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The Euro on Edge

Doubts Grow Over Austerity for Greece

February 16th 2012

Europe Topics - PARTHENON

With the European Union demanding more spending cuts from Greece in return for billions of dollars in bailout funds, doubts are growing over whether more austerity is the right solution for Athens. Some analysts and politicians suggest that a once worst-case scenario, Greece leaving the eurozone, may not be so bad. Even as he promised that Greece would meet European Union requirements for another installment of rescue funds, Greek Finance Minister Evangelos Venizelos said Wednesday that his country was on a "knife's edge." He said Some EU members want Greece to leave the eurozone, which he called  "playing with fire." The EU has set tough conditions for Greece to get a $173 billion bailout. It needs the money by March 20, otherwise it risks defaulting on its massive debt.

Despite angry public protests and riots last weekend, the Greek parliament voted in favor of more austerity measures. The move drew praise from EU officials like European Economic and Monetary Commissioner Olli Rehn. "I'm confident that the other conditions, including for instance, the identification of the concrete measures over 325 million euros [more than $424 million in spending cuts] will be completed by the next meeting of the eurogroup," said Reihn. But Greece did not meet the other conditions by Wednesday, when EU finance ministers were expected to decide on the bailout money. Read more ..

The Arab Fall in Egypt

Egyptian Dissident Warns of Brotherhood's Rise

February 16th 2012

Egypt - muslim_brotherhood

The recent arrest of 19 American aid workers has raised fears that the Egyptian revolution has gone horribly wrong. The arrests follow sweeping victories by the Muslim Brotherhood and other Islamist groups in the country's parliamentary elections. Meanwhile, talk of breaking Egypt's 31-year peace treaty with Israel grows by the day. The prospects for democracy look grim. Bargaining with the Devil? Egyptian native Majed El Shafie, president of the Canadian-based humanitarian organization One Free World International, told CBN News the Obama administration has miscalculated the Muslim Brotherhood's true intentions. "The political vacuum is being used by the Muslim extremists. And that is what we are seeing today. And we warned about it a long time ago. But the Obama administration did not listen. They were excited, they were happy," El Shafie said. "This administration keeps saying, 'We can deal with the Muslim Brotherhood. We can have a dialogue with the Muslim Brotherhood,'" he continued.

But according to El Shafie, the "Muslim Brotherhood is the terrorist mother ship for Hamas, for al Qaeda, and for many other Islamic terror groups in the Middle East." El Shafie said Brotherhood leaders held a strategy meeting in Cairo just a few days before their recent legislative victories. "They didn't discuss health care, education, economics, finance -- any of the important issues to the people," he told CBN News. "They discussed how they could get rid of Israel. And this is the sad reality." Read more ..

Edge of Terrorism

Hamas Terror is in Transition

February 13th 2012

Terrorism - Hamas and flags

After more than five years of existing in political stalemate, Hamas is now trying to manage a worsening relationship with Iran and Syria and exploit the political rise of its Islamist parent organization, the Egyptian Muslim Brotherhood (MB). Without a clear vision on how to proceed, Hamas is likely to undergo serious internal strains that could raise the potential for a splintering of the heretofore most tightly run organization of the Palestinian territories.

Six years ago, Hamas unexpectedly swept parliamentary elections in the Palestinian territories and won the right to form a government. But the idea of a self-professed Islamist militant organization running the Palestinian government did not sit well with Israel and much of the West or with Hamas' rival, Fatah. Sanctions on Hamas immediately intensified, and a civil war broke out between Hamas and Fatah. Hamas was driven into political isolation after it forcibly took over the Gaza Strip in mid-2007. Read more ..

International Relations

How the Arab Spring Warmed US-Turkish Relations

February 12th 2012

Turkish Topics - Obama and Erdogan

U.S.-Turkish relations entered into a tumultuous period with the beginning of Iraq War in 2003. This difficult phase in bilateral ties appears to have ended with the beginning of the Arab Spring.

Until recently, disagreements on a number of issues—such as how to deal with Iran’s nuclearization—undermined Washington’s historical bond with Ankara.

Today, however, the United States and Turkey are closely cooperating, with President Barack Obama and Turkish Prime Minister Recep Tayyip Erdogan having formed what is probably the strongest relationship between a U.S. president and a Turkish prime minister in decades. Read more ..

Mexico's Drug Wars

The Insidious Influence of Mexico's Narco-Terrorists in this Year's Presidential Election

February 9th 2012

Mexican Topics - Mexico votes

Mexico will hold its presidential election July 1 against the backdrop of a protracted war against criminal cartels in the country. Former President Vicente Fox of the National Action Party (PAN) launched that struggle; his successor, Felipe Calderon, also of the PAN, greatly expanded it. While many Mexicans apparently support action against the cartels, the Calderon government has come under much criticism for its pursuit of the cartels, contributing to Calderon's low popularity at the moment. The PAN is widely expected to lose in July to the Institutional Revolutionary Party (PRI), which controlled the Mexican presidency for most of the 20th century until Fox's victory in 2000. According to polls, the PAN has lost credibility among many Mexican voters, many of whom also once again view the PRI as a viable alternative.

In our effort to track Mexico's criminal cartels and to help our readers understand the dynamics that shape the violence in Mexico, Stratfor talks to a variety of people, including Mexican and U.S. government officials, journalists, business owners, taxi drivers and street vendors. At present, many of these contacts are saying that the Calderon administration could attempt to pull off some sort of last-minute political coup (in U.S. political parlance, an "October surprise") to boost the PAN's popularity so it can retain the presidency. Read more ..

