Fair Observer's extended report of the week's events. [Note: Click here for the summary version.]

As we enter 2014, the world continues to be as kaleidoscopic a swirl of activity as ever. At a time of emails, tweets and cell phones, there is a real risk of drowning in the noise. Our goal is to cut through the clutter and give you the information that matters. In other words, we want to help you make sense of the world.

Please keep an eye out for our best articles of 2013 and tell us how we can do better. We wish you all the best for the new year.

North America

In the US, the National Security Agency (NSA) saga rolls on. A week after a judge damned NSA surveillance in a 68-page judgment, another has found it legal. New York District Judge William Pauley described NSA surveillance as a "counter-punch" to al-Qaeda. He believes that the Fourth Amendment, which was discussed in the previous weekly report, is "fundamental, but not absolute." He went on to say that restrictions on the Fourth Amendment are to be judged by their reasonableness. At a time when "people voluntarily surrender personal and seemingly-private information" to companies that profit out of them, the NSA’s action passes the test of reasonableness because it is subject to "executive and congressional oversight, as well as continual monitoring by a dedicated group of judges."

The debate over NSA activities was long overdue and will now be carried out not only by the press, the public and the Congress but also by the judiciary. Ultimately, the case will go to the Supreme Court. In the meantime, NSA surveillance might be rolled back on the recommendations of a presidential panel which has already stated that fundamental values such as the protection of privacy and civil liberties "have been eroded by excessive intelligence collection."

About 1.3 million people will stop receiving "emergency employment compensation" in the US from January 1, 2014. This program was created on June 30, 2008, by former President George W. Bush as a response to the recession. Many Republicans argue that the government should not be spending $25 billion on the program, while the White House argues that the program is essential to keep millions of families out of poverty. At a time of continuing economic weakness and a harsh winter, it is doctrinaire for Republicans to cut a mere $25 billion when they have opposed other cuts, especially in the military. In a US budge of around $3.6 trillion, $25 billion amounts to a mere 0.69% of the total figure, which could have been cut later.

After being hit by a record fine of $13 billion by the Department of Justice, JP Morgan is in further trouble. The Securities and Exchange Commission (SEC) and the Federal Bureau of Investigation (FBI) are investigating JP Morgan in an anti-bribery case. In 2006, JP Morgan began the "Sons and Daughters" program to hire friends and family of the ruling elite of China. They were subjected to less stringent standards and the suspicion is that they helped JP Morgan win lucrative business. Well-connected people around the world have long pushed their children into important positions. Nepotism has long been a universal problem. Legacy students are admitted to Ivy Leagues and the pudgy North Korean leader succeeded his father without having to do anything to prove himself. Details have yet to emerge, but either JP Morgan engaged in some quid pro quo with Chinese leaders or the SEC is locked in overreach.

Latin America

Cuba continues to gradually open its economy. The government has eased restrictions on loans to private borrowers. Individuals and small businesses can now borrow smaller amounts. The minimum lending amount has been reduced from 3,000 pesos to 1,000 pesos. Borrowers will have longer to repay their loans and will be able to use their houses and jewelry as security. Last week, Cuba lifted restrictions on citizens buying foreign-made cars. Two years ago when Raul Castro took over from his brother Fidel, he launched a series of measures to reform Cuban socialism. After years of communism, the Cuban economy is in dire straits. The reform process is inevitable and will eventually gather momentum. At some point, the Cuban economy will be in a similar position to Myanmar’s with investors rushing in to profit from untapped opportunities.

In Mexico, five decapitated bodies were found in the western Michoacan state as drug cartels continue their turf wars that have inflicted incalculable damage to the country. Despite the federal government sending thousands of troops to the state, violence has continued. Mass graves were recently found and three local police officers were killed last week. The War on Drugs is simply not working anywhere and Mexico is no exception. Troops are unlikely to succeed in a poor society where high payoffs draw a steady stream of recruits to gangs. Some towns have formed vigilante armed groups but they are unlikely to succeed in the long-run. Ultimately, there is no solution for Mexico except to try alternatives like Uruguay’s policy of legalization of the growing, sale and use of marijuana.

Southeast Brazil is suffering catastrophic floods following torrential rain. The states of Espirito Santo and Minas Gerais have reported their worst downpours in 90 years. More than 40 people have died and around 70,000 have been forced to flee from their homes. Bridges and roads have suffered extensive damage. In 2011, Brazil suffered its worst natural disaster when over 800 people died in floods. Clearly, weather patterns around the world are becoming more erratic and Brazil is going to be more vulnerable to disastrous floods by virtue of its geography.

In a freak event that will undoubtedly inspire Hollywood films, more than 60 people in the Argentinean city of Rosario were attacked by a swarm of piranha fish when they were cooling off in the Parana River.

