NAVIC: India’s eye in the sky

http://www.livemint.com/Opinion/nvUxIhQveytvMNQKADl3wM/NAVIC-Indias-eye-in-the-sky.html
The indigenous global navigation satellite could boost India’s credentials as a regional collaborative partner
Kira HujuAnanth Padmanabhan

NAVIC (Navigation with Indian Constellation), India’s indigenous global navigation satellite system, is expected to become fully operational from this month. Consisting of a constellation of three geostationary, four geosynchronous and two on-standby satellites, NAVIC will facilitate accurate real-time positioning and timing services over India and the region around it extending to 1,500km. While India is joining a club of global powers—the US, EU, China and Russia—who control their own navigation satellite systems, NAVIC’s reach is regional. This is an auspicious occasion for South Asian cooperation.
While the Narendra Modi administration has sought to primarily draw attention to the benefits of NAVIC to Indian citizens, dedicating the acronym to Indian fishermen and navigators, its full operationalization carries profound implications and opportunities for the South Asian region at large. At a time when neighbours like Sri Lanka and Nepal harbour misgivings over Indian interference in their internal affairs and question the Indian commitment to a balanced regional order, sharing the benefits of NAVIC could countenance India’s credentials as a collaborative partner in the region.

“Net security providers” are states that deploy their surplus national assets for the safety and stability of other countries, including by way of responding to natural and man-made disasters. Having a global navigation system bolsters the ability of a nation to serve as a net security provider, especially through the guarantee of such assurance policies. The US equivalent, Global Positioning System (GPS), played a significant role in relief efforts post disasters such as the tsunami in the Indian Ocean region in 2004 and the Pakistan-India earthquake in 2005, and has delivered significant strategic and economic benefits to the US.
Through land-area mapping, yield monitoring and precision-planting of crops, NAVIC allows for the development of civic capabilities in food and livelihood security. In the wake of the 2015 earthquake in Nepal, NAVIC also arrives as an instrument for environmental and meteorological monitoring, as well as climate research. These capabilities can be leveraged to design reliable and efficient response mechanisms for natural disasters, alleviating the devastation they wreak through well-managed disaster relief.

America uses stealthy submarines to hack other countries’ systems

https://www.washingtonpost.com/news/the-switch/wp/2016/07/29/america-is-hacking-other-countries-with-stealthy-submarines/ 

By Brian Fung and Andrea Peterson July 29 

When Donald Trump effectively called for Russia to hack into Hillary Clinton's emails Wednesday, the GOP nominee's remarks touched off a (predictable) media firestorm. Here was a presidential candidate from a major U.S. party encouraging a foreign government to target American interests with cyberspying — an act that could not only expose national security information but also potentially undermine the actual security infrastructure of the United States. 

Cyberwarriors working for Moscow and other regimes are already poking and prodding at our networks, so there's little reason to think Trump's words were all that damaging in themselves. But it's a good opportunity to talk about the state of state-sponsored hacking, and to offer a reminder that the United States is just as active in this space as the next government. 

The U.S. approach to this digital battleground is pretty advanced. For example: Did you know that the military uses its submarines as underwater hacking platforms? 

In fact, subs represent an important component of America's cyber strategy. They act defensively to protect themselves and the country from digital attack, but — more interestingly — they also have a role to play in carrying out cyberattacks, according to two U.S. Navy officials at a recent Washington conference. 

"There is a — an offensive capability that we are, that we prize very highly," said Rear Adm. Michael Jabaley, the U.S. Navy's program executive officer for submarines. "And this is where I really can't talk about much, but suffice to say we have submarines out there on the front lines that are very involved, at the highest technical level, doing exactly the kind of things that you would want them to do." 

The so-called "silent service" has a long history of using information technology to gain an edge on America's rivals. In the 1970s, the U.S. government instructed its submarines to tap undersea communications cables off the Russian coast, recording the messages being relayed back and forth between Soviet forces. (The National Security Agency has continued that tradition, monitoring underwater fiber cables as part of its globe-spanning intelligence-gathering apparatus. In some cases, the government has struck closed-door deals with the cable operators ensuring that U.S. spies can gain secure access to the information traveling over those pipes.)

The View From Olympus: Watch Korea

https://www.traditionalright.com/author/wslind/

Author: William S. Lind 

By now, the Korean drill is familiar to all. We take some symbolic action against North Korea. The North responds with its Tasmanian Devil act, threatening “lakes of fire”, firing missiles into the ocean and maybe, at the limit, shooting some artillery at South Korea. Casualties, if there are any, are few. South Korea in turn tugs at its leash, which we hold firmly. Yawn. 

This time may be different. We did the usual, announcing some meaningless new sanctions on the North, though this time targeting its rulers by name, which slightly ups the ante. The North is playing its part, shouting hyperbolic threats, including war. 

But here is where the current case departs from the script. No one is paying any attention to North Korea’s tantrum. We’ve seen it too often. The world’s reaction is, “let ’em starve in the dark.” From the North Korean perspective, the act no longer works. 

Except in South Korea. This is the second change from the usual script. The South is fed up with the North’s antics. The South Korean president’s mother and father were killed years ago by North Korean assassins. She has not forgotten. In every recent incident, the South has suffered more casualties (when there were any) than the North. The general South Korean attitude seems to be, “We’re not going to take it any more.” 

What can South Korea do? Invade North Korea. 

The Pentagon’s Korean war scenarios all assume an attack by North Korea on South Korea. I suspect we have devoted little or no thought to the opposite case. We can always just jerk on South Korea’s leash and tell it to sit. 

That may no longer be true. South Korea has a powerful military of its own. If the president says, “Go get ’em!,” it would. 

Here’s a possible scenario: Its hysteria universally ignored, the North hits South Korea hard in an action that quickly ends. One possibility would be an artillery raid on Seoul that is over in 15 minutes. The physical damage would not be great, but the South Korean government and military would be utterly humiliated. 

The South Korean people, enraged, demand serious action in return. They don’t want mere retaliation; they want a final solution to the North Korean problem. Remembering her parents, South Korea’s president orders her armed forces to invade, with the object of complete conquest and reunification. We tell the South Koreans, “Stop!” They reply with, “Lead, follow, or get out of the way.” 

** Russia and Turkey Maneuver

Aug. 10, 2016 

By George Friedman 

The two countries seem to be moving closer, but will it last? 

Russian President Vladimir Putin and Turkish President Recep Tayyip Erdoğan had a meeting on Tuesday. It is not clear what precisely came of it, but it is clear what is at stake. Russia is a weakening power where the state of the economy is now the main issue, and the question of Ukraine remains at the center of its strategic concerns. Turkey is an emerging power whose current internal crisis is being managed effectively, if brutally. Both face an enormously powerful United States, uncertain of what to do with its power and acting at times in a random and unpredictable way. For Russia and Turkey, their next moves can have existential consequences. For the United States, nothing that happens to either of the two countries rises to an existential event. Distance and power greatly insulate the United States from miscalculation. 

