Massenbach-Letter. NEWS 07.07.17

Massenbach-Letter. News

  • McKinsey: Making it in America
  • Deutsche Bank Research – Sinkendes deutsches Trendwachstum zu wenig im Fokus der Parteien
  • USOil Giants Lobby Against Bill to Toughen Russia Sanctions
  • Nord Stream 2: a test of German Power
  • Bundeswehr und Tradition: Zum Beispiel Richthofen
  • DEBKAfile: Putin and Xi agree on a plan for defusing NKorea missile crisis

From our Russian News Desk. (The views expressed are the author‘s own.)

  • Ischinger/Browne/Nunn/Ivanov: Open Letter to President Donald Trump and President Vladimir Putin
  • Russia and NATO: A Paradoxical Crisis
  • In the Skies over Syria: Rivalry Instead of Coordinated Actions
  • Breaking the U.S.-Russia Impasse: Keeping the Door Open to Dialogue
  • How is Russia Capitalizing on US-Iran Tensions in Syria?

Massenbach*USOil Giants Lobby Against Bill to Toughen Russia Sanctions

Pushback from energy companies, other industries threatens to complicate House passage of the legislation

Exxon Mobil Corp. and other energy companies have joined President Donald Trump in expressing concerns over a bill to toughen sanctions on Russia, arguing that it could shut down oil and gas projects around the world that involve Russian partners.

The pushback from energy companies such as Exxon and Chevron Corp. —and other industries—threatens to complicate House passage of the legislation, aimed partly at punishing Russia for what U.S. officials describe as interference in last year’s U.S. election. The bill breezed through the Senate last month on a bipartisan, 98-2 vote.

Exxon’s advocacy also presents a potential political problem for the Trump administration, which has been trying to avoid conflict-of-interest questions involving Secretary of State Rex Tillerson, the oil giant’s former chief executive. Mr. Tillerson, who has promised to recuse himself from matters involving Exxon, hasn’t explicitly spoken out against the sanctions bill, but last month urged Congress not to take any actions that tie the administration’s hands.

Mr. Trump is set to meet Russian President Vladimir Putin face-to-face this week for the first time since the election at the G-20 summit of world leaders in Hamburg, Germany. The White House hasn’t ruled out a presidential veto of the sanctions measure, which includes a provision that would make it more difficult for the president to relax existing sanctions against the Kremlin, saying that it could erode Mr. Trump’s ability to conduct diplomacy.

A U.S. special prosecutor and Congress are investigating Russia’s use of cyberattacks in the election and whether there were improper ties between aides to Mr. Trump and Russia’s government. The president has denied any wrongdoing.

As the nation’s top diplomat, Mr. Tillerson has said Russia must be held accountable. A senior State Department official said Monday that “Secretary Tillerson retired from Exxon prior to assuming his position as Secretary of State” and added, “As a general matter, Russian sanctions cover broad areas, including the invasion of Ukraine, and are coordinated with our allies.”

The White House hasn’t ruled out a veto by President Donald Trump of the sanctions measure.

Lobbyists for Exxon and other oil industry players have expressed dismay to lawmakers about several provisions in the legislation, including measures to prohibit partnerships with Russian individuals or companies under sanctions around the world, and to add congressional review of certain sanctions exemptions. Companies also have expressed concern that the bill could force them to disclose information they consider proprietary.

Exxon spokesman Alan Jeffers said the company doesn’t have a position on sanctions but has provided legislators with information about how the bill could “disadvantage U.S. companies compared to our non-U.S. counterparts.” A Chevron spokesman declined to comment.

The lobbying by Exxon and other big oil companies is part of a push to preserve potential business relationships with Russia, even as U.S. ties with the Kremlin sink to new lows.

The bill has the potential to scuttle any U.S. business partnership around the world that involves Russian partners. That has prompted concerns not only from energy firms but also banking and industrial companies, according to people familiar with the matter. General Electric Co. is closely watching the legislation over concerns it could disadvantage U.S. companies relative to global peers, one person said.

“This has far-reaching impacts to a variety of companies and industries,” said Jack Gerard, chief executive of the American Petroleum Institute. “It has the potential to penalize U.S. interests and advantage Russia.”

The bill faces an uncertain fate in the House, after objections raised by some House Republicans, including Rep. Pete Sessions of Texas. A standoff was avoidable, some analysts say.

Leon Panetta, who served as White House chief of staff under former President Bill Clinton and as a cabinet member in the Obama administration, said that Congress and the Trump administration should try to forge a consensus on what sanctions should be applied.

“When it comes to sanctions policy the best course for this country is to have both the Congress and the president in the same place,” Mr. Panetta said. “If it looks like there’s a dispute between the president and Congress it sends a terrible message to our adversaries and our allies.”

For Exxon, the stakes are especially high: The legislation could further dismantle its fragile partnership with Russian oil giant PAO Rosneft, which has been mostly on hold since the U.S. imposed sanctions on the country in 2014 after Russia’s annexation of Crimea. The oil company previously sought a waiver from sanctions, a request the Trump administration rejected in April.

Exxon has moved ahead with an expansion of a project with Rosneft that preceded the current sanctions near Russia’s Sakhalin Island in the country’s Far East. It has produced more than 650 million barrels of oil since 2005 and is one of the largest foreign investments in Russia.

