Monday, 31 December 2012

MIDDLE-EAST: ''Post-Revolution'': Islamism- Secularism and Disillusionment

Syria is caught up in a civil war, Islamists are in power in Cairo and Tunis, Turkey is caught between fronts and the Middle-East peace process is stalled. What to make of the region two years after the Arab Spring?

Two years after the beginning of unrest in North Africa and the Middle East, the Islamists seem to have emerged as the clear winners. Many are now claiming that the Arab Spring has been followed by an Islamist winter.

The euphoria over the fall of dictators in Tunisia, Egypt and Libya is gone. The bloody civil war drags on in Syria, as a horrified public and helpless politicians stand by. And the persistent and massive repression of the opposition in Bahrain has nearly disappeared from the headlines.

The Arab world has once again become a greater source of worry than hope to the Western world.
The struggle for the Arab soul hasn't been decided yet.

The new conditions have led to power shifts in the region: Syria has lost its leading position, while Egypt appears to be regaining its usual role as Arab leader. The upheaval in the Middle East marks the end of the post-Ottoman system, a political world view created by Britain and France.

The post-Ottoman system relied on Sunni domination, a model that was shaken by the first Gulf War and the creation of the Kurdish security zone in northern Iraq, is dying out, and a new order of political Islam and Nationalism are taking shape.

In Syria, where the war is still raging, the question remains as to whether the secular state will be jeopardized if more radical forces within the opposition prevail.

In Tunisia, an Islamist Prime Minister, Hamadi Jebali, is running the show since 2011. His Ennahda Party, a branch of Egypt's Muslim Brotherhood, had repeatedly assured Tunisians that it did not intend to introduce Islamic law or curtail the rights of women. Tunisia's Islamists have distanced themselves from that position since summer, and yet they are still behaving more reasonably than their counterparts in other countries in the region, as they observe from a safe distance the game President Mursi is currently playing in Egypt.

In Egypt, an Islamist President, Mohamed Mursi has now dictatorial special powers, after the majority of Egyptians clearly voted in favor of ''sharia law'' constitutional reform, in rushed proceedings.

In Iraq, kurdish nationalism is now on the rise and Sunni domination has been surpassed by the rise of Shiite Islam, with ethnic and religious minorities splintering off all over the place. This process is most evident in Syria, where the peaceful uprising of opposition groups against the Bashar al Assad's regime has become a multi-ethnic civil war.

Throughout the Middle East and North African region, there are really only four countries that are reasonably stable: Iran, Turkey, Israel and Egypt. Only one of these countries, Egypt, is almost entirely Sunni. But even these four states have been rocked by internal and external conflicts.

Set against these dramatic upheavals, Turkey has gained greater importance in the region. The secular state, a NATO member, is expected to serve as a model for the post-revolutionary Arab states with their new Islamist governments.

This model has not succeeded, and now Turkey offers a new direction. Even though it may not be perfect, it could show the people of Tunisia and Egypt how to combine Islam and democracy, and even Islam and secularism. But caution is required when it comes to use Turkey as a model. Turkey's geopolitical interests  are in collision with Egypt's, Tunisia's. These two are more inclined toward political Islam than western sense of democracy.

Under Prime Minister Recep Tayyip Erdogan and his Islamic party AKP, Turkey has become a one-party state in which the Alevi minority are suppressed and excluded and only party members can find jobs. Democratic rights have been terminated, the media has been silenced and the legal system has been eroded. Instead, Turkey shows that Islamic parties are able to take power through democratic elections, and then take advantage of their power to destroy democracy.

Along with Turkey, the European Union has also been directly affected by the developments in the Middle East and North Africa and bears some responsibilities in this political maze in Arab world and North Africa.

For example, Europe is struggling to twist Israel's arms to hold the construction of new settlement in West Bank, vaguely named E1, despite international condemnation. In Egypt, Europe falls short to criticize Mursi's new sweeping powers and the new ''sharia law'' constitution adopted recently.

The EU's associated partnership program was designed to help 16 neighboring countries from Belarus to the Caucasus, the Middle East and northern Africa. The goal had to be to create a region of stability, security and prosperity. But the EU was quickly reaching its political and financial limits, not least because of differing interests among its own member states.

The ubiquitous idea of a Marshall plan for the Middle East is something that could only ever work with the support of the wealthy Arab monarchies.

Many analysts, including myself, strongly criticize the EU's policy on the Arab world and the long-standing cooperation between Europe and the now fallen dictators in Egypt, Libya and Tunisia.

The EU has no human rights policy. In future the European Union should only commit to achieving human rights goals in writing if Brussels was prepared to work toward actually reaching those targetsrope.

By Guylain Gustave Moke
Political Analyst/Writer
Investigative Journalist

Photo-Credit: Reuters

Friday, 28 December 2012

U.S.-RUSSIA: ''New Arms Race'': Global Strike Missile Program

If reports in Russian state media this month are accurate, the world may be on the brink of seeing a new intercontinental ballistic missile (ICBM) race, though of a conventional type rather than the nuclear arms race of the Cold War.

According to a report by RIA Novosti, Moscow may be developing a heavy-liquid-fuel, non-nuclear, precision-guided payload capability for a new class of ICBMs, which would give Russia near-global coverage similar to that sought by the U.S. under the controversial ''Prompt Global Strike'' program.

Using rhetoric that harkened back to the dark days of the Cold War, Russian Strategic Missile Forces Commander Colonel General Sergei Karakayev warned that Russia could develop its own strategic conventional ICBM force if the U.S. did not pull back from its efforts to create such a system, which gives the U.S. the ability to strike targets anywhere in the world within a matter of minutes.

In an apparent reference to U.S. and NATO plans to deploy missile defense systems in Europe, Karakayev said the new ICBM would be able to penetrate “any missile defense system likely to emerge in the near future.” Although the U.S. claims that the defense systems are targeted at a nuclear-armed Iran, Moscow contends that the deployment will also allow for the intercept of Russian ICBMs and thus undermine its deterrent capability.

Unlike current solid-fuel ICBMs, “the higher energy provided by liquid fuels gives it more varied and effective methods of countermeasures against global missile defense screens, including space-based elements of those systems,” Russian media quoted Karakayev as saying (“while less stable than solid fuel, liquid fuel propellants provide the highest energy per unit of fuel mass and variable thrust capability”).

Karakayev’s remarks could furthermore indicate breakthroughs in missile maneuverability, an important component in a missile’s ability to penetrate air defenses.

According to the Colonel General, the new missile will be deployed by 2018 and will be “largely superior” to its predecessors, including the Voyevoda (SS-18 '' Satan'').

Despite the advantages of having a conventional global strike capability – especially if coupled with hypersonic projectiles — proponents of the program tend to highlight its potential in the context of an attack against countries or intrastate organizations that do not possess long-range nuclear capability.

For clear reasons, conventionally armed ICBMs quickly lose their appeal if an opponent has a countervailing nuclear force: Given the difficulty of distinguishing between an incoming ICBM equipped with a conventional warhead and one that carries a nuclear weapon, targets might not wait until detonation to discern the nuclear status of the incoming payload, and instead retaliate through nuclear means.

Meanwhile, in what was ostensibly the first confirmation of the existence of the project, Karakayev also mentioned that a series of tests of a new solid-fuel ICBM had already been conducted and that the program was '' right on path'' (in its reporting on last’s announcement, Agence France-Presse seems to confuse the two types of ICBMs).

The latest test, using a mobile launcher, was held on October 24 at the Kapustin Yar firing range in southern Russia — less than a week after Russian President Vladimir Putin personally led Moscow's most comprehensive test of its strategic nuclear arsenal since the end of the Cold War.

According to separate reports, Russia plans to test-fire a total of 11 ICBMs in 2013. Karakayev said that a new, fourth-generation automated battle management system was being introduced for the strategic missile forces, which will possess a rapid and automated retargeting capability for the nation’s ICBMs.

As the U.S. and Russia are both unlikely to abandon plans to create their conventional global strike missile forces, other countries, primarily China, and perhaps India, are likely to follow suit. In an odd twist, by adding conventional warheads to hitherto nuclear-tipped ICBMs, Moscow and Washington (and whoever else comes after) risk adding noise to what is already a dangerous game of signals interpretation, one that held the world hostage for decades.

By Guylain Gustave Moke
Political Analyst/Writer
Investigative Journalist

Photo-Credit: Wikipédia. Russia MIR.

Thursday, 27 December 2012

FRANCE: The greatest dilemma of Hollande's presidency: Reformer or Leftist?

After six months of Socialist rule in France, a fierce and crucial debate, is dominating the media to suss out whether the french President, Francois Hollande, France's first Socialist president in 17 years,  is a reformer or a leftist. Nobody seems to know until know. This is not just a theoretical debate, but a crucial one to understanding where France is heading in the midst of a prolonged economic crisis.

