Sunday, November 24, 2013

Deal Reached to Halt Iran's Nuclear Program

By Yochi Dreazen from Geneva

The historic nuclear deal Iran signed with the United States and five other world powers early Sunday morning represents the biggest gamble of President Barack Obama's presidency, and the success or failure of that bet will have serious repercussions for the administration's standing on Capitol Hill, Washington's relationships with Israel and other Middle Eastern allies, and the national security of the United States itself.
The deal painstakingly assembled during four days of marathon negotiations at a luxury hotel here calls for Iran to halt most of its uranium enrichment efforts, eliminate its stockpiles of uranium already purified to near weapons grade quality, open its facilities to daily monitoring by international inspectors and significantly slow the construction of the Arak plutonium reactor. Nuclear weapons can be assembled using either enriched uranium or plutonium, and the new pact is designed to make it difficult, if not impossible, for Iran to gain enough of either material for a bomb.
In exchange, Iran would gain some relief from the punishing economic sanctions that had been leveled by Washington and its allies in recent years, freeing up roughly $6 billion. Tehran also won a commitment that the so-called P5+1 nations - the United States, Russia, China, France, Germany and Britain - wouldn't impose any new sanctions for the next six months. That was an important win for the Iranians since the existing measures have cut its oil exports in half and driven the price of its currency down to a historic low.
The negotiations between the two sides have been going on in stops and starts for nearly a decade, but the actual unveiling of the deal was strangely muted. The text of the agreement itself was signed at roughly 3:30 AM in Geneva's Palais des Nations in a quiet ceremony open to only a small number of reporters and not televised or otherwise broadcast electronically. Lady Catherine Ashton, the European Union's chief diplomat and one of the prime architects of the deal, didn't participate in the public rollout of the agreement or take any questions from reporters.

President Obama, speaking from the White House, said the deal "halted the progress of the Iranian nuclear program" and "cut off Iran's most likely paths to a bomb." He also stressed that the agreement was an interim measure designed to give negotiators from both sides six months to work towards a broader, permanent nuclear agreement. If a deal couldn't be reached - or if the United States found evidence that Iran was trying to secretly continue work on its nuclear weapons program - Obama promised to restore the sanctions that had been lifted and impose harsh new ones.
The White House moved quickly to try to preempt criticism that the deal gave Iran too much.  A senior administration official in Washington said the primary U.S. sanctions against Iran's oil and banking sectors would remain fully intact, which means that Iran would lose roughly $30 billion in oil revenue over the next six months, far more than it stands to gain as part of the agreement.  "Iran will actually be worse off at the end of this six month deal than it is today," the official said.
With the agreement in place, the administration is now gambling that it can overcome three distinct challenges.
First, the White House has to persuade skeptical lawmakers to hold off on imposing new sanctions on Iran during the next six months. That may be a hard sell given the number of lawmakers from both parties who want to increase the sanctions on Iran rather than softening or relieving any of the existing measures. Senate Majority Leader Harry Reid of Nevada, a close White House ally, has said he's prepared to take up a tough new sanctions bill when the Senate comes back into session next month. The bill would almost certainly pass if it was put to a full vote. Secretary of State John Kerry said Obama was prepared to veto new sanctions legislation, but that's a battle the White House would dearly love to avoid.
Next, the administration faces the tough task of convincing Israel that the deal does enough to constrain Iran's nuclear program that Israel should give the administration more time to work out a permanent pact with Tehran rather than resorting to unilateral military strikes. Israeli Prime Minister Benjamin Netanyahu was harshly critical of earlier iterations of the nuclear deal and has promised to do whatever is necessary to protect his country. Administration officials said Obama would speak to Netanyahu Sunday to brief him on the details of the deal. One official said in an interview that the White House felt that Netanyahu, no matter how angry he was about the agreement, would reluctantly give the administration six months to test Tehran's intentions.  With the P5+1 countries committed to ongoing negotiations with Iran, the official said that Netanyahu knows any military action would risk rupturing Israel's relationships with the U.S., China and most of Europe. "Bibi will hold his nose, but he'll let us have six months," the official said.
The third and final unknown is what the deal will ultimately mean for American national security.  The agreement imposes an unprecedented number of new restrictions on Iran's nuclear program and, if fully implemented, would make it extraordinarily difficult for Tehran to obtain a bomb. Still, the deal doesn't require Iran to disassemble any of its roughly 19,000 centrifuges or to destroy all of its uranium enrichment equipment. Netanyahu and other critics argue that leaving the core infrastructure of Iran's nuclear program intact means that Tehran could restart its weapons push anytime it wants, particularly if it senses that the West has lost its appetite for further sanctions or the potential use of military force.
Even if the deal succeeds in freezing Iran's nuclear program, meanwhile, Washington and Tehran still remain on opposite sides of the Syrian civil war and face lingerng disputes over Iran's support for Hezbollah in Lebanon, a network of heavily-armed Shiite militias in Iraq, and Shiite activist groups in Saudi Arabia and other Persian Gulf states. The nuclear deal could clear the way for further pacts down the road devoted specifically to issues like reducing Tehran's support for the regime of Syrian strongman Bashar al-Assad.  For the moment, though, those disputes serve as reminders of just how enormous a bet Obama has made by inking this new nuclear deal with Tehran.  
 -This report was first published in Foreign Policy on 24/11/2013

