Archives: Articles

 

 

The US dollar will lose its status as the global reserve currency over the next 25 years, according to a survey of central bank reserve managers who collectively control more than $8,000bn.

More than half the managers, who were polled by UBS, predicted that the dollar would be replaced by a portfolio of currencies within the next 25 years.

That marks a departure from previous years, when the central bank reserve managers have said the dollar would retain its status as the sole reserve currency.

UBS surveyed more than 80 central bank reserve managers, sovereign wealth funds and multilateral institutions with more than $8,000bn in assets at its annual seminar for sovereign institutions last week. The results were not weighted for assets under management.

The results are the latest sign of dissatisfaction with the dollar as a reserve currency, amid concerns over the US government’s inability to rein in spending and the Federal Reserve’s huge expansion of its balance sheet.

“Right now there is great concern out there around the financial trajectory that the US is on,” said Larry Hatheway, chief economist at UBS.

The US currency has slid 5 per cent so far this year, and is trading close to its lowest ever level against a basket of the world’s major currencies.

Holders of large reserves, most notably China, have been diversifying away from the dollar. In the first four months of this year, three quarters of the $200bn expansion in China’s foreign exchange reserves was invested in non-US dollar assets, Standard Chartered estimates.

The prediction of a multipolar currency world replacing the current dollar dominance chimes with the thinking of some leading policymakers.

Robert Zoellick, president of the World Bank, last year proposed a new monetary system involving a number of major global currencies, including the dollar, euro, yen, pound and renminbi.

The system should also make use of gold, Mr Zoellick added. The results of the UBS poll also point to a growing role for bullion, with 6 per cent of reserve managers surveyed saying the biggest change in their reserves over the next decade would be the addition of more gold. In contrast to previous years, none of the managers surveyed was intending to make significant sales of gold in the next decade.

Central banks have bought about 151 tonnes of gold so far this year, led by Russia and Mexico, according to the World Gold Council, and are on track to make their largest annual purchases of bullion since the collapse in 1971 of the Bretton Woods system, which pegged the value of the dollar to gold.

The reserve managers predicted that gold would be the best performing asset class over the next year, citing sovereign defaults as the chief risk to the global economy.

The yellow metal has risen 19.5 per cent in the past year to trade at about $1,500 a troy ounce on Monday, buoyed by the emergence of sovereign debt concerns in the US as well as eurozone debt woes.

 

 

Afgantsy: The Russians in Afghanistan 1979-89 by Rodric Braithwaite

Profile, 417 pp, £25.00, March 2011, ISBN 978 1 84668 054 0

A Long Goodbye: The Soviet Withdrawal from Afghanistan by Artemy Kalinovsky

Harvard, 304 pp, £20.95, May 2011, ISBN 978 0 674 05866 8

You are invited to read this free essay from the London Review of Books. Subscribe now to access every article from every fortnightly issue of the London Review of Books, including the entire archive of 12,574 essays.

Rodric Braithwaite, British ambassador to Moscow between 1988 and 1992, was in Russia when Soviet troops crossed the Oxus into Afghanistan in 1979. His fascinating account of the Soviet intervention is based almost entirely on Russian sources: interviews with participants, information from veterans’ websites and from archives, although those of the GRU and the KGB remain mostly sealed. Each page reads like a warning to Afghanistan’s current occupiers. Braithwaite wrote two devastating articles in the Financial Times opposing the Iraq War and the atmosphere of fear created by New Labour propaganda but Afgantsy is written in a very different register. The Soviet intervention is seen as a tragedy for both the Russians and the Afghans.

The principal aim of Soviet foreign policy in the region had always been to preserve Afghanistan as a neutral state. Lenin was too orthodox a Marxist to believe that tribesmen and shepherds could make the leap forward to socialism: ‘Herdsmen can’t be transformed into a proletarian mass.’ His successors were not at all pleased when, in 1973, Muhammad Daud toppled his cousin King Zahir Shah in a palace coup and proclaimed a republic. Moscow had enjoyed warm relations with the king, a genial old buffer who presided over the tribal confederation that constituted the Afghan state. The Soviet leaders were even less pleased when in April 1978 a group of communist army officers staged a coup and called it a revolution. A few months earlier, two rival communist factions, Parcham (Flag) and Khalq (People), whose members were mostly university graduates and urban intellectuals, along with a few dozen officers and their clansmen in the armed services, had with great reluctance reunited as the People’s Democratic Party of Afghanistan. Parcham followed an orthodox pro-Soviet line; Khalq was more independent of the Soviet Union and less in thrall to classic Marxist notions about the prerequisites for a transition to communism. Noor Mohammed Taraki, a Khalqi, was appointed general secretary, with Babrak Karmal of Parcham as his deputy. Hafizullah Amin, another leading Khalqi, was elected to the Politburo, but only after a struggle. Parcham claimed he was a CIA agent, recruited during his time as a student at Columbia.

Such accusations, intended to discredit a political opponent, were not uncommon on the South Asian left and were usually ignored. But Amin didn’t deny them. According to Braithwaite he claimed that ‘he was short of money at the time and that he had merely been stringing the CIA along.’ Heard that one before? Whatever the truth, in the two years that followed, no CIA agent could have done a better job of isolating and destroying the Afghan left and effectively offering up the country to its enemies. The PDPA claimed a joint membership of 15,000; Parcham, which claimed 1500 members, was in a permanent minority. Both figures were exaggerated and such political support as the PDPA did have in Kabul soon evaporated, forcing the Khalq leaders to rely on their tribal cronies in the army, while Parcham depended on support from the Soviet Embassy to prevent them from being politically and physically eliminated.

The country in which the two communist groupuscules had seized power was one of the most backward in the world. Each Pashtun tribe controlled the land-use, the water and grazing grounds on its territory; the khans or chiefs employed some of their clansmen as tenant farmers and others essentially as serfs. Each tribe had its own band of armed men. A king ruled the confederacy of tribes, but until the late 1930s monarchs were regularly assassinated or exiled after palace revolts or tribal rebellions. King Amanullah, who reigned from 1919 until 1929, tried to modernise the country by proposing a secular state on the Turkish model; his draft constitution envisaged a lower chamber elected on the basis of a universal franchise, coeducation, import substitution through the creation of light industries, a reorganised tax structure, a national bank, new roads and a communications network. But British political agents stirred up a tribal revolt against the reforms, and Amanullah went into exile on the Italian riviera; he died in 1960.

Had the PDPA combined Amanullah’s programme with a sensible plan for land reform, they might have been more successful, but the Khalqis, in particular, were fantasists. Hafizullah Amin boasted that they were going to teach the Russians the meaning of revolution: ‘After our great revolution the toilers should know that there does exist a short cut from the feudal class to the working class and our revolution proved it.’ The PDPA’s land reforms were intended to catapult the countryside straight from landlordism to collectivisation. But the peasants were afraid of taking over the land without back-up and the landlords denounced the communists as atheists and infidels. ‘Ninety-eight per cent support the reforms,’ Amin boasted. But his pledge to exterminate the 2 per cent who didn’t was a little rash.

Yuri Andropov, then head of the KGB, and Andrei Gromyko, the foreign minister, were contemptuous of the notion that what had taken place in Kabul was a revolution. Andropov had learned a few lessons from his experience as Soviet ambassador in Hungary during the 1956 uprising. As far as he was concerned what had happened in Kabul was a coup d’état, carried out by a relatively small communist faction in the armed forces. Unlike the South Yemeni revolution of the same period it had limited mass support. That was a huge problem. Sending in the Red Army to support the PDPA would, he concluded, be counterproductive.

The Afghan leaders, faced with a mutiny in Herat and discontent elsewhere, pressed for Soviet ground troops. Andropov warned the Politburo that the general population would see Soviet troops as aggressors. He was strongly backed by the prime minister, Aleksei Kosygin, and the defence minister, General Ustinov. In a phone call to Taraki, Kosygin suggested that the Kabul regime ‘should arm the workers, the petty bourgeoisie and the white-collar workers in Herat’, emulating the Iranians, ‘who had thrown out the Americans with no outside help’: ‘Could the Afghan government not raise, say, fifty thousand students, peasants and workers in Kabul, and arm them with additional weapons supplied by Moscow?’ Braithwaite calls this naivety, but I’m not sure it wasn’t rather a way of pointing out that the regime didn’t have a social base. Taraki, failing to detect the irony, responded that even in Kabul the workers constituted a tiny minority. This made clear the real problem: a regime without support at home was dependent for survival on military backing from an outside power. Afghanistan wasn’t Cuba, where, despite an ill-fated invasion, numerous attempts to bump off Castro and an economic blockade (partially neutralised by Soviet economic aid), the United States failed to bring about regime change. The reason was obvious: the Cuban revolution was real; it had mass support.

The PDPA’s lack of a social base was a problem that a repressive regime couldn’t surmount. When Vladimir Kryuchkov, a senior KGB official, visited Kabul in 1978 he was horrified to hear Taraki boast that within a year the mosques would be empty. There were more political prisoners and executions in the first two years of PDPA rule than in the preceding 50 years. When Aleksandr Puzanov, the Soviet ambassador, protested to Amin about the scale of the repression, he was told that the PDPA was merely following the example of the early Soviet Union. The problem, according to the Afghans, was the unwillingness of the Soviet Union to commit ground troops and defend the revolution.

Realising that they were failing to convince the Russians, the Afghan communists turned on one another. It was this brutal settling of scores that finally provoked the Soviet intervention. The dominant Khalq faction purged its Parcham rivals from the government, and three cabinet ministers sought refuge in a Soviet safehouse. They were hidden in containers, taken to Bagram airbase and flown out of the country. Braithwaite reports that their leader, Babrak Karmal, was regarded by the Russians as ‘emotional’ and ‘inclined to abstraction to the detriment of concrete analysis’. The Parcham leadership was mothballed until it was needed, which turned out to be sooner than anyone expected.