Although the French have been familiar with Hollande for decades, many find themselves wondering who exactly they have elected: A reformer? A traditional Socialist? 

There's the Hollande whose party knows him as a Social Democrat and a pragmatist, and there's the man who not only promised during his campaign to reduce retirement age for some French workers back down to 60 and to increase taxes on income above €1 million ($1.3 million) to 75 percent, but also actually implemented those changes once he was in office.

The French president surrounds himself with members of the classical Left, for example, his minister for "Industrial Renewal," populist Arnaud Montebourg. When Montebourg heard French carmaker PSA had decided to close its Peugeot factory outside Paris, the minister reacted with a rant against the company and demanded for the government to intervene.

On the other side of the equation, one of the president's closest advisors is former Rothschild banker Emmanuel Macron, who is said to have responded to Hollande's budget law imposing a 75 percent tax on the country's highest earners with a memo that read, "That's like Cuba but without the sun."

It's impossible to know which of these people Hollande listens to, or when and why. The president doesn't want to pin himself down to a single course of action, which can be interpreted either as a sign of his open spirit -- or a lack of direction. No one can say for sure whether or not Hollande has opinions of his own or whether F. Hollande is a Social Democrat or Leftist.

France's economy, for decades, has found its attractiveness in capitalism and finding the right balance with a Social government, in the midst of economic crisis, has been F. Hollande's dilemma.

Democrat socialist contrast social democracy with democratic socialism by defining the former as an attempt to strenghten the welfare state, and the latter as an alternative socialist economic system to capitalism. In social democracy, capitalism could never be sufficiently ''humanized'', and any attempt to suppress the economic contradictions of capitalism would only cause them to emerge elsewhere. For example, attempts to reduce unemployment too much would result in inflation, and too much job security would erode labor discipline.

Having included €20bn in new taxes in its 2013 budget, French Social government fears ''shock'' action demanded by business, which wants social charges on jobs shifted rapidly on to direct taxes and spending cuts, would stall the economy into reverse.

Unemployment in France is over 10 percent, national debt is 90 percent of gross domestic product, the economy is barely growing and public spending is at 57 percent of GDP. This is very much a country in need of restructuring. It remains unclear whether France will truly comply in 2013 with the Maastricht criteria, which stipulate a maximum of 3 percent new indebtedness.

During his presidential campaign, Hollande often made it sound as if he could reform the country effortlessly, talking of "renewal" rather than of the painful measures that would be necessary to achieve it. Many of his campaign promises gave the impression that there was money available, just waiting to be given out. But six months gone, he has done nothing at all.

Socialist of the classical, orthodox and anlytical variations argue that beacuse social democratic programs retain the capitalist mode of production, they also retain the fundemental issues of capitalism, including cyclical fluctuations, exploitation and alienation. Social democratic programs intended to ameliorate capitalism, such as unemployment benefits, taxation on profits and the wealthy, create contradictions of their own by limiting the efficiency of the capitalist system by reducing incentives for capitalists to invest in production.

Here, perhaps, lies the greatest dilemma of Hollande's presidency.
In the midst of the economic crisis, France's Socialists are confused. The minister of industrial renewal is calling for nationalization of some industries and ''deglobalization'', while the president shies away from necessary structural reforms.
Failing to walk on his shoes of ''reformer'' and ''leaning toward ''Left-wing'', the French Socialist President in 17 years, has abandoned his Social Democrat stance and become more of a liberal capitalist.
As the saying in France goes '' In France we don't have oil, but we have ideas'', maybe F. Hollande is revolutionizing a new concept of '' Social rule in France''.
By Guylain Gustave Moke
Political Analyst/Writer
Investigative Journalist
Photo-Credit: Wikipédia. French President, Francois Hollande.

Wednesday, 26 December 2012

MIDDLE EAST: '' Israel New settlement'': Israel's dangerous seed of status quo

Israel is currently ignoring criticism from the West and UN as it continues to pursue its settlement policies in the Palestinian Territories. It is also unlikely to reverse course anytime soon. Prospects for a two-state solution are getting dimmer.

By quickly implementing this new settlement construction, Israel intends to create a situation that will be difficult to undo. Theoretically speaking, the coalition parties have always avowed their willingness to give up a portion of the settlements if the Palestinians would guarantee Israel's security in a peace treaty, but practically speaking, any hope of dismantling the large blocks of settlements on the outskirts of Jerusalem, Bethlehem and Ramallah is unrealistic.

Israeli critics have accused Netanyahu of backing the plans to pander to hard-liner voters ahead of Jan.22 parliamentary elections. While Netanyahu's Likud Party holds a firm lead in opinion polls, they also show losing support to even harder line religious and nationalist parties.

Construction on most of the projects could be years away, making it easy for Netanyahu to court voters while leaving open the possibility of putting the projects back on hold after the vote. But his strategy has antagonized Israel's allies and the fierce international reactions appear to have caught Israeli officials off guard.

Numerous UN resolutions have stated that the building and existence of Israeli settlements in the West bank, East Jerusalem and the Golan Heights are a violation of international law, including UN Security Council resolutions in 1979 and 1980. UN Security Council Resolution 446 refers to the Fourth Geneva Convention as the applicable international legal instrument, and calls upon Israel to desist from transferring its own population into territories to change their demographic makeup.

The position of successive Israeli governments is that all authorized settlements are entirely legal and consistent with international law, despite Israel's armistice agreements having all being with high Contracting Parties. In practice, Israel does not accept that the Fourth Geneva Convention applies de jure, but has stated that on humanitarian issues it will govern itself de facto by its provisions, without specifying which these are.

Israel has justified its civilian settlements by stating that a temporary use of land and buildings for various purposes appears permissible under a plea of military necessity and that settlements fulfilled security needs.  It is further argued that UNSC resolution 242 calls for '' secure and recognized boundaries'', and that neither the 1946-1967 armistice demarcation lines, nor the 1967 cease-fire lines have proved themselves secure.

This argument seems to be legally acceptable because Israel has signed peace treaties with Egypt and Jordan but there are no peace treaties governing Israel's borders related to the West Bank, the Gaza Strip and the Golan Heights. Israel therefore can assert that the armistice lines, also known as the Green Line, of 1949 have no other legal status.

Under international law, Isreal could, within the framework of UNSC resolutions 446, 452, 465, 471 and 476, build settlements for military or agriculture purposes. However, even though, military and agriculture purposes might be in favor of Israel's establishment of civilian settlements, the establishment of the settlement vaguely named E1 is inconsistent with international law and against Article 49 of the Fourth Geneva Convention.

Putting absolute primacy on one's own security, though, carries a dangerous seed of destruction and status quo within it. And perforating the West Bank with further new settlements to the point that a Palestinian state is no longer conceivable there -- that act serves to push off the oft-evoked two-state solution to an unattainably distant future.

But Netanyahu's government isn't thinking about the future. It only thinks about maintaining a status quo, and it continues to build settlements in the West Bank, in order to secure the settlers' votes. Israel is playing for time -- and that's a dangerous game.

By Guylain Gustave Moke
Political Analyst/Writer
Investigative Journalist
Researcher and Author

Photo Credit: AFP.

Monday, 24 December 2012

EUROPE: '' Euro-Zone crisis'': Hidden Risks will Plague growth in 2013

EU leaders were full of praise for the euro-zone bank oversight plan passed two weeks ago at the EU summit in Brussels. But the deal is not nearly as watertight as they claimed. It lacks a legal foundation and could lead to a conflict of interest at the highest levels of the European Central Bank. The recent resolutions made by the European leaders suppose to save the common currency but the future in Euro-zone into next year looks uncertain.

The agreement reached by European leaders and their finance ministers in Brussels summit were just a series of systematic small steps. In Brussels summit, EU leaders agreed to Euro-zone Bank oversight plan but hidden risks and Euro-zone economies forecast into next year plague Euro-zone bank oversight plan and Euro-zone economies growth.

The deal marked just the latest milestone on the road to joint liability in the euro zone -- and the danger of a collapse has still not been precluded. Europe's economic crisis, say experts, will only continue to get worse next year.

No wonder, then, that financially powerful countries outside the euro-zone were less than impressed by the new banking watchdog. The oversight regime is open to non-euro-zone EU members as well, but Sweden, for example, isn't even considering it.

According to the agreement, the new oversight agency must submit all of its important decisions for authorization. In the case of conflicts, the agency must also submit to the decision of a mediation committee -- a provision which is not sufficiently grounded in European law.

The euro crisis will morph into a European crisis in 2013. The survival of the common currency is not in question any longer, but European economies, after two years of crippling and contra-cyclical austerity, are stuck on flat. Furthermore, the question is not so much whether any country will exit the euro but whether the further integration of the zone will lead to the exit or de facto ouster of a non-euro member from the European Union. In 2013, Europe will be weakened by its economy and threatened in its unity.