El Salvador’s Chaparrastique volcano erupted. Thousands fled their homes for safety. Emergency shelters have been set up and people within three kilometers of the volcano are being evacuated. This is a coffee-producing region and the fear is that this year’s crop might be affected.

Europe

The Russian city of Volgograd has been hit by terrorist attacks at a train station and on a trolleybus. Over 30 people have died so far in both the attacks. Russia is gearing up for the 2014 Winter Olympics that will be held in Sochi. The city is close to the Caucasus region where resentment against Moscow has led to insurgency in Chechnya and Dagestan. The country has suffered terrorist attacks in the past but has largely managed to control both insurgency and terrorism. The attacks demonstrate that Russia’s policy of brutal repression has its limits and the country remains vulnerable to Islamist insurgent groups of the Caucasus. These groups are likely to target other Russian cities in the run-up to the Olympics to draw attention to the region. Moscow, on the other hand, will try to avoid any further attacks to avoid losing face.

In Ukraine, protests persist and tens of thousands have marched to the private Mezhygirya residence of President Viktor Yanukovych demanding his resignation. Protests have been continuing for more than a month. They seemed to be losing momentum, especially after Russian President Vladimir Putin promised Ukraine $15 billion and a sweet gas deal. However, Tetyana Chornovol, a prominent journalist, was attacked on Christmas provoking outrage. She had accused Yanukovych of corruption over the financing of his Mezhygirya residence. Naturally, Yanukovych denies being behind the attack on Chornovol. Initially, protests began because Yanukovych reneged on a deal with the European Union (EU) at the last minute. This attack epitomizes for many Ukrainians what they are fighting for. They are fighting to become a truly democratic state that respects fundamental freedoms and functions through a rule of law. Unfortunately for them, Yanukovych and his supporters from the eastern part of the county still feel more attracted to Russia. The strife in Ukraine is set to continue for some time to come.

In France, the ridiculous rate of 75% taxation for high earners has been approved by its highest court. The initial proposal to tax individuals was deemed unconstitutional. Therefore, President Francois Hollande’s government came up with a measure to make employers liable for the tax on all salaries that exceed €1 million. This measure will last two years and has met with howls of protest from businesses. Football clubs have gone on strike over it and noted actor Gerard Depardieu has taken Russian citizenship in protest. France is a country where the government already controls over 56% of the GDP. The private sector has been squeezed out. Red tape has driven French entrepreneurs abroad. The French economy needs to be freed from the dead hand of the state if it is to bloom again. Instead France is hurtling to disaster and will damage the rest of the eurozone in the process.

Middle East & North Africa

After banning the Muslim Brotherhood, Egypt’s government has now declared the Brotherhood to be a terrorist organization. It has launched a crackdown and arrested thousands of protesters. Protests, violence and repression are increasing in Egypt. A violent crackdown on universities, especially, the famous al-Azhar of Cairo, has led to deaths. The press is being persecuted too. In the latest incident, four Al Jazeera journalists have been arrested in Cairo. General Abdul Fattah al-Sisi is expected to be the next president and there are only two possibilities facing Egypt. First, it descends into civil war just as Algeria did in the 1990s. Second, it becomes an authoritarian state where Mubarakism lives on after Mubarak.

Turkish Prime Minister Recep Tayyip Erdogan is embroiled in a major corruption scandal involving juicy real estate deals. Three ministers have resigned but Erdogan has vowed to fight on. One of the departing ministers has called for Erdogan to quit as well. The government has changed rules for the police, appointed new police chiefs, and brought in new prosecutors. Journalists have been banned from visiting police stations. Erdogan is blaming outsiders, in particular the US, to drum up patriotic support. He is also blaming the Gulen movement that comprises of fellow Islamists and that used to be an ally. Just as during the Taksim protests over the summer, Erdogan is demonstrating his authoritarian streak. Turkey is facing a social breakdown and a slowdown in the economy with the Turkish lira hitting a record low. This scandal will weaken both Erdogan and Turkey.

In neighboring Syria, the government has been bombing the rebel-held parts of Aleppo killing more than 300 people, including 87 children. It has used barrel bombs – crude devices filled with explosives and fuel – that kill indiscriminately. Syria’s civil war has spilled into Lebanon. Mohamad Chatah, a former finance minister and prominent Sunni leader who was a prominent critic of Syria and Hezbollah, was killed along with 11 others. Sunni Muslims are largely supporting their brethren in Syria while Shi'as back the Alawite Assad regime. Sectarianism is exacerbated by foreign influence. Saudi Arabia is already funding fighters in Syria with experience in Afghanistan, Chechnya, Bosnia-Hercegovina, Libya and Iraq. It has just pledged $3 billion to the Lebanese army and French President Hollande, who was visiting Saudi Arabia, has agreed to supply weapons to its former colony. In the 1970s and 1980s, the Maronite Christian community fought Muslims, both Shi'a and Sunni. Any new civil war in Lebanon will be between Shi'as and Sunnis and mirror the brutal conflict in Syria.

