Posts Tagged ‘Russia’

Venezuela’s Oil Production Is Collapsing — Increasing the odds of a debt default — Already struggling to pay interest and principal on its $60-billion foreign debt

January 18, 2018

Sharp drop in output increases the odds of a debt default, worsens economic crisis

CARACAS, Venezuela—Venezuela’s oil output is collapsing at an accelerating pace, deepening an economic and humanitarian crisis and increasing the chances the country will default on its debts.

Production fell 216,000 barrels a day to 1.6 million in December compared to November, the 15th consecutive monthly decline, according to data released Thursday by the Organization of the Petroleum Exporting Countries.

Image result for Venezuela oil industry deteriorates, photos

Venezuela’s decline in output accelerated rapidly in the last quarter of the year. During 2017 as a whole, it fell 649,000 barrels a day, a decline of 29%.

This ranks among the deepest declines in the industry’s recent history. Russia’s output slid 23% during the fall of the Soviet Union, and Iraq’s output dropped by the same share after the 2003 U.S. invasion, according to data from OPEC and BP Statistical Review.

The decline has been caused by a deep economic crisis and widespread corruption and mismanagement, compounded by a purge of state-run Petroleos de Venezuela SA by President Nicolás Maduro that has paralyzed the oil giant. U.S. sanctions have scared off some of the last remaining investors.

“In Venezuela there is no war, nor strike, but what’s left of the oil industry is crumbling on its own,” said Evanán Romero, a former PdVSA director.

Since the country exports little else, Venezuela’s state-led economy relies on oil exports for 95% of its hard currency, according to the latest official data. That means the output decline will add more pressure to the government, which has drastically cut back on imports of everything from machinery to food and medicines to make ends meet. The economy has shrunk an estimated 40% in the past four years. Malnutrition is spreading among the young and elderly while health officials report a resurgence of illnesses ranging from malaria to diphtheria.

Venezuela is also entering the world’s first episode of hyperinflation in a decade. Prices rose an estimated 2,600% last year, the country’s National Assembly estimates. Nearly one in four factories didn’t reopen after Christmas, according to the local industry association. And at least four people have died in looting outbreaks across the country in recent weeks.

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This week, the state oil company’s new chief, National Guard Gen. Manuel Quevedo, blamed the downturn on sabotage and terrorist attacks by the opposition, without providing any evidence. He said production has stabilized and will grow to 2.5 million barrels per day this year.

Most analysts, however, expect Venezuela’s production to continue falling, adding to the country’s economic woes.

By this year’s end, output could fall to 1.3 million barrels a day, according to Francisco Monaldi, a Venezuelan energy expert at Rice University.

“The only discussion right now is how much is it going to decline by. There is no talk of a turnaround,” said Luisa Palacios, analyst at consultancy Medley Global Advisors in New York.

The output decline means Venezuela has been the only major oil producer to not benefit from rising crude oil prices. The value of the Venezuelan oil export basket rose 25% last year on the back of stronger global demand and shrinking inventories. But this windfall was wiped out by lower output and the rising cost of oil products imported by PdVSA to aid its operations.

Brokerage Torino Capital forecasts that the value of Venezuelan oil exports will fall about three billion this year to $26.5 billion. As recently as 2012 the country earned $93 billion from oil exports.

A boy, his clothes saturated with oil, sits in a boat at the fishing town of Cabimas. Photo: FABIOLA FERRERO FOR THE WALL STREET JOURNAL

The country has already been struggling to pay interest and principal on its $60-billion foreign debt. A full-blown default would deepen the country’s woes, potentially putting oil sales at risk.

PdVSA and the central government are in default on more than $700 million of bond payments. The state oil company hasn’t made any interest payments for a month, raising fears that creditors could start seizing oil shipments as compensation.

Last week, a tanker carrying Venezuelan crude was detained in the Caribbean island of Curaçao at the request of an unidentified group of investors seeking $30 million in back payments from Venezuela, according to diplomats familiar with the matter

“If Venezuela’s oil shipments become a target, that would be the worst possible scenario for the country’s oil industry,” said Artyom Tchen, an Oslo-based oil analyst at consultancy Rystad Energy.

The crisis has created a vicious cycle of underinvestment and falling output, which cripples the economy further. PdVSA’s operational spending has fallen two thirds from 2014 to 2016, according to the latest official data.

