Global News Journal

from Pakistan: Now or Never?:

In India-Iran oil spat, nuclear row trumps Afghan war

Not too long ago, you could have predicted relatively easily how regional rivalries would play out in Afghanistan.  Saudi Arabia would line up alongside Pakistan while Iran and India would coordinate their policies to curb the influence of their main regional rivals. 

But that pattern has been shifting for a while -- the row over Indian oil payments to Iran is if anything a continuation of that shift rather than a dramatic new departure in global diplomacy.  And as two foreign policy crises converge, over Iran's nuclear programme and the war in Afghanistan, the chances are that those traditional alliances will be dented further. It is no longer a safe bet to assume that rivalry between Sunni Saudi Arabia and Shi'ite Iran will fit neatly into Pakistan-India hostility so that the four countries fall easily into two opposing camps come any final showdown over Afghanistan.

India, which has been working to improve its relationship with the United States for much of the last decade, already earned Iran's wrath by voting against it at the International Atomic Energy Association (IAEA) over its nuclear programme, first in 2005 and then again in 2009. Though India has since been trying to repair the damage, comments by Supreme Leader Ayatollah Ali Khamenei late last year criticising India over Kashmir soured the mood further between the two former allies.

The decision by the Reserve Bank of India (RBI) last week to suspend payments for oil imports made by Indian companies from Iran that use the Asian Clearing Union (ACU), a clearing house used to process multilateral payments between South Asian countries and Iran, was pretty much in line with that trajectory of slowly deteriorating relations.

As a caveat, it would probably be unwise to read too much into the oil payments row -- Indian media have complained that the RBI decision was not coordinated across government departments and reported that the timing of its announcement came as a surprise even to the foreign ministry.  But extend the trajectory further and the outlook for coordination between India and Iran on Afghanistan does not look too promising.

India, Iran and Russia all supported the then Northern Alliance which opposed the Taliban when they were in power from 1996 to 2001.  But Washington and others have since accused Iran of covertly backing the Taliban -- an allegation Tehran denies -- in order to maintain pressure on the United States.  In the event of an escalation of the nuclear row, it could ratchet up support for the Taliban to make life even harder for the United States. That is anathema to India, which sees the Taliban as a Pakistan-backed movement used by Islamabad to try to maintain its influence in Afghanistan.

Meanwhile India has been cultivating ties with Saudi Arabia, which was one of only three countries along with Pakistan and the United Arab Emirates to recognise the Taliban government when it was in power.  In February last year, Prime Minister Prime Minister Manmohan Singh made the first visit to Saudi Arabia by an Indian leader since 1982, seeking to build economic ties and to enlist the kingdom’s help in improving regional security.

Volcano chaos: A pointer to potential Iran/Gulf smoke disruption?

As if they didn’t have enough to think about, planners trying to pin down the unintended consequences of a strike on Iran may be required to reorder their lengthy worry list.

The concern? Iceland’s volcano, or rather, the vivid reminder the exploding mountain provided to governments of the importance of civil emergency planning.

The ash clouds and the flight chaos it produced may be a foretaste, writ large, of the disruption to daily life in the Gulf that could temporarily result from military conflict and its aftermath in the area, some analysts say.

The Kuwait oil fires of the 1990-91 Gulf conflict provide an example of the confusion and damage that can result from smoke and pollution, quite apart from the popular anxiety caused by war itself, write Riad Kahwaji and Theodore Karasik of the Institute for Near East and Gulf Military Analysis. In January, 1991, Iraqi forces torched hundreds of Kuwaiti oil fields, creating clouds of heavy smoke across the northern Gulf in the last moments of the conflict. Saddam Hussein’s action was mainly political, not military: in what Kuwaitis perceived as a monumental act of spite, he was laying waste to an asset he was forced to relinquish.

But the impact was dramatic. Then the world’s worst oilfield disaster, the problem was worsened by winter weather, with oil-laden rain infesting engines in the air and on the ground, they recall.

The clouds did not significantly affect military operations, which by then were virtually finished. But they caused considerable costs, complications and anxieties in the aftermath, temporarily denting confidence among some in the resilience of Kuwait’s post-war recovery efforts.

The fires burned for nine months, blotting out the sun in places around the northern Gulf and causing record low temperatures.  Hundreds of tonnes of chemical compounds known as polyaromatic hydrocarbons and metal particles were propelled into the atmosphere in oilfire smoke or onto the desert floor in spilled crude oil that formed lakes.

