Gen. Yuri Ivanov, 52, deputy head of GRU

According to a new Israeli book (excerpted below) General Mohammed Suleiman was assassinated by two Israeli snipers. A number of analysts quoted by Nicholas Blanford in Time Magazine argued that he was killed by Syrians due to factional squabbles within the regime. The same thing was said about the assassinated of Imad Mughniyeh. It would seem that both were taken out by Israel, perhaps with some US intelligence assistance. This raises questions about who may have killed Major-General Yuri Ivanov. He was the deputy head of Russia’s foreign military intelligence arm known as GRU which is thought to operate the biggest network of foreign spies out of all of Russia’s clandestine intelligence services. He disappeared from the coast of Lattakia and his body washed up in Turkey.

http://www.myfaithmyvoice.com/ – watch a well done video – 1 minute – on US Muslims

US Seeks Israel Peace Talks With Syria, Lebanon – Envoy
2010-09-01

WASHINGTON (AFP) – The United States is pushing for peace talks between Israel, Syria and Lebanon, US envoy George Mitchell said, as the Israelis prepared to resume direct negotiations with the Palestinians.

Wider peace talks between Israel and its northern Arab neighbors, which have been in perpetual conflict with the Jewish state since its creation in 1948, are seen as vital to any lasting peace in the region.

“With respect to Syria, our efforts continue to try to engage Israel and Syria in discussions and negotiations that would lead to peace there and also Israel and Lebanon,” said Mitchell, US President Barack Obama’s Middle East envoy.

“You will recall that when the president announced my appointment two days after he entered office, he referred to comprehensive peace and defined it as Israel and Palestinians, Israel and Syria, Israel and Lebanon, and Israel at peace with and having normal relations with all of its Arab neighbors,” Mitchell said, before adding: “And that remains our objective.”

The US envoy was briefing journalists ahead of Thursday’s resumption of direct peace talks between Israeli Prime Minister Benjamin Netanyahu and Palestinian leader Mahmud Abbas.

Top level talks in search of an elusive Middle East peace deal broke off in December 2008 when Israel invaded the Palestinian Gaza Strip to halt militant rocket fire on its south.

Daniel Levy, the Director of the Middle East Task Force of the New America Foundation provides the full audio of their briefing on the new peace talks. Also, here is his take: “Want That Israeli-Palestinian Peace Deal, Mr. President? Perform a C-Section,”on the resumption of Israeli-Palestinian talks at Huffington Post.

Ambassador Chas W. Freeman offers a different take. Speaking in Norway, he suggests that Europeans pressure the US and Israel to follow international law: “America’s Faltering Search for Peace in the Middle East: Openings for Others?”

OBG hails Syrian economic performance
2010-09-01 13:14:09.451 GMT

DAMASCUS, September 1 (Xinhua) — Oxford Business Group (OBG), in its recently issued report, hailed Syria’s economic performance, the official SANA news agency reported Wednesday.

In its annual report, OBG elaborated the remarkable progress achieved by Syria in liberalizing its economy.

“The successful steps taken by Syria in liberalizing its economy have been matched with its achievements on the international stage,” SANA quoted the report as saying.

It also said Syrian government efforts to establish an active public-private partnership have led to the increase in investment projects and other economic activities.

Syria’s annual growth rate has reached 5.5 percent during 2009 while its GDP has increased to 31 billion U.S. dollars in the same year. Private sector’s contribution to GDP reached 65.5 percent in 2009 compared with 64.7 percent in 2008.

Top Russian Spy’s Body Washes Up ‘After Swimming Accident’
2010-08-31, Andrew Osborn

Aug. 31 (Telegraph) — Major-General Yuri Ivanov, 52, was the deputy head of Russia’s foreign military intelligence arm known as GRU which is thought to operate the biggest network of foreign spies out of all of Russia’s clandestine intelligence services.

His badly decomposed body was found washed up on the Turkish coast by local fishermen earlier this month after he disappeared in the Syrian coastal resort of Latakia further south. The Russian army’s in-house newspaper, Red Star, did not report his death until last Saturday when he was quietly buried in Moscow.

The circumstances of his death are reminiscent of a John Le Carre novel and have therefore fuelled theories that he may have been murdered in Syria and his body then thrown into the Mediterranean where it drifted for days.

According to the Kremlin, he was on holiday in Syria and died in a tragic swimming accident. However, other reports have suggested he was on official business and the location where he is reported to have disappeared was only about fifty miles from a strategically vital Russian naval facility in the Syrian port of Tartus which is being expanded and upgraded to service and refuel ships from Russia’s Black Sea Fleet.

The facility is Russia’s only foothold in the Mediterranean Sea, and Mossad, Israel’s national intelligence agency, is know to be concerned that Moscow will use the upgraded facility as a base for spy ships and electronic espionage directed at the Middle East. The port is also close to the Turkish port of Ceyhan, a terminal for the Baku-Tbilisi-Ceyhan oil pipeline which is seen as a lifeline for Georgia, against whom Russia fought a short war in 2008.

The long road to Syria
Ynetnews special: New book reveals full story behind bombing of Syrian reactor by Israel

…Assassination in Syria

On the evening of August 2, 2008, 11 months after the bombing of the reactor, a festive dinner was held on the terrace of a summer house in Rimal al-Zahabiya, north of the Syrian city of Tartous. The summer house was adjacent to the shore and had a magnificent view. The terrace overlooked the sea and served as a refuge from the summer’s high humidity. The guests were close friends of the house’s owner, General Mohammed Suleiman, who had traveled there for a weekend break.

Suleiman was President Assad’s top aide on military and security matters. He was in charge of the reactor’s construction and its security. Government circles in Damascus referred to him Assad’s shadow. His office was located in the presidential palace, next to Assad’s, and few knew him in Syria and abroad. While Suleiman’s name was not mentioned in the media, Mossad and Western intelligence agencies knew him and his actions well. The 47-year-old Syrian was an engineering graduate of Damascus University. During his studies he befriended Basil Assad, then-President Hafez Assad’s firstborn son and Bashar Assad’s older brother. After Basil’s death in a road accident, his father was sure to bring Suleiman close to himself and his heir. In 2000, Hafez Assad died and his son Bashar was elected president. With his rise to power, the young president made Suleiman his confidant and close advisor.

Suleiman played a unique role: He was a member of the Syrian research board, which dealt with the development of missiles, chemical and biological weapons and nuclear research and development. As part of his job, he was Syria’s contact with North Korea. He coordinated the transfer of the reactor’s parts to Syria and was in charge of security arrangements for the North Korean scientists and technicians involved in its construction. The reactor’s bombing was a serious blow for Suleiman, but not a lethal one. After overcoming the initial shock, he began to plan the construction of an alternate reactor, for which a location had yet to be determined. Suleiman’s new mission was much more complex and difficult than before, since he was now aware that he was on the Israeli and American intelligence agencies’ radars.

Ahead of the next phase of his secret mission, Suleiman took a few days off and traveled to his summer home. A vacation and dinner with his friends was the best medicine for the pressure he was under. From his seat by the table he watched the waves lazily crawling up the shore. But what he didn’t see, at a distance of some 150 meters (165 yards) from the terrace, was two figures waiting, motionless in the dark water. They reached this point from a far off distance in a ship that dropped them off some two 2 kilometers (1.2 miles) from Suleiman’s house. From there they dived until they neared his home. The two were professional snipers, possessing a wealth of experience and nerves of steel. They carried their weapons in water-proof covers. When they reached the shore they immediately spotted Suleiman’s house. The information they received from their country’s intelligence agency was accurate. They identified the building and the terrace, scanned the people seated at the table and focused on their target: The general sitting opposite them, among his guests.

Around 9 pm the snipers returned to test their aim and range. They watched Suleiman, sitting on a chair at the center of the table surrounded by his friends. It was crowded around the table, which forced the snipers to reset their focus and aim at the host’s head. They continued to hide in the water. Then the signal was given. The two emerged from the water to the shore, moved closer to the house, aimed their rifles and shot Suleiman simultaneously. The hit was lethal. His head was first jolted back and then collapsed forward on the table. Those present did not understand what had happened, because they didn’t hear a sound – the rifles were equipped with silencers. Only after they noticed the blood flowing from Suleiman’s head did they realize he had been shot. A commotion broke out on the terrace, which enabled the snipers to flee via a pre-planned escape route. The Sunday Times reported a slightly different version, saying the snipers were IDF Flotilla 13 commandoes who arrived in Tartous on a luxury yacht belonging to an Israeli businessman, carried out their mission, and vanished.

