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Ed Webb

The Pandemic Could Spark a New Refugee Crisis by Destabilizing Egypt, Turkey, Tunisia, ... - 0 views

  • middle-income countries—including Turkey, Ukraine, Egypt, and Morocco—do not benefit from global initiatives like the debt relief programs led by the International Monetary Fund (IMF), which target less developed nations. Yet they lack the domestic resources to rebound effectively from the deep recession that awaits them. The rising risk aversion in global markets has constrained their debt-raising options. Their economic well-being has further been undermined by the coronavirus-related economic downturn, raising fears about economic dislocation and political instability.
  • the economic resilience of Europe’s neighbors is clearly at risk. A major revenue stream for many of Europe’s southern and eastern neighbors is tourism. In 2018, tourism revenues as a share of total exports of goods and services reached 41 percent in Jordan and 25 percent in Egypt, according to the United Nations World Tourism Organization.
  • In absolute numbers, Turkey’s tourism revenues including international transport were the highest at $37 billion, amounting to around 5 percent of GDP. This important revenue source is now set to evaporate as the virus takes its toll. The collapse of the tourism industry will also have significant repercussions for the sustainability of employment. For Jordan, Morocco, and Tunisia, tourism provided for around 7 percent of total employment, compared with the global median of 3.8 percent.
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  • Europe’s neighbors are set to endure even more hardship when it comes to trade imbalances as their exports are due to collapse. They will be among the most affected from the ongoing fall in consumer demand in Europe given their heavy reliance on the continental market. The European Union’s share of total exports stands at some 65 percent for Morocco, 50 percent for Turkey, and 43 percent for Ukraine.
  • a perfect storm on Europe’s borders. The combination of recessionary economics, balance of payments difficulties, and surging unemployment has created a formidable challenge that will jeopardize domestic social contracts
  • The ensuing political and economic instabilities would not only create the conditions for the rise of radicalization in these afflicted societies but also trigger new cross-border movements and refugee flows across the Mediterranean.
  • In the absence of a global consensus, EU governments should consider shifting their IMF-held SDRs to financially strained neighboring countries. That would amount to a financial stimulus of about $95 billion with no fiscal impact on EU and national budgets.
  • the European Central Bank (ECB) should be more actively involved in establishing swap arrangements with the central banks of partner countries. Under such a scheme, beneficiary countries would obtain euros from the ECB against a collateral in their own currency. These arrangements would provide beneficiary countries with foreign exchange liquidity and replenish their reserves
Ed Webb