The cash crunch comes as Mr. Maduro faces elections sometime this year. As oil production falls, it will become increasingly difficult for the president to maintain handouts of imported food to supporters, which has kept his ruling party in power amid an economic meltdown, said Siobhan Morden, strategist at Nomura Securities.

Part of the problem is that some 1.3 million barrels a day of Venezuelan oil is already spoken for between the domestic market and pre-paid supply and debt deals with allies Russia, China and Cuba, said Mr. Monaldi. That leaves precious little to sell in the open market.

Making matters worse, Mr. Maduro’s government jailed almost 70 senior managers on graft allegations in the past three months, appointing half a dozen generals with no industry experience to run the firm.

Mr. Monaldi says the purge is merely a political show to rid the company of the last appointees of Mr. Maduro’s predecessor, which will hasten the company’s decline.

“The top people in PdVSA are gone or in prison while the new military guys and the National Guard clearly don’t understand anything,” he said.

Multinational firms partnered with PdVSA in southern Venezuela, home to the world’s biggest oil reserves in the Orinoco Oil Belt, have cut spending to a minimum because of overdue bills, red tape and high taxes, say oil industry sources.

“International operators have essentially zero appetite for putting any additional investment dollars into Venezuela under current conditions,” said Pavel Molchanov, oil analyst at brokerage Raymond James.

Write to Anatoly Kurmanaev at Anatoly.kurmanaev@wsj.com and Kejal Vyas at kejal.vyas@wsj.com

 https://www.wsj.com/articles/venezuelas-oil-industry-takes-a-fall-1516271401
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Russian police raid opposition leader Navalny’s office

January 18, 2018

AFP

© AFP | Actvisits say 13 of Navalny’s campaign offices have been raided

SAINT PETERSBURG (AFP) – Russian opposition leader Alexei Navalny said Thursday that police were raiding his campaign headquarters in Saint Petersburg as he pressed ahead with a call for a boycott of presidential polls.”Right now a search is going on in our Saint Petersburg headquarters,” Navalny wrote on Twitter, posting a video of uniformed police and non-uniformed officials with his staff.

The charismatic politician, who has called a major protest on January 28, is urging voters to boycott the March election in which President Vladimir Putin is expected to win a fourth Kremlin term.

Navalny himself has been barred from standing in the election because of a fraud conviction he says was politically motivated.

His campaign offices around the country are gathering support for a poll boycott, but supporters say his campaign workers have come under intense pressure from the authorities.

The coordinator of the Saint Petersburg office, Denis Mikhailov, told AFP: “They are seizing computers, laptops and printed materials. They said they received a signal that we are distributing some dissident leaflets and that’s the reason for the seizure.”

Mikhailov added that he did not know what leaflets the police were referring to.

Navalny’s campaign press secretary Ruslan Shavedinnov told AFP that “in the last two days there have been searches in 11 offices, they are taking away equipment and leaflets supposedly calling for a boycott.”

Shavedinnov added that as he was speaking police had arrived at a 12th campaign office in the town of Izhevsk in the Urals region.

“We link this to the January 28 protest. The authorities are afraid of a large number of people on the streets and are trying to hinder us.”

The campaign office’s Twitter account said that police “have chucked out everyone except the coordinator (and) seized equipment, turned off our security cameras and covered the windows… so we cannot film.”

Navalny wrote on Twitter that the authorities “are afraid of a boycott by voters. That means it’s the right thing to do. Join us.”

US military presence in Syria ‘aggression against national sovereignty’ — U.S. wants to pave the way diplomatically for the eventual departure of Syrian President Bashar Assad

January 18, 2018

Above, Syrian government forces stand on a tank in Jabal Al-Hass in the southern part of Aleppo province as they advance towards the Abu Duhur military airport in the ongoing offensive against opposition fighters. (AFP)
BEIRUT: The Syrian government said on Thursday that a US military presence in Syria represented an “aggression” against Syrian sovereignty, and vowed to free the country from any “illegitimate” foreign presence.
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The Syrian Foreign Ministry statement was a response to a speech by US Secretary of State Rex Tillerson on Wednesday in which he signaled that US forces would stay in parts of Syria indefinitely.
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“The American military presence on Syrian land is illegitimate and represents a blatant breach of international law and an aggression against national sovereignty,” the statement said.
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Syria would continue its “relentless war against terrorist movements with their different names until every inch of Syrian soil is cleansed” and would work with “the same determination” to free Syria of any “illegitimate foreign presence.”
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Tillerson signaled an open-ended military presence as part of a broader strategy to prevent Daesh’s resurgence, pave the way diplomatically for the eventual departure of Syrian President Bashar Assad and curtail Iran’s influence.
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The US has around 2,000 military personnel in Syria, deployed as part of the US-led coalition’s campaign against Islamic State. The Syrian Foreign Ministry statement said the government was not in need of US dollars “stained with the blood of Syrians.”
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Tillerson: Evidence sanctions ‘really starting to hurt’ North Korea

