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Showing posts with label news. Show all posts
Showing posts with label news. Show all posts

Tuesday, August 26, 2014

The world is not responding to events in #Israel, but rather to the description of these events by news organizations @tabletmag



A former AP correspondent explains how and why reporters get Israel so wrong, and why it matters

An Insider’s Guide to the Most Important Story on Earth






The Israel Story


Is there anything left to say about Israel and Gaza? Newspapers this
summer have been full of little else. Television viewers see heaps of
rubble and plumes of smoke in their sleep. A representative article from a recent issue of The New Yorker
described the summer’s events by dedicating one sentence each to the
horrors in Nigeria and Ukraine, four sentences to the crazed génocidaires of ISIS, and the rest of the article—30 sentences—to Israel and Gaza.


When the hysteria abates, I believe the events in Gaza will not be
remembered by the world as particularly important. People were killed,
most of them Palestinians, including many unarmed innocents. I wish I
could say the tragedy of their deaths, or the deaths of Israel’s
soldiers, will change something, that they mark a turning point. But
they don’t. This round was not the first in the Arab wars with Israel
and will not be the last. The Israeli campaign was little different in
its execution from any other waged by a Western army against a similar
enemy in recent years, except for the more immediate nature of the
threat to a country’s own population, and the greater exertions, however
futile, to avoid civilian deaths.


The lasting importance of this summer’s war, I believe, doesn’t lie
in the war itself. It lies instead in the way the war has been described
and responded to abroad, and the way this has laid bare the resurgence
of an old, twisted pattern of thought and its migration from the margins
to the mainstream of Western discourse—namely, a hostile obsession with
Jews. The key to understanding this resurgence is not to be found among
jihadi webmasters, basement conspiracy theorists, or radical activists.
It is instead to be found first among the educated and respectable
people who populate the international news industry; decent people, many
of them, and some of them my former colleagues.


While global mania about Israeli actions has come to be taken for
granted, it is actually the result of decisions made by individual human
beings in positions of responsibility—in this case, journalists and
editors. The world is not responding to events in this country, but
rather to the description of these events by news organizations. The key
to understanding the strange nature of the response is thus to be found
in the practice of journalism, and specifically in a severe malfunction
that is occurring in that profession—my profession—here in Israel.


In this essay I will try to provide a few tools to make sense of the
news from Israel. I acquired these tools as an insider: Between 2006 and
the end of 2011 I was a reporter and editor in the Jerusalem bureau of
the Associated Press, one of the world’s two biggest news providers. I
have lived in Israel since 1995 and have been reporting on it since
1997.


This essay is not an exhaustive survey of the sins of the
international media, a conservative polemic, or a defense of Israeli
policies. (I am a believer in the importance of the “mainstream” media, a
liberal, and a critic of many of my country’s policies.) It necessarily
involves some generalizations. I will first outline the central tropes
of the international media’s Israel story—a story on which there is
surprisingly little variation among mainstream outlets, and one which
is, as the word “story” suggests, a narrative construct that is largely
fiction. I will then note the broader historical context of the way
Israel has come to be discussed and explain why I believe it to be a
matter of concern not only for people preoccupied with Jewish affairs. I
will try to keep it brief.


How Important Is the Israel Story?


Staffing is the best measure of the importance of a story to a
particular news organization. When I was a correspondent at the AP, the
agency had more than 40 staffers covering Israel and the Palestinian
territories. That was significantly more news staff than the AP had in
China, Russia, or India, or in all of the 50 countries of sub-Saharan
Africa combined. It was higher than the total number of news-gathering
employees in all the countries where the uprisings of the “Arab Spring”
eventually erupted.


To offer a sense of scale: Before the outbreak of the civil war in
Syria, the permanent AP presence in that country consisted of a single
regime-approved stringer. The AP’s editors believed, that is, that
Syria’s importance was less than one-40th that of Israel. I don’t mean
to pick on the AP—the agency is wholly average, which makes it useful as
an example. The big players in the news business practice groupthink,
and these staffing arrangements were reflected across the herd. Staffing
levels in Israel have decreased somewhat since the Arab uprisings
began, but remain high. And when Israel flares up, as it did this
summer, reporters are often moved from deadlier conflicts. Israel still
trumps nearly everything else.


The volume of press coverage that results, even when little is going
on, gives this conflict a prominence compared to which its actual human
toll is absurdly small. In all of 2013, for example, the
Israeli-Palestinian conflict claimed 42 lives—that is, roughly the
monthly homicide rate in the city of Chicago. Jerusalem, internationally
renowned as a city of conflict, had slightly fewer violent deaths per
capita last year than Portland, Ore., one of America’s safer cities. In
contrast, in three years the Syrian conflict has claimed an estimated
190,000 lives, or about 70,000 more than the number of people who have
ever died in the Arab-Israeli conflict since it began a century ago.


News organizations have nonetheless decided that this conflict is more important than, for example, the more than 1,600 women murdered in Pakistan last year (271 after being raped and 193 of them burned alive), the ongoing erasure of Tibet by the Chinese Communist Party, the carnage in Congo (more than 5 million dead as of 2012) or the Central African Republic , and the drug wars in Mexico (death toll between 2006 and 2012: 60,000 ), let alone conflicts no one has ever heard of in obscure corners of India or Thailand . They believe Israel to be the most important story on earth, or very close.


What Is Important About the Israel Story, and What Is Not


A reporter working in the international press corps here understands
quickly that what is important in the Israel-Palestinian story is
Israel. If you follow mainstream coverage, you will find nearly no real
analysis of Palestinian society or ideologies, profiles of armed
Palestinian groups, or investigation of Palestinian government.
Palestinians are not taken seriously as agents of their own fate. The
West has decided that Palestinians should want a state alongside Israel,
so that opinion is attributed to them as fact, though anyone who has
spent time with actual Palestinians understands that things are
(understandably, in my opinion) more complicated. Who they are and what
they want is not important: The story mandates that they exist as
passive victims of the party that matters.


Corruption, for example, is a pressing concern for many Palestinians
under the rule of the Palestinian Authority, but when I and another
reporter once suggested an article on the subject, we were informed by
the bureau chief that Palestinian corruption was “not the story.”
(Israeli corruption was, and we covered it at length.)



Israeli actions are analyzed and criticized, and every flaw in
Israeli society is aggressively reported. In one seven-week period, from
Nov. 8 to Dec. 16, 2011, I decided to count the stories coming out of
our bureau on the various moral failings of Israeli society—proposed
legislation meant to suppress the media, the rising influence of
Orthodox Jews, unauthorized settlement outposts, gender segregation, and
so forth. I counted 27 separate articles, an average of a story every
two days. In a very conservative estimate, this seven-week tally was
higher than the total number of significantly critical stories about
Palestinian government and society, including the totalitarian Islamists
of Hamas, that our bureau had published in the preceding three years.


The Hamas charter, for example, calls not just for Israel’s
destruction but for the murder of Jews and blames Jews for engineering
the French and Russian revolutions and both world wars; the charter was
never mentioned in print when I was at the AP, though Hamas won a
Palestinian national election and had become one of the region’s most
important players. To draw the link with this summer’s events: An
observer might think Hamas’ decision in recent years to construct a
military infrastructure beneath Gaza’s civilian infrastructure would be
deemed newsworthy, if only because of what it meant about the way the
next conflict would be fought and the cost to innocent people. But that
is not the case. The Hamas emplacements were not important in
themselves, and were therefore ignored. What was important was the
Israeli decision to attack them.


There has been much discussion recently of Hamas attempts to
intimidate reporters. Any veteran of the press corps here knows the
intimidation is real, and I saw it in action myself as an editor on the
AP news desk. During the 2008-2009 Gaza fighting I personally erased a
key detail—that Hamas fighters were dressed as civilians and being
counted as civilians in the death toll—because of a threat to our
reporter in Gaza. (The policy was then, and remains, not to inform
readers that the story is censored unless the censorship is Israeli.
Earlier this month, the AP’s Jerusalem news editor reported and
submitted a story on Hamas intimidation; the story was shunted into deep
freeze by his superiors and has not been published.)


But if critics imagine that journalists are clamoring to cover Hamas
and are stymied by thugs and threats, it is generally not so. There are
many low-risk ways to report Hamas actions, if the will is there: under
bylines from Israel, under no byline, by citing Israeli sources.
Reporters are resourceful when they want to be.


The fact is that Hamas intimidation is largely beside the point
because the actions of Palestinians are beside the point: Most reporters
in Gaza believe their job is to document violence directed by Israel at
Palestinian civilians. That is the essence of the Israel story. In
addition, reporters are under deadline and often at risk, and many don’t
speak the language and have only the most tenuous grip on what is going
on. They are dependent on Palestinian colleagues and fixers who either
fear Hamas, support Hamas, or both. Reporters don’t need Hamas enforcers
to shoo them away from facts that muddy the simple story they have been
sent to tell.


It is not coincidence that the few journalists who have documented
Hamas fighters and rocket launches in civilian areas this summer were
generally not, as you might expect, from the large news organizations
with big and permanent Gaza operations. They were mostly scrappy,
peripheral, and newly arrived players—a Finn, an Indian crew, a few others. These poor souls didn’t get the memo.