Under Sisi, firms owned by Egypt's military have flourished - 0 views

  • Maadi is one of dozens of military-owned companies that have flourished since Abdel Fattah al-Sisi, a former armed forces chief, became president in 2014, a year after leading the military in ousting Islamist President Mohamed Mursi.
  • In interviews conducted over the course of a year, the chairmen of nine military-owned firms described how their businesses are expanding and discussed their plans for future growth. Figures from the Ministry of Military Production - one of three main bodies that oversee military firms - show that revenues at its firms are rising sharply. The ministry’s figures and the chairmen’s accounts give rare insight into the way the military is growing in economic influence.
  • Some Egyptian businessmen and foreign investors say they are unsettled by the military’s push into civilian activities and complain about tax and other advantages granted to military-owned firms
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  • In 2016, the military and other security institutions were given exemptions in a new value-added tax (VAT) law enacted as part of IMF-inspired reforms. The law states that the military does not have to pay VAT on goods, equipment, machinery, services and raw materials needed for the purposes of armament, defense and national security.The Ministry of Defense has the right to decide which goods and services qualify. Civilian businessmen complain that this can leave the system open to abuse. Receipts for a cup of coffee at private sector hotels, for example, add 14 percent VAT. Receipts at military hotels do not. Employees at the military-owned Al-Masah Hotel in Cairo told Reuters that no VAT was charged when renting venues for weddings and conferences.
  • The Ministry of Military Production is projecting that operating revenues from its 20 firms will reach 15 billion Egyptian pounds in 2018/2019, five times higher than in 2013/2014, according to a ministry chart. The ministry does not disclose what happens to the revenues. The chairmen of two of the firms said profits go to the ministry or are reinvested in the business.
  • “I don’t want to be a local shop. I want to be a company that has the capacity to export and compete internationally.”
  • Egypt’s military, the biggest in the Arab world, has advantages.It enjoys financial support from Saudi Arabia and the United Arab Emirates, staunch supporters of Sisi since he toppled the group they see as a threat to the Middle East, the Muslim Brotherhood. Western powers see Cairo as a bulwark against Islamist militancy. Egypt receives $1.3 billion in military aid annually from the United States alone.
  • The chairmen of two military engineering companies, Abu Zaabal Engineering Industries Co and Helwan Engineering Industries Co, said in recent years it had become much easier to access financing through the Ministry of Military Production.
  • The Ministry of Military Production signed a memorandum of understanding with China’s GCL Group last week to build a solar panel factory worth up to $2 billion. The military has taken over much of the construction of intercity roads from the Ministry of Transport and now controls the toll stations along most major highways.
  • Economists and investors say reforms tied to a $12 billion three-year IMF program signed in Nov. 2016 should lay the ground for economic expansion. But foreign investors are still shying away from Egypt, apart from those focusing on the more resilient energy sector. Non-oil foreign direct investment fell to about $3 billion in 2017 from $4.7 billion in 2016, according to Reuters calculations based on central bank statistics.  
  • foreign investors were reluctant to invest in sectors where the military is expanding or in one they might enter, worried that competing against the military with its special privileges could expose their investment to risk. If an investor had a business dispute with the military, the commercial officer said, there was no point in taking it to arbitration. “You just leave the country,” he said.
  • Among projects the Ministry of Military Production announced in 2017 was a plan to plant 20 million palm trees with an Emirati company and build a factory to make sugar from their dates. It agreed with a Saudi company to jointly manufacture elevators. The military inaugurated the Middle East’s biggest fish farm on the Nile Delta east of Alexandria.
  • In 2015, the defense minister issued a decree exempting nearly 600 hotels, resorts and other properties owned by the military from real estate taxes
  • Military companies receive an exemption from import tariffs under a 1986 law and from income taxes under a 2005 law. Cargoes sent to military companies do not have to be inspected.
  • At bustling Cairo squares, people line up to buy subsidized meat and other food handed out from trucks sponsored by the military. Sisi said he had instructed the military to enter the market “to supply more chicken to push down prices.”Some disagree with such measures on the grounds the military’s mission is to protect the country from external threats.“We have reached a point where they are competing even with street vendors,”
Ed Webb

Ever Given: Egyptian Can-do Helped Unclog the Suez Canal - Bloomberg - 0 views

  • the sense of relief, joy and pride Egyptians felt over their success. The dredger and a fleet of tug boats had worked day and night to unclog one of the world’s most important waterways, eventually refloating the Ever Given in a week — Egyptian can-do beat the expectations of experts who predicted it would take twice as long.
  • served as a reminder of how much of their potential is stymied by a political economy that deters experimentation, punishes innovation and ultimately pushes many Egyptians to seek opportunities abroad
  • Centered on a bigotry of low expectations is the idea that Egyptian workers are uniquely unimaginative and unindustrious, and that these traits — rather than the greed and grift of their rulers — are to blame for the country’s economic failings.
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  • the industriousness and ingenuity displayed by the Mashhour crew and their colleagues on the tug boats are the very qualities that allow millions of Egyptians to survive the misrule that has led to rising poverty levels even as limited reforms have primarily benefited the ruling elites and crony capitalists. While the government in Cairo has received kudos for GDP growth, Egypt’s poverty rate has nearly doubled over 20 years, from 16.7% in the year 2000 to 32.5% in 2019.
  • The patronizing view that the man in the street needs the guiding hand of his betters has often encouraged international partners over the years to direct funding to the elites rather than small and medium-sized enterprises, despite pledges to prioritize those very sectors.
  • their government provides them with neither the competitive market economy nor the political freedoms that would allow them to demonstrate their readiness.
  • the waterway is of exceptional value to the government in Cairo: Not only is it a significant source of hard currency for a country with a chronic trade deficit, its strategic importance to global commerce elevates Egypt’s international status
  • Many who seek the resources — and salaries — commensurate with their skills must leave the country to find them. This is why remittances from abroad dwarf many sectors of the economy. Remittances in 2020 were worth $29.6 billion, over five times the Suez Canal’s revenue of $5.61 billion and more than double the revenues from tourism at its 2019 peak of $13 billion.
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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  • Fiscal crises caused by falling prices limit governments’ room for domestic maneuver and force painful political choices
  • 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
  • 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
  • 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