January 18, 2018

Image result for rex tillerson in vancouver, photos

Reuters

(Reuters) – U.S. Secretary of State Rex Tillerson said on Wednesday the United States is getting evidence that international sanctions are “really starting to hurt” North Korea, even as he accused Russia of not implementing all of the measures.

 

U.S. President Donald Trump told Reuters in an interview earlier on Wednesday that Russia was helping North Korea evade international sanctions and that Pyongyang was getting closer every day to being able to deliver a long-range missile to the United States.

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Canadian Minister of Foreign Affairs Chrystia Freeland, right, greets Secretary of State of the United States, Rex Tillerson during a meeting on North Korea in Vancouver, British Columbia, Tuesday, Jan. 16, 2018. Officials are discussing sanctions, preventing the spread of weapons and diplomatic options. (Jonathan Hayward/The Canadian Press via AP)

Tillerson told reporters the Russian failure to comply with the U.N. measures “primarily” concerned fuel “but some other areas potentially as well.” He did not provide details.

Nevertheless, Tillerson said he was confident the pressure would eventually bring North Korea to the negotiating table over its nuclear and missile programs. Pyongyang has carried out nuclear and missiles tests in defiance of U.N. and other sanctions.

“We are getting a lot of evidence that these sanctions are really starting to hurt,” Tillerson said, citing intelligence and anecdotal evidence from defectors.

He said Japan told a conference on North Korea in Vancouver on Tuesday that more than 100 North Korean fishing boats had drifted into its waters and two-thirds of those aboard them had died.

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“What they learned is that they are being sent out in the winter time because there’s food shortages and they are being sent out to fish with inadequate fuel to get back,” he said.

South Korean President Moon Jae-in had attributed North Korea’s recent willingness to talk to South Korea to the pain of sanctions, Tillerson told an event at Stanford University in California.

But he later said he suspected Russia may not only be failing to implement some sanctions but “frustrating” some of the effort to press the North.

“It’s apparent to us that they’re not implementing all the sanctions and there’s some evidence they may be frustrating some of the sanctions,” Tillerson said aboard his aircraft while returning from Vancouver.

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United States Secretary of State Rex Tillerson speaks with South Korean Foreign Minister Kang Kyung-wha during a meeting on North Korea in Vancouver, British Columbia, Tuesday, Jan. 16, 2018. Officials are discussing sanctions, preventing the spread of weapons and diplomatic options. (Jonathan Hayward/The Canadian Press via AP)

CHINESE PRESSURE

China did not attend the Vancouver meeting, where 20 nations agreed to step up sanctions pressure on the North, but Tillerson highlighted Beijing’s role.

“We have never had Chinese support for sanctions like we’re getting now,” he said. “Russia’s a slightly different issue, but the Chinese have leaned in hard on the North Koreans.”

Asked whether there was a humanitarian concern that sanctions were hurting ordinary North Koreans, he said: “That’s a choice the regime’s making. The regime gets to decide how they allocate their available resources.”

“We are not going to take any responsibility for the fact that he (North Korean leader Kim Jong Un) is choosing to make his own people suffer,” Tillerson said.

Asked if he was concerned that South Korea might resume some humanitarian aid to North Korea as part of the resumption of North-South talks this month, thereby weakening sanctions, Tillerson said: “Countries will have to make their own choice, but we would be very skeptical that aid that goes into the country will necessarily relieve the suffering of the people.”

Tillerson said that, while North Korea had a record of seeking to drive a wedge between the United States and its allies through “charm offensives,” Washington was supportive of the North-South dialogue.

Tillerson said of North Korean leader Kim Jong Un: “He knows how to reach me, if he wants to talk. But he’s got to tell me he wants to talk. We’re not going to chase him.”

He said he was confident the sides would eventually get to the negotiating table and he wanted North Korea to know that, when that happened, the United States had “very, very strong military options standing behind me.”

