Massenbach-Letter. NEWS 19.5.17

Massenbach-Letter. News

  • U.S. Sec. of Defense – Mattis Fills Key Executive Positions at the Pentagon
  • U.S. Senator Bob Corker: Strongly Supporting John Sullivan as Deputy Secretary of State
  • GPF: The Latest Trump Crisis
  • GPF: The Cost of Fixing Russia’s Economy
  • FT / Nick Butler: The importance of the Iranian election
  • Frankly Speaking: China’s Belt and Road blueprint augurs changed global order
  • U.S. Dep. of State: Direct Line – Argentina: Transportation Infrastructure Opportunities for U.S. Business

Massenbach. Ordensfrau: Nordafrika total überfordert von Flüchtlingszustrom

Die nordafrikanischen Staaten, die ans Mittelmeer angrenzen, sind von der „regelrechten Invasion“ durch Menschen, die aus dem Süden Afrikas stammen und nach Europa wollen, völlig überfordert – und eine langfristige Lösung ist nicht in Sicht: Ernüchternd hat die Don-Bosco-Schwester Maria Rohrer am Wochenende vor Journalisten in Wien die Lage in Nordafrika geschildert. Die 70-jährige Ordensfrau, die seit vier Jahrzehnten in Afrika lebt und wirkt, besuchte Wien anlässlich der 20-Jahr-Feiern des Hilfswerks „Jugend Eine Welt“.

Tunesien sei in den vergangenen Jahren zum Korridor nach Europa geworden, so der Eindruck Rohrers, die seit 2010, kurz vor Beginn des „Arabischen Frühlings“, in dem Maghreb-Land tätig ist. Das Kommen und Gehen mache sich in ihrer katholischen Pfarrei im Nordosten der Hauptstadt Tunis stark bemerkbar, wo bei den Gottesdiensten Menschen aus 80 Nationen anzutreffen seien und die Zahl der Schwarzafrikaner plötzlich stark zugenommen habe. „Fast alle wollen in Tunesien Geld verdienen, um damit den Schlepper nach Europa zu bezahlen“, so die aus der Schweiz stammende Ordensfrau, die in der Seelsorge für Studentinnen aus Schwarzafrika tätig ist.

Viele der in Tunesien Gestrandeten seien Opfer von Menschenhändlern, gab Rohrer an. Massenweise würden Mütter oder auch minderjährige Mädchen etwa in der Elfenbeinküste mit „tollen Arbeitsangeboten“ gelockt; das Ticket dafür wäre bereits bezahlt, werde ihnen gesagt. „Wenn sie in Tunesien am Flughafen ankommen, werden sie genötigt, als Familienhilfe, Putzfrau oder in der Prostitution zu dienen und man sagt ihnen: Wir haben für dich bezahlt, du musst deine Schulden jetzt abarbeiten.“ Aus Angst, sonst nicht mehr nach Europa weiter reisen zu können, ließen sich die Opfer in Tunesien keine Aufenthaltsbewilligung ausstellen.

Ist das Geld nach Monaten der harten Arbeit dann aufgetrieben, verschwinden die Migranten laut Rohrers Berichten in Richtung Libyen, von wo aus die Flüchtlingsboote nach Europa starten. Doch bei der Ankunft im Nachbarland würde ihnen alles abgenommen – Geld, Uhren, Dokumente und Handys. „Man nutzt sie erneut aus, als Arbeiter oder für Sexdienste, sperrt sie in Gefängnisse, die man Lager nennt, die aber mit den KZs aus dem Zweiten Weltkrieg vergleichbar sind“, verwies die Don-Bosco-Schwester auf Betroffenen-Berichte. Manche überlebten die Schikanen nicht, viele würden Opfer von Misshandlungen und Vergewaltigungen. „Wenn sie dann endlich auf die Schiffe steigen, sind sie so abgemagert und krank, dass sie auf der Überfahrt sterben.“

Misshandlungen auch auf Booten

Die Flüchtlingsboote queren bei der Überfahrt nach Lampedusa teils tunesische Gewässer – und werden oft von der Küstenwache abgefangen, die in den vergangenen Jahren durch internationale Unterstützung mit Schiffen, Hubschrauber und Waffen aufgerüstet wurde, um Migranten nicht nach Europa durchkommen zu lassen. Flüchtlingsboote werden zurückgeholt, die Lebendigen im Falle eines Untergehens gerettet und die Leichen geborgen. Sexuelle Ausbeutung gebe es auch auf den Booten, erklärte Sr. Rohrer: „Wenn es Frauen zurückschaffen und darüber reden, berichten sie, wie schlimm es ihnen ergangen ist. Sie sind schockiert und traumatisiert.“

