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Iran on Edge

The Challenges Facing Rohani


Taking over the presidency in a country where decisions are ultimately made by the supreme leader is challenging enough. Having to begin that task by clearing colossal hurdles left by your predecessor is nearly mission impossible.

Immediately upon being sworn in as Iran's president at a public inauguration on August 4, Hassan Rohani must scale a mountain of challenges inherited from Mahmud Ahmadinejad's eight years in office, including an ailing economy, crippling international sanctions, troubled international relations, tricky nuclear negotiations, and an increasingly repressive and politically intolerant domestic atmosphere at home.

On his way to winning the presidency, Rohani pledged to tackle such big-ticket issues head on. But, in doing so, he risks suffering the same fate as his predecessors, whose aims conflicted with the conservative establishment and ultimately undermined their efforts to enact changes and implement their plans. Read more ..

Inside Latin America

Latin America's Moment May Come in 2013

December 31st 2012

Latin American Leaders

Looking back at the past year, many of the posts on Latin America’s Moment touch on the region’s economic development, and its trade and investment ties with the rest of the world. Here is a recap of some of the main themes.

Overall, 2012 was a year of economic optimism for most Latin American economies. The IMF’s Latin America Economic Outlook report, which I write about here, was quite bullish. And ECLAC announced that Latin America hit an all-time $150 billion high in foreign direct investment, led by Brazil. Also crucial in the region’s economic development were the growing number of women in the workforce.

Brazil’s economy still dominated the headlines, though the positive near consensus faded, as analysts grappled with slow growth. I argue here and here that, while Brazil’s hype may have been initially overdone, the country still boasts a solid consumer base, a relatively high GDP per capita, and a successful conditional cash program that is helping to pull many into the middle class. Read more ..

The Battle for Syria

Is the Kurdish Nation Re-emerging?

December 31st 2012

Ciwan and son, Syrian Kurdish refugees

In Syria, the Assad regime’s retreat back to Damascus and the Alawi heartlands in the west of the country has made possible the emergence of a Kurdish autonomous area in the country’s northeast. This area shares a border with Kurdish- controlled northern Iraq. As a result, a contiguous area of Kurdish control, stretching along the southern border of Turkey, has come into being. This emergent reality is raising again a question long dismissed from serious strategic discussion: namely, that of the establishment of a Kurdish state. However, the obstacles on the path to Kurdish sovereignty remain formidable, and the geo-politics of the situation are fraught and complex.

The Kurdish Regional Government (KRG) in northern Iraq, led by Massoud Barzani, possesses its own armed forces, political system, capacity for oil production, public services and Kurdish-language education system and media. Its capital, Erbil, has the feel of a boomtown, with construction cranes along the skyline and new malls and hotels emerging from the dust. Read more ..

Edging Toard the Fiscal Cliff

Overhaul of US Foreign Aid is Long Overdue

December 31st 2012


At a time when competing government priorities face the chopping block, advocates of effective foreign aid have a responsibility to make the case that aid directly serves our country’s long-term national-security and economic interests, and in a cost-effective way.

A key goal of foreign aid is to make the right investments that reinforce America’s priorities. Unfortunately, the current foreign aid process and the underlying statute are encrusted with legislative barnacles built up over half a century that are messy, conflicting and outdated, and that actually hinder our ability to deliver foreign aid effectively and efficiently. It is time for a complete overhaul. The 21st century requires a foreign aid program that recognizes today’s priorities and streamlines the process in the post-Cold War era. For instance, do we still need language in current law, passed in 1961, that requires the president to assure Congress that foreign aid recipients are not “controlled by the international Communist conspiracy”? Read more ..

Nigeria on Edge

Nigeria: What If Globalization Reverses?

December 30th 2012

Nigeria Oil

According to Fortune Magazine, investments in foreign held assets are decreasing. Joshua Cooper Ramo points out that, “figures on investment in assets held overseas, probably the best indicator of enthusiasm for globalism, are drifting down toward 40 percent from more than 50 percent in 2008.”  Ramo further notes that during “most of the past twenty years trade has raced ahead of global economic growth,” but in the last twenty-four months, it has slowed and, “this year, globally we’ll be below the twenty year average rate of trade growth yet again.”  According to Ramo, “We find everywhere signs of a world turning inward and of an era when the inside will define success and deliver growth—for companies, for nations, even for your career—in the way the outside once did.”