The Trump administration has said repeatedly that all options are available, including military ones, in forcing North Korea to give up its development of nuclear missiles capable of reaching the United States, although it prefers a diplomatic solution.

Reporting by David Brunnstrom; Editing by Grant McCool and Robert Birsel

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Conflict among world powers a growing concern, World Economic Forum expersts say

January 17, 2018

 

World Economic Forum (WEF) President Borge Brende attends a press conference ahead of the WEF 2018 Annual Meeting. (AFP)

GENEVA: A survey by the World Economic Forum finds that more than nine in 10 experts are worried about worsening economic or political confrontation between world powers, amid a trend toward “charismatic strongman politics.”

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The WEF, the organizer of the annual Davos conference that convenes next week, cites a “deteriorating geopolitical landscape” and increasing cyber threats as key factors behind a pessimistic outlook this year — adding to continued and pre-eminent worries about the environment.
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Its Global Risks Report released Wednesday is based on a survey of nearly 1,000 experts and decision-makers from business, academia and other fields about 30 risks over a 10-year horizon. The report notes that a global economic rebound can help solve some problems, but it also pointed to increasingly complex challenges.
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“Global risks, nowadays, are so interconnected that they can threaten the very systems on which our societies, economies, and international relations are based,” said Alison Martin, chief risk officer at Zurich Insurance Group, which contributed to the report, at a London news conference.
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Margareta Drzeniek-Hanouz, a WEF executive committee member focusing on economic progress, called the results “striking.” She noted that on “political and economic confrontations, 93 percent of the respondents think they will increase somewhat or significantly … in the coming year.”
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WEF said four in five survey respondents expect rising risks “associated with war involving major powers.”
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The report said geopolitical risks have been exacerbated by falling commitment to “rules-based multilateralism.” It noted how President Donald Trump “delivered on some of his unilateralist campaign pledges” by pulling the US out of the Paris climate accord and a trans-Pacific trade pact.
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It also said “identity politics” could fan geopolitical and domestic risks.
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“Charismatic strongman politics is on the rise across the world,” it said. “In addition to the ‘America First’ platform of President Trump, variations on this theme can be seen in numerous countries from China to Japan, Russia, Turkey, Saudi Arabia, the Philippines and elsewhere.”
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The report said last year’s clash of “strong-state instincts” of Trump and North Korean leader Kim Jong Un “has created uncertainty about the strength of the norms created by decades of work to prevent nuclear conflict.”
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WEF also said geopolitical tensions are fanning an increase in the scale and sophistication of cyberattacks, and suggests greater investment in prevention is needed.
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John Drzik, president of global risk and digital at insurer Marsh & McLennan Companies, pointed to the prospects of “more state-sponsored attacks — to add to the financially motivated attacks that are already out there.”
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He suggested too few companies have a cyber-incident response plan in place.
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The WEF risk report is expected to foment discussion in some of the 400 panel talks next week in the Swiss Alpine town of Davos.
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Trump is set to deliver a speech on the last day of the Jan. 23-26 event. He is to be among 70 heads of state or government who are expected to be on hand, along with hundreds of business executives, academics, government officials, artists and other notables.

Putin seeks to be ’emperor for life’: Kremlin critic Navalny says

January 17, 2018

AFP

© AFP | Russian opposition leader Alexei Navalny spoke to AFP at the office of his Anti-corruption Foundation (FBK) in Moscow on January 16, 2018

MOSCOW (AFP) – The Kremlin’s top critic Alexei Navalny has slammed Russia’s March presidential election, in which he is barred from running, as a sham meant to “re-appoint” Vladimir Putin on his way to becoming “emperor for life”.With two months to go before Russians vote in polls that are all but guaranteed to hand Putin a historic fourth term, the 41-year-old opposition leader and anti-corruption campaigner spoke to AFP Tuesday in his campaign headquarters.

“This is not an election and my role will consist of explaining to people that this procedure, which they call an election, in fact is only held to re-appoint Putin,” he said.

“We will prove this and convince people that it’s impossible to recognise either these polls or this regime.”

Navalny last year mounted a national campaign, meeting thousands of people in cities across Russia, but in December the Central Election Commission said he could not take part due to a controversial embezzlement conviction which the opposition leader says is fabricated.

He is now ready to channel the force of his campaign team into persuading Russians to boycott the polls, calling his first major protest of this year on January 28.

