Posted by Mike Sweeney on Fri, Jul 30, 2010 @ 11:51 AM
The international community is pressuring the Juba and Khartoum governments to speed up preparation for a vote on South Sudan’s future – a decision that will be dominated by the fate of coveted oil resources -- but an expert on the African country criticizes the lack of understanding about Sudan .
The referendum, scheduled for January 2011, is widely expected to result in the south parting ways with the north after years of bitterness and war.
Oil is located mainly in the south, but the north is also on the hunt for the precious commodity because a deal to divide the oil wealth will run out in six months. Many predict that arguing about the future of the resource will put the two sides on the brink of war once again.
“ Sudan is alarmingly unprepared for that referendum,” said Rosie Sharpe, a campaigner for Global Witness, a London-based non-governmental organization focusing on conflict and resources.
But Benaiah Yongo-Bure, an associate professor of social science at Kettering University in Flint , Mich. , dismissed the accusations by foreign NGOs that the Khartoum government and South Sudan are not ready for post-referendum life.
“They go and say things without a deeper understanding of Sudan ,” charged
Yongo-Bure, a Sudan expatriate. “They talk too much without knowing the reality of Sudan , and they’re confusing things. I know [the two governments] are not ready, but the referendum will have to go on and they’ll get ready in the process.”
A global coalition of 26 humanitarian and human rights organizations like Refugees International and the African Centre for Justice and Peace Studies issued a report in mid-July warning that the Comprehensive Peace Agreement (CPA), which ended 20-plus years of war and has held both sides at bay for five years, will expire in six months while many political issues like oil sharing and border demarcation have not been resolved.
“Neither Sudanese actors, nor the so-called international Guarantors who have formally pledged to support them to implement the CPA, are well prepared,” states the report, titled “Renewing the Pledge.” CPA guarantors include the African Union, the United States , Italy and the United Kingdom , among others.
Author Dave Eggers and John Prendergast, co-founder of the Enough Project, also weighed in: If no referendum takes place in January, or if the results are manipulated, then fighting will break out worse than before.
And earlier this month, Global Witness -- which cautioned that a wealth sharing agreement is coming to an end just as the south is predicted to vote to secede -- issued five principles for a post-referendum oil deal in Sudan such as full public disclosure.
“The precariousness of the situation cannot be overstated,” Global Witness’ briefing paper notes.
Global Witness’ report is based, in part, on its investigations into the country's current oil wealth sharing deal and experience in working on oil and transparency issues in Angola , Equatorial Guinea , the Republic of Congo , Cambodia and East Timor , according to a press release accompanying the report’s release.
Still, the dire warnings of many human rights organizations bother Yongo-Bure.
Even with 10 years to prepare, the southern government of Juba and the northern government of Khartoum would still be racing to tie up all loose ends, Yongo-Bure told OilPrice.com. “The north does not want the south to go,” he said. “They also don’t want to change their issues of Islamic law, the issue of sharing in the power. They want to dominate Sudan .”
Given this internal turmoil, the “international community is not helping,” he declared, noting that foreign groups are pressing the weaker south to “submit” to the north because it is in Juba ’s best interests. He said he doubts an agreement can be forged unless the south gives in to the requests of its northern neighbor for the continued flow of oil money.
While international groups “don’t say” categorically that the south should give in to the north, Yongo-Bure said this is how he interprets the NGO message.
Yet if the referendum spurs the official breakup of Sudan , the professor does not see the benefit of sharing resources. “There’s no obligation,” he noted.
Despite NGO criticisms of the slow pace of negotiations, there is no shortage of attention on Sudan these days.
Several standing committees in Sudan are tackling post-referendum issues, said Parek Maduot, a member of the Sudan People’s Liberation Movement (the southern Sudanese political party) and an independent commentator on Sudan affairs based in Virginia . Former South African President Thabo Mbeki also heads an African Union contact group, he said. Over the next three or four months, extensive meetings will be held between Juba and Khartoum , and even abroad, to resolve lingering issues between both sides, Maduot said.
This week, Mbeki convened a two-day session that begins the process of negotiating post-referendum arrangements, according to a New Sudan Vision report. The report states that global experts gave presentations on the likely consequences of negotiating oil, citizenship, borders and other issues.
The eventual system adopted to share oil if the south becomes independent must come with a mechanism to verify that wealth is being shared, Global Witness’ Sharpe told OilPrice.com. One would need to know the volume of oil produced, the price of every individual sale of oil and the cost claimed back by oil companies, she noted.
“And it’s practically impossible to verify all of those things, which means that there continues to be mistrust over whether the oil revenues are being shared fairly,” Sharpe maintained. “Practically every southerner you’d speak to thinks that they’ve been cheated over the oil revenues.”
A number of options have been suggested on how to resolve the oil question, including that the northern capital Khartoum should charge its southern counterpart Juba a fee for using a pipeline to move the resource, she said. This kind of a system would be “more easily verifiable than a percentage split in the oil revenues,” she added.
According to this proposal, the south would know “how much oil has been loaded into the pipeline, [and] will need to trust what comes out the other end,” Sharpe said. “And the north will know what comes out of Port Sudan but needs to know that all the oil has gone into the pipeline in the first place.”
This creates a situation where “both parties need to trust each other, which gives them both an interest in coming up with a transparent arrangement,” she said.
Under this option, southern Sudan would not simply pay for the physical use of the pipeline shipping crude through the north, but also technical expertise from Chinese and Malaysian oil firms, added Maduot, the independent Sudan commentator.
Kettering University ’s Yongo-Bure backs the idea of renting pipelines from the north, which would go up to Port Sudan , a city located on the Red Sea . The agreement would have to be renewed every “two or so years,” but should not tie the south in for too long, he advised.
The rationale is that if the north overcharges the south, the latter can pursue alternative options, Yongo-Bure explained. While the Kenyan government has offered Juba access to a port north of the city of Mombasa , and Toyota is willing to construct a pipeline, the pipeline will take time to put in place, he said.