South of the Border

Brazil Fills the Gap as U.S. Differences with Latin America Widen

February 9th 2012

Latin American Topics - Dilma Roussef and Raul Castro
Pres. Dilma Rousseff of Brazil and Pres. Raul Castro of Cuba

Brazilian President Dilma Rousseff’s recent visit to Havana could easily have been a tense one.  On Thursday, January 19th, jailed Cuban dissident Wilman Villar died in a prison hospital under murky circumstances, while Brazil recently granted a visa to well-known online journalist and longtime Castro critic Yoani Sanchez to leave her native Cuba and attend a documentary film premier in Brasília.  Rousseff avoided publicly criticizing the Castro administration when pressed by reporters on what the Cuban opposition calls human rights abuses, instead referencing the human rights record of the United States in regard to the Guantanamo Bay military prison.  However, she seemed perfectly happy to discuss Cuba and Brazil’s burgeoning economic partnership, which has grown significantly in recent years.

The renovation and expansion of Mariel, a key port near Havana, represents the latest manifestation of the aforementioned partnership between the two countries.  Brazil has provided USD 683 million in loans to the Cuban government for the project, which is spearheaded by Brazilian construction firm Odebrecht.  Brazilian officials have also signed a 10-year agreement to help modernize Cuban sugar company Azcuba’s sugar mills in Cienfuegos.  Brazil has given Cuba another USD 400 million in credits to buy Brazilian agricultural projects and USD 200 million more for tractors and other agricultural equipment.  These loans are crucial for Cuban agriculture, which is struggling to expand and modernize, and are essentially stimulus packages for Brazil in the sense that they will pour money back into the Brazilian economy.  Rousseff defined this collaboration as a “historic commitment” to “help the progress of economic development” in Cuba, which continues to endure the U.S. trade embargo. Read more ..

The Bear is Back

Russia and US Relations: Tensions On the Rise

February 6th 2012

Russian Topics - Kremlin
Moscow Kremlin

As Russia and the United States prepare for their respective presidential elections, tensions between the countries are growing, yet it is unclear how far each side will go. The central point of contention is U.S. ballistic missile defense (BMD) plans. Russia has several levers, including its ability to cut off supply lines to the NATO-led war effort in Afghanistan, to use in the standoff over BMD, but the United States could retaliate by supporting the current protests in Russia. 

Moscow and Washington have been in a standoff over myriad issues ever since Russia began to roll back Western influence in its periphery and assert its own power. Following the collapse of the Soviet Union, the United States got involved in the region with the intentions of creating a cordon around Russia, in order to prevent it from ever becoming a global threat again. 

However, the U.S. focus shifted to the Islamic world following 2001, and a previously crippled Russia began to strengthen. Washington continued some of its policies of Russian containment, such as trying to give the key former Soviet states of Georgia and Ukraine NATO membership, yet Eurasia was not the United States' key focus. The time granted Russia an opportunity to resurge into its former Soviet states. Moscow's ultimate goal is not to recreate the Soviet Union. Instead, Russia wants to limit the influence of external powers in the former Soviet Union and to be recognized as the dominant player there. Consequently, foreign governments, particularly the United States and Europe, must shape bilateral relations within the framework of this understanding. Read more ..

The 2012 Vote

Presidential Super PACs Raise $49 Million through December

February 6th 2012

Politics - republican debate

Outside groups that funded numerous attack ads in the GOP primaries collected $49 million in donations in 2011, with huge contributions coming from billionaires, corporations, and labor unions, something that would have been illegal were it not for pivotal court decisions in early 2010.

The top recipient among these so-called “super PACS” was Restore Our Future, which raised $30.2 million to assist the candidacy of former Massachusetts Gov. Mitt Romney—more than what was raised by the official campaign committees of any of Romney’s GOP opponents.

Federal Election Commission documents filed by super PACs that spent money to support or defeat a presidential candidate in one of the primaries were reviewed for this article. When considering all super PACs in 2011, total contributions were almost $100 million. Read more ..

The 2012 Vote

Super PACs Heighten the Election Contribution Bar in 2012

February 4th 2012

Money - Money Money Money

Super PAC American Crossroads and its sister organization raised more than $51 million last year with more than 60 percent of the total flowing into Crossroads GPS, the nonprofit arm that is not required to report its donors. American Crossroads, a Super PAC that reports to the Federal Election Commission, raked in $18.4 million last year, including a $5 million donation from Texas tycoon Harold Simmons, plus another $2 million from Contran, a company that he controls, according to Crossroads sources.

Crossroads GPS, the nonprofit group that shares leadership and offices with American Crossroads, pulled in $31.6 million last year, a ratio similar to what the two groups accounted for in 2010 when they raised a combined $71 million. The two Republican groups were launched in 2010 by GOP super consultants Karl Rove and Ed Gillespie. They are now getting fundraising help from former Mississippi Governor and ex-party chairman Haley Barbour. The groups have publicly said that they’re shooting to raise at least $240 million to help the GOP win the White House and control both houses of Congress. Donors and fundraisers who have been solicited by Barbour and other group leaders, say that privately the two Crossroads groups are aiming for $300 million, the most ambitious outside effort underway. Currently plans call for spending about half the funds to help take the White House, and the rest to win the Senate and keep the House, say fundraisers close to the groups. The Crossroads groups appear to be the biggest beneficiaries of court rulings in 2010 that permitted corporations, individuals and unions to give unlimited amounts to groups that expressly advocate for or against candidates. Read more ..

The Battle For Syria

Syria's Fate-Not Entirely Out of the Western World's Hands

February 3rd 2012

Syrian Issues - Syria protest
Syrian Protesters

Conventional wisdom in Washington and in European capitals is that the Syrian regime of Bashar al-Asad is doomed. The protests that have spread across the country since March of 2011 and have claimed the lives of more than 6,000 people appear to be progressing by their own inertia. Secure in the assumption that "it's only a matter of time," Western countries have tagged on sanctions and other punitive measures that target Syria's economy, and yet they have left out any discussion over the possibility of military intervention.