Amin decided to get rid of Taraki, using a classic Stalinist ploy: he set up a fake assassination attempt on his own life, in which one of his bodyguards was killed, and blamed it on Taraki. Artemy Kalinovsky, whose book A Long Goodbye: The Soviet Withdrawal from Afghanistan in most respects confirms Braithwaite’s account, takes a different view of this crucial episode, suggesting that Amin was indeed the intended victim. But he produces no evidence, and all the evidence there is suggests the opposite. Amin wanted total control and believed his grip on the army was sufficient to ensure his elevation and its acceptance by the Russians. His troops surrounded the presidential palace and arrested Taraki. In Moscow the old men of the Politburo were annoyed but prepared to accept the new leader. Then Amin made a deadly mistake. He decided to have Taraki killed. Three intelligence officers from the presidential guard were deputed to assassinate the man they had sworn to protect.

‘Taraki was in his dressing-gown when the three men came for him,’ Braithwaite writes:

[Lieutenant] Ruzi said: ‘We’ve come to take you to another place.’ Taraki gave him some money and jewellery to pass on to his wife … The party went downstairs to another small room, in which there was a dilapidated bed. Taraki handed over his party card and his watch, which he asked should be given to Amin. Ruzi told Eqbal to bind Taraki’s hands with a sheet and ordered Taraki to lie down on the bed. Taraki did so without protest … Ruzi then covered Taraki’s head with a pillow and when he removed it Taraki was dead. The whole business lasted 15 minutes. Not bothering with the cotton shroud, they rolled Taraki’s body in a blanket and took him in their Land Rover to the cemetery, where they buried him. They were in tears when they reported back to [their boss].

The next morning, the Kabul Times reported the sudden and tragic death of ‘a genius, a great and much-loved leader’. Andropov, shaken by the KGB’s failure to predict what had happened, changed his mind about intervention. Amin had to be removed at all costs.

The military high command, though, wasn’t convinced that Amin had to be replaced. The most senior Soviet military adviser in Kabul, General Gorelov, described him as ‘a man of strong will, a very hard worker, an exceptional organiser and a self-proclaimed friend of the Soviet Union’, even if he was also ‘cunning, deceitful and ruthlessly repressive’. But the KGB was equally clear that Amin had to go. In their view he wasn’t capable of creating a popular coalition that could resist the mujahedin. The Parcham leaders were more likely to be able to do this, they believed, and in any case could be controlled by their Soviet advisers. Nobody seems to have realised that it was already too late. Once they returned to power, Parcham took their revenge on Khalq cadres and many were purged, imprisoned or killed. Babrak Karmal, now president, explained that they were merely punishing those who had repressed ‘innocent’ Afghans. The Russians themselves killed Amin.

The Soviet 40th Army was formed in great secrecy to fight in Afghanistan. Most of the recruits were drawn from poor families, not from the party or military elite. Braithwaite quotes the historian Grigory Krivosheyev’s suggestion that the time had come to reinstate ‘the old romantic name of the armed forces: The Workers’ and Peasants’ Red Army’. This hurriedly assembled force was certainly well-equipped: ‘Never before in the history of the Soviet armed forces had an army had its own air force,’ the 40th Army’s last commanding officer, General Gromov, pointed out. ‘It was particularly well supplied with special forces units – eight battalions in all, alongside the highly trained air assault and reconnaissance units.’ None of this was much use in a counter-insurgency operation. The Afghan guerrillas – or ‘freedom fighters’, as they were called in the West at the time – were backed up by ‘international brigades’ dispatched at Washington’s request by Egypt, Saudi Arabia and Algeria, among whose number was the late Osama bin Laden. The fear that Soviet Muslim soldiers would desert in droves to the enemy proved to be unfounded. The conflict was brutal. Before killing the Russians they captured, the Afghans tortured, mutilated and occasionally skinned them. Braithwaite describes a horrific incident in Kunar province. When mujahedin there surprised a group of Russians, several soldiers committed suicide rather than surrender; the others were mutilated and burned alive. The sole survivor never recovered his sanity. The 40th Army responded in kind. One veteran wrote:

The thirst for blood … is a terrible desire. It is so strong that you cannot resist it. I saw for myself how the battalion opened a hail of fire on a group that was descending towards our column. And they were our soldiers, a detachment from the reconnaissance company who had been guarding us on the flank. They were only 200 metres away and we were 90 per cent sure they were our people. And nevertheless – the thirst for blood, the desire to kill at all costs. Dozens of times I saw with my own eyes how the new recruits would shout and cry with joy after killing their first Afghan, pointing in the direction of the dead man, clapping one another on the back, and firing off a whole magazine into the corpse ‘just to make sure’ … Not everyone can master this feeling, this instinct, and stifle the monster in his soul.

Another soldier, Vanya Kosogovski from Odessa, told how, after lobbing a grenade into a village house, he went in to inspect the results. He’d killed an old woman and a few children. A younger woman and some other children were still alive. He shot them dead, hurling in another grenade afterwards – just to make sure.

Andropov’s fears had been justified. By the time he died in 1984 the Soviet leaders knew the war was unwinnable; that, via Pakistan’s ISI, the US and its allies were arming the mujahedin with the latest weaponry, soon to include Stinger missiles (which became black market bestsellers in Pakistan). Above all, they were aware that the government in Kabul was useless. They began to discuss an exit strategy.

In 1985, Mikhail Gorbachev took power, but as Kalinovsky points out, it was three years before he felt able to admit the scale of the disaster. ‘By the beginning of May 1988,’ he wrote to party members, ‘we lost 13,310 troops in Afghanistan; 35,478 Soviet officers and soldiers were wounded, many of whom became disabled; 301 are missing in action … Afghan losses, naturally, were much heavier, including the losses among the civilian population.’ In February 1989 the 40th Army left Afghanistan. General Gromov, ever the drama queen, was the last Soviet soldier to march across the bridge over the Oxus. The Soviets left behind a Parcham government led by the former secret police chief Muhammad Najibullah.

A few months earlier Yevgeni Primakov had met senior figures from the Pakistan foreign ministry and suggested that it was in everybody’s interests to put a national coalition government in place in Afghanistan. If Pakistan attempted a takeover, its writ wouldn’t extend beyond the Pashtun region. But if nothing was done, Najibullah would fall and the mujahedin would before long be at each other’s throats. His advice was conveyed to Pakistan’s prime minister, Benazir Bhutto, but rejected on the say-so of the United States.

Primakov was soon proved right: as the mujahedin fought among themselves the country slipped into chaos. The mujahedin leaders were a mirror image of the divided left, whose leaders they knew well and against whom they had fought for political space at Kabul University in the 1960s. The Afghan Jamiat-e Islami was founded by a theology student called Burhanuddin Rabbani in 1968 and concentrated on winning cadres and defeating the left at the university. It recruited Gulbuddin Hekmatyar, a sharp-tongued student from the engineering faculty, but Hekmatyar soon decided he wanted his own outfit and set up the Hizb-e Islami with support from Islamabad. Three years after the Soviet withdrawal, Najibullah’s government fell and Rabbani became president; his defence minister was Ahmad Shah Massoud, a charismatic Tajik guerrilla leader from the North. Two years after that, Hekmatyar, by now an asset of the ISI, linked up with a former pro-Soviet warlord, General Dostum, in an attempt to dislodge his old rivals from power. Twenty-five thousand people were killed in Kabul in the course of 1994 as a result of his campaign, and half the city was reduced to dust. A new wave of refugees poured into Pakistan, destabilising its already fragile social structure.

The Bhutto government, made nervous by the increasing activity of Afghan jihadis in Pakistan, now decided to train and arm the children of Afghan refugees who had fled across the border in the 1980s, and use them, bulked out by Pakistani ‘volunteers’, to take the country. It was the most successful operation in the history of the Pakistan army. The Taliban took Kabul (murdering Najibullah) and ended the disorder by imposing a clerical dictatorship: women in burqas, rapists executed, poppy fields destroyed etc. Gradually, Mullah Omar’s government gained autonomy from its patrons in Islamabad and even engaged in friendly negotiations with US oil companies. But its Wahhabi connections proved fatal. The rest we know.

Kalinovsky quotes a New York Times op-ed of January 2010, written jointly by General Gromov (now the governor of the Moscow region) and Dmitri Rogozin (Russia’s ambassador to Nato), in which they expressed neocon-like reservations about a premature US withdrawal from Afghanistan. ‘We are utterly dissatisfied with the mood of capitulation at Nato headquarters,’ they wrote, ‘be it under the cover of “humanistic pacifism” or pragmatism.’ Braithwaite, meanwhile, tells us that a Moscow-based commercial company, Vertical-T, is supplying Russian Mi-8 helicopters and pilots to help Nato: ‘When one of these helicopters was shot down in 2008, the Russian ambassador in Kabul contacted the Taliban for the return of the bodies. “You mean they were Russians?” said the Taliban. “We thought they were Americans. Of course you can have them.”’

We hope you enjoyed reading this free essay from the London Review of Books. Subscribe now to access every article from every fortnightly issue of the London Review of Books, including the entire archive of 12,574 essays.

Vol. 33 No. 12 · 16 June 2011 » Tariq Ali » Andropov was right (print version)

pages 13-14 | 3131 words

 

 

08 June, 2011

Countercurrents.org

On June 6, the Bahrain Center for Human Rights (BCHR) reported the mistreatment of doctors and nurses, explaining their arrests, detentions, torture and upcoming military trials for doing their job.

Psychologists for Social Responsibility (PsySR) President Stephen Soldz spoke publicly saying:

“We cannot be silent. Many of our members are health providers. The government of Bahrain arrested nearly 50 doctors and other health providers, many of whom have been tortured. Their ‘crime’ is refusing to let injured protesters die and informing the world press about the abuses they witnessed.”

Scheduled to start on June 6, trials for 47 doctors and other medical providers will begin next week, maliciously charged with:

— refraining from providing aid;

— embezzling public funds;

— physical assault;

— assault leading to death;

— possessing unlicensed weapons and ammunition;

— not performing their employment duties, and thus endangering lives and health;

— forcefully occupying a public building;

— promoting regime change illegally;

— inciting hatred against the regime;

— promoting sectarian hate;

— spreading false news and rumors harming the public interest; and

— participating in unlicensed protests and rallies.