Syria’s official bodies were shocked. The government initially kept quiet and did not address the reports of an assassination. There was much embarrassment. How did the hit team make it to northern Syria? How did it flee the site? Was there no place left in Syria where the regime’s heads could feel safe? Days after the incident a brief official statement was released saying, “Syria is holding an investigation to find those responsible for this crime.” But Arab media extensively reported on the affair from day one and raised speculations about the identities of the perpetrators. Arab newspapers focused on elements that had an interest in assassinating the general, and were quick to point to Israel. They also claimed that Israel carried out the assassination because of Suleiman’s involvement in the construction of the reactor Dir al-Zur. While Arab media sang Suleiman’s praises, Western intelligence agencies had a completely different reaction to his death. In the capitals of the free world, no one shed a tear over the general’s untimely passing.

Article written by Michael Bar-Zohar and Nissim Mishal, authors of recently released book “Mossad – The Great Operations.”

UN Tribunal Won’t File Indictment on Hariri Killing Next Month

01 Sep 2010, Source: Reuters
* Bellemare says hasn’t drafted indictment yet
* Rejects accusations that U.N. investigation is politicised
* Says Hezbollah evidence being assessed

BEIRUT, Sept 1 (Reuters) – The U.N. prosecutor investigating the killing of Lebanon’s former premier Rafik al-Hariri said he would not rush to indict suspects, dampening expectations of imminent indictments which had raised tensions in Lebanon.

“Let me state clearly that the indictment has not been drafted yet,” Daniel Bellemare said in an rare media interview published by the website NOW Lebanon. “I will only file the indictment when I am satisfied there is enough evidence”.

Media reports had said that Bellemare could issue indictments this month against members of the Shi’ite guerrilla group Hezbollah in connection with the 2005 bombing which killed Hariri and 22 other people. Hezbollah leader Sayyed Hassan Nasrallah, who has denied any Hezbollah involvement in the killing and called the U.N. tribunal an “Israeli project”, stepped up his criticism in recent weeks. That raised tensions in the unity government led by Hariri’s son, Prime Minister Saad al-Hariri, who supports the U.N. court.

Bellemare rejected accusations that the five-year investigation was politicised. “We operate in a political context. But the decision that will be made is not a political decision,” he said.

HEZBOLLAH EVIDENCE ASSESSED

Asked if he would file any indictment by the end of the year, Bellemare said he was “very optimistic” and was moving as fast as possible. “Let’s say as soon as possible, but not sooner than possible,” he said.

He said video footage provided by Hezbollah, which Nasrallah said showed that Israeli drones had surveyed the route taken by Hariri’s motorcade before the bombing, was being assessed and was “not being taken lightly”. “If somebody comes to me with credible evidence that shows me that I may not be on the right path, whatever path I am on, then of course I will look at that material. That is exactly what we are doing,” he said, adding he did not know whether Hezbollah’s evidence would further delay any indictment.

Bellemare declined to say whether his team had questioned any Israelis. “What I am saying is that we are reviewing all the possible existing evidence.”

A rare glimpse from inside the prison: father and son al-Abdallah

When Bashar al-Assad came to power, Mohammad al-Abdallah believed things in Syria would finally change for good. Ten years later, he tells the story of a personal desillusionment.
By Mohammad al-Abdallah

Oslo’s Yossi Beilin in Bloomberg: (Thanks to our friend at Friday Lunch Club)

“… Netanyahu wasn’t voted in by the right wing to divide East Jerusalem or to resolve, even symbolically, the problem of Palestinian refugees. The distance between his positions and the minimum claims of the pragmatic Palestinian camp can’t be bridged. Even when he talks about a willingness to accept the two-state solution, and even when he makes promises to surprise, he reverts to a long list of positions that don’t allow him to reach a historic compromise.
Abbas can’t implement a peace agreement with Israel because as long as Hamas retains control of Gaza, Gaza won’t be part of the solution, and there can’t be any “safe passage” between the West Bank and Gaza. In addition, it won’t be possible to work out land swaps between Israel and the West Bank because the area designated for them is the region surrounding the Gaza Strip, and no Israeli government would agree to hand over land adjacent to Gaza while it is still under Hamas control.

This situation means we need to pursue a different line of thought, which will lead us, at this stage, to a solution that isn’t ideal, but which is far better than the continuation of the current situation: a partial agreement.”

The Uncertain Future of Democracy Promotion, by Steven Heydemann
Review of Policy Paper Beyond Orthodox Approaches: Assessing Opportunities for Democracy Support in the Middle East and North Africa

Democracy promotion has had a tough decade, nowhere more so than in the Middle East. Ten years ago, the democratic optimism that followed the end of the Cold War was in relatively good health. Today, after a decade of authoritarian reversals, a sustained “backlash against democracy promotion,”[1] and authoritarian resurgence from Russia to Africa to Latin America, post-Cold War optimism has given way to a darker, more sober assessment of democratization’s limits. The Middle East in particular, with not a single experience of transition from Morocco to Iran, has been the crucible of hard-won lessons about the durability of authoritarian regimes and their resilience even in the face of quite extraordinary pressures.

If you want to understand what direction the region is really moving in, read Max Blumenthal’s, How to Kill Goyim and Influence People: Israeli Rabbis Defend Book’s Shocking Religious Defense of Killing Non-Jews (with Video) – A rabbinical guidebook for killing non-Jews has sparked an uproar in Israel and exposed the power that a bunch of genocidal theocrats wield over the government.

New Round Up

Beyond Moderates and Militants
How Obama Can Chart a New Course in the Middle East
By Robert Malley and Peter Harling
Foreign Affairs, September/October 2010 – Extracts

In the Middle East, U.S. President Barack Obama has spent the first year and a half of his presidency seeking to undo the damage wrought by his predecessor. He has made up some ground. But given how slowly U.S. policy has shifted, his administration runs the risk of implementing ideas that might have worked if President George W. Bush had pursued them a decade ago. The region, meanwhile, will have moved on.

It is a familiar pattern. For decades, the West has been playing catch-up with a region it pictures as stagnant. Yet the Middle East evolves faster and less predictably than Western policymakers imagine. As a rule, U.S. and European governments eventually grasp their missteps, yet by the time their belated realizations typically occur, their ensuing policy adjustments end up being hopelessly out of date and ineffective………….

The alternative is for the United States to play the role of conductor, coordinating the efforts of different nations even as it preserves its privileged ties to Israel and others. For example, Egypt and Saudi Arabia, together with Qatar and Turkey, could spearhead efforts to bring about Palestinian national reconciliation consistent with a continued U.S.-led peace process. Turkey, assuming that it mends its ties with Israel and maintains its newfound credibility in Arab countries, could serve as a channel to Hamas and Syria on peace talks or to Iran on the nuclear issue. Under the auspices of the United States, Iraq’s Arab neighbors and Iran could reach a minimal consensus on Iraq’s future aimed at maintaining Iraq’s territorial unity, preserving its Arab identity, protecting Kurdish rights, and ensuring healthy, balanced relations between Baghdad and Tehran. Washington should intensify its efforts to resume and conclude peace negotiations between Israel and Syria, which would do far more to affect Tehran’s calculations than several more rounds of UN sanctions. Syria also could be useful in reaching out to residual pockets of Sunni militants in Iraq…..

For the United States, adapting to new patterns of power would at a minimum mean accepting the need for internal Palestinian reconciliation and acknowledging that a strong, unified Palestinian partner is more likely to produce a sustainable peace agreement than a weak, fragmented one. The United States must take into account the concerns of different Israeli and Palestinian constituencies (for example, acceptance of the Jewish right to national self-determination and recognition of the historic injustice suffered by Palestinian refugees); acknowledge that meaningful Israeli-Syrian negotiations have become a necessary complement to Israeli-Palestinian talks, not a distraction from them; and grasp the necessity of including new regional actors to help achieve what is now beyond the ability of Washington and its allies to do on their own: giving legitimacy and credibility to an Israeli-Palestinian accord.

It will not be easy for the United States to undertake such a strategic shift, nor will it be risk free. Traditional allies, feeling jilted, might lose confidence or rebel; newfound partners, getting a whiff of U.S. weakness, could prove unreliable. Still, hanging on to an outmoded policy paradigm does not offer much hope. The likely consequences would be increased regional divisions, increased tensions, and increased chances of conflict. Obama began his presidency with the unmistakable ambition of turning a page. To succeed in the Middle East, he will have to go further and close the book on the failed policies of the past.

