Monthly Archives: July 2016

Depleting Rosewood Qing-dynasty Style

Ming Dynasty Wardrobe or Dead Rosewood Tree. image from wikipedia

On May 13th, 2016 hoping to save his country’s dwindling forests, Thongloun Sisoulith, the new prime minister of Laos, banned all timber exports. A government representative says environmental protection is among its top priorities. But a report to be published on June 24th, 2016  by the Environmental Investigation Agency (EIA), an NGO, suggests the clampdown will not be implemented by local officials—and even if it is, may come too late to save Siamese rosewood from being eradicated in Laos and Cambodia.

Much like the trade in rhino horn and tiger skins, trade in rosewood is driven by demand from China’s burgeoning middle classes for goods once reserved for the rich: in this case, hongmu, or “redwood”, furniture made in the ornate Qing-dynasty style. Siamese rosewood is among the most highly prized of the 33 types of tree used to make hongmu.

Five years ago Thailand had roughly 90,000 Siamese rosewood trees—more than anywhere else in the world. But the EIA says “significant volumes, if not most” of those trees were illegally chopped down before trade in Siamese rosewood became regulated under the Convention on International Trade in Endangered Species (CITES), a treaty.

That grim history seems to be repeating itself in Laos and Cambodia. Between June 2013 and December 2014 Vietnam and China (including Hong Kong) imported more than 76,000 cubic metres of Siamese rosewood—more than the total amount growing in Thailand in 2011. Jago Wadley of the EIA says that Vietnam is a conduit through which the wood enters China. Of the total amount imported, 83% came from Laos and 16% from Cambodia.

Documentation accompanying the imported wood showed that 85% was harvested in the wild. Corrupt local officials have failed to enforce the restrictions imposed by the central Lao and Cambodian governments. Middlemen pay villagers to cut down the trees; they then sell the timber to Chinese or Vietnamese businessmen.

Excerpts Endangered species: No rosewood of such virtue, Economist, June 25, 2016

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The Genius Puppetry behind the Syrian War

Puppet hands

By most accounts, America’s efforts to covertly train and supply moderate rebels in Syria aren’t going so well. Apart from the obvious (Assad is still firmly entrenched in power and continuing to receive ever-growing external support),The New York Times recently reported that some arms provided by the Central Intelligence Agency (CIA) and Saudi Arabia haven’t quite reached their intended targets. According to the report, some individuals in Jordan’s intelligence bureau — ostensibly partnering to funnel weapons to Assad’s opponents — stole weapons destined for U.S.-backed rebels and instead sold them on the black market…..

American involvement in Syria comes in two main flavors. The first is a limited covert operation to support moderate rebels in their quest to unseat Assad. The second is an overt military campaign to combat ISIL. .

Deliberations over what the United States ought to do militarily in Syria began as early as 2012. The first rebels trained, funded, and armed by the CIA — a small “50-man cell” of fighters — were reported to have arrived in the fall of 2013, a few months after Obama gave the green light. Since then, America’s CIA covert operation against the Syrian regime, known as Timber Sycamore, has grown substantially. In 2014, reports suggested that the United States was “ramping up” its support to the rebels through the provision of TOW anti-tank guided missiles. Earlier this year, The New York Times reported that America wasn’t acting alone. Timber Sycamore had become a joint effort with Saudi Arabia: The Saudis provided cash and arms, while the Americans provided training.

To date, efforts to replace Assad or bring him to the negotiating table haven’t succeeded….[and]America’s efforts to replace Assad are further complicated by a parallel but distinct effort to degrade and destroy ISIL…

Covert intervention allows major powers to “back stage” their role. As a result, any escalatory incidents or clashes can be obscured from the “audience” (i.e. domestic publics and third party states), which preserves face-saving ways to de-escalate. “Back-staging” outside meddling can protect the “front stage” performance of a localized war with limited geopolitical stakes and the potential for diplomatic resolution. The CIA’s Timber Sycamore program embodies this logic in key respects. By rejecting an overt and acknowledged relationship with Syrian rebel groups, the Obama White House has retained greater flexibility to tweak the program as the war evolves. Even relatively porous secrecy may help to evade the daily media reporting, public justifications, and regular congressional involvement that so often accompany overt programs. Moreover, by embracing a “back stage” role in Syria, the United States has avoided a naked geopolitical challenge to other states. Doing so reduces the chances of a public diplomatic crisis should American-supplied weaponry advertently or inadvertently be used in a clash with, say, Iranian personnel in Syria. Russia’s “front stage” air intervention and American overt air strikes against ISIL only strengthens this limited war logic. With Russian and American pilots in the skies, keeping the American program against Russia’s ally in Damascus low-profile makes U.S.-Russian crisis prevention measures easier.