As written, the bill could affect two existing Exxon projects outside of Russia in which Rosneft holds a stake, according to people familiar with the matter. One is a development involving the use of hydraulic fracturing in the Permian basin in New Mexico, and the other is a prospect in Canada’s Alberta province.

The prohibition on Russia partnerships would strike at the heart of efforts by Rosneft to expand outside of Russia. British oil giant BP PLC owns 20% of Rosneft, and the Russian company signed a deal in March with Italian energy company Eni SpA to cooperate globally. Rosneft owns a stake in a massive Eni gas field off Egypt’s shores.

Some U.S. House members have echoed Exxon and industry concerns that the legislation could lead to the release of proprietary information. Mr. Sessions, who represents the Dallas area, said he wants to change provisions that could put U.S. firms at a competitive disadvantage.

Mr. Sessions said he is “representing companies in the energy industry that don’t want to be blocked from these deals.”

https://www.wsj.com/articles/oil-giants-lobby-against-bill-to-toughen-russia-sanctions-1499114749

+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

Nord Stream 2: a test of German Power

Nick Butler, FT

Power in Europe speaks with a German accent. With the UK at the exit door of the EU and France still economically weak Germany is uncomfortably dominant. The latest example of this is the plan for the new Nord Stream 2 pipeline which will bring natural gas from Russia across the Baltic to the North German coast and then onwards to Central and Western Europe.

The question is how Germany will use its power.

13 EU member states have protested against the Nord Stream project, saying it will divert trade and transit revenues away from them and increase European dependence on Russian gas for decades to come. The protesting states want the European Commission to take control of negotiations of the project away from Germany and to set gas trade in the context of the Energy Union – a concept agreed in 2014 but never implemented.

The Energy Union was designed to diversify sources of supply and build pan European infrastructure in the interests of security of supply. Most of the 13 are former members of the Soviet bloc and remain overwhelmingly dependent on Russia for supplies of both gas and electricity provided through grids built in the Comecon era.

In the words of the former Polish Prime Minister Jerzy Buzek, now Chair of the Industry Committee of the European Parliament, Nord Stream 2 and the Energy Union cannot coexist.

At the same time the US Senate, by a majority of 97 to 2 agreed three weeks ago to impose sanctions on companies involved in funding Russian export pipeline projects – the latest in a series of steps designed to use Russian economic interests as leverage over Kremlin policy on Ukraine.

In Berlin the official line is that Nord Stream 2 is just a straightforward commercial venture in which neither the EU or the US should interfere. The $10bn project not only cements the sensitive relationship between Germany and Russia but also establishes Germany as an entrepot in the European gas market, replacing the declining gas production from the Dutch and British sectors of the North Sea.

Seen from Russia the logic of Nord Stream 2 is clear.

The country remains dependent on oil and gas revenue which provided, even with low prices, almost half of its total export revenues in 2016. With the oil price beyond control, Russia has every incentive to maximise its revenue from gas sales and to maintain its share of the European gas market by whatever means.

From a European perspective the benefits are far less clear.

If built Nord Stream 2 will entrench Russian dominance of the European market. Russia currently supplies 34 per cent of European gas. With Nord Stream 2 that will rise perhaps to more than 40 per cent. The project destroys the concept of diversifying supplies.

There are numerous potential sources of supply, some of which could have provided much needed revenue to Europe’s neighbours across the Mediterranean such as Algeria and Libya where stabilisation through economic development is necessary to halt the flow of refugees.

With Nord Stream 2 in place Russia will be able to divert gas trade away from Ukraine, reducing the country’s income from transit fees and making Ukraine ever more dependent on EU subsidies. Even if a short term offer is made to cushion the impact of Nord Stream 2 on Ukraine, the longer term threat will remain.

Of course, Germany has the power to push aside the objections of the smaller European states. Berlin can impose any decision it wants on Brussels. But to press ahead and force the project through would have consequences.

The latest results from the fascinating Pew study of international opinion show that Germany is regarded as having too much power in Europe already – particularly in Southern Europe where Mrs Merkel is blamed for imposing unending austerity.

In Germany itself Nord Stream 2 is seen as the creation of the Social Democratic party – and in particular the former German Chancellor Gerhard Schröder who just happens to be the chairman of the project. Mrs Merkel would lose little by allowing the project to stall and would win respect in the serious parts of the US administration and Congress who are looking for support against Russian behaviour in Ukraine and Syria and alleged Russian interference in the US election.

A political solution would be to allow Nord Stream 2 to fall into the hands of the European Commission lawyers who could find good reasons for not proceeding – many of them set out in some excellent recent articles by Professor Alan Riley.

The gas would not be missed.

Indigenous supplies are certainly declining but demand for gas is also falling – 12.5% down across the EU over the last decade according to the latest BP Statistical Review. Surging renewable supplies could push gas demand down further in the future. With a global gas glut European importers could sign long term deals with suppliers from around the world.

Nord Stream 2 is anything but a simple commercial project. What happens next matters for Russia and for the US. But most significant of all is what is what the decision on Nord Stream 2 will tell us about how Germany intends to handle its economic and political dominance of Europe.

http://blogs.ft.com/nick-butler/2017/07/03/nord-stream-2-a-test-of-german-power/

About: Nord Stream 2: https://www.nord-stream2.com/company/shareholder-and-financial-investors/

**********************************************************************************************************************

From our Russian News Desk. (The views expressed are the author‘s own.)

