Israel Attacks Gaza Flotilla: Casualties Reported

Given that this happened in international waters its seems to be an overt act of maritime piracy by the Israeli Navy/Government. WaPo story here, Al Jazeera video of the boarding and report below:

World Cup Crazy

A building decorated with a giant soccer ball on its rooftop and flags of World Cup teams on its facade is seen near the Martyrs' Square in downtown Beirut May 17, 2010. For weeks Brazilian, German, Spanish, Italian and Argentine flags have fluttered from cars in Lebanon, where fans adopt top World Cup teams with an exuberant passion most countries reserve for their national side. (Reuters Pictures via Daylife)

Call it Country-Eastern

CNN reports:

...

Born in Ponca City, Oklahoma, to Egyptian immigrants, [Kareem] Salama has invented a genre of music by blending his family's roots with his country of birth. His songs incorporate the Arabic poetry of a medieval Muslim theologian with the iconic twang of American country music.

Country-eastern, some might call it.

"The messages I try to focus on -- and I think it's sort of the focus of country music generally -- is just values: family values, love, kindness, things like that," Salama said after a recent performance in Cairo, one of the first stops on the monthlong seven-country tour.

And while he may resemble his audience in appearance, his Southern-accent-infused Arabic -- admittedly rusty -- draws giggles from the crowd.

"Is that proper? Is that right?" he asked the audience after attempting an Arabic thank-you.

But with lyrics such as "I want to live in a land called paradise / I want to go the Valley of the Kings," Salama's cross-cultural approach is hitting home.

"He has really nice songs, written songs. His voice is amazing. His band is amazing," concertgoer Sheriin Ali gushed after Salama's Cairo performance.

According to the State Department, Salama's tour -- which will stop in Morocco, Kuwait, Bahrain, Syria, Jerusalem and Jordan -- "is designed to bring to audiences in the Middle East a rising American musical talent, representative of America's diversity of faith and heritage, who can serve as a bridge between Americans and the peoples of the Middle East."

...

Hat Tip: The Vulture

Leb Web Digest 28.05.10

• The Atlantic: Lebanon's Unlikely Microbrewed Beers
• The New Yorker: No Secrets
• MidEastWire Blog: M. Aoun + I. Fares Coordinate in Akkar
• YaLibnan: Chomsky Chats Up Hizballah 
• WaPo: Psychologically - This is Turkey's 9/11
• World Tribune: UNIFIL Conducts Evacuation Exercise
• Daily Star: Qatar Launches Soccer Projects in Lebanon
• NOWLebanon: Mossad - Turkey Building Alliance with Iran
• Turkish Weekly: Leb Ambassador - Lebanon will Defend Iran

Quick Note: This post was updated on June 2nd 2010

Inflation in Lebanon: April 2010

Via Reuters:

Lebanon's inflation rate rose to 4.7 percent year-on-year in April largely due to increases in the costs of transportation and utilities, figures from the government statistics department showed.

The consumer price index rose 0.6 percent in April compared to the previous month.

The statistics department figures showed transportation costs rose by 15.3 percent year-on-year in April while water, electricity, gas and other fuels increased by 13.9 percent.

Central bank governor Riad Salameh said last week that inflation is expected to remain between 4-5 percent this year.

He also expected the Lebanese economy to grow by 7-8 percent this year, revised from a previous 5 percent forecast.

...

Price growth fell sharply last year, hovering between 1.5 and 4 percent throughout 2009 after peaking at 14 percent in 2008.

Finance Minister Raya Haffar al-Hassan has said Lebanon's economic growth could rise to as much as 8 percent if structural reforms and delayed privatisation plans are implemented.

Privatisation is contentious in the highly-indebted country with government plans to liberalise the telecoms and electricity sectors long opposed by powerful leaders.

London Taxi in Lebanon

London taxis are driven in a convoy in Tabarja, north of Beirut April 9, 2010. Lebanon-based company National New Dawn, the sole agent of the London Taxi, brought in a fleet of the TX4 taxis to Beirut earlier this month, with 50 vehicles expected to be operating by the end of summer. The London Taxi brand is also available for franchising, but only to those who will purchase 10 or more of the taxis. (Reuters Pictures via Daylife)

Hizballah: In its Heart of Hearts

David Kenner in FP on why Hizballah and the Syrians pretend that the Shebaa Farms are grounds for the presence of the parasitic IRGC-extension in Lebanon (hint: its in the last line):

...

... Lebanon's anti-Hezbollah coalition was forced to abandon its agenda following Hezbollah's invasion of West Beirut and the Chouf, and now only exists as a shadow of its former self. Lebanese Prime Minister Saad Hariri, once at the movement's vanguard, was obliged to confer with Hezbollah's ally, Syrian President Bashar al-Assad, before arriving in Washington today. One of the coalition's other pillars, Druze leader Walid Jumblatt, now describes support for Hezbollah as a "political and strategic requirement" and has recently begun attacking senior members of his own party for keeping ties open to the few remaining anti-Hezbollah figures.

... In 2001, Maronite Patriarch Nasrallah Boutros Sfeir became one of the first major figures to call for the withdrawal of Syrian troops from Lebanon, a step that would have been impossible if Israel was still occupying the south. The patriarch would get his wish in 2005, following massive anti-Syrian protests. Lebanon's anti-Syrian coalition even won a majority in the May 2009 parliamentary election; its recent shift to accommodation of Hezbollah is not the result of conviction, but the militia's overwhelming military strength.

In the wake of the withdrawal's 10-year anniversary, the old partisans have recycled their old arguments. ... No serious voice in Israel calls for the reoccupation of a "security zone" in Lebanon. And, in its heart of hearts, Hezbollah must realize that its position would be more secure if there was still an Israeli enemy in Lebanon to demonize.

Holiday Inn

The war-ravaged five-star Holiday Inn hotel (C) stands in the Lebanese capital Beirut on April 12, 2010. The hotel witnessed one of the deadliest and fiercest battles of the Lebanese civil war with rival militiamen using it to fight each other from room to room. Lebanon commemorates on April 13, 2010 the 35th anniversary of the start of the civil war which broke out the same day in 1975. (Getty Images via Daylife)

Israel's Museum of Tolerance and Coexistence

The cordoned off construction site of [an Israeli] museum dedicated to tolerance and coexistence, is seen from above, in downtown Jerusalem, Wednesday, Feb. 10, 2010. Descendants of Muslims buried at the cemetery said they would petition the U.N. Wednesday against the building of the museum over a part of the cemetery. (AP Photo via Daylife - Top; Bottom)

Looks like the Israeli museum is off to a fitting start, you couldn't make this *irony* up, from the NYTimes:

Excavators clearing ground for a museum in Jerusalem dedicated to tolerance have damaged many remains while exhuming more than 1,000 skeletons from a medieval Muslim cemetery, the Israeli newspaper Haaretz reported Tuesday. Israel’s Antiquities Authority confirmed that skeletons had been removed from the cemetery but denied that the remains were mistreated. Muslim groups have been trying to halt construction of the Museum of Tolerance because it is to be built on top of the cemetery, which dates at least from the 14th century. Haaretz published photographs it said were from the excavations. They showed full human skeletons and fractured human skulls.