If true, and if sustained, where would such a trend toward an “inside world” leave Nigeria?  The country has, and does, depend heavily on export markets and foreign investment to maintain its oil industry, which provides 95 percent of the country’s foreign exchange earnings and 80 percent of its budgetary revenue.  Moreover, trade integration is believed to contribute to economic performance.  Nigerian officials have considered “deeper trade integration as a means to foster economic growth and alleviate poverty,” according to some researchers. Yet the country’s National Bureau of Statistics reports unemployment at 21 percent, implying, says the Leadership newspaper, “policy failure.” Read more ..

Edging Toward the Fiscal Cliff

Fiscal Talks Continue in Senate with Agreement Far From Certain

December 30th 2012

Cliff Face West Wales

Congressional leaders and senior aides huddled on Saturday in a last-minute attempt to iron out a resolution in the so-called "fiscal cliff" crisis. But a deal -- at least for the time being -- seemed far from certain. The rare weekend negotiations come on the heels of a meeting held at the White House on Friday as part of a last-ditch effort to resolve the looming fiscal crisis. If lawmakers do not come to an agreement in the next few days, taxpayers in all income brackets would see an increase in taxes and a slew of spending cuts would kick in.

A Senate aide with knowledge of the talks said late Saturday afternoon there is "no major progress." One sticking point in the talks continues to be on taxes, according to aides. President Obama has reiterated that tax cuts should extend to the middle class, asking top earners to pay more in taxes. But Republicans have insisted that tax cuts be extended for all taxpayers. Read more ..

Israel on Edge

Israel Redefines Victory in the New Middle East

December 30th 2012

Exhausted Israeli Soldier

Senior Israeli officials have indicated this month that any round of future fighting with Hezbollah will make last month's Gaza conflict seem minor by comparison. Offense, not defense, is still preferred.

Israel is redefining its concept of military victory in a Middle East dominated by terrorist organizations turned quasi-state actors.

Once, decisive, unmistakable victories, accompanied by conquests of territory that had been used to stage attacks against Israel, provided all parties concerned with a "knockout" image. Victory was seen by the Israel Defense Forces as a clear-cut event, which ended when the enemy raised a white flag. Today, however, the IDF considers this thinking out of date in the 21st century battle arenas of the region, where a terror organization such as Hamas will continue firing rockets into Israel right up until the last day of a conflict, and claim victory despite absorbing the majority of damages and casualties. Read more ..

The Battle for Syria

Has the Assad Regime Reached the Terminal Phase?

December 29th 2012

Syrian Rebels in Aleppo

Based on events on the ground, one can safely state that the Syrian regime is steadily losing ground to rebel forces, since as much as 60 to 70 percent of the territory has fallen into their hands.

Yet, while rebel forces have seized parts of Aleppo and are fighting on the outskirts of Damascus, even cutting, at times, the main road to the city’s international airport, most of the main bastions of the Syrian regime, including the bulk of the big cities, are still in Assad’s hands. The Syrian army is still fighting like a united force and the main institutions of the regime are still functioning. Objectively speaking, even though there have been defections from the Syrian ruling elite, the main corps of the body politic is still loyal to Assad and is aligned behind him. Read more ..

Israel on Edge

Is Education a Threat to Peace?

December 28th 2012

West Bank Construction

The newest threat to peace in the Middle East is a college–at least according to the government of the United Kingdom.

The educational institution in question is Ariel College, now Ariel University, in the Israeli settlement of Ariel in the West Bank. Ariel was founded in 1978 and now has about 20,000 residents. Ariel College was founded in 1982 as a branch of Bar Ilan University, became independent in 2005, and now has a remarkable 14,000 students from all over Israel and even a branch in Tel Aviv. It also has the largest group of Ethiopian-born immigrant students of any university in Israel, and hundreds of Israeli Arab students. The university has five faculties as of now: architecture, natural science, engineering, health sciences, and humanities and social sciences, and plans to add more. In 2008 Ariel College applied for upgrading from college to university, and despite strong opposition in some parts of Israel’s educational establishment, that change was just approved. Read more ..

Spain on Edge

Muslims Upset Over Spain's Offer of Citizenship to Sephardic Jews

December 28th 2012

Synagogue in Cordoba
Synagogue in Cordoba, Spain.

The Spanish government has announced that it will grant automatic citizenship to Jews of Sephardic descent, whose ancestors were expelled from Spain in 1492. The measure has been welcomed by Jewish groups, who say the move is long overdue and that it rights a historic wrong. But Muslim groups are now clamoring for reciprocity, and are demanding that the Spanish government grant instant citizenship to millions of descendants of Muslims who were also expelled from Spain during the Middle Ages.

The so-called Right of Return for Sephardic Jews (Sepharad means Spain in Hebrew) was announced in Madrid on November 22 by the Spanish Justice Minister, Alberto Ruiz-Gallardón, and the Foreign Minister, José Manuel García-Margallo.

