, elitist consumerism and corruption, saw the emergence ofpublic expressions of a social pious Islamism that made important inroads inTunisian society while going almost undetected
Ed Webb

Peter Schwartzstein | Climate Change and Water Woes Drove ISIS Recruiting in Iraq - 0 views

  • With every flood or bout of extreme heat or cold, the jihadists would reappear, often supplementing their sales pitches with gifts. When a particularly vicious drought struck in 2010, the fifth in seven years, they doled out food baskets. When fierce winds eviscerated hundreds of eggplant fields near Kirkuk in the spring of 2012, they distributed cash. As farming communities limped from one debilitating crisis to another, the recruiters—all members of what soon became the Islamic State—began to see a return on their investment.
  • By the time the Islamic State (also known as ISIS) seized this swath of Iraq—along with most of the country’s west and north—in a brutal summer-long blitzkrieg in 2014, few locals were surprised to see dozens of former fertilizer market regulars among its ranks.
  • ISIS appears to have attracted much more support from water-deprived communities than from their better-resourced peers
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  • Across rural Iraq and Syria, farmers, officials, and village elders tell similar stories of desperate farmhands swapping backhoes for assault rifles. Already battered by decades of shoddy environmental policies, which had hobbled agriculture and impoverished its dependents, these men were in no state to navigate the extra challenges of climate change. And so when ISIS came along, propelled in large part by sectarian grievances and religious fanaticism, many of the most environmentally damaged Sunni Arab villages quickly emerged as some of the deep-pocketed jihadists’ foremost recruiting grounds.
  • Hussein torched some of southern Iraq’s most bountiful date plantations for fear that Iranian saboteurs might use them as cover to attack oil facilities around Basra. Where once 12 million palm trees stood, there’s now just miles of dusty scrubland laced with oil spills
  • Years of below average rains in the Kurdish region and Nineveh governorate, the only parts of Iraq where rain-fed agriculture was historically possible, had increased the country’s dependence on the Euphrates and Tigris, the Fertile Crescent’s two great rivers. At the same time, upstream Turkey and Iran were relentlessly damming them and their tributaries. Turkey has built over 600 large dams, including dozens of major ones near the Iraqi and Syrian borders. The Tigris and Euphrates’ combined flow in southern Iraq has subsequently shrunk so much that the Persian Gulf now barrels up to 45 miles upriver at high tide (the rivers used to project freshwater up to 3 miles out to sea).
  • water was becoming a resource that in some parts of Iraq only wealthier landowners could afford
  • By 2011, much of the Iraqi countryside was in desperate financial straits. Some 39 percent of people in rural areas were living in poverty, according to the World Bank. That’s two and a half times the country’s urban rate. Almost half lacked safe drinking water. The problems were so devastating in 2012-13 that tens of thousands of villagers ditched their fields altogether, preferring to try their luck in the slum districts of nearby cities instead.
  • Some 39 percent of those polled in Salahaddin cited drought as a reason for their displacement. Studies from neighboring Syria, large parts of which enjoy similar conditions to northern and western Iraq, suggest that anthropogenic climate change has tripled the probability of long, debilitating droughts.
  • When severe water shortages killed off countless livestock in 2011-12, jihadists descended on the animal markets to size up the frantic farmers, many of whom were trying to sell off their remaining cows and sheep before they too succumbed to drought. “They just watched us. We were like food on the table to them,”
  • After several years of energetic groundwater extraction near the oil refining town of Baiji, Samir Saed’s two wells ran dry in early 2014, forcing him to lay off the two young men he employed as farm laborers. Jobless and angry, he suspects they soon joined ISIS
  • the jihadists expertly exploited the desperation in Iraq’s agricultural heartland by rationalizing its inhabitants’ woes. They spread rumors that the Shia-dominated government was delaying crop payments and cutting off water to Sunni farmers. In fact, the lack of rain wasn’t due to climate change, but really a man-made ploy designed to drive Sunni landowners from their rich fertile fields, their emissaries suggested. Broke and unable to deal with their fast changing environment, many farmers ate it up.
  • The jihadists adopted scorched earth tactics as they were beaten back, laying waste to hundreds of thousands of acres of prime farmland. And so for returning farmers, climate change and shoddy governance are now among the least of their worries. ISIS fighters ripped up buried irrigation pipes to mold makeshift mortars. They poisoned wells, blew up water canals, and carted off everything that was of any value, notably generators, tractors, and water pump parts.
  • More or less broke after the oil price crash, the Iraqi state can’t afford to pay farmers for crops they’ve delivered to state silos, let alone cover the multi-billion dollar agricultural clean up bill
  • Turkey has almost finished building the Ilisu Dam, which threatens to further cut the Tigris’ flow when it comes online, probably next year. Hotter temperatures are evaporating more and more surface water—up to six feet worth in Iraq’s lakes every year, according to Nature Iraq, a local NGO. As Baghdad’s relations with the upstream Kurdish region deteriorate, farmers might once more bear the brunt of the dispute. Kurdish authorities have cut off water to mostly Arab areas on several occasions in the past
  • If Iraq can’t get a grip on its crumbling environment, the next war might not be far off.
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