In fact, doctors and nurses are being tried for doing their job. They committed no crimes but are treated like enemies of the state.

Justifying its repression, regime authorities said a military court will try 23 doctors and 24 nurses. “They abused their profession and prevented some people from entering the Salmaniya Hospital (the nation’s largest public facility).” In fact, despite extreme repression, they performed heroically, treating sick and wounded patients.

Yet Salmaniya Hospital was falsely called a hotbed of sectarian tension. BCHR said “it is quite clear that it was the presence of military and police inside the hospital which sparked this tension, with security forces interfering with the doctors’ work,” instigating violence by their actions.

In fact, regime authorities fear medical providers for reflecting the non-sectarian nature of the protests, opposite of what security forces claim.

“Their Hippocratic Oath means they have to treat patients regardless of politics or religion. They are a symbol of the unity of the majority against the oppression of the (fascist) government and its cronies, and therefore they are dangerous.”

As long as King Hamad keeps Bahrainis divided and has Western and Gulf Council States backing, he can retain power. It’s why he reacted violently against the slogan “No Sunni, No Shia, just Bahraini.”

BCHR believes doctors and nurses were especially targeted because they’re key witnesses to criminal acts. They’ve seen dead, wounded and tortured victims and can provide damning evidence if asked. If silenced, however, by intimidation, torture and/or show trials, key witnesses will be lost. “We must not let the government get away with these crimes.”

Many other medical providers are afraid to speak publicly about what they’ve seen or know, fearing retaliation. However, some gave the international media anonymous statements.

On May 29, AFP headlined, “Bahraini female doctors recount detention ‘horror,’ ” saying:

Released from prison, Shiite women doctors explained “abuse and torture by police after being accused of backing pro-democracy protests in the Sunni-led monarchy.”

They explained they were tortured and abused to sign confessions, one doctor saying her interrogator said:

“I advise you that we will get you to say whatever we want, either by you saying it willingly, or we will beat you like a donkey and torture you until you say it.”

Explaining she treated wounded patients, she was struck in the face, an interrogator saying:

“It seems you don’t want to cooperate,” accusing her of “stealing blood units to splash on the wounded” to exaggerate injuries for television and other crimes against state authorities.

Blindfolded and handcuffed, she was severely beaten, electro-shocked, thrown to the floor, beaten again with electric cables, especially the soles of her feet. “Even policewomen were shocked when they saw my state as I came out of the interrogation room,” she said.

The next day, she was again abused, sexually harassed and threatened with rape, an interrogator saying “I will hang you from your breasts and rape you.” She finally signed a confession to end the ordeal. Afterward, she spent 20 more days in prison before released, agreeing not to give interviews or participate in protests.

Other doctors described similar ordeals. Those freed can’t travel, remain suspended from work unpaid, and 47 doctors and nurses face trials. AFP asked Bahraini authorities to comment, but got no response.

By politicizing medical care and abusing doctors and nurses, injured protesters are afraid to get treatment, fearing arrests, torture, trials and convictions. As a result, determining precise numbers hurt is compromised, suggesting many more than publicly known.

Nonetheless, for nearly four months, Bahrain’s “had the highest per capita arrests and second highest per capita deaths of any Arab country (after Libya)….” America ignored it, Obama urging only dialogue and resolution, quietly going along with criminal viciousness.

As a result, it’s up to people of conscience, independent journalists, and international public opinion to explain what can’t be ignored, demanding accountability for crimes this great and all political prisoners released and exonerated.

Stephen Lendman lives in Chicago and can be reached at lendmanstephen@sbcglobal.net. Also visit his blog site at sjlendman.blogspot.com and listen to cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network Thursdays at 10AM US Central time and Saturdays and Sundays at noon. All programs are archived for easy listening.

http://www.progressiveradionetwork.com/the-progressive-news-hour/

June 14 (Bloomberg) — On a sunny Saturday in early June, Larry Zhou strolled the floor of a property exhibition in Hong Kong, wondering whether it was time to buy another home — not in the city, where residential prices have soared 50 percent in the past two years, but maybe in Thailand or Malaysia.

“My wife and I have been thinking about investing outside of the country since we already own an apartment in Shanghai,” Zhou, a 38-year-old civil engineer, said in an interview at the Hong Kong Convention & Exhibition Centre before wrapping up a business trip and returning home. “I’ve known people in Shanghai who like to bring their money and invest in Hong Kong properties, but I think Hong Kong is way too expensive.”

The two-day event that lured Zhou and 3,000 others is one way that China’s blossoming wealthy and middle classes are finding investment properties and second homes around the world — exporting a real estate boom that has driven up prices 26 percent in Shanghai last year and 28 percent in Beijing, and bolstering markets around the world. In cities with established Chinese populations, like Sydney, Singapore, and San Francisco, Asians on homebuying tours meet brokers such as Betty Chan, who markets herself on her website as “Las Vegas’ #1 Chinese Lady Real Estate Broker.”

Investors are grabbing everything from $68,000 foreclosed condominiums in Florida to $2 million beachfront villas in Vietnam, a buying spree fueled by China’s surging wealth that mirrors the country’s expanding influence in markets for gold, oil and food. The search for overseas property accelerated in the past seven months as the governments in Hong Kong and Beijing imposed purchasing and financing limits, steps that are starting to cool off domestic markets.

Driven Overseas

Buyers from China have come to international property investing much later than their counterparts in Hong Kong, who are wealthier and have a more easily convertible currency.

“The purchase restrictions in China drove them overseas, while they look for investments to counter the inflation,” said Mo Tianquan, founder and chairman of Beijing-based SouFun Holdings Ltd., which runs China’s biggest real estate website and organizes buying excursions abroad. “Some of them will buy homes considering better education opportunities for their kids, while others look for immigration options.”

Hong Kong on June 10 intensified its efforts to curb property prices, requiring buyers of homes costing more than HK$6 million ($770,000) to increase up-front payments. For properties of HK$10 million or more, the down payment will be 50 percent.

Surcharge for Outsiders

Foreign buyers must deposit an additional 10 percent, a change made as demand from China rises. Borrowers whose income is primarily from outside Hong Kong will need to make the higher down payment unless they can demonstrate a “close connection” to the city, such as working for a local employer or having immediate family there, the Hong Kong Monetary Authority said.

The government on Nov. 19 increased stamp duties on homes sold within six months of purchase and mandated higher down payments on those costing HK$8 million or more. Hong Kong, which broker Savills Plc says is the world’s most expensive place to buy an apartment, reported the number of home-sale transactions fell for a fifth straight month in May amid rising mortgage rates.

As global economies recover following the collapse of Lehman Brothers Holdings Inc. in September 2008 and the ensuing financial crisis, more investors in Hong Kong are willing to explore newer, riskier markets in their quest for higher returns, said Michael Piro, director of sales at Indochina Land, the real estate division of Indochina Capital Corp., Vietnam’s third- largest investment firm.

Across Asia

The company is resuming sales of properties to Hong Kong buyers after a two-year hiatus and plans to target them for its new luxury development in the Con Dao islands off the southeast coast of Vietnam, Piro said.

Banyan Tree Holdings Ltd. sold villas priced from $750,000 to $3 million at an event in March showcasing properties in Bangkok and Phuket in Thailand, Bintan in Indonesia and Lijiang in China, according to Dan Simmons, vice president at the Singapore-based firm’s Banyan Tree Residences & Laguna Property unit.

In Sri Lanka, which was last year named the New York Times’ top travel destination, beachfront land is being acquired by foreign investors who have poured into the country since the end of almost 30 years of civil war in 2009, said Sue Fitzgerald, whose firm, Property Perfect Solutions, is marketing Karooda Properties’ Thona Bay resort on the eastern coast of the Indian Ocean island nation. Hong Kong residents, who account for 70 percent of Fitzgerald’s clients, are buying there in the hope of getting more for their money than they do at home, she said.

Vietnam Villas

Resort developers often sell individual villas, many before they’re completed, with guaranteed returns over a specified number of years. A buyer can stay at the property and use the resort’s amenities free of charge for a certain number of days a year, with the developer or an outside company renting it out for the owner at other times.

Indochina Land’s most recent sale, to a buyer from Hong Kong, was a $2 million villa at its Nam Hai beachside development in the city of Hoi An on Vietnam’s central coast, Piro said. The 3,000-square-meter (32,000-square-foot) property features a 348-square-meter house with three bedrooms and a swimming pool.

For buyers from China, the investing drive shifted into high gear after the government stepped up efforts to prevent real estate bubbles in cities such as Shanghai and Shenzhen.

Deflating the Bubble

China lifted the minimum down payment for second-home purchases to 60 percent from 50 percent in January, after 19 straight months of price increases. The government also set interest rates for second-home mortgages at no less than 110 percent of benchmark rates while mandating that those who sell within five years of purchase pay full transaction taxes.

China’s home prices rose at a slower pace in major cities in April even as they quickened in smaller ones. The government last month said it won’t ease property curbs and ordered local officials to continue to implement measures to control prices. The value of home sales climbed 16 percent from January to May, while property development investment rose 35 percent.

“A lot of mainlanders have come into Hong Kong, buying into luxury and mid-priced properties and pushing prices up, and the government has imposed restrictions to curb the market,” said Fitzgerald of Property Perfect, who is based in Hong Kong. “You wouldn’t buy here at the moment. People are looking at more interesting markets, they’re looking for places where they can build, where they can buy-to-let, and where they can retire.”

London Beckons

One such place is London, where education, language and Britain’s weak currency have combined to make the capital the leading city in Europe for Chinese residential real estate buyers, according to Yolande Barnes, research director at Savills, the U.K.’s largest publicly traded property broker.

“It’s quite a recent phenomenon,” she said. “They have been much more of a force after 2009, and in common with a lot of overseas buyers, that’s the result of favorable exchange rates.”