Under existing Spanish law, Sephardic Jews already benefit from a preferential naturalization procedure that allows them to claim Spanish citizenship after having lived in Spain for only two years, a privilege that is also available to citizens of Spain's former colonies in Latin America and elsewhere. Read more ..

Edging Toward the Fiscal Cliff

Obama and Republicans: Little Room Left to Maneuver Before Fiscal Cliff

December 27th 2012

Click to select Image

With little time left for action, President Obama and members of the Senate will return to Washington on Thursday in search of a scaled-back agreement to lessen the economic pain of the “fiscal cliff.” Lawmakers are under pressure to pass some kind of legislation that reverses or delays the tax increases and spending cuts slated for January, but they find themselves without a clear path forward after the breakdown in negotiations between Obama and Speaker John Boehner (R-Ohio).

The president is scheduled to fly back from Hawaii on Wednesday night to return to work on a fiscal deal. The Senate is also expected to be back in business Thursday, though flight delays from a winter storm could prevent the upper chamber from reassembling quickly.

Republican leaders in the House, meanwhile, have yet to notify members of any plans to reconvene. GOP leaders held a private conference call Wednesday to discuss their plans, a chat that a Boehner spokesman described as "routine." Read more ..

The Iranian Threat

Iran Fears May Be Compelling Saudi Arabia to Begin to Tell the Truth About Israel

December 27th 2012

Iran Missiles

If there were a prize for the Arab country that has done most to promote Arab-Israeli peace recently, I'd seriously consider nominating Saudi Arabia. Admittedly, that's a counterintuitive choice: Riyadh doesn't even recognize Israel and shows no signs of doing so anytime soon; moreover, it finances the spread of extremist Islamic ideology. But Saudi-funded papers have been doing something that may be far more important than another handshake on the White House lawn: providing a platform for Arab journalists and public figures to challenge the dominant Middle Eastern narrative of Israel as the root of all evil. 

Consider, for instance, a column published last month in Asharq Al-Awsat, a paper owned by a member of the Saudi royal family and known for its support of the Saudi monarchy. Written by the paper's then-deputy editor-in-chief, Adel Al Toraifi, and titled "Who holds Hamas' terrorism to account?" the column blamed not Israel, but Hamas, for Palestinian casualties during both the second intifada and the recent fighting in Gaza. Read more ..

Peru and Chile

The Power of Historical Memory in Peru/Chile Maritime Dispute

December 27th 2012

SS Huascar of Chile and Peru

In January 2008, Peru called Chile before the International Court of Justice (ICJ) in The Hague in order to resolve a maritime dispute between the two countries. Both belligerents, dispute the exact metrics of the current maritime border that for decades has embittered relations between both countries; the area of the maritime zone that is being contested is roughly 37 thousand square kilometers of water. While a verdict is not expected before 2013, the trial has currently entered a critical stage as delegations from both countries recently finished presenting their oral arguments before the court. The proceedings are being followed closely not only by the two immediate claimants, but also by a broader community, with social media, as well as conventional news organs being used to distribute information on new developments that may occur. Read more ..

The Darkest Edge

America is Talking about Guns while the NRA is Not Listening

December 27th 2012

Sandy Hook Shooting

Top GOP pollster Frank Luntz said the National Rifle Association's call for armed guards in schools shows it is not listening to the public response to the shooting in Newtown, Conn.

"The public wants guns out of the schools, not in the schools," Luntz said Wednesday morning on CBS. "And they are not asking for a security official or someone else."

"I don’t think the NRA is listening. I don’t think they understand most Americans would protect the Second Amendment rights and yet agree with the idea that not every human being should own a gun, not every gun should be available at anytime, anywhere, for anyone. At gun shows, you should not be able to buy something there without any kind of check whatsoever."

Luntz is a prominent Republican pollster, though he's also worked for Mayors Against Illegal Guns, a group backed by New York City Mayor Michael Bloomberg (I) that calls for stricter gun-control laws. Luntz conducted a poll for the group in May that found many NRA members would support some restrictions on firearms. Read more ..

The Battle for Syria

Weapons of Mass Distortion--Syria's Chemical Weapons Not Yet Deployed

December 26th 2012

Syria fighting injured baby


Broken Housing

US and Canada Remain at Opposite Ends of the Housing Cycle

December 25th 2012


North American housing markets present an interesting contrast between the U.S. and Canada.

It now appears that the U.S. has passed the bottom of its housing markets at long last. After falling for six years from the 2006 high in a terrific bust, house prices are now widely rising from their lows, and house sales are increasing. So the U.S. is starting to come up from the bottom.

