Wednesday, January 17, 2018

Iran’s complex of crises

From the Asia Times, 3 January 2018, by David P. Goldman:

A jump in poultry prices sparked Iran’s protests of the past several days according to media reports.

If this is true, the spark landed on long-prepared tinder.

...Radio Farda, an affiliate of America’s Radio Liberty, posted a disturbing smartphone video Jan. 2 showing a mob burning down the police station in the Iranian town of Ghahdarijan, 24km from the ancient city of Isfahan and too small to be found on Google Maps. ... the river Zayandeh Rud (“life-giver”) which gave rise to Isfahan dried up before reaching the city, the victim of Iran’s mismanagement of its dwindling water resources. Canals to distribute water to the city’s periphery were built by the Savafid dynasty in the 17th century and fostered a green city in the midst of the central Iranian desert.

Ghahdarijan’s protests have been long in the making. Two years ago, an adviser to Iran’s environment ministry, Issa Kalandari, warned 50 million Iranians would be left without water, due to the exhaustion of 70% of Iran’s groundwater and the ill-considered diversion of rivers to compensate. Agriculture consumes 92% of Iran’s water. Capital-intensive farming methods could conserve water, but they also would drive peasants off the land into cities already suffering from about 30% youth unemployment.

For the past year, numerous observers have been warning of an impending economic crisis.
“Estimates of Iran’s military expenditure in Syria vary from US$6 billion a year to $15-$20 billion a year. That includes $4 billion of direct costs as well as subsidies for Hezbollah and other Iranian-controlled irregulars... Assuming that lower estimates are closer to the truth, the cost of the Syrian war to the Tehran regime is roughly in the same range as the country’s total budget deficit, now running at a $9.3 billion annual rate….The Iranian regime is ready to sacrifice the most urgent needs of its internal economy in favor of its ambitions in Syria. Iran cut development spending to just one-third of the intended level as state income lagged forecasts during the three quarters ending last December, according to the country’s central bank.”[Goldman wrote last year] 
According to SIPRI (Stockholm International Peace Research Institute) and various other sources, Iran military expenditures in 2016 were $12.4 billion; by comparison, those of Saudi Arabia amounted to $61.4 billion (2016) and the UAE $23.7 billion (2014 figure). The 2017-18 budget deficit was estimated by the central bank of Iran at $9.6 billion (2.1% of GDP). By comparison, the Saudi deficit in 2017 was $57 billion (8.9% of GDP). The off-balance sheet liabilities of the Iranian state, however, are huge even by the dodgy accounting standards of emerging-market governments.

For nearly four decades, Iran has cannibalized its physical and human capital, leaving the Islamic state with multiple crises and a deep sense of malaise. Water management is only one of several hidden deficits that the Islamic state has accumulated since the 1979 revolution. Large parts of Iran’s pension system face bankruptcy in the short term, and the government’s annual arrears to its underfunded social security system are many times the size of its official budget deficit. With the world’s fastest-aging population, Iran’s demographics will make an already-critical problem much worse during the next several years. Iran is the first country to get old before it got rich, setting in motion a pension crisis more acute than any other in the world.

Iran’s banking system, moreover, is insolvent, in part because of economic strains and partly because of massive insider lending to real-estate investors connected to the regime. The cost of a bailout might be as high as 50% of GDP, the costliest in recent financial history. Alireza Ramezani wrote last year in Al-Monitor, “Toxic assets account for 40-45% of total banking assets in the country, economic newspaper Donya-e Eqtesad reported Nov. 9, citing official data. Nearly 15% of these assets consist of immovable assets such as land and buildings. The rest consists of nonperforming loans and government debt. No official data is available about the banks’ fixed assets, but a report by Serat News website in December estimated the total value of immovable property owned by 31 Iranian banks and credit institutions at 448 trillion rials ($13.8 billion), without it providing any details on the surplus properties.”

Iran is riddled with wildcat banks offering deposit interest of up to 30%. Early in 2017 the regime capped the deposit rate at 15%, but few banks complied, the economic daily Donya-e Eqtesad reported June 8. The government responded by allowing 10 private credit institutions to fail, wiping out the savings of scores of millions of small depositors. Eurasia Diary reported Jan. 2, “A major groundswell of anger has also been building over the collapse of unauthorized lending companies that left millions of investors out of pocket. These companies mushroomed in the financial free-for-all under former president Mahmoud Ahmadinejad, lending wildly during the construction boom and collapsing when the bubble burst. Rouhani said in December that such lending companies had captured a quarter of the financial market with three to four million accounts by the time he took power in 2013 and started shutting them down.”

Parviz Aghili, chief executive of Middle East Bank, estimated that a full re-organisation of the Iranian banking sector’s roughly $700 billion balance sheet would cost $180 billion to $200 billion, or 50% of Iran’s GDP. “And we cannot afford it,” he said, according to an October 2017 Reuters report. Iran’s GDP is a bit over $428 billion.

Iran’s pension funds are running enormous losses. At most immediate risk is the Civil Service Pension Fund, with a million insured. The Iranian Financial Tribune reported Nov. 21 that CSP  “has more than one million first named insured while the number of its pensioners exceeds 1.2 million, suggesting that pensioners outnumber the employed insured population… which is horrific.” The Social Security system still has four insured for every pensioner, but in fiscal year 2016-2017, “premiums made up only 21% of pension funds’ revenues and the profits gained through investment of funds and sale of assets only accounted for 8% of resources, leaving the government to shoulder the costs of the funds. Currently, the government owes more than 1,400 trillion rials ($35 billion) and counting” to Social Security.