Therefore, Russia and Turkey are measuring their moves with as much precision as they can bring to bear. In the short term, they have common interests. Each wants to maintain its own freedom for maneuver by deflecting the United States, rather than directly confronting it. Each watches as the European Union tries to figure out what it is and what it plans to do. Europe’s uncertainty gives both countries breathing room and at the same time a large degree of uneasiness. They cannot assume that they know what the shape of European power will be five years from now. The chaos may intensify, or a powerful country or coalition might emerge. What happens in Europe matters to Russia and Turkey.

On the surface then, they would appear to have common interests. In fact, there are signs that these common interests are bearing fruit. Ever since the fall of the Soviet Union, Armenia has maintained a close but subordinate relationship with Russia. This allowed Armenia to defeat Azerbaijan in a war in the early 1990s, which allowed it to seize what had been Azerbaijani territory prior to the war. The region in question is called Nagorno-Karabakh and it has remained a flashpoint between the two countries. Almost 40,000 people were killed in the war, even more Azerbaijanis fled Nagorno-Karabakh and the war sputtered on with periodic clashes and casualties. 

Azerbaijan’s foreign policy was complex. Caught between Iran and Russia, it constantly had to maintain a policy that preserved its independence without threatening either country to the point that they might act. The Azerbaijanis wanted a close relationship with the U.S., but the U.S. pushed them away over human rights issues and because strategically it would place the U.S. in an unsustainable position, between Russia, Iran and Turkey. Lacking an anchor, Azerbaijan shifted its weight constantly. The Nagorno-Karabakh situation remained a fundamental issue.

Asia’s Looming Subsurface Challenge

http://warontherocks.com/2016/08/asias-looming-subsurface-challenge/ 

John Schaus, Lauren Dickey and Andrew Metrick

August 11, 2016 

From the 1950s until today, Russia’s dangerous Atlantic submarine force has represented the technological pacing threat for the U.S. Navy in the undersea domain. However, this trend is slowly changing. It will be the waters of the Pacific, not the Atlantic, where the U.S. Navy will be most sorely tested. In his 2016 posture hearing, Commander of U.S. Pacific Command Admiral Harry Harris noted that Chinese, Russian, and North Korean submarines constitute 150 of 200 submarines currently in the Pacific. Numbers only tell part of an increasingly ominous story. The trajectory of submarine investments made by these nations — and ten other Asia-Pacific countries — will create a far more dangerous undersea domain in the Asia-Pacific by 2030. Developing the policies and frameworks that will enable effective shaping of this environment must be started before the crisis hits. 

The recent unanimous award by the International Tribunal on the Law of the Sea and China’s vocal and active rejection of the legitimacy of the decision bolsters the need for many countries in the region to have a credible submarine deterrent force. Not surprisingly, countries throughout the region have been working for some time to bolster their submarine forces and others are considering establishing such capabilities. Both trends are captured in figure one below, tracing current and 2030 expected total diesel (SSK) and nuclear (SSN) submarine fleet numbers. Countries in Asia are seeking credible deterrence forces as their confidence wanes regarding the peacefulness of China’s rise and the reliability of U.S. commitment to preserve stability

. Figure 1: Current and Expected Future Attack Submarine Forces of Asia-Pacific Countries 

Submarine Missions 

Submarines can be used to defend a nation’s territory and to project power abroad. Most nations in maritime Asia are acquiring submarines for their sea denial capabilities to credibly deter larger, more militarily capable adversaries. Submarine warfare is inherently asymmetric, imposing potentially large costs on any potential adversary. The mere threat of submarine activity can dramatically affect an adversary’s planning considerations. In peacetime, submarine forces accomplish these goals by monitoring the naval activities of other countries, protecting their country’s sea lines of communication, and, for a small number of nations, providing a sea-based nuclear deterrent. A well-equipped submarine force operated by a highly trained crew provides an exceptionally capable and flexible platform for these many missions. 

Geography in the Asia-Pacific 

The maritime geography of the Asia-Pacific — and its centrality to the U.S. and global economy — has powerful implications for how submarines can be employed throughout the region. The first island chain, running from Japan through Taiwan to the Philippines, forms a natural barrier that China fears may “bottle up” its naval forces. Similarly, the relatively small number of approaches through the islands provides China’s increasingly capable missile force a relatively small number of aim-points should it seek to counter foreign countries’ navies. Key chokepoints such as the Malacca, Lombok, and Sunda Straits further complicate access to the region (Figure 2, below)

. Figure 2: Maritime Chokepoints in Asia (Source: Asia Maritime Transparency Initiative) 

Spying on the U.S. Submarine That Spies For the NSA and CIA

http://phasezero.gawker.com/spying-on-the-u-s-submarine-that-spies-for-the-nsa-and-1693109418

Adam Weinstein and William M. Arkin 4/07/15 

Everyone saw the USS Annapolis come home last year. It returned, poignantly, on Sept. 11, and there was a seriousness amid the usual dockside fanfare—sailors meeting newborn children for the first time, a school band playing "Anchors Aweigh." But there was no mention of the boat's secret missions. 

From March to September 2014, the U.S. submarine's 152-man crew cruised the deeps of the Mediterranean, Red Sea and Arabian Gulf, earning a earning a coveted Battle "E" for their efficiency in doing all the fleet had asked of them. Which involved ... what, exactly? They covered 34,000 nautical miles, participated in one multinational exercise, and made port calls in Portugal, Spain, Bahrain, and Gibraltar, according to official Navy reports. 

There was something else, according to the sub's captain, Commander Chester T. Parks. "During this time," he told reporters, "Annapolis completed four missions vital to national security." 

Technically, his boat is a fast-attack submarine, responsible for tracking and killing enemy subs and surface ships when shit goes down. But the Annapolis was equipped for a very special top secret task, one that didn't involve its Mark 48 ADCAP torpedoes—or any shooting weapons at all. It was a mission that wasn't yet accomplished as the boat ported and the crew embraced their families on the dock at Submarine Base New London, Conn. 

First, Parks and his team would have to brief some high-level NSA and CIA officials.

This jewel of the silent service, it turns out, is a very good listener. 

Deep in the trove of National Security Agency documents leaked by Edward Snowden is a classified Powerpoint training presentation for workers at the Naval Information Operations Command Maryland—the Navy component of the NSA. The presentation explains the ins and outs of computer network exploitation (CNE) "to change or collect information residing on or transiting computer networks." To spy, that is, on any computer network anywhere—and not just to listen, but to manipulate and even shut it down. 