Canada is at the opposite end of the cycle. Having weathered the crisis of 2007-09 far better, it looks like Canada's housing markets have just gone over the top, a top of very high house prices and household debt levels, and now are starting down.

The U.S. Federal Housing Finance Agency's house price index for the third quarter of 2012, counting house purchases financed by Fannie Mae and Freddie Mac, was up 4% over a year ago, partially reflecting a lower proportion of distressed sales. This house price index rose in 39 of the 50 states. The widely followed S&P/ Case-Shiller National House Price Index was up 3.6% year-over-year in September.


Japan on Edge

How Beijing Sees Abe’s Return

December 24th 2012

Shinzo Abe
Shinzo Abe

An Xinhua editorial that also appeared in the U.S. edition of the China Daily asserts that the impending premiership of Japan’s Shinzo Abe would “destabilize” East Asia. Yet the piece in reality makes a case for why Abe’s next term in office would be a good thing.  To quote from the article:

"…Abe has called for an increase in Japan's defense spending, easing constitutional restrictions on the military and even changing Japan's so-called Self Defense Forces into a full-fledged military.

Abe is likely to push through several changes with little opposition, including abolishing the requirement for a separate new law each time Japan wants to send peacekeepers abroad and establishing a National Security Council to streamline decision-making, which was a primary, though eventually unrealized, goal of Abe's previous administration."

The editorial also rightly notes that “for the first time in decades, national defense played a significant role in Japan's general election,” yet refrains from listing the reasons for this, namely North Korea’s renewed belligerence and the on-going crisis over the Senkaku (Diaoyu) Islands between China and Japan. Read more ..

Yemen on Edge

Stabilizing Yemen's Government

December 24th 2012

Yemen Female Protestor

The ongoing process of stabilizing Yemen's political, military, financial, administrative, and economic spheres will require expanded U.S. governance and development efforts.

In a series of decrees signed on December 19, Yemeni president Abdu Rabu Mansour Hadi announced a fundamental reorganization of the country's military. Although these initiatives address many of the opposition's demands for reform, various challenges will persist as the process of political consolidation and stability moves incrementally forward.


In 2011, Yemen became embroiled in a political crisis between then president Ali Saleh, who had ruled for over thirty years, and opponents who criticized his regime's corruption, leadership failings, and lack of services. As the crisis unfolded, opponents mounted a series of protests; Saleh responded by initiating limited reforms, but his efforts did not satisfy the opposition's demands. Read more ..

Venezuela on Edge

Chavez Party Gubenatorial Victory Spells Disaster for the Region

December 23rd 2012

Hugo Chavez

Chavez continues to be the hero in Venezuela and the region. In the last elections for state governors that took place on Sunday, December 16th, Chavez’s party, the United Socialist Party of Venezuela (PSUV), won overwhelmingly and now holds 20 out of the 23 state governments in the nation.

The opposition lost important states such as Zulia that it had controlled for more than eight years. Likewise, the opposition lost the state of Carabobo, a state that has never been in the hands of a pro-Chavez government. Even in the state of Tachira, which was the only state the opposition won in the October 7th presidential election, was lost to Chavez’s political loyalists.

Those who think that Chavez’s movement will not survive his death should be dissuaded from this belief given the results of this gubernatorial election which proves exactly the opposite. Populism and the government’s massive use of state resources were key to winning those elections. Read more ..

Palestine on Edge

Hamas Planning Overthrow of Fatah on West Bank

December 23rd 2012

Hamas protester

The terror group Hamas is plotting a Gaza-style takeover of the West Bank, the Sunday Times reports. The Iranian-backed terror group is planning a putsch much like the one that brought it to power in the Gaza Strip in 2007. In that conflict, which lasted just eight days, Hamas fighters soundly defeated the Fatah security services aligned with Mahmoud Abbas.

This time, both Israel and Fatah are preparing for any attempt by Hamas to seize the West Bank's military and political institutions. The Times of Israel, quoting the Sunday Times, reports: "Jerusalem fears that a Hamas takeover of the West Bank would give Iran, which is allied with the group, a foothold on the border of Israel’s heartland, the report said. Reportedly, Iran is the driving force behind Hamas’s push to control the West Bank. A source close to Prime Minister Benjamin Netanyahu told the paper that the prime minister is maneuvering to halt Iran and Hamas from gaining dominion of the territory. "[Netanyahu] understands the geopolitical changes in the Middle East. No way would [he] give up an inch of the West Bank — he is convinced that the intelligence assessment about a [Hamas] takeover is solid,” the source said. Read more ..