What Else Isn’t Important?


The fact that Israelis quite recently elected moderate governments
that sought reconciliation with the Palestinians, and which were
undermined by the Palestinians, is considered unimportant and rarely
mentioned. These lacunae are often not oversights but a matter of
policy. In early 2009, for example, two colleagues of mine obtained
information that Israeli Prime Minister Ehud Olmert had made a
significant peace offer to the Palestinian Authority several months
earlier, and that the Palestinians had deemed it insufficient. This had
not been reported yet and it was—or should have been—one of the biggest
stories of the year. The reporters obtained confirmation from both sides
and one even saw a map, but the top editors at the bureau decided that
they would not publish the story.


Some staffers were furious, but it didn’t help. Our narrative was
that the Palestinians were moderate and the Israelis recalcitrant and
increasingly extreme. Reporting the Olmert offer—like delving too deeply
into the subject of Hamas—would make that narrative look like nonsense.
And so we were instructed to ignore it, and did, for more than a year
and a half.


This decision taught me a lesson that should be clear to consumers of
the Israel story: Many of the people deciding what you will read and
see from here view their role not as explanatory but as political.
Coverage is a weapon to be placed at the disposal of the side they like.


How Is the Israel Story Framed?


The Israel story is framed in the same terms that have been in use
since the early 1990s—the quest for a “two-state solution.” It is
accepted that the conflict is “Israeli-Palestinian,” meaning that it is a
conflict taking place on land that Israel controls—0.2 percent of the
Arab world—in which Jews are a majority and Arabs a minority. The
conflict is more accurately described as “Israel-Arab,” or
“Jewish-Arab”—that is, a conflict between the 6 million Jews of Israel
and 300 million Arabs in surrounding countries. (Perhaps “Israel-Muslim”
would be more accurate, to take into account the enmity of non-Arab
states like Iran and Turkey, and, more broadly, 1 billion Muslims
worldwide.) This is the conflict that has been playing out in different
forms for a century, before Israel existed, before Israel captured the
Palestinian territories of Gaza and the West Bank, and before the term
“Palestinian” was in use.


The “Israeli-Palestinian” framing allows the Jews, a tiny minority in
the Middle East, to be depicted as the stronger party. It also includes
the implicit assumption that if the Palestinian problem is somehow
solved the conflict will be over, though no informed person today
believes this to be true. This definition also allows the Israeli
settlement project, which I believe is a serious moral and strategic
error on Israel’s part, to be described not as what it is—one more
destructive symptom of the conflict—but rather as its cause.


A knowledgeable observer of the Middle East cannot avoid the
impression that the region is a volcano and that the lava is radical
Islam, an ideology whose various incarnations are now shaping this part
of the world. Israel is a tiny village on the slopes of the volcano.
Hamas is the local representative of radical Islam and is openly
dedicated to the eradication of the Jewish minority enclave in Israel,
just as Hezbollah is the dominant representative of radical Islam in
Lebanon, the Islamic State in Syria and Iraq, the Taliban in Afghanistan
and Pakistan, and so forth.


Hamas is not, as it freely admits, party to the effort to create a
Palestinian state alongside Israel. It has different goals about which
it is quite open and that are similar to those of the groups listed
above. Since the mid 1990s, more than any other player, Hamas has
destroyed the Israeli left, swayed moderate Israelis against territorial
withdrawals, and buried the chances of a two-state compromise. That’s
one accurate way to frame the story.


An observer might also legitimately frame the story through the lens
of minorities in the Middle East, all of which are under intense
pressure from Islam: When minorities are helpless, their fate is that of
the Yazidis or Christians of northern Iraq, as we have just seen, and
when they are armed and organized they can fight back and survive, as in
the case of the Jews and (we must hope) the Kurds.



There are, in other words, many different ways to see what is
happening here. Jerusalem is less than a day’s drive from Aleppo or
Baghdad, and it should be clear to everyone that peace is pretty elusive
in the Middle East even in places where Jews are absent. But reporters
generally cannot see the Israel story in relation to anything else.
Instead of describing Israel as one of the villages abutting the
volcano, they describe Israel as the volcano.


The Israel story is framed to seem as if it has nothing to do with
events nearby because the “Israel” of international journalism does not
exist in the same geo-political universe as Iraq, Syria, or Egypt. The
Israel story is not a story about current events. It is about something
else.


The Old Blank Screen


For centuries, stateless Jews played the role of a lightning rod for
ill will among the majority population. They were a symbol of things
that were wrong. Did you want to make the point that greed was bad? Jews
were greedy. Cowardice? Jews were cowardly. Were you a Communist? Jews
were capitalists. Were you a capitalist? In that case, Jews were
Communists. Moral failure was the essential trait of the Jew. It was
their role in Christian tradition—the only reason European society knew
or cared about them in the first place.


Like many Jews who grew up late in the 20th century in friendly
Western cities, I dismissed such ideas as the feverish memories of my
grandparents. One thing I have learned—and I’m not alone this summer—is
that I was foolish to have done so. Today, people in the West tend to
believe the ills of the age are racism, colonialism, and militarism. The
world’s only Jewish country has done less harm than most countries on
earth, and more good—and yet when people went looking for a country that
would symbolize the sins of our new post-colonial, post-militaristic,
post-ethnic dream-world, the country they chose was this one.


When the people responsible for explaining the world to the world,
journalists, cover the Jews’ war as more worthy of attention than any
other, when they portray the Jews of Israel as the party obviously in
the wrong, when they omit all possible justifications for the Jews’
actions and obscure the true face of their enemies, what they are saying
to their readers—whether they intend to or not—is that Jews are the
worst people on earth. The Jews are a symbol of the evils that civilized
people are taught from an early age to abhor. International press
coverage has become a morality play starring a familiar villain.


Some readers might remember that Britain participated in the 2003
invasion of Iraq, the fallout from which has now killed more than three
times the number of people ever killed in the Israel-Arab conflict; yet
in Britain, protesters furiously condemn Jewish militarism. White people
in London and Paris whose parents not long ago had themselves fanned by
dark people in the sitting rooms of Rangoon or Algiers condemn Jewish
“colonialism.” Americans who live in places called “Manhattan” or
“Seattle” condemn Jews for displacing the native people of Palestine.
Russian reporters condemn Israel’s brutal military tactics. Belgian
reporters condemn Israel’s treatment of Africans. When Israel opened a
transportation service for Palestinian workers in the occupied West Bank
a few years ago, American news consumers could read about Israel
“segregating buses.” And there are a lot of people in Europe, and not
just in Germany, who enjoy hearing the Jews accused of genocide.


You don’t need to be a history professor, or a psychiatrist, to
understand what’s going on. Having rehabilitated themselves against
considerable odds in a minute corner of the earth, the descendants of
powerless people who were pushed out of Europe and the Islamic Middle
East have become what their grandparents were—the pool into which the
world spits. The Jews of Israel are the screen onto which it has become
socially acceptable to project the things you hate about yourself and
your own country. The tool through which this psychological projection
is executed is the international press.


Who Cares If the World Gets the Israel Story Wrong?


Because a gap has opened here between the way things are and the way
they are described, opinions are wrong and policies are wrong, and
observers are regularly blindsided by events. Such things have happened
before. In the years leading to the breakdown of Soviet Communism in
1991, as the Russia expert Leon Aron wrote in a 2011 essay for Foreign Policy,
“virtually no Western expert, scholar, official, or politician foresaw
the impending collapse of the Soviet Union.” The empire had been rotting
for years and the signs were there, but the people who were supposed to
be seeing and reporting them failed and when the superpower imploded
everyone was surprised.


Whatever
the outcome in this region in the next decade, it will have as much to
do with Israel as World War II had to do with Spain
And there was the Spanish civil war: “Early in life I had noticed
that no event is ever correctly reported in a newspaper, but in Spain,
for the first time, I saw newspaper reports which do not bear any
relation to the facts, not even the relationship which is implied in an
ordinary lie. … I saw, in fact, history being written not in terms of
what had happened but of what ought to have happened according to
various ‘party lines.’ ” That was George Orwell, writing in 1942.


Orwell did not step off an airplane in Catalonia, stand next to a
Republican cannon, and have himself filmed while confidently repeating
what everyone else was saying or describing what any fool could see:
weaponry, rubble, bodies. He looked beyond the ideological fantasies of
his peers and knew that what was important was not necessarily visible.
Spain, he understood, was not really about Spain at all—it was about a
clash of totalitarian systems, German and Russian. He knew he was
witnessing a threat to European civilization, and he wrote that, and he
was right.


Understanding what happened in Gaza this summer means understanding
Hezbollah in Lebanon, the rise of the Sunni jihadis in Syria and Iraq,
and the long tentacles of Iran. It requires figuring out why countries
like Egypt and Saudi Arabia now see themselves as closer to Israel than
to Hamas. Above all, it requires us to understand what is clear to
nearly everyone in the Middle East: The ascendant force in our part of
the world is not democracy or modernity. It is rather an empowered
strain of Islam that assumes different and sometimes conflicting forms,
and that is willing to employ extreme violence in a quest to unite the
region under its control and confront the West. Those who grasp this
fact will be able to look around and connect the dots.