'Apocalypse soon': reluctant Middle East forced to open eyes to climate crisis | Climat... - 0 views

  • In Qatar, the country with the highest per capita carbon emissions in the world and the biggest producer of liquid gas, the outdoors is already being air conditioned.
  • In the United Arab Emirates it is estimated that the climate crisis costs £6bn a year in higher health costs. The salinity of the Gulf, caused by proliferating desalination plants, has increased by 20%, with all the likely impact on marine life and biodiversity.
  • The Middle East is warming at twice the rate of the rest of the world. By the end of the century, if the more dire predictions prove true, Mecca may not be habitable, making the summer Haj a pilgrimage of peril, even catastrophe
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  • The ruling elites are all dependent on oil rents for the survival of their regimes. They need the oil business to stay alive for them to stay in power. Their system is based on continued oil rent, but ultimately, the citizens’ long-term interests are with a liveable climate
  • The precise point oil demand will peak has been contested, and depends on a myriad of assumptions about regulation, technology and consumer behaviour. But many people say demand will peak in about 2040, and then decline.
  • the International Energy Association’s report Net Zero by 2050, by contrast, proposed oil demand fall from 88m barrels a day (mb/d) in 2020, to 72 mb/d in 2030 and to 24 mb/d in 2050, a fall of almost 75% between 2020 and 2050. It argued that the Gulf has all three elements needed to switch to renewables: capital, sun and large tracts of vacant land.
  • The Gulf’s self-proclaimed first mover, the UAE, was the first country in the region to ratify the Paris agreement and is now the least dependent on oil for government revenues. Last week it announced a “net zero initiative by 2050” to be begun with $163bn (£118bn) of investments and a new minister for climate change and the environment, Mariam Almheiri. The announcement came after the UAE ordered an 80-day brainstorming session in every government department from June. It was the first petro-state to embrace net zero in domestic consumption.
  • Opec’s own projections suggest oil demand will rise in absolute terms through to 2045, and oil’s share of world wide energy demand will fall only from 30% to 28%. Hardly a green revolution.
  • Aramco, the Saudi company with the largest carbon footprint in the world, is not trying to diversify at the rate of Shell or BP. Indeed, it has just announced an investment to increase crude capacity from 12m barrels a day to 13m barrels by 2027
  • If you see the lifestyle in the UAE, Saudi Arabia and Qatar, it is based on endless consumption
  • The region is responsible for only 4.7 % of worldwide carbon emissions, dwarfed by the pollution from Europe, America and China. The oil that the Middle East exports is logged against the carbon emissions of the users, not the producers.
  • The Gulf States are still highly reliant on oil and gas exports, which remain more than 70% of total goods exports in Kuwait, Qatar, Saudi Arabia and Oman, and on oil revenues, which exceed 70% of total government revenues in Kuwait, Qatar, Oman, and Bahrain. In Vision 2030, published in 2016, the Saudi crown prince, Mohammed bin Salman, promised to turn the country into a diversified industrial power house. The reality is very different. The World Bank shows Saudi Arabia is still 75% dependent on oil exports for its budget.
  • Gulf states are deeply competitive, so a flurry of news is emerging. Qatar has appointed a climate minister; Bahrain is targeting net zero by 2050; Kuwait has a new emissions plan.
  • Fossil fuels shipped abroad are not on the Saudi’s carbon ledger, owing to UN accounting rules, and the promised internal reduction in emissions is dependent on a heavy bet that unproven blue hydrogen and carbon capture technology will work.
Ed Webb