The Edge of Health

Tracking the History of HIV

December 23rd 2012

Human immunodeficiency virus (HIV) may have affected humans for much longer than is currently believed. Alfred Roca, an assistant professor in the College of Agricultural, Consumer and Environmental Sciences at the University of Illinois, thinks that the genomes of an isolated West African human population provide important clues about how the disease has evolved.

HIV is thought to have originated from chimpanzees in central Africa that were infected with simian immunodeficiency virus (SIV), a retrovirus. "If you look at the diversity present across SIV in chimpanzees, it suggests that they have had it for tens of thousands of years," Roca said.

HIV-1 Type M, which accounts for 90 percent of human infections, is believed to have crossed the species barrier into human populations between 1884 and 1924. Roca said that it may have crossed much earlier and many times, selecting for genetic resistance in isolated rural populations while remaining undetected. Read more ..

Iran's Nukes

Big Business Sides with Iran in Face of Nuclear Threat

December 22nd 2012

Iran centrifuges


Broken Government

Looking Ahead to 2013 Primaries, GOP Representatives Abandon 'Plan B'

December 22nd 2012

John Boehner
House Speaker John Boehner

Many House Republicans refused to vote for Speaker John Boehner’s (R-Ohio) Plan B bill because they were “gun shy” about drawing primary challengers in the 2014, according to several lawmakers.

A number of members involved in the intense whipping operation that took place over the past two days tsaid that entrenched no votes were more concerned with perception than principle. “I think that there were members that are so gun shy about primaries that they weren't willing to take a risk ... some members told me that it was just too hard to explain how it wasn't a tax increase,” Rep. Mike Coffman (R-Colo.) said shortly following Thursday night’s abrupt conference meeting where Boehner told his colleagues they wouldn’t vote on the bill. Read more ..

Israel on Edge

Palestinians Threaten Multilateral "War" Against Israel

December 21st 2012

IDF Soldiers

Following a day of blustering threats from the Palestinian Authority, Israel's foreign ministry responded in kind, calling "The 'new rules' the Palestinians are talking about... no different than the old rules that have always resulted in conflict, hatred, violence and their defeat."

The P.A. threatened on Thursday to do everything from seek sanctions against Israel to fomenting violence on the ground in the West Bank, claiming that their rise to non-member state status at the U.N. had changed the rules of their conflict with Israel.

According to YNet, Foreign Ministry Spokesman Yigal Palmor hit back hard on Friday, saying that: The Palestinians' tragedy is that instead of dedicating efforts to building themselves, they are focusing on trying to harm Israel. Instead of building their future they are immersed in attempts to ruin ours. This strategy has led to nothing but failure after failure for them. They continue digging in their heels out of some delusional, suicidal power drunkenness. Read more ..

The Battle for Syria

Proof of Obama's Policy of Making Syria into an Anti-Western and Anti-Semitic Islamist State

December 20th 2012

Syrian Jihadis

In his article “The Revolt of Islam in Syria” (Jerusalem Post, December 12), Jonathan Spyer — senior fellow at the GLORIA Center — points out compelling information about the new Western-backed leadership in Syria.

The bottom line: if this is Syria’s new government, then Syria now has an Islamist regime.

This is happening with the knowledge and collaboration of the Obama administration and a number of European governments. It is a catastrophe, and one that’s taking place due to the deliberate decisions of President Barack Obama and other Western leaders. Even if one rationalizes the Islamist takeover in Egypt as due to internal events, this one is U.S.-made. Read more ..

The Battle for Syria

Syrian Crisis Evolves From Arab Spring to a War between Sunnis and Shiites

December 19th 2012


In Syria, what began as an Arab Spring, eager for greater dignity, work and freedom, has slipped out of hand to become a regional and international conflict in which Saudi Arabia and Qatar are fighting against Iran , Turkey and Israel against Syria, Russia and China against the United States and Europe.

At first efforts were concentrated on the demand for greater dignity, but after receiving only violence as a response from the government, the Spring has become a well armed rebellion. Many army officers have defected and organized an armed response. Now both sides are fighting with weapons.

A conflict within Islam

Syria, unlike Egypt, is a multicultural and multiethnic country: there are Druze, Christians (9%), Kurds (7%), Sunni (70%), and other small groups, and this country, so far, is dominated by the Alawite (12-13%).

All this leads the Syrian tensions to a regional conflict. The fear, for Sunnis and the majority of Arab countries, is that Syria, religiously tied to Iran, could become increasingly instrumental to the spread of Shiism.