Beklemmend ist jedoch auch die Konfrontation mit den ständig an die tunesischen Küste gespülten Leichen, über die es keinerlei Zahlen oder Medienberichte gibt, wie die Ordensfrau betonte. Obwohl dies nicht zutreffe, würden die toten Schwarzafrikaner von den tunesischen Behörden pauschal als Christen angesehen und an die christlichen Pfarreien für die Bestattung in Massengräbern „zurückgegeben“. Es gebe somit ein „christliches Begräbnis für Unbekannte. Denn da die Toten vor der Bootsfahrt aus Sicherheitsgründen alle Identitätsnachweise weggeworfen haben, weiß man nachher nicht, wer sie sind, aus welchem Land sie kommen und ob ihre Familie weiß, dass sie ertrunken sind.“ Der in Tunis für die Begräbnisse zuständige Priester – ein Tansanier – sei an seiner Belastungsgrenze, berichtete Rohrer; allein in der ersten Maiwoche habe man 180 Leichen gefunden.

Überlebende Flüchtlinge, welche die tunesische Küstenwache zurückbringt, werden des Landes verwiesen, darunter laut Rohrers Angaben auch viele Minderjährige. Die meisten würden jedoch zwei Monate später wieder auftauchen und es trotz der enormen Schwierigkeiten erneut probieren.

http://de.radiovaticana.va/news/2017/05/16/ordensfrau_nordafrika_total_überfordert_von_flüchtlingszust/1312481

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founded by George Friedman.

The Cost of Fixing Russia’s Economy.

May 12, 2017 Putin must choose between trying to save the economy and saving himself.

By Xander Snyder

Russia is facing an economic crisis, and the search for palatable solutions has come up empty. Low oil and natural gas prices have hamstrung the Russian economy, which depends on the sale of hydrocarbons. President Vladimir Putin knows the status quo must change, but he has put off a decision on the path forward as long as he could, reluctant to face the negative political and social consequences of action. Details of a plan are now on the table, but if he isn’t careful, it could cost Putin the support of rich and poor alike.

A Man With a Plan

Last year, Putin tasked Alexei Kudrin with devising an economic plan for the future. Kudrin served as deputy prime minister from 2000 to 2004 and finance minister from 2000 to 2011 but has been out of government ever since. A well-known advocate of liberal economic policies, Kudrin will present his plan, known as Plan K, to Putin later this month. From what we know, the plan is meant to invest more government money in areas that are more likely to produce greater economic growth – namely, technology and education – without unduly increasing the budget. This would entail cuts in other areas, specifically pensions. The extent of those cuts was laid out last week in an article by Russian newspaper Vedomosti, which said Kudrin’s policy includes reducing the number of pensioners by 9 percent.

The reduction in pensions is a core component of Kudrin’s plan, but the political backlash is difficult to balance against the potential economic benefits. The plan would decrease the number of pensioners by increasing the age limit to draw a pension from 55 to 63 years old for women and from 60 to 65 for men. It would also increase the number of years an individual must pay into the pension system to be eligible.

Needless to say, these suggestions are not popular. About 43 million Russians, 30 percent of the population, draw pensions. Pension income has already been falling – in real terms, it dropped by 7 percent from 2014 to 2016. If Kudrin’s plan is implemented, fewer people will collect pensions. This will exacerbate the challenging living situations for many retired Russians since, unlike in the West, the vast majority of Russian retirees depend almost exclusively on their pension income (over 90 percent of Russian retirees lived entirely on their pensions as of 2013). Currently, pensions are at 1.5 times subsistence levels (down from 1.8 times in 2012), or about 34 percent of the average Russian salary. A recent BBC article reported on 4,000 pensioners who filed complaints about their pensions being too low. People have taken to the streets across the country to voice their displeasure about missing or skipped pension checks. That Kudrin’s plan is even being considered given the unrest already underway shows how hard-pressed the Kremlin is for funds.