Wednesday, November 20, 2013

Hezbollah Under Fire

Could the Bombing in Beirut Spell the End of the Shia Group?

A Supporter of Hezbollah gestures as he stands at the site of a car bomb in
Beirut's southern suburbs, August 15, 2013. 
(Hasan Shaaban / Courtesy Reuters)

Hassan Nasrallah has to wonder whether his approach to the civil war in Syria is starting to backfire. In a recent speech in the southern suburbs of Beirut on a Shiite day of mourning, the Hezbollah chief, in a rare public appearance, urged hundredsof followers to continue the fight against Sunni extremists in Syria. The result, he claimed, would be to spare his Shiite organization and Lebanon as a whole fromSunni extremism. But the double bombing that hit the Iranian embassy in Beirut this afternoon, killing more than 23 people, shows that Nasrallah’s preventive war in Syria is having exactly the opposite effect.

It is not just that al Qaeda, despite Hezbollah’s military advances in Syria, has been able to penetrate deep into the Shiite party’s sphere of influence and wreak havoc. More important is that the same extremists that Nasrallah was hoping to fight outside Lebanon are on the verge of turning Lebanon into another Iraq, a country defined by Sunni-Shiite sectarian violence. In this increasingly likely scenario, Hezbollah stands to lose the most. That is because Lebanese Shiites, Hezbollah’s main constituency, fear sectarian civil war more than anything else. Even the staunchest Hezbollah supporters want to keep the peace with the Sunni and Christian communities, as I argued in Foreign Affairs in August (see below).

But don’t count on Nasrallah to change course. Perhaps he believes that current circumstances, as dire as they are, are much more tolerable than the horror scenario of Syria falling into the hands of his enemies. Regardless of what Nasrallah’s convictions are, the bottom line is that he has put his party on a collision course with the region’s Sunnis -- moderates and extremists alike -- and it is too late for him to take a step back. The tragedy is that he has dragged Lebanon along with him.

Masters at tit-for-tit, Hezbollah and Iran will undoubtedly respond with force and precision to today’s pair of explosions. They may target the Saudi embassy in Beirut (or Saudi interests in Lebanon and abroad), given their belief that Riyadh is supporting Sunni extremists in Syria and across the region. It is more likely that Hezbollah, rather than Iran, will carry out any revenge attack. The two suicide bombings come at a time of rapprochement between Iran and the United States and one of increasing discord between Riyadh and Washington. Iran’s current priority may not be to punish the Saudis but to prepare for tomorrow’s round of negotiations with the P5+1, arguably the most consequential diplomatic summit since the Iranian Revolution. A strategic accord with the Americans, the mullahs are probably thinking, is more urgent than striking back against the Saudis or their proxies.