(The following four extracts are taken from Syria Report)

Government Provides Update on Works on the Tigris River Project
30 August 2010

A Syrian state official has announced that the very first phase of works on the project to divert water from the Tigris River was about to be completed.

Samir Moura, the head of the Water Resources Department in the Governorate of Hassakeh, where the Tigris lies, said that concrete works around the main pumping station in the project would be completed by the end of September.

The works are only worth SYP 252 million (USD 5.36 million), while the total cost of the Tigris Water Diversion Project is about SYP 150 billion (USD 3.20 billion). The works being done represent therefore only a tiny portion of the total but the fact that Mr Moura’s statement was published on the front page of Tishreen, a state daily on August 25, shows the need for the Government to publicise the advancement of works.

In June last year, as the country faced the consequences of a third consecutive year of drought, the Government announced that it would be accelerating works on a 30-year long project to use water from the Tigris River to irrigate some 150,000 hectares of land.

The Tigris River, which is sourced in Turkey, does not enter the Syrian territory as such but lies over the Syrian-Iraqi border. As a consequence Syria can use a small share of the River’s water but hasn’t done so yet.

The project to use the water from the Tigris has been discussed for decades. In April 1980, the Syrian Government actually signed a study and design contract with Agrocomplect, a Bulgarian engineering firm specialized in the field of irrigation, land-reclamation, water supply, and hydro technical and agro-industrial construction. However, budget constraints led to an indefinite postponement.

Besides irrigating directly some 150,000 Ha of land, part of the water will also be used to support another 60,000 Ha irrigation project that is supposed to be fed by the Khabour River, a tributary of the Euphrates. The Khabour has almost completely dried up because of upstream works by Turkey.

A new private university, the country’s sixteenth, has opened in Syria.

The National University is located in the Governorate of Hama, south of the city of the same name. The university is the second private institution to open in the Governorate after the Arab Private University for Science and Technology, which opened its doors in July 2009.

NU will start with two faculties, business management & finance and architecture & construction planning. Three new faculties will be opened in the coming years to teach IT engineering, food industries and health science. When the entire facility, which spreads over 200,000 sqm, is completed, NU will accommodate up to 3,000 students. The investment cost of the project was not disclosed.

NU is an investment by more than 125 investors from Hama. Private universities were allowed to set up in Syria in August 2001.

Government Cancels Deal for Private Sector Management of State-Owned Cement Plant
29 August 2010

Altoun Group has withdrawn from the contract it had won earlier this year to invest in, and develop, a state-owned cement plant.
In a letter sent to the Ministry of Industry, Altoun justified its decision by the fact that the Government had not given it the formal go ahead to begin works months after the signing of the contract. Syria’s cement market is growing on the back of strong investment in the real estate market by local and regional investors. Two large private sector plants are under construction, the first by France’s Lafarge and the second, Al-Badia Cement, by Italcementi in joint-venture with Syrian and Saudi investors.

Syrian-US Trade Reaches USD 440 Million in Six Months to June

Bilateral trade between Syria and the US reached USD 440.5 million in the first six months of this year as Syrian exports reached a 19-year high, thanks to an increase in the sale of oil derivatives.

The spiritual leader of Shas, one of the parties within Israel’s governing coalition, called on God to strike down all Palestinians on the eve of direct talks between the Israeli and Palestinian governments.

Egyptian dissident Saad Eddin Ibrahim endorsed Gamal Mubarak’s right to run for the Egypt’s presidency.

Palestinian President Mahmoud Abbas warned that he would pull out of peace talks if Israeli settlement construction resumed.

Syria-Hezbollah would unite vs. Israel
By Jack Khoury and The Associated Press, 2010-08-30

Kuwait’s al-Rai daily says Lebanon-based group, Syrian army have created a joint military command, dividing potential war fronts.

The Lebanon-based Shi’ite militant group Hezbollah and the Syrian army have initiated a significant military cooperation in joint preparation for the possibility of a future armed conflict with Israel, the Kuwaiti daily al-Rai reported on Monday.
Bashar Assad

The report came as Syrian president Bashar Assad urged Lebanon’s Prime Minister Saad Hariri earlier Monday to support Hezbollah and maintain calm in the divided country.

Speaking with al-Rai Monday, sources have indicated that Hezbollah and Syria have formed a joint headquarters meant to orchestrate the cooperation between the two forces, which is to be commanded by two officers – one from the Syrian military and one from Hezbollah.

The joint command, the report said, would ensure full cooperation in land, sea, and air warfare, as well as take care of the positioning of anti-aircraft missiles in both Lebanon and Syria in order to confront the possibility of an Israeli nuclear assault.

Recent exchanges between the two organizations reportedly included trading information regarding strategic sites within Israel, including airports and other facilities, as well as dividing up the prospective war fronts between themselves.

The report also stated that Damascus and Hezbollah also worked together on the possibility of joint artillery strike against Israel, as well as drawing up a collective plan for the defense of vital Lebanon, Syria sites in case of an Israeli attack.

The two organizations also reportedly shared information gather by Hezbollah following the Second Lebanon War in 2006, including military conclusions and tactics.

The al-Rai report also stated Syria’s contentment with Turkey’s recent announcement that it would ban Israeli warplanes from entering its airspace, since it prevents the possibility of an Israeli airstrike from that direction.

At summer school, Iraqi refugees in Syria try to catch up By Sarah Birke, Christian Science Monitor/ August 30, 2010

has written a wonderful review

When Joshua Landis recommended to me Elaine Imady’s book, I wasn’t sure that I had time for it. I had a large backload of books on my desk …. Now that I have read the book I realize how far from getting it right I was. …

Damascus Stock Market is up 52.5% YTS.  3rd best performing after Mongolia and Srilanka’s, which were up about 65% YTD.

Investments in Syria’s Industrial Cities Increased Sharply over the Last 12 Months (Syria Report)

The combined value of the investments in Syria’s industrial cities reached SYP 441.7 billion at the end of the first half of this year or an annual increase of 70 percent. Read

“The Syrian Colony, Washington Street,” by W. Bengough, depicts a turn-of-the-century street scene This is not what the lower west side of Manhattan would look like if the much-debated Islamic community center were built two blocks from the World Trade Center site. This is what it looked like decades before the World Trade Center was even envisioned. This is its heritage. not far from the focus of the current debate over an Islamic center.

But it is worth recalling the old sights and sounds and smells of Washington Street as a reminder that in New York — a city as densely layered as baklava — no one has a definitive claim on any part of town, and history can turn up some unexpected people in surprising places.

بشار الاسد بعد عقد: اقتصاد السوق..لكن بأي ثمن؟

داماسكوس بيرو

Salam Kawakibi, Senior Researcher for the Arab Reform Initiative has two new articles that are excellent and worth the read. The review of the history of private media is particularly well researched. The Private Media in Syria –And — Internet or “Enter Not” the Syrian Experience

Syria sex trade uncovered
Saturday, August 28 ABC News Video
A well done and heart breaking video story – a must see. Iraq – What a mess and the US is declaring victory.

Tony Karon has an excellent piece, “Two Minutes to Midnight? Cutting Through the Media’s Bogus Bomb-Iran Debate,” on Tom Dispatch. Here is a good quote from David Kay that he uses:

Israel is engaged in psychological warfare with the Obama administration — and it only partly concerns Iran… [B]eyond Iran, of probably greater importance to the current Israeli government is avoiding the Obama administration pushing it into a choice between settlements and territorial arrangements with the Palestinians that it is unwilling to make and permanent damage to its relationship with the U.S. Hyping the Iranian nuclear program and the need for early military action is a nice bargaining counter… if the U.S. wants to avoid an imminent Israeli strike, it must make concessions to Israel on the Palestinian issues.

Despite Israeli protests, Russia won’t halt arms sale to Syria – Haaretz Daily Newspaper

The agreement in question is for P-800 Yakhont missiles, a highly accurate Russian weapon with a 300-kilometer range capable of carrying a warhead of up to 200 kilograms.

Jack Matlock has begun to blog. He was ambassador to Russia and served on the NSC under Reagan. He weighs in on Goldberg:

Iran, even with nuclear weapons, does not pose an existential threat to Israel, as fanatics claim.  Iran’s leaders, though unprincipled hoodlums, are not suicidal and Israel’s reported hundred or so nuclear weapons are sufficient to pose an existential threat to Iran.