Putin appears to prefer Kudrin’s approach, but it isn’t the only option. A second plan was proposed by the Stolypin Club, a group of Russian economists formed in 2012 to prepare alternative economic strategies for the country. Both approaches focus on growing investment, but Stolypin’s suggests that new investment should come predominantly from the government, facilitated by looser monetary policy (that is, printing money) and greater government borrowing. Kudrin’s plan, on the other hand, aims to spur greater investment by small and medium-sized businesses by redirecting government spending without significantly increasing it.

The shortcoming of the Stolypin Club’s plan is that an increased money supply does not equal an increase in real purchasing power. Fiscal stimulus can be effective, but only if the increase in government spending is not offset by a decrease in the value of its currency, which would occur if the increase in spending were “financed” by printing more money instead of raising taxes (which is not politically appealing).

The Stolypin Club’s proposed solution to limit the depreciation of the ruble is to replace the floating exchange regime with a fixed-rate regime. The central bank would spend foreign reserves to purchase rubles, thereby maintaining demand for the ruble and preventing its depreciation. The extent to which the bank can do this is limited, however, by the amount of foreign reserves it has on hand. Should it run out, it would cause a run on the ruble as those who hold rubles rush to exchange them before they lose further value. This would not be a new phenomenon for Russia – a high fixed exchange rate was one of the primary causes of its 1998 financial crisis. The Stolypin Club’s plan can therefore act as a stopgap, but it is not a long-term solution to Russia’s economic predicament.

Now that more details about Kudrin’s plan are available, the fact that Putin is still planning to meet with him is a sign that the president is taking the idea of austerity seriously. Putin recognizes the political challenge that a drop in pension income presents, but he also knows that the Russian economy cannot sustain itself if it continues to rely so heavily on hydrocarbons. The Russian people still widely support Putin, but their support is based on the belief that he can fix the economy. Many in the civil-military elite, however, feel that the president’s best days are behind him – he lost Ukraine, and now the state is losing oil revenue – and are beginning to consider alternatives. Russians have a profound and impressive ability to endure hardship when they believe it is for a purpose, but Russian history shows that there is a limit to how long the Russian people are willing to suffer if leaders’ solutions appear to be failing. Putin will probably be re-elected in 2018 if he runs, but he will be expected to have an economic game plan.

Only So Much

In the meantime, Putin must find a way to implement structural economic reforms that can diversify Russia away from its dependence on energy sales while limiting the short-term economic hardships – and thus political consequences – that such policies would entail. Russia is already experiencing social unrest. Putin has already reformed the leadership of the security services, reshuffled various state ministries and replaced regional governors. There is only so much that can be done. Russia needs austerity, but too much can push the ongoing unrest beyond the point where the security forces can control it. Putin saw firsthand how this can lead to regime change: Large-scale protests after the default crisis of 1998 paved the way to his own rise to power.

At the same time, the masses are not the only potential threat to Putin’s continued rule. Kudrin’s plan to save the country would require judicial reform to work – he wants to encourage small and medium-sized businesses to invest, which they will not do if they feel that the judicial system is rigged against them and that their investments aren’t protected. But reforming the courts would mean subjecting hitherto protected oligarchs to the rule of law to a greater extent, something that risks turning many of Putin’s inner circle against him. It would represent a decentralization of the Kremlin’s power: No longer could Putin decide who is and is not above the law. Given Putin’s moves the past two years to consolidate power, this is obviously something he would like to avoid. But as Kudrin has stressed, without judicial reform, the market would continue to lack sufficient property protection to encourage greater business investment.

One of Geopolitical Futures’ major forecasts is a deterioration of the Russian economy as it struggles to branch out from its reliance on hydrocarbons while energy prices are low and the government’s coffers are dwindling. Diversification will require some degree of austerity, which will not only dampen consumption at the expense of greater government-driven investment – suppressing economic growth at least initially – but it will also generate resentment among the middle and lower-middle classes that constitute Putin’s base of support. Meanwhile, judicial reform, central to Kudrin’s plan, would threaten Putin’s support from the upper class.

Putin has a limited number of options, none of which are good. Maintaining the status quo is a dead end because low energy prices will only continue to wreck the Russian economy. Therefore, Putin will implement austerity measures, but he will do so slowly in hopes that the short-term political consequences will not be so severe as to break his hold on power.

https://geopoliticalfutures.com/cost-fixing-russias-economy/

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Policy= res publica

Freudenberg-Pilster* The Latest Trump Crisis

founded by George Friedman.

