Make Sense of the World: Weekly Report

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

This is the second weekly commentary on key developments across the globe titled “Make Sense of the World: Weekly Report.” We will pick out the most important events, trends and issues for the week and explain them to you with clarity and brevity.

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This is an extended report and you can click here for the summary version.

Asia Pacific

The big news in Asia Pacific was the third plenum of the 18th Central Committee of the Communist Party of China. Xinhua has a good summary of the main points of the communiqué issued by China’s leaders after the plenum, the most significant in the post-Deng Xiaopeng era. There is the usual bureaucratic jargon along with some major changes.

First, markets have been called upon to play a “decisive” role in the allocation of resources. This could mean major reforms because earlier markets were only meant to play a “basic” role. Asian markets still fell despite this declaration as there was no mention of financial reforms. Second, a “State Security Committee” will be set up. The Chinese leadership believes the Soviet security system had become weak, corrupt and ineffective. It wants to avoid that mistake and emulate the US by creating its version of the National Security Council. Third, President Xi Jinping has emerged as the most powerful Chinese leader since Deng. Fourth, the one-child policy has been relaxed and a baby bonanza of a million extra births per year is expected. Fifth, education reforms are also on the horizon to develop more-rounded students and foster creativity. Sixth, the dreaded labor camps will be abolished as part of a reform of the justice system. Finally, those who cause environmental damage will be held “criminally responsible” and there will be a tax on the use of almost every natural resource.

While Chinese leaders were meeting at their plenum, China celebrated November 11 by shopping. This day is marketed as “Singles Day” and shoppers spent $5.7 billion buying online. This is thrice what American shoppers spend on Cyber Monday. It demonstrates three things:

  1. The one child policy combined with the Chinese preference for sons has led to selective abortion, leading to a massive gender imbalance. Millions of Chinese men are not likely to find love, adding another incentive to splurge on this day.
  2. E-commerce is growing exponentially in China.
  3. The rise of consumerism among single children born after 1980, the “Little Emperors,” is changing the country beyond recognition. China’s leaders are only bowing to the inevitable by giving markets a “decisive” role, given that its next generation is one of compulsive shoppers.

Elsewhere in Asia Pacific, the Philippine government has botched the relief effort. Floods and landslides in Vietnam have wreaked havoc. The trouble over the amnesty bill has receded in Thailand as the government has retreated. Economic worries are surfacing about Southeast Asia. Many worry that the bubble might be about to burst. Debt-funded consumer and government spending has grown in the region and, in particular, in Malaysia, Indonesia and Thailand.

Central & South Asia

India is in electoral circus mode. Accusations are flying on a daily basis. The Congress-led government has declined to grant autonomy to India’s Central Bureau of Investigation (CBI), making independent investigation of any case with political ramifications impossible.

There was hype and hoopla over the retirement of a cricketing god, named Sachin Tendulkar. While he is a fine player, awarding India’s highest honor to him was a classic case of the country's fixation with actors and cricketers. This national award can be given posthumously and the politicians award it to celebrity figures to gain electoral advantage or to reward political fealty. Many suspect that the ruling party is trying to use Tendulkar as a totem for upcoming elections.

The more important issue that India has to confront is the way it treats Africans. After independence, India emerged as a leader of the developing world. In the 1950s, it led the Non-Aligned Movement and supported independence of African colonies.

That era is over. Today, India is in a row with Nigeria over the murder of a Nigerian in Goa. Large parts of the state have been run-over by foreigners. Mandrem and Morjim are Russian localities and Arambol is home to Israelis. Drug use is common and many foreigners are involved in drug trade. The murder was a result of the gang war between two drug gangs, which led to Nigerian protests. While some Nigerians are involved in drug trade, at the heart of the row is Indian racism towards Africans. Goa is ruled by the BJP, a party challenging the ruling Congress Party in New Delhi. One of its ministers declared that Nigerians are “like cancer” — an irresponsible comment at best and a xenophobic one at worst.

In neighboring Pakistan, the Nawaz Sharif government is going to put former President Pervez Musharraf on trial for treason. Musharraf was a military general who deposed Sharif in a coup, and he will become the first military leader to be tried for treason in Pakistan’s 66-year history.

