The World Weekly - Week 49 - 2012

April 1819. François Constantin takes responsibility for the worldwide business expansion of Vacheron Constantin. During a business trip to Italy, this visionary man coined the phrase which would become the company motto in a letter addressed to the manufacture: “…do better if possible, and that is always possible …”.

www.vacheron-constantin.com

True to this motto and to the spirit that forged its history, Vacheron Constantin still remains committed to pushing the boundaries of watchmaking in order to provide its clients with the highest standards of technology, aesthetics and finish.

Patrimony Contemporaine Perpetual Calendar Hallmark of Geneva, pink-gold case, ultra-slim mechanical movement with automatic winding, calibre 1120 QP, moon phases.

Reference: 43175/000R -9687

49/52 LETTER FROM THE EDITOR

The unfinished revolution

Editor-in-Chief James Geary Art Director John Bowling Senior Editors Karen Bartlett Peter Guest Writer/Reporters Zach Brown Frances Perraudin Designers Enrico Buratto Cath Levett (infographics) Researchers Sílvia Amaro Pauline Bock Greg Walton

THE PICTURE P.06 Holy waters: A Roma baptism helps heal a rift INFOGRAPHIC P.08 Show me the money: International current account deficits GOOD NEWS P.10 Life on Mars and a good week for solar power WORLD VIEW P.12 A year of extremes: The cost of climate change Greek far-right party, Golden Dawn, is gaining popularity

DIGEST P.15 The right’s might: The rise of Greece’s Golden Dawn The trial of Radovan Karadzic: Questions for Peter Robinson U.S. border reinforcement hits Arizona businesses Ramadan Shallah predicts more violence in Gaza A fence to keep the rain in: Kenya’s climate change solution Failure to launch: One year since the death of Kim Jong-il DOSSIER P.22 The unfinished revolution: Two years on from the Arab Spring BUSINESS P.30 Building the Palestinian brand—with beer The vultures circle Argentina’s debt Hard cash: Will the U.S. turn to dollar coins?

Market reforms have opened up Havana to U.S. home buyers

Chairman Roland Rudd Managing Director Rory O’Grady Operations Manager Philip Olivier Senior Advisors Nick Edgley Fiona Sanderson Sales Director Christian Morrow Distribution managers Mario Gaito Heloise Delegue Oliver Morgan (GKM) Printed by Headley Brothers

CULTURE Émigrés find a home in Havana Mogadishu’s million-dollar mansions Where Hong Kong people park their money A musical memorial to Japan’s tsunami victims

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NEXT WEEK’S NEWS P.38 Japan calls a snap election – again Nuclear watchdog officials pay Iran a visit Front cover photo: An Egyptian holds a banner against President Mohamed Morsi, comparing him with Hosni Mubarak. Photo: Mohamed Abd El Ghany/Reuters.

Small photos: KCNA/Reuters, Enrique Calvo/Reuters, KYODO The World Weekly | DECEMBER 06 2012 | 05

Rubens Abboud/Alamy, Yorgos Karahalis/Reuters (TOP)

On Dec. 17, 2010, a street vendor named Mohamed Bouazizi set himself on fire in the town of Sidi Bouzid, Tunisia, igniting the social and political uprisings that became the Arab Spring. Two years later, the conflagrations that spread across the Middle East are far from over; indeed, in Egypt, protestors are back on the street, denouncing what they see as President Mohamed Morsi’s attempt to grant himself the kind of dictatorial powers once enjoyed by ousted autocrat Hosni Mubarak.

Throughout the region—in Yemen, Jordan, Syria, Qatar and in Tunisia itself, where the Arab Spring started—upheaval is the norm, with people often intent on achieving contradictory goals: a more secular state versus a stricter adherence to religious rule, political and economic reform versus maintenance of an authoritarian status quo. This week’s cover Dossier chronicles the state of the Arab Spring, two years on.

This is just the second issue of The World Weekly but our stories on the Middle East are an excellent example of what we strive to achieve every week. Through original journalism, as well as through curation of syndicated content from a wide selection of international sources, we hope to highlight the different points of view that exist around crucial social, political and economic issues. We provide a unique international perspective on the news by sourcing articles from Europe, the Americas, the Middle East, Africa and Asia and through infographics like our World View map, which tracks how a single topic (this week it’s climate change) is playing itself out around the world.

In this way, we aim to foster a more diverse and representative debate about the most urgent questions of the day. One of those questions is being asked right now in the Middle East. How the Arab Spring nations answer it will affect us all.

Look for The World Weekly on Thursdays in leading corporate venues and transport hubs around London. And tell us what you think at editorial@theworldweekly.com.

James Geary, editor-in-chief

THE PICTURE

Waters of life Slobozia, Romania

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he Roma, Europe’s largest ethnic minority, have a difficult history. The nomadic tribe’s presence on the continent stretches back a thousand years to its arrival from India. In Romania, the Roma lived in slavery until the mid-19th century. Following emancipation, Romani numbers gradually increased, with around a fifth of Europe’s

when then French President Nicolas Sarkozy expelled thousands of Romani migrants, most of whom were Romanian citizens. Back in Romania, a local mayor’s plan to wall off an entire Romani housing area led to accusations of ghettoization, while instances of underage marriage within Romani communities have provoked outrage.

There are attempts to heal the rift. At this ceremony, non-Roma Romanians from the local community were chosen as godparents.

Bogdan Cristel/REUTERS

estimated 10 million Roma living in the country. Here, in Slobozia, roughly 80 miles east of Bucharest, an Orthodox priest blesses a Romani baby during a baptism ceremony.

Integration for the Roma has not been easy. Despite European Union efforts, Romani communities remain marginalized, living in poor conditions with little access to education and healthcare.

Debate over the treatment of Roma in Europe erupted two years ago,

The World Weekly | DECEMBER 06 2012 | 07

Show me the money GERMANY $183 b

ONE CUBE = $1 b

Some economists argue that when Germany joined the euro its currency was undervalued, allowing it to accrue a large current account surplus

RUSSIA $102 b JAPAN $95 b

Russia’s large surplus is linked to high oil prices.

The country is the second largest oil exporter in the world

Japan’s economy is currently on the brink of recession

LIBYA $19 b

IRELAND $4 b

After Libya’s revolution, gas and oil exports generated a significant surplus

After years of austerity, Ireland now has a small surplus

CHINA $191 b China has the biggest surplus in the world. Some see this as proof that the country’s currency is undervalued

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FRANCE -$45 b U.K. -$81 b The U.K. reached its largest current account deficit on record in the second quarter of 2012

U.S. -$487 b BRAZIL -$62 b Brazil has the biggest deficit in Latin America and the eighth highest number of millionaires in the world

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ust when you thought things in the euro zone couldn’t get worse, the single currency area has entered another recession, fears over the French economy are rising, and even in Germany growth is sliding perilously close to zero. The austerity medicine many countries took to cure them of their debt addictions has, in some cases, made their conditions worse. In the U.S., President Obama and Congress seem ready to throw themselves over the “fiscal cliff,” a package of mandatory

08 | The World Weekly | DECEMBER 06 2012

The U.S. has the biggest deficit in the world. The U.S.’s trade deficit with China is the largest that any country has ever had

spending cuts and tax increases that could help reduce the deficit but also potentially push America, too, into recession. To avoid that means spending to grow, which means raising the debt ceiling (again), which means borrowing from China (again). The ability of China, and to a lesser extent Germany, to backstop their struggling peers is illustrated above. As 2012 comes to a close, these current account balance figures show where the money— and the power—may lie next year.

ILLUSTRATION: Cath Levett, SOURCE: IMF

France has been warned by the IMF that it risks falling behind Spain and Italy if it does not reform its economy

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Mouse in the House/Alamy

GOOD NEWS

Best thing since sliced bread Scientists at American firm Microzap claim to have developed a technique that uses microwave technology to kill bacteria and stop bread going moldy for up to 60 days.

Frances Perraudin The world weekly

Things are looking up for solar

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he question of whether other planets can sustain life has preoccupied scientists for generations. A new study from the Desert Research Institute in Nevada may have brought us one small step closer to an answer. Polar researchers have discovered life forms in an Antarctic lake that is 13 degrees below freezing, pitch dark, seven times saltier than the sea and buried beneath 20 meters of thick ice.

Lake Vida in East Antarctica, which hasn’t been exposed to the earth’s atmosphere for nearly 3,000 years, is home to microbes from eight major bacterial groups. The discovery has excited scientists studying the possibility of extraterrestrial life, as conditions in the lake are similar to those on Mars and other planets in the solar system. The researchers believe the lake holds vital information about the ability of life forms to develop in the absence of oxygen, carbon dioxide and sunlight. “This provides us with new boundary conditions on the limits for life,” says Peter Doran, principal researcher with the Lake Vida project.

Researchers are trying to work out how the life forms get their energy. The current theory is that chemical reactions between the brine and the underlying sediment generate nitrous oxide and molecular hydrogen, which could provide the energy needed to sustain life. “If that’s the case,” says Alison Murray, a co-author of the study, “this gives us an entirely new framework for thinking of how life can be supported in cryoecosystems [ecosystems found in ice].”

Crime takes a holiday

Facebook friends

hether it’s due to Hollywood films, or gritty reality, New York City isn’t known around the world as a peaceful place. But, according to the city’s police department, November 26th was the first day on record when no violent crime was reported.

July saw a short, sharp spike in the homicide rate which New Yorkers took to calling ‘the summer of blood’, but overall the city’s crime rate has actually improved steadily since 1990. Criminologists and police officials were, however, quick to point out that it was highly unlikely that no violent crime was committed, even if none was reported.

he use of Facebook and Twitter to spread insults has been highly publicized. But some north American colleges are using social networking for a good cause. Queen’s University in Ontario was the first to set up a compliments page on Facebook. A student can send a compliment to the page’s inbox and the message will be posted, anonymously or with their name, on the compliments wall. The idea has been picked up by colleges across Canada and the U.S. One message on the Penn State compliments Facebook page reads: “You are a wonderful, b-e-a-utiful person who is great at o-chem and bio and all that nonsense.”

Brendan McDermid/Reuters

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The Solar Sandy project, a coalition of three sustainable energy organizations, has deployed mobile solar generators across the city to provide residents with temporary electricity. In the storm’s aftermath, the misuse of gas-powered generators caused a series of fires and, during the worst of the hurricane, renewable energy sources remained the most robust. Solar Sandy project backers argue this highlights the need for clean energy.

Meanwhile, according to Denmark’s Ministry of Foreign Affairs, the country is to reach its 2020 solar energy target of a 200 megawatt capacity by the end of 2012, eight years earlier than planned. Currently, 22 percent of Denmark’s energy comes from renewables. Earlier this year, the government set a target to get all of its energy from environmentally friendly sources by 2050.

“Denmark benefits from a strong design tradition and this also characterizes the Danish solar sector, in which aesthetics and thinking ahead of user needs is a central part of product development,” said project manager Kim Schultz from Invest in Denmark, part of the Ministry of Foreign Affairs.

“This means that solar solutions are more likely to meet consumers’ demands.”

Whereas Denmark is ahead of the crowd in terms of green energy, Qatar is only just getting started. The gas-rich country, not well known for its commitment to clean energy, aims to raise its share of solar energy to 16 percent by 2018. Qatar is currently the world’s biggest exporter of liquefied natural gas and has the highest per capita greenhouse gas emissions.

imagebroker/Alamy

Stocktrek Images/Alamy

hen hurricane Sandy hit the east coast of America on October 30, it left millions of people without power. More than a month later, approximately 800 apartment buildings in New York City are still in need of an electricity supply. But solar power has come to the rescue in New York—and it’s making headway in other parts of the world, too.

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The cost of climate change WORLD VIEW

Climate change has largely dropped off the political agenda, but extreme weather events are wreaking havoc around the world

U.S.

