CENTCOM chief: Islamic State can be defeated without US ground troops — Iran steps in

March 5, 2015

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Undersecretary of Defense for Policy Christine Wormuth and CENTCOM Commander Gen. Lloyd Austin testify at a House Armed Services Committee hearing on Capitol Hill, March 3, 2015. Photo Rick Vasquez/Stars and Stripes

By Travis J. Tritten
Stars and Stripes

WASHINGTON — The general in charge of U.S. forces in the Middle East defended the Obama administration’s war strategy Tuesday, telling House lawmakers that the Islamic State will be defeated without ground U.S. combat troops.Gen. Lloyd Austin said the Islamic extremist group is already losing the ability to govern and hold territory in Iraq and Syria following seven months of U.S. and coalition airstrikes, and that eventually it will be pushed out by Iraq and Syrian proxy forces.

The U.S.-led military coalition in Iraq has killed more than 8,500 Islamic State fighters since its bombing campaign began in August, he said.

The general testified before the House Armed Services Committee as Congress — including many skeptical Republicans — weighs the president’s proposal for a new war authorization that would lay down guidelines for the Islamic State offensive, including whether American troops will join the fight.

“I think we will be able to get this done with the approach we have taken,” Austin said. “At the end of the day … this needs to be done by the Iraqis.”

To replace authorizations passed after 9/11, the White House is proposing a war authorization that would restrict large-scale combat ground forces and expire after three years.

It would largely continue current policies, which administration and military officials say are working. Several months ago, the Islamic State could move freely in large convoys waving its signature black flags, but the air offensive has pushed the group into a “defensive crouch” across Iraq and Syria, Austin said.

“The enemy is beginning to struggle in a number of areas, in the ability to govern and the ability to hold territory,” he said.

Meanwhile, President Obama has authorized some 3,000 U.S. troops, many of whom are deployed to Iraq to train and advise the Iraq army, which launched a major offensive this week to take back the city of Tikrit, but without U.S. help. In Syria, a new program to train and equip moderate Syrian rebels against the Islamic State is set to begin later this month and could enable a coordinated ground offensive later this year.

Austin and Undersecretary of Defense for Policy Christine Wormuth both backed the Obama administration insistence that any war authorization passed by Congress should limit another United States ground war in Iraq.

Republicans in the Senate have questioned whether limiting U.S. involvement to advising and airstrikes can defeat the Islamic extremists.

Lawmakers pressed Austin to weigh in on ground troops. But there was little push back on the White House strategy from the Armed Services Committee on Tuesday.

Rep. John Garamendi, D-Calif., said he backs the three-year sunset clause proposed for the war authorization.

The measure would force a new debate on the conflict during the 2016 presidential campaign, he said.

http://www.stripes.com/news/middle-east/centcom-chief-islamic-state-can-be-defeated-without-us-ground-troops-1.332526

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New poll finds major American support for sending U.S. ground troops to fight Islamic State

Yahoo News

Congressional hawks who favor sending U.S. ground troops to fight the Islamic State militant group in Iraq and Syria got a boost on Wednesday from a new poll that found Americans favor doing so by a lopsided 2-to-1 edge.

The Quinnipiac University assessment, which had a margin of error of plus or minus 2.7 percentage points, confirmed a public opinion trend since late last year showing that Americans are increasingly turning in favor of ground combat after months of Islamic State videos showing the group’s atrocities in agonizing detail, including the beheadings of U.S. nationals.

The poll comes as a trio of top officials — Secretary of State John Kerry, Defense Secretary Ash Carter and Chairman of the Joint Chiefs of Staff Martin Dempsey — are scheduled to face questions about President Barack Obama’s war plans from the Senate Foreign Relations Committee in a March 11 hearing.

The Quinnipiac poll found that 62 percent of Americans support sending U.S. troops to fight IS, as the militant group is also known, in Iraq and Syria. Thirty percent oppose such an escalation.

Fifty-three percent of respondents said they worried that the U.S. military “will not go far enough in stopping” IS, while 39 percent expressed concern that the military will go “too far,” Quinnipiac reported.

Obama has asked Congress to greenlight a sweeping Authorization for the Use of Military Force (AUMF) that expires in three years and includes deliberately vague language restricting “the use of the United States Armed Forces in enduring offensive ground combat operations.” Republicans, including Senate Armed Services Committee Chairman John McCain, have loudly complained that the AUMF imposes wrong-headed limitations on the military campaign. Democrats, including Senate Foreign Relations Committee ranking member Bob Menendez (D-New Jersey) have worried that the vague language does little, if anything, to limit the operations, because there is no precise meaning to “enduring ground combat operations.”

The measure would not confine the war on IS to Iraq and Syria, a geographic limit that some Democrats had sought. And the expiration date would make any renewal fight the next president’s problem, something that makes many Republicans unhappy.

Democrats privately accused the White House last year of stalling debate on the AUMF in order to kick the process to a Republican-controlled Congress more likely to oppose limits on the military campaign. Administration officials have privately expressed concerns about losing too many Democrats in any final AUMF vote, which would show the world that the United States is divided about tackling IS.

The vague language of the White House-drafted AUMF reflected those concerns, as well as strong opposition from top administration foreign policy and national security staff to setting any meaningful limits on the operation.

It’s not clear that Congress will overcome those divisions and approve an AUMF. Next week’s hearing is expected to showcase the broad divisions among lawmakers and hint at what — if anything — the White House is prepared to do to shore up support.

The White House has said it is already acting legally, citing the 2001 AUMF that was approved in response to the Sept. 11 attacks as well as the president’s war-making powers under Article 2 of the Constitution.

A White House official recently told Yahoo News that the administration would not object if Congress were to amend the proposed AUMF to stipulate that it — not the 2001 AUMF — is the only authority for the military campaign. But that would not restrict Obama’s actions, since the new AUMF expires under his successor.

The Quinnipiac poll found that that Americans favor congressional approval of the AUMF by a 64-to-23 percent edge.

Obama, who says he has no plans to send U.S. ground troops into combat against IS, has said he does not envision a massive incursion, as in previous wars in Iraq or Afghanistan. And top aides have carefully kept things similarly vague.