Pakistan is beset by turmoil of all kinds. On the day of Ashura, Shi'a-Sunni violence erupted in Rawalpindi, which remains under curfew since. Earlier in the week, Dr. Nasiruddin Haqqani, son of Jalaluddin Haqqani, the founder of Haqqani Network, was gunned down in Islamabad. He was responsible for fundraising, logistics and political affairs of the Haqqani Network; his death is arguably more important than Hakimullah Mesud’s, who was killed just days ago in a US drone strike.

Afghanistan and the US have agreed upon a draft of the Bilateral Security Agreement (BSA) that has been sent to Loya Jirga, the Afghan assembly of tribal leaders for their consent. The BSA will extend US military presence in Afghanistan for an indefinite period. It also gives the US exclusive legal jurisdiction over its military and civil personnel.

As tribal leaders gathered to vote on the BSA, a powerful suicide attack a few hundred yards away killed at least ten people. This was followed by the beheading of six security contractors in southern Afghanistan.

While violence continues, Afghan opium production has reached a record high. The area under poppy cultivation has risen to 209,000 hectares, up from 154,000 in 2012 and the 2007 peak figure of 193,000.

Middle East & North Africa

Saudi Arabia, with its massive oil wealth, has decided to clamp down on foreign workers. It has an estimated 9 million workers serving a population of 19 million. Foreign workers are often from poorer countries such as Egypt, Ethiopia, Bangladesh, Indonesia and Pakistan.

An unfair visa sponsorship system means that their sponsors often demand an annual fee for bringing them into the country. Workers are underpaid, subjected to abuse and treated with a racism that is among the most extreme in the world. In effect, an affluent Saudi society is being served by what The Economist calls “a pliant underclass with few rights.” The kingdom aims for a Saudization of the labor market to decrease its 13 percent unemployment rate. However, it remains to be seen whether cosseted Saudis will take up the jobs that have so far been done by poor immigrants.

It turns out that Saudi Arabia is not alone in mistreating immigrant workers. Amnesty International has slammed Qatar for treating workers like animals and even referring to them as such. Dangerous working conditions, non-payment of wages and squalid living conditions are par for the course. Often, workers are threatened with penalty fines, deportation or loss of income if they do not show up to work, even when they are not being paid. Racism is rife, employers disregard basic human rights, and workers live in fear.

Civil war continues in Syria. A bomb attack on a government building near Damascus has killed 31 people, while two explosions occurred near the Iranian Embassy in neighboring Lebanon. Violence has been increasing in the Syrian capital with clashes between government forces and rebels intensifying in the suburbs.

In North Africa, Libya’s deputy intelligence chief has been kidnapped as the central government struggles to control powerful local militia. Clashes have occurred in Tripoli and the Misrata militia is to leave the city.

In Iraq, just as in Pakistan, Shi'a pilgrims have been targeted. Bomb blasts in Baquba killed at least 20 people and left many more wounded. According to the UN, “indiscriminate violence is constant.” Sectarian violence has reached its highest level since 2008.

Meanwhile, Egypt is conducting talks with Russia. The parties are discussing an arms deal worth $2 billion. If it were to go through, US influence on Egypt would diminish. The US cut defense aid when the Egyptian military ousted former President Mohammed Morsi. Now, Egyptian generals are striking back.

In neighboring Gaza, Hamas is feeling the pressure from the generals who have destroyed 90 percent of the tunnels between Gaza and Egypt. Gaza has no power, sewage is flowing untreated, and inflation is rampant. Hamas is under immense pressure and is cracking down on dissent.

As the situation turns desperate, Hamas has appointed its first spokeswoman. Isra al-Modallal is a divorced young woman of 23 and it is heartening to see the Islamist group — with a patchy record on women’s rights — move in the right direction. In Turkey, women can now wear trousers in parliament, relaxing a regulation that only allowed them to wear suits.

Finally, Boeing has emerged as a big winner of the Dubai Airshow, netting $100 billion of orders from the four big carriers of the Gulf: Etihad, Qatar Airways, Emirates and flydubai.