Building a pipeline to a different country would require paying that government for the use of the infrastructure, Maduot told OilPrice.com. With immediate financing, there are many companies that have the expertise and can build it within three years but the cost ranges from $2 billion to $4 billion, he added.
“It’s doable if there’s a political will,” said Maduot, “but it’s not a decision you can make in a vacuum.” Khartoum would undoubtedly be opposed to a plan that cuts its oil revenues within two or three years and hits its bottom line, he explained. The idea would also lead to renewed insecurity and fighting, he cautioned.
Critically dependent on oil, both north and south will eventually come to an agreement, he predicted, but not without “hiccups along the way.”
This article was written by Fawzia Sheikh for OilPrice.com who offer detailed analysis on Oil, alternative Energy, Commodities, and Geopolitics. They also provide free Geopolitical intelligence to help investors gain a greater understanding of world events and the impact they have on certain regions and sectors. Visit: http://www.oilprice.com
Posted by Mike Sweeney on Wed, Jul 28, 2010 @ 09:08 AM
With BP poised to move on from the Gulf oil spill with a new chief executive, the beleaguered London-based company might look attractive to Middle East sovereign wealth funds after all.
It would be a parting legacy from outgoing CEO Tony Hayward if his efforts earlier this month to court the funds in Abu Dhabi and other oil-producing countries were to bear fruit.
It may seem counter-intuitive at first blush that funds set up to diversify assets for oil exporters would want to invest in a major oil company. But BP, originally known as British Petroleum, has made good on its motto of recent years to go “beyond petroleum” – and it could do the same for oil producers.
BP has energetically acquired assets in natural gas and renewable energy that could translate into useful technology transfer for the well-heeled sovereign funds.
As Victoria Barbary, a senior analyst at the Monitor advisory group, recently told Reuters: “SWFs over the last two years have been actively investing into technology transfer from an economic diversification point of view. From this perspective, BP actually have an attractive portfolio.”
Leaving the U.S. as persona non grata in the wake of the oil spill, Hayward embarked on a whirlwind tour at the beginning of July to court SWFs as shareholders, in large part to bolster the company’s defense against a takeover.
Among others, he met with Abu Dhabi’s crown prince, Mohammed bin Zayed al-Nahyan, urging him to have the emirate’s sovereign wealth fund, considered to be the largest in the world, acquire up to 10% of BP, according to news reports.
Libya reportedly was also considering an investment through its sovereign wealth fund, though Kuwait, which already owns BP stock, ruled out any further acquisition for the time being.
Along with its decision to replace Hayward as chief executive, the BP board this week also agreed to sell off $30 billion in company assets to offset its expenditures in connection with the oil spill. The sale, representing a good 10% of BP’s assets, would offer an opportunity for oil producers to acquire non-oil assets directly.
By. Darrell Delamaide for OilPrice.com who offer detailed analysis on Oil, alternative Energy, Commodities, and Geopolitics. They also provide free Geopolitical intelligence to help investors gain a greater understanding of world events and the impact they have on certain regions and sectors. Visit: http://www.oilprice.com
Posted by Jeff Ramson on Sun, Jul 25, 2010 @ 07:22 AM
Prices of crude oil futures slumped below $79 a barrel on Friday despite a stock market rally and the rise of Tropical Storm Bonnie in the Gulf of Mexico. The downward turn on Friday followed a sharp gain Thursday amid positive corporate earnings reports that some saw as a signal of economic recovery and the brewing tropical storm. Technical analysts noted that oil prices have encountered resistance as they approach the $80 a barrel threshold. There appears to be little momentum for breaking through that barrier, they said. Other analysts said that market fundamentals were failing to provide any “guidance” for prices.
The reaction of markets Friday to the report from European regulators that only seven out of 91 banks subjected to a “stress test” would need to add capital, and only a modest amount slightly under $5 billion, was mixed. Some participants expressed relief that the exercise was over while others were skeptical that the tests had been stressful enough to be meaningful. The euro regained ground against the dollar after a slight dip when the stress test results came out. The benchmark West Texas Intermediate contract settled at $78.98 a barrel on Friday, after surging to $79.30 on Thursday. It finished last week at $76.01 a barrel. Oil prices had been tracking the stock market fairly consistently the past few weeks, so analysts were surprised that oil futures parted ways with stocks. The Dow Jones Industrial Average closed up 102 points Friday, at 10,424.62 points, gaining 3.2% on the week.
The threat of disruption of production in the Gulf of Mexico from the advent of a new tropical storm, which should have been bullish for oil prices, also failed to halt the decline on Friday. Weather forecasters predicted Bonnie would not reach hurricane force before making landfall on Sunday. Earlier in the week, an unexpected increase in oil inventories and a gloomy economic forecast from Federal Reserve chairman Ben Bernanke cut short an incipient rally, with prices surging above $78 a barrel on Wednesday before closing below $77. “The economic outlook remains unusually uncertain,” Bernanke said in congressional testimony. The Fed is ready to jump either way, he indicated, depending on whether the economy shows signs of a more robust recovery or a renewed slide into negative growth.
By. Darrell Delamaide for OilPrice.com who offer detailed analysis on Oil, alternative Energy, Commodities, Finance and Geopolitics. They also provide free Geopolitical intelligence to help investors gain a greater understanding of world events and the impact they have on certain regions and sectors. Visit: http://www.oilprice.com
Posted by Mike Sweeney on Fri, Jul 23, 2010 @ 11:16 AM
The United States and the NATO allies are preparing to disengage and soon withdraw from Afghanistan and even the most vocal advocates of the "long-term commitment" do not anticipate more than five years of active US and NATO involvement. All the local key players — in Kabul , Islamabad , and countless tribal and localized foci of power — are cognizant and are already maneuvering and posturing to deal with the new reality.
Irrespective of the political solution and/or compromise which will emerge in Kabul , the US is leaving behind a huge powder keg of global and regional significance with a short fuse burning profusely: namely, the impact of Afghanistan ’s growing, expanding and thriving heroin economy.