  • Ischinger/Browne/Nunn/Ivanov: Open Letter to President Donald Trump and President Vladimir Putin
  • Russia and NATO: A Paradoxical Crisis
  • In the Skies over Syria: Rivalry Instead of Coordinated Actions
  • Breaking the U.S.-Russia Impasse: Keeping the Door Open to Dialogue
  • How is Russia Capitalizing on US-Iran Tensions in Syria?

************************************************************************************************************************

Policy= res publica

Freudenberg-Pilster* McKinsey:Making it in America

The United States needs to regain its competitive edge in manufacturing while also grappling with its two-tiered labor market and finding ways to make economic growth more inclusive.

The United States always assumed that its forward momentum would carry the next generation toward greater prosperity, just as it took for granted that its technical prowess in manufacturing would guarantee its global market share. But now those assumptions have been upended. Although unemployment is down and wages are finally ticking up again, these indicators can distract from the bigger picture. Tens of millions of workers are struggling to make it in America, and even a full-time job does not guarantee a decent standard of living.

Manufacturing is not the only sector with poor wage growth, nor is it the largest. But it was once the backbone of the middle class, and its erosion is symptomatic of broader shifts in the economy.

Part 1 of this research preview looks at how this unfolded and outlines how the sector could exploit changes in technology and value chains to compete for new market opportunities.

Part 2 traces what has happened to wages across the economy more broadly and considers what caused these pressures.

Finally, Part 3 starts a conversation about solutions that can lead to more inclusive growth.

  • The United States is increasingly a two-tiered economy, with millions of workers struggling to get by
  • US manufacturing needs to regain its competitive edge and retool for the 21st century
  • Where do we go from here?

http://www.mckinsey.com/global-themes/employment-and-growth/making-it-in-america?cid=other-eml-alt-mgi-mgi-oth-1706&hlkid=9a5ebf51bb0a4effa1e76ba687560f65&hctky=9325411&hdpid=3383757b-0852-415d-a526-2dc264a34554

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

Barandat* Deutsche Bank Research – Sinkendes deutsches Trendwachstum zu wenig im Fokus der Parteien

http://www.dbresearch.de/MAIL/DBR_INTERNET_DE-PROD/PROD0000000000446219.pdf

In vielen entwickelten Industrienationen hat sich das Trendwachstum seit Mitte der 70er Jahre deutlich abgeschwächt – so auch in Deutschland.

Gegenwärtig überstahlt die dynamische Konjunktur diese schleichende Wachstumsschwäche. In diesem Zusammenhang ist der demografische Wandel für die deutsche Volkswirtschaft von besonderer Bedeutung. Er wird die Entwicklung des Erwerbspersonenpotentials, des Kapitalstocks und des technischen Wissens dämpfen. Bis 2025 dürfte sich das deutsche Trendwachstum somit nochmals halbieren auf dann nur noch 3/4 %. Daher sind die politischen Entscheidungsträger mehr denn je gefordert, dieser tiefgreifenden Entwicklung Rechnung zu tragen. Die Wahlprogramme und das bisherige Handeln der etablierten Parteien zeigen zu diesem zentralen Thema erwartungsgemäß unterschiedliche Positionen.

*******************************************************************************************************************

Middle East

The Qatar Crisis

· Adam Hanieh

The Saudi Arabia–UAE battle against Qatar is a struggle for regional power with no heroes to cheer for.

The June 5 decision by Saudi Arabia, the United Arab Emirates (UAE), Bahrain, and Egypt to suspend diplomatic ties with Qatar has sent shockwaves through the Middle East.

The ensuing blockade shut down much of the Gulf’s maritime and land trade with Qatar, provoking fears that the tiny state would soon face food shortages. Major air carriers, including Emirates, Gulf Air, flydubai, and Etihad Airways, canceled flights, and Qatari citizens living in the participating nations had just two weeks to return home. Even immigrants with Qatari residency permits would be caught up in the expulsion.

The UAE outlawed any expression of sympathy for Qatar — including on Twitter — and threatened offenders with jail terms of up to fifteen years.

Governments closely linked to Saudi Arabia and the UAE quickly expressed support for the blockade, including the Tobruk-based House of Representatives in Libya (one of the country’s warring governmental factions), the Saudi-backed Abed Rabbo Mansour Hadi government in Yemen, as well as the Comoros, Mauritania, and the Maldives.

The move against Qatar came after months of bad press in American and Gulf media, in which state officials repeatedly claimed that Qatar was financing Islamist groups and growing closer to Iran.

Yousef Al Otaiba, UAE’s ambassador to the United States, played a major role in this campaign. Since the beginning of the 2010 Arab uprisings, Otaiba has roamed Washington’s corridors of power, warning that these popular revolts threaten the region’s established order and claiming that Qatar supports movements and individuals hostile to both Saudi Arabia and the UAE.

Former American government officials and think tanks — notably the neoconservative, pro-Israel Foundation for the Defense of Democracies (FDD), a prominent supporter of the 2003 invasion of Iraq — have taken up this anti-Qatari crusade. On May 23, the FDD convened a high-profile seminar to discuss the Gulf nation’s relationship with the Muslim Brotherhood and how the Trump administration should respond. There, former secretary of defense Robert Gates called on the American government to relocate its massive airbase in Qatar unless the country cut ties with such groups.

According to emails released shortly after the conference, Otaiba supposedly reviewed and encouraged Gates’s comments. Indeed, this leak reportedly helped trigger the blockade, revealing the ambassador’s cozy relationship with Gates, the FDD, and other figures close to the Trump administration.

