Massenbach-Letter: NEWS 12.08.16

Massenbach-Letter. News

· Russia, Azerbaijan, Iran pledge to enhance cooperation

· Declining economic activity and oil revenues in Russia are adversely affecting its regional neighbors

· Friedman: Beyond the Turkish Coup

· Gallup: Fear of the "Greater of Two Evils" Could Spur High Turnout * WSJ-Opinion: Trump’s Tax Revolution

· The Roots of Middle East Mistrust – Die Wurzeln des Misstrauens im Mittleren Osten

· Deutschland-Trend:Merkels Beliebtheit stürzt ab – aus einem Grund

Massenbach*Russia, Azerbaijan, Iran pledge to enhance cooperation

Iranian President Hassan Rouhani (L), Azerbaijani President Ilham Aliyev (C) and Russian President Vladimir Putin pose for a group photo during a trilateral meeting in Baku, Azerbaijan, Aug. 8, 2016. The meeting is expected to focus on trade, energy, communications, transportation, environment as well as the Syrian situation and the Islamic State threat to Russia. (Xinhua/AZERTAC)

BAKU, Aug. 8 (Xinhua) — A final declaration of Russia, Azerbaijan and Iran summit reflected the whole range of cooperation opportunities offered by the new format, Russian Foreign Minister Sergey Lavrov said here on Monday.

He made the remarks during a joint press conference with Azerbaijan’s Foreign Minister Elmar Mammadyarov and Iranian Foreign Minister Mohammad Javad Zarif in Baku.

According to Lavrov, the final document of the summit has covered "both political and economic issues with a focus on transport and energy."

Lavrov said the three leaders agreed to establish a tripartite mechanism for cooperation at the ministerial level and relevant ministries.

Russian President Vladimir Putin, Azerbaijani President Ilham Aliyev and Iranian President Hassan Rouhani have pledged to counter the growing global threat of terrorism in a joint declaration of a trilateral summit here on Monday.

The three leaders expressed their willingness to combat terrorism, extremism, transnational organized crime, illicit trafficking in arms, drugs and their precursors, as well as human trafficking and crimes in the sphere of information and communication technologies.

They have also recognized that "the unresolved conflicts in the region are a major obstacle to regional cooperation," and underlined the importance of their settlement "on the basis of principles and norms of international law."

"The parties will continue the comprehensive development of equal and mutually beneficial cooperation, and to deepen and broaden the political dialogue at various levels across the entire spectrum of issues of mutual interest," the document said.

Russia, Azerbaijan and Iran also agreed to deepen cooperation in various sectors of the economy "on the basis of equality and mutual benefit."

The three presidents also pledged to take effective measures to develop transportation and communication infrastructure in order to expand the opportunities for passenger and cargo transportation via the North-South corridor.

"The parties stressed the importance of an early agreement on the Caspian Sea Convention, and the Foreign Ministers were instructed to intensify the preparation for the Fifth Caspian summit. The new format will have a positive impact on regional processes," Lavrov pointed out, adding that Russia accepted the invitation to attend the next trilateral summit in Iran.

Foreign Minister of Iran Mohammad Javad Zarif said that the heads of the three countries agreed to foster cooperation in the areas of security, energy, transit and other areas.

The Geographical Lynchpin: Great Power Jockeying in the Caspian

Zbigniew Brzezinkski defined “Eurasia” as one of the most important geopolitical concepts. He observed, “Ever since the continents started interacting politically, some five hundred years ago, Eurasia has been the center of world power. A power that dominates “Eurasia” would control two of the world’s three most advanced and economically productive regions.

A mere glance at the map also suggests that control over “Eurasia” would almost automatically entail Africa’s subordination, rendering the Western Hemisphere and Oceania geopolitically peripheral to the world’s central continent. About 75 per cent of the world’s people live in “Eurasia”, and most of the world’s physical wealth is there as well, both in its enterprises and underneath its soil. “Eurasia” accounts for about three-fourths of the world’s known energy resources.”

In the Western sense, when political scientists talk about “Eurasia”, they generally mean Russia. Russia has been marginalized at the edge of a Western-dominated political and economic system and in recent years has begun to stress a geopolitics that puts Russia at the center of a number of axes: European-Asian, Christian-Muslim-Buddhist, Mediterranean-Indian, Slavic-Turkic, and so on. A strategy towards Eurasia is paramount in deterring any Russian aggression in Eurasia. Russia is one of three states running interference against American objectives in Eurasia, the other two being Iran and China. Russia poses the biggest threat against American objectives in the region due mainly to a supposed historical security imperative to control the Eurasian landmass. However, this explanation doesn’t fully fit the evidence. Russia does not act the way it does based on centuries-old habits. Instead the strategy lies in the much newer habit of senior Russian policymakers who belonged to the all-Union elite before 1991 and have the tendency to see the post-Soviet Eurasian states as though they were still Soviet Socialist Republics, that is, still largely geopolitically beholden to the power of Russia. Probably the biggest and often most overlooked region in Eurasia is the Caspian Sea. If the U.S is to have a grand strategy to deal with Russia and an emboldened Iran, policymakers in Washington cannot ignore the Caspian region for the sake of convenience. The Caspian Sea is important for many reasons and beyond a doubt Russia and Iran are the two biggest actors in the region. Furthermore, China has invested heavily in a number of infrastructure projects in Central Asia and Moscow is keeping a close eye on Beijing’s motives in the region and views Beijing as a potential competitor for influence in the region in the same way Russia sees Iran. They are Russian partners, but partners with a tinge of rivalry and tension. (see more att. Caspian-1)


