UNITED NATIONS - OUTSOURCING PEACEKEEPING

UNITED NATIONS MULLS USE OF MERCENARIES FOR INTERNATIONAL INTERVENTIONS

Source: UPI

UNITED NATIONS is assessing private military and security companies and their commitment to international norms, an envoy said from New York.

The UNITED NATIONS announced a panel discussion on the use of mercenaries and private security companies is scheduled in due course at U.N. headquarters.

Group director Anton Katz said the UNITED NATIONS has an opportunity to influence the standards and behavior of the private security industry in a way that puts it in line with international human rights laws.Katz said the working group would assess a draft measure which would provide an overview of U.N. policies on mercenaries and private contractors.

“The UNITED NATIONS should serve as a model for world governments and other organizations in its use of private military and security companies,” he said in a statement Friday. “Without proper standards and oversight, the outsourcing of security functions by the UNITED NATIONS to private companies could have a negative effect on the effectiveness and image of the UNITED NATIONS in the field.”

A working group on mercenaries during meetings in 2011 found “considerable” evidence that LIBERIAN mercenaries were involved in the post-election conflict in neighboring IVORY COAST. Foreign fighters in LIBYA were reportedly used by the former regime of Moammar Gadhafi to repress peaceful demonstrations against the government during the 2011 civil war.

EUROPE AND ITS YOUTH: A TICKING TIME BOMB?

BANKS COUNT TEN TIMES MORE THAN EUROPE’S YOUTH 

By Roberto Savio via IDN

Youth At the last summit of EUROPEAN heads of state in Brussels, the main theme was youth unemployment, which has now reached 23% of EUROPEAN youth (although it stands at 41% in SPAIN). Last year, the International Labour Organization issued a dramatic report on 'Global Employment Trends for Youth 2012' in which it spoke of a “lost generation”. 

COMMON EURO PENSION FOR BABY BOOMER GENERATION (BORN BETWEEN 1958 AND 1963)

According to projections, the generation currently seeking to enter the market place will retire with a pension of just 480 euro – if it actually succeeds in entering the market – because of temporary jobs without social contributions.

6BILLION DOLLARS SUPPORT FOR YOUTH UNEMPLOYMENT VERSUS 60 BILLION DOLLARS FOR SUPPORTING EUROPE’S BANKS 

After long discussions, EUROPE’S leaders decided to allocate 6 billion dollars of EUROPEAN money, to fight youth unemployment. After much shorter discussion, they decided to allocate up to 60 billion dollars to support EUROPE’S banks. This, on top of the striking subsidies already received: the EUROPEAN Central Bank alone has given one thousand billion dollars to the banks at nominal cost.

BRITISH FINANCIAL SYSTEM NOW ACCOUNTS FOR 10% OF THE BRITISH GROSS DOMESTIC PRODUCT (GDP)!

All the efforts to create a EUROPEAN banking system under a central regulator are now on hold until the GERMAN elections in September. A member of the GERMAN delegation at the June summit is reported saying:”We know well what we are supposed to do, to calm financial markets. But we are not elected by financial markets, we are elected by GERMAN citizens.” (NYT | IHT online). And of course, no effort has been made to explain to GERMANY’S citizens why it is in their interest to show economic solidarity with the most fragile countries of EUROPE. Democracy, as it is understood today, is based on leaders who follow popular feelings not on leaders who feel their duty to push their electors towards a world of vision and challenges.

The summit was also obliged to accept the blackmail of BRITISH Prime Minister David Cameron: either you maintain the subsidies that then Prime Minister Margaret Thatcher obtained in 1973, when you insisted that we join EUROPE (which makes BRITAIN a net recipient of EUROPEAN money), or we will block the EUROPEAN budget. This is because the anti-EUROPE electorate in BRITAIN is growing and Cameron could not afford to appear weak. But Cameron was one of the strongest proponents of the subsidy for the banks, and no wonder: the financial system now accounts for 10% of the BRITISH gross domestic product (GDP)!