Even if euro zone leaders decide that the folly must stop, they will pay the price of two years of cult-like devotion to austerity: in the arsenal of measures deployed to save the euro, it’s the one thing that has failed to work. European governments have created two bailout funds, rescued three euro members and recapitalised the banks of a fourth. They have restructured Greek debt twice. The ECB has poured cheap funds on the banking system, and it has promised to do “whatever it takes” to keep the common currency together.

Yet governments have undermined these efforts by obsessing about fiscal discipline - and it shows. After declining 0.4 percent in 2012, the euro zone’s economy as a whole will stagnate next year. Official forecasts vary - but few lie outside the spectrum that stretches from mild shrinkage to paltry growth.

In a rosy scenario, where reason would prevail, euro zone leaders in 2013 would stop reacting and start acting. They would design joint policies aimed at stimulating growth and reducing unemployment from levels that have become unbearable. It will simply not do to wait for the future benefits of the structural reforms most of them have begun to implement.

Meanwhile, powerful centrifugal forces are pulling non-euro members away from the EU. Some of them, such as the UK, never saw it any more than a one-dimensional “single market” in the first place. But if it ever comes to a choice between a smaller EU and a stronger monetary union, it’s easy to see what euro zone governments will choose. 2013 could be the year when that choice becomes clearer.

By Guylain Gustave Moke
Political Analyst/Writer
Investigative Journalist

KENYA: '' Presidential Election'': Ethnic Violence Overshadow Campaign

Kenya's last election ended in chaos and violence. Thousands were killed, and hundreds of thousands more were displaced. Many fear the upcoming election could bring more violence.  

This time around, the election will be held on 04 March 2013.  It could be the first presidential election held under the new constitution, which was passed during the 2010 referendum and the first to be run by the Independent Electoral and Boundaries Commission. Above all, it could be the first presidential election where the candidates face a second round run-off between the first and the second if no-one achieves a simple majority in the first round or if the winner does not get 25% of the votes in at least 24 counties.

Last Friday, raiders armed with guns, machetes and spears killed 30 people, including several children, and torched their houses in Kenya's coastal region. This is heightening security concerns ahead of next year's election..Last week incident appeared to have been a revenge attack by settled Pokomo farmers against the semi-nomadic Orma pastoralists after a series of clashes in August in which more than 100 people were killed.

The two groups have fought for years over access to grazing, farmland and water but many analysts put the blame on politicians seeking to drive away parts of the local population they believe, will vote for their rival in the next presidential election in March. It further raises fears of a repeat of the ethnic violence that rocked Kenya after the disputed 2007 presidential election, in which more than 1,200 people were killed countrywide and many more thousands driven from theirs homes.

In 2007 presidential election, ethnic violence erupted after incumbent President Mwai Kibaki was declared the winner. Both supporters, Mwai Kibaki's and R. Olenga's clashed. The 2007 ethinic violence escalated and a first was directed mainly against Kikuyu people, Mr. Kibaki's community, but in previous elections, for example in 1992 presidential election, some of the Kikuyu also engaged in retaliatory ethnic violence against Mr. Odinga supporters, primarily Luos and Kalenjin. Indeed Kenya has a rich history of post-electoral ethnic violence.

To this day, it remains unclear just who exactly was responsible for the expulsions and ethnic violence. However, both the Kenyans and Fatou Bensouda, the chief prosecutor at the International Criminal Court at The Hague, agree that some of the violence was well-organized.

The ICC has thus admitted a case against four Kenyan individuals for acting as indirect accomplices to murder, displacement and persecution. Complicating matters, however, is the fact that two of the defendants are candidates in upcoming presidential elections -- and are leading most opinion polls.
They are Uhuru Kenyatta, one of the country's richest men and the finance minister until January, and William Ruto, who was likewise a member of the cabinet until he was thrown out on suspicion of corruption.

In early December, the two men announced that they would run as a team, so that Kenyatta could become president and Ruto his vice president. The charges at The Hague allege that both candidates hired criminal bands who went on murderous rampages through the streets. By the time the ICC opens proceedings against the duo in April, it is likely that they will be charging the Kenyan president and vice president.

The situation has many Kenyans worried that their country could be thrust into chaos once again when people go to the polls on March, there have been reports of violent outbreaks across the country. All of these conflicts have at least one ethnic component to them.
The country does have a number of anti-violence projects underway in poor areas, plus a new constitution and strict laws against ethnic incitement. But between the alliance of Kenyatta and Ruto and their biggest opponent, Prime Minister Raila Odinga, there seems to be a return to politics driven by ethnic concerns.

The ICC Chief Prosecutor Bensouda is aware that it could influence the upcoming elections, but she has not let that affect her work. Her job is to achieve justice for the victims of the expulsions and murders,  and prevent another 2007-2008 crisis.

History has tendency in repeating itself when one does not learn the ''lesson of the past''.  I hope that kenyans politicians will spare Kenyans voters of ethnic rhetoric now and then and Kenyans voters will have the maturity of moving forward without eliminating one to another.

By Guylain Gustave Moke
Political Analyst/Writer
Investigative Journalist

Photo Credit: Raila Odinga, Presidential candidate, Wikipédia.

Friday, 21 December 2012

EUROPE:'' Euro-zone Crisis'': Cyprus is crying for an urgent bailout

Euro-zone member state Cyprus badly needs a bailout, but the International Monetary Fund is demanding a debt haircut first, according to media reports. The resulting stand-off with Europe has delayed the country's badly needed aid package. To ward off insolvency, Nicosia has raided the pension funds of state-owned companies.

Cyprus did its part on Wednesday night. The country's parliament approved a 2013 budget which included far-reaching austerity measures so as to satisfy the conditions for the impending bailout of the debt-stricken country. While aimed at significantly reducing the country's budget deficit, the spending cuts and tax hikes are likely to result in a 3.5 percent shrinkage of the economy in 2013 along with an uptick in unemployment.

Yet despite the measures, Nicosia's would-be creditors remain at odds over the emergency aid deal, even as the country teeters on the brink of insolvency. The International Monetary Fund is demanding a partial Cypriot default involving private creditors before it joins the bailout deal.

The IMF is concerned that, despite the austerity measures the country has now adopted, it still wouldn't be able to shoulder the interest payments due on its debt.

Several European countries agree with the IMF. Others, however, believe that such a default could be dangerous. After all, when private creditors were pressured to write down a portion of their Greek debt holdings, the euro zone went to great lengths to present the move as one that would not be repeated. Should such a default now be applied to Cyprus, it could severely undermine investor trust in the euro zone.

This week, the country was forced to borrow €250 million ($330 million) from the pension funds of state-owned companies just to be able to pay the holiday salaries of civil servants. The move came on the heels of a high-level Finance Ministry official saying that Nicosia was just days away from insolvency.

The country is massively exposed to Greek debt and its banking sector is struggling mightily as a result. Furthermore, the size of the banking sector dwarfs the size of the Cypriot gross domestic product. Whereas the country's banks have assets of some €150 billion, the GDP was just under €18 billion in 2011.

The troika of international lenders, made up of the European Central Bank, the European Commission and the IMF, are looking at an aid package of €17 billion for the country. As a percentage of GDP, it would be the largest bailout yet of a euro-zone member state. Fully €10 billion of that would go towards propping up the country's wobbly banking sector.

According to unconfirmed reports, one possible model in circulation for keeping the IMF on board envisions Russia sending €5 billion to the IMF which would then send the money on to Nicosia. Not only would such a solution guarantee the formal involvement of the IMF, but it would also benefit Russia. After all, a large chunk of the money invested in Cypriot banks  comes from wealthy Russians.

Indeed, it is a situation that has many in the EU wary of the coming Cypriot bailout. Many have accused Cyprus of not doing enough to combat money laundering and fear that some of the money coming from Russia is not entirely aboveboard.

What's more, many are also skeptical of the IMF partial default plan for economic reasons as well. Whereas many foreign banks held Greek debt when the debt haircut was engineered in March of this year, most Cypriot bonds are held by Cypriot banks. Should they be forced to write down part of that debt, their situation will only worsen, requiring more bailout help and driving up Cypriot debt. The net result would be largely neutral.

A final decision on the deal is set to be made in the coming weeks with the goal of sending the initial tranche of emergency aid in February. Until then, the pension funds of state-owned firms will have to do.

By Guylain Gustave Moke
Political Analyst/Writer
Investigative Journalist

EUROPE: '' Russia-EU Summit'': Drifting Apart tensions

Russian President Vladimir Putin is in Brussels for a summit with European Union leaders that is expected to focus on Putin's push to expand Moscow energy Gazprom deeper into the EU and a new tariff imposed by the Russians on imported cars and Russia's desire for a visa-waiver for its citizens traveling to Europe.