The pound has lost about a fifth of its value against the Hong Kong dollar since the U.K.’s housing market peaked in the third quarter of 2007.

In 2008, none of the 82 million pounds of overseas transactions in London’s Canary Wharf and Docklands areas for existing homes involved Chinese buyers, according to London- based Savills. Last year, they accounted for 40 percent of the 100 million pounds of property acquired by foreign investors. Residential prices in prime central London rose 2 percent in the first quarter from the previous three months.

College Town

Chinese families are increasingly sending their children to the U.K. for college, with around 100,000 students in the country last year, said Jennet Siebrits, head of U.K. residential research in London at CB Richard Ellis Group Inc., the world’s largest commercial-property broker. That compares with 4,000 in 1999.

London has four of the world’s top 100 universities, one more than its nearest rival, New York, according to a survey compiled for the London-based Times Higher Education magazine.

At Barratt Developments Plc, the U.K.’s largest homebuilder by volume, 42 percent of the residential units it sold in London this year through May were to overseas customers, all of whom were Chinese, said Gary Patrick, regional sales director at the London-based company.

For the Chinese, where you buy in London depends on how long you’ve been wealthy, said Barnes of Savills. Second- and third-generation Hong Kong residents gravitate toward prime central London locations like Knightsbridge, Mayfair and Kensington, while the newly rich look in Canary Wharf and the Docklands.

In the Wings

“It’s the established Hong Kong billionaire versus the newly wealthy multimillionaires of China who might be buying foreign property for the first time,” Barnes said.

Even as London heats up, some Chinese and other investors are looking farther afield in Europe, according to Tim Murphy, founder and chief executive officer of IP Global, a Hong Kong- based real estate advisory firm.

“Investors are looking at a number of markets outside of the U.K., including Germany, Italy, Spain and Turkey, all of which are only six to 12 months away from really flourishing with opportunities,” Murphy said in an e-mail.

Istanbul is especially promising, with prices rising and “a strong economic outlook, a growing tourism industry, low interest rates, great location and growth in housing loan volumes,” he said.

Vancouver, Silicon Valley

In North America, moderate weather, good schools and established Chinese communities are drawing buyers to cities such as Vancouver, which had the third-highest housing costs among English-speaking cities worldwide in 2010, according to Canada’s Frontier Centre for Public Policy. Hong Kong and Sydney were first and second.

Sales of detached homes, townhouses and condominiums in metropolitan Vancouver climbed 32 percent in March from the previous month, and were just below a record for the month of 4,371 transactions set in 2004. The median price of a detached house in greater Vancouver rose 13 percent in 2010 to a record C$774,000 ($792,000) from C$685,000 at the end of 2009, according to the Real Estate Board of Greater Vancouver.

In the U.S., Chinese buyers have helped support home sales and prices in Silicon Valley and Hawaii, while they are an increasing presence in Las Vegas and New York, according to local brokers. They accounted for 9 percent of U.S. home purchases by foreigners in the 12 months ended in March of both 2010 and 2011, up from 5 percent in 2009, according to a survey released in May by the National Association of Realtors, a Chicago-based trade group. That’s second to Canadians, who accounted for 23 percent of international sales.

Prices Climb Back

Sales of existing single-family detached houses in Cupertino, California — where Apple Inc. is based — rose 21 percent in the first quarter from a year earlier, and the median home price climbed 2.1 percent to $1 million, putting it 13 percent below its 2007 record, according to DataQuick, a San Diego-based provider of real estate statistics. Nationally, prices on comparable properties are down 37 percent from the peak in 2006.

California residential resales and median prices also rose in Palo Alto, where Facebook Inc. is based and which is adjacent to Stanford University; in Mountain View, where Google Inc. has its headquarters; and in Sunnyvale, Atherton, San Carlos and Los Gatos, according to DataQuick.

It’s almost impossible to find two-to-four-unit apartment buildings to buy in Cupertino partly because of high demand from non-U.S. buyers, primarily Chinese, said Jim Carter, a real estate agent at Intero Real Estate Services in Los Altos, California.

Circumventing Currency Rules

“If the son or daughter doesn’t have enough money, what happens is the parents or grandparents from China will help them fund the deal,” he said. “In most places, it’s all cash. They just transfer the money, like, boom.”

The annual limit for Chinese citizens to buy foreign currencies is $50,000, according to China’s State Administration of Foreign Exchange. It’s an obstacle many can get around.

“Most of these buyers are rich and they have their trade companies or rep offices in Hong Kong, Kuala Lumpur or Singapore,” said Larry Hu, a Shanghai-based director of the residential department for Knight Frank LLP. “Those places don’t have currency controls, so they can pay via their companies’ offshore accounts.”

Value of Schools

At Coldwell Banker’s residential office in Cupertino, “we’re seeing a huge number of all-cash transactions, and most of those are from mainland China,” said Nina Yamaguchi, managing broker. “The thing that draws the Asians here is the schools are so highly touted. Cupertino is certainly not beautiful. It doesn’t have wonderful architecture.”

Yamaguchi estimates that about one-third of her firm’s recent residential deals have been all cash, primarily at the two ends of the market — the most expensive properties and distressed sales.

“I’ve been managing this group of people for over 17 years and we’ve always had a strong Asian demographic, but now it seems even more so,” Yamaguchi said.

Checking new listings the third week of May, she saw a house for sale in near-mint condition located in the Prospect High School district. Meanwhile, about a mile (1.6 kilometers) up the road, a smaller house in worse shape listed for $350,000 more because the owner would qualify for Lynbrook High School, which scores higher on the state academic performance index, she said.

Hawaii Bound

“You can almost guarantee that the buyers of the smaller, more expensive house are going to be Asian,” she said. “What tends to happen is older white people retire because they can get so much more for their house, and the younger Asian demographic moves in.”

Hawaii is attracting a growing share of China’s emerging millionaires with its golf courses and hotels, as well as luxury vacation homes, said Patricia Choi of Choi International in Honolulu.

“I could tell a marked difference” in client referrals during a three-week trip to China in April, compared with a trip last year, she said.

In Waipahu, northwest of Honolulu on the island of Oahu, sales of existing single-family detached houses rose 1.8 percent in the first quarter from a year earlier, and the median price climbed 5.7 percent to $512,500, 12 percent below the record in 2007, according to DataQuick.

While Honolulu sales fell 4.8 percent last quarter, the median price rose 1.1 percent to $720,000, putting it 18 percent below its peak.

“The luxury market continues to be strong, with low inventory,” Choi said.

Betting on Vegas

“The big thing is they can buy fee simple land,” said Choi, referring to private ownership. In China, the government owns all the land. “That is an important factor that will create more interest in buying properties here and will be reflected in the price they’re willing to pay.

In Las Vegas, where prices plunged 58 percent from their 2006 peak, broker Chan said she saw a big increase in buyers from China as news spread of the city’s low-cost homes. Nevada had the highest rate of foreclosure filings in April at one per 97 households, according to RealtyTrac Inc., an Irvine, California-based data seller.

Chinese entrepreneurs with import-export, engineering, medical-device, cell-phone manufacturing and restaurant businesses are buying vacation homes, homes for children who attend school in Las Vegas and income property, said Chan, who is originally from Hong Kong.

“The No. 1 reason is the price,” she said. “They don’t flip. Chinese like to keep.”

New York

The Chinese are usually in a hurry when they shop, often buying at least two houses per visit, paying cash because they don’t have time to take out a mortgage, Chan said.

“They don’t mind spending $1 million or $2 million here,” she said. “But they aren’t building. Last year, a group came to start a project. They looked around, did calculations and decided it’s not really worth the effort. Now in China, they can make more money.”

In New York, interest among Chinese buyers has picked up noticeably since January, about the same time the government in Beijing issued new restrictions on second-home buying, according to Asher Alcobi, president and co-founder of Peter Ashe Real Estate, a New York brokerage specializing in luxury properties.

Trump Appeal

One of Alcobi’s Chinese clients recently closed on two units at Manhattan’s Trump SoHo, a condominium hotel where the apartments are rented out as hotel rooms for more than half the year and owners share the revenue.

“Chinese love the Trump,” Alcobi said. Anything that has the Trump name is good.”

High-net-worth buyers are looking in Manhattan because property prices in China and Hong Kong are already at bubble levels, said Wei Min Tan, founder of Castle Avenue Partners, a group within New York’s Rutenberg Realty that assists buyers from overseas.

“From a price perspective, New York is actually cheap,” he said. “Hong Kong is 50 percent more expensive than Manhattan on a square-foot basis.”

While Chinese buying has provided a welcomed boost to struggling U.S. cities, there has been a backlash in Australia, long a magnet for Asian immigrants. The federal government introduced rules in April 2010 requiring temporary residents to seek approval to buy existing property and sell when leaving. Buyers living overseas can purchase only newly built housing.

Shut Out

The changes, which reversed a 2008 easing of restrictions on foreign investments in property, came after local homebuyers and real estate groups blamed demand from overseas investors, particularly Chinese, for inflating prices. Values rose 5.8 percent in 2010 after soaring almost 14 percent in the previous year, government statistics show.

“There’s a whole field of Chinese buyers wanting to buy, but they can’t purchase existing properties here anymore,” said Garth Turnbull, property consultant at City Residential in Melbourne. “There are some sales to parents whose children are studying here. That used to be just part of the market, but now it’s basically all that’s left.”

As buyers living in China turn to new properties to comply with the rules, companies including Meriton Pty., Australia’s biggest apartment developer, have benefited.

“Our sales are determined by the Chinese,” said Harry Triguboff, founder and managing director of Sydney-based Meriton, which gets about 15 percent of its sales from Chinese buyers. “They’re the ones who’re buying. They’ve been buying from me for the past 40 years, but they’ve become more important in the last few years.”

Florida Foreclosures

Australian house prices declined in the first quarter by the most since 2008, the statistics bureau said last month, as rising interest rates and natural disasters kept homebuyers on the sidelines even as homes listed for sale climbed to a two- year high.