Less than 10% of Iran’s population is over 60, the result of a surge in the country’s fertility rate to a peak of seven children per female in 1979. Fertility since has declined to between 1.6 and 1.8, the lowest in the developing world. As the present generation ages, the ratio of Iranians over 60 will jump to 35% by around 2045 and to 45% later in the century.

Iran has talented people but can’t employ them. Youth unemployment stands at 20%, but that does not take into account disguised youth unemployment in the form of 4.7 million undergraduate students: “According to the UNESCO Institute of Statistics, the number of students enrolled at the tertiary level increased by 258 percent in the past 15 years – from 1.3 million in 1999 to 4.7 million in 2014,” World Education News reports. But “only 6 percent of approximately 900,000 applicants to master’s degree programs and merely 4 percent of 127,000 doctoral applicants reportedly got admitted to a program in 2011.” Undergraduates account for 30% of Iran’s total population aged 15-30. If we estimate conservatively that half of the students are warehoused in mass diploma mills like the Islamic Azad University system with 1.7 million students, the true youth unemployment rate is 45% rather than the official 30%.

Iran has several top engineering schools, but the vast majority of their graduates emigrate. In all, 3.5 million Iranians are preparing to leave the country, according to Masoud Khansari, head of the Tehran Chamber of Commerce.

Adding together the costs of recapitalization the banking system, bailout out the pension funds, and repairing the country’s water system put the government’s off-balance-sheet liabilities far above its GDP. Although direct government debt is small, the Iranian regime is drowning in unfunded obligations.

It is not at all clear how, or whether, the present regime or any successor regime will resolve these interlocking crises. Iran requires an anti-corruption program as tough as Xi Jinping’s, and the marshalling of public and private resources to reverse what some analysts call its “water bankruptcy.” It must open its closed and kleptocratic financial system to domestic and foreign entrepreneurs who can put its young people to work and persuade the talented few who graduate from its elite engineering schools to remain in the country. It cannot sustain foreign military adventures and an ambitious ballistic missile program at the same time.

The present regime is incapable of carrying out this complex and costly transformation, and no opposition is available with a clear vision of how to replace it. The street protests indicate that regime has lost credibility, which will make it all the more difficult to maneuver.

Faced with problems on this scale, third world governments typically reduce their liabilities through devaluation and inflation. Iran’s pension and financial liabilities are owed to its people, but the government earns money in hard currency. Currency devaluation and inflation represent a transfer of wealth to the regime from the people. During the past year, the Iranian rial has lost more than 10% of its value, falling from 36,000 to the US dollar to 41,000. The likeliest outcome is a prolonged period of instability punctuated by sporadic but violent street protests, and further economic deterioration.

The public protests in Iran are entering a second week. They have become countrywide with a diverse social mix taking part. There have also been incidents of vandalism directed at public property.

What began as an eruption of public discontent about the high level of unemployment, economic hardships and price hikes has taken on the random features of anti-government sentiment. Yet, it is not as if the protests are turning into an insurrection or a ‘Color Revolution’.

In all likelihood, they will subside. The big question is whether the government will be compelled to use coercive methods to scatter the protestors? So far, it appears the approach is to ride out the turbulence.

At the highest level of government, President Hassan Rouhani, even while alleging external incitement and Saudi Arabia in particular, has acknowledged that there are genuine grievances among the people. Rouhani also admitted: “One of the people’s demands is a more open atmosphere.”

He seemed to sense what was happening on the streets was an opportunity to push forward his reform agenda within the corridors of power in Tehran.

He reportedly remarked: “We should listen to this voice and turn it into an opportunity. We should see what the problem is and also what the solution is … The people should express their grievances in a way that will lead to better living conditions for citizens and investments in the country.”

Clearly, Rouhani is not flustered. Nor is he on the defensive. But it does need gumption to say publicly at this point: “Iran’s economy is better than the global average. However, it does not mean that all the problems have been solved.

“The problems should be resolved through unity. If we all unite, I have no doubt that the people will support us,” he went on to say. “If necessary, the people will pour into the streets to defend the system. However, it does not mean ignoring voices of criticism and protest.”

Remarks such as these suggest Rouhani does not fear any significant erosion in his thumping mandate after the elections in May. But his dilemma is that there is no quick fix to the accumulated economic problems.

Apart from the fall in oil revenue and the renewed United States sanctions, there are structural problems in terms of pricing, allocation of resources, the interplay of market forces, rampant corruption and so on.

The Majlis, also known as the Islamic Consultative Assembly or Iranian Parliament, has proved to be conservative vis-à-vis Rouhani’s reform agenda. Hence the remark directed at the heads of parliamentary commissions during a meeting in Tehran on Monday: “All bodies, in proportion to their responsibility, should join hands to resolve the problems facing the country.”

But there is unanimity of opinion among the top leadership in Tehran that the unrest has been instigated and fueled by outside powers. Supreme Leader Ayatollah Ali Khamenei touched on it briefly, adding: “I have a lot more to say about these developments but will share them with our dear people in a due time.”

On the other hand, the powerful Secretary-General of the Supreme National Security Council of Iran, Ali Shamkhani, was brutally frank and explicit.

“The Saudi [Arabian] government has hired people to provoke the Iranians to participate in street protests, by using social media and making different hash tags [#] against the government in Iran,” Shamkhani said.

“Based on studies, around 27% of the hash tags which have been made belong to the Saudis. Of course, they don’t belong to the Saudi people but the Saudi government, meaning the [administration] of Mohammed bin Salman [the crown prince].