Two decades after the collapse of the Soviet Union, hopes for a harmonious convergence between East and West have not been fulfilled. The entire European House that Mikhail Gorbachev once dreamt of stands empty today. The difficult relationship between the East and the West is symptomatic of something even greater.

In economic terms, Russia, the world's largest country by landmass, and the EU, the strongest economic bloc, are becoming ever more intertwined. Politically, however, they are drifting further apart. As reliant as each partner may be on the other, they do not appear to have joint plans together for the future.

For Putin, the main issue in Friday's talks is EU energy market regulations intended to boost competition, which Moscow has described as discriminatory against Russia's state-controlled Gazprom gas company. European officials have warned Gazprom that it would have to allow third-party gas producers to use the prospective South Stream pipeline to comply with its new regulations. The EU's Third Energy Package bans suppliers from owning transit facilities such as pipelines.

Russia has argued that South Stream, which will run under the Black Sea and circumvent the US-and the EU-backed Nabucco pipeline project, should be exempt from the market regulations. The pipeline's construction began earlier this month.

Europe gets about two-fifths of its gas from Russia. South Stream, along with the already-operating Nord Stream pipeline under the Baltic Sea, would allow Russian gas to bypass Ukraine and avoid the repetition of supply cut-offs to Europe that came amid Russia-Ukraine pricing disputes.

There is also growing dissonance in the area of economic cooperation. At first glance, things appear to be going swimmingly. Bilateral trade is constantly growing, reaching €309 billion ($409 billion) in 2011. Moscow has helped to shore up the euro during the crisis by holding 41 percent of its €400 billion in foreign currency reserves in the European common currency. Meanwhile, 80 percent of the EU's foreign investment is placed in Russia. An estimated 20,000 EU-based firms have established subsidiaries in Russia.

Meanwhile, 45 percent of Russian exports -- largely oil and gas -- go to the EU. But that's precisely what Brussels would like to see change.

Putin also wants to secure a deal that would see Europe and Russia eliminate visa requirements on both sides for travelers in time for the 2014 Winter Olympic Games in Sotchi. But he has few prospects for his intiative -- the Europeans have been holding back on the proposal for years for political reasons. Russia believes that the "Common Steps Towards Visa-Free Travel" agreement, signed one year ago, provides a roadmap for the lifting of the visa requirement. On the EU side, however, there is only vague discussion of new negotiations.

There are also active disputes over protectionist measures taken by the Kremlin, which has, for example, banned the import of livestock from the EU. In addition, the country also hasn't yet signed a treaty that would provide foreign airlines with flyover rights for Siberia.

Russia and Europe might be close to each other however there is big drift, a lack of trust between them. Cold war resentments are still at play.  In Europe, doubts are growing that Russia really wants to be a "true partner and Europe fears that Russia is fatalistically falling back into its old, anti-Western tradition, on the one hand, Moscow no longer views the West as a model, given the dual debt crisis in Europe and the United States. Moscow views Europe as an industrial museum that is losing the war of innovation., on the other.

On the energy issue, Putin is unlikely to win any concessions for Gazprom as the EU's effort to diversify routes of supply has reduced Moscow's influence.

In Russia, has enough of being lectured about human rights like some kind of school pupil by the West and is shifting toward Asia. In the west, the number authoritarian laws that the Duma, Russia's parliament, adopts, has strengthened the position of anti-Russia hawks Today Russia-EU summit undercores the drifting apart tensions.

By Guylain Gustave Moke
Political Analyst/Writer
Investigative Journalist

Thursday, 20 December 2012

SOUTH KOREA: '': Park Geun-hye, first female president's expectations

Park Geun-hye, the daughter of former dictator Park Chung-hye, was elected president of South Korea on Wednesday, defeating her liberal opponent, Moon Jae-in, and becoming the first female leader of the country.

The 60-year old conservative, Park Geun-hye, will return to the presidential palace in Seoul where she served as her father's first lady in the 1970s, after her mother was assassinated by a North Korean-backed gunman.

With more than 88 percent of the votes counted, Park led with 51.6 percent to 48 percent for her left-wing changeller, human rights lawyer Moon Jae-in, giving her unassailable lead that forced Moon to concede.

While the campaigns of Park, of the conservative ruling Saenuri Party, and Moon, of the progressive opposition Democratic Unity Party, focused mainly on the slowing economy and other domestic economic issues, the candidates took significantly different lines on foreign policy, particularly when it came to North Korea.

The main foreign policy difference that came out of the campaign was the pace and conceptual approach in dealing with North Korea.  They both indicated that they wanted to engage North Korea in dialogue, but Park’s approach, albeit more generous than the current approach that the Lee Myung-bak administration is taking, is still essentially a conditions-based approach.

Park has said she would negotiate with Kim Jong-un, the youthful leader of North Korea who recently celebrated a year in office, but wants Pyongyang to give up its nuclear weapon program as a pre-condition for aid. But Moon would have tried to use economic engagement as a tool for transformation.

On August 15,1974, South Korea's Independence Day, Park Geun-hye, lost her mother, then the country's first lady to an assassin acting under orders from the North Korea. But 38 years later, the conflict on the peninsula persists. The long-simmering tensions between North and South Korea resulted in an acute crisis in November 2010. For the first time since the Korean War, North Korea shelled South Korean territory, killing soldiers and civilians on the Island of Yeonpyeong.

These events starkly illustrated the dual reality of the Koream Peninsula and of East Asia more broadly, but mort importantly they highlight the relative continuity in the mistrustful relationship between North Korea and South Korea under Park.

Two majors reasons are behind this  skepticism: On the one hand, the Korean Peninsula remains volatile. The proliferation of weapons of mass destruction by North Korea, the modernization of conventional forces across the region, and nascent great-power rivalries highlight the endemic security dilemmas that plague this part of Asia. On the other hand, South Korea's extraordinary development, sometimes called the Miracle on the Han River, has , alongside China's rise, become a major driver of the global economy over the past decade.

While some issues, such as North Korea policy, will require coordination, nothing in the Park platform is likely to “catch the U.S. flat-footed. Park remains a firm supporter of a trade pact with the United States that and looks set to continue the free-market policies of her predecessor, although she has said she would seek to spread wealth more evenly.

When it comes to China, Park is likely to work to improve relations while also maintaining South Korea’s strong alliance with the U.S. Park realizes South Korea needs a constructive relationship with China, in part because China’s cooperation is essential in dealing with North Korea.

But Park will have to show China the alliance with the U.S. is not directed primarily toward China, but rather is focused on North Korea and other South Korean interests.

While Park does not want to abandon the platform that is provided by the alliance relationship with the U.S., which essentially allows South Korea to punch above its weight in relations with China, the challenge is to find the right balance to show a willingness to cooperate with China, but without giving China a veto on South Korea’s own security choices.

One development to watch will be whether South Korea and Japan can manage their differences, or at least “find a way of ensuring that the existing differences do not spin out of control,”.

The return of the Liberal Democratic Party to power in Japan will create problems for Seoul, particularly because of the sensitive issue of “comfort women” and the fact that Shinzo Abe, the presumptive new prime minister of Japan, denies the Japanese forced these South Korean women into sex slavery during World War II.

The onus for a positive relationship with Japan under a Park administration is really going to lie with Japan, particularly as Park will be the first woman president of South Korea, she might not be able to ignore the comfort women issue.

This makes it all the more apparent that Japan will have to adjust its stance on the issue “as a prerequisite to being able to move forward.”

One of the major characteristics of Park’s circumstances is her father negotiated the normalization agreement with Japan. The agreement isn’t contested, but the relationship still has a big political component in South Korea, and that circumstance constrains Park to a certain degree in terms of the extent to which she can actively reach out.

The information revolution, globalisation and democratization clashing with competitive instincts of the region powers, Japan and China, and the Korean Peninsula volatility, military brinkmanship, and above all North Korea policy and South Korea economy, will be Park Geun-hye first concerns.

Although Park Geun hye's policy could be sometimes sketchy, she will need to adopt a bolder and more creative approach to achieve these goals and impress the world.

By Guylain Gustave Moke
Political Analyst/Writer
Investigative Journalist
Researcher and Author

JAPAN: '' Foreign Policy'': Shinzo Abe's vexing challenges

On Dec. 16, the Japanese public delivered Prime Minister Yoshihiko Noda a predictable, but nonetheless crushing defeat in parliamentary elections.

The magnitude of the public’s rejection of the ruling Democratic Party of Japan (DPJ) trumped poll predictions and resulted in the Liberal Democratic Party (LDP), led by Shinzo Abe, wresting total control of the Lower House.