“I believe that we give the president the options necessary in order to deal with the emergency,” retired Marine Corps Gen. John Allen, the president’s point man on the conflict, told the Senate Foreign Relations Committee on Feb. 25. “And ‘enduring’ might only be two weeks. But ‘enduring’ might be two years.”

On Feb. 25, Kerry told the House Foreign Affairs Committee, “We’re not talking about American ground troops, and there is no authorization in here putting American combat ground troops into an enduring offensive combat situation.”

While it’s not clear how much or whether the poll will shift the debate in Congress, the general public opinion trend has appeared to show increasing support for sending U.S. ground troops into combat. Americans still seem broadly divided about the issue, however.

A February poll by the nonpartisan Pew Research Center found that 49 percent of respondents worried the United States would not go far enough in trying to defeat IS, while 46 percent were more worried about the U.S. going too far. Forty-seven percent backed sending ground troops into combat, and 49 percent opposed taking that step. An October Pew poll found Americans split 39-to-55 percent on the same issue. The latest Pew poll had a margin of error of plus or minus 2.9 percentage points.

A CBS News poll, also conducted in February, found 57 percent of respondents favored sending U.S. ground troops into combat, against 37 percent who were opposed. That assessment, which had an error margin of plus or minus 3 percentage points, reflected a big shift from a September poll that found a 39-to-55 percent split.

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Shiite fighters fired a rocket during clashes with Islamic State militants in Salahuddin Province on Sunday. Credit Ahmed Al-Hussaini/Reuters

U.S. Strategy in Iraq Increasingly Relies on Iran

WASHINGTON — At a time when President Obama is under political pressure from congressional Republicans over negotiations to rein in Tehran’s nuclear ambitions, a startling paradox has emerged: Mr. Obama is becoming increasingly dependent on Iranian fighters as he tries to contain the Islamic State militant group in Iraq and Syria without committing American ground troops.

In the four days since Iranian troops joined 30,000 Iraqi forces to try to wrest Saddam Hussein’s hometown of Tikrit back from Islamic State control, American officials have said the United States is not coordinating with Iran, one of its fiercest global foes, in the fight against a common enemy.

That may be technically true. But American war planners have been closely monitoring Iran’s parallel war against the Islamic State, also known as ISIS or ISIL, through a range of channels, including conversations on radio frequencies that each side knows the other is monitoring. And the two militaries frequently seek to avoid conflict in their activities by using Iraqi command centers as an intermediary.

Read the rest:

http://www.nytimes.com/2015/03/06/world/middleeast/us-strategy-in-iraq-increasingly-relies-on-iran.html?hp&action=click&pgtype=Homepage&module=first-column-region&region=top-news&WT.nav=top-news&_r=0

Auction in Thailand Displays Fruits of Police Corruption — “Corruption is part of our police culture.”

March 5, 2015
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BANGKOK — Mar 5, 2015, 5:59 AM ET

Hillary’s “Clintonian Entitlement” Prompted “Secretive” Email System, Controlled by Lawyers — So Much For Talk of Transparency and Federal Law

March 5, 2015

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Charles Krauthammer told viewers Wednesday  on “Special Report with Bret Baier”  that revelations that former Secretary of State Hillary Clinton used a private email addressed hosted on a server in her New York home showed that if “you’re using a private account, you’re setting it up in your house so it’s protected, you are clearly constructing a system in which you control access.”

Krauthammer, a syndicated columnist and Fox News contributor criticized Clinton’s motives saying, “If anybody ever demands access, you will have your lawyers out there, for blocking, questioning and protecting it…if you want to make something disappear by swapping out a server, you can do it and nobody knows.

“Now, why would you do that if you’re Secretary of State and you’re not intending at some point to be secretive about it?”

Krauthammer also noted that this latest scandal is likely to have lasting impact for Mrs. Clinton:  “this is the same old Clinton that we know, and I think the reason that it hurts her is because we’ve seen the movie before throughout the 90s.

“The Clintons aren’t just entitled, they also have a sense that they are to be protected in a way no one else is. Then they end up, when they’re accused of either violating the law or the practice, making distinctions that are…I mean, the adjective Clintonian was invented for these fine distinctions, between legal and illegal, proper and improper.

“This is a version of ‘it depends what the word is- is.’”

Includes video:

http://www.foxnews.com/politics/2015/03/04/krauthammer-clinton-clearly-constructing-system-in-which-control-access-1575777630/

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BRET BAIER: ABC’s 20/20 did a story back in 2001 in which it had Mrs. Clinton on camera saying this:

HILLARY CLINTON: As much as I’ve been investigated and all of that, you know, why would I — I don’t even want — why would I ever want to do e-mail? Could you imagine?

That was from 20/20. It seems that this server, Charles, was set up the day that she was sworn in as secretary of state. The domain is active until after the election of 2016.

CHARLES KRAUTHAMMER: Yes, a lot of people have private e-mail accounts but name one who has a private server set up that they control and it’s in their house with Secret Service protecting the house.

BAIER: Well, Jeb Bush used a private account, private server, as well.

KRAUTHAMMER: But he put it all out so anybody can access.

JUAN WILLIAMS: We don’t know that.

KRAUTHAMMER: Well, we don’t know that? Has there been any allegations they’ve been hiding it?

WILLIAMS: No, no, that he hasn’t put it all out. We know that he has put some out but there are indications that it’s not all out.

KRAUTHAMMER: If you are going to be secretary of state and you said in 2001 why would I do e-mail and you’re using a private account, you are setting it up in your house so it’s protected, you are clearly constructing a system in which you control access. If anybody ever demands access you will have your lawyers out there for a year blocking questioning and protecting it. And as we just heard if you want to make something disappear by swapping out a server you can do it and nobody knows.