Back at the housing exposition in Hong Kong, David Lau is pitching condominiums in Apopka, Florida, about 15 miles north of Orlando, Florida, that his client acquired during the subprime-mortgage crisis. An 800-square-foot unit is going for $68,000, down from the original price of $129,000.

“The prices we’re selling them at are below cost,” said Lau, executive director at Singapore-based property agency Roof Real Estate Group Pte. “Most of the people who’ve checked out our booth are locals, but we’re also aware of the huge buying power of mainland Chinese buyers. That’s why our next stop is going to be Guangzhou.”

WRITTEN BY KELVIN WONG, NICHOLA SAMINATHER AND HUI-YONG YU

–With assistance from Christopher Spillane in London, Bonnie Cao in Shanghai and Oshrat Carmiel and John Gittelsohn in New York. Editors: Larry Edelman, Daniel Taub, Rob Urban

To contact the reporters on this story: Kelvin Wong in Hong Kong at kwong40@bloomberg.net; Nichola Saminather in Sydney at nsaminather1@bloomberg.net; Hui-yong Yu in Vancouver at hyu@bloomberg.net

To contact the editors responsible for this story: Andreea Papuc at apapuc1@bloomberg.net; Kara Wetzel at kwetzel@bloomberg.net

 

RE: Inspection and sealing of Freedom Flotilla II cargo

Dear Mr. UN Secretary-General Ban Ki-moon,

We are writing to urge you to use your good offices in support of the humanitarian needs of the people of Gaza.

In our view, you can support the people of Gaza with two key actions. First, by appointing a representative to inspect and seal the cargo of the boats of the Freedom Flotilla II—thus assuring the Israeli government that the boats are carrying humanitarian supplies such as toys, medical supplies, cement and educational materials. Equally important, we strongly urge you to use your authority to call on all governments to support the safe passage of the Freedom Flotilla II. We are disappointed to learn of your recent efforts to persuade member governments from stopping the delivery of humanitarian aid to Gaza on the Freedom Flotilla II. We urge you to reconsider and instead encourage member states to lend support and ask Israel not to use force against legitimate humanitarian initiatives undertaken by civil society to help ease the suffering of the people of Gaza who are facing a humanitarian crisis of devastating scale.

The Freedom Flotilla II, organized by 14 national groups and international coalitions and carrying approximately 1500 ‘freedom riders,’ is set to sail to Gaza this month. Sailing in the spirit of promoting human rights, prosperity, and social responsibility, the aim of the Flotilla is to alleviate the humanitarian crisis faced by the citizens of Gaza.

The blockade in Gaza is clearly having a harmful impact on the people of Gaza, and indeed UNDP and other agencies report high levels of malnutrition and other disturbing health problems. According to a report by the World Food Programme and the Food and Agriculture Organization, the level of “abject poverty” among the Palestinians of Gaza has tripled since the imposition of the blockade, with 61 % of households not having enough food. The blockade has crippled the Gaza economy and destroyed Palestinians’ livelihoods and homes.

We believe our requests to you are in keeping with UN Security Council Resolution 1860 of January 2009 as well as the 2010 UN Human Rights Council fact-finding mission on the attack on Freedom Flotilla I, which are calling for a lift of the blockade to allow humanitarian assistance. We urge you to do all you can to support this nonviolent international humanitarian effort, to provide UN representatives to inspect and seal the cargo, and to appeal to all governments to allow safe passage of the Freedom Flotilla II.

Thank you for your attention to this important matter. We look forward to your positive response.

Sincerely,

Mairead Maguire, Nobel Peace Laureate 1976

Rigoberta Menchu Tum, Nobel Peace Laureate 1992

Jody Williams, Nobel Peace Laureate 1997

Shirin Ebadi, Nobel Peace Laureate 2003

India’s prime minister is allowing India’s environment to be destroyed in order to cater to powerful foreign investors.

Indian farmers are being forcibly moved from their land to make way for rich foreign investors and their environmentally destructive plans [EPA]

On June 29, Prime Minister Manmohan Singh met with editors of a few newspapers. When asked about whether he had been putting pressure on the Environment Ministry to approve environmentally destructive projects, he said “yes”, and justified that by quoting Indira Gandhi: “Poverty is the biggest polluter, we need to have a balance”.

Indira Gandhi said this in Stockholm, 1972 at the first Environmental Conference. She also read a quote from the Atharvaveda: “Whatever, I dig of you, O Earth, May that grow quickly upon you, O Pure One, may my thrust never pierce thy Vital points, thy heart”.

The Prime Minister has conveniently ignored the more significant quote.

The Prime Minister’s duty is to uphold the nation’s constitution and nation’s laws – including environmental laws – not to subvert them. By admitting that he has been putting pressure on the Environment Ministry, he has admitted that he is subverting the law.

Most commentators view the removal of Jairam Ramesh from the Environment Ministry during the July 12, 2011 cabinet-reshuffle as a further step towards environmental deregulation.

While quoting Indira Gandhi to justify his subversion of environmental law, the prime minister seems to have forgotten that Indira Gandhi created the country’s environmental governance structure during her tenure as prime minister. It was Indira Gandhi’s intervention that supported the call stop a hydro-electric project in Silent Valley, Kerala – saving an ecosystem rich in biodiversity.

It was Indira Gandhi’s concern that Mussorie, the queen of the hills, was being stripped naked by limestone mining that led the Environment Ministry to take action. We were invited to do the study of the environmental impact of limestone mining in Doon Valley in 1981 which eventually became the basis of a Supreme Court case.

In 1983, the Supreme Court shut down the mines.

In the pre-trade liberalisation days, it was accepted that if commerce undermines ecosystems which support life, then that commercial activity must stop because life must carry on. Article 21 of the Constitution makes it the duty of the state to protect life – and since ecological processes support life, the state has a duty to protect ecology.

‘The poor live in the places polluted by the rich’

Under Prof. Manmohan Singh’s leadership since the 1990’s the idea of “growth fetishism” has been exposed; which is the idea that all ecological devastation is justified in the name of growth. Who is driving this ecological devastation and the pollution? The rich and powerful corporations? Or the poor and powerless women, farmers, tribals and displaced rural communities who are forced to become urban slum dwellers?

The poor live in the places polluted by the rich, they do not cause the pollution. And they live in polluted places because they are displaced from their homes in rural areas where they had lived sustainably for millennia. They are victims of pollution because they are victims of dispossession – this is environmental injustice. And it is an inevitable consequence of the outsourcing of pollution from rich countries in the disguise of foreign direct investment (FDI).

Coastal Orissa is a case in point.

In the Jagatsingpur district, where POSCO’s giant US $12 billion steel plant is planned as the highest FDI, farmers grow biodiversity – betel vines and paddy, coconut and cashew, fruits and fish. There is no pollution and no waste; that is a prosperity that GDP does not count.

This economy of sustenance is being uprooted by means of violence in order to enable POSCO to export our iron-ore and steel. Every law of the land including the Forest Rights Act and the Coastal Zone Regulation Act is being violated as committee after committee has recognised. And when the Ministry of Environment Committees affirms the violation of laws, it is the prime minister who puts pressure on the Environment Minister to give an approval to POSCO.

In June, it was the women and children of Govindpur, Dinkia and Nuagaon who laid down in front of the police in the scorching sun in an effort to stop the land grab. They were still forming a human barricade when I visited on June 23.

The prime minister is intervening against the country’s laws to promote this land and resource grab. POSCO gets our land and our resources – while all that we will inherit from the POSCO project is ecological destruction, pollution, displaced people and the destruction of our democracy.

Environmental destruction affects the poor first

In India, it is the corporations that are building giant coal-based power plants – which are major climate polluters. The automobile industry pushes more cars onto our roads which is leading to higher carbon dioxide emissions. Emissions from the use of fossil fuel are driven by the economically powerful, not the poor. But it is the poor who are most vulnerable to the floods, droughts and cyclones that climate change intensifies.

The same applies for toxic pollution.

More than 25 years since the Bhopal disaster, children are still born sick and disabled [GALLO/GETTY]

In 1996, a case was filed in the Supreme Court to stop the import of toxic waste from the US. This waste was generated by rich consumers in the US, not by the poor in India who put their lives at risk sorting out the toxic garbage. The Bhopal disaster and its continuing toxic pollution was not caused by the poor who died there by the thousands. It was caused by Union Carbide, now owned by Dow.

A major issue related to toxic waste is the pesticide ‘endosulfan’ which has been banned by the UN and most countries in the world. The Supreme Court in India has ordered an interim ban, following the disaster which killed 1000 people and crippled more than 9000 in Kasargod – where endosulfan was sprayed on cashew plantations for 20 years. These innocent victims did not cause the toxic pollution – it was caused by powerful corporations who have used their influence to block a ban on endosulfan, even as more people die and children are born disabled.

Toxic agrichemicals harm all life.

Synthetic fertilisers eventually run into rivers and oceans, creating “dead zones”. Nitrogen oxide released from nitrogen fertilisers accumulates in the atmosphere as a green house gas that is 300 times more damaging than carbon dioxide. These synthetic fertilisers are also used to make bombs as the recent terrorist attacks in Mumbai and the Oklahoma city bombings in the US have shown.

We now have a new form of pollution in agriculture – genetic pollution from genetically engineered crops, which is destroying biodiversity and devastating farmers’ livelihoods.

The poor do not cause chemical and genetic pollution – giant chemical/biotechnology corporations do. And the chemical corporations are also the gene giants who now control seeds. Here too, instead of being the voice of poor and vulnerable farmers, the prime minister has become the voice of powerful global corporations by repeatedly referring to genetic engineering as the ‘second Green Revolution’.

Privatising profit and natural resources, socialising pollution

Whether it is atmospheric pollution, toxic pollution, genetic pollution or urban waste pollution, environmental pollution is an externality of a greed based economy which privatises profit and natural resources and socialises pollution. The rich accumulate the land, the biodiversity, the water, the air and the profits. The poor bear the burden of dispossession and accumulated pollution.

We expect the prime minister to uphold India’s Constitution and environmental laws – not subvert them while he supports and promotes the polluters.