I do not believe that Bibi Netanyahu is as deranged on this issue as Jeffrey Goldberg pictures him. He is a master manipulator, and I believe that he and his Likud-minded colleagues are using the issue to distract attention from Israeli policies that are making the peace process impossible: the continuation of settlement activity in the West Bank and the illegal isolation of the Gaza strip.  These are policies that make a true settlement with the Palestinians impossible. They are policies that empower Iranian diplomacy in the area, even in Arab countries  which traditionally fear Iranian influence.

The most serious existential threat to a Jewish state in Palestine comes from the policies of the existing Israeli government. All the bru-ha-ha about an alleged “existential threat” from Iran is most likely designed to deflect U.S. and world attention from that fundamental fact.

Hamas, the I.R.A. and Us
By ALI ABUNIMAH, August 28, 2010, in the New York Times

… Both the Irish and Middle Eastern conflicts figure prominently in American domestic politics — yet both have played out in very different ways. The United States allowed the Irish-American lobby to help steer policy toward the weaker side: the Irish government in Dublin and Sinn Fein and other nationalist parties in the north. At times, the United States put intense pressure on the British government, leveling the field so that negotiations could result in an agreement with broad support. By contrast, the American government let the Israel lobby shift the balance of United States support toward the stronger of the two parties: Israel….

Israeli Foreign Minister Lieberman says settlement building will restart in September.

Israel is planning to attack Hezbollah arms depots in Syria – Haaretz

Israel is planning to attack Hezbollah arms depots and weapons manufacturing plants in Syria, the Kuwaiti newspaper Al Rai reported on Saturday. The report is based on Western sources who asserted that Israel has increased its military force level along the northern border in the Golan Heights and Mount Dov areas.

US Threatens Turkish Firms Over Business With Iran: Report
2010-08-20 12:42:26.751 GMT

Istanbul (dpa) — The United States has warned Turkey of possible sanctions against Turkish firms doing an increasing amount of business with Iran, … The warning comes at a time of strongly expanding economic ties between Turkey and Iran, and after Turkey had voted against the UN Security Council resolution in June on new sanctions against Tehran.Turkish Minister of State Hayati Yazici was cited as saying that Turkey aims to achieve a trade volume with Iran in the coming year to 20 billion dollars. Last year’s trade volume was 5.5 billion dollars.Among other steps, the countries plan to double, to four, the number of customs control points on their joint border.

Republicans reject Obama’s Turkey envoy -  The Cable:

“…The nomination of Frank Ricciardone to be the next U.S. ambassador to Turkey is being held up in the Senate and the GOP has no intention of allowing a vote on the nomination any time soon.

A spokesperson for Sen. Sam Brownback, R-KS, confirmed to The Cable that his office has placed a hold on the nomination, which was reported out favorably by the Senate Foreign Relations Committee last month. Brownback is preparing a letter now to Secretary of State Hillary Clinton explaining the reasons for his objections.

Brownback’s office declined to specify the contents of the letter, but multiple GOP senate aides from other offices said that there was widespread support throughout the caucus for Brownback’s position and that there was nothing specific the administration could do to convince Ricciardone’s detractors to allow his nomination to proceed. If Brownback did release his hold, it’s likely another one would surface soon after. “He’s just the wrong guy for this sensitive post at this time and the hope is that the administration will recognize that he won’t be confirmed this year and nominate someone better,” said one senior GOP aide close to the issue…”

The Caspian Sea: China’s Silk Road Strategy Converges with Damascus
By Christina Lin

The Caspian region is becoming enmeshed in a web of overlapping political, military, trade and energy interests of countries extending from Asia, to the Middle East, to Russia, to Europe. Given the rising instability of Middle East energy supplies, the Caspian basin has emerged in prominence as an alternative resource for the world’s growing energy consumers. It is estimated that the Caspian Sea is home to the world’s largest reservoir for oil and natural gas after the Persian Gulf and Russia [1]. Historically, Russia had a monopoly of influence in the region during the Soviet era, but after 1991 the United States began making inroads into the region to reduce Russia’s influence over the newly formed independent states [2]. In recent years, both China and the European Union have stepped up their presence and have become active players in the region. Other new players albeit smaller but with increasing footprints include countries such as India, Japan and South Korea. Of the various players, China has the fastest growing presence in the region—driven by its voracious energy appetite but also enabled by the Shanghai Cooperation Organization (SCO) framework. As China embarks on its “look west” development Silk Road Strategy, Syria’s “look east” policy appears to be converging with Chinese interests at the Caspian Sea. The interplay of China’s growing footprint in the Caspian region via its modern Silk Road—reinforced by Syrian President Assad’s nascent “Four Seas Strategy”—will have important implications for the United States, the European Union and other allies. ….

Syria’s Four Seas Strategy

While China is moving west towards the Caspian Sea, Damascus is concurrently moving eastward. Since 2009, Bashar al-Assad has been promoting a “Four Seas Strategy” to turn Damascus into a trade hub among the Black Sea, Mediterranean Sea, Persian Gulf/Arabian Sea and the Caspian Sea. Aligning Syria with countries that lie on these shores—Turkey, Iran, and Azerbaijan (The Weekly Middle East Reporter, August 1, 2009)—Assad peddled this idea in May 2009 with Turkey, stating that “Once the economic space between Syria, Turkey, Iraq and Iran become integrated, we would link the Mediterranean, Caspian, Black Sea, and the [Persian] Gulf … we aren’t just important in the Middle East…Once we link these four seas, we become the compulsory intersection of the whole world in investment, transport and more.” He described Syria’s nexus of “a single, larger perimeter [with Turkey, Iran and Russia]…we’re talking about the center of the world” [17]. Syria can thus act as a means of access for EU countries to markets in the Arab world and western Asian countries [18]. Assad discussed this vision with Medvedev in May this year, and in August 2009 he received Iranian supreme leader Ali Khamenei’s blessing when he presented this strategy [19].

To this end, Assad is taking steps to expand the Arab Gas Pipeline (AGP) to pipe gas from Egypt and Iraq via Syria, and connecting with Nabucco pipelines to Turkey onto Europe.

AGP currently links Egypt with Jordan, Syria, Lebanon, and a new 62 km link between Syria and Turkey was signed in 2009 to be completed in 2011 (Forward Magazine, February 2010). This would provide a much-demanded supply of gas to northern Syria, and as gas becomes available form other sources (primarily Iraq), it will ultimately serve as a supply route to Turkey and the EU. Syria’s long-term aim is to be a transit state for Egypt, Iraq, Iran and Azerbaijan (Eurasia Review, June 29). In 2009 Assad visited Azerbaijan—the first Syrian president to visit since Azeri independence in 1991—and signed 19 cooperation agreements and MOUs on economic, political and commercial fields. This included a deal for Azerbaijan to export 1.5 bcm of gas annually to Syria via Turkey in mid 2011 (World Bulletin, July 2; The Turkish weekly, June 29). It is also eyeing a role in the Nabucco gas pipeline project, while Russia’s Gazprom considers joining the Arab Gas Pipeline that will feed gas from Egypt, Iraq, and Azerbaijan into Nabucco (Pipeline International, May 12). Another Russian company, Stoytransgaz, has been involved in the construction of the first two stages of the AGP, building a gas processing plant in central Syria and another 75km south of Al-Rakka (World Bulletin, July 2; The Turkish Weekly, June 29).

Implications

China’s Silk Road Strategy is linking up with Syria’s look east policy at the Caspian region. The region is a key source for feeding various pipeline projects: Azeri gas to the first stage of the Nabucco pipeline to Europe, which will eventually connect with the AGP to the Middle East; Turkmen and Kazakh gas via the Central Asia-China Pipeline and the Kazakhstan-China Pipeline to China; and Turkmen gas to Afghanistan, Pakistan and India via the TAPI pipeline to South Asia. Concurrently, a new Eurasian regional security architecture based on energy security appears to be emerging, with Turkey, Syria and Iran in the Four Seas Strategy to connect with the Shanghai Cooperation Organization. In 2007 an Iranian Fars News Agency article, entitled “Inevitable Iran-Turkey-Syria-Russia Alliance,” discussed how this “union of four” would challenge U.S. policies in the Middle East (Fars News Agency, November 5, 2007). Likewise, Russia and China may be taking steps to use the SCO to build a new regional security architecture that reinforces each other’s territorial integrity while retrenching Western influences [20]. As Russia is steadily increasing its Black Sea Fleet (Reuters, July 12; Christian Science Monitor, May 19), gaining a foothold in the Mediterranean via the Syrian port Tartus and forming a Black Sea military alliance with Turkey and Ukraine to be signed in August 2010 (RIA Novosti, June 28; Vestinik Kavkaza, June 29; World Security Network, July 7), China is increasing its footprint in the Caspian region via the SCO and Silk Road of pipelines, rail and highways [21]. Once again, there appears to be a new “great game” around the Caspian region and the Greater Middle East.