China Top Consumer of Qatari Gas

From the FT:

...

Qatar is in talks to sell an extra 10m tonnes of liquefied natural gas to China a year and 4m tonnes to India to meet Asia’s thirst for energy to offset slowdowns in the US and Europe.

Abdullah al-Attiyah, the energy minister, said the Gulf state already sold 5m tonnes of LNG to China. If the new agreement is signed, China would overtake Japan, which buys about 8m tonnes a year, and become Qatar’s main gas customer.

...

Qatar is expanding its gas export capacity in spite of concerns about a surplus in global supplies placing downward pressure on prices, particularly in the US. Mr Attiyah said Qatar was on schedule to increase its capacity from 62m tonnes to 77m by the end of September. ...

...

Gas prices are often linked to oil but there is no uniform pricing mechanism. Qatar wants gas to be priced on parity with oil, a move that would give exporters greater stability.

Lifecycle of a Razorwire Fence

Top: Lebanese residents of the southern town of Abbasiyeh remove a razor wire fence which was set up by Israel three days earlier on the so-called Blue Line, a border demarcation between Israel and Lebanon set by the United Nations, in Abbasiyeh, Lebanon, Friday, April 16, 2010. (AP Photo via Daylife) Bottom: Israeli soldiers set up a new razor wire fence near the so-called Blue Line, a border demarcation between Israel and Lebanon set by the United Nations, seen from the border town of Abbasiyeh, Lebanon, Tuesday, April 13, 2010. Lebanon is marking the 35th anniversary of the start of the 1975-90 civil war, in which Israel was often a player. (AP Photo via Daylife)

Hizballah Continues to Target Lebanese State

NOWLebanon's managing editor, Hanin Ghadar, writes:

A new campaign against Lebanese state institutions is underway. This time the target is Finance Minister Raya al-Hassan’s proposed budget for 2010. ...

...

But first, what does Hezbollah want from Lebanon? The Party of God does not want an Islamic state. That would make it an easy target. Instead, it is easier for Hezbollah to whip up the masses by pointing to the poor performance of the Hariri government while not having to offer solutions or alternatives to the country’s social and economic problems.

This is because its agenda is strictly political. After the Syrian army’s withdrawal in 2005, Hezbollah stepped in and rallied the pro-Syrian camp against a March 14 movement that threatened to revive state institutions and ensure genuine national sovereignty.

Now that this has been achieved, Hezbollah still needs to take care of a few other items of business. First, it must overturn UN Security Council resolutions 1701 and 1559, two decisions that were designed to safeguard Lebanon’s long-term sovereignty. Second, it must stamp out the Special Tribunal for Lebanon (STL), the court established to bring to justice the killers of former Prime Minister Rafik Hariri and dozens of other victims of political violence.

...

Economically, the party’s model follows that of distribution rather than production. The process is simple: Hezbollah spreads funds that come from Iran among its supporters or its charitable institutions. This creates a state of dependency rather than self sufficiency, a situation not helped by the specter of war. ...

On a security level, in 2006 Hezbollah effectively transformed the country into a stretch of the Israel-Iran frontline, where Lebanon no longer matters. In fact, in a televised speech broadcast during the 2006 war, Hezbollah Secretary General Hassan Nasrallah stated, “Whether the Lebanese liked it or not, Lebanon and the Resistance are waging a fight on behalf of the Muslim Umma (Nation).”

All this is not good news for the Lebanese, including the Shia, who, despite being so closely associated with Hezbollah, are the first to pay for the party’s reckless policies. Hezbollah’s wars destroy their towns and villages. Investors will never put their money in the South, while Shia youth leave in droves in search of work and security abroad.

So back to the municipal elections: Hezbollah may have created a culture of resistance, but the Shia community has maintained its social dynamic. Look, for example, at the current municipal elections, when Hezbollah and the Amal Movement could not, as they had planned, impose consensus lists in all villages in South Lebanon. In short, family proved to be stronger than party and showed that the Shia’s social and cultural fabric has not been totally absorbed by Hezbollah or, to a lesser extent, Amal.

...

A friend from the South once told me: “I support Hezbollah because in 2000, they promised us peace of mind. In 2006, they delivered a ‘divine victory’ and dignity to the community. Now they should let us live.”

Hezbollah knows it cannot afford a war now, but paralyzing the state institutions makes it clear to the Lebanese, including the Shia, that it has little else to offer.

Leb Web Digest 21.05.10

• Foreign Policy Magazine: The False Religion of MidEast Peace
• Al Jazeera: Turkish AA Batteries Moved Close to Syrian Border
• David Schenker: Hizballah's Partner Meets Obama 
• FT: Lebanon Lambasted Over Press Freedom
• Robert Fisk: The Arabs Have Their Gulags Too
• The Economist: The Middle East: Islam's Many Hats 
• Michael Young: A Foolish Quest in Hezbollahland  
• NYTimes: After A Hero's Welcome, the Ardor Fades
• The National: Heat Rises in Boycott of Israeli Settler Goods

Syrian Red Herrings

Writing in the Daily Star, Michael Young warns of Syria's real purpose and the red herrings it continues to use to distract and disorient US policy towards it. We're not out of the woods yet ladies and gentlemen:

...

For the State Department to defend an ambassador as necessary to get Assad’s ear is ridiculous. In itself, the transmission of messages is not, and should not be, what justifies a significant political reversal, especially when the previous ambassador was pulled because the US assumed that Syria had ordered the assassination of Rafik Hariri, the former Lebanese prime minister.

On the other hand, the Republicans, by making Ford the issue, have also confused matters. The sanctions they are demanding may be justified, but sanctions, like the dispatching of an ambassador, do not in themselves constitute policy; they are instruments of policy. ...

If the dispute over an ambassador is a red herring, oddly enough so too is the discussion over Scuds. If or when a war occurs between Hizbullah and Israel, it is probably fair to say that Syrian Scuds will not be a major part of it. Assad will continue to push against the red lines in his relationship with Israel, but not to the extent of supplying significant quantities of powerful missiles that may invite massive Israeli retaliation against Syria. Moreover, fueling and firing a Scud takes time, so that Hizbullah would doubtless do so far away from the southern border, in areas under its control. Most of those areas happen to be located too close to Syrian territory for comfort.

Syrian weapons to Hizbullah appear to be there to serve a more complex purpose. I continue to believe that the primary Syrian objective is to create the proper conditions for a Syrian military return to Lebanon. This is not an easy venture, or one guaranteed of success. However, reversing what happened in 2005 has been very much on Assad’s mind since he lost the Lebanon that his father bequeathed to him and that Hafez Assad had spent two and a half decades fighting hard over in order to consolidate Syrian rule. That loss was a bitter one for Bashar, striking at the very heart of his political self-esteem.