Israel is not an idea, a symbol of good or evil, or a litmus test for
liberal opinion at dinner parties. It is a small country in a scary
part of the world that is getting scarier. It should be reported as
critically as any other place, and understood in context and in
proportion. Israel is not one of the most important stories in the
world, or even in the Middle East; whatever the outcome in this region
in the next decade, it will have as much to do with Israel as World War
II had to do with Spain. Israel is a speck on the map—a sideshow that
happens to carry an unusual emotional charge.


Many in the West clearly prefer the old comfort of parsing the moral
failings of Jews, and the familiar feeling of superiority this brings
them, to confronting an unhappy and confusing reality. They may convince
themselves that all of this is the Jews’ problem, and indeed the Jews’
fault. But journalists engage in these fantasies at the cost of their
credibility and that of their profession. And, as Orwell would tell us,
the world entertains fantasies at its peril.


***




A Former AP Correspondent Explains How and Why His Colleagues Get Israel So Wrong – Tablet Magazine





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Thursday, March 6, 2014

The chutzpah! #Putin Defends #Ukraine’s Jews, Slams Ukraine’s Jewish Oligarchs

The chutzpah!

Putin Defends Ukraine's Jews, Slams Ukraine's Jewish Oligarchs

Cites Ukraine's appointment of oligarchs as governors as reason for unrest
Yesterday morning, Vladimir Putin, president of the Russian Federation, gave his first post-Crimea invasion press conference. What rapidly became apparent, as he slouched in a gilded hall studded with Russian flags, was that the combination of Putin's surreal interpretation of events with his lavishly baroque epistemology has given form to some bizarrely contradictory dualities in his worldview. He railed against a politicized judiciary selectively prosecuting the enemies of the chief executive, overlooking that it's exactly what the Russian Judiciary does routinely; he argued the change of government in Kiev was an armed coup, but the one in Crimea was entirely legitimate. The usage of force by Ukrainians is unjustified, but completely justified from the Russian side.

The Russian leader also insisted that Ukraine's deposed president, Viktor Yanukovych, retains authority as the country's elected head of state, but also described him as a corrupt failure whose political career was finished. Putin also admitted that he understood well popular demands for "cardinal changes in government" by Ukrainians—demands, he asserted, that simply stemmed from their "having become habituated to switching one thief and opportunist for another thief and opportunist." He spat out the word "opportunist" in disgust.

What #Russians Think of the Intervention in #Ukraine @ForeignAffairs





By sending troops into Crimea, Russian President Vladimir Putin has amplified Ukraine's turmoil and set off the most dangerous crisis Europe has seen this century. Less noted, however, is that the move portends a significant change in Russia's domestic politics. Putin has abandoned the strategy that has underwritten his political dominance for the last 14 years. And in doing so, he has bet the throne on an approach that is likely to fail.

The secret to Putin's past political success is simple: Presiding over years of rapid economic recovery, he could claim credit for restoring stability after Russia's chaotic transition from communism. During his first two presidential terms, from 2000 to 2008, the country's growth rate averaged seven percent a year. In fact, that success mostly reflected factors beyond Putin's control, including surging oil prices and a flood of liquidity into emerging markets. But it did also require a commitment to open borders, integration into international institutions such as the World Trade Organization and the Organization for Economic Cooperation and Development, cordial relations with Western business circles, and efforts to project an image of modernity and increasing sophistication. A 13 percent flat income tax and a conservative macroeconomic policy did not hurt.

As Russians' incomes soared, so did Putin's popularity. His consistently high approval ratings -- since 2000, they have never fallen below 60 percent on polls conducted by the Levada Center, a Russian nongovernmental organization -- have rallied Russia's fractious elites to the president's side and kept naysayers at bay. The global financial crisis in 2008–9 threw Putin's strategy into doubt. By massively boosting spending, the government managed to protect Russians' living standards. But in the last two years, the public has recognized that the growth rates of Putin's first two terms are not returning. Since late 2011, quarterly growth has fallen steadily from 5.1 to 1.2 percent a year.

Recharging the economy would require a serious commitment to safeguarding property rights and attacking corruption. As stagnation deepened, rumors circulated in Moscow last year that Putin would reinstate his competent and respected former finance minister, Alexei Kudrin, and allow him to introduce political and economic reforms. But that did not happen.

Instead, with the invasion of Crimea, Putin appears to have settled on a Plan B for mobilizing support. Whereas the first approach demanded integration, the second embraces isolation. It involves appealing to emotional nationalism, berating the West, and rallying the public against supposed attempts at cultural imperialism. Plan B is not entirely new. In fact, Putin has been flirting with it since the mid-2000s. Since then, the two approaches have coexisted awkwardly. He has managed to slip back and forth between aggressive rhetoric -- for instance, comparing NATO foreign policy to that of the Third Reich -- and signing deals with Wall Street executives.

But with Russian troops now in Simferopol, Putin appears to have doubled down on nationalism and given up on rapid growth. The great champion of "stability" has taken to tearing up the map of Europe. Whatever the ultimate outcome of the recent intervention, it has already done serious damage to Russia's economic prospects.

The military operation itself will not cost much, although perhaps more if Putin extends it to other regions of eastern Ukraine. Subsidizing the Crimean economy -- and perhaps even that of Ukraine's Russian-speaking rust belt -- is not even the main concern. Nor is the ruble's fall, which the Central Bank slowed on Monday with a frantic raise in interest rates and the sale of $12 billion of currency reserves. That will drive up prices of imports, which will surely anger consumers, but it will help exports and ease pressure on the budget.

The real problem is the potential medium-run fall in foreign investment and acceleration of capital flight. Wars tend to elevate perceived political risk -- and that goes double when leaders' decisions appear erratic. Western sanctions, if they materialize, will add to the discomfort. Few investors will want to tie up money in companies whose executives may be banned from travel to the West, whose accounts may be frozen, and whose board meetings may be upstaged by the home country invading another of its neighbors.

Putin may have discounted such economic consequences based on the short-lived and moderate international reaction to Russia's 2008 war with Georgia. But that was quite different. Russian troops intervened only after Georgian artillery fired on Russian peacemakers and local South Ossetian civilians. In the Crimea, no one had shot at the locally stationed Russian troops with so much as a peashooter. The Ukrainian case looks more like unprovoked aggression. It also starts to look like a pattern -- one that already has other countries with large Russian-speaking minorities, such as Estonia, Latvia, and Kazakhstan, worried.

If Putin has decisively embraced anti-Western nationalism as his mobilizing strategy, evidence suggests that it will not work.

For one thing, Russians, in general, do not like foreign adventures. A survey one month ago by the polling firm VCIOM found that 73 percent of respondents were opposed to Russia getting involved in Ukrainian politics. Not even supporters of the ultranationalist Liberal Democratic Party or the communists favored intervention. Of course, at the time of polling, Putin's supporters might have thought that he favored staying out as well.

No polls have yet appeared on the Crimean operation. When they do, we should expect a temporary rally. Still, after previous comparable incidents, the immediate boost has been fleeting. In late 1999, Putin, then prime minister to President Boris Yeltsin, sent troops into Chechnya and saw his approval rating leap to 79 percent. By June 2000, it had tumbled to 61 percent. In March 2000, 73 percent of Russians favored continuing the military operation that Putin had started. By January 2001, that had fallen to 38 percent, and a majority already supported negotiating with the Chechen guerrillas. Russians rallied behind Putin in 2002, when Chechen terrorists took hostages in a Moscow theater. But just two months later, the six-point jump in his rating had evaporated. Similarly, as Russian troops fought in Georgia in September 2008, Putin's approval surged by eight percentage points. Yet by February 2009, it had fallen back below the initial level.

Second, playing the anti-Western card may also work less well than Putin imagines. Strange as it may seem, Putin is actually much less popular among Russians who are hostile toward the West than among those with pro-Western views. After 13 years of hobnobbing with former Italian Prime Minister Silvio Berlusconi and German Chancellor Angela Merkel, it is hard for him to play the anti-establishment nationalist. In a November 2012 Levada Center poll, 72 percent of those who said they felt "very positive" about the United States approved of Putin. Among those who said they felt "very negative" about the United States, his approval rate was only 42 percent.

By reaching out to Russian patriots, Putin risks splitting his elite supporters. For his friends in business, the Ukraine operation creates enormous headaches -- from potential sanctions and travel bans to market volatility and tighter Western credit. They will see the vulgar nationalism of some of Putin's other friends costing them money and respect, and Putin's unpredictable behavior threatening their investments. Their loyalty will become more conditional than it already was. And as economic conditions worsen, protests are likely to break out among ordinary Russians.