It must be said that Iran's enemies, rather than Israel, are Sunnis. On the other hand, the fear of Islam is the fear of Shiism, which is advancing in every Islamic country. Last week, in Cairo (Egypt), I came across a group of Shiite Muslims for the first time in more than a millennium, who were promoting their religion there. They were stopped by Sunni leaders. I have heard that the same phenomenon is occurring in Algeria, Morocco, Tunisia, and in many African countries. Read more ..

The Arab Winter of Rage in Libya

Libya Shuts Certain Border Sections

December 18th 2012

Libya protesters

Libya's struggling government on Sunday ordered the nation's southern borders to be closed and ordered the military to create restricted areas in several regions. The reason given for these closures was the enormous influx of illegal immigrants and contraband. The nations singled out were Chad, Niger, Sudan and Algeria, all countries with active Islamic terrorist organizations, according to the Israeli source, a member of the law enforcement and intelligence community. While the nation struggles to create a secular democracy, Libya's southern regions are plagued with rampant lawlessness and violence ever since its dictator Moamar Khadhafi's regime was toppled and he was executed by an angry mob last year.

Some nations within the European Union have volunteered to train the Libyan military and police in border security measures and combating the trafficking of weapons and drugs across Libya's borders. The parliamentary decree said the southern regions of Ghadames, Ghat, Obari, Al-Shati, Sebha, Murzuq and Kufra would be military zones subject to martial law. Read more ..

Global Migration

The World Comes to Grips with the Phenomenon of Unceasing Migration

December 18th 2012

Latino immigration rally

On December 18, the United Nations and countries around the world mark International Migrants Day, an event established a dozen years ago to acknowledge the contributions made by economic migrants. People have always been on the move in search of a better life. Today, it’s estimated that more than 200 million people worldwide are working in foreign lands, hoping for a future they couldn’t find at home. And the numbers are growing each year. Experts who study this mass migration are working to convince governments that, given the right policies, they have much to gain – whether they are the country migrants are leaving or the one that is their destination.

But there are still societal roadblocks fueled by false assumptions about migrants that prevent the free flow of international migration. Among them are persistent beliefs that migrants are a burden on host nations, even dangerous. Read more ..

The Arab Winter of Rage

Transition towards Democracy in North Africa

December 17th 2012

African ancestry

Egypt’s transition is turbulent, to say the least. The upcoming constitutional referendum is becoming more fraught by the day. Because most of the country’s judges are refusing to supervise the referendum, it is now scheduled to take place on two different dates: December 15 and December 22. Egypt’s main opposition coalition, after considerable indecision, has decided to participate in the referendum—trying to vote it down rather than boycotting it—but says it will not participate without sufficient oversight, monitoring, and security.

All of this is taking place against a backdrop of increasing economic instability and uncertainty: this week, President Morsi announced tax increases stipulated by the IMF, only to rescind them hours later. Egypt also delayed its loan from the IMF in order to better explain required austerity measures to the population.

How are its North African neighbors, Tunisia and Libya, faring in their transitions? Read more ..

China Rising

Beijing Testing Tokyo

December 16th 2012

Senkaku Islands

Early this morning, East China Sea time, China sent a small reconnaissance plane into Japanese airspace over the Senkaku Islands. Too small to register on Japan’s air defense radar, but large enough to make a point, this propeller jet assigned to the Chinese Marine Surveillance Agency was perfectly timed to take advantage of the distraction of North Korea’s missile launch.

China and Japan have been drawing lines in the waters around the Senkaku Islands (Diaoyu Islands for the Chinese) almost daily since the Japanese government under Prime Minister Yoshihiko Noda purchased these islands from a private owner on September 11. China’s foreign ministry spokesman, Hong Lei, has consistently argued that Japan escalated the bilateral dispute over these small uninhabited islands by “nationalizing” them. China’s foreign minister Yang Jiechi took his case to the United Nations, where he derided the Japanese government for challenging the post-WWII settlement in Asia. Read more ..

Nigeria on Edge

Nigeria Rises to Top-20 of Money Laundering Nations

December 16th 2012

Nigeria Oil

A new study by the US-based research and advocacy organisation, Global Financial Integrity (GFI), has placed Nigeria in the 7th position out of the 20 biggest exporters of illicit financial flows over a decade, with cumulative figure of US$129 billion and an average of US$12.9 billion. BusinessDay reports that the organisation also revealed that among the 20 top exporters of illegal capital in 2010, Nigeria occupied the same position with US$19.66 billion.

The GFI report, which is coming barely one week after Transparency International's Corruption Perception Index placed Nigeria 135th out of 176th corrupt countries, covered 2001 to 2010.