The heavily redacted presentation includes an example of a "tailored access operations" target for these military hackers: an unidentified nation's president, Parliament, and military leaders: 

A proliferation of quieter submarines is pushing navies to concoct better ways to track them

Seek, but shall ye find? 

http://www.economist.com/news/science-and-technology/21703360-proliferation-quieter-submarines-pushing-navies-concoct-better-ways Aug 6th 2016 | From the print edition

DURING war games played off the coast of Florida last year, a nuclear-powered French attack submarine, Saphir, eluded America’s sub-hunting aircraft and vessels with enough stealth to sink (fictitiously) a newly overhauled American aircraft-carrier, Theodore Roosevelt, and most of her escort. An account of the drill on a French defence-ministry website was promptly deleted, but too late for it to go unnoticed. 

Nor was this French victory a fluke. In 2006, in what was very far from being a war game, a Chinese diesel-electric submarine surfaced near Okinawa within torpedo range of another American carrier, Kitty Hawk, without having been detected by that carrier’s escort of more than a dozen vessels and anti-submarine aircraft. And, from the point of view of carrier-deploying navies, things are threatening to get worse. Saphir, launched in 1981, hardly represents the state of the art in underwater undetectability; in the decade since the Okinawa incident diesel-electrics have become even quieter. For an inkling of the silence of the new generation of such subs when they are running on battery power alone, without their engines turning, Jerry Hendrix, a former anti-submarine operations officer on the Theodore Roosevelt, asks: “How loud is your flashlight?” 

In this section

Seek, but shall ye find? 

Moreover, submarines are spreading. Since the cold war ended, the number of countries deploying them has risen from a dozen or so to about 40. Many of the newcomers are not part of the Western system of alliances. Some are actively hostile to it. And more may join them. A secondhand diesel-electric boat—not state of the art, admittedly, but effective nevertheless—can be had for as little as $350m. 

Worse, for those trying to defend ships from submarine attack, Western powers have routinely cut anti-submarine spending since the end of the cold war. American carriers retired the S-3 Viking submarine-hunting warplane in 2009, leaving shorter-range helicopters to compensate. Since the Soviet Union’s demise the average surface escort of an American carrier has shrunk from six vessels to four. 

Modern submarines are not merely quieter than their predecessors, they are also better armed. Many carry anti-ship guided missiles as well as torpedoes. One such, the CM-708 UNB, was shown off by China in April. It packs a 155kg warhead and, after popping out of the water, flies at near the speed of sound for about 290km. An export version is available but, if you prefer, Russia’s submarine-launched Kalibr-PL missile offers a bigger warhead and a terminal sprint at Mach three. In December a submerged Russian submarine hit Islamic State targets in Syria with four similar missiles. 

Potential adversaries operate or have ordered more submarines than Western powers could feasibly find and track with their existing defences. Even Iran has more than a dozen well-armed “midget” subs that hide in the shallows of the Persian Gulf, as well as three big Russian-made Kilo class diesel-electrics. Israel’s navy trains as if this trio carry the Kalibr-PL’s export variant, according to an Israeli expert. Countries which plan to arm submarines with that missile include China, India and Vietnam. The upshot is that many warships are in jeopardy and may only learn just how great that jeopardy is, says Alain Coldefy, a former vice-chief of France’s defence staff, once a missile is closing fast. 

America Is Smashing Russia and OPEC's Grip On The Oil Market

http://nationalinterest.org/feature/america-smashing-russia-opecs-grip-the-oil-market-17340?page=show

The shale gas revolution in the United States is overturning the old order.

Anthony Fensom, August 14, 2016

Far from being threatened by recent weak prices, America’s status as an emerging energy superpower has solidified in 2016, weakening OPEC’s grip over the oil market along with Russia’s influence over Europe’s gas supplies. For the next U.S. president, the geopolitical environment could look a lot more benign, should the nation’s energy industry continue on its current path.

The start of the revolution occurred in February, when the first major U.S. gas export shipment from Cheniere Energy set sail for Brazil. According to Cheniere, the United States could be “one of the three biggest suppliers of LNG (liquefied natural gas) by 2020.” In recent months, U.S. LNG has even been exported to the energy-rich Middle East, a move British newspaper theFinancial Times described as akin to “sending coal to Newcastle.”

But the shale gas revolution in the United States is rapidly overturning the “old order,” and the dust has yet to settle.

Taking on the cartel

For decades it was thought U.S. oil production had peaked around 1970, as thirty years of declining production set in and the OPEC cartel’s manipulation of oil supply and prices gave a number of politically sensitive regions an uncomfortably large degree of influence over global markets.

But in 2009, driven by the newly economically viable hydraulic fracking extraction method, U.S. oil production rose, and it kept rising until global oversupply forced U.S. production cuts last year.

After initially downplaying shale’s potential to rival OPEC’s monopoly, Saudi Arabia launched what critics called a price war against the new industry in 2014: it refused to cut production when many other OPEC states wanted to do so, and Riyadh contended that it was merely letting the market take its course. This continues to glut the market, with the Saudis hitting a new all-time production high just last month.

But while their strategy of oversupply may have made some high cost operators economically unviable, including those in OPEC member states Angola, Nigeria and Venezuela, U.S. shale extractors have proven highly adept at cutting costs. This has opened up a profit margin even below that which Saudi Arabia needs to fund its welfare state, which the International Monetary Fund believes could go bankrupt in five years without major policy changes.

Outgoing Pioneer Natural Resources CEO Scott Sheffield last month declaredhis company had cut pre-tax production costs in the West Texas Permian basin to just $2.25 per barrel, and low production costs are not the only advantage U.S. shale extractors enjoy.

New projects using traditional extraction methods typically have a five-year lead time and a ten-year payback time, while new shale projects have only a one-year lead time and an eighteen-month payback time, according to Goldman Sachs head of European Equity Research Michele Della Vigna. In addition, the ease of developing new projects, and of increasing or decreasing supply to meet demand, has drastically flattened the supply curve of the global oil market, and weakened OPEC’s power to manipulate prices.

Della Vigna expects this shift will leave the United States and OPEC fighting for market share as the two key players, with the rest of the producers battling to remain relevant.

Freeing Europe from Russia’s stranglehold

Ten years ago, Russia, Qatar and Iran were the established gas giants, together owning 57 percent of global conventional gas reserves and forming the core of the Gas Exporting Countries Forum (GECF), referred to by then Russian Energy Minister Sergey Shmatko as the “gas OPEC.”

Islamic State faces uphill 'branding war' in Afghanistan, Pakistan

http://www.reuters.com/article/us-pakistan-afghanistan-islamicstate-idUSKCN10P0QZ?utm_source=Sailthru&utm_medium=email&utm_campaign=Defense%20EBB%2008-15-16&utm_term=Editorial%20-%20Early%20Bird%20Brief

By Kay Johnson and Mehreen Zahra-Malik | ISLAMABAD

The U.S. drone strike that killed Islamic State's commander for Afghanistan and Pakistan was the latest blow to the Middle East-led movement's ambitions to expand into a region where the long-established Taliban remain the dominant Islamist force.