The LDP along with its ally, the Komeito Party, won 325 seats in the election, giving it a “supermajority” of two-thirds of the total representatives. This will effectively allow Abe to override any vetoes from the Upper House of the Japanese Diet, which is still led by the DPJ.

The LDP has been given a strong mandate largely as a result of Japan’s economic malaise during the DPJ’s three-year reign. However, the rebirth of the LDP and Abe, who served as prime minister in 2006-2007, has significant foreign policy implications, in particular for Japan’s role in Asia.

Abe has been branded by the foreign press as a “nationalist” and “hard-liner” due to his conservative policy stances on North Korea and Japan’s territorial disputes with China, South Korea and Russia.

However, while Abe’s position on these disputes may be less ambiguous than Noda’s, he will face the same vexing challenges as his DPJ predecessor in addressing them. As a result, he is likely to adopt a tempered and strategic approach to relations with the region.

Amid recent tensions with Tokyo over the Japanese-administered Senkaku
Islands, claimed by China as the Diaoyu, Beijing is concerned that the LDP victory could have an adverse effect on bilateral relations.

South Korea, which elected its first female president, Park Geun hye, yesterday, is also carefully watching developments in Tokyo with an eye to how this may affect its fractured bilateral relationship with Japan.

In particular, both Beijing and Seoul are concerned about Abe’s defiance of their protests regarding visits to the Yasukuni Shrine in Tokyo, which honors Japan’s World War II war dead, including some war criminals. Abe visited the shrine as recently as October, as leader of the opposition. The symbolism of the Yasukuni visits, however, will be magnified once Abe becomes prime minister, and he will need to weigh more carefully the risks involved in making future trips.

Abe’s approach to Japan’s territorial disputes will also be an imposing challenge. In policy speeches leading up to the election, he indicated his firm view regarding Japan’s sovereignty over not only the Senkaku, but also the Takeshima Islands
(Japanese-administered but claimed by South Korea as the Dokdo) and the Russian-administered Southern Kuril Islands(claimed by Japan as the Northern Territories).

At the LDP victory rally Sunday, Abe was equally unequivocal, stating, “The [Senkakus are] the inherent territory of Japan. . . . There is no room for negotiations about that.” It will be important to watch how this rhetoric is informed by Abe’s stated intention to revise the role of Japan’s Self Defense Forces (SDF), which would provide a credible “silent hand” to any diplomatic efforts to resolving the disputes.

The dynamic geopolitical landscape in East Asia is also compelling Japan to adapt its force posture to new realities.

In previous years, Japan had positioned the SDF predominantly on its northern island of Hokkaido, as a result of tensions with North Korea and, to a lesser extent, Russia. That has changed, with the majority of the SDF now repositioned to the southern islands. Defense spending is another priority. Japan currently caps spending on defense to 1 percent of its GDP. However, there is significant pressure, both internally and externally, for Tokyo to increase this amount in light of new responsibilities. Abe has also placed a strong emphasis on even greater defense cooperation with the U.S.

But despite the LDP’s more pointed approach to these hot-button issues, it is unlikely that Japan will alter its core strategy of increased economic engagement with China, South Korea and the Association of Southeast Asian Nations (ASEAN). After his victory, Abe noted, “China is an indispensable country for the Japanese economy to keep growing. Japan needs to use some wisdom so that political problems will not develop and affect economic issues.”

Japan’s economy is often overlooked when compared with China, which surged past Japan last year to become the world’s second-largest economy, and South Korea, which has inked significant free trade agreements with the United States
and the European Union.

However, Tokyo has taken a proactive approach in this area in recent years, signing Economic Partnership Agreements (EPAs) with India, Singapore, Malaysia, Thailand, Indonesia, Vietnam, Brunei and the Philippines. Japan is also in current EPA negotiations with regional heavyweights South Korea and Australia.

There is a growing narrative that portrays Japan as being in permanent decline, unable to compete with Asia’s young and dynamic markets. This view is overly simplistic. While Japan has significant demographic pressures (a low birth rate and a high proportion of pensioners) and economic challenges (high debt and low growth), the country continues to innovate and be an important part of the supply chain in Asia.

China’s economy relies primarily on manufacturing, and despite Beijing’s sparring with Tokyo, China needs Japan’s foreign direct investment and niche technological products to complete its exports. Similarly, as ASEAN grows, it will continue to rely on Japan as a secure player in the global supply chain. ASEAN will also stay close to Japan for geopolitical reasons as it looks to hedge against China.

It will be an immense challenge, however, for Abe and the LDP to leverage and enhance this role to position Japan for a prosperous and secure future in Asia. Abe’s intention to separate politics from economics with regard to Japan’s territorial disputes is laudable, but maintaining this course will be increasingly challenging over the coming months.

By Guylain Gustave Moke
Political Analyst/Writer
Investigative Journalist
Researcher and Author

Tuesday, 18 December 2012

FRANCE: '' Crisis deepens'': France is worried. France is depressed

In the midst of the economic crisis, France's Socialists are denying reality. The minister of industrial renewal is calling for nationalization of some industries, while the president shies away from necessary structural reforms.  

Fifteen MP's and elected socialist have written to Francois Hollande asking him to change his course to meet the ''legitimate aspirations of employees and workers to improve their modest material conditions of life. '' It is urgent to restore the economic and social agenda top priority of government action'', wrote in a letter published Monday, December 17, by ''Le Parisien''.  

French two-thirds (66%) believe that employment should be the priority area for action in the field of public action, against 46% a year ago, according to the barometer BVA-Institut Paul-Delouvier utilities on Monday, who noted a ''dramatic surge '' of this concern. Between 2010 and 2011, the proportion of French judging the priority employment rose from 46% to 58%. National education comes second (48%), followed by health (38%).

In addition, 42% of good opinions, the survey shows ''a widespread discontent of the French in most major areas of intervention'' of the state, relapsing normal levels observed in the Sarkozy presidency'', notes the barometer.

France is worried. France is beset by doubts and France is depressed, says writer Jean d'Ormesson, a member of the Académie Française. The philosopher Pascal Bruckner confirms his diagnosis: "France's biggest party is the party of fear. The French are afraid of the world, afraid of others and, most of all, afraid of their own fear."

This leads them to turn a blind eye to reality. They feel vindicated in their repression of reality by the crowds of tourists in the country, who value France precisely because of the museum-like quality of its savoir vivre.

President Hollande, a cautious tactician by nature who prefers to bypass obstacles rather than to jump over them, initially believed that he could take his time with the introduction of important reforms. One of the reasons he chose Ayrault to head his government was because of Ayrault's complacent approach. Together, Hollande and Ayrault allowed half a year to pass without embarking on any significant reforms.

Even former EADS chief Gallois, an advocate of the rapid restoration of French competitiveness, had to admit that a program like Germany's Agenda 2010 package of reforms would not be accepted in France. Nevertheless, he did not mince words in his report on the state of the French economy, noting that industry's share of economic output has declined from 18 percent in 2000 to 12.5 percent today.

This puts France in 15th place among the 17 countries in the euro zone, and significantly behind Italy. The country's industrial sector has lost 2 million jobs since the Mitterand era. In 2011, France had a trade deficit of €71.2 billion ($93.1 billion), compared with a surplus of €3.5 billion in 2002. At the same time, the national debt has grown to 90 percent of the gross domestic product.

Public sector spending now accounts for almost 57 percent of GDP, more than in Sweden or Germany. For every 1,000 residents, there are 90 public servants. The public sector employs 22 percent of all workers.

La douce France is a sleepy country of bureaucrats and government officials who want their peace and quiet. But the bad news is beginning to pile up for Hollande.

 Last week, the government was confronted with another disastrous report, this time on the situation facing France's young people, who have been especially hard-hit by poverty and unemployment.

Sociologist Olivier Galland, who headed the study, detects a feeling of bitterness and abandonment among 16- to 25-year-olds. "All of the elements are in place that could trigger yet another explosion," like the one in the late fall of 2005, when there was rioting in the outskirts of major French cities.

"The system won't survive if we don't change," says Gérard Dussillol, a French expert on finance who works for a Franco-Belgian think-tank. He believes that "France, as a domino, can shake the entire system of the euro zone."

Even fashion designer Karl Lagerfeld no longer has anything good to say about his adopted country, where he claims to pay €2 million in annual taxes, which he calls "a sort of spa tax to the French state." French politics, with its symbolic tax on the rich, has become "grotesque," says Lagerfeld, while the French have "sterilized themselves intellectually."  

There are many indications that time is running out for Hollande.

Beyond France's ailing economy, there is another disastrous statistic at play. Some 23 percent of the country's 18- to 24-year-olds live in poverty, according to a study by the National Institute for Youth and Community Education (INJEP). These are mainly high school or university dropouts who have little to no access to health care and limited chances of improving their situations.

