Lebanon hires McKinsey to restructure its economy

Beirut

At the end of this week, the Lebanon government will sign a six months agreement with McKinsey & Co. to restructure its week economy, announced the Economy and Trade Minister Raed Khoury. The consulting firm will start to work with various ministries to implement a long-term strategy for the Lebanon, which has the highest debt in the Arab world and the world’s third highest in terms of debt-to-GDP ratio.

The government implemented over the course of 2017 a series of structural reforms to boost revenue and stop the debt rising, but they had little effects on the fiscal balance and weren’t enough to lift the previous Moody’s downgrade.

Over 50 percent of Lebanese are living abroad, especially in other Gulf and African countries, and the weak economy survives through the remittances that have kept flowing in from outside the country. This helped Lebanon to accumulate big foreign reserves and to avoid a fiscal crisis, despite the political turmoils that left the country without a President or Prime Minister many times.

The Lebanon’s Economic and Trade minister said this model is no longer sustainable, and that the debt-to-GDP ratio could rise to 170 percent in the next years if no actions are taken. The country is changing its demography quickly, especially due to the Syrian civil war, which produced at least 1,5 million refugees who have fled to Lebanon to escape from war atrocities. Khoury thinks Singapore is the model to follow for the Lebanon, as the two countries share a similar demographic structure.

Lebanon’s economy has many grey areas,  as the money controlled by the Hezbollah group, and will be difficult for McKansey’s consultants to analyze them.

Iran protests: corruption and economic issues are devouring the country

The wave of protests in Iran began on December 28, during a demonstration in Mashhad, Iran’s second-largest city, against the President Hassan Rouhani. The protests quickly escalated across the country in all major cities, including Tehran, Kermanshah, Isfahan, Hamedan, Rasht, Qom, Sari, with Iranian people calling for the religious establishment to step down. In Mashhad people called for the “death of the dictator” (Ali Khamenei), which is a serious matter for an Islamic country where the supreme leader holds complete authority.

People have taken to the streets for six consecutive days and Iranian security forces struggle to contain the largest protest since 2009 presidential election, when Iranians protested against Mahmoud Ahmadinejad’s reelection. The death toll have risen to 21 people nationwide on Tuesday, as reported  by state television, while clashes with police have intensified. All major news are being reported by state-controlled media and is difficult to confirm those reports independently.

On Saturday the government temporarily blocked many social networks, including Telegram and Instagram, which had been used by people to organize some of the anti-government protests. In the same day President Hassan Rouhan said “Iranians had the right to criticize but must not cause unrest”.

Why Iranians are protesting

The main factors fuelling the protests seem to be economic. Unemployment in Iran is at 12.4% and many university graduates struggle to find a job, while those who find one get paid sporadically. Poverty has increased since 2014 due to a decline social assistance in real terms, and between 44.5 percent and 55 percent of Iran’s urban population is living below the poverty line, showed the report “Measurement and Economic Analysis of Urban Poverty”.

Furthermore, inflation keeps rising and in November rose on 9.6 percent year-on-year, recording the highest inflation rate since July 2017, while most citizens must take on several jobs in order to survive.

Iran is the second largest economy of MENA region after Saudi Arabia, and in 2016 the Iranian economy bounced back at an estimated 6.4 percent, benefiting from the removal of oil sanctions and a recovery in exports. However, most people are not benefiting from the sanctions removal as the government is implementing a series of structural reforms to fight its debt problems.

Rouhani’s opponents often accused his administration of having ignored the poorest, and during the election campaign they promised to create millions of jobs and triple monthly cash payments to low-income families.

The corruption is killing the country

In Iran there’s a powerful system of political patronage and nepotism that pervades all sectors – including the judicial system, the police, the public sectors – and is killing the country. Rich people are often spared prosecution or fare well in trials, while public funds often find their way into few individual’s hands.

In the last six years there were four major financial corruption cases for approximately $17 billion: the 2011 Iranian embezzlement scandal; the Babak Zanjani case; the National Copper Company case.

 

“The world will recognize the state of Palestine with East Jerusalem as its capital”, said Turkish Prime Minister

“In the near future, the entire world will recognize the state of Palestine with East Jerusalem as its capital, and this problem will cease to exist”, said the Turkish Prime Minister Binali Yıldırım on Saturday, during a speech at a Justice and Development (AK) Party event in the northwestern province.

“Both the Muslim world and the Christian world, in short humanity, looked out for the rightful cause of the Palestinians, which has been going on for years”, he added.

Since 6 December, thousands of Palestinians took to the streets of Gaza every day to protest against President Trump’s decision to recognize Jerusalem as Israel’s capital, and to move the US embassy from Tel Aviv to Jerusalem. Many Arab leaders rejected Trump’s move, while European Union’s High Representative Francesca Mogherini said Europe will not follow the United States. “The European Union has a clear and united position. We believe the only realistic solution to the conflict between Israel and Palestine is based on two states and with Jerusalem as the capital of both”, said Mogherini in a press conference on 7 December.

Few days ago, during a visit in Riyadh, Binali Yıldırım  and Salman bin Abdulaziz invited the Islamic world to”act with unity” against the US decision and “emphasised the importance of Jerusalem’s status”.

During Saturday conference, the Turkey PM announced the resumption of US-Turkey visa services after nearly two months. “Relations have moved one step further towards normalization. The visa issue has finally been resolved”, said  Yıldırım.

Syria: where ISIS’ weapons come from? A quarter were made in Romania, Bulgaria and Hungary

General-purpose machine guns

A new report by Conflict Armament Research (CAR) claims nearly a quarter of arms recovered from Islamic State (also known as ISIS or ISIL) in Iraq and Syria were made in Romania, Bulgaria and Hungary.