But there are more pragmatic reasons as well. Only a military presence allows the Syrian regime to control Lebanon’s Sunni community, with the implications this has domestically for Assad. It also allows Syria to stifle its old bugbear, the Maronite community, where Samir Geagea has made headway at a time when the Aounist movement is losing steam. But perhaps most important, only if Syria is physically present in Lebanon can it turn the “Hizbullah card” to its advantage by projecting itself as the sole actor able to contain the party – which it would nevertheless allow to pursue a “resistance’ agenda, since Syria could use this as leverage whenever it needs to bargain with the Arab states, the US, Israel, even Iran.

If Syria can guarantee that the next war between Hizbullah and Israel is particularly vicious and that Hizbullah can hold its own (Syria’s passing of game-changing weaponry, for example more effective anti-aircraft missiles, would help do so), this could open up numerous possibilities. Israeli retaliation would be ferocious, the Lebanese state and government would emerge from the maelstrom discredited and weak, United Nations resolutions on Lebanon would effectively collapse, and Hizbullah would be perceived by Arab states and Israel as a major regional menace, which Assad could then use as a wedge to facilitate acceptance of a Syrian military comeback.

The absence of a credible UN-sponsored post-conflict framework would be Syria’s opening. No one, least of all the Israelis, would take seriously a new international force in southern Lebanon. That conviction could swing the Americans. Subcontract Lebanon to Syria once again and everyone is happy, the rationale might go.

That’s where the hard questioning should come in Washington. If Syria’s energies are primarily geared toward reestablishing a military presence in Lebanon, then American engagement of Damascus will not change much in Bashar Assad’s plans. Washington needs to move beyond Robert Ford to address the real issue: Syria’s intention to again use Lebanon as the platform from which to become a dominant Arab state.

ISF Displays Harleys

Members of Lebanon's Internal Security Forces inspect Harley-Davidson motorcycles during a donation ceremony in Dbayeh, north of Beirut May 18, 2010. The U.S. Embassy in Lebanon donated the motorcycles to the Internal Security Forces during a ceremony held today. (Reuters Pictures via Daylife)

STL: Indictments and Some Personal Info

Indictments to come between September and December 2010 and some personal info from Cassesse, the Daily Star reports:

Special Tribunal for Lebanon prosecutor Daniel Bellemare plans to file charges this fall, tribunal President Antonio Cassese told The Daily Star in an exclusive interview on Saturday.

...

The UN Security Council established the court to try suspects in the February 2005 assassination of former Prime Minister Rafik Hariri, although the tribunal has a mandate to pursue the perpetrators behind assassinations, attempted killings and political violence from October 2004 through January 2007. Hariri’s killing sparked a wave of popular demonstrations which brought about the withdrawal of Syrian troops from Lebanon after a 29-year presence. Syria has always denied any involvement in Hariri’s assassination.

At the same time, Cassese believes the tribunal will struggle to find enough donations for its budget next year, because the added costs of a trial would run into state budgets shrunken by the economic crisis afflicting the Western nations bankrolling the court. Lebanon pays 49 percent of the tribunal’s annual budget, which for 2010 amounts to $55.35 million.

...

Experts on international law have said it remains unclear how far the tribunal could go in any case to pursue high-ranking politicians, because the court’s statutes do not address whether heads of state enjoy immunity from the court. While Cassese said he could not comment on his court’s jurisdiction, he added that he had previously published his opinion that international tribunals did not have to respect diplomatic immunity because of the serious nature of the crimes they deal with.

“As an academic studying international law, I am on record … I have always argued that, as the International Court of Justice rightly pointed out, heads of state do not have functional immunity – that means that immunity because of the exercise of their functions while they were incumbent,” Cassese said.

“They enjoy personal immunities, however, before national courts. Before international tribunals they don’t enjoy any immunity whatsoever.”

The tribunal has also battled negative perceptions over the exodus of key personnel. Since being officially established in a suburb of Holland’s The Hague in March last year, the tribunal has witnessed the exits of the chief of investigations and two registrars – the officials who act as the court’s chief executive. Cassese said that all international courts experienced high rates of staff turnover, but the departures were usually connected to outside issues such as family or more lucrative job opportunities.

“I know that when [registrar Robin Vincent] left and then when [Vincent’s successor] David Tolbert left, people said, ‘So there is something wrong with this tribunal,’” Cassese said. “This happens all the time because these are international institutions where people are, in a way, taken away from their own countries. You don’t have friends. You don’t make friends in The Hague. I only go out to dinner with ambassadors or judges. So you get fed up.”

Cassese resigned from his post as president of the International Criminal Tribunal for the former Yugoslavia because his wife threatened him with divorce, even though he relished the work, he said. “I myself left after seven years because my wife said, look, either you come back or I will divorce you,” he said. “I had no choice. I was very happy to work there. I enjoyed my job very much, but then I had a family problem.”

PM Saad Hariri in Damascus

Lebanese Prime Minister Saad Hariri meets Syrian President Bashar Assad (May 18, 2010 via Dalati & Nohra)

Lebanese Emigrant Youth Camp 2010

For the past 10 years, the Lebanese Ministry of Foreign Affairs and Emigrants has organized summer camps and excursions in Lebanon for youths of Lebanese descent living abroad.  The camp is a great way for youths to get acquainted with the lands of their forefathers and to establish a binding link between Lebanon's massive ex-patriot populations and their country of origin.  

Below are details from the Lebanese Ministry of Foreign Affairs and Emigrants - Directorate General of Emigrants, for this year's Youth Camp (visit the page here):

The Ministry of Foreign Affairs and Emigrants- Directorate General of Emigrants - organizes the Tenth Lebanese Emigrant Youth Camp from July 16 to July 24, 2010. It includes a program of visits to all Lebanese regions and a stay in a summer residence near Beirut. Participation forms and the program are available in the Lebanese embassies and consulates and on our website: www.emigrants.gov.lb

The Ministry of Foreign Affairs and Emigrants - Directorate General of Emigrants, organizes the Tenth Emigrant Youth Camp 2010 between the 16th and the 24th of July 2010, in an attempt to promote a better relationship between young Lebanese migrants and their mother land, and to let them know better their country of origin its cultural, environmental features and tourist sites in all the Lebanese provinces, through seminars and excursions that will be offered during the camp. Participants will stay at the Ministry’s expenses; they will only pay their trip to Lebanon.

Conditions of Participation:

• Participants should be Lebanese or of Lebanese origin

• Their age should vary between 17 and 25 years

• They should be students of secondary or university level

• They must conform to the internal regulations of the camp : in terms of order, discipline and program.

• The enclosed must be filled, signed and sent to the diplomatic missions, or directly to the Directorate General of Emigrants at the following :

Fax numbers : (961)- 840924/8.