“[He] launches these hash tags, and those who do this are the Israelis and westerners. The hash tags about the situation in Iran have been launched from the US, Britain and Saudi Arabia,” Shamkhani added.

Significantly, the Turkish Foreign Minister, Mevlut Cavusoglu, held a phone conversation with his Iranian counterpart, Mohammad Javad Zarifon, on Tuesday about the situation in Iran. Ankara appears to have shared intelligence with Tehran, reciprocating the Iranian gesture during the failed coup attempt in Turkey back in July, 2016.

The Turkish Foreign Ministry also issued a statement, expressing concern over the developments in Iran, but voicing support for the government and cautioning against “provocative rhetoric and external intervention.”

The written statement said that Turkey “attaches great importance to the protection of friendly and brotherly Iran’s social peace and stability.”

It is too early to assess the impact of the developments on regional politics or, more importantly, on Iran’s regional policies.

What is apparent is that US President Donald Trump apart, only three regional states – two Muslim countries and one non-Muslim – feel elated over the turmoil in Iran. They are namely, Saudi Arabia, the United Arab Emirates and Israel.

Obviously, this is sweet music to their ears..

PLO Official: We Will Demand Cancellation of the Oslo Accords

From Breitbart, 6 January 2018, by Ali Waked:

Palestinian President Mahmoud Abbas gestures as he speaks during a meeting of the Central Committee of the Palestine Liberation Organization (PLO), in the West Bank city of Ramallah, Wednesday, July 27, 2011. Abbas said Wednesday he will ask the United Nations to endorse Palestinian independence this fall even if negotiations restart with Israel. (AP Photo/Majdi Mohammed)

TEL AVIV — The Palestinian Central Committee will convene in the middle of this month to discuss the formation of a Palestinian strategy in response to the historic decision by President Donald Trump to recognize Jerusalem as the capital of Israel.

Jamil Mizher, a politburo member of the Popular Front for the Liberation of Palestine, the second-largest group in the PLO after Fatah, told Breitbart Jerusalem that during the meeting of the Central Committee, his organization will demand “the annulment of the Oslo Accords, a declaration to this effect and a declaration that the Palestinians are no longer bound by all the agreements, especially security cooperation and economic agreements.”

...According to Mizher, the Popular Front for the Liberation of Palestine is trying to organize the committee meeting in Beirut or Cairo and not Ramallah in order to allow leaders and representatives of the terrorist groups Hamas and Islamic Jihad to participate.
“We really want the leaders of Hamas and Islamic Jihad and representatives of the Democratic Front for the Liberation of Palestine, who can’t come to the West Bank, to be able to participate in the meeting because of the sensitivity and importance of the matter,” said Mizher.

He added that his group has taken action “so that all the organizations will be committed to the demand to cancel the agreements signed with the occupation*, especially the Oslo Accords and all their clauses. As far as we’re concerned, in action and reality, this agreement is over and it no longer has any place in light of recent developments, especially Trump’s declaration regarding Jerusalem.”

[*“The occupation” is a derogatory and misleading reference to Israel. Palestinian factions refuse to recognize Israel’s right to exist.]

The alternative to the Oslo agreements, said Mizher, “is the obligation of all the Palestinian factions to unit around a national campaign for liberation and the removal of the occupation. There are no other options before the Palestinians besides coping with and confronting the Israeli-American project. We will need to handle them with all our power.”

Last month, just a few days after Trump’s speech recognizing Jerusalem as Israel’s capital, the Abu Ali Mustafa Brigades, the military wing of the Popular Front for the Liberation of Palestine, announced that the organization will begin targeting “American targets in the Palestinian territories from Rafah in the south (on the Egyptian border), to Rosh HaNikra (on the Lebanese border) in the north” in reaction to Trump’s declaration.

The Popular Front for the Liberation of Palestine is the group that in October 2001 murdered the Israeli tourism minister Rehavam Ze’evi in response to the elimination of the organization’s leader Abu Ali Mustafa just a few months prior.

Palestinian leader’s own goal

From The Australian Editorial, January 17, 2018:

Palestinian Authority president Mahmoud Abbas is doing the cause of Palestinian statehood no good by refusing to accept the new reality introduced into Middle East settlement prospects by Donald Trump. Mr Abbas’s rejection of proposals (even before they have been finalised) for peace talks being worked out by Mr Trump’s son-in-law Jared Kushner and Middle East envoy Jason Greenblatt is shortsighted. Dismissing Mr Trump’s assertion he is trying to achieve “the peace deal of the century”, Mr Abbas declared: “We won’t accept his project ... his deal of the century is the slap of the century.” Mr Abbas insists Washington has no further role to play following Mr Trump’s move to relocate the US embassy from Tel Aviv to Jerusalem.

With moves under way to cut the $US600 million ($753m) in aid the US provides for the Palestinians each year, Mr Abbas needs to face reality. Yet in his Palestinian Central Council address he provocatively pledged to continue one of the most contentious aspects of the Palestinian aid debate — the $US345m allocated in the Palestinian Authority’s annual budget to families of terrorists who kill Israelis.

Mr Trump has made it clear he has had enough of the Palestinians getting “hundreds of millions of dollars each year ... and we get no appreciation or respect”. The President has also turned his attention to the UN Relief and Works Agency for Palestine, which was founded in 1949 and has provided successive generations of Palestinians with “refugee” status. The US has long been UNRWA’s biggest benefactor, giving $US370m in 2016. As Middle East commentator Daniel Pipes has pointed out, it has “a long record of misbehaviour: incitement against Israel, supporting violent attacks on Jews, corruption, and perpetuating (rather than ending) the refugee problem”. Mr Trump is planning drastic cuts to Washington’s contribution.