ARCTIC

Droughts parched some 80 percent of agricultural land and 1,700 regions were declared natural disaster areas

Arctic sea-ice retreated to less than 1.4 million square miles. It is now less than half the size it was 50 years ago

GREENLAND Ice sheets are melting five times faster than they were 20 years ago, shrinking by 263 billion tons annually

NEW YORK Superstorm Sandy wreaked havoc in New York and New Jersey, leaving 125 dead

ATLANTIC A record high of 19 storms, 10 of which became hurricanes, raged for the third year in a row

CARIBBEAN Sandy left a trail of destruction, 71 dead and repair costs of $315 billion

BRAZIL

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he Doha Climate Change Conference has attracted little attention—and is expected to achieve even less. Not a single G8 leader showed up in Qatar. And the press seems to be paying less attention, too. In 2007, for example, three major U.S. networks ran 147 stories on climate change; in 2011, they ran just 14. That’s too bad, since recent extreme weather events suggest climate change could be speeding up. The first 10 months of 2012 were the warmest on record; in the U.K., they were also the wettest. There were floods across Europe, freak weather occurrences throughout Asia and Africa, and devastating droughts in Russia and the U.S., which sent global food prices soaring.

The journal Science reports that ice sheets in Greenland and the Antarctic are melting faster than ever. The European Space Agency says the summer Arctic could be open sea within a decade. All this comes as the U.S. is still counting the financial cost of superstorm Sandy: The latest estimates from New York and New Jersey put the figure at over $71 billion. Speaking to The Guardian about the Doha summit, Achim Steiner, executive director of the U.N. Environment Program, said, “I don’t see enough of a sense of urgency. We do not have time to waste.”

12 | The World Weekly | december 06 2012

Eight people died and 13,000 were evacuated after unusually heavy rain in January

NIGERIA The worst floods in 50 years left 150 dead and 60,000 homeless

WEST AFRICA Ten years of repeated droughts have left 19 million people affected by food shortages

EUROPE A cold wave caused over 300 deaths and hundreds of millions of dollars in damage

$18 b

The amount droughts are predicted to cost the global economy by 2030

$94 b

The amount floods and landslides are predicted to cost the global economy by 2030

$100 b The amount storms are predicted to cost the global economy by 2030*

RUSSIA Drought destroyed swathes of agricultural land, causing a 50 percent jump in the price of wheat

CHINA Intense rain in June flooded 50,000 hectares of farmland and five million people were evacuated from their homes

INDIA

HORN OF AFRICA This year’s rain has been late in some areas, so aid agencies are preparing for a repeat of last year’s crippling drought

Rainfall was 10 percent lower than average, leading to increased food prices and fears over food security

ANTARTIC Dwindling ice sheets in the Western Antarctic have contributed to rising sea levels, which have increased 11 mm in the last two decades

* Source: DARA International ILLUSTRATION: Cath Levett

The World Weekly | december 06 2012 | 13

YORGOS KARAHALIS / REUTERS

DIGEST EUROPE

The right’s might Greece’s economic crisis has helped far-right group Golden Dawn become a credible political force REUTERS Dina Kyriakidou, ATHENS

Wearing a ‘Golden Dawn’ T-shirt, a supporter of Greece’s extreme right party distributes packs of pasta in Syntagma Square in Athens

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rm raised in a Nazi-style salute, the leader of Greece’s fastest-rising political party surveyed hundreds of young men in black T-shirts as they exploded into cheers. Their battle cry reverberated through the night: Blood! Honor! Golden Dawn! “We may sometimes raise our hand this way, but these hands are clean, not dirty. They haven’t stolen,” shouted Nikolaos Mihaloliakos as he stood, floodlit, in front of about 2,000 diehard party followers filling an open-air amphitheater at Goudi Park, a former military camp near Athens.

“We were dozens, then a few hundred. Now we’re thousands and it’s only the beginning,” cried the leader of Golden Dawn, a far-right party that is seeing its support soar amid Greece’s economic collapse. Riding a wave of public anger at corrupt politicians, austerity and illegal immigration, Golden Dawn’s popularity has doubled in a few months. A survey by VPRC, an independent polling company, put the party’s support at 14 percent in October, compared with the seven percent it won in June’s election.

Political analysts see no immediate halt to its

meteoric ascent. They warn that Golden Dawn, which denies being neo-Nazi despite openly adopting similar ideology and symbols, may lure as many as one in three Greek voters. The party now lies third in the polls, behind conservative New Democracy and the main opposition, the radical leftist Syriza. Violent behavior by Golden Dawn members, who often stroll through run-down Athens neighborhoods harassing immigrants, seems to boost rather than hurt the party’s standing.

The possibility that Golden Dawn could capture second place in a snap election is slim but real, say pollsters. Analysts believe that, ultimately, the party lacks the broad appeal and structure needed to gain mass traction. In World War II Greece suffered massacres and famine in its fight against the Nazis, and the specter of the 1967-1974 military junta still hangs heavy over modern politics.

Short, squat and combative, Mihaloliakos once praised Hitler and denied the Nazi gas chambers existed. A former special forces commando in the Greek army, he met the leaders of the Greek military junta while in prison for carrying illegal weapons and explosives as a member of a far-right group in 1979.

When pressed on such issues, Golden Dawn says they are all in the past and it is looking to the future.

For years after Mihaloliakos founded the party in 1985 it remained marginal. In the 2009 elections, Golden Dawn won just 0.29 percent of the vote, or fewer than 20,000 votes. Yet in June, the party amassed votes from across the political spectrum, wiping out the more moderate nationalist LAOS party The World Weekly | december 06 2012 | 15

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DIGEST EUROPE

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and winning support from as far left as the communist KKE party, pollsters said. Now it is stealing votes from New Democracy, which flip-flopped on the international bailout keeping Greece afloat and, after coming to power, imposed harsh cuts instead of relief measures. Though Golden Dawn attracts mainly urban male voters up to 35 years old, the party is also gaining its share of women and the elderly, primarily those suffering unemployment or falling living standards.

Part of its appeal is down to the sort of welfare work that Hamas, the Palestinian party, does in Gaza.

Golden Dawn distributes food in poor neighborhoods, helps old ladies get money safely from ATMs, and has also set up a Greeks-only blood bank.

“I voted for Golden Dawn for the first time in June and I will vote for them again because they are the only ones who really care about Greece,” said 45-yearold Demetra, an unemployed Athenian, as she walked through the party’s rally at Goudi Park. “All the other politicians have sold us out.”

In parliament Golden Dawn’s 18 lawmakers cluster in a rear corner of the marble-covered hall, but make no attempt to hide their ideology. Parliamentarian Eleni Zaroulia, wife of party leader Mihaloliakos, described

POINTS

Thirteen of the 17 governments in the euro zone have collapsed or been replaced since the economic crisis began.

Unemployment in the euro zone hit a record high of 11.7 percent in November, according to the E.U. statistics service.

immigrants as “every sort of sub-human who invades our country carrying all sorts of diseases.”

The United Nations High Commissioner for Refugees (UNHCR) and other groups recorded 87 racist attacks in the first nine months of the year. “This is not even the tip of the iceberg. There are even more attacks that are not recorded,” said Daphne Kapetanaki of the UNHCR. Golden Dawn strongly denies any involvement in racist attacks. Several of its members have been detained in relation to such assaults, but have been released for lack of evidence.

With more than one million foreign nationals in Greece, a country of 11 million people, tensions are unlikely to ease any time soon. Ilias Panagiotaros, the party spokesman, said he and his colleagues would even be ready for the top spot. The party’s priorities for government, he said, would include eradicating corruption and jump-starting the economy, but most importantly closing the borders and expelling all illegal immigrants. “We will seal the borders but do it properly, not the nonsense they are doing now.

Then we will immediately deport all illegals,” he said.

“Although, when we come to power, they’ll leave by themselves.”

An end to impunity Radovan Karadzic’s legal advisor says his client is “not benefitting from the presumption of innocence”

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POINTS

Peter Robinson is an American lawyer and a legal adviser to the former Bosnian Serb President Radovan Karadzic.

Robinson has also served as a defense counsel at the International Criminal Tribunal for Rwanda.

PETER GUEST THE WORLD WEEKLY

16 | The World Weekly | december 06 2012

ormer Bosnian Serb leader Radovan Karadzic’s trial for war crimes against humanity began in October. Karadzic was indicted on a total of 11 counts, including two of genocide, and stands accused of ordering the deaths of thousands of Muslims and the ethnic cleansing of non-Serbs from Bosnia during the violent breakup of the former Yugoslavia in the 1990s.

Former Kosovan prime minister Ramush Haradinaj was acquitted of war crimes charges in November, with two of his associates. The acquittal has been criticized

by Serbian nationalists, who say that the International Criminal Tribunal for the Former Yugoslavia and its successor, the International Criminal Court, are biased toward Western-backed Kosovan leaders.

Are defendants genuinely getting a fair trial in high profile war crimes cases?

It is very difficult for defendants to get a fair trial under these circumstances. Some have genuinely received a fair trial; others have not. In large part it depends on the integrity of the individual judges.

There has been criticism from the developing world that the process has become a political tool for the developed world. Does this undermine the credibility of these tribunals?

Yes. The double standard is a very uncomfortable one in international justice. Only leaders of small, pariah countries are held to the high standards of international justice. That has to change for international justice to be truly viable in the long term.

Given the nature of the crimes under discussion, the confrontation of witnesses and the presence of lobby groups and NGOs with other agendas, are these trials or theater?

Actually, these trials are so long and drawn out, and filled with minute details that there is very little room for theater. Most of the trials are like hand-to-hand combat over small facts that can add up to a big picture. The media spotlight only shines on them at the beginning and at the end. In between, we are working with little theater and an even smaller audience.

What is the ultimate purpose of these trials?

The main benefit of these tribunals is to serve notice to leaders that no matter how powerful you might be in your own country, you can be called to account for atrocities by the international community. That end to impunity is a terrific thing. The devil is in the details—holding fair trials in a reasonable time and holding everyone to the same standards. The victims are often disappointed by their role in these trials, but their interests are ably represented by the prosecution in most cases.

Karadzic has questioned the accuracy of the reporting of the Balkan War. Is the media environment appropriate for this trial to proceed fairly?

The narrative of what happened in Bosnia in 1992 to 1995 has influenced everyone to the point that Dr. Karadzic is certainly not benefitting from the presumption of innocence by the public.

John Moore/Getty Images

DIGEST AMERICAS

“We either help ourselves, or die” How securing the U.S.-Mexico border is hurting trade and harming Arizona’s economy New York Times Fernando Santos and Brenna Rae Goth, Arizona

DATA

POINTS

The first border patrol was established in 1904 to stop Asian workers entering the U.S. through Mexico.

The Secure Fence Act 2006 initiated a program of border reinforcement, with the construction of an extra 700 miles of fencing.

The U.S. border patrol near Nogales, Mexico keeps Mexicans—and their disposable income—out of Arizona 18 | The World Weekly | december 06 2012

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hen the copper smelters closed and the jobs dried up in Douglas, Arizona, the people who used to sustain the small shops along this border city’s commercial strips left to find work elsewhere. The Ortega family looked toward their neighbor to the south, Agua Prieta, Mexico, for a new clientele.

For decades, catering to Mexicans had been a reliable business plan for the Ortegas and many other store owners here, a multigenerational band of believers who have been around too long to give up. But the tight border enforcement prompted by the Sept. 11 attacks—and amplified by the harsh realities and language of drug violence and illegal immigration—gradually made it harder to get across the border legally, then too much of a bother, and finally a discomfiting waste of time. Like the copper smelter workers, the Mexicans, little by little, also began to disappear.