E-Mail : director@emigrants.gov.lb

• Enclose with the form two passport photographs and a photocopy of your passport.

Note: Priority is given to the first coming participants.

The General Directorate of Emigrants provides all participants with the following:

1- Residence in a school dorms in one of the Lebanese mountain summer resort; where girls stay in a separate building from the boys’ building. Those buildings are equipped with bedrooms, w.c., showers and cleaning means. The school has a variety of sports playgrounds, restaurants, theater and clinic.

2- Administrative group from the General Directorate of Emigrants organizing the whole camp.

3- Employees from the General Directorate of Emigrants meeting the participants at the Beirut International Airport and escorting them to the camp.

4- Police escort during the touristic tours and a perpetual police department inside the camp for the safety of the participants.

5- Medical team composed of doctors from different specialization staying in the camp supported by a team from the Lebanese Red Cross.

6- Professional Tour-Guides to escort the participants during their tours.

7- Personal accident insurance for all the participants inside and outside the camp.

8- Transportation in modern airconditioned comfortable buses during the excursions to visit the Lebanese archeological and natural sites, in addition to the official visits.

9- Breakfast and dinner meals in the camp’s restaurant and lunch meals in the best Lebanese restaurants during the excursions.

10- Entertainment and sports activities supervised by a team of coaches; an official opening ceremony and artistic shows in addition to a final ceremony performed by the participants.

N.B: Available on the participants expenses:

1- Local and international phone, internet, according to the official fee.

2- Laundry to fulfill the participants needs.

Iran Signs New Nuclear Deal with Turkey and Brazil

Brazilian President Luiz Inacio Lula da Silva, and Turkish Prime Minister Recep Tayyip Erdogan (R) smile as Iranian President Mahmoud Ahmadinejad (C) talks to Brazil's Foreign Minister Celso Amorim after Iran inked a nuclear fuel swap deal in Tehran on May 17, 2010 under which 1,200 kilos of low enriched uranium will be shipped to Turkey, potentially ending a standoff with world powers gearing for new sanctions against Tehran. The agreement, under which Iran will in turn receive nuclear fuel for a Tehran reactor, was signed in the Iranian capital between the foreign ministers of Iran, Turkey and Brazil. (Getty Images via Daylife)

In a move still requiring UNSC approval, Iran has signed a nuclear exchange agreement with Turkey and Brazil. The agreement allows Iran to transfer only a fraction of the amount of nuclear material originally called for by the UNSC, in return for the exchange taking place on Turkish soil. The Washington Post reports:

Iran signed a surprise deal for a nuclear fuel swap with Western nations on Monday, brokered by Brazil and Turkey. It was the first such agreement by the Islamic Republic with foreign nations since 2004.

...

The agreement announced in Tehran on Monday builds on a swap deal Iran struck in October with the "Vienna group" -- a negotiating bloc that consists of the United States, Russia and France and representatives of the International Atomic Energy Agency.

That pact fell apart after Iran insisted that any swap must take place on Iranian soil and be carried out in batches or simultaneously. The failure prompted the Obama administration to back off its policy of engagement with the Islamic Republic.

The big difference now is that Iran -- facing tougher sanctions -- has severely compromised on its demand that the swap take place within its borders. It is now prepared to send 2,640 pounds of low-enriched uranium to neighboring Turkey and to wait up to a year for the delivery of higher-enriched fuel from Russia and France.

If, for any reason, the swap fails, Iran's stockpile would be returned by Turkey, Davutoglu said.

The amount of low-enriched uranium agreed upon in the new deal, however, is significantly lower than the 70 percent of Iran's stockpile that U.S. officials have said they expect to be sent abroad.

An unnamed State Department official told Reuters news agency on Monday that 70 percent of the stockpile would equal nearly 4,400 pounds. In February, 70 percent of the stockpile was estimated at between 3,179 and 3,828 pounds.

The head of Iran's Atomic Energy Agency, Ali Akbar Salehi, in an interview said the increase was "insignificant." Iran's Foreign Ministry spokesman also stated that Iran would not stop enriching its uranium up to 20 percent, a controversial move that Iran started after the first swap proposal failed.

...

Brazilian and Turkish representatives said they hope the deal will lead to further talks focused on solving the international standoff over Iran's nuclear program. Iran is supposed to send the Vienna group a letter within one week, seeking its approval.

Update: The Economist elucidates:

...

The thinking behind the failed October deal was to take most of Iran’s stockpile of enriched uranium out of play, in order to create time for negotiations. But because Iran has carried on enriching uranium since it turned down the October deal, it has quite a lot more of the low-enriched stuff sitting around than it would send to Turkey under the new deal (some 1,100 kg according to Jacqueline Shire of the Institute for Science and International Security). Getting uranium from 20% enriched to the 90% or so needed for a bomb takes a lot less effort than getting to the original 3.5% in the first place. So even if the new deal with Brazil and Turkey sticks it is unlikely to buy Iran much time to avoid a vote on sanctions.

Word at the UN had it that a sanctions deal (a full arms embargo, financial and shipping sanctions and restrictions on the Revolutionary Guard) was near. Russia has recently joined America in sending a stronger signal that Iran must stop enrichment, as the UN Security Council has demanded, and answer the IAEA's increasingly pointed questions about activities that appear to indicate an interest in weapons development. This would have left only China in a position to veto sanctions, and China has traditionally not liked to veto alone.

The case against sanctions, in other words, seemed to be crumbling. But Turkey and Brazil might just succeed in swinging other temporary members of the Security Council against sanctions. Lebanon is already publicly sceptical, and Gabon has called for a negotiated solution. Mexico may feel caught between its important American relationship and its regional partner and rival, Brazil. Even if none of the veto-wielders bolts, the Western coalition could have to scrape for the nine votes needed, sending a weak signal.

Unless details of the new deal (a letter is to be sent to the IAEA this week) contain pleasant surprises, it appears Iran may have successfully repeated its old trick of widening divisions between the countries preparing to tighten the sanctions net around it. ...

Related Posts:

• Are Brazil and Turkey Simply Buying Time for Iran?
• Iran's Real Goal is the Gulf

Syria Will Return After Israel Destroys Lebanon

Writing in NOWLebanon, Michael Young spells it out:

...

Syria never accepted its Lebanese military withdrawal. I’ve argued that for its president, Bashar al-Assad, the prime objective in the coming years is to reverse what happened in 2005 and return his tanks to Lebanon. But several conditions are needed for him to do so: Arab acceptance, Israeli approval and an American green light.

Arab acquiescence, given the ongoing fear of Iran in the region and its extensions such as Hezbollah, may be a foregone conclusion. Israeli consent, if the proper conditions are met, may be easier than we imagine, hence the importance of statements like Netanyahu’s. That would leave the United States, which initially would resist a Syrian redeployment in Lebanon. But before going too far along that path, consider a scenario that might dilute American disapproval.

