Massenbach-Letter: NEWS 13/06/14

Massenbach-Letter

Udo von Massenbach

Guten Morgen.

· The Evolution of al Qa’ida and Other Salafi Jihadists

· Zenith:Die Revolution ist Illusion

· The Future of American Land Power: Does Forward Presence Still Matter? The Case of the Army in the Pacific

· SPECIAL REPORT-How fracking helps America beat German industry

· Kazakh leader: Turkey should join Eurasian union

· Borderlands: The View Beyond Ukraine

Massenbach* A Persistent Threat *The Evolution of al Qa’ida and Other Salafi Jihadists*

Abstract

This report examines the status and evolution of al Qa’ida and other Salafi-jihadist groups, a subject of intense debate in the West. Based on an analysis of thousands of primary source documents, the report concludes that there has been an increase in the number of Salafi-jihadist groups, fighters, and attacks over the past several years. The author uses this analysis to build a framework for addressing the varying levels of threat in different countries, from engagement in high-threat, low government capacity countries; to forward partnering in medium-threat, limited government capacity environments; to offshore balancing in countries with low levels of threat and sufficient government capacity to counter Salafi-jihadist groups.

Key Findings

The number of Salafi-jihadist groups and fighters increased after 2010, as well as the number of attacks perpetrated by al Qa’ida and its affiliates.

Examples include groups operating in Tunisia, Algeria, Mali, Libya, Egypt (including the Sinai Peninsula), Lebanon, and Syria.

These trends suggest that the United States needs to remain focused on countering the proliferation of Salafi-jihadist groups, which have started to resurge in North Africa and the Middle East, despite the temptations to shift attention and resources to the strategic "rebalance" to the Asia-Pacific region and to significantly decrease counterterrorism budgets in an era of fiscal constraint.

The broader Salafi-jihadist movement has become more decentralized.

Control is diffused among four tiers: (1) core al Qa’ida in Pakistan, led by Ayman al-Zawahiri; (2) formal affiliates that have sworn allegiance to core al Qa’ida, located in Syria, Somalia, Yemen, and North Africa; (3) a panoply of Salafi-jihadist groups that have not sworn allegiance to al Qa’ida but are committed to establishing an extremist Islamic emirate; and (4) inspired individuals and networks.

The threat posed by the diverse set of Salafi-jihadist groups varies widely.

Some are locally focused and have shown little interest in attacking Western targets. Others, like al Qa’ida in the Arabian Peninsula, present an immediate threat to the U.S. homeland, along with inspired individuals like the Tsarnaev brothers — the perpetrators of the April 2013 Boston Marathon bombings. In addition, several Salafi-jihadist groups pose a medium-level threat because of their desire and ability to target U.S. citizens and facilities overseas, including U.S. embassies.

Recommendations

· The United States should establish a more adaptive counterterrorism strategy that involves a combination of engagement, forward partnering, and offshore balancing.

· The United States should consider a more aggressive strategy to target Salafi-jihadist groups in Syria, which in 2013 had more than half of Salafi-jihadists worldwide, either clandestinely or with regional and local allies.

http://www.rand.org/pubs/research_reports/RR637.html?utm_source=policycurrents&utm_medium=email&utm_campaign=policycurrents20140605

http://www.rand.org/content/dam/rand/pubs/research_reports/RR600/RR637/RAND_RR637.pdf

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Policy= res publica

Freudenberg-Pilster* IZA: ARBEITEN OHNE GRENZEN – Eine Agenda für Europas Zukunft*

Freie Mobilität hilft, das knapper werdende Humankapital innerhalb der EU besser zu verteilen.

Die Freizügigkeit von Unionsbürgern und Arbeitskräften innerhalb der Europäischen Union zählt zu den Eckpfeilern des europäischen Einigungsprozesses und ist in den europäischen Verträgen als Grundrecht fixiert.

In einem freiheitlichen und gemeinsamen Europa gibt es keine EU-Bürger erster und zweiter Klasse. Dennoch unternehmen einzelne Länder und Gruppierungen derzeit Vorstöße, das Rad der Geschichte wieder zurückzudrehen und die Freizügigkeit für EU-Arbeitnehmer erneut einzuschränken.

Wir sehen diese Entwicklung, auch wenn sie innerhalb des gemeinsamen Binnenmarktes nur von einer Minderheit unterstützt wird, mit wachsender Sorge. Die Versuche, die Freizügigkeit als Grundrecht zu beschränken, schaden dem europäischen Interesse an einer dynamischen wirtschaftlichen Entwicklung.

Die Rufe nach einer Beschneidung dieser Freiheiten dienen vor allem der Positionierung im Vorfeld der Wahlen zum Europäischen Parlament und sind der sachlichen Diskussion insofern wenig förderlich.

Ein echter europäischer Arbeitsmarkt ohne Grenzen ist nicht zuletzt eine Grundvoraussetzung für einen funktionierenden Binnenmarkt und einen stabilen Euro. Er steigert die Wachstumschancen und erleichtert die europaweite Ausbalancierung von Angebot und Nachfrage.

Die ungehinderte Freizügigkeit für Arbeitnehmer sorgt für mehr wirtschaftliche Dynamik in der gesamten EU, hilft beim Abbau der gravierenden ökonomischen Ungleichgewichte zwischen den Mitgliedsstaaten und mildert die negativen Auswirkungen der demographischen Entwicklung.

Freie Mobilität führt nicht zu nennenswerter Wohlfahrtsmigration, sondern hilft vielmehr, das knapper werdende Humankapital innerhalb der EU besser zu verteilen.