Petro-aggression: How Russia's oil makes war more likely - 0 views

  • A Russian natural gas embargo is a trick that can probably only be pulled once (not unlike the 1973 oil embargo).  So in a sense, European dependence on Russian energy does not imply short-term vulnerability – except that European policymakers’ perceptions of vulnerability can become its own reality.
  • Russia’s resource curse.  Russia’s energy revenues (from both oil and gas) have ensconced Vladimir Putin as an autocrat and given him a free hand in foreign policy.  Russia is so heavily dependent on its energy revenues that it is a classic petrostate, making it more susceptible to corruption, autocracy and violent conflict.
  • Russia’s incursion into Crimea can be seen as a close cousin of petro-aggression.  A state is more likely to instigate international conflict when it has a combination of (a) oil income and (b) a leader with aggressive preferences.  A lot more likely: 250 percent more military conflict than a typical non-petrostate, on average.  Oil income means more military spending, increasing the state’s scope for potential conflicts.  Even more importantly, it distorts the domestic politics of the state, reducing the leader’s domestic political risk from military adventurism and aggressive foreign policy.
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  • Here lies the real risk of Europe’s energy situation: So long as it continues to buy Russian oil and gas, it is sending massive amounts of cash to a neighboring dictator.  By keeping the taps on, Putin consolidates his power as Russian dictator.
  • Diversifying away from fossil fuels would bring security benefits (in addition to some obvious environmental ones), in part by reducing the money sent to petrostates like Russia.
Ed Webb

Can ISIS overcome the insurgency resource curse? - The Washington Post - 0 views

  • IS  is also gaining momentum in the struggle to control two natural resources that have defined the history of the Middle East – oil and water.
  • If control of oil has driven economic development in the modern Middle East, control of water has been a fundamental component of civilization itself. For decades, both the Syrian and Iraqi governments focused on hydrology in their bids for socioeconomic development, building a bevy of dams, canals and other infrastructure to control floods, improve agricultural irrigation and generate electricity for their populations. Denying or diverting water, though, was also tantamount to war. During the Iran-Iraq War (1980-1988) Saddam Hussein fretted that Iran would destroy dikes and dams on the upper Tigris River in order to cause flooding in Baghdad. In the early 1990s Syria and Iraq nearly went to war with Turkey over plans to divert part of the Euphrates River, and in 1992 Iraq famously cut off the water to the marshes of southern Mesopotamia in order to destroy the terrain where Shiite insurgents were hiding out. Punishing drought conditions in rural Syria may even have caused social unrest that helped precipitate the beginning of the March 2011 uprising.
  • According to New York Times reporter Thanassis Cambanis, IS  left the staff at the Tabqa Dam unharmed and in place, allowing the facility to continue operations and even selling electricity back to the Syrian government. Similarly, oil fields under IS  control continue to pump. Indeed, IS  has shrewdly managed these resources to help ensure a steady and sustainable stream of revenue. As one IS fighter told the New York Times, while Assad’s loyalists chant “Assad or burn the country,” IS retorts “We will burn Assad and keep the country.” Beside revenue from oil and water, IS  collects a variety of commercial taxes, including on trucks and cellphone towers.
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  • In February 2013, IS took control of the Tabqa Hydroelectric Dam (Syria), once a showcase in Hafez al-Assad’s development plan and a major electricity source for Aleppo. Earlier this spring, IS opened up dikes around Fallujah to impede the Iraqi army as it tried to besiege the stronghold, causing flooding as far away as Najaf and Baghdad. With its recent advances, IS now controls the hydroelectric dam at Mosul, Iraq’s largest, and IS  is poised to take the dam at Haditha, the country’s second largest. With the tables turned, the Iraqi government finds itself considering a preemptive opening of the Haditha floodgates to block IS’s path.
  • Whereas resources like diamonds or drugs motivate rebel forces to take as much as they can as quickly as they can, the need to manage capital and technology-intensive natural resources has actually increased the interdependence between IS and civilians. Already in effective control of significant amounts of oil and water, the Islamic State is one step closer to becoming a reality.
Ed Webb

Tunisia's olive production could halve by 2030 due to climate change | Middle East Eye - 2 views

  • Tunisia's 3,000-year history of olive farming is under threat with warnings that production is at risk of halving by 2030 because of the extremes of climate change, from floods to droughts.
  • In the short term, Tunisia's olive oil sector, which accounts for more than 40 percent of revenues from agricultural exports and five percent of total exports, has cause to celebrate.Official figures project a record output of 340,000 tonnes in 2015, with 312,000 tonnes for export, making Tunisia - for the first time - the world's leading exporter of the prized product.
  • before we used to have severe drought one year out of five. Now it's an average of two in five
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  • Climate change affects the entire olive oil sector that employs 390,000 of the country's 560,000 agricultural workers and provides a source of revenue for one million Tunisians
Ed Webb