The issue at hand is not just the significant impact which the easily available and relatively cheap heroin has on the addiction rates in Russia , Europe, Central Asia, Iran , Pakistan , and Afghanistan , and the consequent public health, social stability and mortality-rate issues.
In global terms, the key threat is the impact that the vast sums of drug money has on the long-term regional stability of vast tracks of Eurasia: namely, the funding of a myriad of “causes” ranging from jihadist terrorism and subversion to violent and destabilizing secessionism and separatism.
Russia is most concerned with these developments because most of them occur on Russia ’s own doorstep and soft underbelly. Moreover, Russia has always been cognizant of the potential dangers emanating from chaos at the Heart of Asia and the Greater Black Sea Basin. As a result, the Kremlin embarked on a major initiative to secure long-term international commitment to resolving Afghanistan ’s endemic narcotics problem, which means consolidating a stable form of governance and thus eliminating the consequences of the region-wide narco-funded terrorism and destabilization.
On June 9-10, 2010, the Kremlin convened in Moscow an international forum entitled Afghan Drug Production: A Challenge to the International Community as the launch of the international drive to resolve Afghanistan ’s long-term challenges where Russian Pres. Dmitry Medvedev delivered the opening speech.
“We consider drug addiction the most serious threat to the development of our country and the health of our people,” he said. Medvedev urged the international community to curtail the global spread of drug crimes which fuel terrorism. This would be possible, Medvedev argued, if the international community did not politicize the fight against drugs, narco-criminality, and narco-terrorism.
“The fight against the drug threat should be removed from any kind of politicization,” Medvedev stressed. He warned that any “political games” on such crucial issues are inadmissible for they “undermine our joint international efforts and weaken our anti-drugs coalition.”
Viktor Ivanov, the Director of Russia’s Federal Service for the Control of Narcotics, articulated the Kremlin’s case why the Afghan drug production is an international rather than a local or regional threat. “The time has come to qualify the status of Afghan drug production as a threat to world peace and security,” Ivanov said.
“This is a key postulate of the action plan that was proposed by Russia to the international community and voiced at NATO headquarters, the European Parliament and Beijing .” The Kremlin considers global drug trafficking to be far more destructive than terrorism alone because drug money is the primary facilitator of numerous threats including terrorism.
The long-term resolution of the crisis in Afghanistan is a precondition, Ivanov explained, because “it was drug production that had given rise to rife political and economic instability in Afghanistan …It is Afghan drug traffic that fuels terrorists in the North Caucasus ; we need to work together to fight it.” Ivanov stressed the Kremlin’s conviction that Afghan drug trafficking “is a global problem” because it “feeds transnational crime and terrorism all over the world” and thus merits international solution.
Heroin production in Afghanistan has vastly expanded since the US-led forces entered in the Autumn of 2001. Initially, poppy cultivation centered in the southern and, to a lesser extent, north-eastern provinces - all focus of US and NATO military activities. Presently, poppy cultivation and drug-related activities have spread throughout most of Afghanistan . For example, a large number of heroin-processing labs — presently estimated at about 200 — were built as well.
However, ISAF [the International Security Assistance Force, in Afghanistan ] prefers to largely ignore the growing narcotics problems for fear of alienating the farmer population that might resent losing its livelihood. However, the US main concern has always been alienating the Kabul-centric political élite, the very same élite which is, at the very core of, and key to, the US-led effort to establish a centralized government in Kabul and a functioning state in Afghanistan . With drug money fueling the political machine which is crucial to the US nation-building efforts, the US has no interest in undermining Afghanistan ’s narco-economy.
In the Moscow forum, US senior officials acknowledged the US reluctance to commit to the eradication of Afghanistan ’s poppy cultivation and narco-economy. Patrick Ward, the Acting Deputy Director for Supply Reduction at the White House Office of National Drug Control Policy, warned that intense anti-narcotics operations “will further undermine the rule of law and reinforce the nexus between drugs and terrorism”. He stated that US and ISAF forces must not find themselves in a position where they were perceived as the instrument of eradicating “the only source of income of people who live in the second poorest country of the world”.
The US Ambassador to Russia , John Beyrle, reiterated that the US would not take Russia ’s advice about eradicating Afghanistan ’s opium harvests anytime soon for fear of engendering popular alienation. UNODC Director Antonio Maria Costa agreed that “there is no rôle for NATO forces in eradication at the farm level” because this will push the population into the arms of the Taliban. However, he urged the US and NATO to embark on a comprehensive program to solve Afghanistan’s drugs menace at the national-political level; alluding to the centrality of narco-funds in Afghanistan’s politics and power élite.
But the problem of Afghanistan ’s drugs cannot be ignored by the West because the primary strategic long-term impact of Afghanistan ’s drugs is the use of the drug money along the distribution routes from Afghanistan-Pakistan through the energy-rich Central Asia to the western Balkans, mainly Kosovo.
The intimate relationships and close cooperation between the drug trade, international terrorism and separatism are not new phenomena.
In the early-1990s, the Sunni jihadist leadership assumed leadership over a thriving joint action. Specific fatwas from Islamist luminaries authorize these highly irregular, seemingly un-Islamic activities because they also contribute to the destruction of Western society and civilization. The Sunni Islamist fatwas are based on and derived from earlier rulings of the higher Shiite courts issued in connection with operations of HizbAllah and Iranian intelligence. The logic of these activities was elucidated in the mid-1980s in the HizbAllah’s original fatwa on the distribution of drugs: “We are making these drugs for Satan: America and the Jews. If we cannot kill them with guns so we will kill them with drugs.”
The main reason, however, for the Sunni jihadist embracing of the drug-trade was practicality. In the early-1990s, the fledgling jihadist leadership concluded that an intricate system of funding activities in the West was needed. By then, Gulbaddin Hekmatyar was getting ready to ship drugs from Afghanistan to the West and was willing to divert profits from this drug trade to support the fledgling terrorist networks in return for the arrangement of a viable system of money laundering.
An up-and-coming young activist — Osama bin Laden — used his knowledge of the Western financial system and his family’s connections with the European banking system in order to organize the new financial system for jihad. At that time, the net worth of the Islamist network was estimated at $600-million in the West alone.