Durch die Stärkung von Wachstum und Wettbewerbsfähigkeit trägt die Arbeitnehmerfreizügigkeit entscheidend zur Steigerung des Wohlstands in ganz Europa bei.

Abbau noch vorhandener Restriktionen

Statt rückwärtsgewandter Politik gilt es nun, die noch bestehenden Mobilitätshemmnisse auf den europäischen Arbeitsmärkten weiter abzubauen. Nur dann kann es gelingen, das Kernziel der europäischen Idee zu verwirklichen: die Lebensbedingungen aller Bürger in Europa zu verbessern.

Dazu bedarf es der folgenden Maßnahmen:

  1. Bessere Koordinierung im Bereich des Steuer- und Sozialrechts sowie bei der betrieblichen und privaten Altersvorsorge.
  2. Aufbau einer effektiven europaweiten Arbeitskräftevermittlung.
  3. Klare Bedingungen beim Bezug von Sozialleistungen während der Arbeitssuche in einem anderen EU-Mitgliedsstaat.
  4. Unterstützung von grenzüberschreitender Mobilität etwa durch Sprachförderung und Umzugshilfen; Ausweitung der Austauschprogramme für Auszubildende, Studierende und Erwerbstätige.
  5. Generelle europaweite Anerkennung von beruflichen Qualifikationen und Abschlüssen sowie klare Regeln für den Zugang zu regulierten Berufen.
  6. Öffnung auch der öffentlichen Verwaltungen für qualifizierte Bewerber aus dem EU-Ausland.
  7. Verbesserung der Informationspolitik, um die EU-Bürger von den individuellen und gesamtgesellschaftlichen Vorteilen uneingeschränkter Mobilität zu überzeugen.


Vor diesem Hintergrund fordern wir eine Europäische Charta für grenzüberschreitende Arbeitsmobilität.

Wir sind bereit, ein gemeinsames europaweites Aktionsbündnis aus Politik, Wirtschaft und Wissenschaft unter dem Leitmotiv „Arbeiten ohne Grenzen“ zu unterstützen.

Es gilt jetzt alle gesellschaftlichen Kräfte zu mobilisieren, um die Verwirklichung der europäischen Idee entschieden voranzutreiben, statt sie durch eine Aufweichung der erzielten Fortschritte zu behindern.

Unterzeichnet von führenden europäischen Arbeitsökonomen:

Tito Boeri, Bocconi-Universität, Mailand, Italien
Pierre Cahuc, CREST-ENSAE, Paris, Frankreich
Werner Eichhorst, IZA, Bonn, Deutschland
Juan F. Jimeno, Banco de España, Madrid, Spanien
Pawel Kaczmarczyk, Universität Warschau, Polen
Martin Kahanec, Central European University, Budapest, Ungarn
Jo Ritzen, Universität Maastricht, Niederlande
Monica Roman, Wirtschaftsakademie Bukarest, Rumänien
Nina Smith, Universität Aarhus, Dänemark
Alan Winters, University of Sussex, Brighton, Großbritannien
Klaus F. Zimmermann, IZA und Universität Bonn, Deutschland

http://www.iza.org/working_without_borders/de/

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Politics: From Vision to Action

Barandat* The Future of American Landpower:

Does Forward Presence Still Matter? The Case of the Army in the Pacific*

Brief Synopsis

View the Executive Summary

The time has come for a reappraisal of the U.S. Army’s forward presence in East Asia, given the evolving strategic context and the extraordinarily high, recurring costs of deploying U.S. Army forces from the 50 states for increasingly important security cooperation activities across the Indo-Asia-Pacific theater. Without unduly harming America’s commitment to deterrence on the Korean peninsula, a reconfigured Army forward presence could help to achieve U.S. objectives throughout the theater more effectively through more regular, longer-duration engagement with critical allies and partners, while reducing the recurring transportation costs associated with today’s practice of sending U.S.-based units to conduct most exercises and training events across the Indo-Asia-Pacific region. Certainly, there are some major challenges involved in reconfiguring the Army’s forward presence, but these are not insurmountable. Furthermore, to avoid trying would severely limit the effectiveness and the efficiency of the Army’s contribution to broader U.S. national security goals.

http://www.strategicstudiesinstitute.army.mil/pubs/display.cfm?pubID=1202&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+StrategicStudiesInstitute+%28Strategic+Studies+Institute+U.S.+Army+War+College%29#.U460qAcooTM.email

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Suter* IZA Director and Britain’s minister for work and pensions discuss about welfare migration*

Posted on June 4, 2014 by IZA Press

From left to right: Klaus F. Zimmermann, Iain Duncan Smith and Nico Lange (Konrad-Adenauer-Stiftung)

During a meeting with the UK Secretary of State for Work and Pensions, Iain Duncan Smith, IZA Director Klaus F. Zimmermann emphasized the importance of free labor mobility within the European Union. According to Zimmermann a European labor market without borders is also a prerequisite for a functioning single market economy and the stability of the Euro. Without it, growth prospects are hampered – as is any hope for a Europe which manages to balance the laws of supply and demand.

Upon invitation by German Konrad-Adenauer-Stiftung, a Berlin-based political foundation, Duncan Smith and Zimmermann discussed the recently implemented welfare reforms in the United Kingdom, which included measures to improve the flexibility of the labor market, get the unemployed back into jobs and support them in work. These reforms have triggered broad discussions and debates on the question of how to deal with welfare migration and whether to restrict labor mobility.