By Jacob L. Shapiro

It’s becoming a weekly tradition: a Donald Trump misstep and a media explosion, and not always in that order. The Washington Post reported late Monday that U.S. President Donald Trump had revealed “highly classified” information to Russia’s foreign minister, and in so doing, Trump jeopardized the source of the information, as well as the intelligence-sharing agreement with the unnamed ally (since identified by The New York Times as Israel) that provided the information. According to the Post, Trump shared details of a specific IS terrorist plot, including the IS-controlled city where the information came from.

The media has proceeded to work itself into a frenzy over Trump’s misdeeds, but we cannot lose our minds each time some new scandal appears in the headlines. Geopolitical Futures tries to avoid wading into superficial and inconsequential internal politics. Still, there are some important things here that must be understood. First, there is an allegation that Trump has compromised U.S. access to intelligence from its partners. This is a serious allegation with geopolitical ramifications if true, so to the extent possible, its veracity must be evaluated. Second, the battle royal between Trump and the media is a symptom of a deep division within the United States itself. Trump’s election and inconsistency in American foreign policy are other symptoms of this divide. The divide and Trump’s handling of it are already affecting and will continue to affect U.S. foreign policy.

Trump and Russia

To understand the first issue, we must begin with some basic facts about the U.S.-Russia relationship. Trump has sought Russia’s help in combating the Islamic State – and Russia has played a major role in containing the Islamic State in Syria. Russia has a large Muslim population susceptible to radicalization. Russia has also been vulnerable to terrorist attacks, and specifically attacks targeting passenger airplanes, which was reportedly the subject of the information Trump shared. In October 2015, 224 people died when an IS bomb brought down a Russian passenger plane over the Sinai Peninsula. The United States outwardly protests Russia’s support for the Bashar Assad regime, and now even bombs the regime, but in the midnight hour, Washington is grateful that someone intervened and prevented the Islamic State from marching on Damascus, which was a very real concern as recently as 2015.

Where the United States and Russia do not see eye to eye is in Eastern Europe. Russia sees NATO and U.S. moves in Eastern Europe as violating post-Cold War assurances that the West would not extend military forces into former Soviet countries. The United States seeks to contain Russia and to preserve the independence of the states in its buffer zone to keep Russia weak and unable to challenge U.S. hegemony. For the Americans, the objective is to prevent conflict, not to start it, and Trump’s is not the first U.S. administration to try to reach an understanding that skirts conflict with Russia. One of the first things President Barack Obama’s administration tried was a Russian reset, with Secretary of State Hillary Clinton leading the effort. Trump’s supposed ties to Russia cast a pall over his outreach, but leaving aside the allegations and investigations, what matters is that Trump’s policy toward Russia is not strange or groundbreaking. It’s actually rather banal.

It makes sense, then, for Trump to try to build a basis for cooperation with Russia in the fight against the Islamic State. It even makes sense for Trump to brag about how good U.S. intelligence is in Syria to remind Russia that the United States is powerful and that it is watching what Russia does on the ground. The American media does not like that Trump invited the Russians into the Oval Office, but it seems petty to pick a fight over where Trump decided to meet them. Trump is guilty of a similar level of pettiness for not allowing U.S. photographers into the room. That is part of the Trump-media squabble. As for what transpired during the meeting, it appears that nothing Trump did was illegal, and by the Post’s own admission, some of what he disclosed was apparent when the Department of Homeland Security announced it was considering banning laptops and other large electronic devices on flights between Europe and the United States.

A House Divided

Upon deeper scrutiny, the issue is not necessarily what Trump has done or said. It is that Trump cannot trust even his inner circle of advisers. Whoever leaked the information was either in the room or had access to the minutes of the meeting. That means that someone with fairly robust access was willing to risk not just his or her own career but also the effectiveness of U.S.-Russia moves against the Islamic State, as well as U.S. credibility in the world and with allies that share intelligence. It makes Trump look bad, it makes the United States look worse, and it damages U.S. credibility for as long as the Trump administration is in power. That is a victory for the Islamic State, and for all would-be enemies of the United States.