Despite the Palestinian Authority’s massive debt, Mr Abbas is refusing to return to negotiating a two-state solution. It would be hard to think of a more bankrupt policy. Palestinian leaders need to be pragmatic and deal with the new Trump reality.

Tuesday, January 09, 2018

Islamic terrorism: myth and conspiracy theory build augmented reality

From The Australian, 2 Jan 2018, by Sherry Sufi, chairman of the West Australian Liberal Party’s policy committee:

British police officers and emergency services work on Westminster Bridge in the aftermath of a terror incident. Picture: AFP
British police officers and emergency services work on Westminster Bridge in the aftermath of a terror incident. Picture: AFP

Another day. Another terrorist. Another misdiagnosis.

We’ve long been told by ­“experts” that terrorism is the ­result of the perpetrators being mentally ill, poor, unemployed, uneducated or marginalised. Yet al-Qa’ida leader Osama bin Laden was a billionaire and Islamic State leader Abu Bakr al-Baghdadi holds a PhD.

So much for poverty and lack of education.

Present-day Muslims, irrespective of whether they are terrorists or normal citizens, collectively subscribe to an augmented reality featuring a struggle between the imperialist forces of America, ­Israel and their Western allies on one side and the global community of Muslims on the other.

Blind trust in conspiracy theories does more to influence this world view than critical inquiry. No, not the “moon landing never happened” or “Elvis is still alive”- type theories. More so “the Jews, the Freemasons and the illumi­nati control the world” and “September 11 was an inside job to demonise Muslims”-type theories.

Romanticising over the lost glories of a once mighty Islamic empire that stretched from China to Spain remains a favourite pastime in learned Muslim circles. British and French colonialism are deeply ­resented for playing divide-and-conquer between Turks and Arabs in the 1920s to dismantle the Ottoman Empire, the last ­Islamic caliphate on earth.

European Ashkenazi Jews are begrudged for colluding with the British Empire to create Israel in 1948 in the heart of the Islamic world. Many believe the goal of Zionism is to usurp more Arab land and create “Greater Israel” stretching from the rivers Nile in Egypt to the Euphrates in Iraq.

Many similarly believe that ­Israel has a secret plot to demolish the Dome of the Rock and al-Aqsa mosque to rebuild the third Jewish temple over the holy site.

From the 1991 Gulf war to the 2001 war on terror in Afghanistan and the 2003 Iraq war, every case of American military intervention in Muslim nations is perceived as a “crusade” against Islam, despite each having occurred with the support of co-operating elements within those nations.

Liberating Jerusalem from the Zionists, toppling pro-American puppet regimes in Muslim nations and challenging America’s might as the world’s sole superpower are fantasies that lie at the core of this world view.

These are the exact ­aspirations extremist Muslims are striving hard to bring to reality by means of asymmetric warfare, otherwise known as terrorism.

When we see Muslims condemning extremist Muslims, what they’re essentially saying is that suicide bombings, stabbings, kidnappings, beheadings and mowing down pedestrians are unacceptable means to advance these ­aspirations.

They’re not necessarily saying the aspirations are the problem. The condemnation is directed at the means, not the end. Muslims and extremist Muslims often yearn for the same political outcomes. Except one finds an outlet in words, the other in ­weapons.

Islamic State publishes an ­online propaganda magazine called Dabiq. It contains graphic images of Muslim corpses following American drone strikes on al-Qa’ida cells in Yemen and on Taliban hideouts in Pakistan. Such images come with captions reporting more civilian deaths than ­those of terrorists.

The myth that American and Israeli militaries are deliberately killing Muslim civilians because they feel threatened by Islam is the single greatest driving force ­behind radicalisation.

Dabiq urges Muslims worldwide to fight the ­injustices inflicted by “the Crusaders and the Jews” by killing their ­civilians. This call to action ­appeals to some because they are already predisposed to deep-seated anti-American, anti-Zionist resentment.

The British Empire colonised both Hindus and Muslims in the Indian subcontinent for the same length of time. There are prominent Hindu anti-imperialists who believe Britain owes reparations to India, yet there is no Hindu lone wolf mowing down British pedestrians on Westminster Bridge.

America dropped two nuclear bombs on Japan during World War II, yet the Japanese haven’t set up terrorist organisations ­urging people to storm a gay nightclub in Florida and gun down 50 unarmed civilians trying to dance the night away.

America has a longer history of military intervention in Latin America than it does in the Middle East, yet there are no Hispanic ­hijackers flying planes through the World Trade Centre.

Suffice it to say the case of Muslim victimhood is exceptionally eruptive.

It is my contention that unless the myths and conspiracy theories that underpin this augmented reality are comprehensively refuted, Muslims worldwide will continue to remain susceptible to radicalisation.

For now, let’s focus on internalising the diagnosis of the problem presented in this article. As to how the associated world view may be refuted will be a subject for a future article. Stay tuned.