More on this topic:

§ Speech delivered by Secretary of State for Work and Pensions, Iain Duncan Smith

§ Comment by IZA Director Klaus F. Zimmermann

§ IZA Policy Paper No. 75: „Labor Market Reforms and the Great Recession” by Klaus F. Zimmermann

§ EIB article: “The Mobility Challenge for Growth and Integration in Europe” by Klaus F. Zimmermann

Find more information on migration and labor mobility on IZA World of Labor:

§ „Circular Migration“ by Klaus F. Zimmermann

§ “Do migrants take the jobs of native workers?” by Amelie F. Constant

§ “The welfare magnet hypothesis and the welfare take-up of migrants” by Corrado Giulietti

§ “Do immigrant workers depress the wages of native workers?” by Giovanni Peri

http://newsroom.iza.org/en/2014/06/04/iza-director-and-britains-minister-for-work-and-pensions-discuss-about-welfare-migration/

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Middle East

Zenith:Die Revolution ist Illusion

Peer-H. Summek

Syrien wartet auf eine friedliche Entwicklung. Historisch gesehen hatte das Land diese Chance noch nie. Deshalb muss jede Form einer möglichen Ordnung genau durchdacht werden.

Nach drei Jahren »Revolution« in Syrien gibt es nur noch ein Ziel: Frieden. Doch auch wenn die Dringlichkeit dieses Ziels über allem stehen sollte, ist eine wesentliche Frage nicht außer Acht zu lassen: Worin liegt die eigentliche Ursache für den Krieg? Jeder, der das Land und die Menschen kennt, weiß um die Gründe für den anfänglichen »Protest«. Doch dieses Wissen kann die mittlerweile äußerst verfahrene Situation nicht ändern.

Das Land war 2010 bereits am Rande seiner wirtschaftlichen Versorgungskraft. Die Bevölkerung stieg über die letzten Jahrzehnte (1997 ca. 14,5 Millionen Einwohner – 2010 ca. 22 Millionen) mit einer global fast einmalig hohen Rate und die wirtschaftliche Leistungskraft des Landes war gerade noch in der Lage, die Grundbedürfnisse der Bevölkerung zu decken.

Noch in den 1990ern war das Land, auch aufgrund der langjährigen Nähe zur ehemaligen UdSSR, wirtschaftlich und medial isoliert. Die kulturelle und wirtschaftliche Öffnung nach dem Tod von Hafez Al-Assad führte in Syrien zu dem Effekt, der auch die »Revolution« in Ägypten und Tunesien gut erklärt: Die Sehnsucht vor allem junger Menschen nach einer Zukunft mit dem Lebensstandard, der ihnen tagtäglich in Bildern vorgeführt wird.

Es gibt in der Levante genug Ressourcen für eine Illusion, aber nicht genug, um diese zu verwirklichen

Wrestling, McDonalds und große Autos treffen auf Armut, mangelnde Bildung und eine schlechte Infrastruktur. Hinzu kommt die Ansicht, dass der Nachbarstaat Israel Privilegien erhält, die für das eigene Land unerreichbar scheinen. Dieses Gefühl der ungerechten Behandlung ist für die relativ gut ausgebildete Jugend der 1990er Jahre immer unerträglicher geworden. Das gilt für die fortschrittliche städtische Oberschicht genauso wie für die breite Masse der ländlichen Bevölkerung.

Wer Anfang des 21. Jahrhunderts durch die Straßen der beiden levantinischen Städte Beirut und Damaskus streifte, der weiß, dass die jungen Menschen dort dieselben Träume haben wie ihre Altersgenossen in Mitteleuropa. Doch besteht in beiden Regionen jeweils eine andere Perspektive. Eine Tatsache, die nur allzu häufig ignoriert wird. Es gibt in der Levante genug Ressourcen für eine Illusion, aber nicht genug, um diese zu verwirklichen.

Neben der schlechten Wirtschaftskraft fehlen aber auch die gesellschaftlichen Voraussetzungen, um die in den Medien vorgelebte Illusion von Wohlstand in Realität umzusetzen.

Doch diese Erkenntnis nützt den Menschen in Syrien derzeit wenig. Die Realität verlangt nach Frieden. Da hilft der Glanz der Vergangenheit nicht viel. Es muss Stabilität und Ordnung hergestellt werden – nur wie?

Anhand einer Diktatur, die eine Grundversorgung mit planwirtschaftlichen Methoden und notfalls Gewalt herstellen würde? Oder einer Theokratie die letztendlich dasselbe Ziel hat, dafür aber monotheistische Gründlichkeit anwendet – im Zweifel mit der gleichen Gewalt? Oder einer Demokratie, die sich unter den aktuellen Voraussetzungen in einem historisch einmaligen Prozess erst noch bewähren müsste.

Warum führende Mächte als mögliche Helfer in Syrien wegfallen

Vielleicht kann eine ehrliche Hilfe von außen, anders als die machtpolitische Einmischung nach dem Ersten Weltkrieg, eine für die Menschen gute Lösung finden. Doch eben aufgrund ihrer kolonialen Vorgeschichte fallen die meisten der heutzutage »führenden« Mächte als mögliche Helfer weg.

Die USA haben sich in den letzten Jahrzehnten als ein eigentlich idealer Wegbereiter für eben solch einen Prozess selbst disqualifiziert. Die so genannte King-Crane-Kommission, die 1919 die Menschen im Nahen Osten befragte, in welchem Staatswesen sie nach dem Ende des Osmanischen Reiches leben wollten, ist ein sehr gutes Beispiel für die Möglichkeit, die die Vereinigten Staaten einst hatten, als machtpolitisch neutraler Vermittler aufzutreten. Doch die Irakkriege und ein bedingungsloses Festhalten an Israel haben ihnen fast das gesamte politische Ansehen in der Region zerstört.