Imagine if there is a new war between Lebanon and Israel, and this time Hezbollah manages to put up a tough fight for longer than it did in 2006. Having been armed with more advanced Syrian weapons, including effective anti-aircraft missiles and longer range rockets, the party might be able to turn a new war into a serious brawl. Israel’s reaction would be to destroy Lebanon far more extensively than it did four years ago, including its economic infrastructure.

In that case, the Lebanese state and government would be discredited, impoverished, humiliated, and would have to face the inevitable angry public backlash head on. United Nations resolutions, particularly Resolution 1701, would effectively be rendered null and void. Regionally, the Arabs, but also Israel, would regard Hezbollah as a major menace (thanks to Syrian efforts to strengthen the party militarily and ensure it remained a menace). Washington, its attentions elsewhere, could be less inclined to say no if there is a regional consensus, one that the Lebanese support either by conviction or through intimidation, in favor of a Syrian comeback.

Damascus would, of course, market this as a means of stabilizing Lebanon and keeping an eye on Hezbollah, to which it would, nonetheless, give a wide margin of maneuver, since only a Hezbollah perceived as dangerous justifies a Syrian presence in Lebanon.

...

Turkey and the EU

An interesting piece from the FT:

...

A dynamic and growing economy, a constitutional revolution expanding democratic rights and an activist foreign policy establishing Turkey as a regional power have imbued Turks with a new self-confidence. But are they turning their backs on the EU?

Much has been made of the purported “neo-Ottomanism” of foreign policy under Ahmet Davutoglu, the new foreign minister, and the new coolness towards Europe of the ruling and neo-Islamist Justice and Development party (AKP) of Recep Tayyip Erdogan the prime minister. On the face of it, Turkey is playing hard to get. Of the 100 trips Mr Davutoglu made in his first year, 46 were in Europe; most of the rest were to the Middle East and neighbouring countries. “AKP people feel more comfortable in Damascus than Rome”, says Hakan Yilmaz of Bosphorus University. “The new elites want the best of both worlds.”

There are a number of reasons for the turn eastwards, none of them to do with the re-creation of empire. During the cold war, Turkey’s role within Nato was to guard the eastern marches. On its end, the Balkans, central Asia and the Caucasus, and the broader Middle East reopened as a natural region of influence for Turkey. This is being driven by interests more than ideology. Turkey has also just opened more than 30 new embassies in Africa and Latin America. Aircraft from Istanbul to all points of Asia are full. This is not the return of the Ottomans but a commercial comeback – timed to pick up the slack from recession in the EU.

Turkey sees itself as a regional power as well, and is determined to show the EU two things: that it has options and, unlike the EU, it knows how to deploy “soft power” in Europe’s Middle Eastern backyard. In short, that it is an asset. ...

The EU’s freeze on all but four chapters of the accession talks, and the open hostility towards Turkey-in-Europe of some member states – Germany and France think it is too big, too poor and too Muslim to absorb – rankles. “How do you want me to convince my party when [Chancellor Angela] Merkel and [President Nicolas] Sarkozy keep telling me I don’t belong,” Mr Erdogan keeps complaining, according to Marc Pierini, the EU’s ambassador to Ankara. There are barbs aplenty, especially for Mr Sarkozy. “We understand his problem, he doesn’t want another rival, another UK, as it were, inside the EU,” says Selim Yenel, undersecretary at the foreign ministry.

Yet all sides recognise there are things happening in Turkey that would not if there were no accession process – from the deepening of democracy to a transformation of industry that is now a key component of Europe’s competitiveness. The European Investment Bank has tripled its investment in Turkish infrastructure and development to €2.7bn ($3.3bn, £2.3bn) a year. There are 12,600 EU companies in Turkey, 4,000 of them German, including Mercedes and Renault, Airbus and Siemens. “The Turkey that will have completed accession negotiations will be greatly different to the Turkey of today, just as today it has been transformed from the Turkey of 10 years ago,” says Abdullah Gul, Turkey’s president.

Turkey is being transformed, the president says, and he acknowledges that the drive for EU membership “has been the dynamo that drives the reform process”. But, he asks, “Does [the EU] have a strategic outlook? Can it plan 50 years ahead and think of its grandchildren?” A good question.

Related Posts:

• Turkey Tag

Lula In Iran

EDITORS' NOTE: Reuters and other foreign media are subject to Iranian restrictions on leaving the office to report, film or take pictures in Tehran. Iran's Supreme Leader Ayatollah Ali Khamenei (R), Brazilian President Luiz Inacio Lula da Silva (C) and his Iranian counterpart Mahmoud Ahmadinejad attend an official meeting in Tehran May 16, 2010. (Reuters Photo via Daylife)

Related Posts:

• Are Brazil and Turkey Simply Buying Time for Iran?
• Iran's Real Goal is the Gulf

NGO Tabulates Cost of 2009 Parliamentary Elections

The Daily Star reports:

An estimated $35 million was spent on election-related activities by different political parties in the run-up to the 2009 parliamentary election, a new report released this week by The Lebanese Transparency Association (LTA) found.

A further $32 million was spent on political advertising and media in the period from August 2008 and July 2009, the LTA report tackling issues of electoral corruption revealed.

The findings come at the end of a year-long Campaign Finance Monitoring Project, the first initiative to monitor campaign spending in the Middle East. It focused on the key election spending abuses, namely the misappropriation of public funds, electoral advertising, vote buying and campaign spending.

“We are not here to exclude or get any candidates banned,” LTA Project Coordinator, Natacha Sarkis told The Daily Star. “We are just trying to highlight the desperate need for reform. All the money that is being diverted for things like posters could be spent on much-needed development projects.”

The report was compiled by LTA-trained volunteers who assembled information on spending by monitoring Lebanon’s major media outlets and conducting interviews and on-the-ground research.

The report was produced in cooperation with the UK and Canadian embassies, the International Foundation for Electoral Reform and human-rights NGO Open Society.

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A further 3,553 election-related activities, such as festivals and rallies, also took place across all 23 districts as well as oversees, at an estimated cost of just under $10,000 each. Tripoli, where the election was hotly contested, had the highest number of election-related activities.

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According to the report, vote buying is the “overriding” concern in election campaigns. It consists of direct or indirect buying, including the provision of services such as infrastructure renovation, which in some pre-election instances reached $50 million for a single project.

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Although still in its infancy, the 2009 election did see the official adoption of several long-advocated anti-corruption and democratic reforms. These included a limit on spending which was fixed at a flat amount equivalent to LL150 billion and a further LL4,000 for each voter. While hopes remain high about the future impact of these restrictions, they only came into effect in April 2009, a mere two months before the election.

Existing restrictions, like the misuse of public funds or property for electioneering purposes, were also largely ignored and the report noted that almost all ministers and returning candidates used their position to campaign for re-election.