U.S. President Donald Trump boards Air Force One at Andrews Air Force Base on May 4, 2017. BRENDAN SMIALOWSKI/AFP/Getty Images

The deeper problem for Trump is that he is too reliant on charisma. Max Weber, the father of modern social science, wrote in “Politics as a Vocation” that political power can be maintained three ways: by tradition, by charisma and by legality. Of these, Trump has only charisma. He does not have the power to persuade, nor can he guarantee the loyalty of his subordinates. The legislative branch and the judicial branch have already blocked his moves at multiple points. Many of the bureaucrats and technocrats have no love for him. Trump has risen to power by generating popular support from a significant faction of the population. It was enough to get him to power, but it is not enough to enable him to govern. That faction represents only about 35-41 percent of the electorate, based on his approval ratings. Many like to compare Trump to leaders like Duterte, Xi, Putin or Erdogan. The comparison is faulty for many reasons, but one of the least mentioned is that Trump is far less popular in his country than any of them are in theirs.

Which leads us to the second, far more consequential issue, one that we have written about at length but that is no less important for having been stated before. The core of Trump’s strength is the white lower-middle class. The middle class in general in the United States is under pressure and can no longer easily afford the basics of the American dream – a house, a car, the ability to provide for a family and even to go on vacation from time to time. According to the Pew Research Center, real wages for American workers have been flat or even falling for decades. A 2013 University of California, Berkeley study by Emmanuel Saez found that from 2009 to 2012, the real incomes of the top 1 percent in the United States grew by 31.4 percent, while the bottom 99 percent saw growth of just 0.4 percent. Trump leveraged enough of this discontent to propel himself to office.

That Trump’s proposed polices so far generally don’t help the very class of voters that brought him to power matters little. That is the telltale sign of a charismatic leader: a figure who is compelling enough that voters cast ballots against their self-interest. Trump capitalized on the feelings of American workers who believed that they were getting a raw deal and were willing to try something different, and Trump offered different in spades. For the white lower-middle class in particular, the fact that Trump didn’t much care whom he offended, and didn’t care for the identity politics that has mired the left in electoral irrelevance, was just further sign of Trump’s independence and willingness to go against the grain.

There is a fundamental, class-based division in the United States that has emerged between the working and lower-middle class on one hand and the urban, coastal, liberal elites on the other. The former are the Trump faction, and the latter are the Washington Post faction.

The former want Trump to Make America Great Again. The latter oppose Trump’s moves for no other reason than that they come from Trump and that they find Trump repugnant.

Trump’s faction so deeply distrusts the press that every time Trump comes under fire, it validates their perception of Trump as embattled because he is brave enough to fight for them. The Washington Post faction so deeply distrusts the Trump administration that it demands its newspapers make mountains out of molehills on a weekly basis to undermine Trump’s credibility. Trump is caught in the crossfire, a slave to his faction and constrained in what he can do by his need to placate it. The Washington Post is a slave to its faction, which buys more subscriptions because the Post is out for blood.

The result is much moaning and wailing and gnashing of teeth, the manufacturing each week of a new political crisis that will prove once and for all that Trump really is the boogeyman the media makes him out to be, or for Trump, that the media really is out to get him and that he will soon be exonerated of the allegations levied against him. This is what America’s Founding Fathers intended: They wanted paralysis in governance to defend against factions should they appear and claim power. The result, however, is bad for the United States in the short term. The fight against the Islamic State gets placed on the back burner for flashy headlines. Kim Jong Un’s claim that North Korea now has a perfect weapons system doesn’t even make page two. China pushes as hard as it can to erode U.S. influence in Southeast Asia, and Washington is too distracted to do much about it.

Trump may learn that the power of the presidency is to persuade, not to demand loyalty. Even if he does, his opponents are so deeply entrenched and committed to his failure that the question arises whether he can gather the momentum needed to reshape the relationship. He is deeply constrained because any move he makes to garner support from those outside his base jeopardizes his relationship with the base, and he’s constrained by the other factions because they care more about his demise than they do about the success of the executive.