Both the UAE and Saudi Arabia have also claimed that Qatar has sought to strengthen ties to Iran over the past months. One piece of evidence offered for this is the claim that Qatar recently paid $700 million to Iran in order to secure the release of twenty-six Qatari royals who had been kidnapped in Iraq in 2015, and had been held in Iran for a year and a half. This story — which also allegedly involved a separate payment of up to $300 million to Al Qaeda-aligned groups in Syria — was denied by Iraqi Prime Minister Haider al-Abadi, who stated on June 11 that the money remains in the Iraqi central bank.

For its part, Saudi Arabia decried a statement attributed to Qatari Emir Tamim bin Hamad Al Thani, which appeared on the state-owned Qatar News Agency. During a graduation speech for national guard officers at the Al Udeid base, Al Thani purportedly praised Iran and criticized the Gulf states that see the Muslim Brotherhood as a terrorist organization. Qatar explained that the website had been hacked — an assertion the FBI later supported — and that Al Thani had made no such statements.

Amid all these claims and counter-claims, some observers argue that Donald Trump’s visit to Saudi Arabia on May 20 represented a key moment in the campaign against Qatar, alleging that Trump gave Saudi Arabia and the UAE the green light. Indeed, one of his characteristically eloquent tweets seems to confirm this, as the president bragged that the blockade came out of his meetings in Riyadh.

Not everyone in Washington, however, fully supports Saudi Arabia and the UAE. Other officials — notably Rex Tillerson — are calling for an easing of the blockade and a peaceful solution. The United Kingdom’s foreign secretary, Boris Johnson, also weighed in, calling for an end to the conflict while also stating that Qatar “urgently needs to do more to address support for extremist groups.”

Internecine squabbling is nothing new for the Gulf’s fractious ruling families, but the decision to isolate Qatar marks a significant escalation. How should we understand the blockade in the context of wider developments in the Middle East, particularly in the wake of the Arab uprisings? Do these events mark an irreconcilable schism in Gulf politics or a fundamental shift in the historic patterns of American alliances in the region?

Shared Interests and Rivalries

We cannot understand the current conflict without analyzing the wider regional integration project, embodied in the Gulf Cooperation Council (GCC). Saudi Arabia, the United Arab Emirates, Kuwait, Qatar, Bahrain, and Oman established this organization two years after the 1979 Iranian revolution and at the beginning of the war between Iraq and Iran that would last until 1988.

At the time, the GCC was widely seen as an American-backed response to these regional upheavals, designed to establish a security umbrella across the six member states, which the United States would encourage, equip, and oversee.

Not only do these states have rich oil and gas resources — the ultimate explanation for the United States’ interest in such an alliance — but they also share similar structures, marked by authoritarian ruling families and a labor force that primarily consists of largely rightless temporary migrant workers — a feature often forgotten in the flurry of media discussion about the Gulf over the past few weeks. The GCC’s integration project reflected these states’ collective interests, which are uniquely aligned with Western powers.

The relationship between the United States, other Western powers, and the GCC has strengthened considerably since 1981, as Qatar’s Al Udeid air base demonstrates.

Now over fourteen years old, Al Udeid hosts over ten thousand American troops and is the United States’ largest overseas airbase. As the forward headquarters of Special Operations Central Command and Air Forces Central Command, Qatar helps coordinate the United States’ military footprint throughout the region, including in Iraq and Afghanistan.

The United States also runs its principal naval base from Bahrain, home to the Naval Forces Central Command and Fifth Fleet. More than twenty thousand American military personnel are stationed throughout the rest of the Gulf.

The sale of military equipment to the Gulf by the United States and European nations, particularly the United Kingdom and France, is closely linked to this military presence. Trump’s recent visit to Saudi Arabia put this aspect of the US-Saudi relationship on display: the dealmaker-in-chief reportedly signed contracts for more than one hundred billion dollars. (The precise values remain disputed, as they are largely based on letters of intent and include deals agreed upon with the Obama administration.)

According to the Stockholm International Peace Research Institute’s Arms and Military Expenditure Program, nearly 20% of world military imports went to GCC nations in 2015; Saudi Arabia and the UAE ranked first and fifth. Saudi Arabia and the UAE accounted for 80% of all GCC military imports that year, but Qatar, Kuwait, and Oman also appear on the list of the world’s top forty importing countries. The GCC’s share of the global market has more than doubled since 2011, and it has become the largest market for weapons in the world.

These purchases recycle a portion of the Gulf’s petrodollar surpluses to the companies that produce the world’s military hardware. The GCC not only hosts American forces, but it also pays handsomely for the privilege.

The Gulf’s Political Economy

But the significance of the GCC project extends beyond protecting an exclusive club of oil-rich monarchies and maintaining the region’s role as forward headquarters for American military power in the Middle East, Central Asia, and East Africa.

Throughout the 1990s and 2000s, the institutional framework laid down by the GCC encouraged the six member states to devise a much closer political and economic alignment, an arrangement often compared to the European Union. The last two decades have seen considerable progress toward this goal: increased levels of pan-GCC capital flows, a move toward standardized taxes and tariffs for imported goods, policies that encourage the free movement of citizen labor, and more unified political institutions. A common currency, the khaleeji, was even proposed.