Putin's Crimean adventure thus promises to accelerate the degeneration within his regime that started with the December 2011 demonstrations and the economic slowdown. Even if the Kremlin finds a quick and face-saving exit, it will have to juggle a multiplying series of challenges -- dealing with the Ukrainian aftermath, minimizing international fallout, reassuring other neighbors, managing economic turbulence -- just as differences of opinion within the inner circle make action more difficult.

Read the article online here: http://www.foreignaffairs.com/articles/141005/daniel-treisman/watching-putin-in-moscow?cid=soc-twitter-in-snapshots-watching_putin_in_moscow-030614


Monday, January 6, 2014

#Khodorkovsky Pardon Underscores #Russia’s Special Ties with #Germany @iimag

Or money talks...

Khodorkovsky Pardon Underscores Russia’s Special Ties with Germany

Mikhail Khodorkovsky showed an affinity for things American during his glory days as CEO of Yukos Oil Co. in the early 2000s. He discussed selling Yukos to Exxon Mobil Corp., acted as an adviser to an energy investment arm of the superconnected Washington-based private equity firm Carlyle Group and donated $1 million to the Library of Congress at the request of then–First Lady Laura Bush. But he has German politicians to thank for his freedom after ten years in Russian prisons on dubious charges of fraud and embezzlement.
Hans-Dietrich Genscher, the 86-year-old former foreign minister who oversaw German reunification in 1990, reportedly laid the groundwork for Vladimir Putin’s presidential pardon of Khodorkovsky with two-and-a-half years of quiet negotiation. He flew personally to pick up Russia’s most famous prisoner from his camp near the Arctic Circle and whisk him away to Berlin; on German television, Genscher described the mission as “a humanitarian action.” Chancellor Angela Merkel did not hide her own participation in the release. Genscher “worked successfully on possibilities for a solution with a great level of commitment and the support of the chancellor,” she told a news conference shortly after Khodorkovsky’s arrival on German soil.
Genscher, who was Germany’s top diplomat from 1974 to 1992, crafted an elegant compromise between two stubborn antagonists, Khodorkovsky and Putin. The deposed magnate evidently agreed to leave Russia, stay away from politics and not fight to reclaim Yukos assets, most of which were scooped up by Russian state oil company Rosneft. Putin commuted Khodorkovsky’s sentence without a customary admission of guilt, a step that the former billionaire said would have put ex-Yukos colleagues at risk.
Merkel had reasons of her own to press Putin for a human rights concession. She has long been caught between a German business community pressing for warmer ties with Russia and civic groups that abhor the country’s autocratic ways. In 2012 a Bundestag dominated by her Christian Democratic Party passed a motion “expressing concern” about Russia’s law forbidding “homosexual propaganda.”
The timing was also ripe for Putin to toss a bone to Western neighbors enraged over Russia’s torpedoing of a free-trade agreement between the European Union and Ukraine, which provoked huge popular protests in Kiev. Khodorkovsky’s abrupt late-night release came just four days after Putin announced that Russia would buy $15 billion in new Ukrainian bonds, staving off for a few years the threat of bankruptcy for the government of President Viktor Yanukovych. The release also came seven weeks before the opening of the Winter Olympic Games in Sochi, Russia. Putin personally lobbied for Russia to host this spectacle, which official media have trumpeted as an event of national prestige. Two terrorist attacks that killed 30 people in the southern Russian city of Volgograd on December 29 and 30 underscored the vulnerability of the Games, and Russia generally, to terrorism, and hence Putin’s need for international moral support.
But the Russian leader’s concession to the German establishment has much deeper economic roots. Americans like to assume that Washington speaks with the loudest voice on any foreign affair, but the U.S. is something of an afterthought for Russia, being only its eighth-largest trading partner. The EU remains Russia’s economic lifeline, and Germany its gateway to the EU.
Germany on its own holds sway as both the top market and supplier for Russia. It bought €39.8 billion ($54.5 billion) in Russian goods and services in 2012 and sent €37.9 billion in exports to the country, according to Eurostat. “Russia believes its historic reconciliation with Germany is creating a partnership that will bring immense benefits to both sides,” Foreign Minister Sergei Lavrov said in a speech in April.
The EU bought €213 billion of Russian exports and sent €123 billion worth of goods and services to the country. Those amounts dwarfed Russia’s two-way trade with China, which amounted to $88 billion in 2012, according to the Chinese General Customs Administration. The rebound in cross-border commerce has been a conspicuous bright spot for both the EU and Russia as they struggle to recover from the aftershocks of the 2008-’09 financial crisis. The two-way trade hit a record high in 2012 and was up 83 percent from the dark days of 2009. EU countries — including Cyprus, which largely recycles Russian oligarchs’ own capital — account for 75 percent of foreign direct investment in Russia, according to Eurostat figures.
The mutual dependence between Russia and Western Europe persists despite a decade of efforts on both sides to reduce it. Putin has sought to foster closer economic relations with China as a counterweight to the West, but efforts to strike a 30-year agreement to supply natural gas to China have stalled after nine years of negotiation, reportedly because Beijing is demanding much lower prices than Russia’s Gazprom charges European customers.
The EU has tried to cut its dependency on Russian gas with alternative pipelines stretching out to Azerbaijan, Turkmenistan and even Iraq, but none have yet borne fruit. The most persistent project, Nabucco-West, which was meant to bring fuel from Azerbaijan’s giant Shah Deniz field through Turkey to Central Europe, was abandoned in July 2013 after 11 years of planning. Russia accounted for 34 percent of EU natural gas imports in 2012, according to the BP Statistical Review of World Energy.
Russia has also had limited success disentangling its all-important natural gas trade from Ukraine, which became an unreliable partner from Moscow’s point of view after the Orange Revolution of 2005. A new undersea pipeline direct to Germany, known as North Stream, started operating in 2011 (with Merkel’s predecessor as chancellor, Gerhard Schröder, as its chairman), and the Blue Stream pipeline underneath the Black Sea has enabled modest Gazprom exports to Turkey. But a more ambitious end-run around Kiev, known as South Stream, has bogged down. Some 80 percent of supplies to Europe still flow through the pipelines Soviet planners laid out beneath Ukrainian soil.
Against this backdrop of Russia’s economic imperatives, Putin’s zigzag behavior during an eventful December looks less puzzling. The Kremlin feels it cannot afford to “lose” Ukraine. It scuttled Kiev’s pact with the EU not just from knee-jerk imperialism but also as a potential threat to its gas-fueled cash flows. Yet cordial relations with Western Europe, particularly Germany, remain essential. The release of Khodorkovsky, a man for whom Putin has never hidden his personal disgust, can be seen as an easy way to buy some goodwill.
Kremlin watchers hold out little hope that the Khodorkovsky release, and a broader year-end amnesty that also included the jailed rockers from punk group Pussy Riot, herald a Russian tack toward a liberal reform course. Earlier in December Putin disbanded the most respected state-owned news operation, RIA Novosti, and transferred its staff to Russia Today, which will be headed by a conspicuous Kremlin propagandist.
“Putin’s pardon of Mikhail Khodorkovsky is a confirmation of the omnipotence of one man who rules Russia and the fluctuation of his moods and whims,” Lilia Shevtsova, a senior associate at the Carnegie Moscow Center, wrote on the think tank’s web site. “It is definitely not a confirmation of a political thaw.”
But the move does at least show that Putin remains in touch with reality after 13 years in autocratic power, and committed to a pragmatic course by his own lights.

Khodorkovsky Pardon Underscores Russia’s Special Ties with Germany

Thursday, August 1, 2013

Why Anti- #Israel Conspiracy Theories Keep a Foothold in the #Arab #Mideast – Tablet Magazine


Iranians believe that the mastery of [nuclear] science—rather than any other field of science, a bustling economy, and world-renowned industries and export goods, or a first-class educational system—will pave the way for Iran’s triumphant re-entry into the community of nations. Not a new microchip, or the cure for cancer, but a nuclear bomb—a weapon of mass destruction, meant to kill tens of thousands of people.