Which companies are oiling the cogs of EU legislation?

If Europe’s lobbying register is correct, oil giants like Shell and BP are spending just a few hundred thousand euros a year on EU lobbying, sums that are dwarfed by the millions they spend across the Atlantic.

Europe’s voluntary Register of interest representatives, launched in 2008, shows that Shell and BP spent 400,000-450,000 euros each on lobbying in 2008. 

Meanwhile the U.S. Lobbying Disclosure Act database, which companies are obliged to fill out by law, shows that Shell spent $2.3 million on lobbying in 2009 and BP $4.6 million.

This lobbying-cost-saving in Europe is even more of a surprise given that both companies have notched up some significant successes in Europe, such as helping to secure potentially billions of euros for Carbon Capture and Storage technology. NGOs say that kind of lobbying is no mean feat, involving sponsoring expensive receptions and helping to draw up suggestions for EU legislation.

While the United States is a vast marketplace for oil companies, and there is long-established lobbying culture in Washington, it is still surprising that spending on liaising with the European Commission, European Parliament and other relevant bodies and advisers is so relatively small. The EU, consisting of 27 countries and a total population of more than 500 million, is a powerful economic region where big, global companies want to ensure their voice is being heard.

But at least BP and Shell have taken the time to fill out Europe’s voluntary register.

According to Lobbying in Brussels, a report by Friends of the Earth, around 40 percent of Europe’s top 50 companies are absent from the register completely, even though many of them have access passes to the European Parliament, which suggests they are involved in lobbying of some description or other.

Balancing powers in the Malacca Strait

  Singapore’s warning of a terrorist threat in the Malacca Straits has again highighted the issue of who is in charge of security in one of the world’s busiest shipping lanes.

 Singapore, Malaysia and Indonesia have stepped up sea patrols in the strait after Singapore’s navy said on Thursday it had received indications a terrorist group was planning attacks on oil tankers.

A Police Coast Guard vessel patrols shipping lanes near freight ships off the coast of Singapore March 4, 2010. ( REUTERS/Vivek Prakash)

 The 900-km long (550 miles) Malacca Strait, linking Europe and the Middle East with the Asia-Pacific, carries about 40 percent of the world’s trade. More than 50,000 merchant ships ply the waterway every year. 

About 3.3 million barrels per day (bpd) of Middle East crude passed through the strait and to Japan last year. Middle East crude accounts for 90 percent of Japan’s total imports. Up to 80 percent of China’s crude imports are delivered via the narrow and congested waterway.

 So China and Japan have a stake in keeping the Malacca Strait secure, as does India which has a blue water navy patrolling in the Andaman Sea at the western end of the strait.

 The strait is a vital sea lane for the U.S. Navy, which sent warships to Taiwan via the Malacca Strait at a time of heightened tensions between China and Taiwan in 1996.

from Tales from the Trail:

Is Chavez helping Iran build the bomb?

Veteran Manhattan DA Robert Morgenthau is on Hugo Chavez's case.

Morgenthau warned last week at Washington's Brookings Institution that Iran is using Venezuela's financial system to avoid international sanctions so it can acquire materials to develop nuclear weapons and missiles.  He urged more scrutiny of the "emerging axis of Iran and Venezuela" in an op/ed article in the Wall Street Journal, in which he said a number of mysterious Iranian factories had sprung up in remote parts of Venezuela.

Chavez's man in Washington, Venezuelan Ambassador Bernardo Alvarez, called the allegations "outrageous ... unfounded and irresponsible" in a letter to the district attorney seen by Reuters.

True, leftist President Chavez has done little to endear himself to Americans. A fierce critic of the United States, his foreign policy rule of thumb is my enemy's enemies are my friends. His last trip abroad included visits to Libya, Algeria, Syria, Iran, Belarus and Russia. He loudly announced plans to buy Russian tanks and anti-aircraft missiles.

But Chavez maintains the weapons are needed to defend Venezuela, which he says is threatened by a growing U.S. military presence in neighboring Colombia. And he swears he has no intention of developing an atomic bomb.

Besides vast oil reserves, Venezuela has large deposits of uranium, though there are no signs of any plans to mine them.

from The Great Debate UK:

Squandered oil wealth, an African tragedy

-Arvind Ganesan is the Director of the Business and Human Rights Program at Human Rights Watch. The opinions expressed are his own.-

Equatorial Guinea is a tiny country of about half a million people on the west coast of Africa, but is the fourth-largest oil producer in sub-Saharan Africa.