An unforgiving blow came about two years ago, when the American government stopped issuing visas in Agua Prieta, forcing whoever wanted them to travel 115 miles to Nogales, a costly undertaking for Mexicans relying on lean monthly salaries to survive. “I understand the need for securing our border,” said Bill Thomas, 64, who runs Thomas Home Furnishings, a store his father founded 59 years ago, “But what we’ve done is, we’ve shut out the honest guy.”

The feeling is the same along much of the Mexican border in Arizona, where an imposing wall of corrugated steel disconnects main streets, shared histories and bi-national family ties. It has also begun to seep deeper, among business owners and

elected officials inside a state known for its ironfisted approach to illegal immigration.

The Metropolitan Tucson Convention and Visitors Bureau has been running a media campaign in Mexican border states to dispel any notions that Arizona is unwelcoming. At a meeting in October, mayors in the economic development committee at the Maricopa Association of Governments, a regional planning group based in Phoenix, embraced a unifying slogan: “We’re all border communities.”

“Mexicans spend about $2 billion a year in Arizona,” said the committee’s chairman, Thomas L. Schoaf, the mayor of Litchfield Park, a suburb of Phoenix.

About 21 million Mexicans cross legally into Arizona every year, and in Santa Cruz County, which runs along the border, their spending accounts for 40 percent of the sales tax revenue. “A significant part of our economic vitality is related to people who cross the border,” Schoaf said, “so we need to make the crossing more efficient.”

Erik Lee, the associate director of the North American Center for Transborder Studies at Arizona State University, said old infrastructure and inadequate staffing were largely to blame for the costly and unpredictably long waits at border crossings. While the number of Border Patrol agents has virtually doubled since 2004, to 23,306 from 11,684, the number of customs inspectors, who operate the ports of entry, increased by only 12 percent, to 21,893 from 19,525, according to federal statistics.

On average, it took 66 minutes to cross the border from Nogales, Mexico, to Nogales, Ariz., in 2008, costing the regional economy about $200 million, according to estimates compiled by Lee and Christopher E. Wilson of the Mexico Institute at the Woodrow Wilson International Center for Scholars.

Projections by the Commerce Department say the average time to get through ports of entry into the United States will rise to 99 minutes by 2017, a delay the department estimates could cost a total of $12 billion for the economies on the two sides.

In March, voters in Douglas elected Danny Ortega Jr., a third-generation Ortega running the family’s shoe and clothing stores, as mayor.

Ortega, 50, took office in June, bent on finding a lifesaver for his, and the city’s, future. He hired a consultant from Phoenix to push the federal government for changes: an extra southbound lane at the border crossing, which opened in November, and a dedicated lane for prescreened drivers and pedestrians, which has yet to happen. “Let’s not be so regimented and look at every person coming in from Mexico as someone who’s going to commit a crime,” said Ortega, who left I.B.M. after 23 years to help his father and siblings run the family business. “Our financial sustainability is dependent on them.”

He hired a bilingual city manager, and he has reached out to the mayor of Agua Prieta, Irma Villalobos Terán, to figure out ways to cooperate, regardless of federal policies beyond their control.

They also joined a meeting hosted by the Mexican consul in Douglas, Oscar Antonio de la Torre Amezcua, to discuss ways to promote shopping tourism on both sides of the border. “We either help ourselves,” Ortega said, “or we will die.”

DIGEST MIDDLE EAST

Planning for another intifada Ramadan Shallah, head of the militant Palestinian Islamic Jihad group, is expecting further violence in Gaza—and continued backing from Iran

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Khaled al Hariri/REUTERS

n Palestinian history, resistance was always a source of inspiration for our people to continue the struggle in order to get back our rights and homeland, Palestine,” Ramadan Shallah said in his suite at an elegant, fivestar hotel in Cairo.

Though the final details of the Israel-Gaza ceasefire, including in particular the issue of border crossings, are still being discussed through Egyptian mediators, both [Israel and Hamas] have claimed victory. While [Israeli Prime Minister Benjamin] Netanyahu said Hamas and other militant groups suffered a severe military blow, Hamas and Islamic Jihad, the main political Gazaan factions, celebrated the cease-fire agreement, pointing to achievements such as stopping Israeli incursions and the so-called “targeted killings” of hardline militants.

According to Shallah, his party—known for its radical-militant tactics and hence labeled a terrorist organization by most Western countries—will respect the new cease-fire but not rule out another round of fighting. “There is no guarantee to keep our enemy away from Gaza except having strong capabilities that can deter it,” Shallah said.

The timing of the latest exchange of rockets and missiles between Israel and Gaza highlighted the difference in strategy between Hamas and the Palestinian Authority on the West Bank to achieve Palestinian independence. Rejecting the almost 10-year-old Palestinian-Israeli peace agreement, the Oslo accords, Shallah said he saw the political strategy of [Palestinian National Authority President Mahmoud] Abbas as having failed. “We should seek another strategy that cannot exclude resistance,” he said. “[The Islamic Jihad] can consider politics, but not the politics Mahmoud Abbas has been involved in since the signing of the Oslo agreement. It is a kind of

Al Monitor surrender from our point of view,” he said.

Shallah explained that although Abbas and the Fatah Lena Odgaard, Cairo movement, which Abbas represents, for years have been willing to work for a peace agreement with Israel, Israel has refused to commit to any compromises. “For 40 years, the Palestinian Liberation Organization and the Palestinian Authority have extended their hands and offered proposal after proposal, but every time Israel is responding negatively and they are DATA not giving us anything.”

POINTS And with peace negotiations seemingly at a long-lasting stalemate, Shallah said that opting for armed resistance was likely to serve as inspiration The Palestinian to Palestinians on the West Bank, especially as the Islamic Jihad situation there is becoming untenable. “[In the West [PIJ] was formed Bank,] we have a desperate situation and the failure in 1979 by a of the so-called peace process. We reached a deadlock faction of the and this eventually, sooner or later, will bring another Egyptian Muslim intifada,” said Shallah, who doesn’t see the two-state Brotherhood, which felt the solution as possible due to the ongoing expansion of organization was Jewish settlements on Palestinian land. “Therefore, the failing to protect only way before us is steadfastness and resistance in Palestinians the West Bank, too. Resistance would drive Israel out from Israel. of the West Bank, as it did in Gaza.”

Ideologically Shallah praised the major backing Gaza armed aligned with groups received from Iran in the last round of fighting Hamas, the PIJ with Israel and Gaza. He said that the Iranian leadership is believed to supplied both money and weapons, enabling militants receive funding to strike targets as far away as Tel Aviv and Jerusalem. from Iran, Syria Shallah, who is himself on the FBI’s list of most- and Saudi Arabia.

Ramadan wanted terrorists, emphasized his close relationship Shallah received a with Iranian President Mahmoud Ahmadinejad, who he said had called him personally to congratulate him PhD in Economics from Durham on the “successful offensive.”

University before “Iran has been providing us with the support we moving to Florida needed to defend ourselves in the face of the Zionist to teach. He has occupation. Iran supported us militarily and financially been wanted by and with all we need to remain steadfast on our land,” the FBI since 1995. he said, adding, “We hope that all the Arab countries do the same.”

At a press conference, Shallah and Hamas leaderin-exile Khaled Meshaal made it clear that they would continue to stockpile weapons to deter Israel from attacking Gaza again. And it is indeed likely that Iran will continue using Gaza as a proxy for a war with Israel. On the other hand, Israel has now felt the consequences of the Gazan factions’ powerful ally and is likely to do whatever it takes to stop it. As Hamas and Israel debate the free movement of people in and out of the Gaza Strip via Egypt’s shared border, the issue of the free flow of arms will likely reach the negotiating table as well. And how Islamic Jihad will react to any demands for concessions remains unknown.

Al Monitor selects and translates articles from across the Middle East.

Ramadan Shallah says his Palestinian Islamic Jihad group is still stockpiling weapons

The World Weekly | december 06 2012 | 19

DIGEST AFRICA

A fence to keep the rain in As climate change threatens Kenya’s economy, one conservation group has found an effective way to fight it: Build fences around the country’s vital forest ecosystems

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Michael Lewis / GETTY

t was colder when Simon Githau was a boy. In the Aberdares, a forested mountain range 2,000 meters (6,600 feet) above sea level in central Kenya where Githau grew up, a pail of water left outside overnight would freeze. “Today, nothing,” he says.

“That tells you that temperatures have been rising.”

Climate change may have largely slipped off the political agenda, but for Githau and many others in East Africa it is a troubling reality. Githau, a compact, intense man in his early 40s and Kenya Wildlife Service’s senior warden at the Mount Kenya forest reserve, has seen it firsthand. And he’s not alone. Farmers up and down the country—where as much as 75 percent of the population is employed in agriculture, which contributes 20 percent to the country’s gross domestic product—report that the equatorial seasons are no longer predictable. The incidence of extreme weather events has increased, too. As conditions worsen, the country’s critical forest ecosystems, which sustain the nation’s rivers, need to be preserved. To do that, Kenya is turning to a deceptively simple solution—fences.

At least 80 percent of the country’s population lives in the outflows of five mountain forests— Mount Kenya, the Aberdares, the Mau Forest Complex, Mount Elgon and the Cherangani Hills.

Above these mountains the clouds blown in from the Indian Ocean break and create vast natural reservoirs. The tree root systems and rich soil store the water, preventing it from rushing down as floods.

But deforestation has eroded this natural pressure valve.

Attributing individual events to climate change is always difficult, but there are clear trends in this region. Average temperatures have risen, and the droughts that used to come once every 20 years now strike with far greater frequency. When the rains do come to parched areas, there is a risk of flash floods.

20 | The World Weekly | december 06 2012

“Everybody agrees things have changed,” says PETER GUEST, MOUNT KENYA Beatrice Teya, who heads the U.N. Development THE WORLD WEEKLY Program’s disaster management team in the country.

“We have to find ways of adapting.”

Conservation group Rhino Ark has found a way to adapt by building fences to protect these crucial sources of water. The first, a 250-mile fence DATA around the Aberdares, was completed in 2011, POINTS having taken 22 years. It began as a narrow conservation project to separate villages around the mountain from its wildlife. Villagers welcomed the A 2011 fence—which kept marauding animals away from drought in Kenya, their crops. The value of their land soared by 300 one of the worst in percent. “Economically, we are better off,” says recent history, led community group leader Peter Kibuka. “There were to an estimated years when we used to have food relief; now, we 3.75 million people requiring feed ourselves.”

In the Aberdares, the forest is recovering and food aid.

The Stockholm the balance between the human population and the Environment ecosystem is being restored. Rhino Ark’s Christian Institute estimates Lambrechts, a veteran of the U.N. Environment the cost of climate Program, wants to use the same technique to protect change to the the rest of Kenya’s fragile hydrology. By managing country could be human incursions into the forest, the fence should $500 million per allow the ecosystem—and the reservoir—to recover. year.

“We’re not just putting in place poles and wires,” he says. “We’re putting in place systems and tools to manage the ecosystem.”

Doing so is vital. Half the country’s power generating capacity is hydroelectric, and its dams are running below capacity. The infrastructure in the capital is stretched. Kenya’s future depends on the water from its mountain forests. The government has A 250-mile fence pledged $2.3 million per year toward the completion around Mount Kenya aims to of another 250-mile fence around Mount Kenya. preserve an “It’s not that we are tree huggers,” Lambrechts says. economically “What is key is to realize the dependency of our critical forest ecosystem economic activities on these ecosystems.”

DIGEST ASIA

Kyodo/REUTERS

Failure to launch

North Korea’s plans for another rocket test heighten tensions ahead of South Korea’s presidential vote The Korea Herald, Seoul Editorial

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North Korea’s rocket program began in 1969 with help from the Soviet Union.

The country now has some 1,000 missiles.

North Korea has been accused of trying to destabilize the Dec. 12 South Korean presidential elections.