Our Russian news desk:

Declining economic activity and oil revenues in Russia are adversely affecting its regional neighbors

The Russian economy, already weakened by the imposition of Ukraine-related sanctions by the United States and the European Union, has been further damaged by low crude oil prices since the end of 2014. In 2015, Russia was the world’s second-largest producer of petroleum and natural gas, and the oil and natural gas sector accounted for approximately 8% of Russia’s gross domestic product (GDP), according to IHS Markit. However, in conjunction with both lower oil prices and international sanctions, Russia has recently experienced five consecutive quarters of decline in GDP, representing that country’s deepest economic downturn since 2008-09. While consumers in many countries are benefiting from lower oil prices, declines in Russian economic activity are also having an adverse effect on economic growth in many neighboring countries by reducing remittances from migrant populations working in Russia.

Approximately 8% of the Russia’s total inhabitants are migrants (foreign-born populations) according to the United Nations Population Division,1 with the vast majority of migrants coming from Eastern Europe and Central Asia according to the most recent World Bank statistics. These migrants often send a portion of their earnings back to their families or other residents in their country of origin, which are referred to as personal remittances. In some developing countries, remittances are a significant source of purchasing power. Under such circumstances, slower growth or outright declines in remittances can negatively affect the economies of countries dependent on them and, in turn, potentially slow their oil consumption growth.

As Russia’s economy contracted, remittances from Russia to other countries declined by 40% from 2014 to 2015 to roughly $19.7 billion, the lowest amount since 2006, according to the World Bank.2 In 2015, Armenia, Azerbaijan, Georgia, Kyrgyzstan, Tajikistan, Ukraine, and Uzbekistan all received at least 50% of their remittances from Russia. Remittances as measured against GDP in each of these countries was also greater than 1%. Using GDP data from Oxford Economics, the share of remittances as measured against GDP ranged from 3% in Azerbaijan to 33% in Tajikistan in 2015. However, each of these seven countries, which collectively accounted for 0.7% of global GDP in 2015, saw declines in remittance receipts from Russia from 2014 to 2015 (Figure 1), based on statistics from the World Bank stated in U.S. dollars (USD). On average, remittances from Russia to each of these countries declined by 26%, or $0.8 billion.

In addition to the effects that lower economic activity in Russia may have had on the job prospects of migrants and the amount of money they earned in 2015, the severe depreciation of the Russian ruble (RUB) reduced the value of remittances sent from Russia. Because crude oil is priced globally in USD, low crude oil prices can affect exchange rates between the USD and the free-floating currencies of some oil-producing nations, reducing the value of remittances in USD terms. From 2014 to 2015, the average annual USD-RUB exchange rate rose from RUB 38.6 to RUB 61.3 (Figure 2), amounting to a 59% depreciation in the RUB, the largest since 1999.

With the exception of the Ukrainian hryvnia, the RUB also depreciated against the currencies of the selected remittance-receiving countries from 2014 to 2015 (Figure 3), ranging from an annual depreciation of 18% against the Azerbaijani manat to 30% against the Uzbekistani som. However, because the RUB depreciated more against the USD over the same period, the amount of money sent home by migrants shows a larger decline when quoted in USD than if measured in the currencies of the migrants‘ home countries.

In addition to reducing economic activity, declines in remittances can affect a country’s oil consumption, which is often sensitive to the level of income received from both domestic and international sources. Annual oil consumption across the seven countries that receive most of their remittances from Russia grew by an estimated 18% in 2014 and then declined by about 1% in 2015.

The International Monetary Fund’s Regional Economic Outlook for the Caucasus and Central Asian region, which includes six of the seven countries, cites weakness in the Russian economy and the drop in remittance inflows among the reasons why the region’s GDP growth in 2016 is projected to be the lowest in two decades. In addition, some countries in this region are also major oil producers, like Azerbaijan, which has more directly been economically affected by both low crude oil prices and declining crude production.