Turkey Hawks Bird as Israeli Mossad Spy Beacon, Ruffles Feathers

(Photoillustration Tablet Magazine; original photos Shutterstock)
Last week, Turkish authorities released a kestrel after a thorough investigation showed it was not spying for Israel. It’s a good thing the Turks were 100 percent sure because, to hear Israel’s neighbors tell it, the Mossad often employs birds to do its dirty work. One vulture believed to be spying for Israel was detained in Saudi Arabia in 2011, another was apprehended in Sudan in December 2012, and the Turks believed they were also targeted previously, in May 2012, by a European bee-eater.
Like the kestrel, the other birds were all tagged with markers identifying them as research subjects, such as the study of migratory patterns. The very signs then that should have made plain they were part of scientific studies were instead taken as evidence that they had been enchanted by some secret Israeli spell.
The Mossad kestrel is only the latest creature to walk out of the Israeli bestiary, a compendium of God’s creatures lifted from nature and, the story goes, put to work by Jews against Muslims and Arabs. Perhaps the most famous of all Israel’s animal operatives was the shark who attacked German tourists off the coast of Sinai in the winter of 2010, presumably for the purpose of damaging the Egyptian tourism industry—a feat the Egyptians accomplished over the last two and a half years on their own, thanks to the chaos that they’ve unleashed on their now bloody streets, and without any animal collaborators.
If these shaggy dog conspiracy tales are sure to get a laugh from Western readers, it’s worth keeping in mind that magical fantasies seeing Jews as uncanny manipulators of the natural world partake of the same paranoid and sinister narrative structure that authored the blood libel.
There’s nothing funny about it for the Turks, either. Once upon a time, Turkey and Israel enjoyed a strategic relationship. Among other benefits that came from this alliance, Turkey purchased arms from Israel, including drones, of which Israel is the world’s largest exporter. Ankara wanted the unmanned aerial vehicles, among other reasons, to gather intelligence on and then target the Kurdistan Workers’ Party, which has waged a bloody insurgency against Turkey since 1984. After Prime Minister Recep Tayyip Erdogan cashiered the alliance as well as the defense contracts with Israel, the Turks turned to their own domestic industry for unmanned aerial vehicles. The problem, however, was that Turkish drones were unable to beat the nasty habit of crashing.
To say that Ankara has failed to master the science of flight is an understatement. The fact that Turkish authorities believed the bird last week was effectively a new kind of Israeli drone and only released it back into the wild after an X-ray showed it was carrying no surveillance equipment suggests that some in Turkey are incapable of distinguishing science from magic.
Of course some commentators reason that, even accounting for the appetite many Arabs and Muslims have for pre-scientific conspiracy theories, Israeli spies really do pull off some fantastic stunts. However, it’s useful to remember that if Israel, for instance, blew up Imad Mughniyeh in the middle of Damascus, the Mossad’s assassination of Hamas commander Mahmoud al-Mabhouh was captured on video cameras in Dubai. That is, the Israelis also make mistakes—they’re talented and proficient, but they’re people, not supermen, or warlocks and witches.
Still, hundreds of millions of Middle Eastern, African, and Asian Muslims can only understand the world as a large Harry Potter set in which they will never be among the initiates, the spell-casters. Paradoxically, the reason that this horrifying recognition boils to the surface only occasionally is the stunning success and availability of Western science and technology. It is because cell phones, for instance, are so cheap that even the tens of millions of Egyptians who, without government subsidies and foreign aid, couldn’t afford to put food on their plate can purchase technology designed in Palo Alto and Herzilya. Otherwise, the divide between a society that makes and one that simply consumes would be clear for all to see.
You can say that there is no such thing as Western science and technology, but that’s just a Western perspective based on hard-won Western values, like empiricism—either F=MA or it doesn’t. What is verifiable is true not just for so-called Westerners but is true for all men in all times. But this may not be how the vast majority of the Muslim world understands reality.
The 19th-century Muslim reform movement that arose after Napoleon’s 1798 conquest of Egypt was impressed with Western science—specifically the military technology that allowed French troops to overrun the lands of Islam so easily. The reformers counseled Muslims to make use of the science, medicine, and technology that the Westerners brought—but at all costs to avoid the Western values, like free thought, that had made those technological advances possible. In other words, Muslims were forever condemned to the role of eternal consumer, end-user, and never a producer. Perhaps their consolation is that, like servants, Westerners will make it for them anyway.
Two hundred years later, the United Nations’ 2003 Human Development Report on the Arab World, “Building a Knowledge Society,” delivered the bill. “Despite the presence of significant human capital in the region,” the paper explains, “disabling constraints hamper the acquisition, diffusion, and production of knowledge in Arab societies.”
“Between 1980 and 2000,” writes Hillel Ofek in The New Atlantis, “Korea granted 16,328 patents, while nine Arab countries, including Egypt, Saudi Arabia, and the U.A.E., granted a combined total of only 370, many of them registered by foreigners. A study in 1989 found that in one year, the United States published 10,481 scientific papers that were frequently cited, while the entire Arab world published only four.”
According to Pakistani physics professor Pervez Amirali Hoodbhoy, the 57 Organization of Islamic Congress “countries have 8.5 scientists, engineers, and technicians per 1,000 population, compared with a world average of 40.7, and 139.3 for countries of the Organization for Economic Co-operation and Development. Forty-six Muslim countries contributed 1.17 percent of the world’s science literature, whereas 1.66 percent came from India alone and 1.48 percent from Spain. Twenty Arab countries contributed 0.55 percent, compared with 0.89 percent by Israel alone.”
Typically, commentators note that since the Muslim world used to excel in science and technology, there is no reason that it can’t catch up today. The problem is that it’s slipping further behind—and fast. Fifty years ago the gap was costly, but today the price for not understanding science and innovation has increased exponentially. Consider, for instance, the favorite theme of the 19th-century Muslim reformers and rulers—military might. In June 1967, it took Israel six days to defeat the combined Arab armies, including Egypt’s. Despite more than 30 years and many billions of dollars of U.S. military aid, Egypt has fallen further behind the rest of the world, and even its benighted neighbors. Proof can be found in the country’s decision to buy the defective drones that Turkey can’t keep in the air.
Many commentators explain the popular Arab uprisings over the last two and a half years as a consequence of expectations that exceed conditions. This is what happens, Western journalists and analysts reason, when you have millions of college graduates who can only find jobs driving a taxi or pushing a food cart. The reality is that only the rarest of college graduates in Muslim countries is prepared for a Western-style profession.
Cyber-optimists claim that new information technologies will close the gap. Satellite TV, the Internet, Bluetooth will present Muslims with such a clear alternative to their pre-Copernican worldview that they’ll willingly choose to embrace open societies and free markets and become part of the West. But consider some of the ways in which those technologies are used: The Syrian regime used its cell-phone concession to enrich itself. Jihadis set up Internet websites to disseminate propaganda and plan operations. Gulf monarchies like Saudi Arabia and Qatar use their satellite networks not to promote alternative views of the world but to advance the narrow interests of the ruling family. In Egypt, tele-preachers parse passages of the Quran previously impenetrable to much of a population that has a literacy rate of 60 percent to explain why infidels should be killed.
That is, the technology gap isn’t a problem just for the Muslim world, for as the gap grows so does resentment. Consider the region’s most famous research project—the Iranian nuclear program. For decades now this oil-rich Persian Gulf power has been determined to go nuclear—to have a bomb, or as it claims, to provide nuclear energy for its people. Without taking any credit away from the Western intelligence services that have waged inventive clandestine operations to delay the program, including the alleged assassination of nuclear scientists, the reality is that if Iran hasn’t yet mastered the technology, there is something deeply wrong with the scientific culture of the Islamic Republic.
More important, there’s this: Iranians believe that the mastery of this particular field of science—rather than any other field of science, a bustling economy, and world-renowned industries and export goods, or a first-class educational system—will pave the way for Iran’s triumphant re-entry into the community of nations. Not a new microchip, or the cure for cancer, but a nuclear bomb—a weapon of mass destruction, meant to kill tens of thousands of people. A wise man once said never judge a man by his mistakes, but rather by his dreams. In the case of the Muslim Middle East, it is hard not to shudder.
***
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Lee Smith is a senior editor at the Weekly Standard and the author of The Strong Horse: Power, Politics, and the Clash of Arab Civilizations.


Why Anti-Israeli Conspiracy Theories Keep a Foothold in the Arab Mideast – Tablet Magazine

Sunday, July 28, 2013

#UN Honors Warmonger, Bookburner, Mass-Murderer (#Che Guevara) - Humberto Fontana

The UN as shameful as ever honoring Che Guevara. These quotes give you an idea ofthe man and his hate-filled ideas:
“We reject any peaceful approach!" declared the man they honored last week in Havana. “Violence is inevitable! To establish Socialism rivers of blood must flow! If the nuclear missiles had remained (in Cuba) we would have fired them against the heart of the U.S. including New York City. The victory of socialism is well worth millions of atomic victims!”
“My nostrils dilate while savoring the acrid odor of gunpowder and blood. Crazy with fury I will stain my rifle red while slaughtering any surrendered enemy that falls in my hands! We must keep our hatred alive and fan it to paroxysm!” This passage, by the way, comes from the very works enshrined and honored by UNESCO last week. 
not far from where this UNESCO/Guevara ceremony took place, the regime being honored by UNESCO burned hundreds of books and documents ... The bonfire was accompanied by the beating and jailing of the owners and purveyors of these works. The Castroite bonfire was fueled by such works as Orwell’s Animal Farm, the works of Martin Luther King, and the UN Declaration of Human Rights.