We expect our prime minister to recognise that the poor are victims of pollution and environmental degradation – not its cause.

We expect the prime minister to remember that he holds our precious natural heritage and natural capital in trust for future generations – not to be given away to greedy corporations and destroyed for short term profits.

We expect our prime minister to grow beyond his “growth fetishism” and recognise that we are all part of Mother Earth, and that pollution is violence against the Earth and people.

Dr Vandana Shiva is a physicist, ecofeminist, philosopher, activist, and author of more than 20 books and 500 papers. She is the founder of the Research Foundation for Science, Technology and Ecology, and has campaigned for biodiversity, conservation and farmers’ rights – winning the Right Livelihood Award (Alternative Novel Prize) in 1993.

The views expressed in this article are the author’s own and do not necessarily represent Al Jazeera’s editorial policy.

By Vandana Shiva

26 July 2011

Al Jazeera

The total cost to America of its wars in Iraq and Afghanistan, plus the related military operations in Pakistan, is set to exceed $4 trillion – more than three times the sum so far authorised by Congress in the decade since the 9/11 attacks.

This staggering sum emerges from a new study by academics at the Ivy-league Brown University that reveals the $1.3 trillion officially appropriated on Capitol Hill is the tip of a spending iceberg. If other Pentagon outlays, interest payments on money borrowed to finance the wars, and the $400bn estimated to have been spent on the domestic “war on terror”, the total cost is already somewhere between $2.3 and $2.7 trillion.

And even though the wars are now winding down, add in future military spending and above all the cost of looking after veterans, disabled and otherwise and the total bill will be somewhere between $3.7 trillion and $4.4 trillion.

The report by Brown’s Watson Institute for International Studies is not the first time such astronomical figures have been cited; a 2008 study co-authored by the Harvard economist Linda Bilmes and Joseph Stiglitz, a former Nobel economics laureate, reckoned the wars would end up costing over $3 trillion. The difference is that America’s financial position has worsened considerably in the meantime, with a brutal recession and a federal budget deficit running at some $1.5 trillion annually, while healthcare and social security spending is set to soar as the population ages and the baby boomer generation enters retirement.

Unlike most of America’s previous conflicts moreover, Iraq and Afghanistan have been financed almost entirely by borrowed money that sooner or later must be repaid.

The human misery is commensurate. The report concludes that in all, between 225,000 and 258,000 people have died as a result of the wars. Of that total, US soldiers killed on the battlefield represent a small fraction, some 6,100. The civilian death toll in Iraq is put at 125,000 (rather less than some other estimates) and at up to 14,000 in Afghanistan. For Pakistan, no reliable calculation can be made.

Even these figures however only scratch the surface of the suffering, in terms of people injured and maimed, or those who have died from malnutrition or lack of treatment. “When the fighting stops, the indirect dying continues,” Neta Crawford, a co-director of the Brown study, said. Not least, the wars may have created some 7.8 million refugees, roughly equal to the population of Scotland and Wales.

What America achieved by such outlays is also more than questionable. Two brutal regimes, those of the Taliban and Saddam Hussein, have been overturned while al-Qa’ida, the terrorist group that carried out 9/11, by all accounts has been largely destroyed – but in neither Iraq nor Afghanistan is democracy exactly flourishing, while the biggest winner from the Iraq war has been America’s arch-foe Iran.

Osama bin Laden and his henchmen probably spent the pittance of just $500,000 on organising the September 2001 attacks, which killed 3,000 people and directly cost the US economy an estimated $50bn to $100bn. In 2003, President George W Bush proclaimed that the Iraq war would cost $50bn to $60bn. Governments that go to war invariably underestimate the cost – but rarely on such an epic scale.

If the Brown study is correct, the wars that flowed from 9/11 will not only have been the longest in US history. At $4 trillion and counting, their combined cost is approaching that of the Second World War, put at some $4.1 trillion in today’s prices by the Congressional Budget Office

By Rupert Cornwell in Washington

Thursday, 30 June 2011

PARIS, July 18 (UPI) — This is how it must have felt in late July 1914 as Europe careened blindly into a war that would shatter its wealth and its culture and nobody knew how to stop it.

The world we have known since the end World War II, of ever-broadening economic prosperity, is poised for implosion. The global economy has proved over the past three years to be a resilient beast but even it cannot survive the simultaneous collapse of Europe and the United States, its two dominant components.

We are two weeks away from an American default on the world’s greatest, most liquid and essentially most stable source of the debt and credit that fuel the economy of the whole planet. And yet the prospect of default has gone from unthinkable to unlikely to possible and is now teetering on the brink of the probable.

We may be a week away from a collapse of the eurozone and the chaos then unleashed would leave the European Union in shreds. The world’s two largest economies would crumple together, like Sherlock Holmes and Dr. Moriarty plunging together in a death grip over the Reichenbach Falls. At least Arthur Conan Doyle had the good sense to bring Sherlock Holmes back to life. The world of the euro and dollar wouldn’t find reincarnation to be so easy.

As in 1914, there is nothing inevitable about this gruesome double stagger to disaster. Economic conditions have not brought us to this pass. This is a political crisis, brought on by obstinacy, ignorance and dogma.

The ignorance defies belief. We all saw what happened when Lehman Brothers collapsed in September 2008. A U.S. default would be like that, only a hundred times worse, triggering cascades of defaults and bankruptcies as the credit default markets unwound. Interest rates would soar worldwide. A new Great Depression would follow.

And recall that in this world of tight supply chains for our supermarkets, modern societies are perhaps six meals away from blood on the streets.

The dogma is extraordinary. Those Republican congressmen and their Tea Party chorus who say that a U.S. default is needed to tame the beast of Big Government are terrifyingly sure of themselves, even though their leaders know the risks.

“I don’t think anybody in the world really believes that the United States is going to default on our debt,” Speaker of the House John Boehner, R-Ohio, said on Fox News last week. “But given what is going up in Europe, something could spook the market, missing Aug. 2 could spook the market and you could have a real catastrophe.”

There is no shortage of reasonable solutions. The “grand bargain” that Boehner and U.S. President Barack Obama have discussed, which would secure $4 trillion in cuts over the coming decade, is one. The proposal of the Debt Commission, led by former U.S. Sen. Alan Simpson, R-Wyo., and Erskine Bowles, White House chief of staff under President Bill Clinton, is another.

As Bowles told the National Governors’ Association last week:

“We can’t grow our way out of this. We could have decades of double-digit growth and not grow our way out of this enormous debt problem. We can’t tax our way out. The reality is we’ve got to do exactly what you all do every day as governors. We’ve got to cut spending or increase revenues or do some combination of that.”

The obstinacy on display defies belief. Politics is about compromise and building consensus but the current U.S. Congress spurns such qualities as weakness.

On the other side of the Atlantic, the same obstinacy and ignorance are on display, although there is a little less dogma. German Chancellor Angela Merkel has had repeated opportunities to craft a deal that would recapitalize the banks and secure the debt of Greece, Portugal and Ireland. Their total debt is easily manageable, totaling around 7 percent of European gross domestic product.

The mechanisms of a solution aren’t complicated. A true euro-bond, in which all eurozone countries become jointly and severally responsible for the debt, would have resolved the crisis overnight had it been applied two weeks ago.

But that was before the markets got spooked by Merkel’s antics and her refusal to tell German voters the truth: that their country’s $200 billion a year trade surplus, itself an underlying cause of the euro crisis, can only be sustained if Germany uses its financial strength to hold the eurozone together.

So now Italy, with its $2 trillion in sovereign debt, is itself on the line. The result is that in government treasuries and top banks and investment houses, contingency plans are being drafted for a euro collapse.

There is increasing speculation of the eurozone splitting between a solvent Teutonic north (Germany, Holland, Finland, Austria) and an instant devaluation of an insolvent south (Italy, Spain, Portugal, Greece). Nobody knows into which camp France might fall.

The good news is that unlike July 1914 armies and battle fleets aren’t being mobilized. The bad news is that if the double collapse of dollar and euro takes place, the armies would be needed to maintain some kind of order at home. But that would only work if the governments can continue to pay and feed the troops.

By MARTIN WALKER

18 July 2011

Martin Walker is the Editor Emeritus of UPI

© 2011 United Press International, Inc. All Rights Reserved.

 

I am always amused when people talk about ‘US leadership’ in the world today, as I happen to live on earth and not in Hollywood. The last time the phrase was used I found myself looking at a photo of President Obama demonstrating what some people called ‘restrained masculinity’ (or some such nonsense) while watching a live video of Osama ben Laden being knocked out of action by US troops thousands of miles away. So much for postmodern definitions of masculinity, for if that is what we call restrained masculinity today then there must be a hell of a lot of macho guys watching Transformers 3 in the cinemas right now.

Anyway, all this talk of leadership has come to light again after the publication of the former US ambassador John Malott’s article entitled ‘Malaysia’s Political Awakening: A Call for US leadership’ (posted on the website of the East-West Centre EWC in Washington, re: http://www.eastwestcenter.org/ewc-in-washington/ewc-in-washington). The title of the article itself beggars belief: On the one hand there is a statement of fact (‘Malaysia’s political awakening’) and the other a moral/ethical prerogative (‘A call for US leadership’). But as Hume has noted, the leap from ‘is’ to ‘ought’ is a rather complex one, which brings into question other considerations including motive, intent and outcome/results.

Malott’s article takes a stab at being somewhat scientific by citing some index that states that Malaysians are ” the most submissive to authority of any people in the world”. Really? On what basis was this observation made? I am reminded of the Charles Humana Human rights index of the 1980s that claimed – apparently on the basis of reading the Constitution of the Philippines – that the Philippines then (in the 1980s) was one of the freest countries in the world. (Tell that to the journalists who fell foul of the Marcos regime.)

But what worries me the most about this article is that is is bound to be used to the max by the invested interests that oppose any reforms in/to Malaysia, and who are permanently on the look-out for ‘external/foreign threats and/or enemies’ to blame everything on. It is bad enough that Malaysia suffers under a mainstream vernacular press that has made all kinds of allegations about foreign funders and supporters being behind the local reform movement, (and which also suggest that Malaysians are such a passive lot that we need foreigners to reform us otherwise we will just be sitting on our arses.)