Russia’s economy is still projected to contract in 2016, although at a lower rate of -1%, according to Oxford Economics. Brent monthly average spot crude oil prices have risen after reaching a 12-year low in January, which may help to limit Russia’s expected budget deficit in 2016. The depreciation of the RUB against the USD has moderated in 2016 compared with the depreciation that occurred from 2014 to 2015. As the Russian economy begins to stabilize and expand in the coming years, remittance inflows to Eastern European and Central Asian countries may increase and strengthen the region’s economic growth, and potentially its oil consumption.

Iranian President Due in Baku for Official Visit on Sunday (07 Aug. 2016)

TEHRAN (Tasnim) – Iranian President Hassan Rouhani plans to leave for the neighboring country of Azerbaijan Republic on Sunday to attend a trilateral summit among Tehran, Moscow and Baku. President Rouhani and his Russian and Azeri counterparts, Vladimir Putin and Ilham Aliyev, will hold trilateral talks on Monday on various issues, including trilateral cooperation in commerce, energy, telecommunications, environmental issues, fight against terrorism, transportation, and the transit of goods.

During his two-day visit to the Azeri capital, Rouhani is also slated to hold a separate meeting with Putin and exchange views on issues of mutual interest.

In another meeting with his Azeri counterpart due to be held on Sunday, the Iranian president will discuss the process of implementing already reached agreements and bolstering cooperation in commerce, industry, energy, culture, banking, consular facilities and telecommunications, and particularly railroad transportation.

A number of ministers and high ranking officials are to accompany President Rouhani in the official visit.The upcoming summit will follow an April meeting among the Iranian, Russian and Azeri foreign ministers in Baku. In that gathering, Iran’s Mohammad Javad Zarif, Russia’s Sergey Lavrov and Azerbaijan’s Elmar Mammadyarov discussed a range of issues, including ways to settle conflicts in the Nagorno-Karabakh region.

Tehran, Moscow Mull Building Rail Link to Reduce Suez Traffic: Russian Minister

August, 09, 2016 – 16:00

TEHRAN (Tasnim) – Russia’s transport minister, Maxim Sokolovm, said Tehran and Moscow are considering establishing a rail link that would foster trade connectivity through a less trodden path than the Suez Canal.

“If the rail link to Iran is built, it can take some share of the cargo that’s being transported via Suez,” Sokolov said in an interview on Monday, Bloomberg reported.

He added that plans for the railroad may be completed next year.

It will be built as part of the International North-South Transport Corridor (NSTC), a multi-model route to link India and the Middle East to the Caucasus, Central Asia and Europe, which will significantly reduce costs and travel time and boost trade.

For trade, India currently uses maritime transport to link with Russia. From St. Petersburg, the cargo has to sail around the entire western part of Europe and the Suez Canal which takes around 40 days to reach Mumbai.

According to the Russian Railways Logistics, the new route cuts the time just to 14 days and eliminates the need to pass through the Suez Canal, which is not only overloaded, but also very expensive.

Moscow Eyes Construction of LNG Plant in Southern Iran: Russian Minister

TEHRAN (Tasnim) – Russia’s energy minister said Tehran and Moscow are in talks over construction of a liquefied natural gas (LNG) plant to deliver Russian natural gas to northern Iran through Azerbaijan.

"In the gas sector, we are considering the prospects of swap gas deliveries to northern Iran through Azerbaijan with the possibility of constructing an LNG plant in southern Iran, receiving the equivalent of LNG to be delivered to markets in South East Asia where gas consumption is expected to grow with higher rates in the future," Alexander Novak told reporters in Baku, Sputnik reported.

He made the remarks following a trilateral meeting between presidents of Iran, Russia and Azerbaijan in the Azeri capital on Monday.

President Rouhani and his Russian and Azeri counterparts, Vladimir Putin and Ilham Aliyev, held trilateral talks on Monday on various issues, including trilateral cooperation in commerce, energy, telecommunications, environmental issues, fight against terrorism, transportation, and transit of goods.

During his two-day visit to the Azeri capital, Rouhani also held a separate meeting with Putin and exchanged views on issues of mutual interest.

A number of ministers and high ranking officials accompanied President Rouhani in the official visit.

Russia-Turkey rapprochement revives Turkish Stream pipeline talks

Turkey’s President Recep Tayyip Erdogan said on Monday (8 August)that Ankara was ready to take steps towards the implementation of the Turkish Stream gas pipeline project. Bypassing Kyiv, and punishing Sofia for having obstructed the construction of scrapped South Stream, the new Turkish Stream pipeline will travel across the Black Sea to the Turkish city of Ipsila, close to the Greek-Turkish border. Its aim is to deliver 47 billion cubic meters (bcm) of gas to Central Europe and the Balkans. *

Putin: Ankara Makes Positive Decision on Resuming Akkuyu, Turkish Stream

Putin: Ankara Makes Positive Decision on Resuming Akkuyu, Turkish Stream

Putin: Ankara Makes Positive Decision


Policy= res publica

Freudenberg-Pilster* Deutschland-Trend:Merkels Beliebtheit stürzt ab – aus einem Grund

Der Zuspruch der Deutschen für die Kanzlerin geht deutlich zurück. Selbst von den Unionsanhängern unterstützt nur noch eine Minderheit ihre Politik. Merkels Gegenspieler dagegen holt stark auf.