For his part, Nasrallah, the man who has made a living out of vilifying the United States, has gotten excited about the prospect of warmer ties between the United States and Iran. Last week, he said that a nuclear deal would only enhance the power of his party. That depends, of course, on what the Americans and the Iranians actually agree on.

Regardless, Hezbollah would be deluding itself if it got too comfortable and saw the U.S.-Iranian d├ętente as a sign that its strategy was working. No matter how positive regional or international circumstances may be, Hezbollah’s own house is currently burning. The proxy confrontation between Saudi Arabia and Iran, and the sectarian warfare that it has brought to the region, has allowed al Qaeda to knock on Hezbollah’s door, putting the Shiite party’s relationship with its constituency -- and thus its very survival -- at risk.

ORIGINAL ARTICLE: August 16, 2013

With the bloodbath in Egypt, ongoing carnage in Syria, and gruesome bombings in Iraq, another explosion in the Middle East might hardly seem like news. But the importance of the blast that rocked Beirut’s southern Shia-dominated suburbs on August 15, killing around 20 people and wounding hundreds more, should not be diminished. It could spell the beginning of the end for Hezbollah, the dominant political-military actor in Lebanon and one of the United States’ most powerful nemeses in the region.  

Reports of Hezbollah’s death have abounded in the past eight years. In 2008, only two years after a devastating war with Israel, Imad Mughniyeh, Hezbollah’s most senior military commander, was killed in a car bombing in Damascus. Analysts claimed that Hezbollah had lost its military and strategic edge. They also claimed that Israeli intelligence services had infiltrated the organization and that it was only a matter of time before spies within sewed chaos. In fact, Hezbollah was doing just fine. Despite Mughniyeh’s unique skill-set and accomplishments, he was only one part (albeit an important one) of a much larger institution. The group has an organizational structure that would be envied by the most sophisticated corporations, and it was fully capable of replacing Mughniyeh. In fact, it did so less than a week after his funeral.

In July 2011, when an international tribunal investigating the killing of former Lebanese Prime Minister Rafik Hariri formally accused four Hezbollah members of the crime, commentators again rushed to say that the Shia group was doomed, since it had lost legitimacy in the eyes of most non-Shia Lebanese. Yet Hezbollah weathered the storm with a mix of political strategy, violence, and defiance. The group hardly loses any sleep over its deteriorating popularity among non-Shia. As long as it has the guns and the support of its social base, it is business as usual for Hezbollah.

Hezbollah’s prospects truly started looking grim about a year ago, months into the conflict between Syrian President Bashar al-Assad, Hezbollah’s staunch ally, and the Sunni rebels attempting to depose him. The Assad regime seemed on the verge of collapse. About to lose its ally (and the arms and intelligence he passed along), the thinking went, Hezbollah would become politically isolated at home. Those assertions had the ring of truth, but it was never clear that isolation would lead to the group’s demise and, in any event, Assad survived. Even if he is toppled down the road, there is a high probability that Hezbollah and Iran have plan Bs. For example, Iran already seems to be reaching out to Sudan, which, although not a perfect alternative to Syria, has a friendly government with viable Shia connections in Iraq.

Since Hezbollah has survived war, the death of Mughniyeh, the international tribunal’s powerful verdict, its loss of popular legitimacy, and the near loss of its strategic alliance with Syria, it might seem like there isn’t much that could touch it.

But there is: the deterioration of its relationship with its Shia supporters. Throughout Hezbollah’s 31 years of existence, the organization has made cultivating good relations with Lebanese Shia a top priority, knowing full well that such ties would serve as its first and last lines of defense. It is the one source of support that the organization simply cannot live without or replace.

For the first time in Hezbollah’s history, this special bond is in danger. By entering the fray in Syria earlier this year or last to come to Assad’s aid, Hezbollah has flirted with open conflict with the region’s Sunnis -- both moderate and extremist. Regional demographics have always worked against the Shia -- and they know it. Even the staunchest Lebanese Shia supporters of Hezbollah would prefer peace with their fellow Sunni Lebanese and the region to agitation.