Trump Is Right to Cut Funding to UNRWA

A few days ago, President Trump asked an important question in a tweet: 
"[W]e pay the Palestinians HUNDREDS OF MILLIONS OF DOLLARS a year and get no appreciation or respect. But with the Palestinians no longer willing to talk peace, why should we make any of these massive future payments to them?" 
On Friday, Trump answered his question and cut funding to the Palestinians by freezing a $125 million transfer to the United Nations Relief and Works Agency (UNRWA).
Asked about the decision, the State Department said deliberations are ongoing about how to move forward. This presents a tremendous opportunity, but it will take more bold action by the White House. The administration must continue to hold the Palestinians accountable for their rejectionism.
Like Trump's December move on Jerusalem, this represents a bold step that is long overdue. UNRWA, the UN's Palestinian refugee agency, long has needed reform, but with Palestinian leadership unwilling to even feign serious commitment to peace, it's probably time to scrap the agency altogether. It stands in the way of peace.
Trump must hold the Palestinians – and UNRWA – accountable for their rejectionism.
The United States funds UNRWA to the tune of $300 million per year, and it does enjoy important backing and major funding from some in the Muslim world. But the agency runs large annual deficits.
The Israeli government has remained publicly supportive of the agency, resisting attempts to defund UNRWA for fear it will lead to a humanitarian crisis. But things may be changing as the world finally realizes this agency is harmful.
Founded in 1949 to carry out direct relief and works programs for Palestinian refugees from
Israel's War of Independence, UNRWA long ago outlived its charge. When it was established, there were as many as 750,000 refugees. Today, UNRWA considers more than 5 million people to be refugees from that conflict and provides education, health care, social programs, loans and more to people in the West Bank, Gaza, Jordan and Syria.
UNRWA is perpetuating a conflict the Palestinians lost long ago.
At the Middle East Forum, we seek to bring the UNRWA definition of a refugee in alignment with U.S. law that recognizes as refugees only those displaced and their minor children who have not obtained a new nationality and are not "home." This is a conceptual change: "Yes to assistance, no to classification as refugees." The result would leave only about 20,000 legitimate Palestinian refugees.
Helping refugees is a noble charge, but UNRWA isn't actually helping people. It's perpetuating a conflict the Palestinians lost long ago and aiding Arab governments who refuse to provide for the basic needs of their people.
Between 1940 and 1945, World War II created 40 million refugees in Europe. The partition of India and Pakistan displaced 14 million people in 1947. But how many people remain displaced because of these conflagrations? Zero.
Why, then, has the number of refugees from Israel's War of Independence grown nearly sevenfold since 1949? 
The answer is that it's been politically advantageous to the Palestinian leadership and to Israel's Arab neighbors who work to ensure the conflict continues. With UNRWA's support, they've become experts at perpetuating the conflict. 
A recent study found that UNRWA schools teach Palestinian children that, "Jews have no rights whatsoever in the region but only 'greedy ambitions.'" The same study found textbooks in UNRWA schools glorifying terrorists who killed civilians as heroes.
UNRWA has evolved from a temporary relief and works program into a broad social welfare organization.

There have been many ideas about how to reform UNRWA, including forcing host governments such as the Palestinian Authority and Lebanon to take responsibility for their people. But the time for reform has passed. It's time to dismantle the agency.
Israeli Education Minister Naftali Bennett recently called UNRWA a "terror-supporting organization" and said that "aiding the residents of Gaza should be no different than aiding the Syrian residents suffering under a terror regime, or aiding any other group of descendants of refugees."
Ending UNRWA doesn't mean ending humanitarian support for Palestinians. If the definition of a Palestinian refugee changes, the small number of remaining refugees could be served by the U.N. Refugee Agency (UNHCR) and Palestinians in need could be served by the Palestinian Authority.
To help bring that about, Trump should clarify that the U.S. Government's definition of a Palestinian refugee includes only those who are actually refugees. This change would help depoliticize the provision of aid. Importantly, this would be a step toward taking a major point of contention — the rights of Palestinians to return to Israel — off the table, just as the administration did with Jerusalem.
The only path to peace is one that forces Palestinians to accept that continued rejectionism is a dead end.
Ultimately, the path to peace is one that forces the Palestinian people to realize that continued rejection of Israel is a dead end. They must understand that the only way to build a better future for their children is to abandon the conflict that has been central to their identity for most of the last century.
Defunding UNRWA gives Palestinian leadership a stark choice: get serious about forging lasting peace with a Jewish state in Israel, or refuse to play ball and be forced to act like a responsible government that cares for its own people.

President Trump came into office making big promises about solving the Arab-Israeli conflict and reforming the United Nations.
His announcement on Jerusalem dealt a serious blow to the Palestinian rejectionism that has prolonged this conflict for generations. 
Finding a way to end UNRWA's support for the structures behind the unwillingness of Palestinians to make peace would be another important step. Freezing payments is a step in the right direction.

Sunday, January 07, 2018

US and Israel formulate a plan to stop Iran – together

From Jerusalem Post, 28 Dec 2017, by HERB KEINON:

> Netanyahu: When Israelis and Arabs agree on Iran, the world should listen
> Iran asks Muslims to disrupt Israeli ties in region

Secret White House meeting leads to establishment of special US-Israeli work-group meant to prevent Iran from increasing in strength.

Report: US and Israel formulate a plan to stop Iran – together
US President Donald Trump meets with Israeli Prime Minister Benjamin Netanyahu in New York, US, September 18, 2017.. (photo credit: REUTERS)

Top US and Israeli national security officials reached an agreement two weeks ago in Washington on a joint work plan to counter Iranian activity in the Middle East... The document marks the beginning of a new cooperative effort against Iran...

The document, characterized by a US National Security Council representative as an informal “framework,” follows on President Donald Trump’s speech in October outlining a new American policy approach to the Islamic Republic, where he announced that he would not recertify the Iranian nuclear deal.

...A spokesman in the Prime Minister’s Office ...would only say that “there was a meeting in Washington.”