Malott’s article may do much more harm than good for it will be taken as a sign that some US policy-makers endorse and support the reform process in Malaysia, despite the fact that this process came from Malaysians themselves and from Civil Society movements in Malaysia that are home-grown and organic. Human rights NGOs in Malaysia do not need to heed the lessons of US policy makers when it comes to recognising human rights abuses in their own country, or in other countries for that matter- whether it is the detention of political opponents in Kamunting or the detention of foreigners in Guantanamo Bay.

From a slightly wider perspective I am equally concerned about what this says about how US policy makers see their role in the ASEAN region now and into the near future. After all since the 1990s almost all the American-backed dictatorships of ASEAN have collapsed. (Remember those darling dictators who were so strongly supported by the US government before, like Suharto and Marcos?) In a relatively short space of time we have seen the meteoric rise of China which is now asserting itself economically and diplomatically in the region. China’s massive investment into communicative transport infrastructure in Laos, Cambodia, Vietnam, Myanmar/Burma and Thailand means that it will soon have access to goods and resources in mainland Southeast Asia as never before. And China’s soft diplomacy in the region has also paid dividends: Thousands of scholarships are now being given to future technocrats from Southeast Asia to study in China, which will later serve as China’s diplomatic and economic bridge to mainland Southeast Asia too.

The US, on the other hand, is nursing an ailing economy that was rendered all the more feeble thanks to its adventurism abroad. It has its troops bogged down in Afghanistan, Iraq, parts of Central and South Asia, and suffers from over-reach and has over-stretched its resources. Faced with the problem of trying to spread finite manpower over long distances to maintain its former hegemonic role, it cannot deal with China’s growing assertiveness in areas such as the South China Sea.

In the long run, China has two factors on its side, and both are real: Firstly its massive reserves of US dollars which it is investing into areas like Central and Southeast Asia, and secondly its record as a no-nonsense serious diplomatic partner that talks about real things like investment and profit and does not lecture on human rights. (Because China knows it has no human rights record to speak of in the first place; but that makes it rather attractive to other dictatorships and military regimes too.)

Southeast Asia is caught between the devil and the deep blue sea (or caught between Mordor and Isengard if you are a Tolkien fan like me). My suspicion, however, is that in the long run realpolitik will prevail and despite all this alarmist talk of China’s rising, the governments of Southeast Asia (perhaps not civil society) will turn to China for they know that that is the side of their bread that is buttered. Yes, yes we know you Yankees will talk about universal values and all that – but its the Chinese who carry the big fat cheque book ok?

Yes, the Civil Societies of Southeast Asia need all the support they can get to further the cause of public political awareness and the deepening of our democratic institutions; but the long term threat to our fundamental liberties and human security comes from an unrestrained free market that regards all human beings as units of labour to be bought and sold like cattle; and the environment as a source of resources to plunder. America can help this process along, and stop supporting the dictators they have been keeping on their payroll for ages like Marcos, Suharto and the band of bandits currently running parts of the Arab world and Africa. But America also needs to learn that its not the only sheriff in town, and that the rise of China and India means that there are other players in the game too.

Dr Farish Ahmad-Noor (Badrol Hisham Ahmad-Noor) is Senior Fellow for the Research Cluster on Contemporary Islam in Southeast Asia; S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University (NTU).

Can Syria properly be understood as an example of a “pure” Arab popular revolution, an uprising of non-violent, liberal protest against tyranny that has been met only by repression? I believe this narrative to be a complete misreading, deliberately contrived to serve quite separate ambitions. The consequences of turning a blind eye to the reality of what is happening in Syria entails huge risk: the potential of sectarian conflict that would not be confined to Syria alone.

One of the problems with unfolding the Syria paradox is that there is indeed a genuine, domestic demand for change. A huge majority of Syrians want reform. They feel the claustrophobia of the state’s inert heavy-handedness and of the bureaucracy’s haughty indifference toward their daily trials and tribulations. Syrians resent the pervasive corruption, and the arbitrary tentacles of the security authorities intruding into most areas of daily life. But is the widespread demand for reform itself the explanation for the violence in Syria, as many claim?

There is this mass demand for reform. But paradoxically – and contrary to the “awakening” narrative – most Syrians also believe that President Bashar al-Assad shares their conviction for reform. The populations of Damascus, Aleppo, the middle class, the merchant class, and non-Sunni minorities (who amount to one quarter of the population), among others, including the leadership of the Sunni Muslim Brotherhood, fall into this category. They also believe there is no credible “other” that could bring reform.

What then is going on? Why has the conflict become so polarized and bitter, if there is indeed such broad consensus?

I believe the roots of the bitterness lie in Iraq, rather than in Syria, in two distinct ways. Firstly, they extend back into the thinking of the Sunni jihadi trend, as advanced by Abu Musab al-Zarqawi, which evolved in Iraq, surfaced violently in Lebanon, and was transposed into Syria with the return of many Syrian Salafist veterans at the “end” of the Iraq conflict.

Secondly, and separately, the bitterness in Syria is also linked to a profound sense of Sunni grievance felt by certain Arab states at Sunni political disempowerment following Prime Minister Nuri al-Malaki’s rise to power in Iraq, for which they hold Assad responsible.

In a precursor to present events in Syria, the Lebanese army too in 2007 battled with a group of Sunni militants of diverse nationalities who had all fought in Iraq. The group, Fateh al-Islam, had infiltrated Naher al-Bared refugee camp in northern Lebanon from Syria, and had married into Palestinian families living there.

Although the core of foreign fighters was quite small in number, they were well-armed and experienced in urban combat. They attracted a certain amount of local Lebanese support too. That bloody conflict with Lebanon’s army endured for more than three months. At the end, Naher al-Bared was in ruins; and 168 of the Lebanese army lay dead.

That event was the culmination of a pattern of movements from Afghanistan and across the region into, and from, Iraq. Most of these radicalized Sunnis coming to fight the United States occupation had gravitated towards groups loosely associated with Zarqawi. Zarqawi’s al-Qaeda affiliation is not of particular significance to Syria today, but the Zarqawi “Syria” doctrine that evolved in Iraq, is crucial.

Zarqawi, like other Salafists, rejected the artificial frontiers and national divisions inherited from colonialism. Instead, he insisted on calling the aggregate of Lebanon, Syria, Palestine and Jordan, and parts of Turkey and Iraq by its old name: “Bilad a-Sham”. Zarqawi and his followers were virulently anti-Shi’ite – much more so than early al-Qaeda – and asserted that a-Sham was a core Sunni patrimony that had been overtaken by the Shi’ites.

According to this narrative, the Sunni heartland, Syria, had been usurped for the last 40 years by the Shi’ite al-Assads (Alawites are an orientation within Shi’ism). The rise of Hezbollah, facilitated in part by Assad, further eroded Lebanon’s Sunni character, too. Likewise, they point to Assad’s alleged undercutting of former Iraqi prime minister Ayad Allawi as an act which had delivered Iraq to the Shi’ites, namely to Malaki.

From this deep grievance at Sunni disempowerment, Zarqawi allies developed a doctrine in which Syria and Lebanon were no longer platforms from which to launch jihad, but the sites for jihad (against the Shi’ites as much as others). The Syrian Salafists eventually were to return home, nursing this grievance. Many of them – Syrians and non-Syrians – settled in the rural villages lying adjacent to Lebanon and Turkey, and similarly to their confreres in Naher al-Barad, they married locally.

It is these elements – as in Lebanon in 2007 – who are the mainspring of armed violence against the Syrian security services. Unlike Egypt or Tunisia, Syria has experienced hundreds of dead and many hundreds of wounded members of the security forces and police. (Daraa is different: the armed element consists of Bedouin who migrate between Saudi Arabia, Jordan and Syria).

It is difficult to establish numbers, but perhaps 40,000-50,000 Syrians fought in Iraq. With their marriage into local communities, their support base is more extensive than actual numbers that travelled to Iraq. Their objective in Syria is similar to that in Iraq: to establish the conditions for jihad in Syria through exacerbating sectarian animosities – just as Zarqawi did in Iraq through his attacks on the Shi’ites and their shrines. Likewise, they seek a foothold in north-eastern Syria for a Salafist Islamic emirate, which would operate autonomously from the state’s authority.

This segment to the opposition is not interested in “reform” or democracy: They state clearly and publicly that if it costs two million lives to overthrow the “Shi’ite” Alawites the sacrifice will have been worth the loss. Drafting of legislation permitting new political parties or expanding press freedom are matters of complete indifference for them. The Zarqawi movement rejects Western politics outright.

These Salafi groups are the first side of the Syrian “box”: they do not conform to a single organization, but are generally locally-led and autonomous. Loosely inter-connected through a system of communications, they are well-financed and are externally linked.

The second side to the Syrian box are some exile groups: they too are well-financed by the US government and other foreign sources, and have external connections both in the region and the West. Some 2009 cables from the US Embassy in Damascus reveal how a number of these groups and TV stations linked to them have received tens of millions of dollars for their work from the State Department and US-based foundations, along with training and technical assistance. These exile movements believe they can successfully use the Salafist insurgents for their own ends.

The exiles hoped that a Salafist insurrection against the state – albeit confined initially to the periphery of Syria – would provoke such a backlash from the Syrian government that, in turn, a mass of people would be polarized into hostility to the state, and ultimately Western intervention in Syria would become inevitable – ideally following the Libyan model in Benghazi.

That has not happened, although Western leaders, such as French Foreign Minister Alain Juppe, have done much to keep this prospect alive. It is the exiles, often secular and leftist, that are trying to “fix” the Syria narrative for the media. These expatriates have coached the Salafists in “color” revolution techniques in order to portray an unalloyed story of massive and unprovoked repression by a regime refusing reform, whilst the army disintegrates under the pressure of being compelled to kill its countrymen.