This regional integration process supports the specific form of capitalism GCC states share. The large Gulf conglomerates (both state and privately owned) that dominate the Gulf’s political economy operate across Gulf borders, and — similar to the European Union — are also marked by a pronounced interpenetration of capital ownership structures across different Gulf states.

Importantly, however — and this helps us understand the latest conflicts in the region — this integration project did not extinguish the members’ rivalries or competitive tensions. A sharp hierarchy of political and economic power has marked the GCC since its inception, with the main pivot revolving around a Saudi-UAE axis.

These two countries have become the primary sites of capital accumulation, and firms from Saudi Arabia and the UAE dominate the GCC economy in the real estate, finance, trade, logistics, telecommunications, petrochemicals, and manufacturing sectors. There are also significant cross-border investments between Saudi Arabia and the UAE.

This axis is not without its own tension — reflected, for example, in the Emirati rejection of the Saudi-backed unified currency project in 2009 — but their political alignment has developed alongside their economic ties.

Bahrain is closely integrated into this axis as a junior partner. Its ruling Al Khalifa monarchy depends on Saudi financial, political, and military support, as the 2011 uprisings clearly demonstrated.

This sub-alliance influences how other GCC states relate to the rest of the world, a feature clearly illustrated by the region’s trade patterns. Due to relatively low levels of non-hydrocarbon manufacturing and small agricultural sectors, the GCC relies heavily on imports. The Saudi-UAE axis mediates these shipments: they bring goods in, then re-export them to other states, sometimes after value-added processing.

Food imports are of particular importance. The four other GCC states import more food from Saudi Arabia and the UAE combined than from any other country in the world. In 2015, Saudi Arabia and the UAE each ranked as either the first or second food exporter to every one of the other GCC states.

Remarkably — particularly since these figures include major wheat and meat exporters, including the United States, India, Brazil, and Australia — Saudi Arabia and the UAE were responsible for 53% of the total food export value to Oman, 36% to Qatar, 34% to Bahrain, and 24% to Kuwait.

These trends not only underscore the importance of placing the Saudi-UAE axis at the center of our understanding of the rest of the Gulf, but they also help explain the potential effects of the current blockade.

The Regional Scale

Dominated by this Saudi–UAE axis, the other smaller states have played a more marginal role in the Gulf’s political economy. With a tiny citizen population (only 313,000 citizens out of a total population of 2.6 million, an astonishing 12% of the country) and enormous wealth from its vast natural gas reserves, Qatar has particularly chafed at this hierarchical structure.

On a per capita basis, it is the richest country in the world — with 17.5% of its citizen households worth more than one million dollars — yet it has largely been denied a place in the GCC’s wider political and economic structures, muscled out by its bigger neighbors.

Limited by the size of their domestic markets and flush with surplus capital from nearly fifteen years of rising oil and gas prices, a key consequence of these internal competitive hierarchies has been the attempt by all Gulf states to grow beyond the GCC’s borders. Large private and state-backed conglomerates have expanded their operations globally, investing in real estate, financial institutions, emerging technologies, agribusiness, and other sectors. While all GCC states have participated in this process, Saudi Arabia, the UAE, and Qatar have led the way.

Although Gulf capital flows have largely concentrated on North America and Europe, the Middle East has also become an important target. As Arab states opened their markets and liberalized key economic sectors — a process led by the World Bank’s neoliberal poster child, Mubarak’s Egypt — Gulf capital took a leading role throughout the 2000s in buying up privatized assets (often through corrupt deals with state elites) and benefitting from the market opening that followed in the wake of neoliberal reform.

From 2003 to 2015, GCC states accounted for a remarkable 42.5% of total new foreign direct investment (FDI) in other Arab nations. In this period, around half of all foreign investments in Jordan, Egypt, Libya, Lebanon, Palestine, and Tunisia came from the Gulf. Further, from 2010 to 2015, European, Gulf, and North American investors spent just over twenty billion euros on mergers and acquisitions in the Arab World. The GCC share made up almost half, at 44.7%.

As stunning as these figures are, they actually understate the level of internationalization. They do not include, for example, the considerable levels of bilateral aid from the Gulf, nor do they necessarily incorporate Gulf firms’ portfolio investments in regional stock markets.

As this process unfolded, the GCC’s political role became increasingly prominent. The Gulf not only drove the construction of a regional order marked by authoritarian states and liberalized economies, but also benefited from it. All of this occurred under the auspices of Western powers and international financial institutions.

As this process drew the GCC states closer together, it also intensified their rivalries. One of the most important manifestations of this tension came when Qatar attempted to adopt an autonomous regional policy, relatively independent of Saudi Arabia and the UAE.

Qatar began sponsoring different political forces — the Muslim Brotherhood, Hamas, and the Taliban — and hosting a variety of exiled dissidents — the Egyptian cleric Sheikh Yusuf al-Qaradawi, who hosts popular television shows on Qatari channels, and the Palestinian intellectual Azmi Bishara. Qatar also used its extensive media network to promote itself as a regional force, notably through Al Jazeera and its affiliates and, more recently, the daily newspaper and TV channel Al-Araby Al-Jadeed, launched in early 2015.

The Arab uprisings that began in Tunisia in late 2010 accentuated these divisions, but they also emphasized the Gulf’s shared interests. By profoundly threatening the regional order and its authoritarian regimes, the uprisings presented the GCC states with a sharp challenge: how to head off the popular movements and reconstitute the authoritarian, neoliberal order? Each state had a common interest in this counterrevolutionary process, but their responses differed along the lines described above.