KEY WESTERN POWERS UNWILLINGNESS TO PLACE BANKS UNDER CONTROL AND REACT TO THEIR STRINGS OF CRIMES

It is a very curious situation, in which not only has EUROPE spent several hundred billion dollars for its banks, it has even invited the International Monetary Fund (whose controlling member is the UNITED STATES) to join the EUROPEAN Institutions and manage the EUROPEAN crisis. And, in an unprecedented sign of independence and resistance to the UNITED STATES, EUROPE has rejected AMERICAN calls for reducing austerity and starting policies of growth as Washington and Tokyo have been doing, so far with proven success.

Nevertheless, what is common to the three most powerful players in the West (UNITED STATES, EUROPE and JAPAN) has been their inability – and unwillingness – to place banks under control and react to their strings of crimes.

Central bankers from the entire world join in the Bank for International Settlements (BIS) based in Basel. Now its Basel Committee on Banking Supervision, headed by the governor of the SWEDISH Central Bank, Stefan Ingves, has come up with a proposal that would finally subject EUROPEAN banks to balance their capital with the volume of financial operations deemed feasible.

‘REVOLUTIONARY’ PROPOSAL

This ‘revolutionary’ proposal calls a relationship of 3 percent, meaning that the banks would need to hold about 1 euro in capital for every 33 euro in risk or other financial exposures. Obviously, of course, if a bank sustains a loss higher than 3%, it would require the state to eliminate the deficit in order to save the institution. Well, even this bland proposal has been received with a howl of protest from many banks, claiming that they would have great difficulty in raising capital.

UNDER THE OLD CAPITALIST ECONOMY, NO ENTERPRISE WOULD RUN WITHOUT CAPITAL ADEQUATE TO ITS NEED. 

Today we have a new branch of economy, which wants to play without capital, and expects the state to bail it out if anything goes wrong. Here are some of the many wrongdoings by banks.

On April 28, 2002, then New York State Attorney General Eliot Spitzer, on behalf of the U.S. Securities and Exchange Commission (SEC), won a lawsuit ordering 10 U.S. banks to pay 1.4 billion dollars in compensation and fines because of fraudulent activities. One year later, the SEC discovered that 13 out of 15 financial institutions randomly investigated were guilty of fraud. In 2010, Goldman Sachs agreed to a fine of 550 million dollars to avoid a trial for fraud. In July last year, the U.S. Senate presented a 335-page report on the BRITISH bank HSBC, the largest in EUROPE.

Over the years it helped drug dealers and criminals recycle illicit money. For example, the bank sent 60 billion dollars in cash by road or plane from the accounts of MEXICAN drug dealers to its New York Branch. The fine was 1.9 billion dollars. In November 2012, SAC Capital was fined 600 million dollars, and in the same month the second BRITISH bank, Standard Chartered, was fined 667 million dollars. In February this year, Barclays Bank announced that it had set aside 1.165 billion euro to face fines for “illicit transactions” (the bank is now under investigation for a very dubious capital increase of 8.4 billion euro in 2008). And in March this year, Citigroup accepted a fine of 730 million dollars for “selling investments based on junk to unsuspecting clients”. These are just a few of the most clamorous cases, and there are many, many more, involving even the JAPANESE bank Nomura.

CURRENT CRISIS TRIGGERED IN THE USA BY ITS 10 LARGEST BANKS

We all know that the crisis in which we find ourselves (which, for the optimists, will end in 2020 and for the pessimists in 2025) was triggered in the UNITED STATES by the 10 largest banks which decided to sell derivatives based on junk and certified by the Standard & Poor’s and Moody’s rating agencies. U.S. taxpayers “donated” 750,000 million dollars to the banks, while the BRITISH did the same for HSBC, Royal Bank of SCOTLAND, Barclays Bank and Northern Rock.

While this financial disaster was happening, the ‘Big Five’ (Goldman Sachs, Merrill Lynch, Morgan Stanley, Lehman Brothers and Bearn Sterns) paid their executives 3 billion dollars between 2003 and 2007, And, in 2008, they received 20 billion dollars in bonuses while their banks were losing 42 billion dollars.

All of this was certified by Standard & Poor’s and Moody’s, which control 75% of the world market. Now Standard & Poor’s has been requested to pay 500 million dollars. But what about the million people who lost their job, the millions of young people without a future? It’s always the same old story: if you steal bread, you go to jail, but if you steal millions, nothing will happen to you … and if you steal millions in a bank, even less reason to worry.