If successfully tested, North Korea’s Unha-3 rocket could carry missiles that could reach Alaska

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leader Xi Jinping. China is obviously unhappy with the North’s missile test, as it goes against its policy of stabilizing the Korean Peninsula. China has probably conveyed its disapproval of the test through the envoy. The North’s decision to go ahead with its plan probably reflects Kim’s intention to reassert North Korea’s independence from foreign influence, even from China, its only ally.

lmost a year has passed since North Korea’s new leader Kim Jong-un took power following his father’s death on Dec. 17, 2011. The Swisseducated young man was widely expected to take his impoverished nation in a new direction and show a leadership different from his father’s iron-fisted rule.

The Korea Herald is a South Korean daily newspaper Now, as the first anniversary of his father’s death based in Seoul. nears, Kim is preparing to commemorate him in his own unique way―a rocket launch that is widely seen as a cover for a ballistic missile test.

The North’s state news agency KCNA [Korean Central News Agency] said that an Unha-3 rocket Korean Central would lift off between Dec. 10 and 22 to put an earthNews Agency, observing satellite into space. The planned rocket Pyongyang launch deviates from Pyongyang’s past practice in two respects. First, it is the second launch attempt this year, spokesman for the Korean Committee for following the failed one in April. Pyongyang has never Space Technology issued the following made two launch attempts in a year. statement: The DPRK plans to launch The short interval between the two launches another working satellite, second version of calls into question whether the North has identified Kwangmyongsong-3, manufactured by its own the causes of the April debacle and fixed what went efforts and with its own technology, true to the wrong. The North’s space agency asserted that it behests of leader Kim Jong Il. Scientists and had improved the reliability and precision of the technicians of the DPRK analyzed the mistakes satellite and carrier rocket since the April disaster. that were made during the previous April Yet the chances are high that the December launch launch and deepened the work of improving could follow the same fate as the April one, which the reliability and precision of the satellite crashed into the sea after flying a mere 120 kilometers and carrier rocket. A safe flight path has been [75 miles]. chosen so that parts of the carrier rocket that Second, Pyongyang has thus far launched rockets in might fall during the launch process would the spring or summer, not in the middle of winter. This not affect neighboring countries. At the time is because weather conditions are better in spring and of the April launch, the DPRK ensured utmost summer. For a rocket like the North’s Unha-3 that uses transparency of the peaceful scientific and liquid fuel, cold weather is definitely not preferable. technological satellite launch. The DPRK When seen against this backdrop, the young North will fully comply with relevant international Korean leader is taking a gamble with this launch. But regulations and usage as regards the he appears to think that he can make political gains upcoming launch, too. even if the planned launch fails again.

It is worth noting that the North’s announcement The Korean Central News Agency is a statecame just one day after Kim met a senior official from run news outlet in Pyongyang.

Beijing, who delivered a letter from China’s new

A safe flight path FACT

A

The World Weekly | december 06 2012 | 21

DOSSIER

The unfinished revolution Two years on from the Arab Spring, what has really changed in the Middle East? peter guest THE WORLD WEEKLy

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n Dec. 17, 2010, street vendor Mohamed Bouazizi set himself alight in Sidi Bouzid, Tunisia, triggering a wave of social unrest and rebellion in the Middle East. The Arab Spring unseated autocrats across the region—first Zine al-Abidine Ben Ali in Tunisia, then Egypt’s Hosni Mubarak and, finally, brutally, Libya’s Muammar Gaddafi. Like the pro-democracy movements that brought an end to the Soviet Union, the revolts were hailed as the most important political change for a generation, as disenfranchised youth demanded human rights, representation, and an end to corruption.

Two years on, the fragile democracies that emerged face new challenges. Cairo’s Tahrir Square is packed once again, this time in protest against President Mohamed Morsi’s decree granting himself sweeping powers (see ‘The road to Tahrir Square’ on page 24). In Tunisia, a resurgent Salafist movement is agitating against the country’s liberal, secular elements (see ‘Tunisia’s identity crisis’ on page 25).

The Muslim Brotherhood, which propelled Morsi into office, is the fulcrum around which major shifts in power revolve (see story, right).

Likewise, in Libya, the loose alliance of militias that unseated the Gaddafis are turning inward, fighting hardline Islamists whose ideology and financial resources allowed them to fill the vacuum left by the collapsed regime. Conservative groups remain at the forefront of other ongoing protest movements in the region, even those primarily demanding social justice and economic reform. The champion of several revolutions, Qatar, is under scrutiny for its own crackdown on criticism of the royal family (see ‘Qatar’s crackdown on dissent’ on page 28) While conflict in Gaza and protests in Cairo may have diverted international attention, violence in Syria continues to divide the country and its neighbors (see ‘Ready for regime change’ on page 26 and ‘Starting all over, again’ on page 27), while in Yemen, the transition to a freer society seems to have stalled (see ‘The forgotten revolution’ on page 29). From Sanaa to Cairo, Amman to Damascus, many find themselves asking, What were we fighting for?

22 | The World Weekly | december 06 2012

new york times Neil macfarquhar, ramallah

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or years, the United States and its Middle East allies were challenged by the rising might of the so-called Shiite crescent, a political and ideological alliance backed by Iran that linked regional actors deeply hostile to Israel and the West.

But uprising, wars and economics have altered the landscape of the region, paving the way for a new axis to emerge, one led by a Sunni Muslim alliance of Egypt, Qatar and Turkey. That triumvirate played a leading role in helping end the eight-day conflict between Israel and Gaza, in large part by embracing Hamas and luring it further away from the Iran Syria-Hezbollah fold, offering diplomatic clout and promises of hefty aid.

For the United States and Israel, the shifting dynamics offer a chance to isolate a resurgent Iran, limit its access to the Arab world and make it harder for Tehran to arm its agents on Israel’s border. But the gains are also tempered, because while these Sunni leaders are willing to work

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GIANLUIGI GUERCIA/getty

Shiite Muslims make up roughly 10 percent of the world’s Islamic population, with concentrations in Iran, Syria, Bahrain and Lebanon. The split with Sunnis dates back to a seventh century disagreement about who should succeed the Prophet Mohamed.

Salafism is a strict, ultraconservative branch of Islam that believes in the literal truth of the Koran. Its chief proponent in the modern age was Muhammad ibn Abd al-Wahhab, co-founder of the Saudi state.

The Muslim Brotherhood is a Sunni political movement that emerged in Egypt in 1928 and has branches across the Middle East, as well as in the U.S. and U.K.

with Washington, unlike the mullahs in Tehran, they also promote a radical religious-based ideology that has fuelled anti-Western sentiment around the region.

Hamas—which received missiles from Iran that reached Israel’s northern cities—broke with the Iranian axis last winter, openly backing the rebellion against the Syrian president, Bashar al-Assad. But its affinity with the Egypt-Qatar-Turkey axis came to fruition this fall. “That camp has more assets that it can share than Iran—politically, diplomatically, materially,” said Robert Malley, the Middle East program director for the International Crisis Group.

“The Muslim Brotherhood is their world much more so than Iran.”

The Gaza conflict helps illustrate how Middle Eastern alliances have evolved since the Islamist wave that toppled one government after another beginning in January 2011. Iran had no interest in a cease-fire, while Egypt, Qatar and Turkey did.

But it is the fight for Syria that is the defining struggle in this revived Sunni-Shiite duel. The

winner gains a prized strategic crossroads. For now, it appears that that tide is shifting against Iran there, too. The Sunni-led opposition appears in recent days to have made significant inroads against the government, threatening the Assad family’s dynastic rule of 40 years and its long alliance with Iran. If Assad falls, that would render Iran and Hezbollah, which is based in Lebanon, isolated as a Shiite Muslim alliance in an ever more sectarian Middle East.

Clearly, the old leaders Washington relied on to enforce its will, like President Hosni Mubarak of Egypt, are gone or at least eclipsed. The new reality could be a weaker Iran, but a far more religiously conservative Middle East that is less beholden to the United States.

Already, Islamists have been empowered in Egypt, Libya and Tunisia, while Syria’s opposition is being led by Sunni insurgents, including a growing number identified as jihadists, some identified as sympathizing with Al Qaeda. Qatar, which hosts a major United

Egyptians have returned to the heart of last year’s protests, Tahrir Square

›

The World Weekly | december 06 2012 | 23

Nasser Nuri/Reuters

DOSSIER

Handout/Reuters

›

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Egyptian President Mohamed Morsi retains close links to Islamists

Silent protest Egyptian media outlets shut down on Dec. 4 in protest against an article in the country’s draft constitution which they fear could curtail their free speech. Some newspapers went out with an image depicting the media behind bars, while others simply withdrew from news stands.

Egyptian president Mohamed Morsi, was until recently a member of the Muslim Brotherhood, which shares an ideology with Hamas.

Iran has historically supported Hamas and maintained close links with the embattled Assad regime in Syria.

States military base, also helps finance Islamists all long-term truce is more likely. “As Hamas moves around the region. closer to Turkey, Egypt and Qatar, it will be weaker as In Egypt, President Mohamed Morsi resigned as a ‘resistance’ movement because those three countries a member of the Muslim Brotherhood only when do not want a resistance movement,” said Talal he became head of state, but he still remains closely Atrissi, a Lebanese academic specializing in Arablinked with the movement. Turkey, the model for many Iranian relations. of them, has kept strong relations with Washington Those countries will not supply arms, however, so while diminishing the authority of generals who were Hamas will maintain contacts with Tehran. Khaled longstanding American allies.

Meshal, the Hamas leader, told CNN that ties are “not The emerging Sunni axis has put not only Shiites as it used to be in the past, but there is no severing at a disadvantage, but also the old school leaders of relations.” who once allied themselves with Washington.

Where Hamas and Hezbollah were once The old guard members in the Palestinian allies, the fact that they are now at times at Authority are struggling to remain relevant loggerheads illustrates the shift to the new at a time when their failed 20-year quest Sunni axis. A Western diplomat seeking to end the Israeli occupation of Palestinian to explain the changes recently drew a annual funding lands makes them seem both anachronistic forIran’s cross through the region, the meeting point Hezbollah, according to U.S. estimates and obsolete. “Hamas has always argued representing Syria. Along the East-West that it is the future of the changes in the line, he wrote “febrile crescent,” a play on the region because of its revolutionary nature, that it is traditional “Fertile Crescent” used to describe the part of the religious political groups who have been stretch of the Middle East where civilization began. winning the revolutions,” said Ghassan Khatib, an The febrile crescent represents the volatile fault line official at Birzeit University and former government between Sunnis and Shiites, with Syria the prize. spokesman.

The other axis was labelled “Sunni Struggles,” Egypt, Qatar and Turkey all want a more quiet, representing the wrestling within the dominant stable Middle East, which they have said repeatedly Muslim sect over what governments and what requires an end to the Israeli occupation. But the new ideology will emerge triumphant from the current Islamist governments do not talk about a two-state political tumult. The deepest change, of course, is that solution much, so analysts believe some manner of the era of dictators seems to be closing.

$100 m

The road to Tahrir Square Egyptians won’t stand for a return to autocratic rule Financial Times Roula Khalaf

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More than 200,000 people took to the streets of Cairo to protest President Mohamed Morsi’s decree granting himself sweeping new powers.

A new Egyptian constitution is due to be put to a referendum on Dec. 15.

24 | The World Weekly | december 06 2012

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ou might have watched recent events in Egypt and wondered whether there had ever been a revolution. When a ceasefire needed to be brokered between Israel and the Palestinian Hamas in order to end the latest war in Gaza, President Mohamed Morsi proved to be as reliable as Hosni Mubarak. He then proceeded to declare himself absolute ruler, concentrating powers in his hands even more firmly than his ousted predecessor.

Fortunately, however, there was indeed a revolution in Egypt last year. And one of the results of that upheaval is that people have learnt the road to Tahrir Square.