Qatar supported forces allied with the Muslim Brotherhood, while Saudi Arabia and the UAE looked toward people like Abdel Fattah el-Sisi in Egypt and former CIA asset Khalifa Haftar in Libya. A contradictory and rapidly changing constellation of alliances formed around the GCC’s common interests and their internal rivalries.

Qatar supported the Saudi-led intervention in Bahrain, participated in the war against Yemen, and, in Syria, opposed its supposed new ally, Iran. In Egypt, Libya, Tunisia, and Palestine, however, Qatar tended to back rival factions. The lines blur even in these cases: Qatar expressed support for Sisi following the 2013 coup, despite its clear alliance with the Egyptian Muslim Brotherhood.

These diverging alliances also extend to other participants in the current blockade; Sisi’s Egypt, for example, supports the Assad regime in Syria, lining up with Iran but against Saudi Arabia, despite its almost complete dependence on the Saudi–UAE axis.

The key point, often overlooked in the media commentary on the blockade, is that there are no principled political positions involved in these alliances — this is about calculated expediency and a pragmatic assessment by each state of how best to further their regional influence, always within the framework of reordering the region in a way amenable to their collective political and economic power.

We need to keep both these tendencies in mind when we assess the current situation. A strong unanimity of interests underpins the Gulf states’ position on top of the regional order, a situation fully supported by — and in full support of — Western powers. Simultaneously, the GCC is split by rivalries and competition, reflected in the members’ different visions of how to maintain their shared interests.

The Question of Israel

In the wake of the Arab uprisings, we are now seeing an assertion of both of these tendencies. Specifically, the current blockade is a play by Saudi Arabia and the UAE to fully assert their hegemony over the region and to put Qatar back in its place.

But this is not just about Saudi Arabia and the UAE; it fundamentally expresses a general counterrevolutionary process that has been present since the beginning of the uprisings — restoring the status quo of authoritarian neoliberal states that has served the interests of the GCC as a whole (including Qatar) for several decades. All of this must also be seen through the lens of the Gulf’s continued and ever-strengthening alliance with the US and other Western powers.

Within this process, the place of Israel plays a key role. Since the 1990s, American regional policy has sought to bring the GCC and Israel closer together, normalizing economic and political relations between the two pillars of US power in the region. Since the Arab uprising, this rapprochement has appeared more and more likely.

It is no accident that Trump’s first international trip had him visit Saudi Arabia and then Israel (flying directly between the two), a travel schedule that perfectly illustrates the United States’ strategic priorities in the region. Despite the Arab League’s long-standing boycott of relations with Israel, the Gulf region (particularly the Saudi–UAE axis) and Israel agree on key political questions, and both sides are actively seeking to build closer ties.

In late March 2017, Haaretz reported that the UAE and Israel participated in joint military exercises in Greece alongside the United States and several European countries. This was not their first collaboration: a year earlier, Israel, the UAE, Spain, and Pakistan participated in Red Flag, an aerial combat training exercise that took place in Nevada.

In late November 2015, Israel opened a diplomatic office in the UAE’s capital city, Abu Dhabi, as part of the International Renewable Energy Agency — the first time an official Israeli diplomatic presence appeared in that country. Bloomberg Businessweek reported in February 2017 that the office could act as an embassy for Israel’s expanding ties in the Gulf.

Israeli security firms have reportedly set up more than $6 billion worth of security infrastructure in the UAE; this comes after Israel sold an estimated $300 million worth of military technology to the Gulf nation in 2011.

Israeli high-tech military and security firms are also active in Saudi Arabia, where they are purportedly helping Saudi Aramco set up cyber-security, selling advanced missile systems, and even conducting public opinion research for the royal family. Israeli media has stated that the country has offered the Saudis its Iron Dome military technology to defend against attacks from Yemen.

These once-clandestine relationships are now being spoken about openly. The Times of Israel reported in June 2015 that Saudi Arabia and Israel had held five secret meetings since early 2014. In May 2015, then-director general of the Israeli ministry of foreign affairs, Dore Gold, appeared publicly with retired Saudi general Anwar Eshki. The next year, Eshki visited Israel to meet with the former spokesperson for the Israeli Defense Forces and current coordinator of government activities in the territories, Major General Yoav Mordechai.

It shouldn’t come as a surprise, then, that Israel supports the blockade against Qatar. But that doesn’t mean Qatar hasn’t also tried to normalize its relations with Israel. Like the other GCC states, Qatar’s involvement in Palestine has been designed to guarantee itself a better seat at the table — a goal the Israelis have happily supported when it serves their interests.

In 1996, Qatar permitted Israel to open a trade office in Doha, making it the only Gulf state to maintain official relations with Israel at that time. Although the office closed following Israel’s bombardment of Gaza in 2008, Qatar has repeatedly offered to re-establish ties in return for being allowed to supply financial and material aid to Gaza. An Israeli trade delegation that visited Qatar in 2013 reportedly learned that Qatar was interested in investing in the Israeli high-tech sector.

Qatar is the only GCC state that admits Israeli visitors and has allowed Israeli athletes to participate in sporting and cultural events. In 2013, Qatar chaired the Arab League meeting that changed the 2002 peace initiative to allow Israel to keep its settlement blocs in any final agreement. Tzipi Livni, the Israeli justice minister, described the development as “very positive.” And in early February 2017, Muhammad al-Imadi, head of Doha’s national committee for the reconstruction of Gaza, claimed that “he maintains excellent ties” with Israeli political and military officials.