Meanwhile, back at the summit table, the priority for survival is to allocate taxpayers’ money, even if all talk about youth unemployment. After all, what really matters is that leaders will be re-elected.

EUROPE

THE NEW GREAT GAME: EUROPE LOOKS WITHIN FOR ROOTS OF RENEWAL

The term “the Great Game” referred to the strategic rivalry between the BRITISH and RUSSIAN empires in CENTRAL ASIA. Today’s Great Game is the battle for economic survival in a world of low economic growth. In such a world economic nationalism reasserts itself, reducing free trade in goods and services and free movement of capital. Escalating sovereign debt and banking sector problems will favour EUROPEAN introspection.

Individual EUROPEAN economies are modest in size relative to the US. But as a single entity the EUROPEAN UNION, including the 17-member EUROZONE, accounts for more than 25 per cent of global GDP, making it the world’s largest economic unit.

The EU is a more open economy, being the world’s largest exporter and importer of good and services. But around 75 per cent of its trade is within member nations, aided by removal of trade barriers and the common currency. For example, GERMANY, the EU’s largest economy and one of the world’s largest exporters, sells more than 60 per cent of its products within the EU, much of it to other EUROZONE members.

The union is largely self-sufficient in food, thanks in part – as in the US – to subsidies, minimum price schemes and trade restrictions which favour farmers. The EU is a net energy importer, although mutually beneficial strategic agreements with RUSSIA and other neighbouring countries rich in energy can provide security of supply. Significant potential natural gas finds in the EASTERN MEDITERRANEAN may emerge as a source of energy for EUROPE.

Background Information:

ENERGY HOTSPOT: EASTERN MED

http://geopoliticsrst.blogspot.com.ar/2012/04/complexity-of-eastern-med-energy-games.html

COULD IT BE THAT THE TROIKA IN REALITY FOCUSES ON TAKING CONTROL OF CYPRUS’S PROCLAIMED HYDROCARBON FINDINGS? 

http://geopoliticsrst.blogspot.com.ar/2013/03/cypruss-financial-crisis-and-its.html

EUROPE has many of the requirements of a closed economy. The need for greater integration to deal with its debt problems may be the catalyst for the shift to autarchy.

As a unit, the EUROZONE’S current account is nearly balanced, its trade account has a small surplus, the overall fiscal deficit is modest and the aggregate level of public debt, while high, is manageable. But individual members of the EUROZONE vary widely in terms of income, public finances, external account and debt levels. Greater integration would help resolve some of these variations.

However, it would necessitate a net wealth transfer from richer to weaker members. Stronger, more creditworthy members would also have to underwrite the borrowings of weaker nations – something that net lenders such as GERMANY, FINLAND and NETHERLANDS are opposed to.

But even without agreement on EUROZONE bonds, de facto mutualisation of debt will take place. As more financing for weaker nations moves to official institutions such as the EUROPEAN Central Bank and bailout funds, the commitment of stronger countries, especially GERMANY and FRANCE, increases. They implicitly assume the liabilities of weaker members of the EUROZONE.

If the EUROZONE fragments, it will morph into a smaller version of itself, probably consisting of stronger core nations and some smaller entities. Nursing large losses and a significant diminution of wealth, survivors are likely to favour autarchical policies to restore economic health.

Economic difficulties are driving secessionist movements within EUROPE. While ethnic and political identity is the primary driver, an emerging factor is financial. Catalan nationalists argue that the region is financially burdened by being part of SPAIN – which they say absorbs 8 per cent of Catalonia’s GDP, or about €16bn (£14bn) – and would be better off as an independent entity. As SPAIN implements a harsh austerity program, Catalans, facing sharp cutbacks in public services such as health and education, are convinced that independence would restore their economic fortunes.

Separatist movements are also active in many other EUROPEAN nations. The pressures for secession complicate international economic relationships and the reshaping of the global trading system, forcing a narrow domestic focus.

Irrespective of its policy choices, EUROPE faces a prolonged period of economic stagnation as it works off its debt burden and undertakes major structural changes to correct imbalances. During this transition, EUROPE will be forced to focus internally, husbanding savings and wealth needed to absorb the large debt write-offs required. Explicit or implicit capital controls and trade restrictions are natural policy measures to assist in this adjustment, marking a shift to a more closed economy.