The assumption, however, that the regime's days are numbered is seriously flawed. After all, U.S. and EU sanctions may have driven up food and energy prices, but it has failed to fundamentally alter the regime's behavior. The Arab League even took the unprecedented step of kicking Syria out of the organization and dispatching a 165-member delegation of observers to monitor the situation inside the country. This was done, in the hope that their presence would reduce the level of violence. Yet, that mission has proven to be a failure, with the average daily death toll climbing to 50 since the monitors arrived in late December. Read more ..

Europe on Edge

Germany's Dilemma and Europe's Challenges in a Fiscal and Economic Maelstrom

February 2nd 2012

Europe Topics - Merkel and Sarkozy
German Chancellor Angela Merkel and French President Nicolas Sarkozy

The German government has proposed that a European commissioner be appointed to supplant the Greek government. While phrasing the German proposal this way might seem extreme, it is not unreasonable. Under the German proposal, this commissioner would hold power over the Greek national budget and taxation. Since the European Central Bank already controls the Greek currency, the euro, this would effectively transfer control of the Greek government to the European Union, since whoever controls a country's government expenditures, tax rates and monetary policy effectively controls that country. The German proposal therefore would suspend Greek sovereignty and the democratic process as the price of financial aid to Greece.

Though the European Commission rejected the proposal, the concept is far from dead, as it flows directly from the logic of the situation. The Greeks are in the midst of a financial crisis that has made Greece unable to repay money Athens borrowed. Their options are to default on the debt or to negotiate a settlement with their creditors. The International Monetary Fund (IMF) and European Union are managing these negotiations. Read more ..

Europe on Edge

Spain's Economic and Fiscal Woes are a Challenge to New Government and National Cohesion

February 1st 2012

Europe Topics - Spanish PM Mariano Rajoy, Basque Patxi Lopez
Spanish President Mariano Rajoy and Basque leader Patxi Lopez

As part of its spending cuts program, the Spanish government presented a law that would give the central government more control over Spain's autonomous regions. The justification for the law stems from the regions' increasing deficit and the central government's need for more resources. Some regions see this law as an attempt to centralize Madrid's authority and as a potential threat to the delicate balance between the regions and the central government -- a defining feature of Spanish politics. The law will pass out of financial necessity, but its implementation will generate tension between Madrid and the regional administrations.

The Spanish Council of Ministers on Jan. 27 approved a preliminary draft of the Stability and Sustainability Law, meant to reduce Spain's public deficit and debt. Spanish Prime Minister Mariano Rajoy's Popular Party (PP) holds enough of a majority in parliament to ensure the law's adoption, without much modification, in early February. Under the new law, Spain's public debt may not exceed 60 percent of gross domestic product (GDP) and the central and regional administrations must reduce their structural deficit to zero by 2020. This law replicates at Spain's internal level the kind of fiscal oversight the European Union intends to apply to member countries. Read more ..

Broken Banking

Home Foreclosure Crisis: Created by Greed or Negligence?

January 31st 2012

Economy - Foreclosure

Like millions of stories from the great recession, this one begins with homeowners struggling to keep up with a mortgage payment they simply couldn’t afford. By 2009, the adjustable interest rate for Cassandra and Bernard Gray’s Durham, N.C., home loan had spiked to more than 12 percent. “I didn’t know if we were going to be on the street or in a shelter,” Cassandra recalls. “We couldn’t afford groceries. It got pretty bad.” They were thrilled to sign up for a modification plan with their loan servicer, GMAC Home Mortgage, Cassandra Gray said. The modification lowered their payment from $1,128 to $768 per month.

However, after three months, GMAC began returning their payments, the Grays claim in a complaint filed with the North Carolina Commissioner of Banks. GMAC customer service representatives told them there was a “computer glitch” and that the problem would be resolved. Instead, GMAC twice started a foreclosure action. GMAC claimed it had no record of any payment being received. Read more ..

The Iranian Threat

Israel Isn’t Going to Attack Iran and Neither Will the United States

January 30th 2012

Iran - Iran Nuclear
Iranian Nuclear Ventilation Tower

The radio superhero The Shadow had the power to “cloud men’s minds.” But nothing clouds men’s minds like anything that has to do with Jews or Israel. This year’s variation on that theme is the idea that Israel is about to attack Iran. Such a claim repeatedly appears in the media. Some have criticized Israel for attacking Iran and turning the Middle East into a cauldron of turmoil (not as if the region needs any help in that department) despite the fact that it hasn’t even happened.

On the surface, of course, there is apparent evidence for such a thesis. Israel has talked about attacking Iran and one can make a case for such an operation. Yet any serious consideration of this scenario — based on actual research and real analysis rather than what the uninformed assemble in their own heads or Israeli leaders sending a message to create a situation where an attack isn’t necessary — is this: It isn’t going to happen. Read more ..

The Iranian Threat

Israel and the US Perspectives on Iran at Odds

January 30th 2012

Military - Austerity Measures Israel and US

The kerfuffle over the postponement of the highly touted "Austere Challenge 12" joint US-Israel military exercise is over.  Officials in both countries are now on the same page:  it was a "joint decision" having nothing to do with finances, Iran or politics, just "technical issues."  Regardless of the lid they've chosen to cover the pot, it is worth considering where and how the United States and Israel differ in their analysis of the problem posed by Iran's nuclear activity.

The US and Israel agree on the potential danger and they agree on the unacceptability of a nuclear-armed Iran.  They differ, however, on how they assimilate intelligence information; how they assess the pace of Iran's movement toward weapons capability; and even over whether it is weapons that Iran seeks. The United States factors in more heavily what it believes about Iran's intent, which it insists remains unclear.  Reflecting, perhaps, closer proximity and a smaller margin of error, the Israeli government places greater emphasis on its Iran's capabilities, which it believes are clear. Read more ..

Iran’s Nukes

Bunker Busters a Bust?

January 30th 2012

Military - MOP GBU57

In a bizarre development for a country whose military is routinely cited as the most advanced in the world, the United States is reportedly concerned that its bombs are not powerful enough to successfully attack Iran’s nuclear program.