Ähnlich ist es der kommunistischen Ideologie ergangen, die nach dem Zweiten Weltkrieg durchaus eine reale Option darstellte. Assad als ein »offizieller« Vertreter der Baath-Ideologie, ist eines der letzten Relikte dieser Ära.

Der theokratische Ansatz Saudi-Arabiens kann nur in dieser einmaligen Situation, die durch den Ölreichtum geschaffen wurde, funktionieren. Hinzu kommt im Falle des wahhabitischen Königreiches auch noch die aus dem Kalten Krieg herrührende Verquickung aus amerikanischem Protektionismus und einer antiamerikanischen Grundhaltung. Als Beispiel für Syrien ist diese Form der Regierung vollkommen unrealistisch.

Mit oder ohne Assad hätte sich das Land 2011 in der Zwickmühle befunden

Syrien muss sich auf seine ureigenen Stärken berufen: kulturelle Offenheit und Handel. Auch wenn die über Jahrtausende währende, geopolitische Bedeutung Syriens für den Handel heute nicht mehr so deutlich ist, so ist doch die lange Erfahrung der Gesellschaft in kultureller Toleranz immer noch von unschätzbarem Wert. Das mag derzeit merkwürdig klingen, doch wer die Kultur in der Levante kennt, der weiß, wie sich die Toleranz durch Respekt und Abgrenzung anfühlt – zumindest in der monotheistischen Welt.

Solch eine Zielsetzung ist derzeit sicher nur eine Option. Doch angesichts der menschlichen Verrohung der Gesellschaft Syriens muss jede Form einer möglichen Ordnung nach einem Ende der Gewalt durchdacht werden. Und das alles möglichst schnell.

Mit oder ohne Assad hätte sich das Land 2011 in der Zwickmühle befunden. Eine kinderreiche Gesellschaft ohne Zukunftsperspektiven steuert zwangsläufig in einen Konflikt. In den vergangenen drei Jahren ist der Deckmantel, den die Regierung über die Probleme im Land geworfen hatte, weggerissen worden. Übrig bleibt nur die Hoffnungslosigkeit, die sich in der Auflösung der Gesellschaft zeigt. Der Konflikt wird so lange weitergehen, bis sich die Bevölkerung wieder auf einem Niveau befindet, das den »Übriggebliebenen« eine relativ sichere Existenz ermöglicht.

http://www.zenithonline.de/deutsch/politik/a/artikel/die-revolution-ist-illusion-004048/

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STRATFOR/Friedman — Borderlands: The View Beyond Ukraine*

Editor’s Note: This is the final installment in George Friedman’s recent series written during his journey from the Baltics, through Central and Eastern Europe and then east to Turkey and Azerbaijan.

I traveled between Poland and Azerbaijan during a rare period when the forces that shape Europe appear to be in flux, and most of the countries I visited are re-evaluating their positions. The overwhelming sense was anxiety. Observers from countries such as Poland make little effort to hide it. Those from places such as Turkey, which is larger and not directly in the line of fire, look at Ukraine as an undercurrent rather than the dominant theme. But from Poland to Azerbaijan, I heard two questions: Are the Russians on the move? And what can these countries do to protect themselves?

Moscow is anxious too, and some Russians I spoke to expressed this quite openly. From the Russian point of view, the Europeans and Americans did the one thing they knew Moscow could not live with: They installed a pro-Western government in Kiev. For them, the Western claims of a popular rising in Ukraine are belied by the Western-funded nongovernmental organizations that were critical to sustaining the movement to unseat the government. But that is hardly what matters most. A pro-Western government now controls Ukraine, and if that control holds, the Russian Federation is in danger.

The View to Russia’s West

When the Russians look at a map, this is what they see: The Baltic states are in NATO and Ukraine has aligned with the West. The anti-Western government in Belarus is at risk, and were Minsk to change its loyalties, Russia’s potential enemies will have penetrated almost as deeply toward the Russian core as the Nazis did. This is a comparison I heard Russians make several times. For them, the Great Patriotic War (World War II), which left more than 20 million Soviet dead, is a vivid, living memory, and so is Hitler’s treachery. Russians are not a trusting people and have no reason to be. The same is true of the Central Europeans, the Turks and the Caucasians. Nothing in their past permits them the luxury of assuming the best about anyone.

In recent weeks, three things have become obvious. The first is that the Russians will not invade Ukraine directly. You don’t occupy a country of almost 50 million people with the 50,000 troops Russia has mobilized, and you can never assume that an occupied population will welcome you. The Russians have postured as if they were an overwhelming force, but the threat of American munitions dumps and airstrikes against fuel depots — not something that the Russians can dismiss out of hand — as well as the threat of an insurgency leave the Russians wary.

Equally clear is that no European power can defend the line running from Poland to Romania with the decisive force needed to repel a Russian attack — or even support these countries against Russian pressure and potential subversion. Germany is the key country, and Berlin has made it clear that there are limits to what it is prepared to do in Ukraine and to the steps it is ready to take to defend the eastern flank of NATO and the European Union. Berlin does not want another Cold War. Germany depends on Russian energy and ultimately is satisfied with the status quo. The rest of Europe cannot intervene decisively.

Finally, this means that any support to Europe’s eastern flank must come from the United States. Washington spent the past few weeks indicating its commitment to two key countries: Poland and Romania. President Barack Obama went to Poland while Vice President Joe Biden traveled to Romania, and while both leaders stressed Washington’s absolute commitment to Poland’s and Romania’s national security, they were short on specifics. That lack of detail is not surprising — the United States is still taking stock of the situation. Washington is not ready to outline the nature and extent of its support, and from the American point of view, so long as the Russians are focused on Ukraine, there is still time to do so.