Islamophobia as the New Antisemitism <http://www.jeremiahhaber.com/2010/08/islamophobia-as-new-antisemitism.html>

Daniel Luban has written a timely and well-researched article <http://www.tabletmag.com/news-and-politics/43069/the-new-anti-semitism-2/>  in Tablet  on what he calls, the “New Antisemitism,” the anti-Islamic bigotry that is on the rise in the United States. Using the term “New Antisemitism” to describe this bigotry is much more appropriate than using it to describe anti-Zionism or anti-Israelism;

The American Mideast Leadership Program is in full swing, and so are the blogs. Here is a  blog about some of the students’ experiences so far.

Max Blumenthal writes:

A survey conducted recently by Shibley Telhami of the University of Maryland presents a window on the new reality in the Middle East for the benefit of those on the other side of the Atlantic who have failed miserably to understand the aspirations, strength and will of the people of this region. Telhami’s poll indicated that Turkish Prime Minister Recep Tayyip Erdogan tops the “new real world order” popularity stakes with 20% of the votes, followed by Venezuela’s Hugo Chavez with 13%; close behind Chavez with 12% is America’s current bête noir, Iran’s President Mahmoud Ahmadinejad. What was described as particularly bad news for the White House is that 77% of those surveyed believe that Iran has the right to possess nuclear energy and 57% of them consider that a nuclear Iran would be better for the Middle East. Israel, remember, stands unopposed at the moment as a nuclear power in the region.

Discussion of this poll is contained in an excellent piece about Israel’s desecration of Muslim graveyards. No coincidence that the world’s most popular leaders are the most belligerent towards the US and Israel: http://www.intifada-palestine.com/2010/08/why-is-israel-afraid-of-our-cemeteries/
If some politicians and intellectuals in the West still think of a peace process that isolates Hamas and Iran, or divides the region’s resistance groups, then they are wasting their time. The pulse of the people in the Middle East has overtaken them and is heading in a different direction.

Ignatius in the WaPo tries to be positive about the renewed Palestinian-Israeli peace talks. Steven Walt, “Road to Nowhere” feels no obligation to make such a bow.

Ignatius in the WaPo:  “… It’s a classic piece of diplomacy: One side is responding to one letter of invitation; the other is responding to a subtly different request. It’s a finesse that has succeeded in getting both to the table, but it also highlights the huge differences that exist between the two sides — and could scuttle the talks.

The Obama administration is also finessing the question of whether the moratorium on Israeli settlement-building, which is set to expire in late September, will be extended. Administration officials had hoped Netanyahu he would agree to an extension as a confidence-building measure before the talks started. But he hasn’t given any formal assurance. Now, American officials are evidently hoping that once talks are rolling, the Israeli prime minister won’t want to blow them up by resuming settlement activity — and won’t want the political onus of being seen as having undermined the U.S.-led peace effort.

The Arab side has feared that Netanyahu would drag out negotiations without delivering major concessions. In a nod to Palestinian President Mahmoud Abbas, Friday’s announcement said there would be a one-year time limit on the talks.

After opening meetings in Washington on Sept. 1 and 2, U.S. officials plan to move the talks to a venue where the parties can bargain without intrusion. Camp David in Maryland and the Wye Plantation on the Eastern Shore have provided such hideaway meeting places in the past. This time U.S. officials have looked at a range of sites, from White Oak in Florida to retreats in the Middleburg area of Virginia. The final location hasn’t been set, but senior officials favor a spot that’s relatively close to Washington.

The opening of direct Israeli-Palestinian peace talks will be a milestone for President Obama, who came to office with high hopes that he could achieve a breakthrough but quickly discovered the pitfalls of peacemaking. It’s the culmination of a process that included unusual outreach to the Arab world, including his speech in Cairo last year. It also follows the withdrawal of the last official U.S. combat troops from Iraq and Obama’s defense of the right of Muslims to build a mosque in the neighborhood of “ground zero” in lower Manhattan — all steps aimed in part at engaging Arab and Muslim critics of the U.S.

From the first, the administration has been divided over the question of whether the talks should be framed by an opening statement of principles (as the Arabs wanted) or be open-ended (as the Israelis insisted). In the end, they appear to have had it both ways.

But if it was this hard to get people to agree to come to the table, that surely doesn’t bode well for the larger issues that need to be resolved.”

Doors Start to Open to Activists in Syria
2010-08-28
By KAREEM FAHIM

ALEPPO, Syria — For five years, Chavia Ali’s attempts to start a disability rights group were thwarted — by prejudice, a lack of money and the Syrian government’s stranglehold on civic life. The government gave her a license, but prevented the group from meeting because of what Ms. Ali believes was a whisper campaign against her, a Kurd with a growing profile.

Chavia Ali has helped Zahra Sheikhi of the village of Ayn al-Arab, who is blind, become more confident. Ms. Sheikhi has learned to play the tanbour and hopes to move away from home.

Then everything changed.

Last year, Ms. Ali was told that a third of her budget would be paid by a group led by Asma al-Assad, the wife of the Syrian president, Bashar al-Assad. Now Ms. Ali, 29, is everywhere, giving television interviews, speaking at ministry conferences and having her picture taken with the first lady.

The reversal of her group’s fortunes is part of an overture that government officials have described as a new embrace of civil society.

But the embrace is complicated. Even as doors have opened for a few people, like Ms. Ali, they have shut with increasing frequency on activists demanding greater political rights, according to human rights lawyers here.

Aron Lund

The Syria Muslim Brotherhood: Leadership Transition from Bayanouni to Shaqfa
By Aron Lund
Syria Comment, Aug. 21, 2010

I saw the note about the Muslim Brotherhood in your latest blog post. However, what’s really worth pointing out — it’s mentioned briefly in the Khaleej article — is the fact that they’ve elected a new general inspector and top leadership. Ali Sadreddin el-Bayanouni held the post for 14 years, but has now, or so it seems, gracefully stepped aside. I interviewed him in London last year, and he told me he wouldn’t run for a new term since that was not allowed constitutionally, and indeed it seems he stuck to his word. That deserves some recognition, I think, considering how rare it is to see Syrian opposition parties (not to mention ruling parties) change their leaders at mandated intervals. I can think only of Riad el-Turks SCP/SDPP having done so before, but I hope it catches on. The opposition’s calls for democracy become rather more credible if they’re actually practicing democracy in their own organizations…

Mohammed Riad Shaqfa

On the other hand, things may not be as settled as they appear. El-Quds el-Arabi [Aug 2] reported that the new GI, Mohammed Riad Shaqfa is backed by a hawkish faction of “war veterans”, centered around his deputy, one Farouq Teifour from Hama. Everyone they name in the new leadership is from Hama, interestingly enough, since Bayanouni was said to be backed by an Aleppo faction, and there was a three-way faultline between Damascus-Aleppo-Hama in the group during the 70s. On the other hand, both Shaqfa and Bayanouni deny any sort of internal “coup” in el-Sharq el-Awsat [Aug 8] and appear to try to minimize differences.

Be that as it may, it would be a shame if it’s true that Bayanouni’s line has lost influence. He deserves a lot of credit for having spent his time as GI pushing for moderation of their sectarian message and trying to find common ground with both the secular opposition and with the regime. Sadly, the regime did absolutely nothing to encourage this, effectively slapping Bayanouni in the face when he gambled on reconciliation in Spring 2009 by “suspending opposition activity” over the Gaza war and ditching Abdelhalim Khaddam.

el-Quds el-Arabi claims that the “suspension” communique and the regime’s cold shoulder response in 2009 was the final straw that led to a “hawkish” counter-faction taking over. If that’s true (again, I don’t know, and I hope not), this has been amazingly poorly played by Assad — actively burning bridges to people with influence in the conservative Sunni majority might comfort the most isolationist and hardcore elements of the regime, but it’s certainly not what Syria needs. The country will never get safely past the 80s unless there’s some form of public reconciliation involving both the regime and the MB.