The Israeli team was led by National Security Council head Meir Ben-Shabbat, and the US team was led by National Security Adviser H.R. McMaster. Senior defense, intelligence and diplomatic officials from both sides took part in the meeting.

... an agreement was reached on regional goals in the region and several working groups were set up, including one to deal with joint covert and diplomatic steps to prevent Tehran from getting nuclear weapons and to monitor and verify that it is not violating the nuclear deal signed in 2015.

This group will also focus on placing additional pressure on the Islamic Republic through both covert and diplomatic steps.

Another group was set up to counter Iran’s activity in the region, specifically its support for Hezbollah. This group will also formulate a joint policy regarding Syria after the end of the civil war.

A third group is to work to counter Iranian ballistic missile development and the manufacturing of precision missiles in Syria and Lebanon, and a fourth is to address joint preparation for various scenarios of escalation in the region, be they with Iran or with Hezbollah.

Innovation Nation

From "The World in 2018", The Economist feature, by Benjamin Netanyahu:

The future belongs to those who innovate. Israel is seizing the future. With 8.5m people, it has more companies on NASDAQ than almost any other country outside North America and ranks third in the World Economic Forum’s ranking of most innovative economies. Israeli startups receive nearly 20% of global private investment in cyber-security, punching 200 times above our relative weight. Israel recycles 87% of its waste water, five times more than the runner-up. Israeli cows produce more milk per animal than those of any other country.

People everywhere benefit from Israeli innovations in their mobile phones, car navigation systems, life-saving drugs, medical devices—even the cherry tomatoes in their salads. Equally, Israel’s intelligence services have helped stop dozens of terrorist attacks in dozens of countries. These successes are buttressed by world-class universities and research institutions like the Technion, the Weizmann Institute and the Volcani Agri­culture Institute.

Technology without free markets does not get you very far. All national economies are engaged in a race in which the public sector sits astride the shoulders of the private sector. In our case, the public sector got too bloated. Under a policy I called “Fat man/Thin man”, we put it on a strict diet and removed barriers to competition that hampered the private sector, enabling it to sprint forward.

We controlled public spending, lowered tax rates, reformed welfare and pensions, removed foreign-exchange controls, dismantled monopolies, privatised government companies and created new capital markets. The result has been 14 years of nearly continuous GDP growth of 4-5% annually, lowering the debt-to-GDP ratio from roughly 100% to 62%.

We leverage government spending on military intelligence by encouraging veterans to form thousands of civilian IT and cyber-startups, which we regulate as little as possible. Government investments in roads and railways open up land for housing, which is developed by private contractors.

For 50 years government companies searched to no avail for offshore gas. Once we enabled private companies to search, they found gas deposits worth many billions of dollars. The government’s take of these gas revenues will help fund our future needs in education, welfare and infrastructure.

Israel became an economic tiger because we chose to be a nimble mammal rather than a fossil. Benefiting from the nexus of big data, connectivity and artificial intelligence, we are rapidly developing new industries.

Fifty years ago, Israel failed in its effort to develop a car industry. Yet in the past decade we have had 500 startups in automotive technology which receive billions of dollars of investments each year. In 2013 Google bought Waze, a crowd-sourcing navigation system, for $1bn. In 2017 Intel paid $15bn for Jerusalem-based MobileEye, entrusting it to oversee Intel’s worldwide autonomous-vehicle businesses. Our universal digital health database holds great promise for breakthroughs in preventive and personalised medicine.

Since technology alone does not guarantee our future, we must keep promoting entrepreneurship and fight excessive regulation. In the past two years I have chaired a cabinet committee that takes a machete to the weeds of overregulation, and Israel has moved from 27th to 16th in the Global Competitiveness Index.

High-tech diplomacy

What are the lessons of Israel’s economic miracle for 2018 and beyond? The first is: innovate or perish. The second is: innovate to create alliances and advance peace.

Our technological prowess has brought us many new friends, alongside our irreplaceable alliance with America. We negotiated economic pacts with Japan and China. Relations with India are booming. Twice within a year I visited Africa. I am the first Israeli prime minister to visit Australia and Latin America.

But perhaps the most promising change is closer to home. Many Arab countries now see Israel not as an enemy but as an indispensable ally in our common battle against militant Islam. They also seek Israeli technology to help their economies. The potential normalisation with Arab states could help pave the way for peace with the Palestinians.

In 1968, in “The Lessons of History”, the great American writer Will Durant wrote:

The influence of geographic factors diminishes as technology grows. The character and contour of a terrain may offer opportunities for agriculture, mining or trade, but only the imagination and initiative of leaders, and the hardy industry of followers, can transform the possibilities into fact; and only a similar combination (as in Israel today) can make a culture take form over a thousand natural obstacles.

In the half-century since those prophetic words were written, Israel has indeed overcome a thousand obstacles. Its ingenuity offers hope for every nation under the sun.

Thursday, January 04, 2018

Crack down on UNRWA and finally end the fiction of Palestinian refugees

From NY Post, 27 December 2017, by Richard Goldberg, senior adviser at the Foundation for Defense of Democracies:

Fake aid to fake refigees

As the UN General Assembly voted to reject America’s recognition of Jerusalem as the capital of Israel, US Ambassador Nikki Haley issued a stern warning: We’ll remember this the next time you come calling for more hard-earned American taxpayer dollars. Most nation-states called her bluff, leaving many to wonder what comes next.

If President Trump wants to use his financial leverage at the United Nations to strike at the heart of the anti-America, anti-Israel institutional infrastructure, he should look no further than the agency responsible for Palestinian refugees: the United Nations Relief and Works Agency.