Islamic State has enticed hundreds, perhaps thousands, of jihadist fighters in Afghanistan and Pakistan to switch loyalty and has held a small swathe of territory in the eastern Afghan province of Nangarhar, where leader Hafiz Saeed Khan was killed on July 26 by a U.S. drone, Washington confirmed late Friday.

But outside that pocket of territory, security officials and analysts say that Islamic State remains - for now - more of a "brand name" than a cohesive militant force in much of the region.

"Groups around the world want to jump on that bandwagon and cash in on their popularity and the fear they command," said a Pakistani police official based in Islamabad, on condition of anonymity because he was not authorized to speak to media.

Anxiety over Islamic State - also known as ISIS or "Daesh" - in Afghanistan and Pakistan has been building since the al Qaeda breakaway movement seized portions of territory in Iraq and Syria in 2014 and began promoting itself worldwide.

Those fears had gain fresh impetus in the last month after IS's self-declared "Khorasan province" in Afghanistan and Pakistan claimed two especially deadly bombings that each killed more than 70 people - one in the Afghan capital, Kabul, and the latest in the southwestern Pakistani city of Quetta last week.

Yet Pakistani officials and independent analysts have raised doubt on the IS claims, especially for the Quetta bombing - saying the more credible claim for the suicide attack at a hospital was by a Pakistani Taliban offshoot, Jamaat-ur-Ahrar.

"ISIS is increasingly on the defensive as it struggles to defend its shrinking caliphate in Iraq and Syria, so it has a strong incentive to show it's still relevant by taking credit for something it didn't do," said Michael Kugelman, South Asia analyst for the Woodrow Wilson Center, a U.S.-based think tank.

ISIS Expanding Its Presence In Southern Afghanistan

Afghan officials: IS expands presence in restive south

Associated Press, August 14, 2016

KANDAHAR, Afghanistan (AP) — The Islamic State group, which has been building a presence in Afghanistan for more than a year, has established a recruitment and training camp in a restive southern province bordering Pakistan, Afghan officials said.

Last year, hundreds of insurgents fled to Afghanistan from neighboring Pakistan, where the military launched a campaign to clear militants from the lawless tribal regions in the country’s north. Among them were members of the Islamic Movement of Uzbekistan, who joined forces with local Taliban fighters to attack northern Afghan cities such as Kunduz, which was briefly overrun in September.

The Pakistani military campaign also caused around 400 families loyal to the Islamic State group to flee to Afghanistan, Afghan authorities said. The families, many of them Arabs and Chechens, settled in the southern province of Zabul, in the district of Khak-e-Afghan, a former Taliban stronghold with a history of militant violence that has made it a no-go area for Afghan security forces.

The long-term intentions of the IS loyalists in Khak-e-Afghan were initially unclear. Locals said they kept to themselves but appeared wealthy, purchasing expensive properties and never bargaining down prices in the bazaar.

Now officials say the IS operatives have established a headquarters in the district, and are actively recruiting and training locals to join the group as gunmen.

“They have a lot of money. People here are very poor, and that makes them very easy targets for these foreigners,” said Atta Mohammad Haqbayan, the director of Zabul’s provincial council. He said that he asked central authorities in Kabul for help to drive the IS operatives out of the province —"but no one is listening to us.“

In late July, the Afghan military launched an offensive against IS in the east of the country, backed by U.S. forces and air strikes.

This week, the U.S. Department of Defense confirmed that the leader of IS in Afghanistan and Pakistan, Hafiz Saeed, was killed some weeks ago in an American drone strike in the eastern province of Nangarhar.

U.S. military officials have said that there are between 1,500 and 3,000 IS-linked militants in the eastern region, most of them former operatives for the Afghan and Pakistani Taliban groups. They have direct links with the leadership of IS in Iraq and Syria, and for some months earlier this year held control over a number of districts near the Pakistan border.

The commander of American and NATO forces in Afghanistan, U.S. Gen. John Nicholson, has said that dozens of IS commanders and hundreds of fighters have been killed since the Afghan military declared its offensive in late July. He said many insurgents were now fleeing to the south of the country. It was unclear if they were escaping to Zabul.

Afghan officials in Zabul say their requests for military action against IS in the south have gone unanswered. U.S. officials insist there is no substantial evidence to suggest that the Islamic State group is active in Zabul.

IS drew attention to its presence in Zabul last November, when the militants kidnapped and killed seven people from the ethnic Hazara group as fierce fighting raged between IS and local Taliban militants. The killing sparked widespread anger among the Hazara community, a Shiite Muslim group that has long faced discrimination, who organized a mass march to the presidential palace in Kabul.

** Afghan Army Struggling to Hold Territory Against Resurgent Taliban

Afghanistan Forces Struggle to Hold Firm Against Taliban in South

MUJIB MASHAL

New York Times, August 15, 2016

CHAH-I-ANJIR, Afghanistan — As Taliban fighters push toward the southern city of Lashkar Gah, members of Afghanistan’s elite forces are trying to hold their ground here, about 10 miles from the city, the capital of Helmand Province and a critical link in the defense of the entire region.

The Afghan government’s need to rely on the special forces, highly trained for commando raids, to guard the perimeter of the city exposes a stark reality. As Helmand, the largest province in Afghanistan and the center of its opium production, endures intense enemy fire this summer, the regular police and army forces have failed to stand firm, raising the possibility that the Taliban could overrun Lashkar Gah.

“The police, as soon as they were inflicted with some casualties, gave up about 27 posts one after another without a fight, and our posts were surrounded by surprise,” said Col. Nematullah Khalil, the commander of the Afghan Army’s Third Regiment, 215 Corps, whose soldiers are trying to help the special forces hold the line in Chah-i-Anjir, in the Nad Ali district. “The enemy planted a lot of mines wherever they reached, and that slows us down.”

Lt. Col. Mohammad Omar Jan, the police chief of the Nad Ali district, rejected that assessment. The army is blaming the police to cover up its own weakness, Colonel Jan said, adding that the army was responsible for Chah-i-Anjir’s security because his forces were busy trying to secure the district governor’s compound.

“The police are fighting in the front line and suffer heavy casualties more than any other forces,” he said. 

The main road that separates the Afghan forces from the Taliban, who have been striking more forcefully and relentlessly this fighting season, is heavily mined. The waist-high cornfields around the largely abandoned homes look calm, but at night the forces regularly clash with the Taliban. The troops have managed to retake only about a mile in the 10 days since they lost much of the Chah-i-Anjir area, said Colonel Khalil, the Afghan Army officer.

The entire area held by government forces in Helmand has shrunk in recent months. Four districts, including Musa Qala and Nawzad, that were the focus of thousands of American and coalition troops during the 2010 surge are under Taliban control. Frequent airstrikes and reinforcements are required to keep many of the other 10 districts, some only nominally in government control, from falling.