That is what makes the attack in Al Ruweiss so remarkable. Hezbollah’s leadership will see it as an attempt by its enemies to put pressure on the Lebanese Shia community to call for Hezbollah’s withdrawal from Syria -- just as it did after a bombing last month in the same area, and when two other bombs were discovered in the southern suburbs earlier in the year. If Lebanese Shia start to doubt Hezbollah’s strategy, Hezbollah is doomed.

Soon after the first bombing last month, Hezbollah’s leadership vowed to continue the fight in Syria, saying that attacks will only deepen their conviction. At the time, Shia sentiment was still pro-Hezbollah, although some in the community were already starting to question why the group was risking everything. In the last attack, though, there were no deaths. Not this time. And now anxiety is starting to set in.

It would take a long time for increased Shia dissent and dissatisfaction to shake Hezbollah’s grip on the community. After all, Hezbollah has been nurturing these ties since 1982, providing Shia with social goods, a political voice, security, and a sense of empowerment. But with every bomb that goes off in its stronghold -- and with every loss of Shia life that is not caused by Israel -- the group’s control of its support base will wane. Unless Hezbollah changes its Syria strategy, it might soon find itself really alone at home and in the region. 


-This commentary was published first in Foreign Affairs on 19/11/2013
-BILAL Y. SAAB is the executive director and head of research of the Institute for Near East and Gulf Military Analysis (INEGMA) North America.

Tuesday, November 19, 2013

Why Has The U.N. Given Assad A Free Pass On Mass Murder?

Humanitarian workers chronicle Syria's suffering -- but withhold key details on who is at fault.

BY COLUM LYNCH


During the past year, the United Nations' chief relief agency has routinely withheld from the public vital details of the Bashar al-Assad regime's systematic campaign to block humanitarian assistance to Syrian civilians. This silence has infuriated human rights advocates, who believe that greater public exposure of Assad's actions would increase political pressure on the Syrian government to allow the international community to help hundreds of thousands of ordinary Syrians who are trapped in the line of fire.

Instead, the U.N. Office for the Coordination of Humanitarian Affairs (OCHA) -- which oversees international relief efforts in Syria -- has relied on low-key, behind-the-scenes diplomacy to quietly persuade the Syrian regime to open the aid floodgates. So far, critics say, the strategy has been ineffective. Worse, it provides a measure of political cover to the Assad regime as it carries out mass starvation and slaughter, these critics contend.

The U.N. "should be much more willing to point the finger at the Syrian government when they are responsible for vast blockages of aid. They haven't said enough about who is responsible for violations and the character of those violations," said Peggy Hicks, the head of advocacy for Human Rights Watch. "There is always a balancing act, but we have been concerned that the U.N. has been reluctant to recognize the limits of working behind the scenes."

In the latest effort to avoid a diplomatic confrontation, the agency's chief, Valerie Amos, privately urged U.N. Security Council members to hold off on plans to promote a resolution aimed at pressuring Syria to meet its humanitarian obligations. Instead, she has proposed establishing a high-level group -- including representatives of Australia, the United States, Iran, Luxembourg, Russia, and Saudi Arabia -- to quietly pressure Syria's combatants to "lift bureaucratic and other obstacles hindering humanitarian work," according to a confidential copy of the plan. Both Iran and the U.S. have tentatively agreed to participate, Foreign Policy reported on Friday.

During the past month, Amos has engaged in a rare bout of public scolding, criticizing the Syrian government's imposition of bureaucratic delays and its laying siege to civilian towns. While Hicks and other critics say they welcome the change, they say she has not gone far enough.

Amos defended her response, telling Foreign Policy in prepared remarks that her agency has been speaking out in private and public about Syrian government obstructions and that it "publishes regular bulletins on the humanitarian situation inside Syria including constraints on access." But she stated, "We are not just an advocacy organization."
"Our job requires an operational response on the ground, information management, sensitive negotiations and advocacy," said Amos, who on Nov. 13 toured the storm-ravaged town of Tacloban, Philippines, where she is overseeing the troubled humanitarian response to Typhoon Haiyan. "We have a responsibility to help those most in need. We have achieved that through a mix of public pressure and quiet diplomacy with the parties active in the conflict in Syria."