Another founding father of the narco-jihadist alliance was Shamil Basayev. Between April and June 1994, Basayev led a high-level Chechen delegation on a visit to an ISI-sponsored terrorist training infrastructure in both Pakistan and Afghanistan in order to arrange for advanced training and expert help, funding for the Chechen Jihad, and acquisition of weapons.
In Afghanistan , the Chechens visited the ISI’s training facilities in the Khowst area, then run under the banner of Gulbaddin Hekmatyar’s Hizb-i-Islami. In Pakistan , the Chechens had a series of high level meetings with the Pakistani leaders who for a period became the patrons of the Chechen Jihad, arranging for the establishment of a comprehensive training and arming program for the Chechens in Pakistan and Afghanistan .
As a primary source of funds for their jihad, the Chechens were offered a major rôle in the expanding push of heroin from Afghanistan-Pakistan into Europe . The Chechen jihad would be handsomely rewarded for facilitating forward distribution facilities at the gates of Europe . Toward this end, Basayev met with individuals identified as “former ISI senior officials”, who provided contacts for the drugs and weapons smuggling operations.
Moreover, in early 1994, senior Pakistani officials were reported to have intervened with the Taliban leadership to ensure the uninterrupted flow of heroin from the Helmand valley via Qandahar and Jalalabad. Under the new arrangements, the heroin would now be shipped northwards to an airfield near Chitral , Pakistan , from where the drugs, as well as a growing number of Chechens and Arab-Afghan volunteers, were flown to Chechnya . As the volume of heroin increased, truck convoys were dispatched across Central Asia .
By the late-1990s, as the sums of money available from the drug trade increased, bin Laden and the “Russian Mafiya” (in both Russia and several former-Soviet states) established a complex sophisticated money-laundering operation described by an insider as “an extended and octopus-like network that uses political names in Asia and Africa in return for commissions.” The funds were used to finance the Taliban movement and a host of jihadist terrorist operations worldwide. Bin Laden made a commission on these transactions and used this resource to fund his favorite jihadist networks and spectacular terrorism.
By now, the annual income of the Taliban from the drug trade was estimated at $8-billion. Bin Laden was administering and managing these funds — laundering them through his Mafiya connection — in return for a commission of between 10 and 15 percent, which provided an annual income of about a billion dollars for the jihad.
All of this was rattled around the turn of the century. First, the Taliban leadership offered to stop the poppy growing as part of its desperate effort to gain legitimacy and support from the West. Although the Taliban eradicated virtually all poppy cultivation in southern Afghanistan , they permitted the jihadists to continue selling heroin from cached stockpiles.
By the time US forces entered Afghanistan in the Autumn of 2001, there was virtually no poppy cultivation. However, the US and NATO demonstrated benign neglect of the country-wide poverty and chaos. Meanwhile, Islamist leaders realized that the best way to ensure grassroots presence and even support would be through the provision of easy cash to the impoverished population.
The jihadist leadership used its supporter networks in the Persian Gulf States in order to clandestinely purchase virtually all the arable land in southern Afghanistan . Islamist emissaries now offered the population economic security in the form of loans and seeds for poppy cultivation on behalf of the mysterious landlords, and secure payment from buyers who would pick-up the harvest directly from the farmers, thus alleviating the dangers of traveling to the market. As well, tribal and local leaders were handsomely rewarded for their cooperation and endorsement of these arrangements.
By the time Washington committed to the establishment of a centralized government in Kabul , the entire power-political system was dependent on narco-funding for its existence and system of patronage. The US realized that it would be impossible to sustain the semblance of pro-Western system of governance in Kabul and the countryside without looking the other way on the rapidly growing and increasingly addictive narco-funding of Afghanistan ’s upper-most leadership.
Indeed, the poppy cultivation area in Afghanistan rose from 8,000 hectares in 2001 to 74,000 in 2002, peaking at 193,000 in 2007 but going down to 123,000 hectares in 2009. Although the loss is mainly the result of blight attacking the crops rather than eradication by police, the Taliban are effectively capitalizing on the plight of the affected farmers by claiming the farmers were victims of ISAF poisonous spraying and offering financial help in return for the farmers’ support of the Taliban.
Presently, some 80 percent of the total amount of Afghanistan ’s opium is grown in Kandahar , Helmand , and Uruzgan provinces, where the presence and activities of US and ISAF forces is most intense. There are strong indications that farmers throughout Afghanistan are already preparing for a record-breaking opium poppy planting season beginning in mid-September 2010 in hopes of a bumper crop next year.
Slightly more than half the Afghan heroin is smuggled via the northern route: Central Asia, Russia and the GBSB (Greater Black Sea Basin). Secondary is the southern route which carries slightly over a third of the heroin via Iran , Turkey and the Middle East to the GBSB.
Presently, the overall annual income from the Afghan heroin traveling along the northern route alone is more than $17-billion, out of which, the jihadist movement and its localized (separatist/secessionist) allies are making about $15-billion. There is no reliable estimate of the total income of the southern route, but the best guesstimates put it at more than $10-billion, most of which also goes to funding jihadist and secessionist causes (including the Afghan and Pakistani Taliban).
The annual cost of doing business in Afghanistan is below $100-million. The organized-crime networks running the labs and patronage system have a gross income of a couple of billion dollars, a small portion of which is spent on the Kabul power structure. This disparity raises the question of the cost-effectiveness of tolerating the narco-funded leadership in Kabul .
The narco-profits are thus the financial engine of key elements of the current government in Kabul and its regional cronies, as aptly demonstrated in the most recent Aftghan presidential elections. They will not permit their financial life-line to simply go away in the name of democracy or good governance. And having committed to Pres. Hamid Karzai and his patronage system as the key to the future of a modern state in Afghanistan , the US Barack Obama Administration cannot afford to see the administration in Kabul collapsing, no matter who they are or what they do.