While Afghan officials insist that Lashkar Gah will not be lost, their helter-skelter strategy seems unsustainable against an enemy that has proved to be mobile and resilient. Defending the district centers that have not fallen to the Taliban has required a delegation of senior generals and officials from Kabul to shuttle back and forth to monitor developments.

On Thursday morning, the senior generals led the fighting, pushing their ground troops and calling in strikes by Afghan and American aircraft to fend off Taliban advances on the district center of Nawa, just south of Lashkar Gah and one of the safest places in Helmand until recently. The Taliban fire, including mortar barrages, damaged the government buildings and demolished the watchtowers.

On returning to Lashkar Gah, the generals remained in emergency mode, constantly on the line with troops in other districts, urging them to hold their ground. The Taliban fighters, many of them retreating from Nawa, shifted to exert pressure on the center of the neighboring district of Garmsir. The generals rallied some commandos and then piled into helicopters to save Garmsir.

Another team was busy trying to clear the main road to Kandahar Province, which had remained blocked for a week because of Taliban mines and check posts, officials said. Sultan Muhammad, the police chief of Maiwand District, who participated in the road clearance, said that the authorities had defused as many as 100 roadside bombs, and that teams were continuing to clear more even as they were being engaged by the Taliban.

Rising Debt, Shrinking Investment in China

Aug. 16, 2016

By Jacob L. Shapiro

While Beijing knows it needs to reform state-run companies, political and social factors create serious roadblocks.

On Aug. 12, two important reports were published on the current state of the Chinese economy. The first was the International Monetary Fund’s annual review, which said the outlook for near-term growth had improved and then in virtually the same breath pointed out that corporate debt is rising and capital outflows for 2016 will equal 2015’s at $1 trillion. The second report was China’s monthly release of investment data, which showed that fixed asset investment growth in China slowed to 8.1 percent in July. According to Caixin, that’s the slowest year-to-date fixed asset investment growth China has seen in 16 years.

The juxtaposition of these two reports helps us trace the contours of the problems that the Chinese economy faces. It shows how these problems are ultimately not about just facts and figures but rather are about politics. The IMF report’s proposed mitigation efforts make it all sound very easy – reduce corporate debt, restructure or even liquidate state-owned enterprises (SOEs) exhibiting subpar performance and accept lower growth. But for China, as in many countries, economic policy decisions like this are fraught with political consequences that often prevent the goals from being realized.

The Chinese government has identified the need to reform SOEs. It is a common talking point for President Xi Jinping these days. The Chinese government has gone so far as to say publicly that it will eliminate 1.8 million jobs in the overstocked coal and steel sectors, though the timeline for the elimination of those jobs has always been indeterminate. However, that is not good enough for the IMF. The IMF suggests that China cut 8 million jobs in a few key sectors. This is simply not something that China can just do – the social and political costs outweigh the economic.

The corporate debt problem is similar. One of the key issues the IMF report identified is the intensity at which credit growth has accelerated. The regions that have seen the highest levels of credit growth are largely the northeastern and north-central provinces, where industry is the main driver of the economy. Such credit growth is not specifically in keeping with the party line – Premier Li Keqiang spoke to provincial governors in July and exhorted them to eliminate inefficiencies, i.e., not to lend money to SOEs that are struggling to make ends meet.

China is an authoritarian state, but that does not mean that the central government can simply dictate what it wants to local authorities and have it be done. In a sense, the system is built on the lower-ranking party members profiting from their activities. Real reform, on the other hand, is contingent on many of those local officials taking a long-term view rather than short-term view. That is easier to do from IMF headquarters or even from Beijing. It’s much harder for a local official in Shanxi or Heilongjiang to allow SOEs to fail and protests to break out because millions are losing their jobs.

This is not, however, just a center-periphery divide. The central government is caught between continuing to encourage growth to maintain employment and accepting lower growth while boosting domestic consumption. The monthly investment numbers released by the Chinese bear this out. The monthly release is a stark data point of a trend that began roughly around December 2015.

As the graph above shows, before December 2015, the percentage growth between investment in fixed assets by SOEs and by private enterprises was roughly equal. (In absolute terms, private investment accounts for roughly 60 percent of all investments.) January, however, was a rough month for the Chinese economy, as shocks in the stock markets severely weakened investor confidence. In response, China relied on stimulus – more stimulus in the first quarter of 2016, in fact, than any other quarter since the 2008 financial crisis.

** We Welcome China In Djibouti, Just As We Welcomed The West

http://www.defenseone.com/ideas/2016/08/we-welcome-china-djibouti-just-we-welcomed-west/130765/?oref=d_brief_nl

BY MAHAMOUD ALI YOUSSOUF

Djibouti’s foreign minister pushes back on assertions China is elbowing Americans out of the strategic East African footprint.

It is hard for me to take James D. Durso’s assertions about Djibouti, our government, and China’s influence here seriously when his article contains so many errors. Djibouti held no election in 2015, and although April’s presidential election may have had no American monitors, or indeed Mr Durso, in attendance, the African Union’s monitors described it as “inclusive, free and sufficiently transparent to be considered as a credible reflection of the will of the Djiboutian people.” 

I could identify further inaccuracies, but will instead highlight the facts concerning Djibouti’s geopolitical importance and the enduring strength of its relationship with the United States.

Djibouti is a vital partner for the West, Asia, and its Middle East and African neighbors concerning international security matters. It also acts as a regional hub providing critical sea, air, rail, and road linkages for eastern Africa, including the land-locked economies of Ethiopia and South Sudan.

Towards regional stability, Djibouti is a contributor of troops to the African Union Mission in Somalia, or AMISOM. As well as acting in a peacekeeping role, AMISOM provides safe passage and protection to all those involved in the ongoing national reconciliation process. 

Within our own borders, Djibouti has a long tradition of hosting refugees from different countries in the region, such as Somalia and Eritrea. More recently, Djibouti has been at the forefront of countries helping the people of Yemen by providing logistical and humanitarian support to refugees fleeing the violence.

Although tens of thousands of refugees have passed through Djibouti towards safety, 9,000 now reside in our capital, with a further 1,000 living in a refugee camp in the north of the country. As you might imagine, the influx of large numbers of Yemeni civilians pose considerable challenges in terms of security, as well as placing a strain on our economic resources. We are trying to address all of these issues in partnership with the international community.

Some people have questioned whether China’s decision to establish a presence in Djibouti means that our nation’s ties with the United States are weakening. The answer is simple – no.

We welcome China’s presence in Djibouti, just as we previously welcomed forces from the U.S., NATO, France, the United Kingdom, Italy, and Japan, who are present in our country. These are vital strategic allies for Djibouti as we fight against terrorism and piracy, which remain significant threats to the international community and the global economy.