“Putin wants to be emperor for life. His entourage, people who became billionaires and the world’s richest individuals, they want the same thing,” he said, vouching to continue his “political fight.”

Afrin offensive could risk Turkey’s relations with Russia

January 17, 2018

 

Turkey’s President Recep Tayyip Erdogan listens to cheering supporters as he addresses his lawmakers at the parliament in Ankara, Turkey, Tuesday, Jan. 16, 2018. (AP)
ANKARA: Turkey’s preparation for an imminent military operation in the Syrian Kurd province of Afrin could raise the complex and delicate question of who are Ankara’s partners and who are its rivals?
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The operation against a US-backed Kurdish militia, which Turkey considers a terrorist group, will take place amid escalating tensions between Ankara and Washington over their Syria policies.
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President Recep Tayyip Erdogan on Tuesday said the offensive against the “nests” of terror in Afrin and Manbij towns would begin on Wednesday or Thursday. The attack will take place in partnership with Syrian opposition fighters allied to Turkey.
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But the ever-changing dynamics in the nearly seven year conflict may oblige Turkey to go it alone in terms of its international allies — a risky option given the uncertainty as to how regional actors will react.
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For now, Russia seems muted but would prefer Turkey to increase its presence in the de-escalation zone in Idlib by launching more observation posts to monitor a cease-fire. People’s Protection Units
The northwestern Afrin province, which borders Turkey, is currently under the control of the US-backed Kurdish militia People’s Protection Units (YPG) seen as a terrorist organization by Turkey because of its links with the Kurdistan Workers’ Party (PKK), that has waged a decades-long insurgency inside Turkey.
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Moreover, the US-led international coalition against Daesh announced on Sunday that it is training a new border security force in Syria to protect the Turkish-Syrian border.
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The surprise initiative infuriated Turkey and Erdogan vowed on Monday to “kill such a terrorist army before it is born.”
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On Tuesday, he called on NATO, of which both Turkey and the US are members, to stand with Ankara “in the “event of any border aggression.”
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Likewise, Prime Minister Binali Yildirim said that with this move the US showed that it is treating Turkey as its “enemy”.
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Crucially, it will be how Moscow reacts that could determine how Turkey emerges from the offensive.
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Russian Foreign Minister Sergei Lavrov warned on Monday that any formation of a zone under the control of Kurdish militants could lead to the partition of Syria and may impede finding an end to the conflict Syria.
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“We are talking about an extremely complicated geopolitical picture here,” Emre Ersen, a Syria analyst at Marmara University in Istanbul, told Arab News.
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“Although it is true that the PYD (the YPG’s political wing) has built closer links with the US, it has not refrained from developing special relations with Russia particularly in the last couple of years.”
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Ersen said that despite Moscow’s move to improve relations with Turkey, “Russia still believes the PYD can be eventually convinced to make a deal with the Assad regime.”
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Russia is unlikely to be easily persuaded by Turkey to abandon its plans for the PYD’s role in Syria. An agreement between the Kurdish group and the Syrian regime was one of the main goals of Moscow’s Syrian National Dialogue Congress proposal.
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Ersen thinks the US announcement of a new border army in Syria is perceived by Moscow as a major challenge to the rising Russian political and military influence in the Middle East.
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“Therefore, this development will probably bring Turkey and Russia closer in Syria, although they recently hasd some important disagreements regarding the situation in Idlib,” he said.
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There has been speculation that Turkey made a deal with Russia over its increased presence in Idlib in exchange for Moscow’s consent for its military operation in Afrin.
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When Turkey staged its previous offensive into Syria to clear the border of YPG and Daesh threats, Russia did not initially oppose Ankara’s military aircraft using Syrian airspace.
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This gave implicit support to the seven-month Operation Euphrates Shield, which ended in March 2017, and Russia even provided Turkey with some air support of its own.
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Russia now controls the airspace over Idlib and Afrin, and without its approval Ankara will not be able to support its fighters in their operation – a key factor that will determine the success of the offensive.
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“It will be extremely difficult for the Turkish forces to achieve the goals of the Afrin operation without Russia’s implicit or explicit support,” Ersen said. “On the other hand, any kind of Turkish-Russian cooperation in Afrin will most probably alienate the PYD from Moscow, which contradicts Russia’s long-term plans in Syria.”
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Syria’s Afrin has been in Turkey’s sights. The south of the province is monitored by Turkey’s observation posts in Idlib, and the eastern part was sealed during the Euphrates Shield.
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On Tuesday, Turkish Chief of General Staff Gen. Hulusi Akar attended a NATO meeting of defense chiefs in Brussels, and during his speech he said, “NATO should not make discrimination between terror groups in the fight against terrorism.”
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Erol Bural, a former military officer and terrorism expert at the 21st Century Turkey Institute, said it is time for Turkey to use more efficient diplomacy at NATO and the UN to prevent the escalation of this crisis and to strengthen its hand.
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“The US-led border security initiative intends to monitor the Turkey-Syria border, which means NATO’s own borders are under a serious threat,” Bural told Arab News.
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Bural thinks that an operation into Afrin against the PKK-linked YPG terror group may trigger domestic security threats inside Turkey.
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“For the moment Turkey has not announced any exit strategy from such an operation. We don’t know how long Turkish soldiers will stay there,” he said. “it seems that the political objectives are the same with military and state: clearing the area from terrorist threat.
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But, Bural warned that if the operation extends to the east of the Euphrates River, it may lead to direct combat with the US, which controls that zone.
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Syrian Kurdish PYD urges action against Turkish bombing of Afrin