The distribution of humanitarian aid has emerged as a central front of the Syrian government's military campaign to starve out pockets of potential support for the armed resistance. By restricting deliveries to pro-government areas, the Syrian government has gained a political advantage by ensuring that food and assistance is channeled disproportionately to those who support it.

"Both sides want to be the food-giver, but Assad has made it very clear he's not going to let anybody else but him feed Syrians," said Joshua Landis, an expert on Syria at the University of Oklahoma. Assad's hope: that "people will crawl back to him" for bread, salaries, and other subsidies. "And that's what's happening.

While the United States and European powers have publicly denounced the Syrian government's curtailing of assistance to opposition territory, one of their chief objectives in Syria -- saving lives and stopping the wholesale flight of refugees -- has perversely aligned with Assad's aims, according to Landis.

"If you want to stop refugee flow and cauterize Syria, which is [the West's] major objective, the way to do it is to pump more calories into Syria, and the best way to pump calories into Syria is to work through Assad," Landis said. "He owns the Syrians, and he will facilitate that food distribution if it relegitimizes him.

The United Nations estimates that more than 9.5 million Syrians are in need of assistance, including 2.5 million people residing in areas beyond the reach of international relief workers. Many have not received help for more than a year. "Syria has become the great tragedy of this century -- a disgraceful humanitarian calamity with suffering and displacement unparalleled in recent history," Antonio Guterres, the U.N. high commissioner for refugees, said in September.

The Assad government and Syria's armed opposition -- a fractious coalition of fighters that has become increasingly dominated by extremist jihadists -- have both committed widespread abuses of civilians. The al Qaeda-affiliated Islamic State of Iraq and al-Sham, for example, has warned that aid workers are at risk of kidnapping or death in Syria. The International Committee of the Red Cross claims that at least 22 Syrian Arab Red Crescent volunteers have been killed since the conflict started.

"The deliberate targeting of hospitals, medical personnel and transportation by all parties to the conflict remains a daily reality," according to a confidential paper produced by OCHA. "Kidnappings and abductions of humanitarian workers are growing, as is hijacking and seizure of trucks."

But the government's use of aid blockades has been far more sweeping, according to experts on the region. "Both sides are employing siege tactics that seek to gain a military advantage by denying supplies to the civilian population," said Noah Bonsey, the Syria analyst for the International Crisis Group. "But it is a much more of systematic policy on the regime side," one aimed at starving out populations in hard-to-reach rebel strongholds. That includes Ghouta, where the government used chemical weapons in August to try to dislodge the resistance.

For much of the past year, OCHA has studiously avoided opportunities to cast direct blame on the Syrian government for paralyzing the U.N. relief effort in rebel-controlled territory. Instead, the organization preferred to nudge Assad behind the scenes in the hope of widening access for relief workers. Until recently, a typical public statement will raise concern about the brutality of life for civilians under siege but will not identify who is responsible for imposing it. Many basic facts -- for instance, the existence of a Syrian government policy of denying medical syringes into opposition areas -- have been limited to distribution to the Security Council and have been marked strictly confidential.

A review of confidential internal documents provides a far clearer picture of Syrian obstructionism. For instance, one document contained a list of eight villages and neighborhoods in Damascus and Homs that had come under siege by Syrian security forces -- including Moadamiyeh, where thousands of Syrian residents were forced to eat leaves in order to fend off starvation. For anyone paying close attention to Syria's civil war, the government's siege of Syrian villages was hardly a secret.

Syria has failed to act on U.N. requests to establish humanitarian aid offices in numerous cities, including Aleppo, Daraa, and Quamishli. That has complicated U.N. efforts to deliver assistance in the country, according to another internal document OCHA presented to the Security Council this month.