The report, co-authored by GFI Lead Economist Dev Kar and GFI Economist Sarah Freitas, is the first by GFI to incorporate a new, more conservative estimate of illicit financial flows, facilitating comparisons with previous estimates from GFI updates, identifies crime, corruption and tax evasion at near historic highs. It estimates that nearly US$6 trillion were stolen from poor countries within the decade and US$859 billion in 2010 alone.

The report fingered China as leading the pack with US$274 billion average (US$2.74 trillion cumulative); followed by Mexico with US$47.6 billion average (US$476 billion cum.); Malaysia, US$28.5 billion average ($285 billion cum.); Saudi Arabia US$21.0 billion average (US$210 billion cum.); Russia US$15.2 billion average (US$152 billion cum.); and Philippines US$13.8 billion avg. (US$138 billion cum.). Read more ..

The Medical Edge

Scrutiny of Health Records Tightened

December 15th 2012


Federal officials, in an apparent effort to clamp down on Medicare fraud and abuse, are tightening scrutiny of the  growing numbers of doctors who rely on electronic medical records to bill for their services.

The Centers for Medicare and Medicaid Services has directed its auditors to look more closely to make sure the systems are properly documenting the services being paid for by the government. The new policy, announced in November, went into effect earlier this week. At issue is the impact electronic medical records can have on billing for doctor visits. Doctors must choose one of five escalating payment levels, known as “Evaluation and Management” codes that best reflect the amount of time spent with a patient as well as the complexity of the care.

Medical groups argue that computers make it easier for them to document all of the work they do, which leads to higher codes and fees. But officials worry that the software also can be manipulated to inflate bills — a practice known as “upcoding.” Read more ..

Broken Labor

ALEC's Decades of 'Right-to-Work' Effort Pay Off in Michigan

December 14th 2012

Click to select Image

Amid protests by labor unions, and objections from the state’s congressional delegation and even the president, Michigan’s Republican Gov. Rick Snyder signed a “right-to-work” bill into law Tuesday, drawn word-for-word from a 32-year-old “model bill” pushed by a corporate-funded, conservative think tank.

The legislation deals a severe blow to organized labor in a state that has the fifth-highest union density in the country, and it marks the revival of an effort long promoted by the influential American Legislative Exchange Council, a Washington, D.C.-based nonprofit that has seen its share of controversy recently.

Since 1973, ALEC has hosted corporate-sponsored meetings where state legislators and lobbyists meet behind closed doors to write and vote on model legislation. In a 1992 annual report, the free-market think tank boasted that it “provides the private sector an unparalleled opportunity” to influence state legislation. One of its first priorities was passage of “right-to-work” laws, which now exist in 24 states. The 16 states with the lowest union density in the country have right-to-work laws, mostly in the American South and West, while the 13 states with the highest union density do not, until this week. Read more ..

Operation Pillar of Defense

The Gaza Operation and its Effects on Iran

December 13th 2012

Hamas demo

How effectively Israel's recent Gaza operation will deter Palestinian rocket fire remains to be seen. Israelis are skeptical: One poll found that a whopping 88 percent think the truce will not last long. Even Prime Minister Benjamin Netanyahu doesn't sound too confident: Visiting an airbase shortly after the cease-fire took effect, he warned pilots they should already start preparing for the next campaign.

Regardless of what happens in Gaza, however, Operation Pillar of Defense clearly enhanced Israel's deterrence against a much more important enemy - Iran. The operation demonstrated two important things, neither of which was self-evident beforehand. One is that even in the post-Arab Spring world, Israel can conduct military operations without igniting its southern front or shattering its peace with Egypt. The other is that for all the disagreements between Netanyahu and President Barack Obama on other issues, America's traditional support for Israel's right to defend itself takes precedence. Read more ..

The World on Edge

Global Power Will Shift by 2030

December 13th 2012

F-22s at Sunset

The U.S. intelligence community has confirmed in a new report that global power in the future will not be marked by the deployment of large military force or arsenals of nuclear weapons, two measures of American power that still have a large following in Washington.

In a new report entitled “Global Trends 2030: Alternative Worlds”, the National Intelligence Council said global power in that year will be reflected instead by a mix of factors, including the state of technology, health, education, and governance as well as GDP (the size of the national economy), population size, and military spending.

And by 2030, countries in Asia will have surpassed the United States in many of these power metrics, meaning that “the ‘unipolar moment’ is over and Pax Americana – the era of American ascendancy in international politics that began in 1945 – is fast winding down,” the report said. “There will not be any hegemonic power” in 18 years but instead a collection of “networks and coalitions” in which Asian nations and rising economic powers such as India, Brazil, Colombia, Indonesia, Nigeria, South Africa and Turkey will take part. Read more ..