Youth unemployment in France has been high for some time, but it has now climbed to 26 percent. For decades, regardless of their political affiliation, lawmakers have been promising to create a better situation for young people. But exactly the opposite has happened. Labor laws protect those who already enjoy steady jobs, while the economic crisis and recession have limited the number of new jobs created.

By Guylain Gustave Moke
Political Analyst/Writer
Investigative Journalist

Photo: French President Francois Hollande. Photo: Wikipédia.

Monday, 17 December 2012

EU: ''Roadmap'': EU leaders' pre-Christmas exhaustion

As recently as November, EU leaders preached that the last week EU summit would set an ambitious timeline for far-reaching reforms in the euro zone. However, European leaders in Brussels responded to relative calm on the markets by backing away from such aspirations and taking a breather.

By the time the 27 heads of state and government arrived in Brussels last Thursday evening, such ambition had been forgotten. It could be pre-Christmas exhaustion that got the better of the EU leaders, but enthusiasm for reform was nowhere to be found. One after another, they insisted that they would merely hold nonbinding talks about the deepening of the currency union.

The summit agreed on a five-page paper that, while called a "roadmap," is little more than a vague outline for the next six months. Indeed, the most concrete date mentioned is June 2013, by then, European Council President Herman Van Rompuy is to have worked out a solid timeline for the establishment of closer fiscal policy coordination among euro-zone member states.

He is also to examine how bilateral reform treaties between the European Commission and individual common currency members could look in order to make reforms recommended by Brussels more binding. The creation of a fund -- referred to vaguely as "solidarity mechanisms" -- that could be used to reward those countries serious about reform is also to be examined.

At the behest of European Central Bank (ECB), the EU leaders spoke in detail about methods for winding down struggling banks. Such a mechanism is a crucial element of the bank supervisory regime euro-zone finance ministers agreed to last Thursday.

The summit's closing statement reflects that importance. The document will request that the European Commission prepare a law to govern the process for winding down stricken banks -- with the goal of passing it through European Parliament before the current legislative term ends in 2014.

A separate budget for the euro zone, centrally coordinated tax policies and unified labor market rules -- all of that has been left for later. Even a convention on possible changes to EU treaties likely won't take place until after the European parliamentary elections in 2014.

When it comes to the recapitalization of banks, however, taxpayer money will play a role in the future. As soon as the new banking oversight authority is established within the ECB, wobbly banks will be able to apply for assistance directly from the European Stability Mechanism (ESM), the euro-zone bailout fund. Until now, only national governments could apply for ESM aid. Still, it will likely take until 2014 before the procedure has been put in place. Euro-zone member states are to begin examining operational details in the coming months.

In the future, 2012 might well be seen as the year in which the euro zone finally managed to see the light at the end of the euro-crisis tunnel. The permanent bailout fund ESM became operational, the ECB jumped in as a powerful defender of the common currency by pledging unlimited purchases of sovereign bonds from struggling euro-zone member states and the bloc also agreed to a bank supervisory regime. The EU even won the Nobel Peace Prize.

Still, dangers continue to lurk. The euro crisis isn't over yet and it could return at any moment. Nevertheless, European leaders seem to no longer feel an imperative for immediate action.

In other words, European leaders prefer to continue taking the euro crisis one step at a time. This is not a roadmap that outlines the entire route. It merely identifies the next stop.

By Guylain Gustave Moke
Political Analyst/Writer
Investigative Journalist

CHINA: The future of Chinese Capitalism & social inequalities

Since the 1980s, China’s economy has grown rapidly with an average annual growth rate of real GDP at about 10 percent. Today, the Chinese economy is the world’s second largest and is set to surpass the U.S. to become the world’s largest economy by around 2015 when measured by purchasing power parity.

However, various economic, social, and ecological contradictions have accumulated in recent years and China’s current model of capitalism is unlikely to remain viable beyond the medium term.

China’s economic growth has been based on the intense exploitation of a large cheap labor force, unusually high investment rates, and exports to western markets. As the global capitalist economy struggles with stagnation and crisis, China’s exports will achieve at best sluggish growth in the coming years.

Investment has risen to about 50 percent of China’s GDP. The excess investment has reduced the rates of return on capital and threatens to undermine China’s financial system as much of the investment has been financed by bank loans and other forms of debt.

A more sustainable level investment is probably around 30 percent of GDP. However, to lower the investment by about 20 percent of GDP, household consumption needs to rise by a similar magnitude.

Most households depend on wages as their main source of income. Thus, for household consumption to rise by 20 percent of GDP, a large portion of the national income (between 15 and 20 percent of China’s GDP) needs to be redistributed from the capitalists to the workers. This is likely to face strong resistance from China’s capitalist class.

In this context, a serious debate has emerged in Chinese society. A growing number of Chinese intellectuals and social activists argue that China needs to rethink its free market-oriented economic reform. Public ownership of the means of production needs to be revived and income and wealth need to be redistributed from the wealthy to the poor in order to enhance social stability.

These intellectuals and activists are known as the “New Left.” Many of them are also known as the “Maoists” as they tend to have a sympathetic perspective on China’s Maoist socialist past.

In the early 2000s, the Maoist social base was limited to older state sector workers who suffered the most during the privatization in the 1990s. But in recent years, with rising economic and social inequality, the Maoists have gained support among the urban middle class as well as a newer generation of the Chinese working class.

Partly encouraged by the growing influence of Maosim, Bo Xilai attempted a moderate social reform agenda while he was the Party Secretary of the city of Chongqing. Bo Xilai cracked down on organized crimes with connections to the local capitalists, increased investments on social housing, and promoted “simultaneous developments” of state owned and private enterprises (rather than outright privatization as has been practiced in many other parts of China).

Therefore, the recent purge of Bo Xilai is politically significant. It suggests that the “Communist Party” is determined to push forward with further free market-oriented economic reforms without serious social reform. While such a course might benefit Chinese capitalists in the short run, it is set to further intensify China’s various contradictions and potentially prepare the conditions for a general social explosion in the not very distant future.

Historical experience from Brazil, South Korea, and Poland suggested that when a country’s non-agricultural labor force increased to more than 70 percent of the total labor force, the working class was likely to emerge as a powerful political and social force, demanding higher wages, social welfare, and political democracy.

China’s non-agricultural labor force currently accounts for about 60 percent of the total labor force and its share has been rising at an annual rate of about 1 percent. At this rate, China’s non-agricultural share of labor force could exceed the critical threshold of 70 percent by around 2020. If China’s current capitalist system fails to accommodate Chinese workers’ demands by then, a general economic and political crisis will be highly likely.

Chinese capitalist development has taken place at the cost of massive environmental degradation.

The Gini coefficient, developed by Italian Corrado Gini, is the most common method of measuring how equally income is distributed within an economy. The Gini index can range from 0 (where everyone has exactly the same income) to 1( where a single person has all income and the rest has none). This point is especially difficult for China as the sense of inequality has grown rapidly in recent years.

According to Research Center for China Household Finance-jointly run by the China's central bank and the People's Bank of China (PBOC) and the Southwestern University of Finance and Economics, China's Gini-coefficient was 0.61 in 2010.

To put this number in context of the major economies, only notoriously unequal South Africa has a higher coefficient. The United States, considered to be the bastion of unfair '' Anglo-Saxon Capitalism'', is more equal, with a score just over 0.4. Although this latest Chinesse survey of 8, 438 households is not a massive sample size, it is pretty clear that China's true measure is in the region where social unrest is considered to be a threat, more than 0.4.

China stopped publishing its national Gini results in 2000, and the World Bank stopped when it calculated China's reading to be 0.42. The Chinese Academy of Social Sciences (CASS), which often publishes interesting and stimulating research on China's economy, calculated a Gini figure of 0.54 in 2008.

A repressed financial system, toothless trade unions and corruption/rent-seeking by the rich and powerful and social and economic contradictions have long been blamed for China's dramatically worsening inequality.

According to the latest  Living Planet Report, China’s ecological footprint is already more than twice as much as China’s own bio-capacity. China’s has some of the world’s most polluted cities and about 40 percent of China’s land has already been degraded. According to a report prepared by the “2030 Water Resources Group,” China could face a water deficit  that amounts to 25 percent of China’s projected water demand by 2030.

Thus, in the next one or two decades, economic, social, and ecological crises are likely to converge in China, leading to the downfall of China’s current capitalist model. How the crises will be resolved will have enormous implications not only for China’s future but also for the entire planet.

By Guylain Gustave Moke
Political Analyst/Writer
Investigative Journalist

Photo: AFP-archives.

Friday, 14 December 2012

EGYPT: ''Referendum'': The weight of ''Party of the couch'' voters

The battle for Egypt's political future has pitted President Mursi's Islamist supporters against a coalition of his opponents for three bloody and chaotic weeks. But now, many Egyptians say, their country's fate lies largely in the hands of the '' couch party'', ahead of tomorrow draft constitution referendum.