A recent Wall Street Journal report revealed that the U.S. military establishment has concluded that its largest conventional bomb, the so-called “bunker buster” cannot effectively combat Iran’s defense tactics, which involve burying its nuclear facilities deep beneath the surface of the earth.

“The main concern,” YNet reports, “is Iran’s Fordow uranium enrichment site near the city of Qom. The facility … is located under a mountain.” Read more ..

Inside Latin America

China's Great Challenge to U.S. in Latin America

January 28th 2012

Brazil - Dilma Roussef and Hu Jintao
Meeting of Hu Jintao of China and Dilma Roussef of Brazil

Does China represent an economic and political threat to the U.S. in the Western Hemisphere? Four experts describe the playing field faced by the United States in Latin America, a region that has been traditionaly where the U.S. has exercised economic, commercial and military leadership.
Congressman Connie Mack Answers:

China’s economic expansion is rapidly filling spaces vacated and ignored by the United States. In the Western Hemisphere, the lack of a coherent U.S. foreign policy has left the door wide open for a variety of actors. China hasn’t hesitated. 

While the U.S. waited five years to pass free-trade agreements with Colombia and Panama, China has been working with Colombia on developing a coast-to-coast railroad as an alternative to the Panama Canal. While the U.S. spends four years dithering over the Keystone XL pipeline, a slam-dunk energy project with another hemispheric ally—Canada— China has made preparations to buy Canadian oil through new pipelines and invested heavily in national oil companies in Brazil and Venezuela. China has invested in Peru’s mining, oil, wood, fishing, and tourism sectors. Chinese groups have signed agreements in Brazil and Argentina to develop millions of acres of farmland to boost its food security. Read more ..

The Battle for Syria

Diplomatic Solutions to Removal of Assad Gain Momentum

January 27th 2012

Syrian Issues - Nakba Protests

President Obama’s 2012 State of the Union address had much to say about the economy, but relatively little about foreign policy. Yet one line from that brief section stands out: “And in Syria, I have no doubt that the Assad regime will soon discover that the forces of change can’t be reversed, and that human dignity can’t be denied.”

This sentence, which puts the United Stated firmly behind the demise of Bashar al-Assad’s regime, is all the more striking because it followed so closely upon the president’s description of Qadhafi as “gone.” Beyond the mere fact of singling out Syria’s government for such dishonorable mention, Obama’s statement used two very specific words that loom large in a context where every word reflected deliberate decision. First was his use of “soon,” indicating an assessment that Assad does not have much time left in power. Second was “regime,” indicating an official U.S. expectation that not just Assad personally but his whole ruling clique must also go. Read more ..

Mideast Peace on Edge

Palestinians Again Walk Out on Peace Talks

January 26th 2012

Palestine Topics - Mahmoud Abbas and father
Palestinian leader Mahmoud Abbas

The Palestinians continued their long history of sabotaging peace talks on Wednesday, January 25, when they unilaterally declared recent negotiations in Amman a failure and walked out. Naturally, the Palestinians were quick to blame Israel for their own unwillingness to negotiate. Official Saeb Erekat, for example, made it clear that because Israel has not presented its position on the issue of borders with a Palestinian state, from the Palestinians' standpoint, the talks have ended.

Israel is in no way required at this stage to present such a position, nor was this a prerequisite for beginning talks. In the past, the issue of borders, being one of the most fraught and complicated problems facing the negotiators, has always been left to the final stages of negotiations. PA President Mahmoud Abbas, who had previously claimed that the main problem was the lack of a settlement freeze, suddenly began using the same excuse as Erekat, telling Jordan's King Abdullah that the talks were over because Israel "refused to recognize the borders of a Palestinian state." Read more ..

The Arab Fall in Egypt

As The Brotherhood Takes Office Can we Keep Faith with the People?

January 26th 2012

Egypt - Members of Muslim Brotherhood

The Egyptian Parliament re-opened this week with the Muslim Brotherhood in charge and the Salafists in second place. Googling liberals were far behind. It is not surprising as the vast majority of Egyptians are rural, poor, and religious, but since majority rule should never be confused with democracy, the Obama administration is in a tight spot. The U.S. wants western-style capitalism and free markets in a country that looks and acts like ours. The State Department appears to believe it is America's job to tell the Brotherhood what it wants and what it expects. Spokesperson Victoria Nuland said Deputy Secretary of State William Burns' meeting with the Brotherhood's Mohammed Morsi was, "an opportunity to reinforce U.S. expectations that Egypt's new government will support human rights, women's rights and religious tolerance and support Egypt's peace treaty with Israel." CNN reported that Burns' message was, "We want to work with your government. We want a meaningful partnership that fully accepts your government and we want to work with you on your primary goal, which is economic development as long as we feel you are building a democracy that respects human rights and freedom and supports regional peace."

Mr. Burns may believe that economic development should be the Brotherhood's "primary goal," and national survival may bring it to the top of the list right now, but the Muslim Brotherhood stands for the establishment of an Islamic society based on its understanding of God's requirements for man. Mr. Burns is likely to be disappointed when those requirements don't include universalized "human rights and freedom" or "regional peace" for Israel. Read more ..

The Edge of Food

Update on Global Food Commodities

Food - Rice bowl

Most countries have domestic agricultural industries. However, the majority of these countries do not produce more than what their populations can consume. Only a handful of countries are able to export significant quantities of key food staples to countries that cannot meet their consumption needs or experience temporary setbacks in their agricultural sectors.

Output from exporting countries is an important geopolitical issue. Increased demand for global food supplies can cause localized shortages and price spikes. Food shortages and price increases, in turn, can lead to political turmoil and social unrest in countries whose populations depend on these imports for survival. Read more ..