Furthermore, the Afghan narcotics system is the key to the funding and sustenance of numerous regional and global dynamics which will not give up easily. The drug smuggling networks across Central Asia and into Russia and Europe are an integral part of a comprehensive narco-terrorist dynamics/system. Drug-trade funds jihadist terrorism and subversion from Tajikistan to Chechnya to Bosnia-Herzegovina.
Moreover, the various separatist and secessionist movements — that is, minorities feeling pressure of regional dynamics while having sense of alienation and victimization/victimhood — are easy prey to the lure of easily available large sums of money from the drugs and smuggling trade.
Most dangerous are the minuscule states and state-like entities. Since these states and entities are too small and under-developed to be able to sustain themselves economically and socially in a proper and legal way, their local leaderships tend to look the other way as narco-funded organized crime establishes footholds in their midst. The drug-trade and/or money laundering bring money in and thus financially sustain the mini-enclaves and the chimera of self-determination attained.
Consequently, the various separatist and secessionist “causes” from Central Asia to the Caucasus (not just Chechnya and the rest of the North Caucasus ) and to the Balkans have become safe-havens for the drug-trade. These include, for example, the financial and money-laundering centers in Stepanakert and Tiraspol , as well as Kosovo being the primary forward distribution point of Afghan-origin drugs into Western Europe .
And once they gained control over lucrative choke-points, these localized leaders, their cronies and their “causes”, will not give up without fierce fight irrespective of their declared ideologies. The on-going fierce struggle for the control over the Fergana Valley by an alliance of jihadists and drug smugglers is indicative of this trend.
The latest round of fighting which started in early June 2010 already resulted in the death of more than 2,000 civilians and the dislocation of a few hundreds of thousands, mainly Uzbeks. The struggle for the Fergana Valley started in March 2005 when Kurmanbek Bakiyev, at the head of a coalition sponsored by organized crime, exploited the US-sponsored “Tulip Revolution” in order to seize power in Bishkek so that the southern coalition could ensure state patronage to their undertaking.
The combination of subversion of Kyrgyzstan ’s internal power dynamics and horrendous corruption could not be sustained for long. Indeed, it took five years for a coalition of traditional and radical power holders to overthrow Bakiyev. However, soon after Bakiyev was forced out of Bishkek in mid-April 2010, he and his allies started exacerbating the south in order to ensure their control over the Fergana Valley and the lucrative local drug-trade routes.
Hence, the ensuing riots and Kyrgyz-Uzbek fighting were neither spontaneous nor unanticipated.
The toppling of the Bakiyev administration — which was based on the support of the southern clans and their allies and partners among the organized crime and jihadist circles — heralded a struggle for power and control over the lucrative drug-smuggling routes via the Fergana Valley .
Indeed, local jihadists rallied to the cause starting late April as a coalition of jihadists and pro-Bakiyev groups began distributing pamphlets and CDs throughout southern Kyrgyzstan urging the establishment of a separate South Kyrgyzstan Democratic Republic under the ousted Bakiyev.
The incitement stressed the discrimination and disenfranchisement of the Kyrgyz southern clans by an alleged coalition of the Kyrgyz northern clans and the local Uzbek population. It did not take long for hatred and violence to erupt, destroying Bishkek’s control over the area. The jihadists and drug runners already benefit from the de facto dismemberment of Kyrgyzstan for the separate entity in the south encompassing the Fergana Valley already significantly expedite their operations.
A similar trend is emerging in the Armenian enclave of Nagorno-Karabakh within Azerbaijan . For as long as the economic situation was tenuous and there was near complete dependence on the largess of the West delivered via Yerevan (the capital of Armenia), Stepanakert (the capital of the Nagorno-Karabakh region) was ready for a political compromise which was going even beyond the hard-line position of Yerevan in the Minsk Group’s negotiations with Baku.
However, as the economic situation in Nagorno-Karabakh began improving mainly due to the trickle-down effect of transmitted and laundered narco-funds, the position of the Stepanakert authorities regarding the future of the enclave has hardened.
In mid-June 2010, Stepanakert objected to a renewed mediation effort by the Kremlin. Stepanakert is apprehensive that a negotiated solution could be reached as Pres. Medvedev convinced Azerbaijan Pres. Ilham Aliyev and Armenian Pres. Serzh Sarkisian to meet in Saint Petersburg for the first time in more than four months and without the pressure of the Minsk Group’s mediators. Consequently, the Kremlin reported that the two presidents narrowed their differences on some of the lingering thorny issues.
In response, the Stepanakert Armenian leadership announced that the meeting between Aliyev and Sarkisian “will not help find a resolution” for the Nagorno-Karabakh Conflict. Moreover, Stepanakert renewed its demand for a full state status in a new tripartite format — of Armenia , Nagorno-Karabakh, and Azerbaijan — along with the Minsk Group mediators ( Russia , France and the United States ).
Concurrently, Stepanakert’s renewed political push is given a sense of urgency by exacerbating the security situation along the ceasefire line of contact. Starting mid-June 2010, there has been a growing tension and escalation of fighting along the line of contact. Karabakhi-Armenian troops intensified provocations and exchanges of fire with the Azerbaijani military facing them.
The first major incident took place on June 16, 2010 when Karabakhi-Armenian troops ambushed an Azerbaijani patrol and an Azerbaijani soldier was killed in the fighting. This and a few smaller incidents led to growing tension and intensified military activities along the entire cease-fire line.
The number of clashes, ambushes, cross-border raids and brief exchanges of fire grew. On the night of June 18/19, 2010, Azerbaijani military noted preparations by Karabakhi-Armenian forces in north-eastern Nagorno-Karabakh where an Azerbaijani raiding party attacked the Karabakhi-Armenian positions, killing four soldiers and wounding four others before returning into Azerbaijani-controlled territory. Baku confirmed that one Azerbaijani soldier was killed and his body remained in the Karabakhi-Armenian position. Sporadic clashes and exchanges of fire continued.
Southern Kyrgyzstan and Nagorno-Karabakh are but the two most recent examples of the security manifestations of fringe and extremist policies made possible by narco-funding.