Most of the investment in the country’s multi-billion dollar oil industry comes from the United States. ExxonMobil, Hess and Marathon are all there. Right now, the U.S. imports up to 100,000 barrels of oil a day from Equatorial Guinea, or about a quarter of the country’s oil production.

Oil money gives the country the means to be a model for development and human rights. The economy is nearly 130 times as big as it was when oil was discovered in 1995. But as a report released by Human Rights Watch today details, the government has squandered or stolen much of the money at the expense of its people.

It is a sad contrast, since the country has a per capita income comparable to Spain’s or Italy’s and development indicators more like Afghanistan’s. For just one sad example, infant and child mortality actually has increased -- from an already-dismal 103 deaths per thousand in 1990 to 124 per thousand in 2007. Similarly, under-5 mortality rates increased from 170 per thousand in 1990 to 206 per thousand in 2007.

The president and his family are doing just fine, though. They lead lavish lifestyles while most people live in crushing poverty.

A series of corruption scandals involving government officials and their families will give you some idea of how bad it is.

from Africa News blog:

Will Niger Delta amnesty work?

Nigerian President Umaru Yar’Adua has laid out the details of a 60-day amnesty programme for militants and criminals in the Niger Delta. Under the deal, all gunmen who lay down their weapons during a 60-day period ending in October will be immune from prosecution. The offer extends to those currently being prosecuted for militant-related activities, meaning Henry Okah – the suspected leader of the Movement for the Emancipation of the Niger Delta (MEND) – could also walk free if he agrees to renounce the notion of armed struggle.

Several factional leaders – including Ateke Tom, Farah Dagogo, Soboma George and Boyloaf – have said they accept the idea of amnesty in principle but want talks with President Yar’Adua to hammer out the details.

Advocates say such an amnesty would meet one of the key demands of militant groups and is the only way to bring an end to instability which costs Nigeria billions of dollars in lost oil revenues each year, prevents the development of the very communities the militants claim to represent and causes world energy prices to rise further, which ultimately falls back on the Nigerian consumer.

Critics say amnesty simply provides a get-out-of-jail free card to those responsible for kidnappings, acts of sabotage and banditry and that the promises to re-educate and reintegrate them into civilian society would require years of investment. The government has said it will not offer a “buy back” programme – money for surrendered weapons – but does the scheme reward those who have taken up the armed struggle while leaving peaceful protesters with nothing?

It is not the first time amnesty has been offered to armed gangs in the Niger Delta. Yar’Adua’s predecessor Olusegun Obasanjo struck such an agreement in 2004 with militants including Mujahid Dokubo-Asari, whose Niger Delta People's Volunteer Force turned over thousands of weapons in return for amnesty. But the deal later broke down when some factions accused others of profiting from disarmament at their expense, and Asari was later arrested and charged with treason.

Is Yar’Adua’s amnesty offer a serious attempt at resolving the crisis in the Niger Delta or will it suffer the same fate as the previous amnesty deal? Is it simply an attempt to win political currency for the ruling party in the Niger Delta ahead of elections in 2011? What happens after the amnesty? What hope is there that the resources and political will are there to ensure the longer-term development of the Niger Delta and prevent a resurgence of the cycle of the frustration, unemployment and violence that has characterised the region for so long?

Oil’s run-up outpaces most price targets… more upside?

    The recent run-up in oil prices could have further to go as most analysts are likely to begin raising their year-end oil price targets, according to market research firm Birinyi Associates in Stamford, Connecticut.    “Given several considerably lower expectations, we think it is reasonable to expect upgrades,” they said in a research commentary, noting that crude oil prices were already above most firms’ year-end targets.    U.S. front-month crude hit an intraday high of $73.23 on Thursday, the highest intraday level since prices hit $75.69 on Oct. 21.    A year-end oil price target of note recently came from Goldman Sachs, which raised its end-of-2009 oil price forecast on June 4 to $85 a barrel from $65.    Oil’s climb partly reflects weakness of the U.S. dollar and expectations that demand may be picking up as the global recession abates.— Graphic courtesy of Birinyi Associates, Inc.