Why would you do that if you’re secretary of state and you’re not intending at some point to be secretive about it? This is the same old Clinton that we know. And I think the reason that it hurts her is because we’ve seen the movie before throughout the ’90s. The Clintons aren’t just entitled, they also have a sense that they are to be protected in the way no one else is and then they end up when they’re accused of violating either the law or the practice making distinctions that are — I mean, the adjective Clintonian was invented for these fine distinctions between legal, illegal, proper and improper. This is a version of it depends on what the word ‘is’ is.

http://www.realclearpolitics.com/video/2015/03/04/krauthammer_on_clinton_emails_weve_seen_this_movie_before_a_version_of_it_depends_on_what_the_word_is_is.html

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Are peaceful Muslims in denial about their religion?

March 5, 2015

By Adam Walker

The Koran has violent passages, but it also has others that explicitly tells us how to interpret them — and it’s bad news for critics of Islam

Isis has sharpened many people’s sense of paranoia towards Islam. The majority of Muslims have a peaceful reading of the Koran, but as Isis commits more and more atrocities, the argument that the Koran equally invites a violent interpretation of its teachings has begun to gain ground.

A quick internet search that throws up certain passages which, read at face value, could prove these suspicions correct. For example, critics of Islam often cite verses such as: “fight such of the disbelievers as are near to you”; or to “kill the idolaters wherever you find them”. Passages such as these leave an impartial observer wondering — is Islam simply a matter of interpretation? Is the line between a peaceful Muslim and a terrorist simply a matter of which verses you follow and which you ignore?

No, is the emphatic answer of the Koran. Whether Islam is peaceful or extreme is not just a matter of interpretation, and for the simple reason that the Koran tells you exactly how to interpret it. Once you’ve read how it works, you’ll understand exactly why the verses above aren’t actually calling for “Death to the West”, but are in fact completely reasonable in their context. If that sounds far-fetched, then keep reading.

READ MORE
Why there’s nothing Islamic about the ‘Islamic State’

The Koran clearly states that it contains two types of verses: context-independent verses, and context-dependent verses. Context-independent verses are unambiguous and timeless principles which can be applied in every situation. Context-dependent verses are those that are specific to particular situations, and can’t be read in isolation. The Koran then goes on to condemn those who cherry-pick verses to suit their own selfish ends, and tells its reader to take all the verses together before coming to any conclusions.

“Peace” is one of the literal meanings of Islam, and its ultimate aim. And as such, it explicitly teaches that there is no compulsion in matters of faith. Regarding war, it teaches that Muslims are only ever allowed permitted to fight defensively, stating that “permission to fight is given to those against whom war is made, because they have been wronged – and Allah indeed has the power to help them”.

As for how Muslims should co-exist with peaceful people of other beliefs, the Koran couldn’t be clearer: “Allah only forbids you from those who fight you because of religion and expel you from your homes”. For everyone else, it is taught that you should be kind and act fairly towards them.

So just to be clear: Islam is not simply a matter of interpretation, because the Koran itself tells us how to interpret it. Any other interpretation is either willfully dishonest or just plain ignorant.

Once this has been accepted, then can we recognise the evil of Isis without letting them divide us? It is unity across diversity that is the best way to defeat them. Repel evil with that which is best, says the Koran (or: don’t stoop to their level). And this is something that I hope we can all agree on, regardless of our religious beliefs.

http://www.independent.co.uk/voices/comment/are-peaceful-muslims-in-denial-about-their-religion-10084960.html

Li Keqiang tells Hong Kong “one country, two systems” remains but also reinstated the promise of “Hong Kong people governing Hong Kong”

March 5, 2015

By Tony Cheung in Beijing and Peter So
South China Morning Post

Li restated the promise of “Hong Kong people governing Hong Kong”. Photo: Bloomberg

The implementation of the “one country, two systems” principle must strictly comply with the Chinese constitution and the Basic Law, Premier Li Keqiang said at the opening of the annual National People’s Congress in Beijing on Thursday.

It was the first time the role of the constitution has been highlighted in the premier’s annual report when the issue of Hong Kong has been touched upon.

Li also reinstated the promise of “Hong Kong people governing Hong Kong” as well as the city’s “high degree of autonomy” in his concluding remarks.

The two phrases – “the people of Hong Kong governing Hong Kong” and “high degree of autonomy” – were omitted in Li’s report last year, and the report of Yu Zhengsheng, chairman of the Chinese People’s Political Consultative Conference, on Tuesday, raising concerns about whether Beijing is altering its policy on the city.

On the fiscal front, Li also promised to launch the Shenzhen-Hong Kong stock connect “on a trial basis at an appropriate time” and to “work actively to develop pilot free-trade zones in Shanghai, Guangdong, Tianjin and Fujian.”

In his 90-minute speech, Li said, “We [the central government] will steadfastly carry out the principles of ‘one country, two systems’, the people of Hong Kong governing Hong Kong, the people of Macau governing Macau, and both regions enjoying a high degree of autonomy.

“And we will strictly comply with the constitution and the basic laws of these two regions.”

Li did not mention the constitution in the part concerning Hong Kong in previous reports.

Ye Haibo, a professor at Shenzhen University’s Centre for Hong Kong and Macau Basic Laws, said it was the first time in the premier’s working report to highlight the importance of “strictly complying with the constitution and the basic laws” in the implementation of “one country, two systems”.

Ye said, however, the remarks were not entirely new and were consistent with other statements made by state leaders since the third plenary session of 18th central committee in 2013.

He said the significance of highlighting the role of the constitution in the working report was to stress that disputes in interpreting the Basic Law on controversial issues such as political reform had to be resolved under the provisions of the constitution.

But he did not think the remarks had undermined the city’s autonomy and “one country, two systems” because Li also restated the phrases of ”the people of Hong Kong governing Hong Kong” and the city’s “high degree of autonomy”.

“This is clearly a response to the worries and doubts made by Hong Kong and international society and to reassure the ‘one country, two systems’ principle will remain firmly upheld,” Ye said.

Rita Fan Hsu Lai-tai, Hong Kong’s sole representative on the National People’s Congress Standing Committee, said the role of the constitution was highlighted to act as a reminder for Hongkongers, especially after local activists had advocated independence.