There are countless cases of unwarranted separatist and secessionist causes where the legitimate quest of minorities for self-determination could have long been resolved in a form of distinct region or autonomy within the borders of recognized states. However, the mere existence of virtually unlimited narco-funds — a byproduct of the Afghanistan-origin drug trade — enables the separatist and secessionist leaderships to sustain their respective struggles and extreme and unrealistic demands no matter how impractical they might be.
And when the international community refuses to go along with these quests, there emerges the penchant for armed struggle and terrorism if only because weapons and narco-funds are aplenty.
Thus, just starving the poppy cultivation and heroin processing labs in Afghanistan will create a security backlash throughout the Heart of Asia and the Greater Black Sea Basin. Hence, it is imperative to have a systemic approach to resolving not only the Afghan narco-challenges but also the entire regional security challenges aggravated and exacerbated by the mere availability of narco-funds and narco-terrorist groups.
Lastly, there is the issue of state-sponsorship of both terrorism and narco-criminality. These cannot be ignored if tangible long-term eradication of drug problem is sought. At the same time, there is no substitute to the eradication of poppy cultivation and heroin processing labs in Afghanistan . However, the mere physical destruction of crops or labs is only the beginning of a comprehensive process.
Presently the Afghan narco-system has enough built-in redundancy and has enough money to replace interim losses without a tangible systemic loss. One-time or even periodic destruction of assets is therefore an exercise in futility. Therefore, for any attempt to destroy Afghanistan’s narco-system to have prospects of success, the foreign forces involved must stay for a protracted period in order to ensure the long-term impact on the affected society.
Moreover, a long-term military presence is first and foremost a question of ensuring the legitimacy of the central and local authorities, so that the people cooperate with them. As well, there is no point in attempting long-term presence by force if the quality and legitimacy of the civilian governance cannot be ascertained.
Simply put: reversing the criminalization of segments of society is an integral part of resolving the core-problems of that society. In the case of Afghanistan this means the legitimacy of the Kabul Government, establishing viable regionally-based governance, and resolving the endemic tribes-vs-local authorities’ disputes.
Furthermore, the mere eradication of crops and destruction of labs will only create vacuum and domino effect which breed instability, additional terrorism, etc. Therefore, it is imperative to approach the Afghan drugs challenge in the context of a comprehensive political and security solution on a regional level. The Afghan narco-system is an integral part of a larger problem; and so is the solution. Similarly, no political and security solution is possible throughout the Heart of Asia and the Greater Black Sea Basin for as long as the narco-economy keeps funding the opposition and encouraging violence.
The entire narco-terrorist system constitutes a viable threat to the vital interests of Russia . It is a huge time-bomb at Russia ’s soft underbelly, therefore, the Kremlin considers the flow of drugs from Afghanistan to be an issue of vital importance - from the undermining of Russian society to destabilizing regional security.
Although Afghanistan is the primary source of illegal drugs in Europe, the Europeans are reluctant to confront the issue of recreational drug use effectively and this attitude diminishes Europe ’s willingness to address the real challenges.
The narco-terrorism of Eurasia has a minuscule impact on the US and is thus not a priority for Washington , particularly at a time the Obama Administration is yearning to disengage from Afghanistan virtually at all cost. Hence, it is up to Russia — whose vital interests are at stake — to lead the struggle against the rising tide of narco-terrorism at the Heart of Asia and the Greater Black Sea Basin.
Virtually all experts in the Moscow forum agreed that the current situation in Afghanistan-Pakistan-Central Asia was not only untenable, but was rapidly deteriorating. The US/ISAF efforts are considered better than nothing, but the near-unanimous expert opinion is that the security effort barely scratches the surface while the most endemic problems are deep-rooted.
The Kremlin wants NATO to stay in Afghanistan but the US is leading NATO into abandoning Afghanistan . Therefore, the Kremlin plans on convincing the Europeans — specific capitals and the EU — that the collapse of Afghanistan and the rise of drugs and narco-terrorism are detrimental to Europe ’s vital interests. The Kremlin hopes to get the EU/Europe to pressure the US to sustain NATO’s efforts in Afghanistan because Russia is eager for ISAF to remain as a viable force for the duration.
Overall, the highest authorities in the Kremlin — led by Medvedev who delivered a very strong opening statement at the international Afghan Drug Production: a Challenge to the International Community forum — are committed to the Afghan drug-eradication policy in its comprehensive scope/connotation. The Kremlin is petrified by the spread of drugs and narco-funded terrorism, insurgency, violence and instability from Afghanistan via Central Asia into the heart of Russia .
The Kremlin is embarking on an international campaign — first focusing on the EU and NATO — to formulate a joint long-term program to eradicate the Afghan narco-system and byproducts. This is a comprehensive plan which recognizes the imperative to first resolve Afghanistan ’s security and governance problems, but also address the issue of drug-funded separatism, secessionism, and narco-terrorism at the Heart of Asia and the Greater Black Sea Basin as a major policy issue.
What remains to be seen, though, is the extent of cooperation Russia was likely to get from Europe and particularly the United States .
By. Yossef Bodansky for OilPrice.com who offer detailed analysis on Oil, alternative Energy, Commodities, and Geopolitics. They also provide free Geopolitical intelligence to help investors gain a greater understanding of world events and the impact they have on certain regions and sectors. Visit: http://www.oilprice.com
Posted by Jeff Ramson on Fri, Jul 23, 2010 @ 10:06 AM
Interesting article about the ROI of Social Media...
"social media marketing should be an integral part of any company’s online efforts."
There are many ways to measure the ROI of social media marketing. One that Forrester recommends in its new report The ROI of Social Media Marketing is the “risk management perspective.”
Essentially, how does a social media marketing initiative help reduce the financial impact of a reputation management crisis?
The costs of a social PR crisis can be substantial. To generate a value for the risk management perspective, consider how your social media preparedness and assets can reduce these costs across several different social media crisis scenarios. For instance, a midsized company might consider the social implications of a batch of defective products caused by unforeseen manufacturing issues in an overseas plant — and find that involvement in social media helps insure them against an average annual possible risk of $25,000.