Parting the Seas | Newlines Magazine - 0 views

  • Lebanon desperately needed hydrocarbon revenue, but the prospect of a confrontation with a militarily superior Israel was dictating caution among global energy firms
  • Hariri designated his foreign policy adviser and the former ambassador to the United States, Mohamed Chatah, as my most senior governmental point of contact. Mohamed was cordial, but tough in insisting that Lebanon would stand up for its rights. A kindly and decent man, Mohamed shared with me his view that the Lebanese political establishment would seek to steal future hydrocarbon revenues, and he therefore favored the “Alaska approach,” whereby such income would be distributed directly to every Lebanese adult. No doubt it was that kind of thinking that got Mohamed assassinated in 2013.
  • During our many meetings at LAF headquarters my colleagues and I never ceased to be impressed by the professional excellence – scientific, legal, and diplomatic – of the Lebanese team.
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  • this is what Lebanon and Israel each produced: a line extending from where the two countries meet on the wave-washed rocks of Ras en Naqoura/Rosh Ha Nikra roughly 70 miles out to sea, meeting a perpendicular claim line already established by the Republic of Cyprus and accepted by both Israel and Lebanon. Lebanon did what it could, within acceptable customary standards, to make that line bend south, nearly touching established Israeli exploratory fields. Israel did what it could, short of violating anything appropriate, to make its line veer toward the north. Neither side did anything improper or illegal. But 882 square kilometers of Mediterranean Sea were left in dispute.
  • In recent weeks, Washington has succeeded in reviving its Lebanon-Israel maritime mediation. The “Hof Line” – something that ought to be called the “Ray Line” – has received some attention in the press. After three sessions there is no breakthrough. But at least the two parties are in the same room in UNIFIL headquarters, something Israel declined to do a decade ago.The U.S. maritime mediation of 2010-2012 is missing from the annals of great diplomatic accomplishments. Indeed, in the end, it failed. But the parties to this ongoing dispute would be ill-advised to ignore what they accomplished, with good-faith American help, nearly a decade ago. They can, perhaps, try marginally to improve on their predecessors, bearing in mind nothing happens without mutual agreement. Ray gave them everything they need now to get to “Yes.” By honoring his memory, a win-win scenario – the rarest of occurrences in the Middle East – can come about.
Ed Webb

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

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

Lebanon, Israel reach 'historic agreement' on maritime borders | News | Al Jazeera - 0 views

  • Lebanon and Israel have reached a “historic” deal to end a long-running maritime border dispute in the gas-rich Mediterranean Sea, according to negotiators from the two countries.
  • Lebanon’s presidency voiced hope that “the agreement on the demarcation will be announced as soon as possible”. Aoun had previously said that a deal would not signify a “partnership” with Israel. The two countries are technically at war.
  • The deal would resolve a territorial dispute in the eastern tip of the Mediterranean Sea in an area where Lebanon aims to explore for natural gas, and near waters where Israel has already found commercially viable quantities of hydrocarbons.
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  • Lebanon had previously had a number of concerns about the border. The first related to a borderline marked by buoys that was created by Israel as its forces withdrew from Lebanon in 2000. Beirut asked for language in the draft to be changed to avoid this becoming an international maritime border.
  • intermittent negotiations between the two sides have been taking place for more than a decade. “But now Lebanon is in crisis and if it is able to start exploring and drilling [for gas reserves], it could have revenues from gas production to help it with its financial meltdown,”
  • Officials from both countries were in close contact via US mediator Amos Hochstein over the past few days to resolve outstanding differences. US President Joe Biden hailed the deal on Tuesday as a “historic breakthrough” in the Middle East.
  • The US text has not been made public but under terms leaked to the press all of the Karish field would fall under Israeli control, while Qana would be divided but its exploitation would be under Lebanon’s control. Total would be licensed to search for gas in the Qana field, and Israel would receive a share of future revenues. Bou Saab said Lebanon will “get its full rights from the Qana field”, and Israel might receive compensation through Total. There will be no direct partnership in gas exploration or exploitation between the two enemy states, he said.
Ed Webb