“I think it is a reminder, especially in the past year, as we have seen some people publicly advocating Hong Kong independence, or even raising some weird flags at public rallies”, she said referring to colonial-era flags favoured by some activists.

“This cannot be continued because it will affect Hong Kong’s development and Hongkongers’ hope for stability.”

But Hong Kong’s former justice minister Elsie Leung Oi-sie, who is also the deputy director of the NPC’s Hong Kong Basic Law Committee, said she did not think the mention of the constitution was related to the advocacy of independence or the 79-day Occupy Central protests last year.

“I am not surprised at all because the constitution applies to every inch of the territory … and Hong Kong is part of China,” she said.

Amid the Hong Kong government’s ongoing efforts on political reform to achieve universal suffrage for its leader in 2017, Li also reiterated that Beijing “will give full support to the chief executives and governments of Hong Kong and Macau … in governing their regions in accordance with the law, growing the economy, improving people’s standard of living, advancing democracy, and promoting social harmony.”

NPC deputy Bernard Chan said Li’s comments were intended to alleviate Hongkongers’ worries.

“‘One country, two systems’ and a high degree of autonomy are the coherent ideologies of the central government. Hongkongers were worried when these were not included in the report last year … [But] don’t worry, the policy of the central government is still the same,” he said.

Fellow deputy Michael Tien Puk-sun also believes that Li’s remarks underlined the central government’s hope that the Hong Kong can achieve universal suffrage for the city’s leader in 2017.

“If there is no universal suffrage for the chief executive [election], how can there be ‘Hong Kong people governing Hong Kong’ and the city’s ‘high degree of autonomy’?” Tien asked.

He believed that instead of condemning the “illegal” Occupy Central protests, Li had used relatively neutral and moderate language in his report because he did not want to trigger any negative emotions among Hongkongers.

Li added that the central government would “ensure that the mainland and the two regions develop more exchange and cooperation in all fields, and that the two regions continue to play their special roles in the country’s reform, opening up, and modernisation.”

Apparently weighing in on the debate about how Hong Kong should boost its economy, the report added: “We are confident that with the central government continuing its strong support for Hong Kong and Macau, and with continuous improvement to their own competitiveness, these two regions will enjoy long-term prosperity and stability.”

Meanwhile, Chief Executive Leung Chun-ying, who attended the NPC’s opening this morning, had a closed-door meeting with Director of the State Council’s Hong Kong and Macau Affairs Office, Wang Guangya, in the afternoon.

It was understood that NPC chairman Zhang Dejiang, the top official in charge of Hong Kong affairs, will meet Leung on Friday afternoon, after meeting the Hong Kong deputies to the NPC on Friday morning.

Additional reporting by Connie Yau

 

The Fragility of the Global Financial Order

March 5, 2015

Russia and China have been trying to develop their own alternative system. One day soon they may succeed.

ALTERNATE REALITY: A strong dollar keeps countries like Russia and China from undermining U.S. dominance. For now.  
ALTERNATE REALITY: A strong dollar keeps countries like Russia and China from undermining U.S. dominance. For now. Photo: AFP/Getty Images
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By Mark Dubowitz and Jonathan Schanzer
The Wall Street Journal
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The U.S. Treasury has, over the past decade, been at the forefront of waging economic warfare against rogue actors. President Barack Obama has used sanctions to combat Iran’s nuclear program, punish Russian aggression against Ukraine, squeeze the Assad regime in Syria and prevent the flow of funds to terror groups such as the Islamic State and al Qaeda.

U.S. financial-warfare capability reached its height in 2012 when Congress forced the Obama administration and European Union regulators to expel Iranian banks from the Swift system, the primary messaging mode by which financial institutions move funds electronically. As a result, Tehran lost its most important global-banking entry point to finance its overseas trade, impelling the mullahs to negotiate with the West over its illicit nuclear program.

Watching from the sidelines, however, Washington’s adversaries have been developing economic weapons of their own. In 2010 China banned exports of rare-earth minerals critical to Japan’s electronic industry, and Beijing has frequently used economic and diplomatic pressure to challenge the international recognition of Taiwan. Soon China may complement its naval maneuvers in the South China Sea with economic coercion to pressure Vietnam, the Philippines and other Asian nations over ownership of the massive oil and gas reserves in the disputed waters.

As former U.S. Treasury Secretary Henry Paulson describes in his book, “On the Brink,” the Kremlin amid the Great Recession tried to persuade China to dump their massive holdings in Fannie Mae and Freddie Mac . This would have forced an intervention by the U.S. government to save the two institutions and dramatically exacerbated the already-serious economic crisis. The two powers ultimately balked, likely over fears that they had just as much to lose if they were to dump their investments.

In short, America and its allies are vulnerable, and while mutual economic dependence may have made the West’s adversaries cautious, this could change if countries such as China, Russia and Brazil decide to challenge U.S. global economic dominance.

For now, U.S. dominance means that it sets the rules and penalties in the financial sector. That dominance and coercion hinges on the strength of the U.S. dollar. As long as global finance is structured as it is—with the dollar as the currency of choice and U.S. Treasurys seen as the safest investment even during a financial crisis—Washington will continue to enjoy a strong advantage. Thankfully, 87% of international trade is still conducted in dollars and 61% of global foreign-exchange reserves is denominated in dollars.

But this won’t last forever. A number of countries and institutions are already looking at nondollar options. As global-finance expert James Rickards describes in his book “The Death of Money,” the International Monetary Fund is working to establish an alternative global-reserve asset, known as Special Drawing Rights, linked to a basket of currencies that would reduce the weight of the greenback and increase the weight of the yuan.

Other attempts are underway to circumvent the dollar-dominated system, primarily to evade U.S. penalties. One popular workaround is China’s UnionPay, an interbank credit-card association like Link or Interac that also issues credit cards. UnionPay accounts for 45% of all credit and debit cards in circulation and is now accepted in 135 countries. It can also be delinked from New York, providing an alternative for countries like Russia to skirt U.S. sanctions.