In Iraq, the same Shi'a-Sunni conflict is already playing out. Ahmed al-Alwani, a Sunni lawmaker, was arrested in Anbar, a western province bordering Syria, after a clash that left his brother, sister and three bodyguards dead. Iraqi troops are engaged in a major operation in Anbar to flush out al-Qaeda militants that are gaining a foothold both in Anbar and neighboring Syria. The US is rushing Hellfire missiles and surveillance drones to help the Iraqi government. The speaker of the Iraqi parliament, Usama al-Nujaifi, a Sunni leader, dubbed the operation a "blatant violation" of Iraq's constitution and called upon Sunnis to defend themselves, as violence in Iraq reached its worst levels since 2006-7.

Africa

Military forces loyal to South Sudan’s president, Salva Kiir of the Dinka tribe, have driven away a militia of largely Nuer youths that was advancing to the town of Bor. Barely two years after independence from Sudan, the specter of civil war is haunting South Sudan as 1,000 people have already died and over 100,000 have fled their homes. Conflict broke out after Kiir accused Riek Machar, his Nuer former vice president, of plotting a coup. Machar’s rebellion has spread, reaching the oil-producing Unity and Upper Nile states. Oil production has fallen by at least 45,000 barrels per day to 200,000 barrels daily. Because South Sudan has oil, more powerful nations have an interest to intervene. It also means that potential sanctions can be used as leverage. Unsurprisingly, pressure from the United Nations (UN) has led to Kiir agreeing to release eight of 11 senior politicians who have been accused of colluding with Machar to organize a coup. Plenty remains to be done but an end to conflict is a real possibility.

In Central African Republic (CAR), a full-scale civil war is on. Two more peacekeepers were killed and citizens from Chad are being targeted because many rebel Seleka gunmen hail from that country. The battle has fused a tribal conflict with religious fervor thanks, in no small measure, to the work of missionaries. The Christian-Muslim conflict is intensifying and 1,600 French troops and 4,000 African Union soldiers are clearly too few to bring peace. Since CAR has no oil and few resources, outside powers are likely to intervene. Conflict is raging even in the capital Bangui and, unlike South Sudan, there are no prospects of peace.

In Niger, more than 20,000 people have marched to protest against President Mahamadou Issoufou's rule. Demonstrators are demanding an end to corruption and media censorship as well as an improvement in living standards. In one of the world’s poorest countries with a fast growing population, thirst, hunger, lack of education and little healthcare torment most of its inhabitants. Issoufou was elected in 2011 on the promise to change the situation but has failed so far. Although oil production is 16,500 barrels a day and Niger is the world’s fourth largest producer of uranium, government revenues remain low. Companies such as the French nuclear power firm Areva have been suspected of bribing the government, while opposition leader Seini Oumarou claims that the government facilitates an "organized looting" of Niger’s natural resources. The popular upsurge may lead to renegotiation of contracts with companies extracting natural resources.

In Tanzania, the killing of elephants has increased sharply. In November and December, 60 elephants were killed as compared to a mere two in October. The reason for the increase is the suspension of the anti-poaching operation in which security forces followed a shoot-to-kill policy. Appropriately termed Operation Terminate, this exercise led to the killing of 13 civilians and more than 1,000 arrests. After an inquiry by members of parliament, President Jakaya Kikwete has sacked many ministers and called a halt to the operation because of its human rights abuses. He is calling for international help to strengthen Tanzania’s wildlife department and ranger service. However, the massacre of elephants is likely to continue because of the huge demand for ivory from Asia.

Central & South Asia

Russia is extending its arc of influence in Central Asia. After Belarus and Uzbekistan met to discuss deeper economic cooperation, Uzbekistan joined the free trade zone of the Commonwealth of Independent States (CIS), which is a loose association of former Soviet republics. Other members of the CIS free trade zone are Armenia, Belarus, Kazakhstan, Moldova, Russia and Ukraine. Kyrgyzstan and Tajikistan have signed the free trade deal and are expected to ratify the treaty.

In Afghanistan, campaigning for elections has begun. Qayum Karzai, President Hamid Karzai’s brother, is trailing in opinion polls to Abdullah Abdullah and Ashraf Ghani Ahmedzai. The latter is leading in the polls because of support from Uzbek leader Rashid Dostum. Most of Ahmedzai’s supporters come from the north and east. Abdullah’s support comes from the north. This is good news for the US because these regions fear the Taliban takeover of the country and are in favor of the long delayed Bilateral Security Arrangement (BSA). Meanwhile, the US is ratcheting up pressure on Afghans to sign the BSA. Its ambassador said that if no US troops remain in Afghanistan, the Afghans could expect little aid. So far, $88 billion of aid has flowed into the country leading to 7 million more children attending school and a dramatic 80% reduction in maternal mortality during childbirth. If the BSA is not signed, US intelligence estimates that gains made by the Americans will be lost by 2017.