Source: UK Independent

CHINA AND ITS RELATION WITH AFRICA AND THE MEDITERRANEAN

CHINA DISCOVERS THE MEDITERRANEAN Fernand Braudel, maybe the most important historian of the MEDITERRANEAN region, wrote that "the MEDITERRANEAN is not a border, but a place for trade". This sentence is true for all the METR countries (MIDDLE EAST, EUROPE, TURKEY, RUSSIA) but also for those far countries, like CHINA, which have strong interests in the MEDITERRANEAN. The so-called Arab Springs and the CHINESE penetration in the region challenge the position of those analysts who theorized the shift of the fulcrum of trade routes toward the "East". As the UNITED STATES, the unique long-standing superpower of the post-Cold War era, has gradually withdrawn from the MEDITERRANEAN, according to these readings, it follows a loss of centrality of the whole region. CHINA'S ECONOMIC POWER LIES IN MARITIME TRADE Doing business across the MEDITERRANEAN is still relevant for some of the "rising powers", such as CHINA. The pride of CHINA'S fluvial trade and exchanges started centuries before WESTERN kingdoms sought to explore and exploit the world. Still, the rise of Westernized warships and sea power was made possible because of CHINESE navigational innovations.  Even today, CHINA'S economic power lies in maritime trade and, then, in CHINESE long projection eastward and westward. Maritime trade secures CHINA with everything the country needs for its economic growth, especially oil and energy sources. But maritime trade is also important for trading goods, acquiring new markets. CHINA and the MEDITERRANEAN are linked by two reasons: oil and markets. Keeping stability in the region and in its fluvial corridors are, then, crucial points for the CHINESE strategy towards the MIDDLE-EAST. RELATIONS BETWEEN CHINA AND MENA COUNTRIES ARE EXPECTED TO GROW, GIVEN THE PRESENCE OF STRONG CONVERGENT INTERESTS During the CHINA - MENA (MIDDLE EAST, NORTH AFRICA) Forum held in DUBAI in April 2012, the Minister of Higher Education and Scientific Research of the UAE, Sheikh Nahyan Mubarak Al Nahyan, said that relations between CHINA and MENA countries are expected to grow, given the presence of strong convergent interests. Background Information: MALI AND CHINA'S 'WESTERN' FOREIGN POLICY http://geopoliticsrst.blogspot.com.ar/2013/07/mali-and-chinas-western-foreign-policy.html The relationship that CHINA is building with MENA counties depends on the high rate of CHINESE economic growth, penalized by the spread between domestic supply and demand for energy (gas, oil and natural resources). For their part, ARAB countries find it convenient to buy CHINESE consumer goods and also machinery and technologies which are essential to trigger local development strategies. CHINA has surpassed the UNITED STATES in consumption of oil and, according to the latest estimates, its needs amount to 6.2 million barrels per day (bpd). Trade between CHINA and the MENA countries (including IRAN) grew by 37% between 2003 and 2007 and by 21% between 2007 and 2011, reaching a peak of US$263 billion. This was partly achieved through replacing EUROPEAN supplies but also by pushing local producers out of business (such the textile sector in MOROCCO).  Main Maritime Ports of Container Traffic In some MEDITERRANEAN countries, imports from CHINA have increased rapidly, especially in oil-producing nations. CHINA is the second-largest exporter to ALGERIA and LIBYA, above ITALY and GERMANY. CHINA is also leading the exports from these countries, currently held by FRANCE in ALGERIA and by ITALY in LIBYA. Given their lower per capita income, MEDITERRANEAN countries' imports from CHINA have not grown as much as in GULF countries but, in any case, the growth of CHINESE exports has been significant and fast, starting with textiles and other low price consumer goods and then moving to advanced products like consumer electronics, telecommunications, and vehicles. ALGERIA imports considerable volumes of vehicles from CHINA and its presence in this sector is particularly relevant in EGYPT. The development of economic relations has not been limited to trade. The role CHINESE construction company’s play is also very important, particularly in ALGERIA where they were awarded the major share of infrastructure contracts. Among the MENA countries, CHINA'S key partners are Gulf Cooperation Council (GCC) countries, EGYPT, SUDAN and ALGERIA. IMPROVEMENT OF CHINA - EGYPT RELATIONS, THE QUINTESSENCE FOR CHINESE CARGO VESSELS