The Edge of Terrorism

Banking without Borders with Terrorists as Major Clients

December 12th 2012


In the past three months, two London-based banks – HSBC and Standard Chartered – have been accused by the US government of serving as a gateway for Iran into the international financial market. Both financial institutions have come under scrutiny from United States (US) regulators, who have made it clear that banks doing business in the US must cut their ties with illicit Iranian entities or risk losing access to the US market.

On 17 July 2012, the US Senate Permanent Subcommittee on Investigations issued a 335-page report (in addition to several hundred pages of supporting evidence, including bank records and internal emails) accusing HSBC of exposing the US financial system to a range of money laundering, drug trafficking and terrorist financing risks due to its poor anti-money-laundering (AML) controls. Read more ..

Egypt’s Second Revolution

A Turning Point in Egypt: On the Speed—Not the Direction—of the Islamist Transformation

December 11th 2012

Mohamed Morsi - Vivat Rex

A critical moment has arrived for Egypt. But what does it mean? President Morsi has rescinded much of his decree claiming total power, but he could accomplish much the same thing after the constitution is confirmed, and perhaps if he forces the reinstatement of the elected parliament whose election was declared invalid by a court. At any rate, Morsi’s concession has not quieted the demonstrations—another sign that concessions in the Middle East don’t bring agreements—and so this crisis is not going away.

There are three broad possibilities for Egypt. Either the regime will fall, the opposition will be repressed, or there will be an increasingly violent civil war.

The regime will not fall due to these demonstrations alone. Remember what happened to the Mubarak regime—it fell for the following reasons:
• The army would not defend it.
• The army then overthrew it.
• The Muslim Brotherhood-led opposition would not compromise.
• The West would not support the regime. Read more ..

Edging Toward the Fiscal Cliff

Both Obama and Republican Debt Solutions Risk U.S. Credit Downgrade

December 11th 2012

Cliff Face West Wales

Deficit-reduction proposals from Speaker John Boehner (R-Ohio) and President Obama fall short of clearly stabilizing the debt, according to budget experts, putting the U.S. credit rating at risk of a downgrade. Under both proposals, U.S. debt would continue to grow as a percentage of gross domestic product, unless the economy grows at a rapid pace, according to experts who have studied the proposals.

While some suggest new talks between Obama and Boehner suggest a deal is in reach, they have doubts it will be big enough to meaningfully reduce deficits — or satisfy credit rating agencies. “More is going to have to be done. I’m actually getting a bit more optimistic that a fiscal-cliff deal will get done, but at the same time I’m less optimistic that a ‘grand bargain’ will be achieved,” Bob Bixby of the Concord Coalition said. “The real issue is where everything ends up as a percentage of GDP.”

Moody’s, Fitch and Standard and Poor’s have taken a cautious approach in public comments on talks between congressional Republicans and the White House. Read more ..

Israel on Edge

Israel's Periphery and its Geopolitical Dilemma

December 11th 2012

Israel border crossing Eilat

The state of Israel has a basic, inescapable geopolitical dilemma: Its national security requirements outstrip its military capabilities, making it dependent on an outside power. Not only must that power have significant military capabilities but it also must have enough common ground with Israel to align its foreign policy toward the Arab world with that of Israel's. These are rather heavy requirements for such a small nation.

Security, in the Israeli sense, is thus often characterized in terms of survival. And for Israel to survive, it needs just the right blend of geopolitical circumstance, complex diplomatic arrangements and military preparedness to respond to potential threats nearby. Over the past 33 years, a sense of complacency settled over Israel and gave rise to various theories that it could finally overcome its dependency on outside powers. But a familiar sense of unease crept back into the Israeli psyche before any of those arguments could take root. A survey of the Israeli periphery in Egypt, Syria and Jordan explains why. Read more ..

Mexico on Edge

The Changing Landscape of US-Mexico Security Cooperation

December 10th 2012

President Enrique Pena Nieto

U.S.-Mexico security cooperation, led by the Merida Initiative, is vital and must continue. But with Enrique Peña Nieto's inauguration, Mexico's political landscape is now changing, and the United States must adjust its strategy and support accordingly. Building on the lessons of the past five years, the United States should work with Mexico to implement the nonmilitary programs envisioned in the current Merida framework, in particular supporting and prioritizing Mexico's ongoing judicial reform, training police officers at the state and local levels, modernizing the U.S.-Mexico border, and investing in local community and youth-oriented programs.

The Merida Initiative After Five Years

The Merida Initiative was launched in 2007 under the George W. Bush administration, which promised $1.4 billion over three years to "support Mexico's law enforcement in the fight against organized crime." Read more ..

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