In Pakistan, charismatic cricketer-turned-politician Imran Khan continues to keep the pressure on Prime Minister Nawaz Sharif over US drone strikes. Sharif had claimed that protests by Khan’s party were isolating Pakistan. In a fiery response, Khan accused Sharif of emulating the Pakistan People’s Party (PPP) and engaging in duplicity by covertly supporting US drone strikes. He claimed that both Sharif’s party and the PPP were worried not about isolation but about the safety of their assets stashed abroad. Khan has promised to continue blockading NATO supplies until US drone strikes end. Bilawal Bhutto Zardari, the callow leader of PPP and a scion of the Bhutto dynasty, delivered a speech at Garhi Khuda Baksh where his mother and grandfather are buried. Zardari spoke Urdu in an English accent and was often shrieking at the top of his voice. He accused Khan of being a traitor who was in cahoots with the Taliban and who was mourning the recently assassinated Taliban leader, Hakimllah Mehsud. In a long rant, he railed against the late military dictator Zia-ul-Haq, the Punjabi establishment and Sharif. Zardari is just a nuisance but Khan is a real worry for Sharif. Most Pakistanis find drone strikes humiliating and support Khan on the issue.

In India, Arvind Kejriwal has become the youngest chief minister of Delhi. Leading the Aam Aadmi Party (AAP), an anti-corruption outfit, he has made history by upsetting the ruling party run by the Nehru dynasty as well as the opposition party led by Narendra Modi, the chief minister of Gujarat. Kejriwal is known for his personal integrity and it is clear that voters in Delhi want a break from business as usual. Indians beat the Russians in keeping money in Swiss banks. With the rise of Kejriwal, this might start to change.

Asia Pacific

Japanese Prime Minister Shinzo Abe visited the Yasukuni shrine that honors many war criminals, infuriating not only China but also South Korea. Most of Asia found the visit deeply distasteful because the Japanese committed numerous war crimes such as killing civilians, torture and mass rape. The US was disappointed by this visit, which it felt would "exacerbate tensions" with neighbors. Although Abe declared that he did not want to hurt Chinese and Korean feelings, the visit was gratuitous provocation and nationalism at its worst. It broke an unwritten agreement with China that serving Japanese leaders would not visit the shrine. Besides, Abe broke his own promise of not even considering a visit "as long as the issue remains a diplomatic problem."

All countries in East Asia are careering down a dangerous path of provocative nationalism that can lead to disaster. China and South Korea have been flexing their muscles over islands in East China Sea. However, Japan’s actions are increasingly the most worrying of all. Its peacetime constitution has been rolled back, its military is being strengthened despite a still weak economy, and a draconian bill is curtailing transparency thereby endangering Japanese democracy. Under the new law, anyone revealing information about the Fukushima nuclear disaster could be locked up.

Abe has long been a nationalist. His grandfather, Nobusuke Kishi, was minister of industry for much of the war but was never charged and went on to serve as prime minister. Even more so than Britain and France, Japan has never confronted its past. Just as British students learn nothing about the massacres of colored people in other continents, Japanese students learn nothing about war crimes. Abe’s visit is not just insensitive, it seems to be deliberate. Abe might have wanted to provoke China so that he could use the backlash for his purposes. Abe aims to continue consolidating power and revising Japan’s post-war constitution. He believes that the constitution is a post-war national humiliation and wants to reclaim Japanese sovereignty. If Abe had his way, human rights and civil liberties would be put on the chopping block along with pacifism. Furthermore, Abe might be shoring up the support of his right-wing supporters by playing the tough guy.

In China, more than 500 municipal lawmakers in Hunan province have resigned following an election fraud scandal. Li Chongxi, a senior leader from Sichuan province and an aide to disgraced ex-Security Chief Zhou Yongkang, is being investigated as well. They have had to go because of President Xi Jinping’s anti-corruption campaign that has pledged to target both "tigers and flies" – both high and low ranking officials. New government buildings and lavish banquets have been banned as Xi aims to start a new age of austerity to gain public trust and popularity.

Government frugality is unlikely to be matched by Chinese parents. The number of students going abroad has tripled in a decade. A degree from a top US school like Harvard or MIT is worth its weight in gold and often more prestigious than business success. China may be an economic superpower but it still suffers from an inferiority complex. Conversions to Christianity, the adulation of western education, consumption of luxury brands, and the desperation to work for a multinational reveal that this is still a country with a lot of growing up to do.

The views expressed in this article are the author's own and do not necessarily reflect Fair Observer’s editorial policy.

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