Aron Lund,
Sweden

Aron writes:

I’m a Swedish freelance writer, mostly on Middle Eastern issues, with a special fascination for Syria. I spent much of 2005 studying Arabic at Damascus U, and really learned to love the country. Hope to be able to go back for a longer stay some time!

My book (the one I interviewed you for) is being published next month. It’s called Drömmen om Damascus (The Dream of Damascus), and it is published by SILC Förlag. As far as I can tell it’s the first book on Syrian politics in Swedish ever, so it’s about time… It’s intended to be sort of a non-specialist introduction to Syrian politics, focusing on how Hafez constructed the modern state, on Bashar’s first decade, the rise and fall of the Damascus Declaration, and on the various opposition movements. I’ve been interviewing opposition leaders in- & outside of the country for the past two years, incl. people like Khaddam, Bayanouni, Turk, Seif, Abdelazim, and many others.

Aron added in a note:

I just want to underline again that this is newspaper speculation. I’m not privy to their internal politics, and I personally don’t know which version is true. Unfortunately I think there’s good reason to suspect that el-Quds el-A has it about right, but that’s just guessing from what I’ve heard and read.

Further information on Bayanouni (by Landis)

Bayanouni and Khaddam

Ali Sadreddine Bayanouni (علي صدر الدين اليانوني) was born in 1938 in Aleppo and brought up in a religious family, where his father and grandfather were both well known Muslim scholars. He joined the Muslim Brotherhood while in secondary school, in 1954, and went on to receive training as a lawyer. After spending time in prison, he emerged to become the deputy leader of the Brotherhood in 1977. He left Syria two years later and eventually settled in Jordan, where he remained for twenty years. Britain accepted him as a political refugee in 2000, after the Jordanian authorities requested he leave the country. In 2005, he joined with secular leaders of the Syrian opposition to call for elections and freedom in Syria in what was called the Damascus Declaration. In March 2006 he joined Abdel Halim Khaddam in forming the National Salvation Front in an attempt to unite with defectors of the Syrian Baath Party, as well as the secular opposition. The stated principle upon which all elements of the opposition seemed to agree was the need for elections and pluralism in Syria. This was new. Shortly after the Bush administration in the United States was replaced by President Obama’s, which did not place such heavy emphasis on the “Freedom Agenda” but instead called for engagement with Syria, Bayanouni broke with Abdel Halim Khaddam and the NSF was effectively dissolved.

I have been told by reliable sources that Khaddam’s daughter-in-law traveled to Syria this spring to see if a possible pardon could be arranged for her father-in-law and extended family. Her efforts were in vain. Some 22 members of the Khaddam extended family were required to leave Syria and lost their property following Abdel Halim’s Khaddam’s announcement in 2005 that he expected the downfall of the Syrian regime in six months and would work to promote that end by leading Syria’s opposition from France.

For further reading on Bayanouni read this 2006 article by Gary C. Gambill and this interview by Mahan Abedin in 2005. Also see my post about the Khaddam – Bayanouni link up here and about Bayanouni’s changing language on the Alawites, here. Also see Anthony Shadid’s 2005 Washington Post article here.

SYRIAN ECONOMY

Iraq to Allow Iranian Gas Pipeline to Syria, VOA News 12 August 2010

Iraq says it has agreed to allow its neighbor, Iran, to build a natural gas pipeline to Syria through Iraqi territory.

The Economist’s latest Business summary of the MENA states includes this happy quote. – (See the entire summary copied below)

Aside from Qatar, the only country to improve it overall rating in the region was Syria, which has moved up over the past year to B from CCC. Syria ran into difficulties with its external debt in the 1990s and was obliged to restructure its loans from the World Bank. More recently it signed a deal in 2005 to reschedule about US$13bn in debts to Russia (much of which was written off). Consequently Syria now has a relatively small burden of external debt, and ac debt-service ratio of only 1%.The economy is showing robust rates of growth, and the role of the private sector is increasing thanks to recent structural reforms….

Is Syria the Next Hot Market? Watch this report by Lara Setrakian

Poverty in Syria is projected to reach 40% of population by 2015. See article at Syria Steps in Arabic.

Al-Hayat reports on a major corruption case

سورية تعلن اكتشاف فساد بقيمة 104 ملايين دولار خلال 19 شهراً

Syrians dissatisfied, survey shows
August 19, 2010|By Meris Lutz, Los Angeles Times

A survey conducted in secret because of a ban finds most of more than 1,000 respondents are unhappy with political and economic conditions and want emergency rule to end.

A survey of Syrians, conducted in secret because of government prohibitions, shows strong dissatisfaction with prevailing political and economic conditions. Though that may not be a surprise, the fact that any kind of opinion poll could be conducted in Syria, was certainly an eye-opener, the study’s authors say.

Syrian Muslim Brotherhood opposition activity still on hold officially, with internal discussions on dissolving the movement!

LEBANON

Elias Muhanna (QifaNabki) flagged this inteview with Robert Baer in NowLebanon: (Via FLC)

How did Iran’s role evolve in Lebanon over the last decade?

Baer: In 1982, the IRGC [Iranian Revolutionary Guard Corps] arrived in Lebanon with the express purpose of driving out the Americans and the French. Having forced them to withdraw their forces, Iran consciously turned its energy to driving out the Israelis. Currently, Iran is supporting Hezbollah’s shift to becoming a force for stability. Iran intends to prove that it is not only a revolutionary, anti-colonialist force but also one that can govern – or, in Hezbollah’s case, a backer of a local force that can govern.

You say in your book that Iran was able to win the hearts of the Lebanese and Palestinian people by adopting national causes they can relate to, i.e. the struggle against Israeli occupation. Did the end of Israeli occupation over Lebanon weaken the Iranian argument of legitimacy?

Baer: Yes, the Iranians have a reduced role in Lebanon now that the war is more or less over. But the point remains the vast majority of the people in the Middle East look at Israel as an occupying military power, and the irreducible fact is that Iran (and Hezbollah) took it on and won. Samson and Goliath; that distinction will serve Iran for a long time.

Do you believe that Syrian President Bashar al-Assad’s visit to Lebanon with Saudi King Abdullah a few weeks ago is an indicator of Saudi’s attempt to curb Iran’s power over Lebanon? How successful was that?

Baer: The great divide in the Middle East is Saudi Arabia and Iran. If Saudi Arabia’s influence in Lebanon were to completely vanish, it would be a great loss. What Saudi Arabia is trying to do now is bring Syria back into its fold, counting on [it] for helping with Lebanon. Without Syria, Saudi Arabia doesn’t have a chance in Lebanon.

How far would such an alliance go? Is it threatening for Hezbollah?

Baer: Syria will never abandon Hezbollah. The Party of God is an integral piece of its armature of military defense, and no amount of Saudi money will change this reality.

In your book you spoke at length about Hezbollah military commander Imad Mugniyah, describing him as “freelancer,” someone Iran could not completely rely on. What type of relations did Iran maintain with Mugniyah before his death? What about his role within Hezbollah?

Baer: Mugniyah was a fighter. He bridled at Iranian caution and wanted to carry the war to the West Bank and Gaza – and even Western Europe. At the same time he was considered untouchable in Tehran, an icon of the Islamic Resistance.

What is your take on his assassination in Syria in 2008?

Baer: I’ve heard all the theories, but in all honesty I don’t have an answer.

How do you view accusations of the possible involvement of Hezbollah members in the 2005 assassination of Rafik Hariri?

Baer: Let’s wait until the evidence comes out.

Could party members be involved without the knowledge of Hezbollah or Iran?

Baer: I’ve been in and out of Lebanon for 25 years, and I have to admit there’s no better country in the world for making and hiding conspiracies. I can make a convincing case that Arafat assassinated President Bachir Gemayel [in 1982 through the Syrian Social Nationalist Party], but most people would scoff at the idea. Sometimes we never get answers.

Do you think that the argument of Hezbollah’s possible involvement in the Hariri assassination would serve Israel’s objectives? How would this translate across the Middle East?

Baer: I don’t see a clear case that Hariri’s assassination served anyone’s interests, neither Syria’s nor Israel’s. Both countries need a stable Lebanon, with a strong central government. Taking the decision to assassinate Hariri must have involved an extraordinary set of circumstances – ones I can only speculate on.”

Steven Heydemann has a smart assessment at the Channel: “The real deal for Lebanon.” He explains why a Saudi-Syrian-Hizb deal to keep Hariri in power and preserve Lebanon’s calm and economic growth as a winner for the US.