Syria routinely delays the issuance of visas, and when it does grant them, it will not allow relief workers into the country, according to one of the documents. Procedures for delivering aid, as well as importing communications equipment, are particularly cumbersome. For instance, U.N. relief workers must submit a travel request to the Foreign Ministry 72 hours in advance of sending a convoy into the field. Approval must be granted by the Syrian Foreign Ministry, the Syrian Arab Red Cross, and the Ministry of Social Affairs. In the case of medicine deliveries, the U.N. must also obtain a clearance letter from the Ministry of Health.

The Assad government has long prohibited the United Nations from delivering aid across Syria's borders with countries viewed as sympathetic to the armed opposition, including Turkey and Jordan. Instead, aid is shipped through Damascus and often blocked from crossing conflict lines. "Restrictions imposed by Syrian authorities on delivery of medical supplies over past six months include: medical supplies which could be used for surgical interventions (e.g. scissors, infusions, anaesthesia) not allowed into opposition-controlled areas," according to a confidential document provided by Amos's office to the Security Council this month. (The document, however, did note that some medical supplies were delivered to Idlib and the town of Termallah in Homs between August and October).

The United States and its Western allies have denounced Syrian obstructions and have accused the Syian government of stepping up efforts to starve out civilians in towns suspected of sympathizing with the opposition. "The regime has shown that it can facilitate access to chemical weapons inspectors when it wishes, and it could do so for humanitarian relief if it showed a shred of humanity and wished to do so," British Foreign Secretary William Hague recently told British Parliament.

But in the face of such behavior, the U.N. has tread carefully and generally from behind closed doors. This month -- according to confidential documents shared with the U.N. Security Council -- Amos's office backtracked on a plan to set specific timelines for reopening shuttered hospitals and schools in conflict zones. Even a U.N. proposal to deliver polio vaccines to 700,000 Syrian children by January was dropped before it was officially presented to the Security Council on Nov. 4.

In recent weeks, and in the face of intense pressure from human rights groups and aid agencies, the U.N.'s humanitarian agency has stepped up its public complaints about the Assad regime's hostility to relief workers.

"Lack of access is the biggest problem we face in Syria. Both the Government and the opposition are blocking aid deliveries, as I have pointed out in public and in private fora," Amos told Foreign Policyin her statement. "We face serious bureaucratic constraints in getting permission from the Government for convoys and obtaining visas, setting up humanitarian hubs and getting essential equipment through customs. Opposition groups have blocked our convoys and refused to allow us passage through checkpoints."

But she added: "[W]e do not release detailed operational information publicly for reasons including the security of our staff and those in partner organizations, and the integrity of our negotiations."

The U.N.'s caution reflects a long-standing dilemma for U.N. humanitarian relief workers: Is it better to use the bully pulpit to increase pressure on a government to treat its people humanely, or is it better to nudge the government quietly behind the scenes?

For decades, U.N. relief workers have preferred to keep their concerns off the headlines and reveal little about the perpetrators of violence against civilians, thereby preserving their role as neutral healers and helpers.

But a spate of internal reviews of U.N. responses to mass killings from Bosnia to Rwanda and Sri Lanka have challenged that view, arguing that the U.N. cannot remain impartial and silent in the face of massive abuses against civilians.

Last year, Charles Petrie -- a retired U.N. official who served in trouble spots from Rwanda to Myanmar -- conducted a major internal review of the U.N.'s response during the final months of the Sri Lankan civil war, when more than 70,000 civilians were killed, mostly by government shelling. The review faulted the U.N. for failing to confront the government more directly.

"There was a continued reluctance [by the U.N.] to stand up for the rights of the people they were mandated to assist," he wrote. While top U.N. officials frequently decried the death of thousands of civilians "the U.N. greatly weakened the impact of its statements by not identifying the government as the perpetrator of individual attacks associated with these casualties."

But others say it is not so simple. It's true that the U.N. "has a tendency to err on the side of quiet diplomacy longer than they should," said Steven Ratner, a professor of international law at the University of Michigan Law School, who oversaw a second review of the mass killing of civilians in Sri Lanka. "But I think it would be too simplistic to say there is always one right way of handling a situation like Syria. In some situations, quiet diplomacy works; and in others condemnation works; and in others maybe a combination of both" will work.