None of this is to say that the United States’ pre-eminence is at risk: The broad geopolitical forces that govern the behavior of nations tell us that the United States will remain the most powerful country in the world for many decades. But those same forces produced Trump and the current situation in the United States, and as long as the country is this polarized, the near term is going to be a bumpy ride, and the application of U.S. power abroad will suffer for it.

https://geopoliticalfutures.com/latest-trump-crisis/

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

Barandat* U.S. Sec. of Defense-Mattis Fills Key Executive Positions at the Pentagon

Defense Secretary James Mattis began to fill out his staff last week, announcing his choices for three key positions at the department. Experts said the appointees seem well qualified and broadly in line with that of his predecessors.

Mattis named Elbridge Andrew Colby to serve as deputy assistant secretary for strategy and force development. Colby most recently was a Robert M. Gates Senior Fellow at the Center for a New American Security, a national security think tank that produced several appointees in the Obama administration.

He tapped Pete Giambastiani to become principal deputy assistant secretary for legislative affairs. A Naval Academy alumnus, Giambastiani most recently worked as chief of staff to Rep. Tom Rooney, R-Fla., a member of the House Appropriations and Intelligence committees. During the George W. Bush administration, Giambastiani served as a special assistant to the deputy undersecretary of the Navy and the secretary of the Navy.

And Thomas Goffus was named deputy assistant secretary for Europe and NATO. Goffus, a retired Air Force colonel, most recently served as a staffer on the Senate Armed Services Committee.

All three posts are Senior Executive Service positions. Bill Valdez, president of the Senior Executives Association, said the appointments are among the 800 SES slots that can be used for political hires.

http://www.govexec.com/defense/2017/05/defense-chief-fills-key-executive-positions/137891/?oref=govexec_today_pm_nl

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Middle East

The importance of the Iranian election

FT- Nick Butler

The spring of 2017 is certainly the season for elections, with contests in France, Britain and South Korea and the election for the chancellorship in Germany to follow in the autumn. For the international energy companies and the global energy market none is more important than the presidential election in Iran that takes place on May 19.

There are 12 candidates but the main contest will be between the current President Hassan Rouhani and his main challenger Ebrahim Raisi. To label them as moderate and hard line is a convenient western shorthand. The nuances of policies and allegiances makes the comparison more complex. Mr Rouhani is not a secular liberal and Mr Raisi, at least on the basis of his past role as attorney general, is perhaps not as rigid as some imagine. Both are survivors in the complex and often vicious game of knives which has existed in Iran since the 1979 revolution.

But who wins matters. Within the country the next president will have a voice in the choice of the successor to the ailing Supreme Leader Ayattollah Ali Khamenei. Within the region he will determine whether the bitter conflict with Saudi Arabia will continue to destroy Yemen and whether Iran will continue to support the Assad regime in Syria. And internationally the next president will be critical in determining Iran’s relationship to the US and the future of the sanctions regime which for the moment is constraining foreign investment particularly in the oil and gas sector.

As things stand most of the world’s major companies are holding back. American sanctions were partially lifted when agreement was reached on Iran’s nuclear plans in 2015 but some remain in place. Under current US sanctions rules US nationals are not allowed to participate in any activity involving Iran. In several major western companies senior managers who have an American passport have to leave the room whenever Iran is discussed. The sanctions also limit the ability of international investors to use the international banking system to finance activity in Iran.

After the Banque Paribas case, in which in a European bank was fined $8.9bn for breaking US sanctions on Iran, compliance officers have taken a negative view of any involvement whatsoever.

The companies’ desire to get involved in Iran is of course very high. Iran has reserves amounting to 150 bn barrels of oil, more than 1,000 tcf of natural gas and beyond that huge unexplored resources. Costs are low. Much of the infrastructure required for development is already in place even if it needs upgrading. Most of the companies have their own identified targets in mind. For producers, the service sector and the supporting cast of legal and technical specialists Iran is a gold mine waiting to be opened.

The Iranians certainly need investment and technology. Production has risen since the nuclear agreement was reached and Iranian oil output is now at 3.8m barrels per day of which 2.3mbd is exported. But there are signs that the limits of Iran’s capabilities are being reached. It will be impossible to get oil production to the government’s target 5 or 6 mbd and to start producing serious volumes of gas for export without full scale international engagement. It will equally be impossible for the Iranian government to meet the expectations of those who thought that the nuclear deal would bring an end to decades of economic hardship without increasing oil output and sales.