Nach den islamistisch motivierten Anschlägen in Ansbach und Würzburg verlieren Bundeskanzlerin Angela Merkel (CDU) und ihre Flüchtlingspolitik erheblich an Zuspruch.

In der Liste der beliebtesten Politiker rutscht Merkel auf Rang sechs ab, wie der Deutschlandtrend von Infratest Dimap für die "Welt" und die ARD-"Tagesthemen" ergibt.

Nur noch 47 Prozent der Bürger sind mit Merkels Arbeit zufrieden; im Juli waren es noch 59 Prozent.

Die Zustimmung für die Kanzlerin ist damit auf den zweitschlechtesten Wert während dieser Legislaturperiode gefallen. Ihr unionsinterner Gegenspieler, der bayerische Ministerpräsident Horst Seehofer (CSU), gewinnt derweil an Popularität. Kam er im Juli auf eine Zustimmung von 33 Prozent, so beträgt diese nunmehr 44 Prozent.

Beliebtester Politiker bleibt Außenminister Frank-Walter Steinmeier (SPD, 71 Prozent). Beliebter als Merkel sind neben Finanzminister Wolfgang Schäuble und Innenminister Thomas de Maizière (beide CDU) zwei Grünen-Politiker: der baden-württembergische Ministerpräsident Winfried Kretschmann und Parteichef Cem Özdemir.

. (Foto: Infografik Die Welt)

Nur noch jeder dritte Bürger ist mit Merkels Asyl- und Flüchtlingspolitik zufrieden – im Juli hatten sich so noch 42 Prozent geäußert. Fast zwei Drittel der Befragten geben an, mit Merkels Flüchtlingspolitik "weniger zufrieden" oder "gar nicht zufrieden" zu sein. Einen mehrheitlichen Rückhalt hat Merkel auf diesem Feld nur noch bei den Anhängern der Grünen (60 Prozent).

AfD-Anhänger lehnen Merkels Asylpolitik zu 100 Prozent ab

Etwas mehr als die Hälfte der Anhänger von CDU und CSU lehnen Merkels Asyl- und Flüchtlingspolitik ab.

Die Ablehnung bei den Unterstützern von SPD, Linkspartei und FDP ist noch größer.

Die AfD-Sympathisanten lehnen Merkels Flüchtlingspolitik zu 100 Prozent ab.

. (Foto: Infografik Die Welt)

Mit der Politik der Bundesregierung allgemein sind unter allen Befragten 41 Prozent (vier Punkte weniger als im Juli) zufrieden und 55 Prozent nicht zufrieden (plus drei Punkte).

Kritisch betrachten die Deutschen mehrheitlich den seit nunmehr fast einem Jahr dauernden fundamentalen Streit zwischen CDU und CSU, der sich besonders in der Flüchtlingspolitik manifestiert. Knapp zwei Drittel der Befragten werfen der CSU vor, ihr seien die eigenen Interessen wichtiger als der Erfolg der Regierung.

Doch immerhin 40 Prozent stimmen der Aussage zu, es sei gut, dass sich die CSU "sehr offensiv gegen die Kanzlerin positioniert". Gut neun von zehn Bürgern sind der Auffassung, die Koalitionsparteien sollten stärker gemeinsame Lösungen vorantreiben, als sich öffentlich zu streiten.

Die FDP würde den Einzug ins Parlament schaffen

Wäre am Sonntag Bundestagswahl, käme die CDU/CSU unverändert auf 34 Prozent, die SPD auf 22 Prozent. Ebenfalls bei ihren Werten bleiben die Grünen (13 Prozent), AfD (zwölf) und die Linke (neun). Die FDP verliert einen Punkt, würde aber mit fünf Prozent den Einzug ins Parlament schaffen.

Auf Basis dieser Zahlen besäßen weder Union/Grüne noch SPD/Grüne/Linke eine parlamentarische Mehrheit. Möglich wären eine große Koalition oder ein Jamaika-Bündnis aus Union, Grünen und FDP.

Für den Deutschlandtrend hat Infratest Dimap am 1. und 2. August 1003 wahlberechtigte Bürger befragt. Für die Sonntagsfrage wurden vom 1. bis 3. August 1503 Bürger befragt. Die Umfrage ist repräsentativ.