UN Honors Warmonger, Bookburner, Mass-Murderer (Che Guevara)

At a ceremony in Havana last week, UNESCO (U.N. Educational, Scientific, and Cultural Organization) honored Che Guevara by enshrining his writings in its hallowed “Memory of the World Register.” The ceremony included several members of Ernesto “Che” Guevara’s family.
“UNESCO’s work is part of our support for freedom of expression as an inalienable human right set down in Article 19 of the Universal Declaration of Human Rights,” declares the UN’s mission statement.
But not far from where this UNESCO/Guevara ceremony took place Cubans were being starved and beaten in pestiferous torture chambers for the crime of quoting the UN Declaration of Human Rights in public.
“UNESCO is known as the intellectual agency of the United Nations while “Protecting freedom of expression: an essential condition for democracy, development and human dignity,” reads the UN charter.
But not far from where this UNESCO/Guevara ceremony took place, the regime being honored by UNESCO burned hundreds of books and documents in a ceremony only slightly less spectacular than the one hosted by Joseph Goebbels in Berlin’s Opera Square in 1933. The bonfire was accompanied by the beating and jailing of the owners and purveyors of these works. The Castroite bonfire was fueled by such works as Orwell’s Animal Farm, the works of Martin Luther King, and the UN Declaration of Human Rights.
“I plead with Fidel Castro and his government to immediately take their hands off (Cuba’s) independent librarians” pleaded none other than Ray Bradbury at the time. “And to release all those librarians in prison, and to send them back into Cuban culture to inform the people.”
Instead of heeding Bradbury, for the crime of stocking some of the world’s bestselling books, (along with the UN Declaration of Human Rights) the Stalinist regime honored by UNESCO condemned the Cuban librarians to prison terms similar to the one a South African judge handed Nelson Mandela for planting bombs in public places. “As to the disposition of the books, magazines and pamphlets they are to be destroyed by means of incineration because they lack usefulness,” ruled the Castroite “judge.”
Just last week, the UN honored Nelson Mandela with an “International Nelson Mandela Day.” The longest suffering political prisoners in modern history (all Cubans jailed and tortured by the regime honored by the UN last week) have never received so much as a nod or wink from the United Nations.
“As the United Nations agency with a specific mandate to promote 'the free flow of ideas by word and image,' UNESCO works to foster free, independent and pluralistic media in print, broadcast and online. This foundation is why UNESCO today promotes policies for press freedom and the safety of journalists,” reads the UNESCO charter.
But the regime honored by UNESCO last week also holds the honor, according to the Paris-based “Reporters Without Borders," of jailing and torturing the most journalists per-capita on earth. Stunningly, the total number of journalists jailed by the nation honored by UNESCO (pop. 11 million) is only slightly behind that of China (pop. 1.4 billion!)
“Our purpose is to contribute to peace and security by promoting international collaboration through education, science, and culture in order to further universal respect for justice, the rule of law, and human rights along with fundamental freedom,” declares the UNESCO charter.
“We reject any peaceful approach!" declared the man they honored last week in Havana. “Violence is inevitable! To establish Socialism rivers of blood must flow! If the nuclear missiles had remained (in Cuba) we would have fired them against the heart of the U.S. including New York City. The victory of socialism is well worth millions of atomic victims!”
“My nostrils dilate while savoring the acrid odor of gunpowder and blood. Crazy with fury I will stain my rifle red while slaughtering any surrendered enemy that falls in my hands! We must keep our hatred alive and fan it to paroxysm!” This passage, by the way, comes from the very works enshrined and honored by UNESCO last week.
The “acrid odor of gunpowder and blood” rarely reached Che Guevara’s nostril from actual combat. It always came from the close-range murder of bound, gagged or blindfolded men (and boys).
Rigoberto Hernandez was 17 when Che's soldiers dragged him from his cell in La Cabana, jerked his head back to gag him, and started dragging him to the stake. Little "Rigo" pleaded his innocence to the very bloody end. But his pleas were garbled and difficult to understand. His struggles while being gagged and bound to the stake were also awkward. The boy had been a janitor in a Havana high school and was mentally retarded. His single mother had pleaded his case with hysterical sobs. She had begged, beseeched and finally proven to his "prosecutors" that it was a case of mistaken identity. Her only son, a boy in such a condition, couldn't possibly have been "a CIA agent planting bombs."
"FUEGO!" and the firing squad volley shattered Rigo's little bent body as he moaned and struggled awkwardly against his bounds, blindfold and gag. “Certainly we execute!” boasted the man honored by UNESCO last week. “And we will continue executing as long as it is necessary!” Those executions (murders, actually; execution implies a judicial process) had reached about 16,000 by the time of Che Guevara’s boast, the equivalent, given the relative populations, of almost a million executions in the U.S. (This figure comes from The Black Book of Communism, by the way, written by French scholars and published in English by Harvard University Press, neither an outpost of “right-wing Cuban exiles.”)
Quite fittingly, Che’s bloodthirsty boast was made on Dec. 9, 1964, while addressing the hallowed halls of the United Nations.


UN Honors Warmonger, Bookburner, Mass-Murderer (Che Guevara) - Humberto Fontova - Page full


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Tuesday, July 9, 2013

John #Elkann: #Fiat's fresh face

Everything looking Good so Far!

John Elkann: Fiat's fresh face

ELK22 john elkann
Elkann, now 37, at the test track on the roof of Fiat's Lingotto headquarters building in Turin.
(Fortune)

"Turn that off," Sergio Marchionne says, indicating my recorder. Fair enough. He wants to show me a couple of new Chrysler TV ads on his office computer before they are released.