On Saturday, Egyptians are set to begin voting on a national referendum on a draft constitution that President Mursi's critics see as an Islamism-infused charter.  The first round of voting on Saturday will take place in Cairo and other major cities. Official results won't be be announced until after the second round, though it is likely that details will emerge to give a good steer on the first-day figures, which are expected to show a strong vote in favor.

The opposition says the draft constitution does not reflect the aspirations of all 83 million Egyptians because it is too Islamist and tramples on minority rights, including those of the Christian community. Mursi's supporters say the draft constitution is needed if progress is to be made towards democracy.

While the opposition is telling its supporters to vote ''NO'', it has also threatened to boycott proceedings if guarantees for a fair vote are not met. But staying away from the process could risk a loss of credibility.

Egypt has no reliable opinion polling to handicap the poll, Islamists have emerged victorious in every national vote since the country's revolution nearly two years ago. Even opposition leaders acknowledge that the constitution is likely to pass.

That has focused politicians' and analysts' attention on the millions of Egyptians who eschew protests and harbor no political affiliation, including many in the one-third of the population that is illiterate. Many apolitical Egyptians ironically refer to themselves as part of an imagined '' Hezb Al-Kanaba or Party of the couch''.

The so called ''Hezb- Al-Kanaba ou Party of the couch'', are those millions of Egytians who just want to live. They are outside the ''yes'' or ''no'' group. Their vote could powerfully sway the country's politics. Both opposition and Mursi's supporters have been campaigning to win their vote.

Analysts believe that the ''Party of the couch'' or ''third group'' would vote in favor of the constitution for the sake of stability, even if they don't understand or have not read the dense 236-article document.

A ''yes'' vote with a high turnout would confer a legitimacy on Egypt's Islamist rulers, something that has been absent in three weeks of massive protests and would allow them to silent secular-minded critics newly emboldened by Mursi's claims to broad political power. A low turnout could fire up resistance to Islamist rule, allowing the recent public acrimony to damage the new constitution's legitimacy.

The timing is crucial for both Egypt's Islamist-linked leaders and their increasingly unified opponents. With Egyptian parliamentary elections less than two months away, voter attitudes toward the constitution could offer an updated indicator of how the Egyptian polity views the Islamists' expansive attitudes toward power.

By Guylain Gustave Moke
Political Analyst/Writer
Investigative Journalist

Thursday, 13 December 2012

EUROPE: EU Agrees To Give ECB Bank Supervision Powers

Euro-zone finance ministers agreed early Thursday on a far-reaching deal for the creation of an oversight authority for the currency zone's largest banks. The agreement will also allow troubled financial institutions to borrow money directly from European emergency bailout funds.

Following yet another in a seemingly unending series of all-night meetings, euro-zone finance ministers on early Thursday morning signed a deal providing for a single supervisory regime for the currency union's largest banks. The move is a significant step toward unifying financial authority across the bloc and came after months of disagreement over how such a regime might look.

As expected, the deal calls for the largest banks in the 17 euro-zone member states to be supervised by the European Central Bank. Other European Union countries may opt into the regime, but are not bound to do so. The ECB will also be able to intervene in smaller euro-zone banks should it determine that there is a need. The agreement also paves the way for emergency aid from the European Stability Mechanism (ESM) -- the currency union's permanent bailout fund -- to provide aid directly to banks, a change that is aimed at relieving already cash-strapped governments from the strain of propping up ailing financial institutions.

The deal follows months of wrangling among European capitals, with much of the disagreement centering on which banks were to be supervised. Whereas Germany wanted only the bloc's largest banks to come under ECB supervision, France wanted all financial institutions to be included.
In the end, Paris and Berlin came up with a compromise.

Under the agreement, the ECB will directly supervise those banks with assets exceeding €30 billion ($39 billion) or those whose assets represent 20 percent of their home country's annual gross domestic product. There is also a provision calling for the three largest financial institutions in each euro member state to be supervised, should they not all meet the first two criteria.

The ECB, however, will also have the ability to directly intervene in the operations of any of the currency area's 6,000 banks, no matter what their size. Furthermore, EU countries that are not part of the euro zone may submit to supervision as well should they so choose, though none have yet done so. The monitoring authority will begin work in March and should be fully operational by the end of 2013.

The supervisory regime gives the ECB full investigative powers and the ability to penalize banks in a number of different ways, including withdrawing banking licenses or applying financial sanctions.

Ultimately, the plan is to include a fund to be used should a bank need to be wound down, though details still need to be worked out. Germany in particular is wary of using domestic taxpayer funds to help wind down banks abroad.

The deal fulfils a euro-zone promise to take initial steps toward banking union by the end of the year as part of its long-term efforts to combat the debt crisis which has buffered the currency union in recent years.

By Guylain Gustave Moke
Political Analyst/Writer
Investigative Journalist

MALI: Understanding France's urgency for military intervention

Northern Mali is at risk of becoming a breeding ground for terrorists. But with a poorly trained Malian military and political chaos in the capital, few can agree on what should be done to bring peace and the rule of law to the region. France is in favor of quick action, but most of its allies are skeptical.

Modibo Diarra, former prime minister, was forced to resign on Monday. His downfall could intensify the political crisis in Bamako. Since the elected government was deposed by the military in March, the coup leaders have been sharing power with him and the president. Who exactly speaks for the country is a tug-of-war among the various parties.

The removal of Diara complicates the Malian crisis, there is a big risk that this week's events could delay talks now under way with some rebels groups, and the prospect of military intervention, which had been acting as a lever on the rebels, encouraging them to negotiate.

Reports of jihadist fighters from Sudan and Western Sahara arriving to reinforce the radical Islamist rebels controlling northern Mali add new urgency to international debates over military intervention to help the government restore its authority and reunite the country.

More than anything else, it's this political chaos that makes an international military mission in Mali extremely dangerous. There is no clear contact person for international allies. Despite this, the military mission in Mali has already been agreed upon. It is meant to be the next step in the war on terror. But the operational details are still being negotiated -- who, when, what and with how many soldiers.

Since the beginning of the year, several militias have seized power in the north of Mali, among them a separatist movement and jihadists with ties to al-Qaida. Parts of the region have come under Sharia law.

The Malian military, with a force of 5,000 soldiers, is to bring peace to the region. International troops are also to lend their support with around 3,300 soldiers, mostly from members of the Economic Community of West African States (ECOWAS). The United States would likely proffer surveillance from the air. Still, such a campaign would not start sooner than September 2013.

Between now and then, the Malian military has to be trained in anti-guerilla desert warfare -- a challenge that around 400 European military officers are to undertake.

France is pushing for a Mali mission as soon as possible, and would like the training mission to begin already in January. But the rest of Europe and the United Nations are more inclined to give the situation more time.

Algeria, Mali's northern neighbour and the Sahara's greatest military power, has been deeply wary of outside intervention in the crisis, fearing it could mark a reassertion of French influence in the Sahel. But French President, F. Hollande, has sought to reassure his Algerian counterpart, Abdelaziz Bouteflika, that France has no such ambitions and Paris sources believe the Algerians may now become reconciled to the prospect of international action in Mali.

On Monday, EU foreign ministers approved an initial conceptual outline for a training mission in Mali. But it will likely take months rather than weeks for the details to be filled in, much to Paris' chagrin.

There have already been reports of French jihadists residing in Mali who could plan attacks in France. In the Sahel region, six French nationals are being held hostage by jihadist groups. And France is worried about Mali for more than just security reasons.

In contrast to its allies, Paris has economic interests in the country too. Nuclear energy giant Areva, a large portion of which is owned by the French state, had plans to open up a uranium mine there. The company already has several similar mines operating in Niger, to the north, and the region is the most important source of uranium for the company.

France is already at work and has reportedly begun stationing surveillance drones in the country. The government in Paris is putting pressure on the UN Security Council to give the green light for a military mission before the end of the year. But the organization appears to have its doubts.

"A military operation may be required as a last resort to deal with the most hard-line extremist and criminal elements in the north," wrote UN Secretary-General Ban Ki-moon in a report to the Security Council. First, he said, there must be a "broad-based political dialogue" that would address the "long-standing grievances" of communities in the north. That point, he added, has not yet been reached.

The main obstacle to that dialogue is the risks created by the political chaos in the capital Bamako. As long as there is no clear government, negotiations with separatists and Islamists in the north will be difficult. But they are necessary, at the very least to win over individual groups to Bamako's side. Otherwise it will be impossible to achieve lasting peace to the north.

The treatment of politicians in Bamako by parts of the Malian military also makes US involvement in the international mission more doubtful. American law forbids Washington from militarily supporting a regime that took power by deposing a democratically elected government. For this reason, the United States is joining calls for a slower approach -- no military mission until elections take place.