It found that on average campaigning ministers stepped up their official activities by around 50 percent, with 71 percent of ministerial activities being dedicated to electioneering.

“It is against the law to use public funds and utilities [such as schools and houses of worship] to help your campaign,” Omar Kabboul, LTA’s communication director said. “They are using national resources so they do not have to use their own money to fund their campaigns.”

Other positive electoral reforms, including the formation of a commission to oversee election campaigns and the right of NGOs to monitor elections, were enacted in January, however, and provided positive results, the report concluded.

LTA is at present monitoring the ongoing municipal polls and expects to produce a similar report on municipal spending before the summer.

Social Affairs Minister Tours Orphanage

Minister Selim Sayegh Tours at The Islamic Orphanage, Thursday May 13 2010 (via Dalati & Nohra)

Leb Web Digest 14.05.10

• BBCNews: Could the Middle East Become a Nuclear-Free Zone?
• AFP: Nahr el Bared Receives $20 million in US aid
• NOWLebanon: Former SLA Officer Appointed Advisor in Israel
• Foreign Affairs: Lebanon's Scud Row 
• Boston Globe: From the Olive Groves of Lebanon
• Reuters: Russia To Sell Syria Warplanes and Air Defense Systems
• Foreign Policy: Gold Stones, Glass Houses
• Joyce Karam: Scud Crisis Exposes Cracks in US-Lebanon Relations
• BBCNews: US to Fund Israeli "Iron Dome"

Iran's Real Goal is the Gulf

The most immediate threat from a nuclear Iran is not the detonation of a nuclear weapon, but the clout that the possession of such a weapon would provide the Islamic Republic in it's pursuit of regional hegemony. In his latest piece for the Daily Star, Michael Young argues that Iran's real goal is to establish a permanent foothold in the Gulf through its ability to manipulate the GCC states through . Meanwhile, writing in NOWLebanon, Tony Badran provides an excellent summary of Iranian actions and incitements in Gulf countries in it's bid to become the region's dominant power.

Young's analysis is undertaken through the lens of an American foreign policy that seems, at once, enabling to the Iranian regime's agenda and destined to ultimately draw the United States into a violent confrontation with that country - an event that Iran is ensuring would be disastrous for the region.  Young (who's article deserves to be read in full) writes:

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And let’s add one more item to the bleak mix: Washington’s listlessness actually increases the chances that it will enter into a war with Iran, which Obama has been so understandably keen to avoid.

The Arab state system may well be caught up in a phase of terminal deterioration. Most Arab regimes are old and have lost much legitimacy by consolidating their authoritarianism while offering their younger, expanding populations little in the way of consensual social contracts, useful educational opportunities, and better living conditions. Stalemate prevails, and the onetime sway of leading Arab states has devolved to non-Arab states on the region’s periphery: Turkey, Israel and Iran.

This has had negative consequences for the United States, whose political preeminence in the region rested on the old Arab order. Longstanding American allies such as Saudi Arabia, Egypt and Jordan are weaker than ever before. ...

Looking at American policy, what do we see today? For starters, we see an Iran actively challenging America in the region. This may look like hubris, but the Iranians see little that is worrisome. Take Iraq, which the US fought long and hard over and ultimately stabilized after the spectacular blunders of the immediate postwar years in 2003-2005. Today, Obama’s stubborn priority is to withdraw, effectively denying Washington the primary terrain needed to contain Iran, but also to exercise its power over Syria and to an extent Saudi Arabia.

Iraq’s election results provided an opportunity for the Obama administration. Iran’s closest allies lost ground, in contrast to the blocs led by Ayad Allawi and Nouri al-Maliki. Instead of trying to impose some compromise between the two men that could have created the basis of a more stable Sunni-Shiite order, therefore of a new strategic relationship between Washington and Baghdad, Obama did nothing. Iran saw an opening and is now helping establish a Shiite-led government that will doubtless favor Iranian interests.

... Iran has the added ability in places such as Saudi Arabia, Bahrain, and Kuwait, but also in Yemen, of being able to mobilize members of disgruntled Shiite minorities.

The impact of a Palestinian-Israeli settlement on the Gulf and Iraq, the critical playing field in the American-Iranian rivalry, would be relatively limited. The Palestinians have been a tool used by Iran, as has Lebanon, to protect its core objective: building up its supremacy in the Gulf. Iran’s priority is to progressively undermine America in the Middle East, with other regional tensions, in themselves of less immediate importance to Tehran, feeding into this. Hizbullah and Hamas act as useful shock absorbers for Iran while it develops a nuclear capability, the cornerstone of its bid for regional hegemony.

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Badran, on the other hand, provides a cogent account of Iran's operations throughout the Gulf.  In almost every example, Hizballah - as that regime's most advanced and successful offshoot - plays a pivotal role in exporting Iranian "influence" to the region's countries.  The piece should be read in full but you'll find some quotes below:

Just as Egypt’s judiciary handed down convictions in the case of a Hezbollah cell that it uncovered, reports surfaced that an Iranian Revolutionary Guards Corps cell had also been broken up in Kuwait.

This type of Iranian action, while hardly new, is a harbinger of what’s to come once Tehran, which is seeking hegemony over the Middle East and senses an American retreat from the region, crosses the nuclear threshold. It also highlights the precariousness of any containment policy against Iran and its regional proxies.

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The members of the [Kuwaiti] cell apparently included two stateless citizens (known as al-bidoun), a Lebanese citizen who acted as the cell’s liaison with the Iranians, as well as several military officers. One report in Al-Qabas, quoting informed sources, claimed the spy network extended to Bahrain and the United Arab Emirates – which was roundly denied by Saudi Interior Minister Prince Nayef Bin Abdul Aziz. The Kuwaitis, however, are demanding an overhaul of the Gulf Cooperation Council (GCC) security agreement (which Kuwait had previously refrained from signing) in light of “new challenges,” likely meaning the threat of Iranian security breaches.

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While it’s unclear whether the Kuwaiti cell indeed extended to Bahrain and the UAE, Bahrain has also been subject to subversive activities in recent years. On the eve of the Gaza war of 2008-2009, the Bahraini authorities announced the arrest of a group of Shia militants who had received training in Syria, accusing them of planning terrorist attacks during Bahrain’s national day celebrations.

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As for the UAE, it followed Kuwait’s lead by deporting foreigners, especially Lebanese Shia. Starting in summer 2009, scores of Shia were suddenly expelled. A representative of those expelled linked the deportations to being “part of a community that supports the Resistance.” What prompted these expulsions remains unclear. However, given the role of Hezbollah’s networks in Iran’s regional activities, the decision was not particularly surprising.

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While its conventional military power is limited, Iran has engaged in such manipulation through the IRGC’s Al-Quds Force, amplifying its sway through its surrogates and through arms smuggling. The potential interplay between a nuclear Iran and its regional alliances raises serious doubts about the effectiveness of a containment strategy directed against Iran – which is, nevertheless, fast emerging as a consensus strategy in Washington. Especially unconvincing is the notion that the United States can place the burden of its containment efforts on the shaky scaffolding of the Gulf Arab states.