The Islamist militants took the weapons from Syrian rebels and other groups who oppose them, whom bought the weapons from United States and Saudi Arabia (both The United States and Saudi Arabia supplied most of this materiel without authorisation, the report claims).

“CAR has traced numerous items deployed by IS forces to initial exports from Bulgaria to Saudi Arabia. These transfers were uniformly subject to non-retransfer clauses concluded between Saudi Arabia and the Government of Bulgaria prior to export. In this respect onward re-transfers by Saudi Arabia of these weapons contravene its commitments to the Government of Bulgaria not to re-export the material in question without Bulgaria’s prior consent”, it wrote on the report.

The 222 pages report shows 33 percent of ISIS’ weapons come from the EU-bloc, following Russia and China, which combined together provided over 50 percent of ISIS’ weapons.

The United States manufactured only 2 per cent of weapons used from IS forces and documented by CAR in the region.

Furthermore, China, Russia and Eastern European states provided around 90 percent of ammunition used by ISIS militants during their fight.

Turkey sends more soldiers in Qatar

The Turkish government has sent new troops to Turkey’s military base in Qatar, as provided by a joint defence agreement between Ankara and Doha.

The troops will join the Turkey’s soldiers based at the Tariq bin Ziyad military base in southern Doha deployed in 2015, announced on Tuesday Qatar’s defence ministry Khalid bin Mohammad Al Attiyah. The camp, which is Turkey’s first military installation in Middle East, has a capacity of 5.000 soldiers and Ankara plans to increase the number of its forces in Qatar to 3.000, to respect the joint defence agreement signed in 2014 with Doha.

Officially, the cooperation between the Republic of Turkey and Qatar has the goal to fight terrorism and maintaining security in the region. Turkey’s troops will begin military exercises with Qatari Armed Forces to increase joint military capabilities.

Ankara remains a close alley to Doha, and Turkish President Recep Tayyip Erdogan has been a major supporter to Qatar when Saudi Arabia and other Arab states attempted to isolate Doha, diplomatically and economically, on June 5.

War with Islamic State may be over but ISIS fighters are still an issue

IRPGF in Raqqa city

On 9 December, the Iraqi Prime Minister Haider al-Abadi declared victory over the Islamic State (also known as ISIS and ISIL), after three years of intense fighting. “Our forces fully control the Iraqi-Syrian border, and thus we can announce the end of the war against Daesh,” said Mr. Abadi.

Two days later was Vladimir Putin to declare victory against both ISIS and Western-backed rebels. “In just over two years, Russia’s armed forces and the Syrian Army have defeated the most battle-hardened group of international terrorists”, said Putin during his visit to Russia’s Hmeymim air base in Syria.

In October a U.S.-backed Syrian force declared victory over ISIS in Raqqa, former capital of the Islamist group, declaring the city free of any extremist presence.

ISIS territory reached its height in 2014, when the group controlled several major cities in Iraq, 9 provinces in Syria and between 100,000 km and 110,000 km of territory in total. By 2017, ISIS has lost control in Iraq and of its major strongholds, and now the Islamist group occupies only a strip of land in Syria, while Islamist fighters try to resist in Libya, Yemen, Algeria, Nigeria, Philippines, North Caucasus, Gaza and in the Sinai province.

ISIS has proved to be incapable to maintain a degree of operational capability in its territory and with the defeat of Raqqa and other major cities, the militants have no longer a stable home to stay. The victory over the self-declared caliphate, however, leaves many open questions on ISIS militants and on hundreds foreign fighters and sympathisers, who abandoned the Islamic State months before it started to crumble.

Around 40,000 people travelled from around the world to take up arms for the ISIS group as it occupied territory in Syria, and it’s unclear how many survived the battles and how many are still fighting. Analysts and experts around the world are trying to estimate how many have survived, but the numbers are uncertain.

“The issue is: how many have died? How many are still there and willing to fight? How many have gone elsewhere to fight?” said Seth Jones, director of the International Security and Defense Policy Center at the Rand Corporation.

Escape routers are still open and during the last battles many Islamist fighters were able to blend in with civilian refugees or bribe their way to sneak into Turkey.

Jean-Yves Le Drian, France’s Minister of Europe and Foreign Affairs, said that about 500 are still in the Iraq-Syria theatre, while France officials affirmed that 250 already returned to France. 

Many fighter have no other choice but to still fight for the caliphate in Iraq and Syria, while other militants may join other extremist groups and/or relocate in other war zones. The only thing sure is that those militants have gained battle experience, have nothing to lose and it’s unknown where, when and how they will attack.

Russia and Iraq may have declared victory over Islamic State, but ISIS ideology and franchises are still alive and, as  and  write on Foreign Affair, there’s a possibility that ISIS could rise again.

 

Syria: China’s government will deploy troops to fight along Assad

Azaz, Syria

The mess in Syria is going to increase quite soon. The Chinese government decided to sent its troops in Syria to fight along with Al-Assad’s forces. The move comes as China becomes more concerned about the presence of Islamic militants in the East Turkestan region. The Uyghurs, an ethnic group also known as Chinese Muslim fighters,  are frequently blamed for terrorist activity in their own country.

The Chinese government will send on the territory two special units: the “Tigers of Siberia” and the “Night Tigers”. Those troops will be responsible of killing the Uyghur fighters.

The Chinese militias will also support the Assad regime in the fight against the Islamic terrorist group known as ISIL/ISIS (Islamic State).

This is not the first time that Beijing decided to send its troops on the Syrian front. In 2015 5.000 soldiers entered the Syrian territory and stationed in the Western region of Latakia.

The move has been seen by some analysts as part of an agenda to increase China’s authority on the international scene. In early November, China tested the Dongfeng-41,  Beijing’s next-gen Intercontinental Ballistic Missile (ICBM).