Africa

The United Nations Security Council (UNSC) rejected a proposal to suspend the trials of Kenyan President Uhuru Kenyatta and his deputy, William Ruto, for a year at the International Criminal Court (ICC). The proposal was put forth by Rwanda and supported by other African states.

Kenyatta and Ruto are accused of crimes against humanity for the role they played in the ethnic bloodshed that swept across Kenya in the aftermath of the 2007 elections. More than 1,100 people were killed, 3,500 injured, and up to 600,000 forcibly displaced as a result of the violence.

Seven of the 15 UNSC members, including Russia and China, voted for the draft resolution while the others abstained. A UNSC resolution needs nine votes to succeed, assuming none of the five permanent members veto it.

Kenyatta now becomes the first serving head of state to be tried by the ICC. At heart is a deeper issue about global governance. African leaders believe they are being unfairly targeted by the ICC, which is based in The Hague and which they believe to be racist as well as neo-colonial. All of the court’s 20 cases are against Africans, who point out that former British Prime Minister Tony Blair has not attracted any attention for his role in the Iraq War.

The issue is the fact that African leaders believe they are not being treated like everybody else. Global powers such as the United States, China and Russia have not signed up for the ICC. Regional powers such as Israel, Saudi Arabia, Pakistan, India and North Korea have not done so either. Others believe that given poor governance structures, lack of rule of law and an independent judiciary in much of Africa, the ICC is the last resort for Africans for justice and the best way to change the culture of impunity that has long existed in the continent.

A French hostage held for nearly a year escaped in Nigeria but Boko Haram, the Nigerian Islamist group, claimed that it had kidnapped another Frenchman: a priest working in northern Cameroon. The kidnapping occurred soon after the US designated Boko Haram and its splinter group, Ansaru, as “foreign terrorist organizations” on the grounds that they have established links with al-Qaeda in the Islamic Maghreb (AQIM) and al-Shabab in Somalia.

To combat al-Shabab, the UNSC authorized an increase of 4,000 peacekeepers in Somalia. This increase has come on the heels of a US military raid to capture one of the group’s leaders. While the focus has been on the Philippines, the northern self-governing Puntland region of Somalia has suffered from a cyclone that has killed over 100 people, swept away livestock and destroyed homes.

As per the UN Office for the Coordination of Humanitarian Affairs (OCHA), 460,000 people have been displaced in Sudan’s Darfur region in 2013. This figure is higher than the combined figure for 2011 and 2012. OCHA states that this is “a result of inter-tribal fighting and clashes between the Sudanese Armed Forces and armed movements."

OCHA has also been describing the situation in the Central African Republic as “a tinderbox,” because Muslims and Christians are pitted against each other in a brutal civil war that has led to a complete breakdown of law and order.

In neighboring Democratic Republic of Congo, peace talks between the government and the rebel M23 group have collapsed in Kampala. The rebel group had recently declared a ceasefire after military defeat.

Gambia broke its ties with Taiwan for “strategic national interest.” China will invest in Gambia and build infrastructure. China’s footprint in Africa continues to grow and now only Swaziland, Sao Tome, Principe and Burkina Faso retain ties with Taiwan.

Ethiopian workers returned from Saudi Arabia with tales of mistreatment involving beatings, robbery and incarceration.

Nigeria is involved in a diplomatic row with India after a Nigerian was murdered in Goa. This is covered in greater detail in the section on Asia.

Amnesty International has accused Shell of misrepresenting the extent and the causes of pollution in the Niger delta. The company is apparently also failing to curb the devastation caused by oil spills.

Another company has announced that it will sever ties with suppliers who do not respect the land rights of local communities. This company is Coca-Cola and its operations in its two African hubs, Nigeria and South Africa, will be affected.

As more of the world falls in love with chocolate, cocoa processing is consolidating in the hands of two giants who will control over 60 percent of the world supply. Cargill is in the process of buying out Archer Daniels Midland’s cocoa business and Barry Callebaut scooped up the cocoa unit of Petra Foods.

Meanwhile, Forbes reported that the number of African billionaires surged to 27. In 2012, it was 16, reaching a remarkable increase of over two-thirds.

Ericsson declared that it expected mobile subscription in sub-Saharan Africa to reach 930 million by 2019. It estimates smartphones to reach 476 million and mobile data traffic to grow 17 times by that year.