Security Council diplomats say that Amos, a British national who was put forward for the U.N.'s top humanitarian job by her government, is concerned that the pursuit of a more confrontational approach toward Syria will backfire. She worries that it will feed a perception in Damascus that the U.N. aid effort is linked to the Western powers' attempts to bring about the fall of the regime. She has tried to encourage the combatants' allies -- including Russia, Iran, and Saudi Arabia -- to use their influence on the fighters to permit the delivery of relief. "The U.N. doesn't want to be perceived as being politicized," said one Security Council diplomat. The U.N. relief agency, the diplomat said, is concerned that it could be accused of "playing politics with the West."

A second Security Council diplomat defended Amos's handling of the response, saying that has been necessary to proceed discretely in order to avoid antagonizing Russia, Syria's closest ally on the council, or provoking Syria to impose even tighter restriction. Taking an even-handed approach to the crisis has served to induce Russia to accept Security Council pressure on the parties. "She has been outspoken," the diplomat said. They say she has quietly worked behind the scenes to persuade Syria's allies, Russia and Iran, help the U.N. gain access.

"I would think the criticism against OCHA seems unfair; OCHA has been trying to draw attention to these problems and trying to say there is clearly problems in access due to bureaucratic hurdles, which points to the government," said another Council diplomat. "OCHA has responsibility to balance between public awareness and trying to gain concrete steps on the ground, which can sometimes be more efficient not to make too much noise."

The U.N. Security Council has long been paralyzed by a big power standoff, with Russia and China on one side, the United States and its European and Arab allies on the other. But on Oct. 2, the U.N. Security Council finally adopted its first formal statement calling on Syria and the armed opposition to permit unfettered access to relief workers. Human rights and relief organizations said the U.N. has been slow to pressure the government to meet the council's demands. The U.N. only presented the council with a plan of action on Monday, a month after the council issued its plea for access.

Human Rights Watch's Hicks welcomed the U.N. relief coordinators' increasing willingness to speak out in recent weeks, but says the United Nations has too often withheld precise details about who is responsible for blocking assistance to needy civilians. For instance, Hicks noted, Amos has said it was a "scandal" the U.N. can't reach 330,000 people in besieged areas. But she didn't note that the vast majority -- some 280,000 -- are being held captive, part of a systematic campaign to cut off civilians. "The lesson of Sri Lanka shows that when access to people in need is completely blocked and stymied, as has been the case in Syria, the U.N. needs to speak out loudly in a very forceful way in support of all those in need of assistance."


-This article was published first in Foreign Policy on 17/11/2013
-Longtime Washington Post correspondent Colum Lynch reports on all things United Nations for Turtle Bay

Saturday, November 16, 2013

Egypt Relies On Gulf Aid For Economy: Then What?

Since the 2011 uprising that toppled Hosni Mubarak, Egypt has burned through $20 billion dollars in foreign reserves.


Egypt is engaged in a high stakes gamble, using billions of dollars from Gulf Arab allies to stimulate the economy and keep its politically charged streets calm in the hope that investors and tourists will return.

The biggest Arab country’s finances are in a precarious state with a massive deficit but the government, armed with billions of Gulf petrodollars, has rejected the conventional wisdom of IMF-prescribed austerity measures.

If the plan fails, a new government expected to be elected early next year could find itself deep in debt, its currency overvalued and an economy in crisis.

“Now we are living on a ventilator, (with) aid from neighbouring countries and that is understandable in the midst of a meagre tourism industry and reluctance of direct foreign investment,” Sherif Samy, Egypt’s Financial Supervisory Authority head, said.

Saudi Arabia, Kuwait and the United Arab Emirates pledged more than $12 billion in aid to Egypt after the army toppled Islamist President Mohamed Mursi of the Muslim Brotherhood on July 3 following mass protests against his rule.

“Nobody can live, in the long term, on aid,” Samy said. “It is not sustainable.”