In other words, even a mid-size company can realize an annual ROI of $25k by simply looking at the benefits to reputation management.
Combine that with all of the other positive ROI possibilities–more sales, less customer service costs, etc–and it becomes clear why social media marketing should be an integral part of any company’s online efforts.
Posted by Jeff Ramson on Fri, Jul 23, 2010 @ 04:28 AM
Fed Will Intervene if Hiring Does Not Improve: Bernanke
Interesting article, and I just can't figure out this guy. Is anyone seeing inflation?
"The Federal Reserve will try to push borrowing costs even lower if the job market continues to languish, Fed Chairman Ben Bernanke said Thursday, offering his clearest blueprint yet for possible additional monetary easing. After three quarters of solid growth, the U.S. economy has been losing steam, with firms still reluctant to hire and the housing sector seemingly unable to exit a prolonged rut.
Bernanke's comments accompanied Labor Department data released Thursday showing new claims for state unemployment benefits spiked to 464,000 last week."
Full Article @ CNBC
Posted by Jeff Ramson on Thu, Jul 22, 2010 @ 09:15 AM
Although the Ugandan government can boost the security of its fledgling oil industry from future terrorist attacks that may scare away certain investors, Africa analysts doubt violence replicating the twin bombs that struck during the World Cup final is likely.
Somali militant group al-Shabab claimed responsibility for explosions that tore through the capital Kampala July 11 and killed more than 70 people.
Infuriated over Uganda ’s participation in the African Union Mission in Somalia – which may grow if Ugandan President Yoweri Museveni gets his way – al-Qaeda-linked al-Shabab has pledged more terror.
The oil industry has not been singled out as a target, but “one would naturally assume that it would be one of the areas that terrorists would look at,” warned Peter Pham, senior vice president of the National Committee on American Foreign Policy, a New York-based think tank. The bombings underscore that the Ugandan government and its regional and international partners, both public and private, need to “perhaps devote more thought and resources to protecting the infrastructure that has been or is in the process of being built,” he said. He was referring to a reverse-flow pipeline between Uganda and Kenya and other construction underway.
The Uganda People’s Defence Force is an “experienced, well-armed, and largely well-trained body,” but the country needs to secure its economic future through a force that can protect the infrastructure that is the “country’s lifeline” rather than a “battle-ready army,” added Pham.
If al-Shabab can travel over boundaries and carry off “pretty sophisticated double bombs,” it can also venture to remote regions of the country where oil exploration is centered, said Philippe de Pontet, an Africa analyst in Eurasia Group’s Washington office. There is a valid argument that once the oil infrastructure is all in place, in particular a 2,000-kilometer pipeline, it may become a target, he said. However, de Pontet contended, pipelines everywhere in the world are a concern, so this particular terrorist attack does not heighten that risk in a “material way.” He said the pipeline is several years away from being built.
The World Cup-related bombings “might be enough to spook” Investors who know little about Uganda and the region, de Pontet told OilPrice.com. In this sense a country’s image counts, particularly in regard to incoming investment, he noted. The violence may deter an international oil company that is “perhaps dipping its feet in the waters but concerned about being sort of stuck, so to speak, right in the middle of Africa , a landlocked country,” he said. But the potential for such a reaction is not significantly high, he conceded.
The Ugandan government deployed troops permanently about four years ago to the Lake Albertine Graben area, the center of oil exploration about 250 kilometers from Kampala, Lawrence Bategeka, a senior research fellow at the Economic Policy Research Center in Kampala, told OilPrice.com in an e-mail. Albertine Graben is located on the borders of the Democratic Republic of Congo (DRC) and southern Sudan , Bategeka said.
Bategeka believes the government is taking the necessary steps to safeguard the industry. The UPDF works with foreign partner companies to ensure the security of oil exploration and production infrastructure on the ground, Bategeka noted. The organization most likely to disrupt exploration activities are anti-Ugandan rebel groups based in DRC, which is why the government has provided enough protection, he said.
Uganda's oil industry is still at the exploration phase, he said. The drilled wells and the drilling equipment, as well as a small hydropower station being constructed in the Albertine Graben, also account for the assets the Ugandan security forces are guarding, he noted.
For the most part, analysts say the bombing is most likely a one-off attack by al-Shabab.
“It’s possible there could be others but frankly they’ve already made their point,” and this kind of attack is not easy to pull off by this group at such a distance, Eurasia Group’s de Pontet said.
While the bombings in Kampala are an outrage that deserve condemnation, in and of themselves they should have “very limited impact” on Uganda ’s economy, said Pham, the New York think-tank executive. The country’s economy has been growing at a “significant rate” in recent years, spurred on by investments in the oil sector -- which expects to generate more than $2 billion per year -- as well as the “business-friendly policies”embraced by Museveni’s government, Pham said.
“These underlying fundamentals will not change because of a terrorist incident,” he argued. “In fact, we have yet to see even minimal market jitters from investors eager to be a part of the Ugandan economy and, through Uganda , the nascent East Africa Community.”
The oil reserves discovered in Uganda are estimated at more than 2 billion barrels (with less than 40 percent of the Albertine Graben explored), Bategeka said. Once production starts, daily oil production will range from 200,000 barrels to 300,000 barrels or even higher, making Uganda one of the top five oil-producing countries in Africa , he said. Uganda is interested in adding value to its oil rather than simply exporting it in crude form and, to this end, his research center is working on a study to advise the government about the economic implications of such a decision, according to Bategeka.
Uganda is also working on an oil law that will likely pass over the next few months. The anticipated oil revenues will help the government improve access to higher education and strengthen road networks and air travel services, said Ezra Suruma, a distinguished visiting fellow at the Brookings Institution in Washington .
The African nation’s dependence on donor aid, now roughly 25 percent of the budget, will probably drop to “10 percent or less,” said Suruma, a former minister of finance, planning and economic development in Uganda .
He is now the country's senior presidential adviser on finance and planning.