Meanwhile, Russian officials, with Chinese cooperation, are creating an alternative to Swift, according to Andrei Kostin, head of Russia’s state-owned VTB Bank and a close adviser to Vladimir Putin . With the Ukraine crisis escalating, the Kremlin knows that more U.S. sanctions are coming. U.S. legislators and British officials have even contemplated expelling Russian banks from Swift—a move Mr. Kostin has warned would be tantamount to a declaration of war. This system lacks the credibility of Swift, and therefore lacks customers—for now. But the combination of an alternative global-reserve asset, a Chinese global credit card, an alternative Swift system backed by Russia and China, and a number of banks willing to defy the global financial order, could represent a significant challenge to U.S. interests.

U.S. allies will also feel the pain. In 2014, pro-Palestinian organizations petitioned Swift to disconnect Israeli financial institutions from its financial-messaging system. Swift rejected the pressure, explaining that it wouldn’t take action without direction from EU regulators. Swift, however, would presumably comply, as it did in the case of Iran, if Brussels gave the order.

The U.S. and its allies must prepare for a growing and dangerous era. It will be marked by cyberwarfare, by abuses of the international legal system to disrupt national security, and by attempts to undermine the integrity of the U.S.-backed global system. Led by Washington’s sanctions architects, who have turned financial power into a significant instrument of offensive coercion, the West must now turn our punitive system into one that also provides a shield of defense.

Mr. Dubowitz is executive director of the Foundation for Defense of Democracies and its Center on Sanctions and Illicit Finance, where Mr. Schanzer, a former Treasury terrorism analyst, is vice president of research.

Li Keqiang: China Lowers Growth Target To “New Normal” — Wants to Lower Barriers to Private Enterprise

March 5, 2015

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From the BBC

Addressing the National People’s Congress (NPC), Mr Li Keqiang said China would target growth of about 7% in 2015.

With traditional drivers of growth weakening, more structural reform was needed going forward, he said.

Describing pollution as a “blight” on quality of life, he said environmental laws would be strictly enforced.

Some 3,000 legislators from across China convene for the annual legislative session at Beijing’s Great Hall of the People.

China’s economy – slowing but still out in front

Delegates listen to Chinese premier Li Keqiang (on the screen) as he delivers his work report during the opening of the third session of the 12th National People's Congress at the Great Hall of the People in Beijing on March 5, 2015

China describes the NPC as the “supreme organ of state power”. It has the power to enact and amend legislation. In practice, it is generally considered a rubber stamp for the ruling Communist Party.

The premier’s work report traditionally opens the session, which ends on 15 March.

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Analysis: Celia Hatton, Beijing

Every year, the Chinese premier’s annual work report skims a wide variety of topics. The speech is supposed to function as a grand overview of the government’s triumphs and failures in the past year, while also signalling Beijing’s future priorities.

This year showed a narrowed focus on two major topics: the economy and the environment.

Thirty pages of Li Keqiang’s 38-page speech were devoted to the slowing economy. He used the now-ubiquitous phrase the “new normal” to reassure his audience that a lower GDP forecast of 7% was natural and would be in place for a few years.

But the most heartfelt language focused on environmental pollution, an issue that Li Keqiang acknowledged was “a blight on people’s quality of life and a trouble that weighs on their hearts”. A long list of promises followed, from forest protection to the promotion of electric vehicles.

On both issues, Mr Li attempted to strike the same tone: he wanted to appear in touch with problems on the ground and the frustrations of the Chinese people, while reassuring the public that his government knows how to tackle the problems.

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‘Crucial year’

Announcing the annual growth target, Mr Li said China had to “maintain a proper balance between ensuring steady growth and making structural adjustments”.

The 7% figure is lower than the 7.5% set last year – a target that was missed as China grew at its slowest pace in 24 years.

After years of double-digit growth, China’s leaders are now advocating a “new normal” of slower expansion.

The world’s second largest economy is trying to move from an export-led growth model fuelled by government investment to one driven by higher domestic consumption and a larger services sector.

“Deep-seated problems in the country’s economic development are becoming more obvious,” said Mr Li.

“The difficulties we are facing this year could be bigger than last year. The new year is a crucial year for deepening all-round reforms.”

He said China aimed to create more than 10 million new urban jobs in 2015 and maintain an unemployment rate of 4.5%.

Job creation is seen as vital to providing employment for the millions of new graduates who emerge on to the job market each year.

Smoke rises from a chimney of a steel plant next to residential buildings on a hazy day in Fengnan district of Tangshan, Hebei province in this 18 February 2014 file picture
Rapid development has led to major environmental pollution issues across China
A man wears a mask as he makes his way during a polluted day at Tiananmen Square in Beijing 15 January 2015
Correspondents say Mr Li’s comments on the environment reflect public concern

On the environment, Mr Li promised to fight pollution “with all our might”.

“We must strictly enforce environmental laws and regulations; crack down on those guilty of creating illegal emissions and ensure they pay a heavy price for such offences,” he said.

China is facing major pollution problems after runaway industrialisation. Last year, a government report found almost a fifth of China’s soil was contaminated. Unhealthy levels of smog frequently hit its major cities.

Mr Li touched on corruption only briefly, telling lawmakers that the “tough stance” was here to stay.

The government also confirmed that the military budget would rise 10.1% in 2015, as indicated on Wednesday by an official.

See it all with video:

http://www.bbc.com/news/world-asia-china-31743598

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The Wall Street Journal

With a state-of-the-nation speech, Chinese Premier Li Keqiang announced an era of slower growth, saying “China’s economic development has entered a new normal.” The nearly 100-minute speech inside Beijing’s Great Hall of the People on Thursday outlined the Chinese government priorities for the coming year. The overriding imperative: generating enough growth to keep people happy while the government guides a transition away from smokestack industries to services.

1. China’s ‘new normal’ is slower, but not slow.

The lowered growth target of about 7% is the lowest in over a decade, but still — Chinese state media reminded — fast for a major economy. A willingness to see an economic free-fall after years of heady growth it isn’t. Mr. Li several times cited the need to keep the economy humming along. He said maintaining “medium-high-level growth” is crucial to boosting living standards, creating jobs and finding new growth drivers.