All of these trends indicate that none of the Gulf states — including Qatar — should be viewed in any way as a reliable ally or friend of the Palestinian struggle. But the current tensions in the Gulf also hold potentially important implications for political power in Palestine.

Mohammed Dahlan’s increasing political influence speaks to this possibility. Dahlan, a Fatah factional leader some believe will replace Abu Mazen (the current head of the Ramallah-based Palestinian Authority), lives in Abu Dhabi, and the UAE has long supported him politically and financially. He has close ties to Israel and the United States and has become their preferred candidate to succeed the octogenarian Mazen.

Although rivalries within Fatah may cut Dahlan’s rise short, his growing importance points to how the current tensions in the Gulf might realign the power balance in neighboring areas.

Future Directions

Not all GCC states or regional actors support the current blockade. At the time of writing, Oman has allowed Qatar-bound ships to use its ports, and Kuwait has been engaged in frantic diplomatic efforts to calm the tensions. Only Bahrain has stood fully behind Saudi Arabia and the UAE, largely thanks to the Al Khalifa monarchy’s long-standing dependence on Saudi Arabia.

Turkey has offered to send troops to a Turkish military base in Qatar, and Iran has pledged to send food and water to overcome the closure of Qatar’s sole land border with Saudi Arabia. Meanwhile, Saudi Arabia’s attempts to recruit other countries with large Muslim populations — such as Senegal, Niger, Djibouti, and Indonesia — have largely failed. Arab countries like Morocco, Algeria, and Tunisia have also rejected the blockade.

In light of these disputes, we should remember what the GCC represents as a whole. This bloc of states is fully integrated into a US-aligned regional power structure, has massively benefited from neoliberal reforms in the Arab world, and has become more and more intertwined with the region’s political dynamics.

These states share an interest in preserving their regional position and their long-standing political structures. These commitments outweigh the potential benefits of fracturing the project. Likewise, the West and Israel want to see the GCC hold together, as it has served their interests so well over recent decades.

Despite the current schisms, some kind of negotiated solution that sees Qatar defer to the Saudi–UAE axis and accept diminished regional influence is the most likely outcome.

This settlement would ultimately strengthen the Saudi–UAE axis and help consolidate the counterrevolution; it would also likely precipitate a realignment of political power in places like Tunisia, Libya, and Palestine.

But the Left must realize that none of Qatar’s putative allies — specifically Turkey and Iran — represent a progressive alternative for the region. While they may be lined up against the Saudi–UAE front in this context, these states have participated in the post-2011 counterrevolutionary process just as enthusiastically as their rivals.

Perhaps the most important lesson of the current crisis is that we must avoid simplistic readings of the Middle East, especially those based on the notion that “the enemy of my enemy is my friend.”

It would be utterly foolish to consider Qatar, Turkey, or Iran as representative of some progressive realignment just because they happen to be — at least for the moment — on the wrong side of Saudi Arabia, the UAE, and Israel. Jostling for regional power sparked these tensions and produced all sorts of contradictory and shaky political alliances, but none of the states involved represent any kind of political alternative worthy of the Left’s support.

About the Author

Adam Hanieh is a senior lecturer at the School of Oriental and African Studies (SOAS), University of London and the author of Lineages of Revolt: Issues of Contemporary Capitalism in the Middle East.

https://www.jacobinmag.com/2017/06/qatar-saudi-arabia-uae-crisis-middle-east

*********************************************************************************************************************

*Massenbach’s Recommendation*

Bundeswehr und Tradition: Zum Beispiel Richthofen

„..wir (sind) eben nicht einfach nur eine Firma in Konkurrenz zu anderen. Die Verteidigung unseres Landes ist kein Job wie jeder andere. Ich kenne beispielsweise keine Firmen, die von ihren Mitarbeitern per Eid erwarten, dass diese bereit sind im Extremfall ihr Leben für die Sicherung der Firmenphilosophie zu geben. Oder zum Schutz anderer Mitarbeiter. Und besser noch besonders zum Schutz der Geschäftsführung. Darüber hinaus sind wir in einem weiteren Aspekt absolut nicht vergleichbar, den man sich in einer öffentlichen oder politischen Debatte auch nicht wirklich traut anzusprechen. Von uns Soldaten wird erwartet, dass wir höchst professionell in der Verteidigung unserer Gesellschaft sind und im Extremfall bereit sein müssen dafür auch andere Menschen zu töten….“

T.Wiegold 03. Juli 2017 ·

Eigentlich hatte ich gehofft, die Debatte über die Bundeswehr und ihre Traditionspflege käme – nach zig Einträgen und Tausenden von Kommentaren allein hier im Blog – langsam ein wenig zur Ruhe. Dennoch scheint ein weiterer Eintrag nötig: Die Rede, die der stellvertretende Kommodore des Taktischen Luftwaffengeschwaders 71 Richthofen, Oberstleutnant Gero Finke, am vergangenen Wochenende beim Richthofentreffen in Wittmund gehalten hat, dürfte die Diskussion erneut anfachen.

Finkes Rede wurde bereits von der Lokalpresse aufgegriffen, und damit ist es ohnehin nur eine Frage der Zeit, bis sie weitere Kreise zieht. Deshalb dokumentiere ich sie hier (weitgehend) im Wortlaut:

Traditionen pflegen wir auch mit diesem alljährlichen Richthofentreffen.