Turkey on Edge

The Empires Strike Back

January 25th 2012

Turkish Topics - Turkish Flags

As Egyptians and Tunisians vote to replace ousted despots and the Syrian government teeters on the brink, two old imperial powers are competing to exert their political influence over Arab countries in upheaval. And they are not America and Russia. After years of cold-war competition over the Middle East and North Africa, it is now France and Turkey that are vying for lucrative business ties and the chance to mold a new generation of leaders in lands that they once controlled.

This rivalry is nothing new. Since Napoleon invaded Egypt in 1798, France and Turkey have competed for dominance in the Middle East. France's rise as a Mediterranean power has been an inverse function of Turkish decline around the same sea. As the Ottoman Empire gradually collapsed, France acquired Algeria, Tunisia and, temporarily, Egypt. The French took one final bite from the dying empire by securing control over Syria and Lebanon after World War I. Read more ..

Economy on Edge

Putting People Back to Work

January 25th 2012

Economy - Unemployment Line in California

What should be America’s top priority for 2012? For the more than 13 million out-of-work Americans, the answer is clear — it’s jobs. Unemployment has become a major constraint to growth and a contributor to our growing inequality of income. It represents a loss of tax revenues on the one hand and a cost of unemployment benefits on the other. Even more significant is the human toil: As breadwinners lose their job skills over time, they tend toward discouragement and depression, putting family stability at risk. That the U.S. jobless rate has fallen from 9 percent to 8.5 percent is good news. Yet almost half of those still without jobs are the long-term unemployed, jobless for 27 weeks or more. Recent surveys tell us that for each available job, there are at least four candidates. What can be done to get the unemployed back to work? Here are three ideas for the administration and Congress to consider in this new year.

Heal the economy. Getting us back on a growth track is the best way to create new jobs. While our bloated deficit must be reduced over the medium and long term through a combination of budget cuts and revenue increases, right now we need to encourage U.S. businesses to resume hiring. That will only happen when consumers resume spending — not through the corporate tax breaks and deregulation that some are proposing. History has shown that government stimulus can really work if it is targeted on job creation, especially in the public services (e.g., teachers and first-responders) and construction sectors. Read more ..

Inside the War on Narcotics

Mexico is Increasingly Polarized and More Violent as the Narco-War Continues

January 25th 2012

Mexican Topics - Spent cartridges Mexico

Mexico in 2010 bore witness to some 15,273 deaths in connection with the drug trade. The death toll for 2010 surpassed that of any previous year, and in doing so became the deadliest year ever in the country's fight against the cartels.

But in the bloody chronology that is Mexico's cartel war, 2010's time at the top may have been short-lived. Despite the Mexican government's efforts to curb cartel-related violence, the death toll for 2011 may have exceeded what had been an unprecedented number.

According to the Mexican government, cartel-related homicides claimed around 12,900 lives from January to September -- about 1,400 deaths per month. While this figure is lower than that of 2010, it does not account for the final quarter of 2011. The Mexican government has not yet released official statistics for the entire year, but if the monthly average held until year's end, the overall death toll for 2011 would reach 17,000. Though most estimates put the total below that, the actual number of homicides in Mexico is likely higher than what is officially reported. At the very least, although we do not have a final, official number -- and despite media reports to the contrary -- we can conclude that violence in Mexico did not decline substantially in 2011.


Broken Banking

Confusing and Paradoxical Political Treatment of International Financial Centers

January 25th 2012

Money - International Currency 3

The US government has for many years taken a deep interest in  international financial centers (IFCs), viewing them with stringent concern and alleging that tax evaders and fraudsters exploit this industry to the government’s detriment.  Congress held hearings on offshore tax evasion in the early 1960s and has continued to do so in recent years. Members of Congress, both in the Senate and House of Representatives, often criticize IFCs, routinely equating them with offshore tax havens and secrecy jurisdictions.

Estimates of lost corporate taxes through offshore loopholes can reach up to US$100 billion per year, with estimates of overall tax evasion through offshore schemes even higher.

Yet, it is commonly known that much of the corporate taxes lost through offshore loopholes are done through legal means. Transfer pricing, which can be described as a corporation creating an entity in an offshore jurisdiction with lower tax rates than that of the US, then transfering its profits to that jurisdiction, thereby lowering its US taxes, is in principle legal. General Electric for example, received much attention for its 2010 profits of US$14.2 billion without owing any US taxes. Read more ..

The 2012 Vote

Rules Against Coordination Between Super PACs, Candidates, Tough to Enforce

January 24th 2012

Politics - Superpacs
Courtesy: Opensecrets.org

Presidential front-runner Mitt Romney knows that he can’t talk to the people who run the notorious “super PAC” that may have won the Iowa caucuses for him.

“It's illegal, as you probably know. I'm not allowed to communicate with a super PAC in any way, shape or form,” he said in December on MSNBC’s Morning Joe show. “My goodness, if we coordinate in any way whatsoever, we go to the Big House.”

Well, probably not. Criminal prosecution is theoretically possible, but highly unlikely — and even civil sanctions are rare, according to a review of Federal Election Commission actions. Since 1999, the FEC has conducted a total of three investigations into alleged coordination between a candidate committee and an individual or organization making “independent expenditures.” Two of those probes resulted in fines totaling $26,000, according to a Center for Public Integrity investigation. The Citizens United Supreme Court decision and a lower-court ruling in 2010 allowed corporations, individuals and labor unions to make unlimited contributions to independent organizations that use the money to support or defeat a candidate. The ruling led to the creation of “super PACs.”


The Defense Edge

Air Force Needs to Maintain Its Focus on the Nuclear Mission

January 24th 2012

Military - A Bomber

Since the end of the Cold War, the Air Force has struggled to maintain standards of excellence when fulfilling one of its most important missions: being prepared to respond to an adversarial nuclear attack. Recently, the Air Force has decided to move away from having one squadron of bombers dedicated solely to the nuclear mission. This shift increases a risk of failures in the future. Despite dedication of the service to its nuclear mission and an extraordinary performance of the members under complex changes in the strategic environment and declining nuclear and defense budgets after the end of the Cold War, the fulfillment of the mission has not been problem-free.