So when their newly elected president issued a decree giving him overwhelming powers and immunizing his decisions from legal challenge, the people marched back to the center of their earlier revolt. The chants of “The people want the fall of the regime” were replaced with “The people want the fall of Morsi”.

The message from Tahrir was simple: However much Egyptians long for stability and for an end to the rollercoaster ride of political transition, they will not stand for a return to autocratic rule. Even if the uproar subsides as the president rushes to offer

concessions, Morsi has been warned.

It has been easier to galvanize public fury over an apparent power grab by Morsi. Indeed, a combination of liberal parties, former regime loyalists and youth groups have seized the chance to demand mass protests. The courts and many judges were on their side.

It has had an effect. The day after protesters massed in Tahrir Square, Morsi seemed to have realized that his attempt to neutralize a hostile constitutional court had only inflamed passions and deepened divisions.

His move was backfiring, offering a gift to the liberals.

The constitutional panel suddenly declared their work done and that the resulting document can now be put to a vote. This means a referendum on the constitution will be held, followed by new parliamentary elections. Morsi’s decree will therefore soon become a moot point.

Egypt is undoubtedly in for tougher times. But not every aspect of the unrest should be perceived as a catastrophe. As worrying as it is, this round of turmoil also tells us that Egyptians have drawn a line under their authoritarian past. No leader, whether Islamist or non-Islamist, should dare to rule them unchallenged.

Zoubeir Souissi/Reuters

Unsafe Sufis Five Salafists were arrested in Tunisia on suspicion of burning the Saida Manoubia shrine in October, one of a series of attacks on religious sites sacred to the mystical branch of Islam, Sufism. Salafists view more traditionally liberal Sufis with suspicion.

DOSSIER

Tunisia’s identity crisis Why ultra-conservative Salafis are so influential in Tunisian secular politics

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Zoubeir Souissi/Reuters

f one were to take a casual glance at some of the The National, Abu Dhabi Issandr El Amrani reporting about Tunisia of late, one would think the country is on the verge of a takeover by radical Muslim fundamentalists. The question of the future role, in politics and society, of Salafis [a catch-all term that is applied to everything from violent jihadist movements to more scholarly forms of religiosity] appears to be dominant, despite the fact that the Salafis still have no formal role in politics other than as a protest movement and will not have direct influence on important matters, such as the contents of the constitution currently being drafted. Why, then, their oversized role in the country’s public debate?

To understand the centrality of the Salafi question in Tunisian politics, one has to understand the Islamist— Salafi and non-Salafi—perception of the legacy of Habib Bourguiba, the ultra-secularist founder of modern Tunisia.

Since October 2011, when they attacked the headquarters of a television station that had aired the Salafists and film Persepolis, in which God makes a brief appearance liberals have clashed as a character, Tunisia’s Salafis have never left the in Tunisia, the birthplace of the Arab Spring headlines. They’ve continued to dominate them since the attack on the U.S. embassy and American school in Tunis last September, part of the global wave of curtail visible appearances of religiosity. There was fundamentalist protests against a YouTube clip insulting also state intimidation of religious people, curbing the Prophet Mohammed. [In Islam, depictions of God or of religious authority, and sometimes gratuitous DATA the Prophet Mohammed are considered blasphemous.] insults on religious sentiment. Bourguiba, for POINTS Recently, many Tunisians were shocked by a leaked instance, was in the habit of appearing on state video showing [former Prime Minister and leader of the television during Ramadan drinking during daytime, In 1956, dominant Ennahda party] Rachid Ghannouchi speaking and he urged others to do the same.

Tunisia won to a group of young Salafis encouragingly and urging Today, the Islamists’ core grievance is about independence them to bide their time. The message he seemed to be alienation. Bourguiba’s secular experiment, they argue, from France. giving—although he claims the clip was edited to falsely induced a false consciousness by marginalizing Islam’s Habib Bourguiba give this impression—is that the Islamist movement is role in Tunisians’ lives. Their project is now in effect became the at the cusp of a historic opportunity, and they will soon to restore society to what they believe is its natural, country’s first president the get their way. authentic embrace of Islam. More than anywhere else following year.

The manner in which Salafi protests and, on in the Maghreb, Islamists in Tunisia face a political Tunis street occasion, criminal acts [such as attacks on liquor and social current intent on standing up to trader Mohamed stores] have been tackled has also raised them on its own terms. Politically, the latest Bouazizi’s selfsuspicion. In many cases, the authorities manifestation of this is Nida Tounes, the new immolation in have failed to enforce the law, showing party led by Beji Caid Essebsi, the former December 2010 started the Arab suspicious tolerance and a reluctance to prime minister credited for getting Tunisia Spring. A month of the vote won confront Salafis engaged in clearly illegal Percentage through its rocky transition in 2011. later, President by secularists in Tunisia’s 2011 elections actions. All this suggests that Ennahda, To have political discourse in the new Zine El Abidine while maintaining a ‘moderate’ public profile, is Tunisia dominated by unrepentant Bourguibists Ben Ali fled to worried about securing the loyalty of an electoral base and hard-line Islamists would be a great loss. Saudi Arabia.

Salafism can be that includes many ultraconservatives, including Salafis. Luckily, the country is not there yet, despite the broadly categorized So, why are the Salafis so visible, so active and so media hysteria inside and outside the country. The into three groups: apparently angry?

Ennahda-led government needs to be held to account Violent movements Tunisian Islamists’ anger is framed by a particular for its lenience in criminal cases involving Salafis, against the political view of the history of their country. Their problem and the negative legacy of Bourguiba deserves greater order, non-violent is not just with the former Ben Ali regime [which scrutiny. Tunisia’s religious conservatives have serious groups such as Hizb was ousted during the Arab Spring revolts of 2011], grievances, but this should not give them license to al-Nour in Egypt, and quietists.

Salafis protest but with the legacy of Bourguiba, whose disdain become bullies or flout the law. outside the Prime for religion in public life went beyond bans of veiled Minister’s office in women on state television and other measures to The National is a daily newspaper based in Abu Dhabi. Tunis

14%

The World Weekly | december 06 2012 | 25

Handout/Reuters

DOSSIER

Internet blackout On Nov. 29, Syria went offline for two days. The government said that rebels had cut a cable, but international analysts believe the Assad regime blocked access to prevent the dissemination of information by the opposition.

Ready for regime change

AFP/getty

Syrian President Assad is suffering setbacks on the military and diplomatic fronts

The Daily Star, beirut editorial

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While it is easy to talk about the Assad regime’s Fighting between he dramatic political standoff unfolding in Egypt, and a recent eruption of violence in seeming refusal to do anything but push forward with rebels and Syrian government forces the Gaza Strip, have crowded out events in its policy of “fighting terrorists,” the same lack of has intensified Syria from some media outlets. But anyone flexibility and inertia also characterize other actors. around Damascus following Syria knows that the pace of military The Syrian National Coalition has been picking up diplomatic recognition from the Gulf and key developments has picked up noticeably of late.

Rebel fighters have attacked and overrun a handful European states. But the opposition has yet to make of military facilities and posts in several different significant advances when it comes to bringing in parts of the country. In some cases, they have been the Kurds, or forming a government-in-exile, which able to make off with significant caches of weaponry could generate dramatic changes in the 20-month-old and equipment. And, most spectacularly, whether they conflict.

Finally, the Arab League-United Nations DATA are using “imports” or locally seized arms, they have been able to press ahead with shooting down regime envoy Lakhdar Brahimi is contemplating his POINTS next step. The Algerian diplomat will likely put aircraft.

Some of these developments have weakened the forward an initiative that requires compromises, and The Syrian regime’s ability to fight in Aleppo, while a second neither side in the struggle appears ready to offer any National Coalition rebel drive against Damascus, taking place in the concessions. has been The exiled opposition, the regime in Damascus recognized by the sprawling areas around the capital, has picked up and the international community are still moving Gulf States, the pace as well. Amid all of this, the government of at a snail’s pace compared to the fluid and U.S. and several Syrian president Bashar Assad has given no European countries. significant developments on the ground. signal that it intends to alter its crackdown Syria’s large The longer that this careful, calibrated Kurdish minority on civilian protesters and military offensive approach continues, the likelier it is that has been divided against the rebels. Some observers are events inside Syria will force the various by the country’s civil talking about the growing possibility of The number of people estimated to have died sides to play catch-up. And they will only conflict, with some Syria’s fragmentation. There is a focus in Syria’s civil conflict have themselves to blame if they are surprised groups backing the on the sectarian nature of the conflict, but uprising. that people inside the country end up making the even more apparent on the ground is the loose government control in the eastern part of the country, decisions with the biggest impact on Syria’s future. where Syria’s Kurds are divided into pro-uprising and anti-uprising factions.

The Daily Star is a newspaper published in Lebanon.

40,000

26 | The World Weekly | december 06 2012

Muhammad Hamed/Reuters

Fuelling protests More than 150 people were arrested after protests in Jordan over proposed increases to fuel prices. The government intends to increase heating and cooking gas prices by 54 percent. At least one person was killed, and many more injured.

DOSSIER

Starting all over, again Conflict in Syria forces Palestinian refugees to flee their adopted homes

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he sound of shouting children echoes in the Besides this solidarity, Syria-born Palestinians do not le monde/worldcrunch playground of the United Nations-run school receive much help. At Jalil camp, refugees were given laure stephan of Jalil camp in Baalbek, Lebanon. Palestinian mattresses or food parcels from the Lebanese Red Cross, the children from Syria have recently joined the Emirati Red Crescent and even Hezbollah, which considers Palestinian children living in Lebanon. the camp one of its strongholds, says Abou Jihad, one of the And yet, this new coexistence among different parts of the camp’s political leaders. “Winter is coming. The main Palestinian diaspora is not always easy: “Some Palestinian challenges are now housing and heating,” he adds.

DATA children from Syria feel humiliated because those who were Criticized for its slow response, UNRWA provides POINTS born here call them ‘refugees!’ They had never thought of refugees with access to health care and has opened themselves that way before,” says a youth worker. special classes for 1,000 Syrian-born Palestinian children in Many More than 7,000 Syria-based Palestinians have been several camps around the country. The UNRWA, which has Palestinians forced to flee to neighboring Lebanon as the Syrian conflict been underfunded for years, launched a fundraising operation fled to Syria in grows more violent. Most of them have come from Yarmouk, to raise $54 million, including $8 million for Lebanon. The 1948 during the the largest Palestinian refugee camp in Syria, located rest will be mainly used for Palestinians in Syria, but Arab-Israeli War. Today, there are south of Damascus. The flow started last summer also in Jordan. nearly 500,000 as violence moved closer to the Syrian capital.

Living conditions and infrastructure are not Palestinian This is yet again another exile after the the only concerns of these newcomers. Their refugees living in older generations were forced to move from relocation underlines the humiliating fate of the Syria dispersed their native Palestine to Syria. “We stayed in Lebanon-based Palestinians, whose population is across nine camps.

The number of refugees Lebanon has Syria until the very last minute. All our lives, we between 200,000 and 450,000. In a room covered who have fled Syria were happy there as Palestinians,” says 35-year-old in foam mattresses, Karim, a 39-year-old executive, between 200,000 Salwa, speaking from the first floor of a small house with does not have much hope: “Palestinians here are treated and 450,000 Palestinian a rickety staircase. As she serves coffee, this housewife from like animals. If we have to stay in Lebanon because of the refugees from Yarmouk shows us a set of small, round, traditional painted Syrian conflict, we will have to give up our former lives. Syria, while Jordan cups. “We cannot even afford these. We borrowed them! Even if we were refugees, we had regular schools for our has almost two We live off charity. My husband is a scrap merchant; he is children, jobs; we owned land. It means that we’ll have to million.

Conditions looking for a job. It is hard,” she whispers. start everything all over again, as if we were cursed.”