Israel’s Hidden Hands in Lebanon:
Who Killed Hariri?
By ESAM AL-AMIN in Counter Punch
Monday, August 16, 2010

FT [Reg]: Lebanese hopes for tourism bounty dented
2010-08-16

This year’s tourist season in Lebanon has been even more hyped than most. Fadi Abboud, the tourism minister, predicted a 20 per cent increase on last year’s nearly 2m visitors, and pitched this summer as “probably the best in our history”. …

Lebanon Grants Palestinians Work Rights: Lebanon’s Parliament passed a law allowing the country’s Palestinian refugees the right to work in the same professions as other foreigners.

MORE SYRIA ECONOMY

Economist Intelligence Unit – Business Middle East
Business Middle East

The world economy is well into recovery, albeit with some developed economies looking like they might slip back into recession (not our core forecast, however). The global financial system has received a severe battering, and analysis of the various risks within markets remains as important as ever. The Economist Intelligence Unit’s Risk Ratings Review provides such information for 120 countries, using a rating system from AAA to D. Included in these monthly reviews are assessments of banking sector risk, currency risk, and sovereign risk, which feed into a rating for overall country risk. Also included are political and economic structure risk ratings, which inform the other assessments. Ratings for the MENA states vary considerably, with the Gulf Arab states and Israel figuring among the top-ranked countries, while the likes of Sudan, Iraq and Yemen are in the bottom cluster.

PageExcerpt:

The MENA region in general weathered the recession reasonably well. The main exception was the emirate of Dubai, which has been obliged to restructure about US$23.5bn in debts owed by Dubai World, a government-owned conglomerate with heavy exposure to the real estate sector. Thanks to the support of Abu Dhabi and of the UAE federal government, the Dubai debt crisis has been contained. Nevertheless, we maintain a cautious outlook, and we have kept the UAE’s risk rating at BB, the lowest in the Gulf Co-operation Council (GCC). The ratings of three other GCC member states—Saudi Arabia, Bahrain and Kuwait—also remain constrained owing to their banking sector risk, stemming from the Saad/Algosaibi defaults (see page 4) and the collapse of a number of Kuwaiti investments. Qatar, by contrast, has moved back up to an overall A rating, the highest in the region, mainly owing to the exceptionally strong position of the state’s finances. Israel has also edged up the ranking as a result of a marginal improvement in banking risk.

At the other end of the scale, Yemen has also seen a significant fall in its ranking, dropping from B to CC in the space of two years. This is in light of the country’s worsening fiscal position, mounting pressures on the local currency and the increased threat to security, with a rebellion in the north, unrest in the south and growing activity by al-Qaida. Yemen has now resorted to seeking financial support from the IMF (see page 3).

Aside from Qatar, the only country to improve it overall rating in the region was Syria, which has moved up over the past year to B from CCC. Syria ran into difficulties with its external debt in the 1990s and was obliged to restructure its loans from the World Bank. More recently it signed a deal in 2005 to reschedule about US$13bn in debts to Russia (much of which was written off). Consequently Syria now has a relatively small burden of external debt, and ac debt-service ratio of only 1%.The economy is showing robust rates of growth, and the role of the private sector is increasing thanks to recent structural reforms.

Other countries to have registered improvements to some of their ratings include Turkey (currency risk moving from B to BB as the economy has emerged swiftly from recession) and Jordan (sovereign risk up to B from CCC following signs that the economy was not as severely impacted by the recession as earlier feared). Algeria’s sovereign risk has slipped to BB from BBB, largely owing to an increase in its fiscal deficit and a worsening of the investment environment.

The countries in the middle of the regional rankings have remained relatively stable in our risk assessment, with Egypt, Libya, Morocco and Tunisia all retaining the BB overall rating that they had one year ago. This reflects the relatively effective way in which these countries have dealt with the global recession. In Egypt, for example, real GDP growth has steadily increased since it bottomed out at 4.1% in the second quarter of 2008/09 (July-June fiscal year), reaching 5.9% in the fourth quarter of 2009/10, and 5.3% over the fiscal year as a whole.
Ranking by risk

Syria: Banks reaching new heights
Oxford Business Group, 18 August 2010

The Syrian banking sector appears to be in rude health, reporting record figures at a time when many banks in the region are still absorbing the impact of the global financial crisis. In July 2010, the Central Bank of Syria released figures showing that bank assets in the country have topped $40bn for the first time.

With banking expanding across a number of business lines, growth levels have outstripped neighbours in the region. Both state-owned and private banks have been performing strongly this year. While the former still dominate the sector, accounting for 74.5% of banking assets ($31.5bn), the most impressive growth has been witnessed among the latter. Indeed, year-on-year (y-o-y) asset growth increased by 29.04% among private banks, with an impressive expansion rate of 5% for the first quarter of 2010 alone. This compares to state-owned bank asset growth of 9.5% and 1.3% for annual and quarterly increase, respectively.

The uptick in private sector banking is welcome news as the government looks to encourage further competition in the sector and broaden the scope of private financing, for both government projects and private enterprise. The central bank signalled its intent in this regard in January 2010 when it increased the ceiling for foreign ownership stakes in local banks from 49% to 60%. The 14 existing private banks in Syria all have foreign participation, although none of this comes from outside the Arab world.

It is expected that the central bank’s new regulation will encourage additional foreign participation in the sector. A number of companies have already expressed an interest in the Syrian market, with particular and persistent attention from Turkish financial institutions. Türkiye İş Bankası, Ziraat Bank, and two state-owned Turkish banks, Halkbank and Vakıfbank, have all been eyeing the Syrian market this year.

However, the high cost of opening a Syrian affiliate is proving to be an obstacle for many foreign entities. Alongside the foreign ownership reform in January, the central bank also introduced a measure raising the minimum capital requirements of affiliates from S£1.5bn ($32.15m) to S£10bn ($214.4m) for conventional banks and from S£5bn ($107.2m) to S£15bn ($321.5m) for Islamic financial institutions.

The move, ostensibly aimed at making local institutions more robust, has made potential investors somewhat wary. Türkiye İş Bankası and Vakıfbank have said that the high capital requirements mean that they are only likely to open representative offices rather than full affiliates. Furthermore, in mid-July the general manager of Halkbank, Hussein Aydin, told the Turkish press that “Damascus was too expensive to invest in,” and that the bank would rather focus on the Balkans.

However, most private sector banks seem to be making healthy profits and all the indicators point to a thriving sector. Indeed, the banking industry has become increasingly aggressive and ambitious, helping to drive the whole Syrian economy forward. The total loan portfolio of the sector, excluding loans made to the central government, increased 14.7% y-o-y to $22.1bn, according to the central bank’s latest statistics.

The majority of this growth was recorded in the private sector, with private conventional banks’ loan portfolios increasing by 33% and private Islamic banks by 64%. This growth has impacted all sectors of the economy. With the exception of wholesale and retail trade, bank financing has increased across all economic activities, with agriculture recording the biggest jump in lending of 59.2% in the first quarter of 2010 compared to the same period of the previous year. Mining and manufacturing and building and construction also recorded double-digit growth in bank financing.

Such figures illustrate the growing confidence and ambition of the sector. They are also a reflection of government incentives and regulations to encourage banks to support economic development. For example, in May 2009, the central bank took a decision to encourage lending to the manufacturing sector by reducing banks’ reserve requirements based on increased lending.

Following the success of this measure, a similar regulation governing lending to small and medium-sized enterprises (SMEs) went into force from July 2010. Under the decision, banks will be offered a discount in their reserve requirements on a sliding scale dependent on increased lending to SMEs up to a discount level of 5% of reserves for a lending ration of more than 45% to SMEs.

Through this combination of government oversight and private sector involvement, the Syrian banking sector is building momentum. With deposits to the sector also increasing dramatically, the financial industry is buoyant. All indicators are moving in the right direction, and while the record peak in assets is currently seen as something of a landmark, it is likely to be soon forgotten as it is surpassed and new heights are reached.

Monday, August 16, 2010 12:40 PM

Link: http://www.counterpunch.com/amin08162010.html

Israel’s Hidden Hands in Lebanon

Who Killed Hariri?

By ESAM AL-AMIN

“Syria: Luxury Rentals With a Turkish Backstory.”
By Matthew Stevenson’s

Syria, while a rich tourist area, has much of its reconstruction wealth devoted to apartments, which can cost about $2 million. While Syria and its neighboring countries have had their conflicts in the past, this money should go to a transnational rail line to not only increase tourism, but regional trade as well.