Cattle Rustling, Pythons and Boogie Angola Style …. the best reads of May

Climate health costs: bug-borne ills, killer heat Tree-munching beetles, malaria-carrying mosquitoes and deer ticks that spread Lyme disease are three living signs that climate change is likely to exact a heavy toll on human health. These pests and others are expanding their ranges in a warming world, which means people who never had to worry about them will have to start.

Spain rearranges furniture as economy sinks

Moving a 17-metre high monument to Christopher Columbus 100 metres down the road is how the Spanish government is interpreting the advice of John Maynard Keynes. The economist once argued it would be preferable to pay workers to dig holes and fill them in again, rather than allowing them to stand idle and deprive the economy of the multiplier effect of their wages.

Picking up the pieces from Afghanistan’s war

U.S. gunners scanned a lush Afghan valley from their helicopter, as a  white van containing a badly burned baby inched toward another Black Hawk waiting at the army outpost. Eight soldiers had flown into the heart of hostile eastern Afghanistan, in a convoy of one air ambulance and one “chase” helicopter for protection, to collect 18-month-old Amanullah who knocked a pot of scalding water over his legs, penis and scrotum.

In Brazil, extreme weather stokes climate worries

No one could say they hadn’t seen it coming. The sand dunes had been advancing for decades before they swallowed the houses of families in Ilha Grande, an island in Brazil’s Parnaiba river delta. Standing on a dune that covers his old home, one man describes the landscape of his childhood — cashew trees as far as he could see. Not a dune in sight.

Red tape tripping up Iraq

By Mohammed Abbas                                      

Many developing countries are mired in dated bureaucratic practice and tangled in red tape, but of all of them, Iraq can perhaps least afford to see its crucial post-war development suffocated under mounds of paperwork. What hangs in the balance is nothing less than whether oil-rich Iraq can emerge from years of war as a prosperous, democratic and secure state — or whether it sinks back into the bloodshed that almost tore it apart. A love of official stamps, seals and documents in triplicate is by no means only an Iraqi phenomenon. Receiving shipments at Cairo airport, for example, involves one queue to buy a ticket, another to receive it and a third to get it laminated.

But if Iraq is to rebuild its crumbling infrastructure, develop its oil fields and find jobs for legions of restless unemployed — who have easy access to guns — it must make doing business and governing as smooth as possible. Would-be foreign investors are likely to steer clear if Iraqis themselves find the country’s bureaucracy a nightmare. Born in Iraq, I was technically eligible to vote in recent provincial elections, but a trip to a government office to apply for a required residency card was a shocking reminder of the mountain of bureaucracy Iraqis must climb. Hundreds of people shuffled from room to room down long, dim corridors with unmarked doors, clutching sheaves of faded paperwork. A crowd would clamour at a door whenever an official turned up, but otherwise many sat on the floor despondent. Some looked like they had been there for days.

In one office, two officials let people in one at a time. Noise and paper-waving from the crowd outside erupted each time the door opened. “Fake. Fake. This one’s okay, take that to the district office and apply there,” said one official, lazily flicking forged identification cards back at a woman before advising her to go and queue at yet another government building. Far from instilling order, the bureaucracy has fostered an industry in forged documents and fixers versed in byzantine official process, who can apply on your behalf for a hefty fee. Some of that money probably goes to officials. Iraq came second to last out of 180 countries in corruption watchdog Transparency International’s 2008 Corruption Perceptions Index. Meanwhile, roads remain unpaved, sewage disposal is abysmal and millions have no access to decent housing and healthcare, partly because bureaucracy has made it hard to execute Iraq’s budget. For journalists, the insistence on long-winded procedure is maddening. Recent Reuters requests to meet senior Iraqi officials were rejected because the envelope had not been stamped correctly, or because it did not have a randomly generated reference number. Many officials insist on lengthy honorifics and encourage obsequious preambles to questions, which eats away at press conference time and takes up newspaper space. The leads of many Gulf newspaper articles, for example, consist of little but long-winded honorifics. “Noble Leader, Master of the Seven Sand Dunes, who Blesses us with his Beneficience, Sheikh xxxx of xxxx bin xxxx abdul xxx met …” That’s only a mild exaggeration. Democracy has been touted as a way for Iraqis to reconcile after years of war, and last month they voted in local polls. Incumbents fared badly, and the result was seen as a vote against years of perceived corruption and incompetence. The pressure is now on Iraq’s new crop of officials to cut the red tape and show democracy works.