Thursday, February 26, 2009

Does proliferation of private security/military contractors play a role in official troop mutinies?

The mutiny of Bangladeshi border guards may be related to discontent fueled by an increase in the global use of private security and military contractors (many of which have come from Bangladesh). As of December 2008, there were an estimated 1,000 Bangladeshis serving under private contracts in Iraq. And, back in 2000 China's official state news agency, Xinhua News, reported that the Bangladeshi government was considering handing-over some policing jobs to private security companies. The same story reports that, as of 2000, there were over one hundred security companies operating within the country.

The AP reports that: "Among the guards' demands are more food rations and a chance to participate in lucrative, high-paying U.N. peacekeeping missions." The ability to vie for participation in these missions may be the nearest thing border guards have to the lucrative private contracts being snapped up by their co-nationals. Although air transport and similar support services as well as security guards supplied for UN missions have come from the private sector, the UN has so far been loathe to employ private forces for combat purposes.

Tuesday, February 24, 2009

High-Level US politicians visit Syria

Finally more than whispers and rumors - confirmed visits of US officials to Syria:

"Kerry has long been an advocate for engaging with the Syrian regime," Jones added. "He believes that the Bush administration policy of not speaking to the Syrian regime was counterproductive. Yes we have many differences. But he believes it's important to impress on the Syrians how they can play a constructive role in the region if they change their behavior." Kerry believes the Untied States should return a U.S. ambassador to Damascus, Jones added. Kerry, who has previously visited Syria in 2005 and 2006, is accompanied on the trip by two staff foreign-policy advisors, Frank Lowenstein and Perry Camack, who holds the Middle East and North Africa portfolio for the committee.

Rep. Howard Berman (D-CA), the chairman of the House Foreign Affairs Committee, is currently on a trip to Syria*. He is accompanied by Alan Makovsky, the senior Middle East advisor to the committee, a former advisor to the late former chairman Tom Lantos, and a former special advisor to then U.S. Middle East peace envoy Dennis Ross. Asked about the trip, a committee spokeswoman said the committee doesn't discuss the travel of any member of Congress.

Read the whole post here at FP

First Indiana goes blue, then this? I think it might be safe for me to move back . . . .

February 24, 2009
Lugar Report Calls for New Cuba Policy
by Jim Lobe

Monday's call by Indiana Sen. Richard Lugar for a major reassessment of Washington's nearly half-century effort to isolate Cuba increases the likelihood that U.S. President Barack Obama will make substantial changes in policy toward Havana beyond those he promised during his election campaign, according to experts.

"What's significant is that this is the senior statesman for foreign policy in the Republican Party, someone who doesn't have a long track record of advocating for changes in Cuba policy, who has decided to come out and really put his stamp on this issue by saying that the U.S. embargo doesn't favor our national interest," said Daniel Erikson, a Cuba specialist at the Inter-American Dialogue, a think-tank.

"The fact is that Lugar has preempted Obama with his own proposals for changing the policy and in so doing creates a context that is much more favorable to changing the policy beyond the narrow of issue of lifting restrictions on Cuban-American travel and remittances" to the island, added Erikson, author of The Cuba Wars, a recently published book on U.S.-Cuban relations.

"What you are seeing is momentum-building," agreed Geoff Thale, a Cuba specialist at the Washington Office on Latin America (WOLA), a human rights group that has long opposed the trade embargo. "With the policy already under review by the administration, Lugar is creating political space for Obama to take stronger action than he otherwise might."

In an introduction to a staff report he released Monday, Lugar, the ranking Republican and former chairman of the Senate Foreign Relations Committee, said Washington "must recognize the ineffectiveness of our current policy and deal with the Cuban regime in a way that enhances U.S. interests."

"After 47 years … the unilateral embargo on Cuba has failed to achieve its stated purpose of 'bringing democracy to the Cuban people,'" Lugar wrote, "while it may have been used as a foil by the regime to demand further sacrifices from Cuba's impoverished population," he noted, adding that the report, entitled "Changing Cuba Policy – In the United States' National Interest," "provides significant insight and a number of important recommendations to advance U.S. interests with Cuba."