She receives help from relatives who have already settled On top of that, Karim knows that he will soon have remain poor for most refugees, in Jalil. “Most Palestinians from Syria who fled to Lebanon documentation problems: While Syrian refugees were given particularly in are staying with friends and family,” explains Hoda Samra, a six-month visa when they entered Lebanon, Palestinians Lebanon, where the United Nations Relief and Works Agency for Palestine’s can only apply for weekly visas and can only get one Palestinians are Refugees (UNRWA) spokeswoman in Lebanon. “Their month’s extension. That means many will stay in the country banned from owning property hosts have shown great solidarity. Yet it is also quite difficult as illegal aliens, unable to return to their native Syria. as well as from because the families who welcome them are struggling to a number of make ends meet. They are not able to take in newcomers for Le Monde is a French daily newspaper. Worldcrunch professions. the medium or long-term.” translates selected articles from the international press.

MOHAMMED ABED/getty

389,000

Some Palestinian refugees have grown up in exile in Libya The TheWorld WorldWeekly Weekly | | december 06 2012 | 27

Mohamad Dabbouss/Reuters

DOSSIER

Workers unite As the Qatari capital Doha prepares to host the 2022 World Cup, it has permitted a rare protest against employment conditions for its huge migrant workforce. Workplace fatalities are common among the Indian and Nepali laborers attracted by the construction boom.

Qatar’s crackdown on dissent The life sentence given to a Qatari poet for criticizing the Emir has prompted accusations of hypocrisy in a state that backed Arab revolutions Reuters Regan Doherty, DOHA

$2 b

28 | The World Weekly | december 06 2012

imagebroker/Alamy

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court in Qatar, which has supported Arab Qatari ruler’s past promotion of a more uprisings abroad, jailed a local poet for open society, including his hosting of life for criticizing the emir and inciting the groundbreaking television channel revolt, a sentence that drew outrage and Al Jazeera, which has given a voice to cries of hypocrisy from human rights groups. many opposition groups abroad. “This is In his verses, Muhammad Ibn al-Dheeb al-Ajami wrong,” Ajami said. “You can’t have Al praised the Arab Spring revolts that toppled four Jazeera in this country and put me in jail dictators, often with the help of money and other for being a poet.” support from the tiny, energy-rich Gulf state. But Qatar, a close U.S. ally and major he also criticized Qatar’s own absolute monarch. natural gas producer with a large “This is a tremendous miscarriage of justice,” said American military base, has escaped the defence lawyer Nagib al-Naimi, who conveyed the unrest seen in other Arab countries. The verdict to Reuters after a trial held behind closed Emir has taken a high-profile role at times doors in the capital Doha. in calling for human rights, for example At the prison where he has been held for a year, when he went to Gaza last month, the first Ajami, 36, later told Reuters he believed the Emir, foreign leader there in years. Al Jazeera Sheikh Hamad bin Khalifa al-Thani, to be “a good has assiduously covered the Arab revolts, man” who must be unaware of his plight. Naimi said though it gave scant coverage to an uprising last Qatar, a sponsor of the defence would appeal. A royal pardon may also year in neighboring Bahrain, ruled by another Gulf the Arab Spring, has be a possibility.

Arab monarchy. The Qatari government has also taken a hard line on criticisms of the Emir Ajami was not allowed in court and Naimi taken a prominent role in the confrontation between, said the defence was barred from making oral on the one hand, Sunni Muslim-ruled Arab states arguments, although he contested the prosecution like itself and Saudi Arabia and, on the other, noncase that Ajami called for revolution in Qatar, an Arab Iran and its Shiite allies in Syria, Lebanon offense which carries the death penalty. Amnesty and elsewhere.

International described Ajami’s arrest in November Qatar is backing the rebels in Syria’s civil war.

2011 as coming after he published a poem It supported the NATO-backed uprising in Libya named “Jasmine” for the symbol of the and street protests that ousted rulers Tunisian revolt in January last year that in Egypt, Tunisia and Yemen. The DATA launched the Arab Spring. In a broad emirate’s maroon and white flag has POINTS criticism of Gulf rulers, he had written: been a common sight on the streets “We are all Tunisia, in the face of the of Arab capitals where demonstrators Qatar has repressive elite.” have challenged autocracy. But freedom actively supported Amount of a loan from Qatar to Egypt to aid Ajami “did not encourage the overthrow of expression is tightly controlled in the uprisings across reconstruction of any specific regime,” Naimi said. He small Gulf state, home to less than two million the Arab world, described the charges as having been “inciting the people. Self-censorship is prevalent among national backing rebels in overthrow of the ruling regime,” a capital offense, newspapers and other media outlets. Qatar has no Libya and lending millions to postand criticizing the ruler, which is punishable by up organized political opposition. revolution Tunisia. to five years imprisonment under the Qatari penal In October, Human Rights Watch criticized In 2009, the code. Among offending passages from the poem, what it said was a double standard on freedom imprisonment translated from Arabic, was the line: “If the sheikhs of expression in Qatar and urged the Emir not to of poet Moneer cannot carry out justice, we should change the power approve a draft media law penalizing criticism of Said Hanna for and give it to the beautiful woman.” In another the Gulf emirate and its neighbors. In neighboring insulting Egyptian section, Ajami accused a fellow poet of being “with monarchy Saudi Arabia, human rights activist Ali al- president Hosni Mubarak attracted the sheikhs, playing with their Playstations.”

Hattab said: “We are shocked by the verdict. Qatar worldwide Naimi, who has been largely in solitary has tried to help other countries like Libya and Syria opprobrium. confinement, spoke to Reuters in the presence of become more democratic, but they won’t accept it at prison guards and others: “The Emir is a good man. home. It’s shameful, and a double standard.”

I think he doesn’t know that they have me here for a year, that they have put me in a single room. Additional Reuters reporting by Rania El Gamal in If he knew, I would be freed,” he said, noting the Dubai and Dasha Afanasieva in London.

Zoonar GmbH/Alamy

Hidden war On Nov. 28 a Saudi diplomat was assassinated in the Yemeni capital, Sanaa. Riyadh has become heavily involved in the fight against Al Qaeda in the Arabian Peninsula. The Saudi deputy consul in Aden, Abdullah al-Khalidi, was kidnapped by the group in March.

DOSSIER

The forgotten revolution Four reasons for anxiety about the stalled transition in Yemen The Atlantic Danya Greenfield

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The World Weekly | december 06 2012 | 29

Khaled Abdullah Ali Al Mahdi/Reuters

I

t’s been just over a year since Yemen’s president, Ali Abdullah Saleh, stepped down from power after more than 10 months of protests led by youth activists and joined by a cross-section of opposition groups and ordinary Yemenis throughout the country.

Over the past year, Yemen has crawled its way back from the brink of a civil war that could have degenerated into what we now witness in Syria. This alone is reason to applaud the progress made to date.

The long-awaited departure of Saleh was negotiated through a painstaking process that resulted in a transition plan supported by the Gulf Cooperation Council (GCC). The flaws of the GCC deal, however, are many and risk hampering Yemen’s chances for real democratic change.

1. The deal preserved grave political cleavages. The primary political division in Yemen since the transition was between the former president’s son, Ahmed Ali, and the opposition-affiliated military commander, Ali Mohsin. One year later, this rift remains as poignant as ever, each side aligned with powerful relatives and allies. President Abd Rabu Mansour Hadi has removed some key military commanders and governors National Dialogue, creating an impossible burden and Despite protests affiliated with the Saleh family and former regime, but setting unrealistic benchmarks for a six-month process. that unseated the common wisdom dictated that keeping Ahmed Ali and 4. The government is not paying sufficient attention president, Yemen has changed little Ali Mohsin in place was essential in order to prevent to the economy. Given the divided nature of the government and the all-consuming focus on the instability and chaos.

Although a more fundamental restructuring and National Dialogue, there is almost no bandwidth to integration of the armed forces is a core component of think about implementing an economic plan and the GCC plan, very little action has been taken. This how to create new jobs and income for families DATA reality, combined with blanket immunity for Saleh and to survive. Given that the lack of economic POINTS his cohort and no transitional justice system in place to opportunity was a primary driver for the youthaddress legitimate grievances from the conflict, makes led uprising throughout Yemen—and that job creation Ali Abdullah is a critical factor in addressing internal security Saleh stepped most Yemenis feel that very little has changed. problems and the allure of Al Qaeda in the down as president 2. The transitional government is divided Arabian Peninsula—this should be priority of Yemen in and ineffective. The post-Saleh government February 2012, number one for the government. was designed to be a 50/50 joint effort Despite these clear weaknesses of the after mass between the former ruling party (the protests. transition plan, the situation in Yemen General People’s Congress) and the The Yemeni number of confirmed could clearly be far worse. If the basis of government has opposition coalition (Joint Meeting Parties TheU.S. drone strikes in Yemen since 2002 measurement is the extent that bloodshed was been fighting and independent figures). While laudable prevented and the removal of an autocratic, erratic Al Qaeda in the in theory, the reality is that Hadi’s government is deeply divided and lacks the sense that they are leader, then Yemen scores a moderately successful Arabian Peninsula, all playing on the same team trying to achieve the transition, particularly when compared with the killing an affiliate of the global terrorist witnessed in Libya and currently under way in Syria. same goals. network, for more But if the barometer is genuine political than a decade.

3. Expectations for the National Dialogue are unrealistic and may sow the seeds of its failure. The transformation and deepening of democratic Yemen’s GCC deal positioned the National Dialogue as a institutions, Yemen still has a long way to go. The lack economy shrank panacea for Yemen’s most insurmountable problems. of security, pervasive feeling that nothing has really by more than 10 Since the transition plan itself did not address the changed since the days of Saleh, and little improvement percent in 2011. most important political issues plaguing Yemen—the on the economic and basic services front leave a lot to Southern question, the Houthi movement, participation be desired. of women and youth, constitutional reform and electoral system—all these topics have been foisted upon the The Atlantic is an American current affairs magazine.

REUTERS

BUSINESS

Status update The U.N. voted to upgrade the Palestinian Territories’ status to “non-member observer.” Nine nations opposed the motion, with 138 supporting it. In response, Israel seized $120 million in tax revenues it collects on behalf of the Palestinian Authority.

Building the Palestinian brand How Nadim Khoury made Taybeh Beer the best (and only) brewery in the Palestinian Territories Jonathan Kalan, Taybeh The World Weekly

30 | The World Weekly | DECEMBER 06 2012

Jonathan Kalan

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ot far from where Jesus is said to have turned water into wine, a less celebrated individual is accomplishing a contemporary alcohol-infused feat.

Just 12 miles and several military checkpoints northeast of Jerusalem in the little town of Taybeh sits a long room packed with giant slick steel barrels, twisting pipes, empty cases and thick brown bottles.

Boiling vats shoot thick plumes of steam into the air.

Tiny Palestinian flags are draped across the ceiling, and the slippery floors emit the sweet rich smell of malted hops. Here, at the Taybeh Brewing Company, Nadim Khoury masterfully mixes hops, malt and barley to turn the immaculate water from the Ein Samia springs into an improbable brew: Taybeh Beer, the pride of Palestinian beer drinkers. Crafted with 100 percent natural ingredients, Taybeh has a unique body and flavor, with a crisp taste.

Taybeh Beer, established in 1995, is arguably the Middle East’s boldest beer company. Against all odds, this little brewery has survived social, political, religious and military conflicts to retain its title as the only brewery in the Palestinian Territories and the first microbrewery ever in the Middle East.

The brewey is named after its home village, Taybeh, which fittingly means “delicious” in Arabic, and sits on a hill top ringed by magnificent olive trees. Riding a wave of optimism that followed the Oslo peace accords of the mid-1990s, which brought temporary stability to the Israeli-Palestinian conflict, Khoury, Taybeh’s founder and brew master, returned to the West Bank in 1994 after living much of his life in the U.S. He dreamed of turning his passion for home brewing into a symbol of Palestinian identity and unity. “I wanted to make something for my homeland, for Palestine,” he says. “We believe this is how the state of Palestine can be built—through the people, Palestinian brands and products.”