By most definitions, refugees are those forced to flee their country because of persecution, war or violence. Nearly every refugee in the world is cared for by the United Nations High Commissioner on Refugees, whose ultimate goal is repatriation, resettlement and integration. The exception? Palestinian refugees.

Arab states insisted on a different definition for Palestinian-Arab refugees of the Israeli War of Independence — and a different agency to care for them. Today, millions of people are referred to as “Palestinian refugees” even though the only home they, and in many cases even their parents and grandparents, have ever known is either a refugee camp or an Arab host nation like Jordan.

Rather than use the billions of dollars of international assistance provided since 1950 to resettle and integrate Palestinian-Arab refugees — just as Israel successfully resettled and integrated Jewish refugees from the Middle East, North Africa and the Soviet Union — UNRWA’s mandate has always been to keep Palestinians as perpetual refugees.

In truth, it’s not a refugee agency but a welfare agency, which keeps millions of people in a permanent state of dependency and poverty — all while feeding Palestinians an empty promise that one day they’ll settle in Israel.

Yet the United States remains the agency’s largest single-state donor.

Unfortunately, every time Congress tries to expose the fiction of “the Palestinian refugee,” it runs up against a State Department fiercely protective of UNRWA and its mythology. In 2012, an amendment to the annual State-Foreign Operations appropriations bill asked the Obama administration a simple question: How many of the Palestinians currently served by UNRWA were personally displaced by the 1948 war?

The point was to confirm to the world that there are only a relative handful of true Palestinian refugees still alive who may be entitled to repatriation or compensation. The rest, the descendants, are impoverished Palestinian-Arabs who will either become citizens of a future Palestinian state or be absorbed by Arab host nations.

While an official report was eventually sent to Congress, its contents were kept classified to keep the American public from knowing the truth. The Trump administration can take a giant step toward Middle East peace by declassifying that report, updating it and formally adopting a definition for Palestinian refugees that makes a clear distinction between refugees displaced by the 1948 war and their descendants.

The administration and Congress should work together to change the way America funds UNRWA, making clear to taxpayers how much money goes to refugee assistance and how much subsidizes a culture of welfare and terrorism.

Future funding of the agency should be tied to a clear mission of resettlement, integration and economic self-sufficiency. A timetable and work plan should be established for UNRWA’s integration into UNHCR. Conditions should be set in the annual foreign bill, giving Haley the leverage she needs to force changes in the agency’s next biennium budget.

Nations of the world showed their true colors last week. Far too many cared more about castigating Israel than their relationship with the United States.

UNRWA is a case study in the institutional bias that America helps fund at the United Nations. Shining a light on this agency and making it a centerpiece of a new reform agenda would be a victory for American taxpayers and a defeat for the international movement to castigate our closest ally in the Middle East.

Wednesday, January 03, 2018

How to Defund the U.N.

From WSJ 25 December 2017, by John Bolton, senior fellow at the American Enterprise Institute:

U.S. Ambassador to the United Nations Nikki Haley listens during a Security Council meeting concerning Israel and Palestine in New York, Dec. 18.
U.S. Ambassador to the United Nations Nikki Haley listens during a Security Council meeting concerning Israel and Palestine in New York, Dec. 18. 

As an assistant secretary of state in the George H.W. Bush administration, I worked vigorously to repeal a hateful United Nations General Assembly resolution equating Zionism with racism. Foreign diplomats frequently told me the effort was unnecessary. My Soviet counterpart, for example, said Resolution 3379 was only a piece of paper gathering dust on a shelf. Why stir up old controversies years after its 1975 adoption?

We ignored the foreign objections and persisted because that abominable resolution cast a stain of illegitimacy and anti-Semitism on the U.N. It paid off. On Dec. 16, 1991, the General Assembly rescinded the offensive language.

Now, a quarter-century later, the U.N. has come close to repeating Resolution 3379’s original sin. Last week the U.N. showed its true colors with a 128-9 vote condemning President Trump’s recognition of Jerusalem as Israel’s capital.

This seemingly lopsided outcome obscured a significant victory and major opportunity for the president. Thirty-five countries abstained, and 21 didn’t vote at all. Days earlier the Security Council had endorsed similar language, 14-1, defeated only by the U.S. veto. The margin narrowed significantly once Mr. Trump threatened to penalize countries that voted against the U.S. This demonstrated once again that America is heard much more clearly at the U.N. when it puts its money where its mouth is. (In related news, Guatemala announced Sunday it will move its embassy to Jerusalem, a good example for others.)

While imposing financial repercussions on individual governments is entirely legitimate, the White House should also reconsider how Washington funds the U.N. more broadly. Should the U.S. forthrightly withdraw from some U.N. bodies (as we have from UNESCO and as Israel announced its intention to do on Friday)? Should others be partially or totally defunded? What should the government do with surplus money if it does withhold funds?

Despite decades of U.N. “reform” efforts, little or nothing in its culture or effectiveness has changed. Instead, despite providing the body with a disproportionate share of its funding, the U.S. is subjected to autos-da-fé on a regular basis. The only consolation, at least to date, is that this global virtue-signaling has not yet included burning the U.S. ambassador at the stake.

Turtle Bay has been impervious to reform largely because most U.N. budgets are financed through effectively mandatory contributions. 
Under this system, calculated by a “capacity to pay” formula, each U.N. member is assigned a fixed percentage of each agency’s budget to contribute. The highest assessment is 22%, paid by the U.S. This far exceeds other major economies, whose contribution levels are based on prevailing exchange rates rather than purchasing power parity. China’s assessment is just under 8%.