04.08.2016 | 21:19 Uhr

****************************************************************************************************************** Politics: From Vision to Action

Barandat* Beyond the Turkish Coup Geopolitical Futures logo

By George Friedman

Aug. 5, 2016 Turkey has three options for its national strategy moving forward.

Enough time has passed since the attempted coup to begin to take stock of the situation. President Recep Tayyip Erdoğan has clearly emerged from the coup in a stronger position than before. The coup, rather than fragmenting the country, has brought it a greater degree of unity, outside the Kurdish area, than has been seen before.

Erdoğan is restructuring Turkish institutions, from the military to schools to the media, in ways that will support whatever moves he chooses to make. His long-term intentions – the ends toward which he is restructuring Turkish institutions – are unclear. The restructuring, arrests and firings will make him enormously powerful, but the important question is what he intends to do with that power.

Let me begin with a point I have made many times over the years. There are four significant powers in the region, each with the ability to defend themselves and project some degree of power. They are Saudi Arabia, Iran, Israel and Turkey. Of the four, only Turkey has the size, economic power and political influence to shape the region. On the surface, Israel is the strongest power, but its size limits its power projection to its near neighbors. It has political influence, but that is limited by the fact that it is a Jewish state. Saudi Arabia’s primary source of power is money, but the decline in the price of oil has undercut that influence, while its military, as we have seen in Yemen, has not evolved sufficiently in its effectiveness. Iran is limited by geography. Its ability to project and sustain large-scale military forces west of the Zagros Mountains is limited. It is compelled to channel its power through proxies of limited strength.

Turkey alone has the mixture of economic, political and military power to become the major regional power. For over half a millennium, save for the period after World War I, Turkey has been the dominant regional power. Today, it has the largest economy and military in the region and, therefore, ought to have the greatest influence.

However, while its economy has grown dramatically since Erdoğan’s Justice and Development Party took power, it has now slowed and must evolve. The army may be the largest in the Middle East, but much of its size comes from draftees on short-term duty who are effectively untrained. Its equipment has not evolved since the Cold War, and much of its military doctrine is still evolving. It is not clear that Turkey’s other institutions, like its foreign service or intelligence services, are in positions to support a great power. And both domestic and regional politics have limited Turkey’s options.

So Turkey has avoided overextending itself, aware that defeat is possible and would derail Turkish evolution. One policy, more wishful thinking than reality, was to have no enemies. Turkey has moved to a policy of limited engagement along its frontier and increasing openness to more distant powers such as Israel and Russia. It is a policy of subtlety, shifting from hostility to neutrality to limited cooperation and back again as circumstances dictate. Turkey has been cautiously defensive.

The coup permits Erdoğan to reshape Turkey’s institutions in a way that was not possible before the coup. Before the coup, Erdoğan faced substantial opposition. The coup gave him an opportunity to restructure the military, intelligence and other institutions to give Turkey more room to maneuver in the region. Failed coups, when they are thoroughly crushed and discredited, dramatically increase the power of their victims. Erdoğan appears to be ready to take advantage of that.

From this coup, the limitations that have kept Turkey from its full potential in the region will begin to disappear. At the moment, Turkey faces massive chaos to its south, a degree of instability in the Caucasus and emerging U.S.-Russian competition in the Black Sea. Russian influence in the Balkans is rising, particularly in Serbia. The region is fraught with instability and Turkey has not been able to stop it. The restructuring opens the door for Turkey to become much more assertive in the region.

In recent years, Turkey’s policy has been tactical. It has moved from threat to threat and from opportunity to opportunity without a broad strategy, besides avoiding excessive exposure to threats. In the current environment, the general approach of accommodation is becoming less and less tenable. The unpredictability of the situation in the south coupled with potential threats from every direction are forcing it to consider increasing its control of the situation. In this context, a tactical policy must be replaced by a national strategy.

Turkey now has three options. The first is to attempt to manage its interests by itself. The second, is to attempt to ally with Russia for joint management in the region. The third is to return to its prior alliance with the United States.

It is always attractive to be self-reliant. However, Turkey has only just started the process of institutional reconstruction. At minimum, this process will take a decade before a fully self-reliant policy – other than hoping for the best – can be achieved. And even after that point, regional military powers have global economic interests. This asymmetry creates dependencies that are outside of their control. Turkey will need to have allies even as it becomes regionally powerful.

An alliance with Russia makes sense. The ideal strategy is that the two weaker powers collaborate to block the stronger power. After the Vietnam War, the United States allied with China to block the Soviets. The danger in this strategy is that one of the allied powers might be weaker than the other, or that either might suddenly switch alliances. The Russians clearly need Turkey to counterbalance the United States, and Turkey could use Russia for the same end. But if Russia were to weaken due to economic problems, or come to an agreement with the United States over Ukraine, Turkey might find itself alone.