2. Is smaller better?

While China’s large and often unpopular state enterprises typically capture a large share of bank loans and other government support, Mr. Li gave more than a shout-out to small businesses. He promised to make it easier to start new businesses and encourage people to do so. It isn’t so much an ideological retreat from state control to the private sector. The reason, he said, is that China needs to create jobs and smaller businesses do that.

3. The Government is not going away

For all the progress, China’s government still believes strongly in the state’s hand over the invisible hand. The deficit is being widened – to 2.3% of gross domestic product from 2.1% – to spend more money to create growth. Big infrastructure projects are still in vogue, with the government promising 800 billion yuan (about $127.6 billion) for new railways and a similar amount for water projects. One of President Xi Jinping’s pet projects, a bevy of cross-border infrastructure projects to bind neighboring economies to China’s orbit known as the new Silk Road, received three mentions.

4. What about the environment?

Expected to be a hot topic, the environment didn’t feature highly in government priorities. Last year, Mr. Li vowed to “declare war on pollution” in a bow to rising middle-class complaints about noxious air, especially in Beijing. A documentary by a former state TV reporter released last weekend went viral. Mr. Li’s speech, however, offered tinkering on already-laid plans. Energy intensity – a measure of energy used to create economic growth – is to be cut 3.1%, lower than last year’s 4.8% but enough to reach a long-term target.

5. China still has a long way to go

For all China’s tremendous success in becoming an economic powerhouse, income gaps are wide and many people — especially in rural areas — struggle. These government reports are a good reminder of that. This year, Mr. Li said, 60 million more rural Chinese will get access to safe drinking water. Some 200,000 people live without electricity, though more will get it, he said. The social safety net the government has struggled to build out is still thin. The government’s raising pensions, but even so the lowest basic pension across urban and rural China will be 70 yuan a month, less than $12.

http://blogs.wsj.com/briefly/2015/03/04/5-takeaways-from-chinas-state-of-the-nation-speech/

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Employees work on the production line of a beer factory in Shenyang, China. Premier Li Keqiang said Thursday that his country needed to remove barriers to private business. Credit Sheng Li/Reuters

Chinese Premier Warns of Economic Barriers to Private Enterprise

BEIJING — Premier Li Keqiang, in his annual speech to the nation, warned Thursday that China would have to overcome economic inefficiencies, excess capacity and impediments to private enterprise if it were to maintain healthy rates of growth.

In his state-of-the-nation report to the National People’s Congress, the Communist Party-run legislature, which meets in full session once a year, Mr. Li lowered the target for economic growth to “approximately 7 percent” and announced new policies and programs that he said would encourage a more robust private sector to create jobs and foster innovation, moving the country away from its dependence on government-led infrastructure investment, heavy industry and low-end exports.

Mr. Li acknowledged in his opening remarks that the transition would weigh on total growth and would face challenges.

Read the rest:

http://www.nytimes.com/2015/03/05/world/asia/chinese-premier-warns-of-economic-barriers-to-private-enterprise.html?ref=world&_r=0

Australia offers Indonesia prisoner swap to stop executions

March 5, 2015

Country makes desperate 11th hour bid to save lives of two Australian drug smugglers – but media reports Indonesia has rejected the offer

Australian death row prisoners Andrew Chan (C) and Myuran Sukumaran (L) are seen in a holding cell waiting to attend a review hearing in the District Court of Denpasar on the Indonesian island of Bali, in this October 8, 2010 photograph

Andrew Chan (C) and Myuran Sukumaran (L), pictured in a holding cell in Bali in 2010 Photo: REUTERS/Nyoman Budhiana/Antara Foto
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By AFP

.Australia offered Indonesia a prison swap deal in an 11th hour bid to save the lives of two Australian drug smugglers who have been transferred to an island prison where they are to be killed by firing squad within days.

Julie Bishop, Australia’s foreign minister, said on Thursday she made the proposal to her Indonesian counterpart Retno Marsudi who had agreed to convey it to President Joko “Jokowi” Widodo.

But early on Thursday, Indonesia’s deputy foreign minister Abdurrahman Mohammad Fachir said the government rejected Australia’s proposal of a prisoner swap, media reported.

The rejection of the deal was reported by Indonesia’s MetroTV.

The Australian newspaper reported Bishop had offered to repatriate three convicted Indonesian drug criminals in return for the lives of the Australians, Andrew Chan and Myuran Sukumaran.

The ringleaders of the so-called “Bali Nine” drug smuggling gang, the two men left the island’s Kerobokan jail in a convoy of two armoured cars surrounded by security forces and a scrum of journalists, and were taken to Bali airport.

The pair, sentenced to death in 2006 for trying to smuggle heroin out of Indonesia, were woken up in the early hours and given a few minutes to get ready, said Nyoman Putra Surya, a local justice ministry official.

They said “thank you” before leaving, and “we handcuffed them and they were quiet”, he added, before their transfer on a chartered commercial flight.

About 200 police, 50 soldiers and a water cannon were stationed outside the Bali prison as the men, in their early 30s, were driven out, said an AFP reporter at the scene.

The pair were being flown to Cilacap, on Java island, and will then be transferred to Nusakambangan island, home to several high-security prisons.

Officials are yet to announce a date for their executions, but the transfer indicates it is imminent. Authorities must give convicts 72 hours notice before they are put to death.

Tony Abbott, who has repeatedly called for Jakarta not to go ahead with the executions, said Australians were sickened by the developments.

“We frankly are revolted by the prospect of these executions,” he said, adding that “right now millions of Australians are feeling sick in their guts,” the prime minister said.

Mr Abbott said he hoped there might be a “change of heart in Indonesia”, but added: “What I don’t want, though, is to hold out false hope.

“There were some suggestions earlier that perhaps at least some people in the Indonesian system were having second thoughts. But I am afraid those signals seem to be dissipating.”

Even so, he said, “I hope that even at this late hour, the better angels of the Indonesians peoples’ nature will reassert themselves”.

The men recently lost their appeals for presidential clemency, typically a death row convict’s last chance to avoid the firing squad.

The looming executions have strained ties with Australia, traditionally a key ally of Indonesia.