By. Fawzia Sheikh for OilPrice.com who offer detailed analysis on Oil, alternative Energy, Commodities, and Geopolitics. They also provide free Geopolitical intelligence to help investors gain a greater understanding of world events and the impact they have on certain regions and sectors. Visit: http://www.oilprice.com
Posted by Jeff Ramson on Wed, Jul 21, 2010 @ 10:30 AM
The Financial Industry Regulatory Authority said that in August it will begin expanding the amount of information available to the public about current and former securities brokers on FINRA's free online BrokerCheck service.
The expansion, which was approved by the Securities and Exchange Commission, will increase the number of customer complaints reported publicly; extend the public disclosure period for the full record of a broker who leaves the industry from two years to 10 years; and make certain information about former brokers available permanently, such as criminal convictions, some civil injunctive actions and arbitration awards against the broker.
The changes will also formalize a process for current or former brokers to dispute the accuracy of or update factual information disclosed through BrokerCheck.
"This additional information will benefit investors who are considering whether to conduct, or continue to conduct, business with a particular securities firm or broker," FINRA CEO Rick Ketchum said in a statement. "Just as important, it will provide valuable information about persons who have left the securities industry, often not of their own accord, who have established themselves in other segments of the financial services industry and can still cause great harm to the investing public."
The BrokerCheck expansion will be implemented in two phases. In late August, historic complaints will be added to the public records of all current and former brokers. By the end of the year, full records will be publicly available for all brokers whose registrations have terminated within the last 10 years. Also by the end of the year, the additional information that will be permanently available will be added to the records of former brokers and the formal dispute process will be fully in place.
Posted by Mike Sweeney on Tue, Jul 20, 2010 @ 09:06 PM
As more and more advertising dollars flow into social media, some Madison Avenue firms are seeking to grab a piece of the action. But it will be a tough fight as the space is overrun with companies seeking to own the segment, from start-ups to public-relations firms.
Universal McCann, the media-buying firm owned by Interpublic Group of Cos., is bolstering its social-media offering by launching a practice this week called Rally. The division will help marketers develop campaigns, track online chatter about their brands and measure how those campaigns perform. Headed by Heidi Browning, a former MySpace executive, Rally will house several new social-media hires. MySpace, like The Wall Street Journal, is owned by News Corp.
Publicis Groupe's digital umbrella organization, Vivaki, says it also will open a social-media consulting practice by the end of the year. The new group will pool Publicis' social-media tools and experts and use them to beef up the social-media practices that many of Publicis' agencies have already established. Rishad Tobaccowala, chief strategy officer at Vivaki, says he is willing to use his mergers-and-acquisitions budget to bolster the practice if needed.
Full Article
Posted by Jeff Ramson on Tue, Jul 20, 2010 @ 09:13 AM
Can white elephants come in green?
President Barack Obama flew to Holland , Mich. , on Thursday to attend groundbreaking ceremonies for a new lithium-ion battery plant, which the White House advertised as an example of federal stimulus grants at work and a gateway to a clean-energy future.
Great stuff — if you don’t look too hard.
Indeed, the Holland plant, effusively hailed by Michigan Gov. Jennifer Granholm as creating 300 jobs, and 62,000 “green” jobs down the road, will produce batteries in America .
But Compact Power Inc., which received $151 million from a federal stimulus program to open the $303 million plant, isn’t American and neither is its technology: It’s a subsidiary of the giant South Korean conglomerate LG Chem, and its technology is Asian.
Also that age-old bugaboo for electric cars — range and battery life — is still a work in progress. General Motors says its Chevy Volt will go up to 40 miles on a single charge and will have a range-extending, gasoline-assist feature. Nissan’s fully electric car, the Leaf, will have a 100-mile range. Ditto Ford’s electric Focus. Much depends on driving conditions.
Lithium-ion batteries are way ahead of traditional lead-acid batteries in power and weight, but they aren’t perfect. As yet, the best battery is far from being a competitor for a tank of gasoline.
There’s a back story here. The most obvious narrative is the need to create jobs in Michigan , and the hope is that electric vehicles will bolster car production there.
More obscure is the administration’s belief that a brave, new clean-energy America can produce jobs and reduce the output of greenhouse gases. In Obamaland, windmills will turn silently through the night, while millions of fully electric cars get their batteries topped up in driveways and garages.
A green and pleasant land is just a few million batteries away and, by Jove, the Department of Energy is on the job. It has $2.4 million to spend on electric car infrastructure. The department is helping to bring on nine battery plants, including the one in Holland . It’s also promoting charging stations.
Some small facts: These batteries are still so expensive (about $16,000 apiece) that any fully electric car, or near so, requires subsidies down the line to get the price down to where ordinary people will buy them in quantity. The only fully electric vehicle on the market today, the Tesla, is a sports car that costs over $100,000 and is aimed at the well-heeled greens of Hollywood .
While official retail prices for the Ford, Nissan and GM models haven’t been announced, estimates are in the range of $30,000 to $35,000. Federal tax credits are likely to trim several thousand dollars for many buyers.
Batteries have stood in the way of electric cars for more than a century. In the early days of motoring, electric cars covered short distances and held promise. But while internal combustion engines revved ahead, batteries languished.
But the dream of an electric car never died, though the batteries frequently did. In the 1970s, the U.S. government spent lavishly on battery research, including lithium and aluminum air batteries. There are dozens of ways to make batteries, but all have their disadvantages: weight, disposability, life, rate of discharge and market indifference.
If you want everything you get today on a car — electric windows, air conditioning, electric seats, multiple lights, highly variable loads and easy refueling and, maybe, towing capacity — you need a hell of a battery
We have, so to speak, been shocked by presidential energy enthusiasm before. Jimmy Carter believed in liquids from coal and launched the ill-fated Synthetic Fuels Corp., and George W. Bush went hog wild over ethanol — and those expectations are being trimmed daily.
I’ll buy a hybrid and wait, if it’s OK with Obama.
By. Llewellyn King for OilPrice.com who offer detailed analysis on Oil, alternative Energy, Commodities, and Geopolitics. They also provide free Geopolitical intelligence to help investors gain a greater understanding of world events and the impact they have on certain regions and sectors. Visit: http://www.oilprice.com