The report itself, published on the first anniversary of the transfer of power from former President Fidel Castro to his brother, Raul, and based in part on four-day trip to Cuba by a staff delegation last month, called for the resumption of bilateral talks on drug interdiction and migration, enhanced cooperation on alternative energy development, and easing restrictions on travel and trade.

It also urged Havana's reintegration into western-dominated international institutions, such as the World Bank and the Inter-American Development Bank, among other steps Washington could take as part of process of "sequenced engagement" designed to "develop trust" between the two nations.

Lugar's statement and the report's release come amid growing speculation among Cuba specialists regarding the new administration's intentions. During the presidential campaign, Obama had promised to lift restrictions imposed by former President George W. Bush in 2004 on the freedom of Cuban Americans to travel to the island and to send money to their families there. He also indicated, however that he would retain the trade embargo as leverage to encourage political and democratic reform.

During her confirmation hearings, Secretary of State Hillary Clinton, who had taken a harder line on the embargo during her primary campaign against Obama, said the administration would conduct a review of Cuba policy, but, one month after his inauguration, key officials who would be expected to oversee such a process – including the likely assistant secretary of state for Western Hemisphere affairs, Georgetown University professor Arturo Valenzuela, and his counterparts on the National Security Council – are not yet in place.

Nonetheless, Obama is expected to formally lift the Cuban-American-related curbs before the scheduled Summit of the Americas in Trinidad in mid-April, and possibly by mid-March.

Some observers believe he will combine that move with lifting other curbs on travel, including educational and cultural exchanges that brought thousands of U.S. citizens to the island in the late 1990s, and trade, notably requirements that Cuba pay in cash in advance for agricultural imports from the U.S., imposed by Bush.

"I think he will go beyond the Cuban-American curbs and at least go back to the circumstances [that prevailed] at least at the end of the [Bill] Clinton administration," said William LeoGrande, a Cuba specialist and dean of the School of Government at American University. "Remember, it was a Republican-controlled Senate that approved the sale of food and medicine to Cuba back in 2000, so I don't think there is significant political risk."

In the last several weeks, lawmakers, including Lugar in the Senate, have quietly introduced bills that, if passed, would lift all travel restrictions on trips to Cuba by U.S. citizens, a step that could inflict a decisive blow against the embargo.

Such legislation passed in both the House of Representatives and Senate in 2003 and 2004 but was dropped when Bush threatened to veto the bills. Most congressional observers believe they are likely to pass again, over the strong objections of the hard-line anti-Castro lobby centered in south Florida and New Jersey, provided that Obama clearly signals his support.

"Much depends on the Obama's attitude," said LeoGrande, who noted that the hard-liners had gained some influence with new Democratic, as well as right-wing Republican, lawmakers in recent years who have accepted campaign funding from the U.S.-Cuba Democracy PAC.

"If he were to say, 'It's time for a change; I support efforts by Congress to end the travel ban,' that will give political cover to some who might be a little worried about their vote. But if he says, 'I'm just lifting restrictions for Cuban Americans and I'm not in favor of going much further,' then nothing's going to happen."

Obama is likely to get more encouragement from the business community, according to Jake Colvin, vice president of the National Foreign Trade Council (NFTC), an association of several hundred of the large U.S. multi-national companies, which called after Obama's election for the "complete removal of all trade and travel restrictions on Cuba."

Lugar's statement, he said, would be "very positive" for his constituency. "He's been very helpful on unilateral-sanctions reform, but he's never been out front on Cuba. This shows there's increasing interest on the part of new and important actors in the Congress."

The staff report argued that U.S. interests have been harmed by efforts to isolate Cuba in several ways. Not only has it failed to contribute to the island's democratization, but it has also created tensions with both Latin America and Europe, which have chosen a policy of engaging Havana. The report recommended that Washington consider establishing a bipartisan commission to forge a new, multilateral strategy on Cuba with Latin America and the European Union.

Indeed, unless Obama moves to relax the embargo before the Trinidad summit, he could suffer political damage in Latin America, according to Erikson. "Latin Americans are not going to view Obama as a change agent if he still has in place the Bush-imposed sanctions on Cuba by the summit," he said.