So far the involvement of the majors has been limited to exploratory conversations around potential transactions which can only become real if sanctions are removed. Even this level of engagement has been restricted in the last six months by uncertainties around the intentions of President Trump, who described the Iranian nuclear agreement as “the worst deal ever” but who has noticeably not torn up the agreement during his first 100 days in office. Uncertainty has become a US negotiating tactic, in the face of which potential investors can do nothing other than wait.

The outlier among the western companies is the French oil and gas major Total. Total’s CEO Patrick Pouyanne has taken the lead in engaging with Iran and the company has agreed a joint venture to develop Phase 11 of the huge South Pars gas field. Total is working in partnership with the Chinese state enterprise CNPC which could allow development to be financed by Chinese banks, making it immune to US sanctions. But even with the support of the French government Total is being cautious and the transaction remains on hold.

For the moment Iran’s most active partners are the Indian state company ONGC which has just submitted a $3bn bid for development of the Farzad B gas field and a group of Russian companies led by Rosneft and Lukoil. The Indian deal is proceeding but is small scale compared to what is needed. The Russian deal is bigger but Iranians would be forgiven for scepticism as to whether Russia really wants to see large scale additional volumes of gas developed given the current glut and the intensive competition which is driving prices down.

The election on May 19 will shape the outcome. There is a clear risk that entrenched positions and the residual hostility between Iran and the US, which goes back decades, could freeze the situation and delay serious investment for years to come.

On the other hand there is no sign that the new US administration wants to engage in another shooting war in the Middle East and every sign that US companies would like to join the party in Iran. There could be a mutuality of interest in “reviewing” the existing nuclear deal, changing the font and proclaiming victory.

If that happens and sanctions are relaxed, investment will flow into Iran very quickly, funding new developments and production, some of which could be brought onstream very quickly. Anyone hoping that the cycle of oil prices will soon turn, and that the market will tighten over the next two years, should be watching the Iranian election results very carefully.

http://blogs.ft.com/nick-butler/2017/05/14/the-importance-of-the-iranian-election/

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*Massenbach’s Recommendation*

Frankly Speaking: China’s Belt and Road blueprint augurs changed global order

16 May 2017. On 14 May … in Beijing Chinese President Xi Jinping showcased his ‘Belt and Road Initiative’ (BRI) … provide compelling insights into a rapidly transforming global order … while the West takes time out, the rest of the world is in transition. (for more see att._ China makes bid for global economic leadership at Belt and Road forum in Beijing

)

The trillion-dollar BRI, Beijing’s ‘project of the century’, was spotlighted last weekend … Not since America’s Marshall Plan pumped millions of dollars to revive war-devastated Europe has a country undertaken an endeavour of such spectacular scope, vision and financial magnitude …

The Chinese leader is no amateur when it comes to undertaking bold, headline-grabbing initiatives. He made a strong stand for economic globalisation and open trade at the Davos World Economic Forum in January this year.

And the BRI is only part of the story. Significantly, China’s Asian Infrastructure Investment Bank (AIIB) is already working to meet the world’s enormous infrastructure investment needs.

Also, as the US withdraws from the Trans-Pacific Partnership (TPP), the pan-Asian trade pact which excluded China, Beijing and countries in the Association of Southeast Asian Nations (ASEAN) are moving ahead with the Regional Comprehensive Economic Partnership (RCEP) to boost trade within the region …

Xi’s blueprint articulates Beijing’s self-confident repositioning in an uncertain era. Not surprisingly, the US and Japan are not pleased. Most Europeans are interested but cautious …

China may not always be the gentlest of interlocutors, but many countries are ready for a change. After all, the world needs to get better connected. Global infrastructure needs are enormous. Better connectivity is crucial for trade, to attract investments and to achieve some of the most crucial anti-poverty goals included in the Agenda 2030 Sustainable Development Goals (SDGs).

Clearly, BRI is not just about helping others. The search for new engines for domestic Chinese economic growth is an important driver. China wants to boost growth in its western regions, which lag behind the well-developed east coast. Steel and cement are in oversupply and will be used in the BRI projects. There will be job creation for thousands of Chinese workers, as well as foreign nationals …

China will have to ensure that BRI becomes more transparent, procurement rules become more rigorous and projects fit in with the SDGs, including environmental standards … for all the Western concerns that the BRI will allow China to steamroll its partners, in most countries China is not the only show in town.