The state of the Malian military is also cause for concern. Even the perpetually diplomatic Ban Ki-moon came to the conclusion in his report that the country's army is simply not capable at the moment of taking back control of the north from the estimated 10,000 Islamist extremists and separatist guerilla fighters. The support of 3,300 international soldiers is not likely to change that fact.

Malian soldiers tried once before to stop the militias in the north. When that effort failed, part of a frustrated Malian military overthrew the elected government in Bamako. Mali's army doesn't need just training, it first needs reforms. The institution is crippled by internal power struggles and divided along ethnic.

By Guylain Gustave Moke
Political Analyst/Writer
Investigative Journalist

Tuesday, 11 December 2012

AFRICA-ECONOMY: Is Africa emerging as the hopeful continent?

Africa was once dismissed by some as the “hopeless continent.” But healthy economic growth has had some nations’ leaders looking east for inspiration. Despite the ongoing global economic turmoil, a number of African nations have been making impressive strides in their development and the rhetoric surrounding Africa, or at least the continent’s economic development, appears to be changing and the east seems to be the inspiration.

The examples of China and Japan loom large in the minds of many African leaders and elites. Yet in contrasts with these two Asian giants, the post-independent African state is still encumbered with significant structural weaknesses, a lack of professionalism and an excess of cronyism, patronage and other corrupt practices that would make even officials involved in some of China’s most notorious cases of corruption blush. This lingering image has undermined efforts to settle on a positive economic agenda in Africa, even when visionary leaders of developmentally-oriented states such as Mauritius and Botswana have emerged.

Regardless of the model that African nations choose to follow, achieving the enviable growth patterns of some Asian economies will require the strengthening of intra-regional trade. Africa’s recent economic gains have been mainly driven by external trade, especially with emerging economies such as China, India, Brazil and South Korea.

Another vital element in Africa’s future that chimes with the Asian experience is industrialization. This is where African governments really need to shift the economic discourse, away from a focus simply on commodities to a more diversified economic base that adds value to these products. Achieving this will require efficient and ultimately well-maintained infrastructure, a challenge that

African leaders must face up to and address quickly. Interestingly, it is on this very issue that Asia, particularly in the form of increase Chinese investment, is able to offer practical assistance toward achieving this goal (although African nations must also be careful that they don’t miss out on opportunities to develop their own manufacturing sectors, rather than relying on imports and expertise from China).

Another key to African success will be following best practice in success stories like Singapore, particularly the city-state’s merit-based approach to bureaucracy. Whether its growth is state-driven or laissez-faire, a well-organized bureaucratic system should recognize and reward genuine talent. If Africa wants to replicate Asia’s success stories, it will need to work harder to ensure that merit displaces cronyism and elitism as the determiner of progress.

African nations are in a better position to achieve and maintain economic growth than at any time in their post-independent histories. And, in spite of the sporadic political and civil conflict that persists in parts of the continent, there have been many signs of a growing political maturity. With political discipline and a focus on merit-based critical institutions, the social cohesion necessary for sustained economic growth is gradually emerging, which should allow the continent to take advantage of its rich natural resources.

And, looking ahead, Africa has another potential advantage – a youthful population with a hunger for change. Many of the uprisings in support of democracy across the continent have been championed by disaffected young people bitten by the technology bug and anxious for opportunities.

For these young and driven Africans, change isn’t a distant hope, but something achievable. The memories of colonial exploitation are receding further into the rearview mirror as young Africans look forward.

Ultimately, of course, building on Africa’s current economic gains will take a mix of optimism and dispassionate study of success stories like China, Hong Kong, Singapore, and South Korea. But even though the historical settings may differ, the promises of some African leaders to chart a course similar to Asia’s should be seen as the best way of lifting millions of Africans out of poverty – and beyond.

By Guylain Gustave Moke
Political Analyst/Writer
Investigative Journalist

Monday, 10 December 2012

DR- CONGO: Why backroom Kampala deal is flawed peace deal ?

After withdrawing from the provincial capital of Goma, Rwanda and Uganda M23 rebels and Congolese government officials have started ''talks'' yesterday in Kampala. Although they have enjoyed a rare week of peace, residents of eastern Congo are fearful of what failed negotiations might bring.

The truth is that the retreat is just the latest chapter in a long story involving competing mafia-like political and military alliances controlled by leaders in the capitals of Congo, Rwanda, and Uganda, all of whom justify their actions in terms of national security concerns to mask economic and political interests. Sometimes these competing elites fight each other and sometimes they cooperate for control of lucrative resources such as land, livestock, minerals, and timber

The opportunity that the rebel withdrawal presents should not be squandered by leaving the resolution of the conflict solely to these three governments while ignoring the root causes and the real representatives of the local communities most affected by the bloody conflict in eastern Congo.

The time has come, finally, for a real international peace effort -- the kind that actually has a chance of ending the deadliest war the world has witnessed since World War II. This week, the biggest guns are once again assembling to re-divide the pie -- this time in the Ugandan capital of Kampala, where peace talks are beginning between the main combatants.

By global standards, the effort to construct a credible peace process for Congo is manifestly derelict, and has only condemned that country to further cycles of devastating conflict. Each time that Rwandan-backed Congolese rebels with shifting acronyms have taken or threatened Goma over the past decade, hasty backroom negotiations have produced deeply flawed deals that have reduced the military pressure on Congolese President Joseph Kabila's weakened government and permitted the Rwandan-backed rebels to administer strategic eastern zones and oversee taxation and resource looting.

 The procedural flaws of the '' Kampala peace deal'' forecast skepticism and failure to launch a durable peace in eastern Dr-Congo conflict. WHY?

First, the latest non-transparent peace initiative has been largely left to the three actors who have benefited most from the absence of the rule of law: the leaders of Congo, Rwanda, and Uganda. As in previous processes, the interests of rebels backed by Rwanda and Uganda will be represented overwhelmingly by Kigali and Kampala.

Second, these backroom deals have led in the past to short-term security arrangements that address none of the economic and political root causes of the conflict -- a pattern that is repeating itself in the current effort. Previous deals have involved total impunity for war criminals, poorly conceived plans for integrating rights-abusing rebels into the Congolese army, and secret deals outlining governing arrangements.

Third, diverse stakeholders from civil society, political parties, and even other armed groups such as local self-defense militias have virtually no role in the negotiations, effectively silencing grassroots Congolese voices.

Fourth, there is no credible senior mediator from either the African Union or the United Nations who has the gravitas and international backing to introduce an agenda that would go beyond short-term deals cut by those with the biggest guns. The United States has supported the current peace effort -- putting a particular emphasis on Rwanda's participation in the talks -- but has not addressed the fundamentally flawed structure of the process itself.

Fifth, there are no expert teams such as those that supported previous African peace deals everywhere from Sudan to Mozambique to Burundi to support protracted negotiations over tough issues and draw on best practices from other peacemaking efforts around the world.

Sixth, there is no internationally coordinated leverage -- in the form of additional sanctions, aid suspensions, or war crimes investigations -- to compel intransigent parties to consider compromises and no effective approach to create real accountability for committing, orchestrating, or funding crimes against humanity. The International Criminal Court has issued arrest warrants for a few Congolese militia leaders, but no plans have been developed to execute the warrants of those who remain at large, including M23 leader Bosco "The Terminator" Ntaganda.

Seventh, there are no special envoys from the United Nations and United States at the talks, which only adds to the vacuum of diplomatic leadership and undermines any chance for peace.
There is no excuse for this sorry state of affairs. And rectifying the situation does not require huge amounts of money or wrenchingly divisive moves within the U.N. Security Council. It requires leadership -- from the African Union, from the U.N. secretary general, US and UK, both countries supporting proxies that plunder Congolese resources.

The answers to this diplomatic train wreck lie in the successful peace processes that have ended previous African war and beyond the Congolese, Rwandan, and Ugandan governments, the initiative should involve armed and unarmed representatives from throughout eastern Congo -- in particular civil society representatives and political party officials -- to ensure that any agreement has the buy-in of a wide swath of stakeholders.

It is highly hypocritical that Uganda, one of the backers of M23 rebels would play a role of ''mediator'' in this peace deal. But also, Rwanda, the main sponsor of M23 rebels is not on the negotiating table. The absence of the opposition officials in Kampala is a major concern for the success of this peace deal.

Rwanda, Uganda and Joseph Kabila'regime are the reason of the ''existing M23'' rebels and the cause of the easetern Dr-Congo conflict. One must be naive to think that they are part of the solution. A prospect of an everlasting peace deal should start with the neutralization of those '' three musketeers''.

By Guylain Gustave Moke
Political Analyst/Writer
Investigative Journalist