Together with his family, part of a shrinking minority of Christian Palestinians, Khoury pulled together $1.2 million to open the brewery in their ancestral home. “Everyone thought I was out of my mind to open a brewery in a Muslim country,” he recalls.

Although the religion of Islam prohibits drinking alcohol, Palestinians tend to be slightly more liberal in their interpretation. The one percent of Christians left in the West Bank can’t consume the million bottles of beer that the brewer sells each year, Khoury says with a wry smile. The larger challenge though, he says, has been the occupation. “It’s the most difficult obstacle we’re facing; we have no borders,” he says.

Everything made in the Palestinian Territories must

pass through heavily regulated checkpoints and be exported through Israel. Though Taybeh is just DATA a few minutes drive from Jerusalem, for security POINTS reasons the beer must pass through a checkpoint nearly two hours away. Uprisings and protests can seal The Occupied borders in an instant, making deliveries complicated.

Territories’ Once, during the Second Intifada from 2000 to 2005, economy depends the situation was so dire the company ended up on aid as trade delivering beer to Jerusalem by donkey caravan, the restrictions fastest way to cross the checkpoints. imposed by Israel Taybeh faces another problem. The springs of Ein have largely Samia, the source of the water, are dropping lower destroyed its each year, and nearby settlements are now using most export sector. of it. “Beer is water,” Khoury says; without it, he will Agriculture accounts for a be finished.

Despite the difficulties, Taybeh Beer has chugged large part of on for more than 15 years. It shows no signs of slowing the Palestinian down. Most of its customers are in the West Bank, economy but has Jerusalem and Israel, but a handful of international been damaged by consumers have developed an appreciation for the the construction of barriers and product. Japan and Norway are both large markets. settlements.

Since 2005, Taybeh has held the only “Occupied A nascent IT Oktoberfest” in the West Bank, uniting thousands industry is growing of lederhosen-clad, keffiyeh-wearing, beer-drinking in the West Bank, tourists, curious Palestinians and brave Israelis for with companies two days of music, dancing, and drinking each year. including Cisco Politics are put on hold while glasses are raised. Next and Google year, Khoury also plans to open a boutique winery backing in the basement of an 80-room resort hotel he is technology building in Taybeh. Locals laugh and claim there are incubators. no tourists, that the ongoing occupation and military conflict will make it impossible to host a winery in the West Bank. Khoury simply shrugs his shoulders Nadim Khoury returned to and points to the success of the brewery. “The the West Bank in 1994 to start tourists will come. Things will get better,” he says, a brewery that has survived hopeful. “Inshallah.” blockades and conflicts

At Brewin Dolphin, we can’t do our job without knowing what makes you tick.

So we’ll always invest our time.

Before we invest your money.

At Brewin Dolphin, we believe it’s essential to understand what’s important to you. It’s the key to creating and managing your bespoke portfolio. When it comes to your investments, the first thing we earn is your trust.

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BUSINESS

RICARDO FIGUEREDO/AFP/Getty Images

The vultures circle Argentina

Are vulture funds, which try to turn a profit on the bonds of heavily indebted countries, unfairly preying on African and Latin American nations?

PETEr GUEST THE WORLD WEEKLy

The Argentinian naval ship Libertad was impounded as part of a legal battle between hedge fund NML Capital and Buenos Aires 32 | The World Weekly | DECEMBER 06 2012

W

hen the Argentinian naval training vessel ARA Libertad made port in Tema, Ghana in October, it anticipated a brief stop.

Weeks later, it is still there. The 300-foot ship was impounded after a hedge fund, NML Capital, obtained an order from a Ghanaian court. It will be released if Argentina coughs up $20 million to the fund.

NML Capital is owned by Elliott Associates, an investment company founded by Mitt Romney donor Paul Singer. Singer is known for his ability to spin near worthless sovereign debt into gold, and the seizure of the ship was the latest salvo in a bitter legal battle that could drive Argentina to another debt default. It has also reignited discussion of the role of ‘vulture funds’—funds that try to make a profit from the bonds of heavily indebted countries—in emerging markets.

The current situation began in 2001, when Argentina defaulted on its bonds. Unlike companies and individuals, countries cannot formally declare themselves bankrupt. Instead, Argentina unilaterally declared it was unable to pay the interest on its debt and offered to restructure it, effectively swapping investors’ old bonds for ones of considerably lower value. In cases like this, debt-holders often agree to the swap on the basis that they would rather get something

back rather than nothing at all. In 2005 and 2010, Argentina offered bond-holders a deal that gave 35¢ to the dollar on the value of their holdings. Around 93 percent of them agreed.

Elliott Associates cut its teeth buying Peruvian bonds just as the country was entering a U.S.-backed debt restructuring, successfully pulling off a return of several hundred per cent. They then bought into Argentina before the default and refused to accept anything less than the full value of its assets. To get the money back, it sued. The bonds were issued under New York law, as many sovereign issues are, and in February a judge in New York awarded NML Capital $1.33 billion. The company began to seize Argentinian assets wherever it could, trying at one stage to impound the Tango 01, Argentina’s equivalent of Air Force One. Some investment funds have made a good business out of this process. They acquire the distressed debt of countries that have defaulted or gone through debt relief, then go to court to get the money back. While the legal fees can be expensive, they sometimes turn a big profit.

Donegal International, one such fund, successfully sued Zambia for $15 million over bonds dating from the 1970s. It had paid $3 million for the debt and sought $55 million. Others have won judgments against heavily indebted poor countries, such as Liberia, attracting the label ‘vulture funds’ for picking over the economic carcasses of bankrupt states.

Some countries have already learned their lessons.

When Greece negotiated its debt ‘haircut’ in 2011, asking private creditors to cut the value of their

DATA

POINTS

’Vulture funds’ emerged during sovereign debt restructuring in Latin America in the 1980s.

Since the early 1990s, heavily indebted developing countries have had more than $75 billion written off in debt relief.

holdings by half, the government moved quickly to deter the vultures, paying off some of the stauncher hold-outs in order to avoid being dragged into long and damaging legal battles. One hedge fund, Dart Management, which is also suing Argentina, reportedly received €400 million ($520 million) out of a total €436 million ($566 million) paid to investors outside of the haircut deal. Dart did not respond to a request for comment.

Development bodies and charities, which lobbied strongly for debt relief in the 1990s and 2000s, claim vulture funds undermine efforts to relieve poverty.

The U.K. has taken steps through its courts to limit the ability of funds to take action against the least economically developed countries. Even in wealthier countries, such as Argentina, activists say the debts were built up during the country’s military dictatorship and it is unfair to penalize the current administration.

Talking on background, representatives of socalled vulture funds say they see themselves as legitimate collectors of unpaid debts and dispute their characterization as brutal corporate pirates. Some even talk in ideological terms, saying that debt restructuring introduces moral hazard into the international financial system. They also note that the doctrine of ‘sovereign immunity’ means that they cannot collect debts from funds used for aid or development, only from those earmarked for commercial purposes.

Though its efforts to reclaim its money from Argentina had been frustrated, Elliott Associates’s legal team eventually found a weak point in the country’s defenses—the U.S. bank that manages the

interest to holders of its restructured bonds. The Bank of New York Mellon is set to handle around $3 billion of coupon payments on those bonds in December. The fund argued that this money should be diverted to pay back its defaulted debt. The judge agreed.

The judgment means the money that should be paid to the holders of the country’s newer bonds will be diverted to pay back its defaulted ones held by Elliott.

That would mean that the country would technically be in default on its later debt. The only other option would be to hand over $1.33 billion to the vulture funds. Hernán Lorenzino, the Argentinian minister of finance, said in a statement after the judgment that to pay the “fondos buitre” (vulture funds) would be unjust and illegal. It might also set a dangerous precedent. If Argentina paid Elliott, it could face action from the 93 percent who agreed to the swap. An Elliott Associates spokesperson declined to comment.

Argentina has been granted some respite after the injunction was temporarily frozen by another U.S. court, but the ruling caused panic. Fitch Ratings cut its assessment of Argentina’s international bonds to CC, saying that a default was “probable.” The freeze is temporary, and the debate will resume in March, when Argentina must make another coupon payment.

“In three months time we might be back in the same situation,” says Stuart Culverhouse, chief economist of emerging market broker Exotix. “The issue has not gone away. The political economy of this is that Argentina does not want to pay the hold outs under any circumstance. It’s difficult to see how they can do that without either defaulting or breaching the order.”

Eureka/Alamy

David Lewis/Files/REUTERS

Elusive prey A vulture fund, FG Hemisphere, bought up debt from the Democratic Republic of Congo—still called Zaire when the bonds were issued—for $3 million, suing the country’s state mining company in Jersey. FG lost, and its founder said the fund incurred legal costs of $20 million.

Hard times, hard cash Global Post, Boston Matthew Welch and Nina Goldman

DATA

POINTS

Ten countries outside of the U.S. currently use the dollar as their exclusive currency.

Zimbabwe’s currency crisis in 2009 ended in the country adopting the U.S. dollar and South African rand.

T

he sour economy and looming fiscal cliff have economists and politicians throughout the U.S. investigating any way the government can save money, driving some Mint officials to suggest an unusual course of action: phasing out the dollar bill.

Switching to a dollar coin, rather than the paper version, could save U.S. taxpayers $4.4 billion over 30 years [as coins need to be replaced less frequently].

But the U.S. isn’t the only nation that relies heavily on the almighty dollar bill. What would happen in the other dollarreliant economies around the world if the paper version were phased out?

Nations like the Federated States of Micronesia, Palau and El Salvador use the dollar exclusively, and it functions as a de facto currency in Cambodia and Lebanon, among others. Countries usually switch to the dollar when their own currencies become too unstable to do business effectively.

Such was the case for Ecuador, when it adopted the dollar after the sucre succumbed to rampant inflation

during the country’s banking crisis in 2000.

The dollar often becomes far more valuable in these countries than it is in the U.S., leading many foreigners to squirrel away dollars as a more stable form of savings. The Department of Treasury estimates roughly two-thirds of U.S. currency is held abroad, many for just that purpose.

Regardless of how different dollar-dependent nations feel about a switch from bills to coins, most of them will probably accept either in favor of whatever native currency (if any) is available. Whether it’s metal or a cotton-linen blend, U.S. dollars have earned a reputation for their reliability as a global currency.

Canada phased out its Canadian dollar bill in favor of the quaintly nicknamed “Loonie” in 1987.

European countries like the Czech Republic and Iceland also favor coinheavy currencies.

Global Post is a U.S.-based online news outlet.

The World Weekly | DECEMBER 06 2012 | 33

John Smith/ALAMY

Phasing out the dollar bill could save U.S. taxpayers billions, but cause problems for dollar-dependent nations worldwide

Rubens Abboud/Alamy

CULTURE

At home in Havana

La Stampa/ Worldcrunch Paolo Manzo, Havana

Property reforms have opened up Cuba to émigrée investors

F

rom the end of 2011, when President Raúl Castro decided to legalize the buying and selling of houses between Cuba’s private residents, a flood of opportunity has opened up in the country’s real-estate sector. Cuba has not only seen an exponential rise in tourism from the U.S.— thanks to Barack Obama’s decision to allow travel to the communist state—but also in Americans buying property.

It is illegal for foreigners who don’t have permanent residence status to buy property in Cuba, but there are a swarm of intermediary real-estate agents on the Internet who are tolerated by the regime. They make sure that the sale deeds respect the new law by finding dummy resident buyers whose names appear on the contracts but who do not earn in a year even a fraction of the price of the property.