INCREASINGLY UTILIZING THE SUEZ CANAL The GULF area is particularly important as, currently, CHINA imports 35% of its oil needs from the GCC while the UNITED ARAB EMIRATES alone absorb about 40% of CHINESE products exported to MENA (for a value of $32 billion per year). By 2015, it is estimated that CHINA and UAE will exchange goods and services for nearly $100 billion. EGYPT is a key country because of the passage of the CHINESE cargo ships through the Suez Canal. Today, it is estimated that only 60% of the CHINESE maritime traffic passes through the Red Sea, while the remaining part reaches the EUROPEAN ports, such as Rotterdam, sailing around AFRICA. Since this route is a much more expensive in terms of time and costs, the improvement of CHINA-EGYPT relations could open new opportunities with respect to the transit of CHINESE cargo for the shortest route.  A wise way to follow this improvement could be the so-called "relocation strategy", that is creating industrial facilities for transportation in the MENA region, in order to free CHINA from the danger of the crisis of overproduction and to facilitate recipient countries that can lessen the dependence on import-export economies, producing goods by themselves. Pursuing this strategy the CHINA-ARAB States Cooperation Forum held its fifth Ministerial Conference in TUNISIA. During the conference, Yang Jiechi, CHINESE foreign minister, spent a lot of words on how to deepen strategic cooperation and promote common development http://geopoliticsrst.blogspot.com.ar/2012/04/africa-forgotten-and-underestimated.htmlwith ARABS. In April 2013, the EGYPTIAN government signed an investment agreement with CHINESE TEDA corporation to develop part of a joint industrial zone near the Suez Canal. Furthermore EGYPT seeks cooperation with BRICS because of the strong will to turn Suez from a passage for sea traffic that brings in $5.2 billion annually to an investment zone that would in time earn $100 billion. EGYPT IS CHINA'S FIFTH-LARGEST TRADE PARTNER IN AFRICA EGYPT and CHINA agreed to move forward their strategic cooperative relations. "CHINA", Xi stated during a meeting on the sidelines of the fifth leaders' summit of BRICS countries held in Durban, "accords great importance to EGYPT'S status and influence as a major ARAB, Islamic and developing state". EGYPT is now CHINA'S fifth-largest trade partner in AFRICA. In 2009, CHINA was the main foreign investor in EGYPT, exerting an important role in supporting economic growth when the country was affected by the decline in EUROPEAN imports and investment.  In 2011, bilateral trade volume stood at $8.8 billion, a 26.5% increase with respect to the previous year. In the same year president Hu Jintao announced his four-point proposal: deepening political relations; promoting trade and economic cooperation; expanding human exchanges; and strengthening multilateral cooperation in international and regional affairs. Moreover CHINA provided EGYPT with a $200 million loan, and promised to encourage CHINESE entrepreneurs to invest in EGYPT. Background Information: CHINA AND AFRICA THE SECRET WAR BETWEEN CHINA AND THE US FOR AFRICA'S OIL RICHES http://geopoliticsrst.blogspot.co.at/2012/12/usa-china-and-africa.html CHINA’S WINNING STRATEGY IN AFRICA http://geopoliticsrst.blogspot.com.ar/2012/09/chinas-winning-strategy-in-africa.html and http://geopoliticsrst.blogspot.com.ar/2012/04/africa-forgotten-and-underestimated.html A THIRD OF WORLD TRADE PASSES THROUGH THE MEDITERRANEAN. CHINESE exports reach the EUROPEAN and AMERICAN markets by the routes that pass from SUEZ and then to GIBRALTAR. Along the route passing south of AFRICA, rounding the CAPE OF GOOD HOPE, are transported 12.2 million TEUs (20-foot equivalent units, the standard gauge of container capacity) compared with 15.3 TEU crossing the MEDITERRANEAN. In this perspective, the MEDITERRANEAN ports, in GREECE, ITALY, SPAIN, but also in the ARAB countries, represent important strategic outposts. The port of Piraeus is just one of the links in the chain from CHINA to EUROPE via the MEDITERRANEAN that Beijing is trying to strengthen with success. CHINESE companies invest across all the MEDITERRANEAN ports and even in the port of Naples, where the CHINESE Cosco has established a joint partnership at 46% with MSC. There is no doubt that CHINESE investments have economic logic but there is even less doubt that the economic operations of Beijing have geopolitical implications, in terms of growing