Tuesday, February 3, 2009

Le Monde: Dubai's Broken Dreams

The Gulf countries are poster children for the 'contradictions of capitalism.' The financial crisis that laid bare the system's inadequacies for all to see have hit these countries especially hard:

Few experts warned this wealth was not real but virtual´; Dubai’s broken dreams

Samir Aita

January 2009

The Gulf States were expecting a “correction” in the housing market (1); what surprised them was its scale. Local stock markets fell by 50% in six months – and 70% in Dubai, the new wonder of neoliberal capitalism (2). On 20 November, as a huge display of fireworks and Hollywood A-listers heralded the opening of the lavish new Atlantis Hotel, thousands of Asian workers were being bussed off Dubai’s construction sites and out of town.

A legal judgment in a case brought by small savers led to the closure of the Kuwait stock exchange from 14-17 November. In Dubai, property sales collapsed (3). Companies like Nakheel, Emaar, Damac and Omniyat, which have been developing massive skyscrapers and ecological islands, announced lay-offs and suspended new projects.

The director of global banking at the influential British bank HSBC wondered if the landing would be soft or hard, even in ultra-rich Qatar, and speculated that now might be the time to introduce more market regulation and more rigorous risk-management (4).

The US financial services company Citigroup was more forthright. Its expert Mushtaq Khan recently announced that the Dubai dream might be over (5). He said: “Dubai’s two specific concerns are its real-estate sector and how it will refinance the debt it has built up in recent years.” The emirate has borrowed to fund housing projects and foreign acquisitions. The subject is so sensitive that Citigroup’s chairman, Winfried Bischoff, recently met the emir of Dubai, Muhammad bin Rashid al-Maktum (6). Off the record, one banker said: “We haven’t reached the bottom. My holidays in December were cancelled, even though it’s a matter of only seven working days. As far as we’re concerned now, ‘long term’ means three months. We’re desperate for liquidity and have repossessed properties, but the authorities won’t let us put them on the market.”

Although the workings of the Gulf bubble differ from the United States, all the ingredients are there. Supply constriction has caused dizzying inflation (more than 400% in five years). Most mortgages were issued directly by property development companies (rather than through banks), without proper assessment of client risk. Investment was highly leveraged; developers, constructors, managers and sovereign wealth funds all took out huge loans; and risks were spread across derivative products, both conventional and Islamic. In anticipation of a frenzy of future projects, the sector paid inflated prices for construction materials and even – in an attempt to circumvent administrative delays – for manpower.

The whole edifice was predicated upon a continuing rise in the prices of property, raw materials and oil. But everything collapsed, leaving uncertainties about the losses suffered by the sovereign wealth funds and about how much they have borrowed against future receipts.

Meanwhile, Gulf Bank of Kuwait, the country’s second largest, collapsed after massive losses on the foreign exchange market. At a public debate in Qatar, televised by the BBC, the motion that “Gulf Arabs value profit over people” was supported by 75% to 25%, and Mansoor al-Jamri, the editor of Bahrain’s daily Alwasat newspaper, was loudly applauded when he accused the Gulf states of buying their people’s silence through state hand-outs. “I am always hearing in the media and from officials how this is not the right time for the participation of the people. They say, ‘we will give you free education and free housing, but just shut up and don’t criticise.’ The governments have a philosophy based on oil wealth, but instead of letting it trickle down to the people, they use it to silence the elite or bypass their citizens” (7).

Samir Aita is an economist and chairman of A Concept mafhoum

(1) Soren Billing, “Dubai real estate correction ‘very close’”, 28 September 2008.

(2) See Akram Belkaïd, “Fantasy cities for a future that might not come”, Le Monde diplomatique, English edition, August 2008.

(3) Dylan Bowman, “Half of Dubai agents sold no homes in last month”, 17 November 2008.

(4) At the Financial Leaders Forum, Doha, 16-17 November 2008.

(5) Camilla Hall, “‘Dubai dream’ May Be Over on Lower Oil Price, Citigroup Says”, 18 November 2008.

(6) Gulf News, Dubai, 19 November 2008.