Al-Jazeera and al-Arabia have cooperated in advancing this narrative by broadcasting anonymous eyewitness accounts and video footage, without asking questions (see Ibrahim Al-Amine here, for instance).

Yet the Salafists understand that the exiles are using them to provoke incidents, and then to corroborate a media narrative of repression by the external opposition; this might actually serve Salafist interests, too.

These two components may be relatively small in numbers, but the emotional pull from the heightened voice of Sunni grievance – and its need for redress has a much wider and more significant constituency. It is easily fanned into action, both in Syria and in the region as a whole.

Saudi Arabia and Gulf states explicitly trade on fears of Shi’ite “expansionism” to justify Gulf Cooperation Council repression in Bahrain and intervention in Yemen, and the “voice” of assertive sectarianism is being megaphoned into Syria too.

Sunni clerical voices are touting the Arab “awakening” as the “Sunni revolution” in riposte to the Shi’ite revolution of Iran. In March, al-Jazeera broadcast a sermon by Sheikh Youssef al-Qaradawi, which raised the banner of the restoration of Sunni ascendency in Syria. Qaradawi, who is based in Qatar, was joined by Saudi cleric Saleh Al-Luhaidan who urged, “Kill a third of Syrians so the other two-thirds may live.”

Clearly many of the protesters in traditional centers of Sunni irredentism, such as Homs and Hama in Syria, comprise of aggrieved Sunnis seeking the Alawites ouster, and a return to Sunni ascendency. These are not Salafists, but mainstream Syrians for whom the elements of Sunni ascendency, irredentism and reformism have conflated into a sole demand. This is a very frightening prospect for the quarter of the Syrians that form the non-Sunni minorities.

The marginalization of Sunnis in Iraq, Syria and more recently in Lebanon has aggrieved the Saudis and some Gulf states as much as it did the Salafists. The perception that Assad betrayed the Sunni interest in Iraq – although inaccurate – does help account for the vehemence of the Qatari-funded al-Jazeera’s pre-prepared information campaign against Assad.

The French magazine Le Nouvel Observateur has reported on one Stockholm media activist who paid an early secret visit to Doha, where al-Jazeera executives offered open access to the pan-Arab channel and coached the person in how to make his videos harder hitting: “Film women and children. Insist that that they use pacificist slogans.”

In contrast, Arabic press reports have been plain about the demands of Assad that Gulf states (the “Arabs of America”) and European envoys are insisting on, in return for their support. Ibrahim al-Amine, chief editor of the independent newspaper al-Akhbar, listed reform steps, which consist of disbanding the ruling party, initiating new legislation on political parties and the press, the dismissing certain officials, withdrawing the army from the streets, and beginning direct and intensive negotiations with Israel.

The envoys also suggested that such reforms might provide Assad with the pretext to break his alliance with Hezbollah and Hamas, in addition to severing the resistance aspect of Damascus’s relationship with Tehran.

Making these steps, diplomats have suggested, would facilitate improved relations with Arab states and international capitals and the prospect that oil-rich Arab states would offer Assad a $20 billion aid package, in order to smooth Assad’s path away from any economic dependency on Iran.

All of this underlines to the other dimension to events in Syria: its strategic position as the keystone of the arch spanning from southern Lebanon to Iran. It is this role that those in the US and Europe that concern themselves primarily with Israel’s security, have sought to displace. It is not so clear, however, whether Israel is as anxious as some Western officials to see Assad toppled Israeli officials profess respect for the president. And if Assad were to go, no one knows what may follow in Syria.

The US has a record of attempting to intervene in Syria that even predates the US Central Intelligence Agency’s and British intelligence’s 1953 coup in Iran against prime minister Mohammad Mosaddegh.

Between 1947 and 1949, American government officials intervened in Syria. Their aim was to liberate the Syrian people from a corrupt autocratic elite. What resulted was a disaster and led ultimately to the rise to power of the Assad family. Western powers may no longer remember this history, but as one BBC commentator recently noted, the Syrians surely do.

Since the 2003 invasion of Iraq, the US effectively has been threatening the Syrian president with continuing ultimata to make peace with Israel – in a closely worked double act with Paris. Assad’s rejection of that 2003 threat has given rise to a ratcheting sequence of pressures and threats to the Syrian president, including action at the United Nations Security Council; the Special Tribunal on Lebanon over the killing of former premier Rafik al-Hariri and Israeli military action to damage Hezbollah and so to shift the balance of power in Lebanon to Assad’s disadvantage.

The US also began the liberal funding of Syrian opposition groups since at least 2005; and more recently the training of activists, including Syrian activists, on the means to avoid arrest and on secure communications techniques using unlicensed telephone networks and Internet software.

It is these techniques, plus the training of activists by Western non-governmental organizations and other media outlets, that also serve armed, militarized insurrection – as well as peaceful pro-democracy protest movements.

The US has also been active in funding directly or indirectly human-rights centers that have been so active in providing the unverified casualty figures and eyewitness accounts to the media activists. Some such as the Damascus Center for Human Rights states its partnership with the US National Endowment for Democracy and others receive funding from, for example, the Democracy Council and the International Republican Institute.

The Syrian government’s decision to ban foreign journalists has of course contributed to giving external activist sources of information the free hand by which to dominate the media narrative on Syria.

The missing side of the Syrian Pandora’s box, which has been omitted until now, is that of the Syrian army and its response to the protests. The largely Russian-trained army has no experience fighting in a complicated urban setting in which there are genuine protesters together with a small number of armed insurgents who do possess urban warfare and ambush experience from Iraq, and are intent on provoking confrontation with the security forces.

The Syrian army lacks experience in counter-insurgency; it was groomed in the Warsaw Pact school of grand maneuvers and heavy brigades, in which the word “nuance” forms no part of the vocabulary. Tanks and armored brigades are wholly unsuited for crowd control operations, especially in narrow, congested areas. It’s no surprise that such military movements killed unarmed protesters that were caught in the middle, inflaming tensions with genuine reformists and disconcerting the public.

Initially, army esteem was affected by the criticism. Though the stories of army mass desertion are disinformation, there was some erosion of military self-confidence at lower levels of command. And public confidence in the military wobbled, too, as casualties mounted. But it was a “wobble” that ended with the dramatic conflict around Jisr al-Shagour in mid-June, near the Turkish border. Just as the Lebanese nation rallied behind its army in the conflict of Naher al-Bared, so too the Syrians rallied behind their army in the face of the Salafist attack firstly on the police, and subsequently on the army and on state institutions in Jisr. And, as the details of the Jisr al-Shagour conflict unrolled before the public, sentiment turned bitter towards the insurrectionists, possibly decisively.

The images from Jisr, as well as other videos circulating of lynchings and attacks on the security forces will have shocked many Syrians, who will have perceived in them the same cruel “blood lust” that accompanied the images of former Iraqi leader Saddam Hussein’s hanging in 2006.

The Jisr events may prove to have been a pivotal moment. Army self-confidence and honor is on the rise, and the public majority now see in a way that was less evident earlier that Syria faces a serious threat unrelated to any reform agenda. Sentiment has tipped away from thinking in terms of immediate reform.

Public opinion is polarized and embittered towards the Salafists and their allies. Leftist, secular opposition circles are distancing themselves from the Salafist violence – the inherent contradiction of the divergent aspirations of the “exiles” and the Salafists, from the Syrian majority consensus, is now starkly manifest. This, essentially, is the last side to the paradoxical Syrian “box”.

In this atmosphere, dramatic reform might well be viewed by the president’s supporters as signaling weakness, even appeasement to those responsible for killing so many police and army officers at Jisr. Not surprisingly, Assad chose to use last week’s speech to speak to his constituency: to state the difficulties and threats facing Syria, but also to lay out the road map towards an exit from danger and towards substantive reform.

Western comment overwhelmingly has described the speech as “disappointing” or “short on specifics”, but this misses the point. Whereas earlier, a dramatic reform shock, such as advocated by Turkish Foreign Minister Ahmet Davutoglu might, at a certain point, have had a transformatory “shock” effect; it is doubtful that it would achieve that now.

On the contrary, any hint of concessions having being wrested from the government by the type of violence seen at Jisr would likely anger Assad’s own constituency; and yet improbably would never transcend the categorical rejection of the militant opposition seeking to exacerbate tensions to the point of making the West determined to intervene.

By carefully setting out of some very deliberate steps and processes ahead, Assad has correctly read the mood of the majority in Syria. Time will be the judge, but Assad seems set to emerge from a complicated parallel series of challenges directed towards him from movements and states which reflect a range of grievances, special interests, and motivations. The roots of all these are very far removed from issues of legislative and political reform in Syria.

It would hardly be surprising were Assad to see the aggregate of such measures against him effectively to constitute the mounting of a soft coup. He may query the extent of US President Barack Obama’s knowledge of what has been occurring in Syria. It seems unlikely that US officials were wholly ignorant or unaware of the matrix of threats converging to threaten Assad’s stability.

And if so, it will not be for the first time that Syrian officials have noted a “left” hand-“right” hand dysfunctionality in the Obama style of foreign policy, whereby contradictory policy approaches are pursued simultaneously by different US officials.

If, as seems likely, Assad does emerge from all the challenges, the tenor of his recent response to Arab and European envoys suggests that reform will be pursued, in part, to protect Syria’s resistance ethos from such challenges in the future. In 2007, Assad noted wryly, in an unscripted addition to his speech, that he had not had the time to pursue effective reform: “We did not even have time to discuss any idea related to the party law among others. At a certain stage, the economy was a priority, but we did not have time to tackle the economic situation. We have been engaged in a decisive battle [on the external front]; and we had to win. There was no other option …”

Now “reform” is the existential external front. But if the intent of all this was intended to shift the strategic balance in the Middle East, it has not worked. It is unlikely that Assad will emerge more pliable to Western challenges – any more than he has in the past. Alastair Crooke is founder and director of Conflicts Forum and is a former adviser to the former EU Foreign Policy Chief, Javier Solana, from 1997-2003. (Copyright 2011 Alastair Crooke.)

by Alastair Crooke