Report: Sanctions may be speeding Iran's nuclear advancement - CSMonitor.com - 0 views

  • “Putting pressure is just half of the equation; [US and European officials] have succeeded with that, undoubtedly the pain on Iran is immense,” says Mr. Parsi. “But to channel the pain is a very, very different task.”
  • measures have begun to bite, causing economic isolation and a precipitous fall in both oil revenues and the value of the Iranian currency. But Iran has still added thousands of centrifuges to enrich uranium, and deployed a more efficient, second-generation centrifuge model; stepped up uranium enrichment levels from 5 percent to 20 percent, which is technically not too far from weapons-grade; and moved its most sensitive work to a deeply buried site impregnable to air attack.
  • “it is highly unlikely that the regime will succumb to sanctions pressure … [when] no proportionate sanctions relief is put on the table by the P5+1, and capitulation is seen as a greater threat to the regime’s survival than even a military confrontation with the United States.”
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  • "individuals close to the core of Iran's power structure are relishing the narrative of resistance" because although there is economic suffering, Iran “is also gaining newfound respect on the international stage due to its refusal to succumb to Western pressure.”
  • “Stark divisions among the Iranian elite are unmistakable,” notes the NIAC report. “[But] if the testimony of elite insiders is to be believed, sanctions have helped strengthen cohesion rather than intensify rifts.”
Ed Webb

Cultural heritage and violence in the Middle East | openDemocracy - 0 views

  • According to reports of the activist Facebook group Le patrimoine archéologique syrien en danger, all six UNESCO World Heritage sites in Syria have been damaged, major museum collections at Homs and Hama have been looted, and dozens of ancient tells have been obliterated by shelling. In Iraq, recent media stories recount ISIS fighters’ use of antiquities to raise revenues. So-called blood antiquities function as cash-cows, fetching high prices from unscrupulous collectors and netting a handsome cut for ISIS. As devastating as this news is, Syria and Iraq are simply additional chapters in the long-running story wherein conflict is characterised by a two-fold assault on humanity: human bodies themselves as well as the objects and sites that people create and infuse with cultural meaning.
  • So-called blood antiquities function as cash-cows, fetching high prices from unscrupulous collectors and netting a handsome cut for ISIS.
  • Current scholarly discussion on the Armenian genocide, however, focuses almost exclusively on the human destruction, not taking into consideration the systematic annihilation of Armenian sites and monuments that has taken place since then
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  • The destruction of human communities is incomplete without cultural violence. This was the conclusion of lawyer and human rights advocate Raphael Lemkin, the Polish-born jurist who coined the term “genocide” and fought successfully for its recognition by international legal bodies as a crime. In Axis Rule in Occupied Europe (1944), he argued: By ‘genocide’ we mean the destruction of a nation or of an ethnic group…[It signifies] a coordinated plan of different actions aiming at the destruction of essential foundations of the life of national groups, with the aim of annihilating the groups themselves. (Lemkin 1944: 80) Among the “essential foundations” of the life of human societies, Lemkin argued, were cultural sites, objects, and practices. The Holocaust galvanised his human rights work, but it was the tragic case of Turkish Armenians during the beginning decades of the twentieth century that served as the basis for Lemkin’s theory of genocide.
  • Also significant in this context was the systematic replacement of Armenian place names (on streets, buildings, neighbourhoods, towns, and villages) with Turkish names. The erasure of Armenians from collective memory was completed during the Turkish Republic; in their history textbooks, Turkish children hear nothing about Armenian culture or learn simply that they were enemies of the Turks.
  • the Turkish state and its governments have systematically removed all markers of the Armenians’ civilisation
  • This is cultural death, and it is especially dangerous because it legitimates the denial of diversity by authoritarian states and their societies.
  • Historical records document previous erasures of peoples and their culture: the Native Americans and First Nations of north America; the Mayas and Aztecs of Mesoamerica; and the Roman destruction of Carthage (north Africa), which some scholars point to as the earliest recorded organised genocide.
  • the harrowing plight of Syrian journalist Ali Mahmoud Othman, co-founder of Le patrimoine archéologique syrien en danger. Othman was arrested by government forces in March 2012 and has not been heard of since his televised “confession” in May 2012
  • Recurring Internet images of ISIS fighters beheading western men obscure the equally outrageous and horrific acts of sexual violence against women, torture of children, and destruction of homes, markets, churches, Shi’a mosques, and ancient monuments. All of this constitutes the challenging environment in which cultural activists must do their work.
  • Lemkin’s teachings still have something to say to us today: without monuments and cultural objects, social groups are atomised into disaffected, soulless individuals
Ed Webb