Most states have access to US and European funds, not to mention aid from Japan and Saudi Arabia. It’s not a zero-sum game. Asian, African and other representatives I met in Beijing underlined the importance of the tectonic geopolitical shift taking place. “This a historic and transformative moment. We can see the world is changing,” an African ambassador told me. The way ahead is going to be complicated and difficult. China will need to learn how to deal with complex demands and painful facts on the ground in its myriad partner countries. But if he was worried, President Xi certainly wasn’t showing it. Nobody should expect quick fixes, he cautioned. “We will move forward step by step”. Beijing’s journey to greater global influence has truly begun.

http://www.friendsofeurope.org/global-europe/frankly-speaking-chinas-belt-road-blueprint-augurs-changed-global-order/

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But: U.S. Dep. of State: Direct Line: Argentina: Transportation Infrastructure Opportunities for U.S. Business

Bureau of Economic and Business Affairs

June 22, 2017

05-16-17 Full text_ Joint communique of leaders roundtable of Belt and Road forum – X.pdf

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US Senator Bob Corker: Strongly Supporting John Sullivan as Deputy Secretary of State

At the conclusion of a hearing on Tuesday to consider the nomination of John J. Sullivan to serve as deputy secretary of state, Senator Corker expressed his intention to “strongly support” Sullivan’s confirmation.

“Short of something unusual happening, I have to tell you [that] I look forward to very strongly supporting your nomination,” said Corker. “I think you’ve acquitted yourself exceptionally well today. It is evident that in your private meetings with members on both sides of the aisle you’ve done the same there. And I really do believe that the experiences that you’ve had in other departments and the professionalism that you have [shown] as an individual have equipped you to be an exceptional deputy secretary. We thank you for your willingness to serve [and] for your family’s willingness to allow you to do something that we know is going to be a seven-day-a-week job, at least in the beginning, and probably all the way through.”

About: John J. Sullivan (WIKI): His firm biography continued:

He also has served as a senior adviser to four presidential campaigns … [Sullivan] has focused his practice on the growing intersection of global trade/investment and US national security and foreign policies. He advises CEOs, general counsels, and other senior executives on US sanctions and export controls, international trade disputes and regulation, and foreign investment in the United States, the Middle East, Russia, and other countries. His clients include major oil and gas companies, consulting, accounting, and financial services firms, petrochemical companies, and manufacturers. He has represented these clients before executive departments and agencies of the US and foreign governments, as well as in litigation in the United States, where he has filed briefs and presented oral argument in courts across the country.

The biography also discussed work on client business in Russia, Iran, Cuba and Iraq and „advising a multinational manufacturing company on security policies and risk issues in countries with a high threat of terrorism, violence, and political instability“. In the Obama Administration, Sullivan was chairman of the US-Iraq Business Dialogue, „an advisory committee on economic relations between the two countries“.[4]

In February 2004, U.S. Secretary of Defense Donald Rumsfeld appointed Sullivan as Deputy General Counsel of the United States Department of Defense. In this capacity, he was responsible for all litigation involving the department and for counsel on major criminal and congressional investigations. During his tenure, he was awarded the Secretary of Defense’s Medal for Exceptional Public Service.[3]

Sullivan then moved to the U.S. Department of Commerce, where he served as General Counsel. As the department’s chief legal officer and Designated Agency Ethics Official, Sullivan managed the work of over 400 lawyers in the 14 legal offices providing legal advice to all components of the department.[3]

Upon the resignation of Deputy Secretary David Sampson, Sullivan was assigned as Acting Deputy Secretary beginning on September 1, 2007. He was soon thereafter nominated by George W. Bush to serve in a permanent capacity, and was sworn in on March 14, 2008 after confirmation by the United States Senate. As the department’s chief operating officer, he managed a $6.8 billion budget and 38,000 employees in 13 operating units. He was also a member of President Bush’s Management Council and a member of the Board of Directors of the Overseas Private Investment Corporation.[3]

https://en.wikipedia.org/wiki/John_J._Sullivan_(American_lawyer)

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see our letter on:  http://www.massenbach-world.de/41259.html

*Herausgegeben von Udo von Massenbach, Bärbel Freudenberg-Pilster, Joerg Barandat*

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UdovonMassenbach@t-online.de   Mail@Freudenberg-Pilster.de   JoergBarandat@yahoo.de

 

 

 

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