The problem with an alliance with the United States is that the imbalance of power leaves Turkey vulnerable to shifts in American policy. The United States could undertake strategies that are not in Turkey’s interest and force Turkey to support them and commit resources to an extent that is irrational for Turkey. Russia has a policy in Syria that Turkey opposes. The United States has a policy that is far less clear. The United States is more dangerous than Russia in this case, as Russia’s actions can be predicted. For Turkey, the United States possesses the worst attribute an ally can have: unpredictability.

There is another element in this calculation. Russia is near. The United States is far away. Russia is a competitor in the region. The United States has a much lower stake in the region than Russia and is, therefore, in spite of all the drawbacks for Turkey, a safer choice. In the past century, Turkey has had a Russian option. It has always declined the option because proximity raised the stakes too high. The United States is less predictable precisely because it has less at stake.

In making this choice, there is also the question of whether the United States was behind the coup. I am not in a position to know and all things are possible, but I tend not to believe that for a simple reason. The United States is trying to extricate itself from the region by allowing regional powers manage it.

Weakening Turkey would run counter to American interests. If we assume that the CIA is as brilliant as Turks like to believe, then the CIA would have known that the planned coup was being run by incompetents and that the only outcome if the coup succeeded would be chaos in Turkey. The U.S. wants to withdraw from the region and that is impossible unless Turkey is strong. A chaotic Turkey is the last thing the U.S. would have wanted. U.S. sponsorship of a coup would have been unlikely for geopolitical reasons, and also because it would have been an unnecessary risk. In my view, Erdoğan’s victory was in the American interest far more than the alternatives.

Turkey is now making the transition that I forecast years ago from a secondary power to a major regional power. That has placed extreme stress on the Turkish political system, generating a coup that Erdoğan came out of stronger than ever. I also predicted that decades down the road this might lead to conflict. But at this point the fundamental geopolitical reality is that for the foundations of Turkish foreign policy, a relationship with the United States is more rational than one with Russia or trying to operate alone. A foreign policy is designed from the options that are available. Turkey’s power is increasing but has not yet reached the point at which it can invent new options. There will be extreme stress on both sides but in the end, I think the Turkish-American alliance will re-emerge.


Middle East

Serbia: U.S. Vice President Joe Biden is going to Serbia. Russian Prime Minister Dmitry Medvedev is also going to Serbia. Why the high level interest in Serbia?*********************************************************************************************************************

*Massenbach’s Recommendation*

Trump’s Tax Revolution


On Monday Donald Trump laid out an economic plan that “is his most detailed so far and marks a step forward on regulation, taxes and energy,” writes the Journal editorial board. In contrast to Hillary Clinton’s plan to increase both taxes and regulation, Mr. Trump wants to slash the corporate income tax rate to 15% from 35% and allow businesses to immediately expense new investments. He’s also adopted the House Republican plan to simplify taxes for individuals and reduce rates. And he’s calling for a moratorium on new regulations from the federal bureaucracy.

Mr. Trump is still pushing anti-growth trade policy—as is Mrs. Clinton—but the Trump tax and regulatory agenda would create the conditions for American economic revival. The editorial board concludes, “One economic speech won’t persuade Americans who have doubts about President Trump. To revive his campaign, he’ll need to carry the economic growth theme every day from here to November.”

The Wall Street Journal Morning Editorial Report

More Clinton Emails


Hundreds of pages of emails, including many that Hillary Clinton didn’t turn over to the government, have been released by the nonprofit Judicial Watch. A report in the Journal’s news pages says they “offer fresh examples of how top Clinton Foundation officials sought access to the State Department during Mrs. Clinton’s tenure.” Among the foundation donors that Clinton aide Huma Abedin offered to assist was Gilbert Chagoury. The Journal notes, “In the mid-1990s, he was known for his close association with Nigeria’s military dictator, Sani Abacha, which helped him land lucrative business contracts in construction and other areas.”

Democratic advertisements—and Mrs. Clinton—have presented Donald Trump as a maniac who may soon have his finger on the nuclear button. “The ads may be effective but they are a complete misreading of a 70-year-old family man who turned the family business from real-estate development to branding because it was less risky,” writes our columnist Holman Jenkins. “If mainstream Democrats or Republicans don’t pick up on the Trumpian hunger of Americans for leadership, they’re the ones who are crazy and incapable of adapting to feedback.”


Gallup: Fear of the "Greater of Two Evils" Could Spur High Turnout

by V. Lance Tarrance

With three months remaining, the 2016 presidential election is already cemented as a new election archetype — one characterized by unconventional election warfare, politically incorrect posturing and extraordinary intraparty conflict. In the primaries, Donald Trump’s scorched-earth campaigning won the day on the Republican side, yet has prevented him from achieving party unity. At the same time, Bernie Sanders‘ relatively wholesome assault on the political status quo met many Democratic voters where they are — tired of Hillary Clinton’s personal and political baggage. Nevertheless, she is now the party’s nominee.