Arab countries' foreign policy ambitions could start hurting their economies - Business... - 1 views

  • There is a certain irony in the Arab Gulf states’ rising power across the Middle East and North Africa. International prestige, the ability to intervene militarily in regional conflict, and holding the same leverage as international financial institutions in aid and investment are what these states have long coveted. But now that they have the power – both economic and military – Gulf states like Qatar, Saudi Arabia and the UAE are faced with the dilemma of demonstrating their dominance without destroying the neighbourhood.
  • Gulf states’ foreign policies are increasingly at odds with their economic interests
  • The economies of the Gulf states have changed dramatically since the beginning of the second oil boom, between 2003 and 2014. Joined together in the Gulf Cooperation Council (GCC) trade bloc, they are more integrated into the regional and wider international economy in trade and investment flows
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  • The GCC’s outward investments in equity markets, especially towards Europe and the US, means it is also more integrated globally. And it has large amounts of foreign direct investment in infrastructure, agriculture and real estate across the MENA region.
  • The strength of their economic influence in the region lies in huge flows of capital – often a mixture of remittances, foreign aid, and foreign direct investment under the auspices of state-related bodies. This has enabled the Gulf states to usurp international institutions in shaping economic reform across the MENA region, especially in Egypt and other oil importers.
  • Politically, however, the GCC is engaged in numerous interventions across the region that have caused significant disorder and pose a threat to their mutual economic prosperity. The Gulf states were successful in crushing the Arab Spring within their own countries and cementing their development agenda. By contrast, their interventions in Libya, Syria, Yemen and Egypt have stoked the chaos there, putting the stability of the region at risk.
  • In each of these interventions, there is an incumbent economic cost to the GCC states. The war in Yemen is probably the best example of a mounting military expenditure that will only be dwarfed by the cost of re-building Yemen, which surely the UAE and Saudi Arabia will have to help foot. The Gulf States would therefore be wise to start dovetailing their foreign policies with their economic interests by fostering stability instead of conflict.
Ed Webb

UAE to open second military base in east Africa | Middle East Eye - 0 views

  • The United Arab Emirates is going to set up a second military base in the Horn of Africa, sparking concern among some governments in the region.The Somaliland parliament approved the deal for the northern port of Berbera on Sunday
  • Under the 30-year deal, the Emirati government will have exclusive rights to Somaliland’s largest port and manage and oversee operational activities.
  • DP World, the UAE’s ports operator company, will supervise the port, which will gain a naval base as well as an air base. The lease of the port is contingent on the $442 million deal with DP World.
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  • Somaliland will get investment as well as international recognition: no other country has yet recognised the breakaway territory – which separated itself from the rest of Somalia in 1993 - as an "independent state"
  • The Eritrean base has been used by the UAE in the Yemen war against the Houthis. It is not known whether the facility at Berbera will have a similar purpose
  • Abu Dhabi is reaching out to countries in and around the Horn of Africa, as it looks to increase its non-oil revenue through other avenues including real estate, trade and financial services.
  • the UAE will be engaging in trade across the port, and for this, it would require a sustainable road network across Berbera. Hence, as the minister said, it will create opportunities for the local people on infrastructure development.
  • the Somaliland deal has angered Ethiopia, one of the regional powers in the Horn of Africa, which itself has economic ties with the UAE.As recently as last year, the UAE and Ethiopia signed several investment deals, under the terms of which the UAE is legally bound to protect the economic interests of Ethiopia
Sana Usman

Clinton failed to impress India, Oil supply continue from Iran - 0 views

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    NEW DELHI: U.S. Secretary of State Hilary Clinton failed to impress India on oil supply issue with Iran. India said it communal the United States' aim of preventing Iran from building nuclear weapons, but claims that Islamic republic of Iran remained an "important source of oil".
Ed Webb