Since the 2011 uprising that toppled Hosni Mubarak, Egypt has burned through $20 billion dollars in foreign reserves, borrowed billions from its allies and racked up billions in debts to foreign oil companies to prop up its currency.

AVOIDING PAINFUL MEASURES 

The Mursi government worked out an agreement with the International Monetary Fund (IMF) that would have included austerity measures, higher taxes and a reduction of subsidies that eat up a quarter of the budget. It was never implemented.

Egypt is going a different way from many European countries such as Greece whose cash-strapped governments have enforced repeated rounds of austerity measures, squeezing households, to rein in huge budget deficits.

The army-backed government, well aware that IMF conditions could cause a huge popular backlash before elections, has avoided austerity measures.

In a country where protests have forced out two presidents in three years and sent the economy into a tailspin, the interim leaders, appointed after Mursi’s ouster, have internalised this risk.

“The government is faced with a big challenge, especially as it faces coming elections within months,” Samy said.

“They must not be excessive with the social subsidy programmes and wage and pension increases that might titillate the feelings of ordinary citizens in the short term but have a severe impact on the state budget and on the deficit.”

Western powers want a return to democracy in Egypt, which has a peace treaty with Israel and controls the strategic Suez Canal, a global trade route.

What happens in Egypt could have a ripple effect on the rest of the region, which has also suffered from political and economic turmoil since the Arab Spring uprisings.

The government says it is still on track to rewrite the constitution and hold parliamentary and presidential elections in early 2014, part of a political roadmap the army announced after it removed Mursi.

PUMPING MONEY

Supported by the Gulf aid pledges, the government announced a 22.3 billion Egyptian pound ($3.2 billion) stimulus package in August. It later increased it by a third to 29.6 billion pounds and plans yet another 24 billion pound package early next year.

But the government has not spelled out details of any other long-term plans to strengthen the economy.
The interim government has raised the public sector minimum wage and pensions, and the central bank has lowered its key interest rates by a full percentage point since August to encourage growth.

In addition, the government has said it would focus on a series of labour-intensive infrastructure projects and unfinished public projects designed to quickly improve living standards of Egypt’s 85 million citizens.
Some businessmen say there are indications that investors and tourists, once its main source of foreign exchange, will return once the political turmoil subsides.

“Foreign investors are primarily concerned about stability, no violence, where they feel their investments are safe, where there is an ease of going in and out,” said Hussein Choucri, head of Cairo-based HC Securities, a mid-sized investment bank.

“You have some big companies in the Gulf that have discounted the economic and political risk already.”
However, many investors are not only worried about security but recoil from the way Egypt has treated businessmen since the uprising.

State companies that Gulf investors bought under the Mubarak administration have been renationalised and property sales renegotiated after private lawyers challenged the transactions in court.

The interim government has been taking steps to reassure investors.

“We are revising all economic legislation,” Investment Minister Osama Saleh said. “The bids and tenders law, which resulted in many complaints against investors, has been amended so that those who sign contracts with the government will be safe from complaints or lawsuits.”

Egypt’s tourism minister said last month the government plans to launch a marketing campaign in the hope of attracting 13.5 million tourists next year. Only 9.8 million tourists came in 2011, down from 14.7 million the previous year.

If the measures don’t succeed, the country could find its finances in even worse shape than before Mursi’s ouster, forcing it to return to its Gulf benefactors for even more aid.

During Mursi’s year in power, Egypt’s budget deficit widened to almost 14 per cent of gross domestic product (GDP), a number the government, backed by Gulf aid, hopes to reduce to around 10 per cent this year.

It also hopes investors and tourists will bring dollars, taking pressure off the Egyptian pound, which has lost almost 16 per cent of its value since the uprising and even more on the black market.

The country may not be able to count on its Gulf allies forever.

When an Egyptian delegation visited the Gulf last month, the United Arab Emirates deputy Prime Minister Mansour bin Zayed al-Nahayan said Egypt can’t live on Gulf aid alone to fix its economy.

“Egypt must think of innovative and unusual ways (to boost the economy),” he said.

-This article was published by Reuters on 16/11/2013