There are more headlines to come in this campaign, and many will focus on the unprecedented high level of unpopularity of both major party candidates. But rather than keep voters home, the negative tone may instead ignite a much higher turnout at the polls than anyone is expecting. We could see 10 million more voters go to the polls this year than in 2012, a prediction made, in part, based on turnout patterns in the past two open-seat contests, 2000 and 2008. In both instances, turnout was significantly higher than in the incumbent re-election year that preceded it.

Number of Votes Cast in Recent U.S. Presidential Elections

Total vote Turnout
(millions) (% of voting age population)
1996 (re-election) 96 49.0
2000 (open-seat) 105 51.2
Change (pct. pts.) +9
2004 (re-election) 122 56.7
2008 (open-seat) 131 58.2
Change (pct. pts.) +9
2012 (re-election) 129 54.9
2016 (open-seat) NA NA
Change (pct. pts.) NA NA
The American Presidency Project voter turnout data

Not only might the open-seat nature of the 2016 election spur higher turnout than in 2012, but because turnout in 2012 was remarkably low relative to the prior two elections, the increase could be magnified. Should turnout revert to the 57% to 58% level seen in 2004 and 2008, we could be looking at 12 million additional voters than came out in the last election — more than double Barack Obama’s winning margin in 2012.

Some in Washington, D.C., have suggested that the highly unfavorable images of both Trump and Clinton foreshadow a lower voter turnout in this year’s election. But many predictions have failed to come true in this election cycle, and there is good reason to be suspicious of this one as well. For starters, in an election where both candidates have high unfavorable ratings, almost every voter has a reason to come out and vote "against" a candidate, even if they are not eager to vote "for" another. And those who don’t like either standard bearer may feel it is their duty to choose between the lesser of two evils — assuming the greater of the two evils is intolerable.

Not unimportantly, there will also be an unprecedented amount of money spent by the campaigns and super PACs cajoling voters to "stop" Trump or Clinton, or to "save" the Supreme Court, "preserve" NATO, "protect" the country’s national security, or achieve whatever the sponsor’s pet concern might be. Add to that Trump’s typical rhetoric and this will surely be a contest that engages voters‘ emotions — a perfect incubator for a higher-than-expected turnout.

There is already some evidence for this in the data. Gallup polls in late May of this year revealed that 75% of voters have thought "quite a lot" about the upcoming election, up from 63% in January at the beginning of the nomination process. It is also similar to the level in May 2008, notable because turnout in the 2008 election was the highest since the voting age was lowered to 18, and that election garnered the biggest total vote in U.S. history, with over 130 million voters going to the polls.

Traditionally, most presidential elections evolve through four distinct stages: 1) A quick buildup of high name recognition based on the premise that voters usually prefer the "devil they know" to the one they don’t know; 2) A rapid attempt to create a positive image for the candidate by focusing on accomplishments and credentials; 3) A barrage of well-placed TV advertisements designed to contrast the candidates and drive up the opponent’s negatives; and 4) An intense bombardment of positive endorsements in the final two weeks of the campaign. These stages are the normal conventional warfare of campaigns.

This campaign is not normal, however, and these normal steps may well be replaced this year. What is left for the 2016 candidates to do now that their conventions are over? The extraordinarily high unfavorable ratings for both candidates have created a situation in which there is very little space left for positive reinforcement through traditional advertising.

At the end of the Democratic National Convention Clinton enjoyed a solid edge over Trump in favorability (44% vs. 32%), in part because by that point Trump’s convention bounce had mostly faded. However, even with Clinton’s own convention bounce, more Americans still viewed her unfavorably (52%) than favorably (44%).

This situation leaves the candidates with one main option — already well underway on both sides — to try to reinforce and drive up the opponent’s negatives even more. For voters, it may end up quite simply being a question of choosing "the least worst" candidate in a situation in which positives will be in short supply.

Bottom Line

This is truly an epic contest between two individuals who have not been able to rehabilitate their images with the American public, and thus will resort to making their opponent as objectionable to voters as possible. Both campaigns will operate on the assumption that "nice" is not a winning strategy.

The 2016 election has already generated many unfavorable comments from pundits who assume this will lead to general disgust and low turnout, but in reality, we may all find ourselves surprised when the dust settles and more voters than ever get out to the polls to register their choice.

The question is, if 9 to 12 million voters come to the polls who didn’t vote in 2012, will these be disproportionately Trump or Clinton backers? Will they be the white, working-class voters who didn’t show up in 2012, but may have attended Trump’s rallies this spring throughout the Rust Belt? Or will they be the lower socio-economic Democrats as well as young and Hispanic voters who chronically don’t vote, but will in 2016 to stop Trump? It’s too early to say — higher turnout could benefit either candidate, or it could be a wash.