The primary concern for the United States would logically be Poland, the most vulnerable country on the North European Plain. But for now, distance and logistics limit the Russians‘ ability to threaten Poland. The stability of the Baltic states is the greatest fear in the region, and the threat there is not Russian invasion, but Russian subversion — a threat that armored divisions cannot address.

More important, a primary commitment to Poland forces any alliance into a defensive posture. That made sense during the Cold War, when Soviet conventional military forces were much larger and better deployed. But Russia today is far weaker, and a more assertive strategy — one that presents Russia with risks while also defending key assets — is more appropriate.

The Emerging Black Sea Strategy

For these reasons, we see the United States beginning to adopt a Black Sea strategy centered on Romania. The Russians held on to Sevastopol because naval capability in the Black Sea is critical. A strategy that enhances Romania’s naval capability and places U.S. aircraft in the region would pose a threat to the Russian fleet. It would also extend defensive capabilities to Georgia and protect the indispensible route for any pipelines running from Azerbaijan. Put simply, a competent rival Black Sea fleet would create problems for Russia, particularly if the Ukrainian regime survives and Crimea is isolated. The visit by U.S. Secretary of Defense Chuck Hagel to Romania indicates the importance U.S. strategic thinkers place on that country.

It is important to note the extensive diplomacy ongoing between the United States and Turkey, as well as meetings between Turkish, Romanian and Polish leaders. The Turks are obviously vulnerable to energy cutoffs, and Ankara does not want to see the Black Sea used as a battleground. At the same time, Turkey would want to be a part of any alliance structure the United States is constructing in the region. In the long run, the Turks have a deep interest in Iraqi and Iranian energy and little trust in Russian intentions.

What we are seeing is regional players toying with new alliance structures. The process is in its infancy, but it is already forcing the Russians to consider their future. An added dimension to this is of course energy. The Russians would appear to have the advantage here: Many of the nations that fear Moscow also depend on it for natural gas. But there is a Russian weakness here as well. Natural gas is a powerful lever, but it is not particularly profitable. Russia’s national budget — indeed, its economy — is built around oil. The chief danger Moscow faces is that it doesn’t control the price of oil. A radical decline in that benchmark would cause the Russian economy to stagger at the very least. While in Poland, Obama deliberately pointed out Russia’s economic problems. He wanted Russian President Vladimir Putin to know that he understands Russia’s weakness.

Deployment of military force, while necessary, is therefore not the core element of the developing Western strategy. Rather, the key move is to take steps to flood the world market with oil — even knowing that implementing this strategy is extremely difficult. It appears likely that once Tehran reaches an agreement with Washington on nuclear weapons, Iran’s oil market will open up, and a major source of oil will flow. Additional Iraqi oil is also moving toward the market, and Libyan production might soon resume. Washington itself wields the most powerful weapon: The United States could reverse its current policy and start exporting oil and liquefied natural gas.

There are undercurrents in this. Bulgaria announced this weekend that it would suspend construction on South Stream, a pipeline the Russians favor, after the country’s prime minister met with three U.S. senators. In the short run, the strategy may be to limit Russia’s control over Europe’s energy; in the long run, the strategy could create the means to destabilize the Russian economy.

None of this is an immediate threat to Russia. It will be years before these and other alternative sources of energy come online — indeed, some may never be available — and there are many constraints, especially in the short term. U.S. companies and oil-producing allies who depend on high oil prices would suffer alongside Russia — an expensive collateral to this policy. But the game here is geopolitical futures. Once major efforts are underway to increase the worldwide availability of oil, those efforts are hard to stop. The Russian strategy must be to diminish the influence of energy on Moscow’s geopolitical imperatives. The Russians know this, and their aim now is to diversify their economy enough within the next 10 years to reduce their vulnerability to fluctuations in energy markets. The threat to Moscow is a surge in supply that cuts into Russian markets and depresses oil prices before Russia completes this effort.

For the United States, the game is not to massively arm Poland, build a Romanian navy or transform the world oil markets. It is simpler than that: Washington wants to show that it is ready to do these things. Such a show of will forces the Russians to recalculate their position now, before the threat becomes a reality. It is not that the United States is bluffing — it is that Washington would prefer to achieve its goals without a major effort, and frankly, without tanking oil prices.

New Calculations

The United States now has a pro-Western government in Ukraine. If that government survives and is strengthened, the Russian position becomes entirely defensive, and the threat Moscow poses is gone. Further, Belarus could destabilize and end up with a pro-Western government. In either case, the Russian position becomes enormously difficult. Its principal weapon — cutting off natural gas to Europe — would then have to take into account Russia’s strategic vulnerability, and possibly even calculate the potential for instability in Russia itself. The future for Russia becomes the one thing no nation wants: uncertain.

Russia now has two choices. The first is to destabilize Ukraine. Success is uncertain, and Moscow cannot predict the U.S. response. Washington’s moves in Poland, Romania and even Turkey have made this option riskier than it was. The fallback for Russia is to neutralize Ukraine. Russia would leave the current government in place so long as Kiev pledges not to join Western-led multinational structures and not to allow any foreign military presence on Ukrainian territory. In return, the Russians would guarantee Ukraine’s territorial integrity and might even reconsider the status of Crimea.