ISRAEL

U.S., Israel Build Military Cooperation
Amid Fitful Diplomatic Relations, White House Fosters Defense Ties to Reassure a Pivotal Ally, Advance Mideast Peace
By CHARLES LEVINSON in WSJ

TZEELIM, Israel—While the U.S. and Israeli diplomatic relations weather their choppiest phase in years, behind the scenes, military commanders from the two countries have dramatically stepped up cooperation.

The intensified partnership is part of the Obama administration’s broader policy of boosting military support for American allies in the Mideast amid heightened tensions with Iran and its allies such as Hezbollah and Hamas, according to U.S. officials. The Obama administration believes it may also help induce Israeli Prime Minister Benjamin Netanyahu to make concessions in talks with Palestinians, these officials said.

U.S. military aid to Israel has increased markedly this year. Top-ranking U.S. and Israeli soldiers have shuttled between Tel Aviv and Washington with unusual frequency in recent months. A series of joint military exercises in Israel has included a record number of American troops.

This month, about 200 U.S. Marines joined a battalion of Israeli soldiers for an all-night march through the Negev desert, the culmination of three weeks of joint drills. As dawn approached, they crept up on a mock village, an Israeli military-built recreation of a typical Palestinian hamlet, used for combat training.

Explosions, triggered by pyrotechnics engineers, shook the night. Soldiers from another Israeli unit, playing the role of Arab guerrillas, crouched in the fake village’s narrow allies and empty cinderblock homes. They rattled off rounds of blank ammunition from machine guns at the invading U.S. and Israeli forces.

Behind a dune on the village’s edge, a U.S. Marine company commander conferred with his Israeli counterpart before the two barked orders—the Marine in English, the Israeli in Hebrew—to soldiers scattered behind them. As dawn gave way to the Negev desert’s grinding August heat, the forces battled house-to-house in mock battle, as Israeli and Marine generals watched on from the sidelines.

The exercise was the biggest U.S.-Israeli joint infantry exercise ever, according to officials. By comparison, at the same exercise last year, there were only around 20 U.S. Marines involved. In the fall, there will be an even bigger joint infantry exercise involving tanks and armored vehicles, officials said.

Two joint U.S.-Israel committees, the U.S.-Israel Joint Political Military Group and the Defense Policy Advisory Group, which were established years ago and had fallen into disuse, have been beefed up with senior officials, including Undersecretary of Defense for Policy, Michele Flournoy, the top-ranking civilian at the Pentagon, Israeli and U.S. officials said.

The military cooperation began to intensify even as diplomatic relations between Washington and Israel frayed. The effort stems from policy directives the White House gave the Pentagon early in Mr. Obama’s presidency to “deepen and expand the quantity and intensity of cooperation to the fullest extent,” according to a senior administration official.

Officials in Washington and Israel continue to say they haven’t ruled out a military strike against Iran amid Tehran’s nuclear standoff with the West. But the new cooperation appears to be part saber-rattling at Iran and part reassuring Israel that the U.S. is fully committed to its security.

The senior U.S. official said President Barack Obama felt the increased military support is necessary to assure Israel’s security against mounting regional threats, including Iran and its allies: Syria, the Gaza-based Hamas and Hezbollah in Lebanon. “History has shown that Israel is more willing to take risks for peace when it feels it is capable of addressing its security needs,” the official said.

U.S. military aid to Israel reached a high of $2.78 billion in 2010, up from $2.55 billion in 2009. It is slated to jump to $3 billion in 2011. The Obama administration has also requested an additional $205 million to fund a short-range rocket defense shield.

Washington’s stepped-up military support comes amid similar moves to strengthen military ties with America’s Arab allies in the region, including those that don’t maintain ties with Israel.

This week, the Obama administration said it intended to provide new Patriot missile batteries to Kuwait. And Washington is readying a $60 billion sale of advanced F-15 fighter jets and attack helicopters to Saudi Arabia.

Back to Basics on Israel’s Security Needs
Elliott Abrams
Vol. 10, No. 7 19 August 2010 The Jerusalem Center for Public Affairs

* The letter from President Bush to Prime Minister Sharon of April 14, 2004, was a return to the key elements of U.S. policy since 1967 developed under President Johnson – the idea that there would be no return to the situation before June 1967; that the so-called ‘67 borders were incapable of providing Israel with adequate defense and would change. The Bush letter makes no reference to the ‘67 borders. It refers to “the armistice lines of 1949.”

* President Bush stated U.S. policy in a speech in the Rose Garden on June 24, 2002, where he called for “new Palestinian leadership.” It included the understanding that peace was not going to be made as it had been made with Jordan and Egypt, because Israel and the Palestinians were more deeply intertwined. Security for Israel depended also on what happened inside Palestinian society.

* The “incitement” issue is not trivial or marginal. In the case of Israel and the Palestinians, the location of the border and what is on the other side of that border are equally important. President Bush said that the Palestinians needed institutions of statehood where those who are in charge of education policy are not nursing ancient hatreds. Israel should not back away from the incitement issue because it is a security issue.

* Similarly, those who back away from the idea of defensible borders are making a huge mistake. Presumably they think defensible borders are too much to ask for. But there will be no peace with the ‘67 lines, as has been understood since 1967. Clarity about the fact that those lines will change actually promotes peace. The point is to reflect the reality on the ground and establish the basis for a peace that can last. We need to stick to the basics and what is most basic is security. Click here to read the full article.

Pulse Media Reports

A huge trove of newly declassified documents subpoenaed during a 1962-1964 Senate investigation reveals how Israel’s lobby pitched, promoted, and paid to have content placed in America’s top news magazines with overseas funding. The Atlantic (and many others) received hefty rewards for trumpeting Israel’s most vital – but damaging – PR initiatives across America. The relevant documents are now online.

IRAN

NPR has a good conversation with both Goldberg and Jon Lee Anderson who have major articles on Iran: Jon Lee Anderson’s “After The Crackdown” is in the most-recent issue of The New Yorker, and Jeffrey Goldberg’s “The Point of No Return” is The Atlantic‘ cover story.

“…If someone will ‘do’ Iran, it will be the US, not israel…”
… Says Martin Indyk …In the Atlantic:

“…My interpretation of the facts, for what it’s worth, is a little different:

President Obama came into office determined not to use force against Iran — partly because he faced two other wars in the Middle East, but mostly because he was determined to engage Iran and saber-rattling would have been inconsistent with that approach.

By the end of his first year, however, he reached the conclusion that engagement had failed and that it was time to put force back on the table. In January he began to do so. That’s when Gates traveled to the Gulf and delivered a message from the President to the leaders there: “The President is determined to prevent Iran from acquiring nuclear weapons.”

This shift in rhetoric was backed by the deployment of missile defense systems to the Gulf and a bolstering of the U.S. force presence there. The rhetorical shift was made public by NSC Adviser Jim Jones in a speech to the Washington Institute for Near East Policy in the spring.

It was also backed by a Pentagon study of the requirements for a U.S. strike on Iran’s nuclear facilities (foreshadowed in David Sanger’s New York Times’ article about Secretary of Defense Gates’ memo to President Obama). The conclusion of that study was that, in the words of one senior White House official, “The Iranians are not ten feet tall — we can do this.”

And it was backed by what Denis McDonough (the chief of staff of the National Security Council) said to you – that Iran’s nuclear program poses a grave threat to Obama’s vision of a new multipolar world order based in part on the twin pillars of nuclear disarmament and non-proliferation.

The Israelis started to pick up on this shift, approving of the fact that “the Pentagon had done its homework” and noting the change in Obama’s rhetoric. Their focus now shifted to putting salt on Obama’s tail. Hence Defense Minister Barak’s multiple visits to Washington in the last four months.

The Israelis today are more relaxed than your article allows. This is in part because of the shift in Obama’s posture but also because the sanctions are beginning to bite and the Iranians are having real problems with their centrifuges. One of the same generals you quote explained to me at the end of June how far the Iranians were from achieving their objective of a robust breakout capacity.

My interpretation doesn’t change your bottom line that if all these efforts fail and Obama doesn’t take action then the Israelis likely will. But it does lower the odds of Israeli action in the next year substantially below your “better than 50 percent” estimate. Indeed, I would argue that, if current trends continue, it’s actually more likely that the United States will bomb Iran than Israel. …”