The prices show the extent of the boom.

Luxurious colonial-style villas in the most desirable

34 | The World Weekly | december 06 2012

neighborhoods of Havana, the capital, now sell for more than similar properties in Miami, DATA Florida. On the property website Detrás de la POINTS Fachada [Behind the Façade], a small villa with a garden, a terrace overlooking the sea, a living room, In November four bedrooms and three bathrooms is officially on the 2011, the Cuban market at 500,000 CUC, an acronym for ‘convertible government Cuban pesos’, or half a million dollars. Some villas allowed individuals in the luxury areas of Miramar or El Vedado can even to buy and sell homes for the first reach more than a million CUC. The buyers, in the large majority of cases, are time since the 1959 revolution.

Florida Cubans, who emigrated to Miami in the years Previously, people following Fidel Castro’s revolution. Emigrants often were permitted to dream of spending more time in their country of birth swap houses but and now, thanks to the new laws, they can. no money could change hands.

La Stampa is an Italian daily newspaper published in Turin. Worldcrunch translates selected articles from the international media.

In Havana some properties now sell for more than similar ones in Miami, Florida

Jonathan charles

Fabulous prefabs Factory-made flat pack homes were last used in London after World War II. Now, the city’s Hammersmith and Fulham council is deploying modernized prefabs to help those who can’t afford London’s rapidly rising house prices.

Million-dollar mansions After over 20 years of war, house prices in the Somali capital are booming

Feisal Omar/REUTERS

B

efore the outbreak of Somalia’s civil war in 1991, the capital, Mogadishu, was considered one of the most beautiful cities in Africa. With its Persian, Italian and Arab influences, it boasted broad boulevards, large villas and pale sandy beaches. Now, more than two decades on, the country has established a fragile peace, but very few of Mogadishu’s buildings have escaped the bullets and bombs that ripped through the city.

However, despite the very real security threat and the remaining possibility of a return to violence, Somali estate agents are reporting an astonishing property boom. Houses in the more secure areas of the city have sold for huge sums. A seven-bedroom villa that was once owned by the Qatari ambassador would now cost $8,000 a month to rent and over $1 million to buy. Most of the investors are members of the large Somali diaspora, many of whom dream of returning home. “I believe there’s a lot of money to be made here,” British Somali property speculator and businessman Idris Darwan told the BBC. “But it takes a lot of guts to stay in this place.”

Not everybody is thrilled by the idea of a Somali property boom. Despite the country’s progress toward peace, it is far from stable and there are still hundreds

of thousands of displaced people living in camps, with no proper shelter or reliable access to water. NGOs say that million-dollar mansions are not the best place for investment to be going. But commentators view the optimism demonstrated by the boom as a promising sign that, this time, peace will last.

Frances Perraudin THE WORLD WEEKLY

Before the civil war, Mogadishu was famous for its beautiful beaches

This space for rent Parking slots in Hong Kong are suddenly an attractive investment

$850 $700

South China Morning PosT Editorial $0

The South China Morning Post is a daily newspaper based in Hong Kong.

$1150

FEED THE METER Monthly rent for a downtown parking space

source: cnn

quickly sold the slots for a profit before completing their purchase. The number is is London $1014 the highest since 1998. Those who want to Zurich $822 have a share of the pie will be happy to learn rome $744 that [there have recently been] about 40 deals, tokyo $718 with one investor pocketing up to $39,000 in geneva $705 profit. But for the actual parking space users, that means a 20 percent rise in rent.

Arguably, there is nothing wrong with making the best of one’s investment in a free market. But there is cause for concern when the per-square-foot price of a parking space begins to outstrip that of the flats above it. What goes up must come down. There is no shortage of examples to remind investors of the danger ahead. A burst bubble is always the next step for an overheated market.

Enrico Buratto

incamerastock/Alamy

M

oney-minded Hongkongers will never let go an opportunity to make some quick money. Stocks and foreign currencies or flats and shops invariably have an appeal to those with some spare cash to invest. The latest mostsought item is apparently a parking space attached to a housing site. Despite the subdued economic outlook, a standard parking space in Tai Wai [an area in the New Territories region of Hong Kong] has fetched a jaw-dropping $168,000. It is disturbing to see speculators moving away from residential and commercial property to car parks.

The latest frenzy is no doubt fuelled by the Hong Kong government’s introduction of a special stamp duty to dampen soaring property prices. With limited supply and lower transaction levies, parking spaces naturally become an alternative for investors’ hot money. So far this year, there have been 226 transactions in which new buyers

$1000

The World Weekly | december 06 2012 | 35

Kyodo

CULTURE

A driftwood symphony Violins made from debris left by Japan’s 2011 tsunami are helping keep pre-quake memories alive The Japan Times/ Kyodo, Tokyo NORIKO MIYOSHI

DATA

POINTS

The 2011 Japanese earthquake and tsunami killed approximately 15,870 people and, according to World Bank estimates, cost $235 billion.

Japan’s clean up operation was swift, but nearly two years later, debris from the disaster is still washing up on America’s west coast.

Violin maker Nakazawa collected wood for his instruments from the debris left by Japan’s 2011 tsunami

36 | The World Weekly | december 06 2012

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hen an internationally acclaimed Polish violinist performed at a Japanese music festival in early November, the instrument played was not a Stradivarius or another prized violin. It was assembled from driftwood. After his performance at the Ikoma International Music Festival in Nara Prefecture, violinist Nicolas Chumachenco was called back to the stage for an encore. Before starting to play, he showed the audience the back of his violin, on which a picture of a single tree was drawn.

The picture was of the famed “miracle pine tree,” the only tree that survived the devastating tsunami that swept away a pine forest on the coast of Rikuzentakata, Iwate Prefecture, on March 11, 2011, the day the Great East Japan Earthquake hit the region. The instrument played by Chumachenco is one of two violins manufactured by Muneyuki Nakazawa, a violin maker in Tokyo, using driftwood recovered from the debris left by the tsunami.

Nakazawa, 72, is the master of a violin workshop that manufactures new instruments and repairs precious classics like Stradivariuses. After the earthquake and tsunami disaster, Nakazawa felt the urge to do something as an act of sympathy with the disaster victims. Several months after the earthquake, inspiration came when he and his violinist wife, Kimiko, were watching a TV news report about piles of debris, including parts of broken houses, which had been left by the tsunami.

“This is not mere debris. It is a source of family memories, family history,” Kimiko whispered as she watched the TV. She asked Nakazawa, “Can’t you make something using the debris?” He came upon the idea that manufacturing a violin made of parts

of broken houses might be a way of preserving the disaster victims’ family memories.

The body of a violin is composed of parts made of different wood materials. For the front plate, called the belly, a European tree known as spruce is believed to be the ideal material. The back and ribs are typically made of maple. Nakazawa, who was born to a family that runs a lumber business, is selective about wood materials and uses almost exclusively European wood to manufacture violins. “The tone color depends entirely on the wood materials,” he says. “If we don’t fuss about the tone color, a violin could be made of any wood.”

So, he decided to look for wood materials among the debris in the disaster area. Last December, he visited Rikuzentakata and scoured the region for suitable materials, guided by Kazuyuki Hinata, an employee at a local lumber factory. In Rikuzentakata, there was an abundance of driftwood that came from Takata Matsubara, the tsunami-swept coastal grove of Japanese red pine trees, a type of wood that can substitute for spruce as belly material. Meanwhile, alcove posts of houses in this region are typically made of maple, so materials for the backside and ribs were also expected to be found among the debris.

Eventually, Nakazawa collected a sufficient amount of driftwood and wooden posts of broken houses to manufacture several violins. After the wood was lumbered, Nakazawa took it back to Tokyo.

His unique violin-making mission took on urgency after it was decided that his new violin would be used at a one-year anniversary memorial service for the earthquake and tsunami disaster co-organized by Iwate Prefecture and Rikuzentakata that was scheduled for March 11, 2012. Nakazawa had to drastically speed up the manufacturing process, which usually takes four months. The use of unusual materials also posed a challenge, as it required meticulous adjustments of the thickness of the wood plates.

The day before the memorial service, Hinata heard the sound of the violin whose materials he helped to collect. “That was the first time in my life that I listened to a violin played before me. I was reminded of peaceful scenery of the Sanriku coast that I saw before the earthquake,” he recalls. Hinata suffered from the disaster himself and his life has been a struggle ever since. “I felt that this sound might have a comforting effect on our minds,” he says.

Two driftwood violins are now being used in performances as part of a project to encourage disaster victims to keep the lesson of the disaster alive. One of them is being played in Japan and the other abroad.

Over the next few years, a viola and a cello will be added to the driftwood variety of stringed instruments.

Hinata is delighted at the thought that the instruments made out of the remnants of tsunamidevastated pine trees and houses will continue to be passed down from generation to generation. “I’m thrilled to think of their future hundreds of years from now,” he says The Japan Times is a daily newspaper. Kyodo is a Japanese news agency.

D A K S . C O M

NEXT WEEK'S NEWS

No thanks, I’m British Britain’s estrangement from the European Union deepens as Prime Minister David Cameron skips the Oslo ceremony at which the E.U. will pick up its Nobel Peace Prize. He suggested schoolchildren go instead.

Paul Hackett/Reuters

> ISSUE

47/52

Greg Walton The world weekly

MANILA, PHILIPPINES

Larry Downing/Reuters

What it is China snubs its regional neighbors by sitting out talks aimed at defusing tension over territorial and maritime disputes in the South China Sea. Why it matters Vital shipping lanes cross the South China Sea, and it is also believed to be rich in fossil fuels. Recent escalations in rhetoric between China and Japan over disputed islands have led to fears of conflict.

What to expect Brunei, Malaysia, Vietnam and their Filipino hosts to make progress on a number of territorial tiffs.

China and Japan will continue to squabble over the islands, but neither can afford a military confrontation.

TEHRAN, IRAN

TOKYO, JAPAN

SILVIRI, TURKEY

What it is Japan votes in yet another snap election that will determine the country’s political and economic outlook ... until the next snap election.

Why it matters The world’s third largest economy seems to be heading for another recession and now faces the prospect of electing its fourth government in six years. With the global economy faltering and territorial disputes with China escalating, Japan needs political stability now more than ever.

What to expect More economic and political instability. Polls suggest the two main parties, the Liberal Democratic Party and incumbent Prime Minister Yoshihiko Noda’s Democratic Party of Japan, may command less than half the vote. Smaller parties looking to become power brokers are striking some improbable alliances, like that between conservative anti-China campaigner Shintaro Ishihara and moderate mayor of Osaka, Toru Hashimoto.

What it is Almost 200 suspected Kurdish militants go on trial charged with supporting terrorism.

Why it matters At a time of significant gains for Kurds in Syria’s northeast, the trial of a group made up largely of politicians and academics is sure to enrage Turkey’s 14 million Kurds. The Kurdish PKK group has been engaged in an insurgency against the Turkish state since 1984.

What to expect Pitched battles between activists and Ankara’s paramilitary forces in the predominantly Kurdish city of Diyarbakir are the standard response to perceived Turkish crackdowns.

38 | The World Weekly | december 06 2012

A Japanese craftsman puts the finishing touches to a Buddhist ‘Daruma’ doll, a favorite talisman among politicians

JOHANNA LEGUERRE/getty

Yuriko Nakao/Reuters

Abbas/Magnum

What it is Iran hosts nuclear watchdog officials for talks about stalled inspections.

Why it matters With many regarding Israel’s missile defense strategy during the Gaza conflict as a dress rehearsal for a confrontation with the Islamic Republic, this latest round of talks could be the last best chance to avert military strikes.

What to expect The International Atomic Energy Agency to demand access to a site where experts believe the Iranians are testing a nuclear device. The likely result: A face-saving compromise allowing limited inspections.

Crisis averted, for now.

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