Why does the U.S. tolerate this? It is either consistently outvoted when setting the budgets that determine contributions or has joined the “consensus” to avoid the appearance of losing. Yet dodging embarrassing votes means acquiescing to increasingly high expenditures.

The U.S. should reject this international taxation regime and move instead to voluntary contributions. This means paying only for what the country wants—and expecting to get what it pays for. Agencies failing to deliver will see their budgets cut, modestly or substantially. Perhaps America will depart some organizations entirely. This is a performance incentive the current assessment-taxation system simply does not provide.

Start with the U.N. Human Rights Council. Though notorious for its anti-Israel bias, the organization has never hesitated to abuse America. How many know that earlier this year the U.N. dispatched a special rapporteur to investigate poverty in the U.S.? American taxpayers effectively paid a progressive professor to lecture them about how evil their country is.

The U.N.’s five regional economic and social councils, which have no concrete accomplishments, don’t deserve American funding either. If nations believe these regional organizations are worthwhile—a distinctly dubious proposition—they are entirely free to fund them. Why America is assessed to support them is incomprehensible.

Next come vast swaths of U.N. bureaucracy. Most of these budgets could be slashed with little or no real-world impact. Start with the Office for Disarmament Affairs. The U.N. Development Program is another example. Significant savings could be realized by reducing other U.N. offices that are little more than self-licking ice cream cones, including many dealing with “Palestinian” questions. The U.N. Relief and Works Agency for Palestine Refugees could be consolidated into the U.N. High Commissioner for Refugees.

Many U.N. specialized and technical agencies do important work, adhere to their mandates and abjure international politics. A few examples: the International Atomic Energy Agency, the Food and Agriculture Organization and the World Health Organization. They shouldn’t be shuttered, but they also deserve closer scrutiny.

Some will argue incorrectly that unilaterally moving to voluntary contributions violates the U.N. Charter. In construing treaties, like contracts, parties are absolved from performance when others violate their commitments. Defenders of the assessed-contribution model would doubtless not enjoy estimating how often the charter has been violated since 1945.

If the U.S. moved first, Japan and some European Union countries might well follow America’s lead. Elites love the U.N., but they would have a tough time explaining to voters why they are not insisting their contributions be used effectively, as America has. Apart from risking the loss of a meaningless General Assembly vote—the Security Council vote and veto being written into the Charter itself—the U.S. has nothing substantial to lose.

Thus could Mr. Trump revolutionize the U.N. system. The swamp in Turtle Bay might be drained much more quickly than the one in Washington.

Trump’s Security Strategy: The Impact on Israel

US army 
(Image credit: The U.S. Army (Hovering Hawks) [Public domain], via Wikimedia Commons)

US President Donald Trump’s national security strategy – as enunciated on December 18, 2017 - reflects a realistic assessment of clear and present threats to the US, rejecting the politically-correct worldview of the foreign policy establishment, which has been crashed, repeatedly, against the rocks of reality. It provides a prescription for the enhancement of the flourishing, mutually-beneficial US-Israel relationship.

Contrary to the US and West European government, academic and media foreign policy establishment - which are highly critical of Israel and top heavy on wishful-thinking concerning the supposed Arab Spring, ostensible democratization and peaceful coexistence of the Arab World – Trump recognizes the complex and inherently brutal reality of the Middle East. Trump is aware of the lethal threats posed by Shiite (Ayatollahs) and Sunni terrorism and the threats posed by the 2015 Iran Nuclear Agreement.

Apparently, Trump does not embrace the myth of the Palestinian issue as – supposedly - a core cause of regional instability, a crown-jewel of Arab policy-makers, nor the crux of the Arab-Israeli conflict.

According to Trump, apologies, appeasement and multilateralism have been replaced by America-first patriotism, the independence of unilateral US military action, the resurgence of the US posture of deterrence, an expanded defense budget and peace-through-strength.

Will Israel leverage these principles in its own battle against Islamic/Arab terrorism and its public relation posture in the US?  

Trump underlined US national goals, which already benefit from Israel’s own experience and knowhow, harboring a much greater, mutually-beneficial potential:

1. Improving ballistic missile defense and cyber technologies feature Israel as a top partner with the US in the area of groundbreaking research, development and production;

2. Operational and technological homeland security and counter-terrorism highlight Israel’s unique experience as a game-changing contributor to the US’ intelligence, training and operations;

3. The stress on innovation underscores Israel as a platform of cutting-edge technologies for over 200 US hightech giants, as well as the leading battle-tested laboratory of the US defense industries, upgrading the latter’s research and development, global competitiveness, exports and employment-base.

Moreover, Israel has been “the largest US aircraft carrier” – as suggested by the late General Alexander Haig - which does not require US soldiers, deployed in a most critical region for US national security, sparing the necessity for the US to deploy a few more real aircraft carriers and additional divisions to the area between the Indian Ocean and the Mediterranean (at an annual cost of $15BN-$20BN).

The President announced that allies of the US, which benefit from US protection – in the form of US military bases and personnel – “should reimburse the United States for the cost of defending them.” However, unlike Germany (70,000 US troops), South Korea and Japan (40,000 troops each), etc., Israel does not require US military bases and/or personnel, on its soil, for its defense.

In fact, Israel constitutes a most effective, reliable, battle-tested and uniquely unconditional US beachhead, stretching the strategic arm of the US in a most critical region for the American homeland and national security.

Will President Trump’s realistic national security talk be matched by effective walk?