The United States and Djibouti have been allies since our nation gained independence in 1977. We supported the Americans in the Gulf War and after the 2001 terrorist attacks. Camp Lemonnier, the U.S.’s only permanent military base in Africa, houses 4,000 American personnel.

US vs China war would be ‘intense, destructive, protracted’

http://www.news.com.au/world/asia/us-vs-china-war-would-be-intense-destructive-protracted/news-story/4fca5bc6b0d021d5cb291c64d89e3f55

AUGUST 15, 2016

Debra Killaleanews.com.au@DebKillalea

CHINA could match the military might of the US in a decade and any conflict between them would rock the entire world economy.

That is the frightening warning issued by research organisation, Rand Corporation, which highlights how the US and China remain at loggerheads over several regional disputes with large military forces operating closely together.

In its new report War With China, Thinking Through the Unthinkable, Rand warn any conflict would ultimately be intense, destructive and protracted.

“If an incident occurred or a crisis overheated, both have an incentive to strike enemy forces before being struck by them,” the report warns.

“And if hostilities erupted, both have ample forces, technology, industrial might, and personnel to fight across vast expanses of land, sea, air, space and cyberspace.”

A missile is launched from a guided-missile destroyer during a live ammunition drill in the East China Sea this month. Picture: Wu Dengfeng/XinhuaSource:AP

The report also warns while the US has the military might to win any such conflict now, that may not be the case within a decade as the Asian powerhouse catches up.

By 2025, Rand predicts China will have built up its ability to saturate enemy naval forces with missiles and a US victory at this stage would be more uncertain.

The US remains the biggest spender on military across the globe, spending four times as much as rival China.

Figures released by Global Firepower (GFP) confirms spending in 2015 was highest for the US ($581bn) followed by China ($155bn).

The Rand report, which specifies conflict should be avoided at all costs, said there would be a massive political and economic costs associated with such a war.

Political Violence And Sectarianism In Pakistan – Analysis

http://www.eurasiareview.com/13082016-political-violence-and-sectarianism-in-pakistan-analysis-2/ 

By RSIS August 13, 2016 

The recent terrorist attacks in several countries by individuals inspired by the so-called Islamic State (IS) highlight the enduring ideological threat of IS. Serious consolidated efforts are needed to meet the threat with counter-ideology messages to target audiences. 

By Mohamed Bin Ali* 

The spate of terrorist attacks across Asia claimed by the so-called Islamic State group during Ramadan have marred the spiritual victory enjoyed by Muslims during the holy fasting month. Spanning cities across the Muslim world like Istanbul, Baghdad, Dhaka, Jakarta and even Islam’s second holiest city, Medina in Saudi Arabia, the terror attacks appear coordinated. 

The deliberate attacks by terror groups like IS were probably motivated by their fallacious claim that Ramadan is a month of armed struggle for Muslims, which is another misuse of the notion of Jihad in the Islamic legal tradition. While efforts to step-up counter-IS ideology is necessary it is more critical to dispense accurate counter-extremist prescriptions that reach all of its target audiences. 

IS Attacks in Ramadan 

Terror attacks by Muslim extremist groups in the month of Ramadan are not new. Before IS, Al-Qaeda had a history of launching attacks in Iraq during Ramadan. However, the attacks in Ramadan 2016 are seen to be the worst to date in terms of their frequency, intensity and choice of location, especially those attacks that took place in three locations in Saudi Arabia where four suicide bombs exploded killing at least four people. One of the locations was in proximity to the Prophet’s Mosque in Medina. 

While Muslims devote the month of Ramadan to spiritual jihad, IS and other violent Islamist groups claim that Muslims must also perform the physical jihad or armed struggle in this holy month. The attacks in Ramadan are based on their interpretation and emulation of the Battle of Badar, the first battle in Islam which occurred in the month of Ramadan. In that battle that took place in 624 CE, Muslims gained victory against their opponents, the then-pagan Quraish of Mecca. 

The attacks by IS in Medina, Dhaka and Baghdad occurred in the last ten days of Ramadan. According to Islamic traditions, the Night of Power or Lailatul Qadar will occur in the last ten nights of Ramadan when Muslims are encouraged to perform devotional acts such as extra night prayers and charity to seek blessing and forgiveness of God. IS believe that killing their enemies in the name of jihad – as understood by them – in the last ten days of Ramadan is one of the most preferred forms of devotional acts and a way to gain martyrdom. 

IS Ideology 

To counter IS ideology and the misuse of religious concepts such as jihad and martyrdom it is important to understand their religious orientations. IS attempt to assert themselves as the representative of the authentic and original Islam as practised by the early Muslims. They advocate strict adherence to their understanding of Islamic practices as enjoined by Prophet Muhammad, the final prophet, and subsequently practised by the early pious Muslims known as the salaf al-salih. 

In their attempt to portray the authenticity of Islam in their propaganda, IS manipulate religious doctrines such as Jihad (struggle), Syahadah (martyrdom), Al-Wala’ wal Bara’ (Loyalty and Disavowal), Hijrah (migration) and many others to influence young Muslims to join their fold. They also inherited a legacy of takfiri (excommunication) from violent Islamists before them. 

As shown in the recent attacks, IS ideology is also based on a culture of hate and hostility towards both Muslims and non-Muslims. This means that while they preach hatred towards infidelity (kufr) and polytheism (syirik), they also harbour hostility towards Muslims who hold different opinions and disagree with them such as the Shias or those Muslims who promote innovations in religious matters (bid’ah). 

Aug. 15, 2016 By Lili Bayer Germany’s Weak Negotiating Power

Berlin’s authority in negotiations with Russia and Turkey is outweighed by the U.S.

German Foreign Minister Frank-Walter Steinmeier is meeting with his Russian counterpart, Sergei Lavrov, today in Yekaterinburg, Russia to discuss the latest escalation in Ukraine and the impasse over Syria. Last week, German State Secretary Markus Ederer rushed to Turkey to, in the words of the German Foreign Ministry, “re-establish direct channels of communication” with the Turkish authorities. Germany has criticized Turkey’s actions following the failed coup, which caused a strain in relations with Ankara. This raised further questions over whether the European Union’s refugee deal with Turkey will be fulfilled. 

These meetings are a small indication of a larger problem for Berlin: it is facing a growing number of crises, at home and abroad, that it has limited power to address. For Germany, stability in Ukraine and the European Union’s agreement with Ankara on refugees are key priorities. Surrounded by instability, Germany is attempting to play a leadership role in resolving regional crises, but finding that in reality Washington – and not Berlin – holds the cards. Germany’s ability to shape Russia’s actions in Ukraine and Turkey’s trajectory is limited. 