No matter which candidate wins, half of America will be profoundly disappointed, and the victorious administration will start out with unfavorable ratings so high that it may take years to reverse.

The Roots of Middle East Mistrust – Die Wurzeln des Misstrauens im Mittleren Osten

DURHAM – The mistrust that pervades Middle Eastern societies is hard to miss. As controlled experiments confirm, Arabs have substantially less trust in strangers, foreign or domestic, than, say, Europeans. This hampers progress on many fronts, from business development to government reforms.

Low-trust societies participate disproportionately less in international commerce, and attract less investment. And, indeed, according to the World Values Survey and related research, trust among individuals in the Middle East is low enough to limit commercial transactions to people who know one another either personally or through mutual acquaintances. Because of their lack of trust, Arabs will often pass up potentially lucrative opportunities to gain through exchange.

Likewise, in their dealings with public institutions, Arabs tend to seek the intermediation of an individual with whom they have some sort of personal connection. Among the consequences are inequities in what people can expect from such institutions. That undermines their effectiveness.

Clearly, there is a need to address the Middle East’s trust deficit. A first step toward doing so is to understand its causes.

One potentially important clue lies in the difference between perceptions of Muslims and Christians. To be sure, there are no official data quantifying the deficit; in most parts of the Middle East, too few Christians are left to make meaningful statistical comparisons. But casual evidence suggests that the region’s shoppers, merchants, and investors generally consider local Christians to be more trustworthy than local Muslims. “It has always been that way,” they say. My work with the economic historian Jared Rubin exploring Istanbul’s seventeenth- and eighteenth-century Islamic court records may offer insights into why.

At that time, Istanbul was a cosmopolitan city; around 35% of its local residents were Christian, and 6% were Jewish. According to Islamic law (Sharia), Muslims had to do business according to Islamic rules, and if they wanted to adjudicate a conflict, they had to use an Islamic court. For their part, Christians and Jews could do business under their own rules, though they were free also to follow Islamic rules and to use Islamic courts, if they so desired. But, of course, if they were involved in a case against a Muslim, that had to be handled in an Islamic court.

When a Muslim and a non-Muslim faced each other in a trial, the Muslim enjoyed significant advantages. First, the judges’ training predisposed them to give the benefit of any doubt to a fellow Muslim. Second, the court staff was entirely Muslim, which meant that testimony was viewed solely from a Muslim perspective. Third, whereas Muslims could testify against anyone, Christians and Jews could testify only against another non-Muslim.

But these advantages had a downside. Because the legal system made it easier for Muslims to breach contracts with impunity, they were more often tempted to default on their debts and to renege on their obligations as business partners and sellers. Meanwhile, non-Muslims, whose obligations were enforced more vigorously, gained a reputation for trustworthiness. To reflect differences in perceived risk, lenders, who were predominantly Muslim, charged about two percentage points less for credit to Christian and Jewish borrowers than to Muslims (15% annually, as opposed to 17%).

So it seems that perceptions of trustworthiness in the Arab world are rooted, at least partly, in the uneven enforcement of commitments under Islamic law. The sectarian differences in legal enforcement did not last. In the mid-nineteenth century, Islamic courts gave way to what were essentially secular courts, at least with respect to commerce and finance. The enforcement of commitments then became more balanced.

The share of non-Muslims in the Middle East’s Muslim-majority countries has since diminished significantly, through emigration and population exchanges. As a result, few Middle Eastern Muslims have personal experience doing business with non-Muslims. Yet old impressions of Muslims being less trustworthy have endured, passed down through families and networks. Old habits of breaching contracts opportunistically have also survived in places, reinforcing the inherited stereotypes. The tendency to limit transactions to friends and acquaintances is a natural response in a low-trust environment.

It is ironic that these damaging stereotypes emerged from a legal system explicitly intended to give the militarily and politically dominant Muslims an edge in their social and economic relations with Christians and Jews. Beyond raising the costs of economic transactions among Muslims at the time, rules meant to limit religious freedom – the denial of “choice of law” to Muslims and restrictions on non-Muslim judicial testimony – helped to create a culture of mistrust that now limits progress in various areas. Islamic law thus weakened the Muslim communities it was meant to protect.

At a time when various political movements are seeking to re-impose Sharia, it is more important than ever to recognize the long-term damage caused by doing so already. What the Middle East needs today is not Islamic law, but wide-ranging efforts to rebuild trust among and within communities, and in private organizations and government. Reviving Islamic law would only deepen a trust deficit that is a key source of the Middle East’s current economic underdevelopment and political failures.

Timur Kuran

Timur Kuran is Professor of Economics and Political Science at Duke University and the author of The Long Divergence: How Islamic Law Held Back the Middle East.

Naheliegende Idee in Aleppo



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