CHINESE influence in the MEDITERRANEAN basin and then the METR area. CHINA'S NON-INTERFERENCE POLICY AT STAKE Chinese Involvement in Africa Moreover, more influence implies more responsibilities and implications in the internal affairs of recipient countries which are at odds with the non-interference policy implemented by CHINA previously. The case of SOUTH SUDAN self-determination exemplifies the increasing involvement of CHINA in MENA political problems. Independence for SOUTH SUDAN took effect in July 2011. Sudden troubles between the two parts ranged from defining borders to the management of oil resources, for which CHINA is the main operator, as well as the use of the oil pipeline going northward. Oil terminals are located in PORT SUDAN on the RED SEA, and they are the only channel to export oil produced in the South. While CHINA has for a long time been a strong supporter of the government in KHARTOUM, it turned to support the separation between the North and South. Background Information: SOMALILAND’S ROLL IN A POTENTIAL MILITARY CONFLICT BETWEEN ETHIOPIA AND EGYPT http://geopoliticsrst.blogspot.co.at/2013/06/ethiopia-somaliland-and-egypt.html HALF OF SUDAN’S OIL PRODUCTION IS EXPORTED TO CHINA. CHINA repositioned itself to maintain good relations with the government of the South, where major oil interests lie. Half of the oil production in SUDAN (around 490,000 barrels per day) is exported to CHINA. Most of it is extracted in the South. It is reported also that CHINA has started negotiations with Juba authorities for the construction of a pipeline linking oil fields in the SOUTH SUDAN with KENYA. This pipeline would free SOUTH SUDAN from its dependence on the pipelines going to PORT SUDAN, but it would damage relations with KHARTOUM, which would lose transit fees on oil produced in the South. This could also affect relations with EGYPT, with which SUDAN has had longstanding relations. Without doubt, several factors will play in favor of stronger economic relations between CHINA and the METR area in coming years. First, the slow EUROPEAN recovery from the international economic crisis will encourage MEDITERRANEAN countries to diversify their economic relations and further strengthen those with high-growth markets like CHINA. The political changes that followed the Arab Springs will also allow CHINA to increase its range of exports and investment in the MEDITERRANEAN region. CHINA'S NEW GEOPOLITICAL POLICIES PRIORITIZES ECONOMIC INTERESTS OVER THE DEVELOPMENT OF POLITICAL RELATIONS Nevertheless, following the political transformation in the region triggered by the government overthrows in TUNISIA and EGYPT, CHINA will face challenges and dilemmas similar to those faced, for many years, by WESTERN countries. A lesson may however be taken from the recent evolution of CHINESE policy in SUDAN. CHINA'S new policy toward SUDAN shows that it prioritizes the defense of its economic interests over the development of its political relations with the incumbent regimes and, if necessary, it disregards principles such as non-interference in internal affairs. This may have repercussions on CHINA'S relations with Arab countries which opposed the separation of SUDAN.  Another cause of tension, if not a challenge to CHINA'S foreign policy in the region, could manifest itself in another country where CHINA'S economic interests are important: ALGERIA. CHINA, as always, upheld the principle of non-interference in other countries' internal affairs, thus opposing the initiative of some states to intervene in the ARAB countries. However, CHINA has also made clear that it would respect that the people in the region had the legitimate right to demand political change, and that it would also support their right to choose a path for development that suits their national conditions. CHINA has always advocated political methods to penetrate the area, avoiding violent implications. If the contagion of the TUNISIAN and EGYPTIAN revolts reaches ALGERIA, as the ALGERIAN president has been hospitalized, CHINA might find itself in the middle of multiple challenges. Related articles: CHINA’S LAND BRIDGE TO TURKEY CREATES NEW EURASIAN GEOPOLITICAL POTENTIALS http://geopoliticsrst.blogspot.com.ar/2012/05/china-and-turkey.html DRAGON OF THE NEGEV http://geopoliticsrst.blogspot.com.ar/2012/05/china-and-israel-enter-dragon.html Written by Pietro Longo, a post-doctoral research fellow at University of Naples l'Orientale. Expert in Law of the Middle East