In 2006, the Air Force mistakenly sent four nose-cone fuses for intercontinental ballistic missiles to Taiwan. In 2007, the Air Force mistakenly carried six nuclear warheads on cruise missiles on a flight from North Dakota to Louisiana. These incidents prompted then-Defense Secretary Robert Gates to set up a task force to look into the Air Force’s management of nuclear weapons and resulted in broad changes to improve oversight and management of the nuclear mission and inventory. Read more ..

Saudi Arabia on Edge

Saudi Arabia Simmers Even During an Arab Winter

January 24th 2012

Saudi Topics - Saudi Oil

In mid-December 2011, a series of sporadic protests erupted across Saudi Arabia, roughly nine months after the spontaneous outbreak of the “Day of Rage” rallies that ignited in the kingdom back in March 2011. The latest rallies, however, went largely unnoticed by international media. Far more headlines at the end of 2011 were devoted to the $30 billion arms deal between the United States and Saudi Arabia than to protests which, by some, were seen as seedlings of a Saudi version of the Arab Spring. Reports on the crackdown against the December protests largely originated from one source – Human Rights Watch – which reported that Saudi security forces arrested more than 100 protesters on December 16 and December 23, 2011, in Riyadh. The arrests illustrated a pattern of sporadic bursts of Arab Spring determination followed by methodical silencing.

Early in 2011, citizens across Saudi Arabia, regardless of class or sect, glued to international satellite channels, witnessed previously unthinkable yet successful revolutions taking place in Tunisia and Egypt and another revving up in the nearby monarchy of Bahrain. To many of them, it looked as if the Arab Spring was moving on their kingdom. Inspired, hundreds of Saudis took to the streets on March 11, 2011 – some pleading for more rights, some for free elections and others for a constitutional monarchy. A handful even demanded an end to the rule of the Saud dynasty. Read more ..

The Iranian Threat

Ahmadinejad Visits the Countries of the Bolivarian Alliance

January 22nd 2012

Venezuela Topics - Chavez and Ahmadinejad

Now that it is known that Iran is moving ever closer to obtaining a nuclear weapon, the United States is targeting sanctions against the Iranian Central Bank. Likewise, the European Union is moving in the direction of imposing an effective oil embargo on Iran. These sanctions are apparently having a more dire effect on Iran’s economy as evidenced by their threat to close the Straits of Hormuz. If anything the Iranian government’s animus towards the West and towards the U.S and Israel has grown exponentially as Iran sees these two countries as the principals in trying to thwart their nuclear ambitions.

Thus, in order to inflict harm and better position itself against any possible hostile US action, Iran has been seeking allies in the U.S sphere of influence: namely the Western Hemisphere. President Ahmadinejad has found no better friend or ally than Venezuelan President Hugo Chávez. Read more ..

The Arab Fall

The Middle East in 2012: The Year of Living Dangerously

January 20th 2012

Islamic Topics - Egyptian Muslim bros

The region-wide upheaval known as “the Arab Spring” would make it seem that terrorism, especially Islamist terrorism, is pretty much as dead as are its thousands of victims. After all, if the protest demonstration and balloting have proven able to resolve grievances then who needs to blow people up? And the same applies to intimidation and instability since presumably people vote, a government is elected, and democracy immediately enues. But the Middle East is far from through with violence. Where should we look in 2012 for the greatest threats of terrorism and what will be the targets? If we think this through in advance we can better plan to avoid or minimize these problems.

Let’s start with Egypt. If the military refused to move forward with elections or turn power over to the winners (that is, the Islamists) there would be a violent response. And that’s one of the reasons why this is unlikely to happen. The moderates are not going to engage in violence, which is one reason the military feels free to repress them. The problem of crime and general anarchy has already become very serious. Yet political violence in Egypt is very likely and it will come mainly from the Salafists. Remember that there are numerous groups and leaders, even within the al-Nur party which has done so well in the elections. Some radical Salafists will not be satisfied with the pace of progress (regress?) toward Islamism. They will target Christians, liberals, secularists, women demanding rights, tourists, and Israel.  Continuing attacks on Christians are inevitable, with the goal of forcing them to submit or encouraging them to flee. Read more ..

The Edge of Terrrorism

A Hezbollah Crack-up?

January 17th 2012

Palestine Topics - Hassan Nasrallah

Hassan Nasrallah, secretary general of Hezbollah, wants out. Things have gotten so tense for Hezbollah, says Lokman Slim, an independent Lebanese Shiite activist, that according to well-sourced accounts of a meeting two weeks ago, Nasrallah "complained he no longer wanted the job." 

It's hard to blame him. A figure once revered by Arabs for his (relative) success against Israel, Nasrallah is now tainted in the Sunni-majority Middle East by his association with a Syrian regime that has been slaughtering its Sunni opponents. More to the point, it is becoming increasingly unlikely that Hezbollah's patron in Damascus will survive the uprising. Some Lebanese observers are even wondering if the clerical regime in Iran, Hezbollah's main sponsor, will survive. With mounting pressure in the form of U.S. and EU sanctions, a devalued currency, a secret war waged, it seems, by the Americans, Israelis, and perhaps internal adversaries, the Iranians are reduced to making threats—like closing the Strait of Hormuz—that if acted upon could spell the regime's demise. Read more ..

Edge of the Border

Both the U.S. and Mexico face Grassroots Movements and Political End Times

January 17th 2012

Social Topics - Occupy Los Angeles homies

It's full-tilt political boogie in the US and Mexico. Media in both nations are saturated with interviews, profiles and satires of the candidates. Cable blasts virtually nonstop news of the Republican primaries and the ones for president and Mexico City mayor south of the border. In 2012 the neighboring countries will experience national, local and state elections in extraordinary times. In the year 2000, the last time major US and Mexican elections coincided, the results led to jarring and even unimaginable events in both countries.