Europe

The eurozone grew by an anemic 0.1 percent between July and September. Portugal, Italy, Greece and Spain — collectively referred to as PIGS — continue to remain mired in high unemployment, low productivity and poor public finances. Even Germany’s economy grew by a mere 0.3 percent and it is under scrutiny from Brussels for running persistent current account surpluses.

Many argue that Germany’s protection of its domestic services industry enables it to run massive surpluses, thereby skewing the eurozone economy. The truth is that an aging Europe with excessive regulation and little entrepreneurial energy is fast-losing its competitive edge in the new global economy.

Unemployment in parts of Europe has crossed the 50 percent mark. In France, unemployment has been over 10 percent since 1980 when Mitterand became president. The country has now suffered a credit ratings downgrade by Standard & Poor’s because of the disastrous performance of the Hollande government. Brussels has warned Spain and Italy over their debt and deficit levels. French and Dutch plans have barely passed muster. Eastern Europe is not doing much better and the Russian economy, despite its energy bonanza, is in a sorry state.

The economy is not the only thing in question in Europe. NATO launched a massive exercise in northern Poland, its biggest live wire exercise since 2006. At a time when its defense spending is falling fast, this exercise was supposed to be a signal to anyone intending to attack a NATO ally. Russia might have an increasing budget, but it has no intention of attacking a NATO ally; the exercise seems to have been carried out to reassure members looking for relevance in a post-Afghanistan era.

The far right in Europe is becoming more sophisticated. Dutch leader Geert Wilders and French leader Marine Le Pen held a conference in The Hague to announce cooperation in the next elections for the European Parliament to “fight the monster called Europe.” With Pew Research reporting just 41 percent of the French in favor of the EU, the ghosts of the wafer-thin approval of 1992 Maastricht Treaty and the 2005 rejection of the draft European constitution might be about to rise with renewed vigor in France.

In Germany, politicians seem close to a deal that would extend the right of dual citizenship to naturalized Germans and the children of immigrants. Former German President Christian Wulff has become the first German head of state to go on trial for a sum of €753.90 that equal $1,013. The sum is negligible but demonstrates that the principle of public propriety in Germany matters a great deal more than in other countries.

In the talks with Iran, France is taking the strongest line against Tehran. This is surprising because France is never going to play a major role in military action against Iran. French President Francois Hollande is in crisis at home and it seems he is compensating with an overly assertive foreign policy.

Already, the French have intervened in Mali and are stuck there with no end date in sight. On a visit to Israel, Hollande talked tough on Iran while completely omitting to mention Israeli settlements in the West Bank. US Secretary of State John Kerry has been much more even handed in comparison. A left-wing French government is incongruously more bellicose than the US or the UK on Iran and losing the goodwill that Jacques Chirac garnered for France by opposing the Iraq War.

Latin America

Chile’s elections will go into the second round after Michelle Bachelet failed to achieve an outright majority. She received 47 percent of the vote; Evelyn Matthei, her main rival, got 25 percent. Bachelet is still expected to win.

Colombia has elections next year but is already gearing up for them. President Juan Manuel Santos will be competing with Oscar Ivan Zuluaga, who has the backing of former President Alvaro Uribe.

Talks with FARC guerillas suffered a minor hiccup because of the discovery of a purported FARC plot to murder Uribe. Negotiations with the guerillas continue as President Santos presses for a change in drug policy that includes alternatives to prohibition.

The murder rate in Latin America and the Caribbean rose by 11 percent in the first decade of the 21st century. The United Nations Development Program (UNDP) estimates that 1 million people died as a result of criminal violence in the region. Poverty, unemployment, low wages, lack of schooling and family breakdown were said to be some of the contributing causes.

The rate of deforestation in the Amazon rose by 28 percent in Brazil over a year. In the last few years, while deforestation was proceeding apace, the rate of this phenomenon was declining. Environmentalists blame last year’s controversial reform of the forest protection law as the main reason for the rising rate. The change has reduced protected areas on farms and declared an amnesty for areas destroyed before 2008. A Brazilian banker involved in a major corruption scandal fled to Italy. Henrique Pizzoloto has an Italian passport and was avoiding jail terms. Brazil’s Supreme Court has sent 25 businessmen, bankers and politicians, including the chief of staff of ex-President Luiz Inacio Lula da Silva, to prison.