Former Turkish Prime Minister Ahmet Davutoglu (L) shakes hands with President of the European Council Donald Tusk and President of the European Commission Jean-Claude Juncker after a press conference to discuss the migrant deal reached between Turkey and EU states, during a two-day EU summit, on March 18, 2016 in Brussels, Belgium. (Photo by Carl Court/Getty Images) 

For Germany, stability in Ukraine is key. Last week, Russia accused the government in Kiev of conducting a raid in Russia-controlled Crimea and threatened to call off planned talks with Ukraine, Germany and France. Since the annexation of Crimea and outbreak of hostilities in eastern Ukraine in 2014, Germany has attempted to position itself formally as a mediator in the conflict, leading rounds of negotiations between Russia and Ukraine. 

Berlin has sought this role not only because of concerns regarding conflict on Europe’s periphery, but more importantly because Germany fears that an escalation in Ukraine would exacerbate the EU’s fragmentation. The German government is aware that there are already serious divisions within the EU on issues ranging from refugee policy to economic and security matters. Increased Russian aggression in Ukraine would deepen divisions between countries (like the Baltic states and Poland) that see Russia as an existential threat and countries (mainly in southern and Western Europe) for whom Russia is a secondary challenge. 

While Germany has sought to act as a mediator in the conflict, Berlin’s ability to influence Moscow or play a significant role in negotiating a deal is limited. European governments’ main tool for shaping Russia’s behavior is the sanctions regime currently in place. However, sanctions are now a relatively minor thorn in Russia’s side compared with low oil prices, which are the primary cause of the country’s economic woes – and which Germany cannot control. While Germany and France are the main formal negotiators between Russia and Ukraine, Berlin is not in a position to help deliver or guarantee the key compromises Moscow is seeking. 

To Defeat Future Terrorists, Europe Must Look to the Past

http://www.defenseone.com/ideas/2016/08/defeat-future-terrorists-europe-must-look-past/130715/?oref=d_brief_nl

BY JAMIE TARABAYNONE 

AUGUST 14, 2016

Decades of facing down homegrown, radical militancy, offer France, Germany, and Britain, a road map for contending with ISIS.

PARIS—In Paris, church bells clang against the squawk of police sirens. Security forces of every stripe patrol the Jewish quarter in the Marais neighborhood, watching over tourists posing by the Louvre’s pyramid and hovering near the doors of the city’s landmark hotels and boutiques. Even as Paris prepares to empty out just as it does every August, leaving its cobbled streets to dwindling numbers of tourists, it is a city on guard.

The recent, deadly Bastille Day rampage through a seaside boulevard in Nice and the summary execution of an elderly Catholic priest in a village in Normandy have kept the country in the state of emergency President Francois Hollande instituted last November, following the coordinated attack in Paris that left 130 people dead. Heavily armed police now patrol the streets. “What can we do? Stay home?” asked one older man who declined to give his name, waiting in line by the Seine to collect boules for a game of pétanque. “We have to keep moving, keep living, otherwise, what is the point?”

France and the rest of Europe have endured this near state-of-siege before. Older Europeans can recall a time when communists, nationalists, anarchists, Islamists, and international criminals wrought havoc on the continent. Palestinian terrorists shattered the harmony of the 1972 Summer Olympics in Munich, taking hostage and murdering 11 Israeli athletes. Italian communists kidnapped and murdered a former prime minister in 1978. In 1988, Libyan terrorists brought down Pan Am flight 103 over Lockerbie, Scotland, killing 270 people. Through the 1970s and into the 1980s, warring Palestinian factions and Iranian revolutionaries turned Europe into a battleground for settling internal feuds and assassinating enemies, opening fire on the Rome check-in counter for the Israeli airline El Al, and hijacking planes. In France itself, an Algerian Islamist group that had fought the Algerian government during the civil war in 1991 bombed Paris metro stations, a Jewish school, and L’Arc de Triomphe. Hezbollah, as part of its declared aim to expel any French or American presence from Lebanon, conducted at least five bombings on French soil between 1985 and 1986. Armenian terrorists, seeking vengeance for the Armenian Genocide, struck the Orly airport in 1983, killing at least five people.

Another DNC hack: Why Russia may want to influence the US elections

https://www.yahoo.com/news/another-dnc-hack-why-russia-may-want-influence-202919987.html?nhp

August 14, 2016

The Democratic Party is once again the subject of a Wikileaks dump, as information stolen from the party's servers in June continues to be made public.

The newest set of documents came from the Democratic Congressional Campaign Committee (DCCC), the fundraising organization for the House Democrats, and included cell phone numbers and email addresses of nearly 200 lawmakers. The hacker claiming responsibility for both this leak and the leak prior to the Democratic National Convention,Guccifer 2.0, has been linked to Russian intelligence.

The main concern this time around is whether the hack represented a routine cybersecurity attack or a more pointed attempt to influence the presidential election on the part of the Russian intelligence. The F.B.I is leading the investigation of the attack on the Democratic Party's servers that occurred in June, but at this point, officials are fairly certain that Russian intelligence is behind the attack.

Dmitri Alperovitch, the chief technology officer of the cybersecurity firm Crowdstrike, told the Monitor he determined that the attackers “were operating from 8:00 am to 8:00 pm Moscow time, which gave us an indication we’re dealing with government workers rather than cybercriminals burning the midnight oil for profit.”

While Guccifer 2.0 hinted that there may be more emails and files leaked in the future, the fallout of this second round of emails will likely prove less embarrassing than the first, which showed the Democratic National Committee’s bias against Bernie Sanders during the primary elections and prompted the resignation of DNC chairwoman Debbie Wasserman Schultz.

Additionally, investigators found similarities between this attack and previous hacks by Russian intelligence, as well as malicious code that was built on Russian servers.

Still, confusion remains – and in the world of Russian cybersecurity, confusion is a tactic.

"This is what cyberconflict actually looks like," James Lewis, a senior fellow at the Center for Strategic and International Studies (CSIS), a Washington think tank, told the Monitor. “The problem in the US is we’re very militarized, so we tend to think about attacking infrastructure. The Russian approach is much more political and about trying to manipulate public opinion."

Britain’s Nuclear Future Threatened By Espionage And The Brexit

http://oilprice.com/Alternative-Energy/Nuclear-Power/Britains-Nuclear-Future-Threatened-By-Espionage-And-The-Brexit.html

By Gregory Brew - Aug 12, 2016,  

The drama of Britain’s stalled nuclear facility at Hinkley Point C grew more Shakesperean this week, with the Chinese firm involved in its construction now under investigation in the United States for espionage.

It was announced on August 11 that the Chinese CGN firm and engineering advisor Szuhsiung Ho have been indicted on charges of industrial espionage in the United States. The charges relate to alleged attempts to steal nuclear secrets to aid the Chinese nuclear energy program.

The power plant at Hinkley Point, a joint UK-French-Chinese venture, has been at the center of an on-going debate in the UK over the future of the country’s energy infrastructure, its relations with China and its place in the world post-Brexit. It has also emerged as the first real test ofPrime Minister Theresa May, who leads Britain in the aftermath of the vote to leave the EU last June. More broadly, the issue has drawn focus onto the expanding economic influence of China and the possible political consequences this might have world-wide.