The Western strategy is to create a credible threat to fundamental Russian interests. That means guaranteeing Poland’s defense while setting up offensive military capabilities in Romania. But a linchpin of the strategy is to let Moscow know that the United States is prepared if necessary to stage an all-out attack on the price of oil. The goal is to make Putin rethink the long-term risks he is running by cashing in on Russia’s short-term advantage in natural gas exports.

The Russians must now calculate whether they can destabilize Ukraine enough to displace the pro-Western government. They must also consider the costs of doing so. In the meantime, Moscow is exploring possibilities for the neutralization of Ukraine. Germany will be key, and I suspect the Germans would be happy to see Kiev neutralized if doing so brought an end to the crisis.

From the U.S. point of view, a Western-oriented but neutral Ukraine would create a buffer zone without forcing a confrontation with Russia. What the Americans must calculate is how stable this arrangement is and what the Russians might later do to undermine it. The problem with agreeing to any deal is in its enforcement. You enforce it by being able to threaten the other party with the one thing they don’t want. And the one thing that Russia doesn’t want is anything that threatens its weakened economy. If a control mechanism doesn’t emerge, then Ukraine will remain a battleground in a little cold war.

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ZAMAN: Kazakh leader: Turkey should join Eurasian union

Kazakh President Nursultan Nazarbayev has invited Turkey to be a member of the Eurasian Economic Union (EaEU), which was formed on Thursday with a treaty signed by the presidents of Russia, Kazakhstan and Belarus.

The union aims to challenge the economic power of the United States, the European Union and China.

Kazakhstan’s President Nursultan Nazarbayev (R) and his Turkish counterpart, Abdullah Gül, met in the Turkish resort town of Bodrum on Thursday.(Photo: AP)

According to a statement released by the Kazakh presidential office on Friday, Nazarbayev said Turkey should be a member of the EaEU during the fourth summit of the Cooperation Council of Turkic-Speaking States (Turkic Council) on June 4-5 in the Turkish port city of Bodrum.

The Turkic Council is an international organization encompassing Azerbaijan, Kazakhstan, Kyrgyzstan and Turkey, and was founded with the signing of the Nakhchivan Agreement in 2009.

Stressing that there is not much difference between the Turkic Council and EaEU, Nazarbayev said: "The EaEU is open to new members. Turkey and others could become members of our union," according to the statement. Nazarbayev also brought to mind that Armenia and Kyrgyzstan are planned future members of the EaEU and said that many countries are willing to develop trade cooperation with EaEU members.

The EaEU treaty will be put into force on Jan. 1, 2015, once it has passed the formality of being approved by the three former Soviet republics‘ parliaments.

Nazarbayev first called for a Eurasian union just over 20 years ago, with a vision of grouping states together for economic benefits. Taking the European Union as an example, the EaEU will represent a market of 170 million people and will serve three member states with a customs union, with the potential of growth through additional members.

"The original purpose of the Eurasian [Economic] Union was to become a dominant regional economic organization, with a legal architecture controlled by Moscow," said Alexander Cooley, a political science professor at Barnard College, according to Foreign Policy magazine. "But Crimea ended up illustrating that [Russian President Vladimir] Putin would much rather have something to ‚effectively lock countries into Moscow’s political and economic orbit‘," Cooley added.

Turkey has a rocky relationship with the EU, and has been waiting for full membership to the EU for decades. Meanwhile, the EU has criticized Turkey on issues such as freedom of expression and human rights.

In November, Prime Minister Recep Tayyip Erdoğan called on Putin to let Turkey join the Shanghai Cooperation Organization (SCO) during a joint press conference the two leaders held in St. Petersburg. “Include us in the Shanghai Cooperation Organization and relieve us from this pain,” Erdoğan told Putin in an implicit reference to Turkey’s long EU membership process when he was in St. Petersburg for the fourth meeting of the High-Level Cooperation Council between Turkey and Russia. “Besides, we are also ready to ink free trade agreements with countries in Eurasia,” added Erdoğan.

Evaluating Ukraine’s decision to suspend preparations towards signing a free trade and political association agreement with the EU, Putin, in a teasing comment, said Russia is eager to make use of Turkey’s experience with the European bloc. The Turkish prime minister responded in a similar way to Putin on Turkish-EU ties, saying: “Well said. Turkey has 50 years of experience.”

Erdoğan said he has spoken about Turkey’s request to be a member of the SCO to Putin before, and that Turkey attaches importance to this issue.

In late January, Erdoğan said Turkey was seriously considering seeking membership in the SCO, a remark that caused serious concern and confusion in the country, which has been pursuing membership in the EU for a long while. His remarks came at a time when Turkey and the EU were failing to make substantial progress in their accession talks; they were seen as a protest to some European heavyweights that have been blocking Turkey’s membership.

The SCO is a mutual-security organization that was founded in 2001 in Shanghai by the leaders of China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan and Uzbekistan. The other countries, with the exception of Uzbekistan, had been members of the Shanghai Five, founded in 1996; after the inclusion of Uzbekistan in 2001, the members renamed the organization.

Turkey was accepted as a dialogue partner by the Shanghai Five at its annual summit in Beijing on June 7, 2012. Senior European Parliament (EP) members have called Erdoğan’s proposal for membership in the SCO “irresponsible.”