One is about returning war veterans, narrated by Oprah Winfrey, and the other is about farmers, starring Paul Harvey as the voice of God. Each is also about Chrysler products, of course, but the message -- maudlin but effectual -- is America. "We're the only ones who can speak about Detroit today," says Marchionne, who is the CEO of both Fiat and Chrysler. "We're the smallest of the three, and there's a level of legitimacy associated with us pitching the American story. Which is almost bizarre, because the thing is foreign-owned."
Chrysler's recent pedigree is complicated. The company was kidnapped by Daimler in 1998, sold into private equity in 2007, and bailed out by the federal government in 2008, and since then it has been sidling step by step into Fiat's fold. The Italian carmaker started buying shares after Chrysler filed for Chapter 11 bankruptcy in 2009, and by 2011 it had accumulated a majority stake. Fiat hopes to buy the remaining 41.5% from a UAW retiree trust fund, pending a Delaware court's ruling on what the stake is worth; that could happen this summer. Chrysler, you see, is actually Fiat.
But Fiat, if we keep going, is really Exor, an investment company headquartered at the historic Lingotto factory in Turin, Italy, which is where I interviewed Marchionne in a haze of cigarette smoke the day after he returned from the Detroit Auto Show. Besides owning 30% of Fiat, which itself owns Ferrari, Maserati, Lancia, Alfa Romeo, and, oddly, the Turin daily La Stampa, Exor also has big holdings in commercial real estate brokerage (Cushman & Wakefield) and heavy equipment (CNH Industrial, which includes the former Fiat Industrial), and smaller ones in property development (Almacantar), banking (Banca Leonardo), media (The Economist and Banijay Group), paper (Sequana), and the Turin soccer team Juventus. Total sales in 2012 were $146.3 billion. That puts Exor at No. 26 on this year's Fortune Global 500 list, up 19 spots from last year.
While Exor is a public company, it is tightly controlled by the descendants of Giovanni Agnelli, who co-founded Fiat (it's an acronym for Fabbrica Italiana di Automobili Torino) in 1899, built it into one of the great industrial enterprises in Europe, and so gave rise to an enduring family fortune. Exor, you see, is the Agnelli family.
The Agnelli family has one leader, a capo di famiglia. Always one, always male. It was Giovanni Agnelli until he died in 1945. He chose as his successor his grandson and namesake, the Agnelli we knew as Gianni, or l'Avvocato (a nod to his law degree, though he never practiced). Gianni in his prime was brutally handsome, indiscriminately passionate, and daring in the extreme. Born to privilege, he fought on the Russian front in World War II, collected art and automobiles and mistresses, hung out with royalty, wore his wristwatch outside his shirt sleeve, fought the unions and won, and came to personify for the world what it meant to be an Italian man in full during the raucous and glittering middle decades of the 20th century.
MORE: Fortune Global 500 - the full list
Gianni died in 2003, having left Fiat on the verge of bankruptcy. His successor -- the eldest son of his only daughter -- is a lanky, apple-cheeked, curly-haired engineer who was still a college student when the weight of the family began settling on his shoulders. The new guy has a Germanic last name, drinks tea instead of coffee, and prefers family outings to nights on the town. But as a businessman? He's still just 37, and he has held the CEO title at Exor only since 2011, but considering the good things that have happened on his watch -- the stabilization of Fiat, the successful investment in Chrysler, the reorganization of the far-flung family empire -- he could outshine his ancestors. The Agnelli family, today, is John Elkann.
"Sometimes the grandfather would say to me, 'I am sorry I ruined his youth,' " says John's father, the novelist and journalist Alain Elkann. "In the sense that when one is young, one should have more light, more fun, be less overwhelmed by responsibilities. It's one thing to create from nothing when you are young. It's another to inherit a very heavy situation."
In fact John had been preparing unknowingly for the role since he was a child. He was 5 when his parents divorced, and while he says he doesn't remember the breakup, he remembers well the bitterness and recrimination between his parents that endured long after. "Because he was the oldest, he took unpleasant things," says his brother, Lapo. "He had to toughen up in certain areas which are more emotional, and he had to do it young." He was "the most serious of all of us," says his sister, Ginevra, noting it was John who reminded them all to brush their teeth, John whose bed they came to in the night when they were scared, and John who, when the kids made a home movie, chose for his costume a suit and tie.
John Philip Jacob Elkann (he's "Jaki" in the family) was born in New York City and raised like a diplomat's child in London, Rio de Janeiro, and Paris. He speaks the languages of all those places, plus a little Russian; his Italian, natives say, is fine, but his sentence construction sometimes sounds a little off, as if he were translating from French. Vacations were often spent in Italy with his grandparents on both sides of the family. When it came time to go to college, he chose to return to the country that to him felt most like home. Gianni nudged him to study economics at Bocconi in Milan, but Elkann opted instead for engineering at the elite Politecnico di Torino. Because "engineering was tougher," Elkann says. "It just felt more challenging."
MORE: 25 most profitable companies in the world
Being in Turin also meant more opportunities to spend time with his grandfather Gianni. They met often for meals and long conversations about business. Slowly, says Elkann, the outlines of a future somewhere within the family firm began to take shape. Yet he was in no way prepared for the brief conversation that took place at Villa Frescot, the Agnelli family home in the pine-clad hills overlooking Turin, when he was 21.
An older Agnelli cousin, who was being groomed for the capo position, had died suddenly, leaving a board seat open at Fiat. After lunch that day, Elkann recalls, his grandfather said, " 'I'm thinking about the appointment on the board, and I think it should be you.' I wasn't expecting that. I asked him, 'Do you think it makes sense?' "
Reasonable question. In certain photographs of Gianni as a young man one can see clearly that the grandfather and the grandson are descended from the same line. Yet their personalities could hardly be more different. Gianni was devilish and splashy; Elkann, by temperament and appearance, is almost cherubic. He is invariably described as shy.
Having recently spent a fair amount of time with Elkann -- for a series of formal interviews in New York and Turin, at lunch with his kids at the Eataly restaurant across the street from the Lingotto headquarters, on a flight from Turin to Rome aboard the company jet, and during a visit to the studios of Chinese dissident artist Ai Weiwei in Beijing -- I don't think "shy" is the right word. Not for a billionaire industrialist who wears excellent suits, enjoys ocean yachting and small, fast cars ("not absolute speed, more acceleration"), is married to a contessa, and named his three offspring Leone, which means lion, Oceano (ocean), and Vita (life).
That said, most men of Elkann's wealth and standing whom I've ever been around seem to move through the world as if the camera were always rolling. Elkann, who has a sometimes disconcerting habit of staring intently at people, behaves more as if he's watching the movie. Gianni always took the wheel; Elkann, when he's working, is content to be driven. If the car is full, he'll squeeze into whatever seat is available, even the middle one in the back. Once, after a visit to Grugliasco, the new Maserati assembly plant near Turin, he insisted that I take the keys to the Quattroporte from his very reluctant bodyguard and drive us all back to Lingotto.
MORE: Gianni Agnelli - a tough act to follow
Elkann's innate deference, his "Talmudic" way, as his Jewish father describes it, of avoiding direct contradiction, and his willingness to ask questions -- all that gave him space to grow within the family incubator. "Everyone was wanting to be helpful," says Elkann, who was guided closely in those early days by the family's longtime consigliere, Gianluigi Gabetti. "Again, I was very young. I was not a threat to anyone, which clearly helped. If I was 40 years old, maybe the dynamics, the chemistry, would have been different."
Gianni Agnelli died in January 2003, followed 16 months later, after a brief illness, by his younger brother Umberto. Suddenly Elkann was the last one standing. His apprenticeship, which had included a summer working incognito at a headlight factory in Birmingham, England, and a world tour with GE's elite Corporate Audit Staff, was over. "Were we worried that he was too young at that time? Probably," says family member Lupo Rattazzi. "We were coming from a very traumatic period. He inherited a Fiat that was essentially broke. The challenges ahead were absolutely staggering."
The family's flagship was adrift. Two significant capital infusions had failed to make things right. Fiat was hemorrhaging $2 million a day, the stock was plummeting, and the banks, which owned more than $3 billion in convertible debt, were circling.
While the Agnelli business dynasty had always had a family head, the companies within it, including Fiat, had sometimes had outside CEOs. When Umberto died, Fiat's CEO was a man named Giuseppe Morchio. He pushed the board to make him chairman as well. Most in the family believed that Morchio was doing a good job in difficult circumstances, but they were loath to assign total control to one outsider. Fearing Morchio might quit if he didn't get what he wanted, Elkann flew to Geneva for a secret meeting with Marchionne.
MORE: Fiat cars through the ages
Marchionne at the time was CEO of SGS, a Swiss company controlled by Exor. He had been appointed to Fiat's board a year and a half earlier, but the fact is, he was running a company that tests toasters and baby toys. "I had never made a car or a tractor," he says now. "I really didn't know shit."
They ate at Marchionne's favorite Geneva restaurant, Windows in Hotel d'Angleterre, overlooking the lake, and afterward, when the evening had reached the grappa stage and Elkann, who normally doesn't smoke, was matching Marchionne light for light, Elkann humbly asked Marchionne for his help: If Morchio were to quit, would Marchionne consider becoming Fiat's next CEO?
"I sincerely hope you don't need me," he told Elkann.
At seven the next morning, Marchionne says, he got a call from Gabetti, the family consigliere. "He said, 'I know you saw the young man last night,' " Marchionne recalls, " 'but he was speaking on behalf of the family.' " Marchionne agreed to go forward. When the board chose a new chairman -- Fiat veteran (and current Ferrari chairman) Luca Cordero di Montezemolo -- Morchio quit; two days later, Marchionne took over as CEO. While initially few outside the family took Marchionne seriously (he is still seething about the "patronizing look" he got the first time he met the GM (GM, Fortune 500) CEO Rick Wagoner), his appointment marked the beginning of the turnaround at Fiat, and ultimately at Chrysler, and counts as the first big win in Elkann's column.
On Jan. 24, 2013, the Agnelli clan gathered at Turin Cathedral for a ceremony marking the 10th anniversary of Gianni's death. The president of Italy, Giorgio Napolitano, attended, together with cabinet members, bankers, industrialists, the American ambassador, what seemed like the entire Juventus soccer team, and seven full rows of family members. Ordinary Torinesi packed the pews and spilled over into the piazza outdoors. The archbishop of Turin read a missive from the Pope.
MORE: 10 Non-native CEOs in the Global 500
Elkann sat right up front -- with his wife, Livinia, their two boys (the 1-year-old girl stayed home), and Gianni's widow, Marella. On the day of the funeral, 10 years before, many recalled, the skies over the city had been leaden. The gloom then seemed to capture the family's sadness at the passing of an era and its worry about the future.
Today, appropriately, the skies were blue. While the results would not be reported for another week, Elkann already knew that Fiat had just concluded one of its most successful years ever, thanks entirely to surging profits at Chrysler. The auto group's net earnings in 2012 were $1.86 billion; without Chrysler, it would have lost $1.38 billion. "I felt it was an opportunity," Elkann says of the decision to begin buying Chrysler in 2009. "I didn't feel it was going to be such a game changer."
Buried in the Fiat results was fresh evidence of just how dramatic a transformation Elkann has overseen as the family business tilts increasingly toward global markets. A decade ago Italy accounted for almost half of sales by Fiat and its subsidiary brands; today it's less than 10%. That's due largely to Chrysler's positive contribution, but also to surging sales in Brazil, and the negative impact of the collapsed car market across Europe. Sales of all brands in Italy last year dipped to levels last seen in 1979.
The same global shift is taking place more broadly at Exor: Ten years ago three-quarters of Exor's revenues came from Europe; today it's less than one-third. Exor's biggest market now is the U.S., followed by Brazil, Europe, and Asia. That's why Exor measures its performance against the MSCI World Index, a benchmark it outperformed by more than nine percentage points in 2012 as net asset value surged 20.6%, to $10.04 billion.
MORE: 11 disappearing car features
Managing that transition has been as tricky a political feat as a business challenge. Fiat isn't just any other company; it's close to the core of Italy's national identity. The turnout for Gianni's anniversary service was just the latest reminder of that. Another was the time the unions first learned that Fiat and Chrysler were combining and demanded a fuller explanation. Marchionne and Elkann were called to Rome for a meeting with Italy's Prime Minister.
Fiat at its peak employed 300,000 factory workers in Italy; today only 62,000 remain. That number includes 950 workers recently rehired at Grugliasco to build the sixth-generation Maserati Quattroporte -- part of Elkann's strategy to redeploy production assets in Italy to build luxury cars for export. "The opportunity of doing that car, if we weren't present in global markets, would not happen there," says Elkann, and he goes further: Were it not for those global markets, "the company would have been bankrupt."
Last month Exor sold its considerable stake in SGS to a Belgian company, Groupe Bruxelles Lambert, for $2.6 billion. The sale converts an additional 20% of Exor's net asset value to cash, leaving the company with a war chest of nearly $4 billion. Most press reports have speculated that Exor will use the money to buy the rest of Chrysler, but the company has more than it needs for that.
So here is Elkann: still a young man, with the backing of his clan, sitting on a huge pile of cash at a moment when assets the world over are in distress. Expect him to make a big move soon -- the next act in a family drama that has been playing on the world stage for more than 100 years.
This story is from the July 22, 2013 issue of Fortune. To top of page
First Published: July 8, 2013: 6:45 AM ET