The pair are among a group of 10 drug convicts expected to face the firing squad in the upcoming batch of executions.

Officials have not confirmed the identities of the others, although convicts from France, Brazil, the Philippines, Nigeria and Ghana recently lost their appeals for presidential clemency.

Several countries have been piling diplomatic pressure on Jakarta, but President Joko Widodo has been a vocal supporter of the death penalty for drug traffickers, saying Indonesia is facing an “emergency” due to rising narcotics use.

Indonesia executed six people, including five foreigners, in January, sparking a diplomatic storm as Brazil and the Netherlands – whose citizens were among those put to death – recalled their ambassadors.

Muhammad Prasetyo, the attorney-general, said on Tuesday that execution preparations were “95 percent” complete, and the last stage was gathering all the prisoners on Nusakambangan.

Some of them are already on the island, while the Australians and some others are being transferred from elsewhere in Indonesia.

The Australians’ lawyers have launched a series of last-ditch legal bids to try and stop the executions, but all have so far failed.

Judges have already thrown out an application for a second judicial review of their cases, as well as a challenge to Widodo’s decision not to grant them clemency.

The lawyers have lodged an appeal to the decision to dismiss that challenge, which has not yet been ruled on.

Brazil and France have also been ramping up pressure, with Paris summoning Indonesia’s envoy and the Brazilian president refusing to accept the credentials of the new Indonesian ambassador.

The family of the Brazilian, Rodrigo Gularte, say that he has been diagnosed as a paranoid schizophrenic and should be in a psychiatric facility.

The Frenchman facing execution, Serge Atlaoui, has also applied for a judicial review of his sentence, and his wife said last week he was hopeful of success.

South China Sea: China changes the international order (and geography)

March 5, 2015

China’s ‘artificial Islands’ in South China Sea
By Amrita Jash

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China’s steadfast construction of artificial islands on a series of disputed reefs in the South China Sea (SCS) has raised the concerns of a fresh “China threat” in the Asia Pacific – causing a new kind of security dilemma. With such a revisionist activity, China seems to concretize one of the vital Sea Lanes of Communications (SLCOs), giving a new form to China’s assertive behavior.

Such an activity is motivated by China’s curious case of overlapped sovereignty. Wherein, it claims the disputed sea with reference to a “nine-dashed line” – claiming almost the entirety of the South China Sea, leaving no space for the others to exist.

With the on going infrastructure buildup since mid-2014, China has been constructing new installations such as ports, fuel storage depots, air strips, barracks and radar sites – thereby, extending the range of its navy, air force, coast guards and fishing fleets.

 A Chinese Coast Guard vessel passes near the Chinese oil rig, Haiyang Shi You 981 in the South China Sea, about 210 km (130 miles) from the coast of Vietnam. The US says it is concerned at China’s aggressive exertion of sovereignty in the sea.
A Chinese Coast Guard vessel passes near the Chinese oil rig, Haiyang Shi You 981 in the South China Sea, about 210 km (130 miles) from the coast of Vietnam. The US says it is concerned at China’s aggressive exertion of sovereignty in the sea. Photograph: Reuters/Reuters

In validating its actions on a contested territory, China responded by rejecting the protests staged by Manila and Hanoi as well as United States criticism of reclamation, by justifying its activity to fall “within the scope of China’s sovereignty”. This Chinese behavior is representative of the fact that China does not want to conform to the international order presided by the Westphalian norms but rather seeks to change the rules of the order by its “Chinese Characteristics”.

In this context, China’s such ambitious behavior can be attributed to be driven by strong realist motivations and interests. This can be explained as: on one hand, with its physical military presence, China benefits from the resource rich waters by exploiting the fisheries and hydrocarbon resources mainly oil and natural gas.

To meet the increasing demand of fish consumption both domestically and internationally, SCS offers a cost-effective supply chain. And that being a net importer of oil and natural gas, SCS offers an advantage to fulfill its overarching energy needs as well as safeguarding the SLCOs from any bottlenecks, which is vital to its import-export trade and thereby, integral to its growth and development.

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Now, Fiery Cross Reef has been transformed into an artificial island at least 3,000 yards long that experts say is big enough to include an airstrip and could become a Chinese command and control center for military operations in the area. Seen here in November.
Fiery Cross Reef has been transformed into an artificial island at least 3,000 yards long that experts say is big enough to include an airstrip and could become a Chinese command and control center for military operations in the area. Seen here in November. IHS Jane’s

While on the other hand, with such territorial control in the troubled waters, China gains the advantage to project its military power in the Asia Pacific region – posing a strong counterweight to the traditional balance of power mainly maintained by United States and its allies. It signals China’s military prowess and dexterous capability to counter any kind of security threat to its territorial sovereignty.

In this row of Chinese “artificial island buildup”, it can be anticipated that China’s next unilateral move in the region can be Beijing’s enforcement of its Air Defence Identification Zone (ADIZ) over the South China Sea – a similar compellence strategy as envisaged by the China over the Diaoyu/Senkaku Islands in the East China Sea to wade off Japan.

In this context, with such power projection mechanism endorsed by China’s stationing of infrastructure capabilities elevates the nerves of the other claimants. Such an action oriented approach signals escalation of tensions in the international waters of the Asia Pacific. Whereby, China seems to be more aggressive in its claim of territorial sovereignty.

Thereby, in this fall of events in the South China Sea, the reef frenzy raises security concerns not just for the countries concerned such as Philippines, Vietnam, Indonesia, Brunei and Malaysia – whose territorial claims overlap that of China’s, but is also indicative of China’s direct challenge to the United States’ “pivot to Asia” policy as enforced in 2010 to counter balance China’s “rise” in Asia as well as it strategically aims to evade Japan’s strengthened claims and actions over the Diaoyu/Senkaku Islands in the East China Sea.

From the above assessment, it is agreeable that China is keen on changing the rules of the game. These Chinese activities clearly defy the existing status quo of the world order thereby, indicative of China’s keen interest to change the statutory norms of the international order.