Brazil is also going through the painful process of coming to terms with its past. The remains of Joao Goulart, a former president, were exhumed so that the cause of his death could be ascertained. He was deposed by a military coup and died in Argentina in 1976 of a heart attack. It has long been suspected that he was murdered on the behest of Brazil’s military rulers.

North America

Obamacare, President Barack Obama’s healthcare reforms, has been the focus of attention again. The Affordable Care Act (ACA), the legislation that enacted Obamacare, compels insurers to offer a more comprehensive coverage, making many policies void under the new law. This leaves many Americans facing cancelled policies and increased premiums. The numbers who signed up for Obamacare were far fewer than estimated and many Republican governors have refused to implement ACA. Bill Clinton, the former Democrat president, turned on Obama and asked him to fulfill his promise to let Americans keep the healthcare they liked. As the new website for healthcare exchanges malfunctioned, Obama eventually bowed to pressure and deferred the implementation of ACA by a year.

The fumbles over the launch of healthcare reform has infused new life into the political battle for the control of the country. Not too long ago, the US government shutdown had led to a loss of momentum for the Republicans. Democrats were hopeful about the midterms; now they are nervous. In fact, 39 Democrats in the House of Representatives voted for a Republican bill that would allow insurance companies to sell policies that did not comply with the minimum standards of the ACA, blowing a hole through Obamacare. Needless to say, the Senate would not pass this and Obama has promised to veto it.

The partisanship in US politics will ratchet up because the Republicans no longer feel chastised and have smelt blood again. Democrats will have to shore up support from their core loyalists for the next midterm. Until then, everyone will be campaigning, covertly if not overtly. Until the midterms are over, expect more bickering and gridlock in Washington, and little reform on immigration, taxation or anything else.

While political wrangling goes on, the White House declared that, for the first time in two decades, the US is importing less foreign oil than it is producing domestically. It crowed about better gas mileage, more biofuels, less pollution and greater energy independence.

There is some truth to these claims. Gas mileage or, as the rest of the world would say, fuel efficiency has certainly improved as a result of legislation. Greater production of oil and gas in the US has pushed down energy costs for American companies, giving them a competitive advantage vis-à-vis Europe, which has to pay through its nose for Russian gas, and Japan, which will no longer be able to meet its green house gas reductions because of the Fukushima nuclear disaster. Yet, the environmental costs of increased domestic production are yet to be quantified properly and the US is a long way from energy independence.

Snapchat, a hot Silicon Valley startup that began in Stanford, rejected a $3 billion offer from Facebook. Snapchat is a photo messaging platform. It allows people to send messages that disappear once they are viewed. Unlike Facebook or Twitter, people do not leave behind a permanent record. The platform is particularly popular with teenagers. It is said to be used for sexting, the practice of sending sexually explicit pictures that are often used for what teenagers call "hookups."

Such a large amount of money in social media might indicate another Silicon Valley bubble. Snapchat and Twitter are clever tools for communication, but they are not based on hard science or cutting edge technology. For all the talk of being the technology center of the universe, travelling in Silicon Valley is increasingly a third world experience. Interminable traffic jams, pathetic public transport, and poor roads reveal that all is not right in this mythic land.

Three other developments are most interesting this week.

Sony sold over 1 million Playstation 4s in the first 24 hours. It is an indication of the new era we are living in where young people increasingly spend more time behind their screens than playing with each other.

The Defense Advanced Research Projects Agency (DARPA) is building a long-range anti-ship missile to counter China. Back in the day, DARPA came up with the Internet and had a string of successes to its name. China’s development of an anti-ship carrier missile has spooked US policymakers but it is also possible that the defense establishment might be playing up the Chinese threat to avoid sequester cuts of about $500 billion over a decade.

Finally, Google won its copyright battle against publishers and authors. Its scanning project will put more than 30 million works in a digital library. The court accepted Google’s argument that its project is “fair use” and provides “significant public benefits.”

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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