January 17, 2018

This file photo taken on September 4, 2016 shows Pro-Kurdish Peoples’ Democratic Party (HDP) leader Selahattin Demirtas waving during a peace rally against the war in Syria, in Istanbul. (AFP)

BEIRUT: The main Syrian Kurdish political party called on world powers to stop Turkey’s bombardment of the Afrin region in northern Syria.

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“Afrin will not be alone,” the PYD said in a statement on Wednesday, vowing that all northern and eastern Syria would stand with it.
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Ankara has warned of an imminent military operation in Afrin, one of three autonomous cantons that Kurdish forces and their allies have set up since the start of Syria’s conflict in 2011.
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Russia calls for talks between Afghan government and the Taliban

January 17, 2018

Afghanistan’s President Ashraf Ghani speaks during a news conference in Kabul, Afghanistan July 11, 2016. (Reuters)
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MOSCOW: Russia called on Wednesday for urgent talks between the government in Afghanistan and the Taliban, its Foreign Ministry said in a statement, adding Russia could host such talks.
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“We strongly recommend that negotiations start as soon as possible… to put an end to the civil war,” the ministry said.
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How Donald Trump Has Upended U.S. Foreign Policy

January 17, 2018

In his first year, president has reshuffled U.S. relationships, elevating Gulf Arab leaders, alienating Europeans and eschewing some tough talk on China and Russia

From left, President Abdel Fattah el-Sisi of Egypt, King Salman of Saudi Arabia, Melania Trump and President Trump during the opening of an anti-extremist center in Riyadh, Saudi Arabia. CreditSaudi Press Agency

President Trump’s First Year in Office
From the moment he was inaugurated, President Trump brought dramatic change to the White House. Here’s a recap of the whirlwind year …
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In May, a blue and white 747 emblazoned with the presidential seal cruised over Saudi Arabia and Jordan before entering Israeli airspace, making a short but historic journey from Riyadh to Tel Aviv.

That flight, carrying President Donald Trump on his first foreign trip, was remarkable not just because it was the first direct presidential flight between Saudi Arabia and Israel. It also was a potent symbol to the world that Mr. Trump had his own ideas about America’s best friends and enemies.

Gone were the days of visiting Mexico and Canada first—something every president since Reagan (and nearly all of his predecessors) have elected to do. To the contrary, Mr. Trump has soured both of those relationships, repeatedly threatening to withdraw from the North Atlantic Free Trade Agreement and even telling The Wall Street Journal last week that he would use negotiations on the pact to pay for a controversial wall on the U.S.-Mexico border.

In a bid to correct what he views as the faults of his predecessor Barack Obama’s foreign policy, Mr. Trump has reshuffled the deck of American relationships, elevating Gulf Arab leaders, alienating Europeans and eschewing some of the tough talk typically reserved for the heads of China and Russia, diplomats, former officials and analysts said.

A White House official, however, noted that Mr. Trump has formed improbable friendships with Canada’s Prime Minister Justin Trudeau and French President Emmanuel Macron. “They don’t look like Trump types,” the official said.

Mr. Trump has left diplomats around the world scrambling to make sense of what exactly his “America First” vision means for them. Last week, U.S. diplomats were left to defend what some lawmakers said was Mr. Trump’s reference to Haiti and African countries as “shithole countries.”