For the US, the elections take place amid an uneven economic recovery, the historic erosion of the middle class, the clash between austerity and social safety net politics and the sharpening contradictions between the costs of projecting military power abroad while satisfying growing needs at home. Dramatized by foreign policy critic Ron Paul’s showing in early Republican primaries, some of these issues are even gaining traction on the right. As in Mexico, a new year’s gush of gasoline price hikes and other rises in the cost of living greeted the populace. Welcome to the Cost of January. Maybe the end of the Mayan calendar later this year augurs big surprises, after all. Read more ..

Iran's Nukes

British Newspaper Publishes Detailed Account of Alleged Mossad Assassination of Iranian Nuke scientist

January 16th 2012

Iran - Car carrying Mostafa Ahmadi Roshan

A British newspaper has published an article, purporting to be the testimony of an Israeli source, describing the assassination last week of Ahmadi Roshan, an Iranian nuclear scientist, as a Mossad hit.

The UK Sunday Times, which has published alleged exposes of Israeli covert activities before, wrote that "It was a classic assassination mission for Israel." According to YNet, the Times then proceeded to give a detailed, play-by-play account of the assassination itself. Israeli Mossad agents gathered in small groups to observe key locations across Tehran. The agents monitored Roshan's every move from an improvised control room in a safe house nearby. Just before 8 am, an Israeli observer reported the objective had left via an intercepted message. Then the assassins' commander made the final decision, telling agents who were standing by with a motorcycle in a hidden garage to "go."

At around 8:20 am, the agents tracked down the scientist's car, The Sunday Times reported. The masked man made sure the passenger was in fact Roshan before proceeding to attach a magnetic bomb to the vehicle, intended primarily to injure Roshan. Nine seconds later an explosion was heard. The scientist was killed instantly. The driver was badly injured and died in the hospital later that day. Read more ..

Israel and Arabs on Edge

Differences Within Parties -- Not Just Between Them

January 16th 2012

Palestine Topics - Prime Minister Salam Fayyad  and PA President Mahmoud Abbas
PM Salam Fayyad  and PA Pres. Mahmoud Abbas and other PA leaders

After 16 months of no negotiations, Israeli and Palestinian officials met in Amman last week and again this week. Yet, the question remains whether these talks represent a new opening or if they are merely a tactical instrument for each side to perpetuate recriminations?

If it is only about tactics, these talks will enable the Palestinians to rebut the Israeli claim regarding the Quartet's 90-day clock for both sides to present a map on borders and security because there are no direct meetings between Israel and the Palestinians. On the other hand, should the Palestinians walk away from the table, this will enable the Israelis to repeat what they have always said, namely that the Palestinians' refusal to stay at the negotiating table is the source of the impasse.

The idea of talks having only tactical value or something more meaningful depends on a deeper question. At the core, there are internal policy debates within both Israeli and Palestinian policy circles on the value of making any concessions to each other when each side is absolutely certain that no territorial breakthrough will occur during 2012. These quiet domestic debates occur within Palestinian and Israeli policy circles, and not just between them. Read more ..

Obama and Israel

Can Jack Lew Do for Obama What AmeriCorps Did for Clinton?

January 13th 2012

Obama Admin Topics - Jacob Lew

When the son of an Israeli Irgun member, left the White House to run for mayor of Chicago, Rahm Emanuel left a void not quite filled by his replacement Bill Daley.  In many respects Daley was not able to fill the shoes for the President.  He could not get the respect of those he needed on the Hill and even within the Administration to be an effective advocate for Mr. Obama.  So when Daley seemingly abruptly resigned this week, there was no hesitation before New Yorker, and perennial Washington insider Jack Lew, and someone identified as an Orthodox Jew, was called on to step in.

Lew makes for an interesting choice for Mr. Obama, as he is one who has the respect of both sides.  He comes with impressive credentials stemming from his days working for Democratic Congressman Joe Moakley and the late House Speaker Tip O'Neill.  More recently, he was an executive at Citicorp where he ran a group that made alternative investments, such as hedge funds, credit swaps and other creative financial mechanisms that people such as the President say has hurt the economy. 

Lew served as Clinton's Director of the Office of Management and Budget, and also served as a member of the National Security Council.  A feature that might be helpful for Mr. Obama is that while at OMB, the U.S. budget saw a surplus for three years in a row.

Lew is an accomplished man with good intution, and he understands budgets and fiscal prudence. Maybe that’s why he was chosen. Going into what may be a harsh re-election campaign, Mr. Obama may be seeking to bolster his credibility among those who feel he has not done a good job on the economic front. As someone who designed Bill Clinton’s AmeriCorps, a program that helped and continues to create jobs, opportunity, hope and civic pride, perhaps Lew was brought in to develop the next best thing for a struggling administration. Read more ..

Inside Latin America

A Chance for Guatemala to Produce Effective Progress towards Good Governance

January 11th 2012

Latin American Topics - Otto Perez Molina of Guatemala
Guatemalan president-elect Otto Perez Molina

In a rare push to promote indigenous rights in his country, outgoing Guatemalan President Álvaro Colom promised during his campaign to create a government that would seek to unite the ethnically and culturally diverse nation. Following his 2007 electoral victory, he announced, “My objective is to convert Guatemala into a social-democratic country with a Mayan face, with a corn tamale scent, and with the natural beauty that God gave us. It will be a pure Guatemalan social democracy that strengthens the nation’s unity and identity.”

But the level of violence in Guatemala has since suffocated such rhetoric; the country today has the seventh highest rate of violent deaths in the world. In what will undoubtedly be a dramatic political shift from moderate left to hard right, Otto Pérez Molina will take over as president on January 14, 2012. The new administration can either keep up with the progress being made on peacemaking and reconciliation in the areas of indigenous and human rights or all but dismiss the issue as it tackles Guatemala’s notorious security problem. Read more ..