With such actions, it also clarifies China’s gradual departure from Deng Xiaoping’s old dictum of “Keeping a low profile”. For China thinks that the time is ripe to stick its neck out. It is clear from China’s such uncalled unilateral behaviour in the South China Sea which has readily elevated the anxiety level among the actors in the game.

This is directive of the spiralling uncertainty which is resulting into grave concerns over China’s future intentions and motivations. Thereby, with increasing Chinese assertive behavior both literally and figuratively, it is hard to evade a military collision in the tensed bedrock of South China Sea in the near future.

Speaking Freely is an Asia Times Online feature that allows guest writers to have their say. Please click here if you are interested in contributing. Articles submitted for this section allow our readers to express their opinions and do not necessarily meet the same editorial standards of Asia Times Online’s regular contributors.

Amrita Jash is a Doctoral Candidate and Junior Research Fellow at the Centre for East Asian Studies (Chinese Division), School of International Studies, Jawaharlal Nehru University, New Delhi. 

http://www.atimes.com/atimes/China/CHIN-01-050315.html

(Copyright 2015 Amrita Jash)

Related:

Photographs show China building on disputed South China Sea islands using reclamation to enlarge islands for ports and airstrips

 

China says it owns all the South China Sea north of the “nine dash line” shown above

China claims ownership of about 90% of the South China Sea. Most of China’s neighbors believe otherwise.

The chart below shows the area declared by China on 1 January 2014 as “an area under China’s jurisdiction.” China says “foreign fishing vessels” can only enter and work in this area with prior approval from China. Vietnam, the Philippines and others have said they will not comply with China’s law. Experts say, this could be the geographic area that China could declare an air defense identification zone (ADIZ).

 

As China slows down, the Philippines moves to grab foreign investment

March 5, 2015

MANILA (The Street) — The Philippines, a nation long in need of industrialization, is taking steps this year pull investment away from Asia’s manufacturing center: China. And some multinationals are already giving the Southeastern Asian archipelago a chance.

Manila’s ambition to divert foreign investment intended for China has lured electronic hardware manufacturers such as Seiko Epson and Lexmark International. Food and beverages make up another booming sector, and officials expect a surge in bicycle manufacturing next.

Industrial parks in three provinces near the capital, Manila, attract easily trainable, English-literate workers for product assembly jobs or writing user manuals, says Benedict Uy, a Philippine trade representative in Taipei. English is one of the national languages, and the one most widely used in writing. Factory workers in the country may also get paid less than in China, where the minimum wage is 40 percent higher.

“Mastery of the English language — a strong skill set, as [linguistic] dexterity is needed in [writing manuals for] electronics — and lower wages compared to China,” Manila-based Banco de Oro UniBank chief market strategist Jonathan Ravelas says, listing a few reasons that multinational companies try the Philippines.

French President Francois Hollande, left, shakes hands with his Philippine counterpart Benigno Aquino III after the launch of the Manila Call to Action on Climate Change at the Malacañang presidential palace in Manila on Feb. 26, 2015. Many foreign investors want to do business in the Philippines.  AP

French President Francois Hollande, left, shakes hands with his Philippine counterpart Benigno Aquino III after the launch of the Manila Call to Action on Climate Change at the Malacañang presidential palace in Manila on Feb. 26, 2015. Many foreign investors want to do business in the Philippines. AP

The Philippines is also expanding its congested seaport in Manila and a notoriously traffic-choked system of roads leading south into the provinces intended for industrial development. Infrastructure will rise to 5 percent of the $292 billion GDP next year. Further helping exporters, Manila and the European Union last year reached a Generalized System of Preferences Plus deal that eliminates import tariffs from the Southeast Asian side on 6,274 goods.

Manila calls its ambition “China+1,” a growth plan that pits it against Vietnam and other parts of emerging Southeast Asia that offer low-cost factory bases to multinational companies. China says its GDP growth has slowed to a “new normal” partly because foreign investment in factories has cooled. Investors complain of rising land and labor prices in China.

High-tech hardware is shaping up as a China+1 leader for the Philippines. Seiko Epson, Lexmark, and fellow electronics maker Brother Industries have expanded in the Philippines rather than China, Uy says.

Seiko Epson said in December it would invest the equivalent of $111 million in a new factory to produce projectors and inkjet printers, slated to open in early 2017. Today’s Asian production in those areas is “insufficient to meet expected demand,” the company said in a statement.

The food and beverage industry is another prime source of projects diverted from China, the Asian Development Bank’s principal country economist Sona Shrestha says. An icon of that sector’s change in focus is Nestle, which runs a 25-hectare plant near Manila to make sweets and drinks for the domestic market.

The government expects a surge in bicycle manufacturing next. Japanese bike parts maker Shimano has set up a 1.32 billion peso ($29.9 million), 13-hectare factory in the Philippines, where it will benefit from the EU agreement, which axes tariffs on bicycles and their parts. Taiwanese bike builders Giant and Merida are now studying possible investments in the Philippines too, Uy says.

Delta Airlines may gain as well as it flies North American business people to Manila, while foreign investors might go to Citibank, one of a few authorized overseas banks, for financial services.

The Philippines is eager to start seeing China+1 results, because its otherwise on-the-move economy lags its developing Asian peers in foreign direct investment due to a historic lack of infrastructure and relatively long distances to export markets. The Philippines is also no friend of China’s politically.

To ensure the growth of foreign factory investment, the Philippines must still confront its sticky customs rules and tough barriers on foreign property ownership, analysts say. It faces high prices for transportation and energy as well, the Asian Development Bank economist says, calling its energy prices Asia’s highest.

Vietnam and Cambodia may outdo the Philippines on holding down wages for textile manufacturing jobs, she adds.

But foreign direct investment in the country rose from 173 billion pesos ($3.92 billion) in 2004 to 274 billion pesos ($6.22 billion) in 2013, government statistics show. A particular flood came last year. “The pickup in manufacturing is very positive,” Shrestha says. “That sector had not been performing well, or not up to potential.”

http://www.mvariety.com/regional-news/74421-as-china-slows-down-the-philippines-moves-to-grab-foreign-investment


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