Saudi Arabia's Energy Crisis | Arabia, the Gulf, and the GCC Blog - 0 views

  • consuming more and more of its precious petroleum resources, and within a decade may have to begin cutting back on its oil exports to the rest of the world
  • In a recent report entitled, “Burning to Keep Cool: The Hidden Energy Crisis in Saudi Arabia,” Chatham House researchers Glada Lahn and Prof. Paul Stevens said unchecked growth in energy consumption in Saudi Arabia was a “cause for international concern.” If it continues at its present rate, this would threaten the Kingdom’s ability to stabilize world oil markets.
  • Saudi crude export capacity would fall by about 3 million bpd to under 7 million bpd by 2028 unless domestic energy demand growth is checked
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  • Saudi Arabia hopes to buy itself some time with major energy conservation efforts. Saudi Aramco is pursuing an initiative in cooperation with the Kingdom’s utilities and business sector to generate massive energy savings on as rapid a timetable as possible. This initiative includes moves into renewable power sources like solar and wind, plus efforts to slash energy waste and duplication and create a business culture sensitive to energy efficiency
  • Saudi Arabia currently relies on oil revenues for about 80 percent of its government spending
  • Plans to add renewable power would help maintain fiscal balance for another two or three years, but that’s all
  • Chatham House believes “huge economic, social and environmental gains from energy conservation are possible in Saudi Arabia” but it cautions that the longstanding Saudi tradition of low energy prices and the Kingdom’s sluggish bureaucracy pose “challenges” to implementing needed pricing and regulatory reforms.
  • Saudi Arabia is aiming to generate about 10 percent of its power needs from solar energy by the year 2020
Ed Webb

The profitable occupation, and why it is never discussed - 1 views

  • an estimate of the direct and indirect Israeli income from the occupation. Nobody could seriously question the existence of such revenues: From the Israeli companies directly involved in excavating and selling natural resources from the occupied territories – the most prominent example being Ahava beauty products (report, PDF) and a recent Supreme Court ruling even allowed mining Palestinian land in order to satisfy the need of the growing Israeli real-estate market – to the captive market the Palestinian represents for Israel (household Israeli brands can be found anywhere in the West Bank and Gaza). Water is one of the much-needed resources in the Middle East: No less than 80 percent of the Mountain Aquifer – located underneath the West Bank – is used by Israel and the Israeli settlements, and only 20 percent goes to the Palestinian population. (The average Israeli’s water consumption is 3.5-times that of a Palestinian’s.) Still, the main economic benefit Israel draws from its control over the West Bank is hidden in plain sight – we are talking the most expensive, most desired resource here: land.
  • Parts of the West Bank literally became the new suburbs of Tel Aviv.
  • with very few exceptions, Jerusalem is also expanding north, east and south, almost exclusively beyond the Green Line. Currently, half a million Jews live in the occupied West Bank, many of them in government-subsidized projects in the Jerusalem area. One could only imagine the cost of the same projects if they were to be located in proper Israel, especially if the proximity to the metropolitan centers was to be kept
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  • The bottom line is that the control over the West Bank, East Jerusalem and to a lesser extent, Gaza, has substantial value to Israel, one that might even surpass the economic burden posed by the occupation
  • In the early 1990s, land and real estate prices in Israel skyrocketed because of  immigration from the former USSR. One solution Israeli governments – including dovish ones – turned to was the West Bank, but by doing so they were undermining their own effort to separate the West Bank from the rest of Israel. It is also no coincidence that Palestinian resistance erupted in places like Bil’in or Ni’lin, whose land was confiscated for those very same projects, or that the ultra-Orthodox population that was sent to populate those houses is moving further and further to the political right, becoming almost one with the settler movement
  • we never hear about the way the blockade serves Israeli economical interests, only about the security needs
  • Ignoring the benefit to Israel from the occupation serves to blur its colonialist nature
  • (cheap labor is another “benefit” of the occupation which I didn’t discuss here)
  • It’s not always enough to oppose the occupation – one needs to understand its appeal as well. I have written in the past on the Israeli addiction to the political status quo, especially on the Palestinian question. I think that an honest analysis of the cost and benefits of Israeli control over the West Bank would support the notion that the occupation represents an Israeli interest, and therefore would never come to an end as a result of an internal Israeli process alone.
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