Iran’s objective is to replace the US as the primary power in the Middle East, and to reshape the region’s security architecture. Tehran has been pushing the GCC countries to sign a new, collective security treaty with Iran, which has presented itself as the new regional security guarantor, therefore, implicitly, the acknowledged regional hegemony. ...

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Are Brazil and Turkey Simply Buying Time for Iran?

On the announcement of the joint Brazilian-Turkish proposal, rumored to involve a nuclear swap along the Turkish-Iranian border, the WP writes:

Iran said Tuesday that Brazil and Turkey have offered a promising new proposal for a nuclear fuel deal as Tehran steps up a diplomatic push to stave off new U.N. sanctions over its disputed nuclear program.
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The call for sanctions stepped up after Iran last year rejected a U.N.-backed plan that offered nuclear fuel rods to a Tehran reactor in exchange for Iran's stock of lower-level enriched uranium. The swap would have curbed Iran's capacity to make a nuclear bomb.

Under the U.N. proposal, Iran was to send 2,420 pounds (1,100 kilograms) of low-enriched uranium abroad, where it would be further enriched to 20 percent and converted into fuel rods. The rods, which are needed to power a research reactor, would then be returned to Iran. Sending its low-enriched uranium abroad would leave Iran with insufficient stocks to enrich further to weapons-grade level.

Iran, which denies any plan for making nuclear arms, has made several alternate proposals to the West, including one to swap smaller batches of Iran's low-enriched uranium.

But the U.S. and its allies say the proposals obviate the goal of rendering Iran unable to build a nuclear-powered warhead.

In addition to having rejected previous offers presented by the Security Council's five permanent members (plus Germany) in favor of counter-proposals which would have allowed it to continue working towards weapons-grade enrichment, the Iranian regime has stepped up efforts to speed up its enrichment processes, from the WP: 

Iran is poised to make a significant leap in its ability to enrich uranium, with more sophisticated centrifuge technology that is being assembled in secret to advance the country's nuclear efforts, according to U.S. and European intelligence officials and diplomats.
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U.N. nuclear monitors have not been allowed to examine the new centrifuge, which Iranian officials briefly put on display at a news conference last month. But an expert group's analysis of the machine -- based on photos -- suggests that it could be up to five times as productive as the balky centrifuges Iran currently uses to enrich uranium.
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Using its existing centrifuges, Iran has made more than two tons of low-enriched uranium, an amount that officials say could be further enriched to produce enough weapons-grade material for a single nuclear bomb, even as the government insists that its nuclear program is exclusively for energy production.
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One of the known plants, a small, heavily fortified facility built in a mountain tunnel near the city of Qom, has been all but idle in recent months. Construction has slowed to a near halt in the weeks since the facility was publicly revealed in September, according to two Europe-based diplomats privy to intelligence reports about the site.

"They seem to have lost interest in Qom since its discovery," said the diplomat, who, like others, spoke on the condition of anonymity to discuss sensitive intelligence about Iran's nuclear program. "It makes us wonder if they're thinking about a new site."
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Iran's largest enrichment facility, an underground complex near the city of Natanz, also appears to have stalled. Originally built to house 50,000 first-generation centrifuges known as IR1s, Natanz had only about 3,800 functioning machines when U.N. inspectors visited in late January, compared with nearly 5,000 working IR1s the previous spring.

In uranium enrichment, centrifuges spin a gasified form of uranium at supersonic speeds to create the enriched fuel used in commercial nuclear power plants, as well as in nuclear weapons.

The IR1 centrifuge used at Natanz is based on a 1950s Dutch design that Pakistani scientist Abdul Qadeer Khan stole and sold to the Iranians. The machine is prone to crashing, and it was quickly abandoned by other countries that used it.

The new machine displayed by Iran leaps ahead by at least two generations, according to diplomatic sources and nuclear experts. One diplomat said the machine on display was "probably an IR5," adding that the U.N. officials do not know how Iran developed the centrifuge or who might have provided assistance.
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Iran has a limited amount of natural uranium, but it has produced uranium hexafluoride, the feedstock for centrifuges, to keep them running for years.

Ali Akbar Salehi, Iran's nuclear energy chief, was vague when asked during a CBS interview about new facilities. "We may start -- we probably will start -- another site this year," Salehi said. He added that Iran does not intend to notify the U.N. nuclear agency about the new construction until the facility is nearly ready for operation.

After being embarrassed publicly by revelations about the secret Qom plant, President Mahmoud Ahmadinejad boasted that Iran would soon build 10 enrichment facilities.

Commenting on possible motivations and perspectives in Turkey Sinan Ulgen writes in FP:

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In short, Turkey shares much of the same concerns about a nuclear Iran as its partners in the West. The difference stems from the envisaged strategy for addressing the Iranian issue. Turkish policymakers want and continue to believe that a diplomatic solution is possible. Turkish Foreign Minister Ahmet Davutoglu has been in direct talks with his Iranian counterpart to seal a deal allowing the transfer of nuclear fuel to Iran. As such, Ankara is against the imposition of new sanctions on Iran. These differences are likely to lead Turkey to abstain from voting for such a U.N. Security Council resolution, now slated for early June. U.S. policymakers are known to have made clear to their Turkish counterparts that abstention will be viewed by Washington as Turkey's failure to support the new sanctions. After all, unlike other recalcitrant states like China and Brazil, Turkey is a NATO ally and benefits from the U.S nuclear umbrella; it is therefore expected to support the emerging consensus among NATO members regarding sanctions on Iran.

The growing pressure on Ankara to align itself with members of the transatlantic community is closely linked to the ineptitude of Turkish leaders, and in particular of Prime Minister Recep Tayyip Erdogan, to explain the rationale for Turkey's opposition to a new set of sanctions against Iran.

In an interview with the Guardian newspaper, the Turkish prime minister dismissed accusations that Tehran wants to develop nuclear weapons as simple rumors. Indeed, every time the nuclear issue is raised, Erdogan is quick to point his finger to Israel and its nuclear weapons so as to denounce the apparent double standard of the international community. As a result, Turkey's preference for a different strategy for dealing with Iran, involving more diplomacy and less sanctions, comes across as a provocative ideological choice, fueling fears in some quarters that Turkey is moving away from the West.

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On arguments Turkey could present in opposition to the new round of sactions, Ulgen writes:

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Trade and investment sanctions, as experienced in relation to Iraq, have the potential to hurt Turkey and the Turkish economy. The impact will be felt all the more in Turkish provinces near Iran, which are among the poorest in Turkey. As a neighbor of Iran, Turkey is in a different position compared with the other members of the U.N. Security Council with a bilateral trade volume in excess of $10 billion;

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Meanwhile, also writing in FP, Paulo Sotero explores Brazilians' reactions to their president's foray into the Iranian question:

... Lula's administration has pitched the talks to Iran not as a way to come clean but as a way to prove that it is hiding nothing with its peaceful nuclear program -- and the United States and Europe are understandably skeptical. Back home, questions have arisen about the Brazilian leader's motivation for injecting himself and his country in such a daring initiative in the first place.