Unser Namensgeber, Manfred Freiherr von Richthofen, starb am 21. April 1918. Ein Jahr zuvor – am 26. Juni 1917 – gründete er das erste Deutsche Jagdgeschwader, das folgerichtig den Namen JG 1 erhielt. Mit der Einsatztaktik, mehrere Jagdstaffeln zu einem großen Verband, sprich einem Geschwader, zusammenzuführen, um lokal schnell eine deutliche Luftüberlegenheit herzustellen, schlug Richthofen wie häufig zuvor neue und zukunftsweisende Wege ein, die sich bis heute in den Organisationsstrukturen aller Luftwaffen so weltweit wiederfinden.
Die Traditionsgemeinschaft Richthofen zusammen mit mir hat daher dieses fast genau auf den heutigen Tag 100jährige Jubiläum zum Anlass genommen, es als Motto unseres heutigen Richthofentreffens zu wählen. Darum steht auf der Einladungskarte, die Sie vor einigen Monaten erhalten haben: „100 Jahre vom JG 1 zum Taktischen Luftwaffengeschwader 71 Richthofen.“
Was einige Wochen nach dem Versand der Einladungen dann folgte, konnte ich nicht vorhersehen und es machte mich sprachlos.

Die Vorgänge um einen rechtsradikalen Oberleutnant A. waren aufgedeckt worden und beschäftigen seitdem die Bundeswehr und die Öffentlichkeit im Allgemeinen. Seitdem steht das Thema Traditionen in der Bundeswehr und der Umgang mit ihnen im Focus. Es ist folglich für uns in der Truppe ein stark beherrschendes Thema. Daher ist es mir nicht nur ein persönliches Anliegen, zu diesem Themenkomplex im Rahmen dieses ausgesprochen traditionsbewussten Richthofentreffens ein paar Worte zu sagen.

Nein, zeitgleich mit der kurzfristigst befohlenen bundeswehrweiten Suche nach Wehrmachtsdevotionalien im Rahmen der Aufarbeitung der Vorgänge um Oberleutnant A. bekam ich einen Brief vom Kommandierenden General der Luftwaffe.

Ich zitiere auszugsweise:
„In Ihrer Einladung stellen Sie die diesjährige Veranstaltung auch unter das Motto „100 Jahre vom Jagdgeschwader 1 zum Taktischen Luftwaffengeschwader 71 Richthofen“. Durch diesen missverständlichen Titel wird eine direkte Verbindung des Taktischen Luftwaffengeschwader 71 Richthofen zu den ehemaligen Richthofen-Geschwadern der Kaiserzeit sowie des Dritten Reiches hergestellt und damit eine ungebrochene Traditionslinie unserer Luftwaffe zur Wehrmacht impliziert.
Dies widerspricht dem Traditionsverständnis der Bundeswehr und damit auch der Luftwaffe. Ich weise Sie an, während der Veranstaltung das gewählte Motto in Bezug auf das vorgenannte Traditionsverständnis richtigzustellen und keinen Zweifel an der kritischen Auseinandersetzung der Luftwaffe mit der Geschichte zu belassen. Ich erwarte diesbezüglich eine eindeutige Klarstellung.“
Zitat Ende
Ich frage mich nun: Wie konnte das passieren? Was hat dazu geführt, dass es eine solche Anweisung geben muss? Wieso stehen ich, die Traditionsgemeinschaft Richthofen und möglicherweise das Geschwader insgesamt in einem Verdacht, die Gräueltaten eines menschenverachtenden, mörderischen Regimes eventuell zu befürworten oder wertzuschätzen? Wieso müssen wir uns von etwas distanzieren, neben dem wir selbstverständlich niemals gestanden haben? ( for more see att.)

http://augengeradeaus.net/2017/07/bundeswehr-und-tradition-zum-beispiel-richthofen/

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

Putin and Xi agree on a plan for defusing NKorea missile crisis

DEBKAfile July 4, 2017, 7:07 PM (IDT)

In a joint statement after Presidents Vladimir Putin and Xi Jinping met in Moscow Tuesday, their two foreign ministries laid out a joint plan for North Korea to declare a “moratorium on testing nuclear devices and ballistic missiles,” while the US and South Korea would “refrain from large-scale joint maneuvers.” Hinting at the US, both spoke against the “non-regional powers’” military presence in Northeast Asia “and its buildup under the pretext of countering North Korea’s nuclear and missile programs.” They specifically opposed US missile defense systems in the region (THAAD) as “seriously damaging the strategic security interests of regional powers, including Russia and China.

http://www.debka.com/newsupdate/20980/Putin-and-Xi-agree-on-a-plan-for-defusing-NKorea-missile-crisis

****************************************************************************************************************************************************************************************************************************************************************************

*****************************************************************************************************************************************************************************************************************************************************************************

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

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

*****************************************************************************************************************************************

UdovonMassenbachMailJoergBarandat

07-03-17 Bundeswehr und Tradition_ Zum Beispiel Richthofen _ Augen geradeaus.pdf

07-04-17 Ischinger_Nunn_Ivanov_Open Letter to Trump & Putin.docx

07-03-17 Sinkendes deutsches Trendwachstum zu wenig im Fokus der Parteien_PROD0446219.pdf

06-29-17 Making it in America _ McKinsey & Company.pdf

Advertisements