Edge on The Caribbean

Renowned attorney Announces Presidential Bid and offers Road to Rule of Law for Dominican Republic

January 11th 2012

Latin American Topics - Guillermo Moreno Garcia

Guillermo Moreno García, who served as Attorney General of the Dominican Republic from 1996 to 1997, also was a presidential candidate for the Movement for Independence, Unity and Change (Movimiento Independencia, Unidad y Cambio – MIUCA) during the country’s 2008 elections. After his defeat in those elections, Moreno García created his own leftist party, Alianza País, and will run for the presidency again in the upcoming 2012 elections. His supporters hope that his various accomplishments will cast his candidacy in a positive light and raise his popularity.

Perhaps one of Moreno García’s most noticeable achievements was his involvement in the Orlando Martínez case. A famed Dominican journalist, Orlando Martínez Howley was killed on March 17, 1975 during the rule of former President Joaquín Balaguer (1960-1962, 1966-1978, 1986-1996). This president’s second term became known as the “12 years of Balaguer,” a very dark era in Dominican history due to Balaguer’s totalitarian inclinations. Orlando Martínez Howley was just one of hundreds of young people killed or “disappeared” during this period. Although General Joaquín Pou Castro participated in this violent crime against Martínez, neither he nor the other involved perpetrators were persecuted at the time. In fact, justice began to be acheived only when Dominican Republic opinion forced Balaguer to jail the murderers. But in a matter of weeks, the government released the detainees and even promoted them. Read more ..

Africa on Edge

Assessing Obama’s Africa Policy, Looking at 2012 and Beyond

January 11th 2012

Africa Topics - Obama in Africa

The Washington-based Brookings Institution said Africa, to benefit from development opportunities in 2012, must prioritize regional integration efforts and manage a growing youth population. The public policy organization said the continent will have to increase the profile of organizations, such as the African Union, to sustain advancements in public health and increase the African voice in global governance. Wednesday, the group’s Africa Growth Initiative hosts a discussion to identify top priorities for Africa for the coming year and beyond.

Senior Fellow Mwangi Kimenyi, director of the Africa Growth Initiative, said, if re-elected in November, President Barack Obama must take a pro-active policy position that encourages more engagement with Africa. “What we are seeing is sort of what we may call a decline of the United States in Africa because it is being edged out slowly by China, Brazil, Russia, and others.  And so, we would like to see President Obama take a very pro-active policy position with regards to Africa,” he said. Kimenyi said Obama, in his first term, maintained funding for programs initiated and promoted by his predecessor, George W. Bush, including HIV and AIDS treatment and research funding. He also said while the president introduced his own initiatives, such as the Feed the Future program and the Global Climate Initiative, such initiatives are small in scale and scope. Read more ..

Inside Latin America

US Leadership Needed as Iranian President Ahmadinejad courts Latin American Leftists

January 10th 2012

Venezuela Topics - Chavez and Ahmadinejad
Venezuelan Pres. Hugo Chavez and Iranian Pres. Mahmoud Ahmadinejad

President Barack Obama’s authorization of the expulsion of the Venezuelan consul general from that country’s consulate office has further deteriorated relations between the two countries. Although the Obama administration has not been explicit as to the reason for the expulsion, the action is within Washington’s legal right. This decision makes it even more apparent that Washington is unwilling or unable to implement policies that will constructively influence Latin America.

The White House’s latest decision displays the hard truth that President Obama’s approach is to deal with left-leaning hemispheric regimes with a hard-line political agenda of ridicule rather than through constructive policy-making in the region. His administration’s attitude seems to be that no hemispheric issue has the potential to be a compelling factor in the next US presidential election. However, votes could be picked up from rightist exile groups coming from Cuba, Nicaragua, and Venezuela among other disaffected conservatives, who hold passionate thoughts on their personal political agendas. Read more ..

The 2012 Vote

On Budget, Santorum Looks to Out-Cut Them All

January 9th 2012

Politics - Santorum
Rick Santorum

Republican White House hopeful Rick Santorum is proposing cuts to the federal budget that are firmly to the right of Republicans in Congress and his rivals for the GOP nomination. Santorum’s goal of cutting $5 trillion in federal spending over five years exceeds any budget-cutting proposal put forward by the congressional GOP. He would cut federal spending faster and deeper than the budget plans from House Budget Chairman Paul Ryan (R-Wis.) and the conservative House Republican Study Committee. The cuts in Santorum’s budget even trump Sen. Rand Paul (R-Ky.), who has proposed eliminating four Cabinet departments.

The House-passed 2012 GOP budget would cut spending by over $1 trillion over five years, while the RSC would cut it by $2.3 trillion and Paul’s would cut it by $3 trillion, when compared to the Congressional Budget Office (CBO) baseline. Santorum, a former Pennsylvania senator, has tried to distinguish himself from his rivals for the GOP nomination with his budget plan. But the approach also carries political risks, as his plan would almost certainly require immediate benefit cuts for current retirees, leaving him vulnerable to charges that he would destroy the safety net for seniors.

Mitt Romney, who beat Santorum in the Iowa caucuses by only eight votes, has said he supports a “cut, cap and balance” plan that would bring spending down to 20 percent of the economy from the current 24 percent.
This plan puts him in line with the numbers in the House-passed budget, which was the basis of the House’s “cut, cap and balance” bill this summer. The House budget gets to 20 percent over 10 years by cutting $5 trillion. Candidate Rep. Ron Paul (R-Texas), who is also polling strongly in the GOP race, has released a full budget proposal that would eliminate five Cabinet departments, but that four-year plan would rack up only $4.1 trillion in cuts by 2016, compared to the CBO baseline. Read more ..

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