British Liberal Baroness Sarah Ludford and Czech Socialist Libor Roucek underlined that while the proposal was itself taken very negatively in Brussels, the timing was also very unfortunate as it coincided with a period when Russia strongly pressured Ukraine not to sign an association agreement with the EU, which was eventually successful in December last year. Russia is one of the founding members of the SCO.

http://www.todayszaman.com/news-349785-kazakh-leader-turkey-should-join-eurasian-union.html

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*Massenbach’s

Recommendation*

SPECIAL REPORT-How fracking helps America beat German industry

Mon, Jun 2 2014

By Christoph Steitz and Ernest Scheyder

BURGHAUSEN, Germany/GEISMAR, Louisiana, June 2 (Reuters) – Nestled in the green hills of southern Germany, chemical giant Wacker Chemie churns out a wide range of products, from an ingredient for chewing gum to the polysilicon crystals in solar cells.

The electricity to produce all that – enough power for more than 700,000 households annually – has become more costly at Wacker’s main factory in Burghausen. It has played a big part in pushing up the firm’s total energy bill by 70 percent over the last five years, to nearly half a billion euros.

It’s a different story across the Atlantic in the U.S. state of Louisiana. There, chemicals maker Huntsman Corp pays 22 percent less for its power than it did just seven years ago.

The tale of those numbers underlines a profound shift underway in two of the world’s biggest industrial powers. Thanks in large part to Germany’s decision to phase out nuclear power and push into green energy, companies there now pay some of the highest prices in the world for power. On average, German industrial companies with large power appetites paid about 0.15 euros ($0.21) per kilowatt hour (kWh) of electricity last year, according to Eurostat, the European Union’s statistics agency.

In the United States, electricity prices are falling thanks to natural gas derived from fracking – the hydraulic fracturing of rock. Louisiana now boasts industrial electricity prices of just $0.055 per kWh, according to U.S. Energy Information Administration data.

Peter Huntsman, chief executive of the family firm, calls the United States the new global standard for low-cost manufacturing. Huntsman is spending hundreds of millions of dollars to expand in the United States, and rapidly closing plants in Europe. The company estimates that a large, modern petrochemical plant in the United States is $125 million cheaper to run per year than in Europe. That sum includes cheaper power, waste disposal and myriad other factors, and Huntsman said the contrast is similar for Asian plants.

"It’s not a question of whether other countries are competitive or not," Huntsman, brother of former U.S. presidential candidate Jon, said in an interview. "They’re not."

Power isn’t the only reason the United States is becoming so attractive to manufacturers again. Average labour costs in China have more than doubled since 2007 to around $2 per hour, while they’ve risen less in the United States to around $18 per hour, with worker productivity far higher in the United States, according to U.S. government statistics. When you factor in the cost of shipping goods from Asia, it’s little wonder that America has re-emerged as one of the most competitive places to build stuff.

That’s a dramatic change from just a few years ago, when Germany was held up as a model of manufacturing prowess. As recently as 2011, politicians in Washington were openly discussing how to copy Germany’s success.

"We need to be more like Germany," General Electric Chief Executive Jeffrey Immelt said in an interview that year with Reuters.

Now things are heading the other way. German Chancellor Angela Merkel’s energy policies – designed to sharply boost the share of renewables in Germany’s energy mix, tackle climate change and cut Germany’s dependency on foreign gas and oil – are a rising source of concern for the country’s industry, particularly energy-intensive companies like Wacker. According to Germany’s Chamber of Commerce and Industry, half of the country’s industrial companies believe their global competitiveness is threatened by Germany’s energy policy, and a quarter of them are either shifting production abroad or considering doing so. The United States is among the top destinations.

In March, BMW, the world’s largest luxury carmaker, said it would invest $1 billion to expand its plant in Spartanburg, South Carolina, making it the German group’s biggest production facility by 2016. In all, German companies invested more than 800 billion euros in U.S. expansions between 2008 and 2012, according to the most recent Bundesbank statistics. Germany’s Chamber of Commerce and Industry reckons that investments could reach 200 billion euros in 2014, an all-time high.

"In the energy-intensive sectors, such as chemicals, we are facing substantial challenges that will prevail for a longer time," said Carsten Rolle, head of energy and climate policy at the Federation of German Industries (BDI). "It isn’t sudden but a creeping process with new investment going more often to the United States and other places abroad, where energy costs are much lower."

A BIG BET

Wacker, which had sales of 4.5 billion euros last year, is one of the German firms making the shift stateside. The company is investing up to $2.4 billion in a new polysilicon plant in the U.S. state of Tennessee. With 650 employees and capacity of at least 20,000 tonnes a year, the plant will boost Wacker’s capacity to make the material by nearly 40 percent. While the company remains tight-lipped about its exact power costs in Germany, analysts estimate that it will pay a third less for electricity in Tennessee than in its main plant in Burghausen.

Wacker still employs about three quarters of its 16,800 workers in Germany, but most of its capital spending has shifted outside the country. Six years ago, the company spent 84 percent of its investment budget at home. Last year that dropped to 37 percent.

And as energy prices rise, the group is eager to slash costs to soften the blow.

In Germany, "we’re cutting corners wherever possible," said Christian Essers, in charge of the firm’s energy purchases. "But at some point the steps to improve efficiency are getting smaller while the effort to take them gets bigger."

At Huntsman, which had 2013 revenues of $11.08 billion, executives have begun paring down European production of basic chemicals, which typically have small margins. In the last 18 months it has spent $100 million to close several plants and cut more than 600 jobs in Europe.

Huntsman plans to close a Belgian plant this year that makes chemicals used in detergents and soaps, blaming weak profits.

At its Geismar, Louisiana, plant, Huntsman is spending $78 million to boost production capacity of methylene diphenyl diisocyanate (MDI), a chemical used to make insulations and other common consumer goods. When the upgrade is finished early next year, Geismar will be the largest MDI plant in North America.