Britain’s nuclear energy program supplies 21 percent of the country’s power and has been hyped by the country’s Conservative Party as a key component in the long-term plan to reduce carbon emissions. To pay for the plant, the previous government under David Cameron agreed to a subsidy program which would pass the cost of construction onto consumers, charging a premium for cheaper power.

The £18 billion project is projected to provide 25,000 jobs in its construction and 900 permanent positions once it is up and running. The huge facility could supply 7 percent of Britain’s projected energy needs over a 60-year timeframe. Given the current set-backs and that anticipated rate of construction, the plant would not begin generating energy in commercial quantities until 2025. Britain is in dire need of a long-term energy plan that conforms to the Paris Agreement on climate change, and its current infrastructure is dependent on coal-firing plants and older nuclear facilities scheduled for de-commissioning.

Critics have balked at the costs and the long construction time it will take to get the facility up and running. There are also safety concerns with the form of nuclear power to be deployed at Hinkley Point. And then there are the more nebulous political concerns. An uncertain future in Europe after the June Brexit vote means the British partnership with France might prove less attractive in the long term, and there remains a great deal of suspicion in Britain over the involvement of the CGN firm, and the concern that China will use its stake in the British power plant for strategic purposes.

Signs of Trouble in Ukraine Prompt Question: What’s Vladimir Putin Up To?

http://www.nytimes.com/2016/08/12/world/europe/vladimir-putin-crimea-russia.html?smid=tw-share&_r=0

By MAX FISHER AUG. 11, 2016

WASHINGTON — Russia is conducting a series of military and rhetorical escalations toward Ukraine that have anxious Western analysts once again looking for clues as to President Vladimir V. Putin’s next move.

On Wednesday, Russia’s state security agency, the F.S.B., claimed that it had blocked an attack on Crimea by “sabotage-terrorist groups” sponsored by the Ukrainian government, though two Russian soldiers were killed.

Mr. Putin accused the Ukrainian government of using terrorism to incite conflict over Crimea, which has been heavily militarized since Russia annexed it from Ukraine in 2014. He warned ominously, “We obviously will not let such things slide by.”

Russia has increased its military presence in and around Crimea, adding to fears that Moscow might be planning another military intervention in Ukraine. But while Mr. Putin is nothing if not unpredictable, analysts say this may be about Russia seeking diplomatic leverage rather than prepping for war.

What is actually happening in Crimea?

There are two sets of overlapping events, both shrouded in mystery: the supposed recent attack on Crimea and Russia’s buildup there.

The official Russian account lays out the first as follows: It began late on Saturday, when F.S.B. officers discovered a group of saboteurs just on the Crimean side of the land border with Ukraine. A firefight ended with one F.S.B. officer killed and several of the saboteurs captured. Then on Monday, Ukrainian special forces attempted to cross into Crimea, killing one Russian soldier in what the agency called “massive firing” over the border.

The Russian media later cited government sources as saying the captured saboteurs were Crimean residents who had confessed to planning attacks on local tourist facilities. Moscow insists that Ukraine sponsored the plot

Storm Clouds Ahead: Putin Lacks Strategy to Save Russia's Economy

https://themoscowtimes.com/articles/storm-clouds-ahead-putin-lacks-strategy-to-save-russias-economy-54956

Whether you view the glass as half full or half empty, the Russian economy is in for an unpredictable ride.

Aug. 11 2016 

By Sergey Aleksashenko

Maxim Stulov / Vedomosti

Russian economic indicators were equivocal enough during the first half of the year to provide space for both optimists and pessimists. Arguably the glass was half full. Arguably it was half empty.

For the pessimists, GDP fell around 1 percent year-on-year, all components of the domestic demand continues to shrink, and the economy continues to be in recession, now six quarters in a row. For the optimists, the speed of decline is steadily reducing and, hopefully, in the second half of the year it might come to zero, after which the economyshould start to recover — and a good harvest will help.

Inflation is going down. Five quarters ago, it was over 17 percent. Now it has fallen below zero, even to the point of deflation. OK, reply the pessimists, but deflation is a result of seasonal factors, while the Central Bank is keeping its key rate at a very high level (10.5 percent), and refrained from cutting it ten days ago, saying there are visible inflationary risks.

Investment continues to decline, both industrial and in residential construction. Private consumption declines as well, while Russian people say they are cutting their purchases of goods and services to survive. Then again, industrial production is stable, agriculture continues to grow, export is growing slightly in physical terms, despite the drop in commodities prices.

This economic dialogue will continue for a long time, but the main conclusion we can make is already visible. The Russian economy continues to shrink, while the rest of the world economy continues to grow. In other words, you cannot blame external factors for everything. Oil prices started to decline two years ago and since December 2015, i.e. more than year and a half, they have remained within the $35-$50 corridor. The Russian economy has adjusted to this fact — oil production is growing. After a 50 percent fall, import has stabilized and started to recover.

The budget, however, has not adjusted to the new level of oil prices. Buoyed by oil and gas revenues, the state budget inflated expenditures on wages, pensions and social transfers (now 56 percent of the federal budget.) It boosted military spending to 25 percent of overall federal budget spending.

How Palantir Technologies Buys Influence in Washington to Get Intelligence Contracts from USG

How Silicon Valley’s Palantir wired Washington

Ellen Mitchell

Politico, August 14, 2016

When a little-known Silicon Valley software startup began vying for national security contracts, it went up against an entrenched bureaucracy and opposition from major contractors skilled in the Washington game.

But quickly, Palantir began pulling pages from the defense industry’s own playbook — bulking up on lobbyists, challenging the Pentagon’s contracting rules and getting members of Congress to sprinkle favorable language into defense legislation. Seven years later, the secretive firm has landed $1.2 billion worth of federal business, and critics say the legislative favors it has secured will give it a leg up on billions more.

Representatives of the firm — founded by venture capitalist and prominent Donald Trump supporter Peter Thiel — insist it remains an outsider in a Washington culture deeply wedded to the status quo.

But a review of public documents and interviews with key players shows the company is no stranger to Beltway politics and influence. Its lobbying expenditures more than tripled to more than $1 million in a few short years as it enlisted lawmakers such as Republican Sens. John McCain of Arizona and Tom Cotton of Arkansas to help it compete against established players like Raytheon and Northrop Grumman. Now, about 40 percent of Palantir’s business comes from government clients, and it appears to be winning a fight with the Army over a $3 billion program to build a new battlefield intelligence network. 

“The other companies were asleep at the switch,” said an industry consultant who works for one of Palantir’s competitors, speaking on condition he not be identified.

“It’s a company that couldn’t win a contract and now doesn’t want another company to win,” added a congressional aide who has seen the operation up close but is not permitted to speak publicly. “It happens all the time. They’re just being more aggressive about it than normal.”