... As his presidential term comes to an end, Lula's move might be more about building a legacy on the world stage than much of anything else. And it may well backfire.

... Iranian President Mahmoud Ahmadinejad's visit to Brasilia last November was greeted with street protests and strong condemnation by the media and Lula's political opponents. José Serra, then São Paulo's governor and now a leading presidential candidate, criticized the president for embracing a dictator reminiscent of the military regime Lula and Serra -- themselves victims of political persecution -- fought to dislodge from power a quarter-century ago.

... The image of a smiling Brazilian minister of commerce offering the national soccer team's revered yellow jersey to Ahmadinejad in Tehran last month caused discomfort even among Lula's allies. Clovis Rossi, a columnist and early supporter of Lula's foreign policy, wrote that the Brazilian soccer jersey is now "covered with blood" from Iranian dissidents killed by the Islamic government.
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Lula, however, remains undaunted by criticism, which he views as uninformed and undeserved attacks from those too blind to see that he is shepherding Brazil's emergence as a global power. ...

"Call us naive, but I think those who believe in everything the U.S. intelligence service says are much more naive. Look at the case of Iraq," Amorim said in an interview with the AFP. ...

Iran might have liked that rhetoric, but it's far from clear that Tehran will do much more to deliver on its "in principle" agreement for talks. The country has rejected similar deals in the recent past after welcoming them "in principle." U.S. Secretary of State Hillary Clinton dismissed Brazil and Turkey's efforts, accusing Tehran of stalling and trying to gain time instead of addressing the central question about the nature of its nuclear program at the IAEA.
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U.S. and European officials have already signaled to their Brazilian counterparts that a Lula visit to Tehran that fails to produce results could cause major damage to Brazil's relations with its traditional allies. Fearful of this outcome, which he sees as inevitable, former Foreign Minister Luis Felipe Lampreia warned in an op-ed for O Globo that the upcoming visit "will cause incalculable material and political losses" and could raise suspicions about Brazil's own nuclear program -- all in pursuit of a "completely unnecessary" initiative. Added Lampreia, "It is like the person who crosses the street on purpose to step on a banana peel on the opposite sidewalk." Lula is about to test out the wisdom of that approach.

Greek Crisis vs Lebanese Stability

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From right to left Greek, National Bank of Greece and European Union flags wave at the headquarters of the National Bank of Greece, the biggest bank in the country, in Athens, Thursday, April 29, 2010. The European Union said Thursday it expects to conclude talks with the IMF and Greek officials on a deal to lift Greece out of its "debt spiral" by the weekend. (AP Photo via Daylife)

The Daily Star points out the possibility for comparisons and/or contagion effects between the crisis in Greece and the stability in Lebanon:

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The crisis in Greece prompted the EU to inject close to $1 trillion into the market to shore up the euro and avoid an economic pitfall.

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Lebanon, which imports most of its goods from Europe, may benefit in a short term if prices of commodities fell.

But there is growing concern that the Greek example would spread to other countries in the long term and Lebanon may not be immune from this crisis.

“Greece’s debt to GDP is 113 percent while in Lebanon it stands at 148 percent. This should be wakeup call for the Lebanese. We can’t count on remittances alone. We need to act to avoid a big crisis in the future,” former finance minister George Corm said.

Lebanon has managed so far to weather most of the financial crises that struck the United States, Europe and the oil-rich Arab states thanks to the massive cash inflow from Lebanese working abroad.

The other factor which helped the Lebanese economy stand on its feet is the fact that the capital market is not too exposed to the volatile stock markets around the world.

In addition, most of the government’s debt is held by Lebanese banks.

“We are fortunate because we don’t owe the outside world a lot, but nevertheless we should not take things for granted,” Corm said.

He added that even the massive liquidity may not be an added bonus to the Lebanese economy. “We should not forget that interest rates in Europe are near zero while the Lebanese government borrows at interest rates between 8 to 9 percent,” Corm said.

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Turkey-Syria Relations Progressing

The Financial Times reports on Turkey's efforts to push forward on cultural and economic ties with its eastern neighbours, chief amongst them Syria:

Every Friday, tour buses pull up outside the Sanko Park shopping centre in Gaziantep, an industrial city near Turkey’s southern border with Syria.

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They are Syrians coming from Aleppo – just a few hours drive over the border – to snap up electronic goods and shop in fashion chains, from Mango to Marks & Spencer, that are unavailable at home. They now make up about one in 20 of the 850,000 customers each month, spending an average of $120 a head and prompting the mall to open an office that will refund VAT on the spot.

“Syria is Turkey 20 years ago,” says Emin Berk, who runs a new office to encourage small business dealings between Gaziantep and Aleppo. “Gaziantep is the first stop out of Syria: it’s more developed and it has better shopping.”

The cross-border spending sprees are one of the most visible effects of a recent rapprochement between Turkey and Syria, part of Ankara’s drive to strengthen ties with its eastern neighbours, using trade and cultural links to increase its “soft power” in the Middle East.

The two countries scrapped visa requirements last autumn to seal their friendship – a striking reversal of the tension of earlier decades, when Turkey was suspected of planting bombs in Damascus in retaliation for Syria’s sheltering of Kurdish separatists. Landmines still pepper the border that tourists now cross freely, but the new allies are even holding joint military exercises.

Nor is Turkey’s aim purely diplomatic. Officials hope their country’s exporters will tap fresh markets, and create jobs in the poorest south-eastern regions of the country – where unemployment and poverty fuel a sense of grievance among ethnic Kurds, and government subsidies have so far had little effect in attracting investment.

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Gaziantep itself is a prospering manufacturing centre, but it has struggled to absorb an influx of Kurdish jobseekers from further east, especially during last year’s recession.

The growing trade with Syria and Iraq, in particular, helped counter the slump in European markets. Turkey’s exports to those two countries rose by 30 per cent last year compared with 2008.

Cement is one of the most profitable products, Mr Berk says, with a 50kg bag selling for $50 in Turkey, but $140 in Syria. Sanko, the biggest local conglomerate, is building a packing plant next to the border to cut transport costs for its cement. Other exports range from carpet yarn to nappies and machinery for processing lentils.

There are still barriers to trade: Mr Berk says high taxes make it difficult for Turkish businesses to sell finished textiles or foodstuffs in Syria.

Furthermore, scrapping visas has brought other benefits. Gaziantep’s private hospitals are drawing health tourists, and its airport is busier as Syrians drive across the frontier to catch cheaper flights to Europe.

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