That’s a far cry from five years ago, when Geismar was the most expensive MDI plant in Huntsman’s portfolio, more expensive than peers in the Netherlands and China. At times Huntsman was running the Geismar plant far below its capacity because of the expense.

Cheap natural gas has changed all that.

"This facility can export product around the world to the backyard of our competitors and still the product would be cheaper, even with shipping," said Huntsman.

At Port Neches, Texas, Huntsman is investing $125 million on an expansion that, when finished in 2015, will make it the world’s second-largest producer of ethylene oxide, a chemical crucial in the production of carpet, clothing, soap and scores of other consumer goods.

"We’re putting a big bet on the table, and in my opinion this company has yet to take full advantage of the North American shale story," Huntsman told employees at its Geismar site during a town hall meeting in April.

Fracking has allowed the global energy industry to access vast new energy supplies. The process involves injecting sand, water and chemicals at high pressures deep underground to break apart shale rock, allowing oil and natural gas to escape. It first became popular in the United States six years ago and has produced a glut of natural gas in the country, pushing down domestic prices for the fuel by about 61 percent in that timeframe. That’s made it more appealing to use in electricity generation. Now roughly a third of U.S. power plants employ it.

Natural gas is also a key ingredient used to make chemicals, akin to flour in a bakery. Automobile tyres, for instance, are made using styrene, a chemical which is derived from natural gas.

Cheap, plentiful natural gas has helped boost manufacturing’s contribution to U.S. Gross Domestic Product by 15 percent since 2008, when fracking started to become popular. Natural gas made a $2.08 trillion contribution to the U.S. manufacturing sector last year alone.

Natural gas also helps plants power themselves through a process known as cogeneration, the use of excess heat to generate power.

Huntsman’s Port Neches plant, for instance, produces all of its electricity through cogeneration. Most new European plants, by contrast, don’t use cogeneration due to regulations and a lack of cheap natural gas to power generators, analysts say.

Huntsman pays about 80 percent more for electricity in Germany than on the U.S. Gulf Coast, executives said.

"Germany is going to see the (negative) effect of its energy policy three to five years down the road," Huntsman said, explaining that companies will gradually begin to move operations out due to high power prices. "You won’t see this hurt the job market right away."

ENERGY SHIFT

Germany’s high energy costs are rooted in aggressive new energy standards which began during the last decade and are designed to generate up to 60 percent of the nation’s electricity from wind turbines, solar panels and other renewable sources by 2035, up from 27 percent now.

The goal is to make Europe’s largest economy a leader in tackling climate change, and to prove to other nations that a radical overhaul of power markets can happen without too much financial pain.

The accident at Japan’s Fukushima nuclear plant in 2011 emboldened Berlin in its goals, leading Chancellor Merkel to accelerate a phase-out of nuclear power. Before Fukushima, nuclear supplied about a quarter of Germany’s power; by 2022 it will supply none.

This transformation, dubbed the "Energiewende" or energy shift, has made Germany among the most expensive places in the world to purchase electricity. The massive rise is not only due to the payments made for solar power, but all other renewable energy sources, most notably offshore and onshore wind parks, biogas and geothermal plants. Costs are also ballooning due to the country’s power taxes, which account for 14 percent of the total.

Some politicians have begun to worry about the increase. Economy Minister Sigmar Gabriel warned in January that the power price imbalance could cause a "dramatic de-industrialisation" in the country. Officials in his ministry say no issue worries him more than Germany’s creeping loss of competitiveness.

"There is this great confidence that Germany is the bulwark of a sick Europe, but now its industry is concerned about maintaining that strength," said Daniel Yergin, vice chairman of consultancy IHS and author of an influential history of the oil industry.

"Germany faces a double whammy of rising energy costs in Germany and falling energy costs in the United States," he said.

Fracking has been controversial around the world due to the mixture of chemicals and sand injected deep in the earth. It has been blamed in parts of the United States for water contamination, earthquakes and methane leaks, though direct correlations have been hard to establish. Given these concerns, it has received a cool reception in Europe.

Germany has not tapped its shale gas reserves, deterred by its powerful renewable energy lobby, which has warned of the environmental risks linked to fracking.

ECONOMIC LAWS

Generally speaking, power costs are less important than labour in industry. But Wacker’s plant in Burghausen, on Germany’s border with Austria, shows what’s at stake.

Founded a hundred years ago, the plant is now one of Germany’s biggest industrial hubs, employing about 10,000 staff across an area equal to some 460 soccer fields.

Each day, about 250 trucks and 100 train wagons transport goods to and from the plant, where workers turn methanol, silicon, ethylene and rock salt into more than 3,000 different products.

At Burghausen, Wacker makes polysilicon, one of its most important products and one whose manufacturing process is particularly energy-intensive. At one of the plant’s high-security production sites, several cylinder-shaped ovens quietly hum. A lava-like glow emanates from the small windows. Temperatures of more than 1,000 degrees Celsius (1,832 degrees Fahrenheit) are needed over long periods of time to make polysilicon hyper-pure, as clients demand for solar cells.

Wacker Chemie’s bigger rival BASF has found an alternative way to protect itself from rising power prices. BASF SE, the world’s largest chemical company, generates much of its power in Germany via cogeneration, but it gets the natural gas needed for the plants from its own natural gas division in the North Sea. That gives it a cost advantage.

The company, however, remains the exception, and the burden for Germany’s industrial base will get bigger as more and more renewables come online.

For Wacker, it’s an ironic twist of fate. It was a small hydro-plant that helped it expand production in Burghausen after World War One. A hundred years on, green energy sources are forcing the group to look abroad when it thinks about the future.

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