Friday, June 7, 2013

#African #bonds: Handle with care


Africa's bond rush: Handle with care

African governments must use bond revenues to address critical growth constraints, while global conditions are in their favour.
Sub-Saharan Africa has a $7bn potential bond pipeline in 2013. Zambia and Rwanda recently issued heavily over-subscribed bonds, and analysts anticipate issuances from Nigeria, Angola, Ghana (its second), Kenya and Zambia (again). Tanzania has hired a rating adviser as a precursor to a bond issuance in due course, with Mozambique an outside bet.
This is only partly a response to the continent's robust growth. Low yields elsewhere (especially in the eurozone and the US) - as well as excess global liquidity due to quantitative easing - are the global trends pushing bond-hunters to Africa. "There is a lot of excess liquidity internationally and some of that is being used to buy high-yielding assets in Africa," says Mason Cranswick, director of fixed income credit at Credit Suisse.
So the current window of opportunity will not last forever, meaning funds raised must be used by African governments to address critical growth bottlenecks such as infrastructure; highlighted by both recent issuers as an investment priority. "Once liquidity starts drying up, there is a risk that some of the funds will be pulled from Africa. But I think if we keep our momentum we can still attract that capital," says Mr Cranswick. "If we can keep up with the infrastructure, I think we can stay attractive with the rest of the world."
While government bonds could help address Africa's enormous infrastructure deficit, it is no magic bullet. "The binding constraint is debt sustainability issues around these countries," says Mthuli Ncube, chief economist for the African Development Bank. Rwanda could not go much further than $430m, he says. Regional infrastructure bonds can supplement government's efforts, and innovative moves - such as Ethiopia's diaspora bond to raise funds for the Renaissance Dam - can also help. But in the longer term, says Mr Ncube, "what is needed is a deepening of domestic capital markets. That is a process that requires an incredible sequence of reforms.”



http://www.thisisafricaonline.com/Analysis/Africa-s-bond-rush-Handle-with-care

The MasterMetals Blog

Tuesday, March 19, 2013

Monarch in the Middle - #Jordan -Jeffrey Goldberg - The Atlantic

It is still, on occasion, good to be the king.It is not necessarily good to be the king of a Middle Eastern country that is bereft of oil; nor is it necessarily so wonderful to be the king during the turmoil and uncertainty of the Arab Spring. It is certainly not good to be the king when the mystique that once enveloped your throne is evaporating.


Monarch in the Middle - Jeffrey Goldberg - The Atlantic


It is still, on occasion, good to be the king.
It is not necessarily good to be the king of a Middle Eastern country that is bereft of oil; nor is it necessarily so wonderful to be the king during the turmoil and uncertainty of the Arab Spring. It is certainly not good to be the king when the mystique that once enveloped your throne is evaporating.
But when a squadron of Black Hawk helicopters is reserved for your use, and when you are the type of king who finds release from the pressures of monarchy by piloting those Black Hawks up and down the length of your sand-covered kingdom—then it is still good to be the king.
One morning last fall, Abdullah II bin Al-Hussein, the fourth Hashemite king of Jordan, rolled up to a helipad situated close to the royal office complex in Al Hummar, on the western edge of the capital, Amman. He stepped out of an armored Mercedes—he drove himself, and drove fast, like he was being chased—and hustled to one of his Black Hawks. The king, who as a young prince served as a commander in the Royal Jordanian special forces, climbed into the pilot’s seat, talked for a moment with his co‑pilot, a trusted member of the Royal Squadron, and lifted off, pointing us in the direction of the rough, unhappy city of Karak, about 80 miles to the south. A second Black Hawk, filled with bodyguards, lifted off a moment later.
The king was flying himself to Karak, which is one of the poorer cities in a distressingly poor country, to have lunch with the leaders of Jordan’s largest tribes, which form the spine of Jordan’s military and political elite. More than half of all Jordanians are of Palestinian origin, with roots on the West Bank of the Jordan River, but the tribal leaders are from the East Bank, and the Hashemite kings have depended on East Bankers to defend the throne since the Hashemites first came to what was then called Transjordan from Mecca almost 100 years ago. This relationship has a coldly transactional quality: in exchange for their support of the royal court, the leaders of the eastern tribes expect the Hashemites to protect their privileges, and to limit the power of the Palestinians. When the Hashemites appear insufficiently attentive, problems inevitably follow.
Earlier that day, in his private office in Al Hummar, which overlooks the wealthy neighborhoods of West Amman, the king had explained to me the reason for the trip to Karak: he was trying, in advance of parliamentary elections in January, to instruct these tribal leaders on the importance of representative democracy. He wanted, he said, to see Jordanians build political parties that would not simply function as patronage mills but would advance ideas from across a broad ideological spectrum, and thus establish for Jordan a mature political culture. He said he would like to see Palestinians more proportionately represented in parliament. And he would like to do all this, he explained, without allowing the Muslim Brotherhood—a “Masonic cult” (as he describes it) that today controls the most formidable political organization in Jordan, the Islamic Action Front—to hijack the cause of democratic reform in the name of Islam. In other words, the king wants to bring political reform to Jordan, and to cede some of his power to the people—but only to the right people.
It was obvious to me that King Abdullah was looking forward to flying his helicopter—but not so much to the meeting that awaited him in Karak. “I’m sitting with the old dinosaurs today,” he told me.
The men he would be meeting—a former prime minister among them—were leaders of the National Current Party, which had the support of many East Bankers of the south, and which would almost certainly control a substantial bloc of seats in the next parliament. What the party stood for, however, beyond patronage and the status quo, was not entirely clear, even to the king. Shortly after the eruption of the Arab Spring, the king told me, he met with Abdul Hadi al-Majali, the leader of the party. “I read your economic and social manifesto, and it scared the crap out of me,” the king said he told Majali. “This makes no sense whatsoever. If you’re going to reach out to the 70 percent of the population that is younger than me, you’ve got to work on this.” The party manifesto, the king told me, “didn’t have anything. It was slogans. There was no program. Nothing.” He went on, “It’s all about ‘I’ll vote for this guy because I’m in his tribe.’ I want this guy to develop a program that at least people will begin to understand.”

A Visit to the Banks of Jordan. by the Ed. of 'The Parting Gift'. by S (Google Affiliate Ad)

The king landed his helicopter on a soccer field on the outskirts of Karak. The tribal leaders, many of whom had served Abdullah’s father, the late King Hussein, were lined up to greet the king as his motorcade traveled the short distance from the improvised landing pad to a large meeting hall. There were kisses and handshakes and protestations of loyalty to the throne, followed by a lunch of mansaf, lamb cooked in fermented yogurt. Although mansaf is usually eaten with the right hand, the left hand placed behind the back, forks were distributed in a concession to modernity. Still, the meal was eaten standing up around a long, narrow table, in the Bedouin tradition.
Then the business of the afternoon was conducted. The 30 or so men (and one woman, a daughter of one of the tribal leaders) sat on couches against the walls. Tea was served. The king made a short plea for economic reform and for expanding political participation, and then the floor was opened. Leader after leader—many of whom were extremely old, many of whom merely had the appearance of being old—made small-bore requests and complaints. One of the men proposed an idea for the king’s consideration: “In the old days, we had night watchmen in the towns. They would be given sticks. The government should bring this back. It would be for security, and it would create more jobs for the young men.”
I was seated directly across the room from the king, and I caught his attention for a moment; he gave me a brief, wide-eyed look. He was interested in high-tech innovation, and in girls’ education, and in trimming the overstuffed government payroll. A jobs plan focused on men with sticks was not his idea of effective economic reform.
As we were leaving Karak a little while later, I asked him about the men-with-sticks idea. “There’s a lot of work to do,” he said, with fatigue in his voice.
We boarded the Black Hawk and took off. I was seated behind the king. He asked me whether I wanted to make a detour: “Have you ever seen Mount Nebo from the air?” He flew northwest, toward the mountain from which, the Bible tells us, God showed Moses the Land of Israel. The Dead Sea shimmered just beyond. I suggested a quick detour to Jerusalem, which was 30 miles away. “The cousins like to have more warning,” one of his aides said with a smirk. “The cousins” are the Israelis.
The king seemed to be in no rush to return to Amman. As we approached Mount Nebo, we passed over the ruins of the ancient fortress of Machaerus, which was built by the Hasmoneans, and then rebuilt and enlarged by King Herod the Great in 30 B.C. Machaerus is where Herod’s son, Herod Antipas, is said to have delivered to Salome the head of John the Baptist.
“That Herod,” Abdullah said. “Quite a character.” I wasn’t clear on which Herod he meant, father or son, but no matter. Each one had his idiosyncrasies. “Not a role model for you?,” I asked.
“No,” he said. “I have different role models.”

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