Mr. Trump has invoked what he says are Mr. Obama’s mistakes in nearly every major foreign policy roll out—from pulling out of the Paris climate accord, recognizing Jerusalem as Israel’s capital and, most recently, threatening to walk away from the Iran nuclear agreement unless European officials agree by May to address concerns not covered by the original accord.

“He viewed President Obama as having embraced the wrong policies, the wrong allies, and he’s picking the ones that are going to make America great,” said Andrew Bowen, a Middle East expert at the American Enterprise Institute with ties to the Trump administration. “There is a certain personal obsession in his foreign policy to roll back President Obama.”

Mr. Trump accompanied then-Saudi Arabian Deputy Crown Prince Mohammed bin Salman at the White House in March.Photo: Shealah D. Craighead/Planet Pix/ZUMA PREEESS

Since taking office last year, Mr. Trump has forged close bonds with Israel’s Prime Minister Benjamin Netanyahu, Saudi Arabia’s Prince Mohammed bin Salman, Egyptian President Abdel Fattah Al Sisi and Philippine President Rodrigo Duterte, all of whom had particularly frosty relationships with Mr. Obama. He also withdrew from the 12-nation Trans-Pacific Partnership accord that Mr. Obama championed and pared back the former president’s opening to Cuba.

The White House official said Mr. Trump is “very carrot and stick” in his relationships, and usually offers blunt assessments of how he can help allies as well as what his concerns are.

He has refrained from criticizing Russian President Vladimir Putin and has touted his relationship with Chinese President Xi Jinping. He even suggested to the Journal, in remarks later disputed by the White House, that he has a good relationship with North Korean leader Kim Jong Un.

Many leaders have perceived that flattering Mr. Trump will pay dividends. South Korean President Moon Jae-in went out of his way to compliment Mr. Trump’s tough talk for helping to bring about conversations between North and South Korea ahead of the winter Olympics next month.

“All presidents look at the world in terms of personalities and personal matters, but this president more than most measures everything off of how people react to him,” said Aaron David Miller, an adviser to Republican and Democratic secretaries of State now at the Wilson Center.

Most European leaders haven’t been so quick to flatter Mr. Trump, and the results are palpable.

From the moment he was inaugurated, President Trump brought dramatic change to the White House. Here’s a recap of the whirlwind year in Washington. Photo Illustration: Heather Seidel/The Wall Street Journal

Mr. Trump last week scrapped a planned visit to London, capital of America’s historically closest ally, after U.K. leaders criticized him for retweeting videos posted by a far-right British group and as activists prepared protests against his visit. The American leader said he canceled the trip because he didn’t want to back the opening of the new U.S. Embassy there after the Obama administration sold the old one for “peanuts.”

Never mind that the plan to move the embassy began under the Bush administration and that the building’s value declined after the U.K. granted it historic status.

Mr. Trump’s focus on relationships, particularly with those who are complimentary, has also emboldened some leaders in the Middle East. Some diplomats say that Saudi Arabia’s crown prince, Mohammed Bin Salman, has been able to seize on of Mr. Trump’s fondness for Saudi Arabia to advance its interests.

Mr. Trump chatted with Chinese President Xi Jinping during a welcome ceremony at the Great Hall of the People in Beijing in November. Photo: Andy Wong/Associated Press

The Trump administration has infrequently raised a Saudi Arabia-led feud of Gulf Arab states with Qatar as the months drag on, Arab diplomats say.

“Trump is creating a moment in 2018, whether you’re Saudi Arabia or Qatar, when everyone is willing to geopolitically hedge now,” Mr. Bowen said. “Trump has found friends, but he’s made it pretty clear it’s a deal, not an alliance”

Still, officials and experts say Mr. Trump has successfully been able to keep intact an international coalition against Islamic State, with Iraq recently declaring victory over the extremists.

“That’s the kind of thing only the United States can do,” said James Jeffrey, a former ambassador to Baghdad and Ankara and a senior official in the George W. Bush administration. “He didn’t screw it up.”

Trump’s First Year

Video: A Recap of Trump’s Whirlwind First Year
For Business, Trump’s First Year Is a Net Success
Stock Market Roared, Boosted by Earnings and Tax Cut
Write to Felicia Schwartz at Felicia.Schwartz@wsj.com

https://www.wsj.com/articles/how-donald-trump-has-upended-u-s-foreign-policy-1516185000