Excerpts from AUSTIN CARSON AND MICHAEL POZNANSKY, THE LOGIC FOR (SHODDY) U.S. COVERT ACTION IN SYRIA, from War on the Rocks, July 21, 2016

Cleaning Radioactive Water

tritium. Image from wikipedia

Russia’s nuclear energy giant Rosatom’s subsidiary RosRAO has created a prototype water decontamination plant for use at Tokyo Electric Power Co. Holdings’ Fukushima Daiichi nuclear power station — the site of Japan’s largest nuclear disaster in March 2011. The scrubbing facility, unveiled in June 2014, is capable of removing tritium, or radioactive hydrogen, from nuclear-tainted water, something beyond the capabilities of the Fukushima plant’s current cleanup equipment. Distillation and electrolysis isolate and concentrate the isotope, which is then locked away in titanium. Experiments under conditions similar to those on the ground reportedly show the technology cutting wastewater’s radioactive material content to one-6,000th the initial level, making it safe for human consumption or release into the ocean.

Duplicating the facility near the Fukushima site and running it for the five years necessary to process 800,000 cu. meters of contaminated water would cost around $700 million in all. Companies in Japan and the U.S. are at work on their own facilities for tritium disposal, but the Russian plan’s cost and technological capability make it fully competitive, according to the project’s chief.

Rosatom has made other overtures to Japan. Executives from a mining and chemical unit have visited several times this year for talks with Japanese nuclear companies, aiming to cooperate on decommissioning the Fukushima plant and upgrading a reprocessing plant in Aomori Prefecture for spent nuclear fuel. Russia has amassed a wealth of expertise dealing with damaged nuclear reactors in the wake of the Chernobyl disaster, and would like Japan to draw on that knowledge, the subsidiary’s chief executive said.

Revving up nuclear technology exports is essential to re-energizing Russia’s domestic industry and breaking free of dependence on the resource sector, Moscow has decided. The nuclear business, along with the space industry, is one of the few tech-intensive sectors where the country is internationally competitive. President Vladimir Putin has leaned more heavily on leaders in Europe and emerging countries in recent years to agree to deals with Russia’s nuclear companies.

In Japan, the public has grown wary of nuclear energy since the accident, leaving demand for new plants in the country at next to nil. Yet Japan has more than 10 reactors slated for decommissioning, creating a market worth up to 1 trillion yen ($9.42 billion) by some calculations. Russia aims to use cooperation on the Fukushima plant to crack the broader market and grow its influence, a source at a French nuclear energy company said…

But Japanese Prime Minister Shinzo Abe nevertheless visited Russia in May 2016 for top-level talks despite U.S. objections, eager to make progress on territorial disputes over islands north of Hokkaido. Preparation is underway for another summit in the far-eastern city of Vladivostok in September 2016, as well as a visit by Putin to Japan before the year is out.
Excerpts from TAKAYUKI TANAKA, Japan nuclear cleanup next target in Russian economic offensive, Nikkei Asian Review, July 24, 2016

Leaking Radioactive Water into the Ocean

To Each their Bank: China’s Infrastructure Investment Bank

Jakarta slum 2006 image from wikipedia

The Asian Infrastructure Investment Bank (AIIB )reflects China’s new eagerness to institutionalise its official lending abroad, which has been generous but contentious….It is billed as China’s “21st-century” answer to lenders like the World Bank (always led by Americans) and the Asian Development Bank (dominated by Japan)…

China’s financial commitment to the AIIB is equivalent to less than one percent of its remaining reserves. Almost 70% of the institution’s $100 billion of capital is drawn from its other 56 participants. It will also raise money by issuing bonds of its own. Far from being a fair-weather folly, the AIIB appears well-timed. Global capital has retreated from emerging markets, leaving a gap the AIIB will help fill. By the same token, the retreating dollars are sheltering in safe assets, such as the highly rated bonds the AIIB proposes to sell.

Unlike the World Bank, which is pulled hither and thither by its members, the AIIB will keep a tighter focus on infrastructure. It has no sitting board or permanent branch offices in borrowing countries. It is also quick, approving four projects within six months of its launch date. More established multilateral lenders can take a year or two to do the same. Some fear the AIIB will deviate from prevailing norms in other, more troubling ways—undercutting environmental standards, say. But of its first four projects, three are joint ventures with existing institutions, subject to their protocols. Its $217m project to improve slum-life in 154 Indonesian cities, led by a veteran of the World Bank, seems alert to the dangers of soil erosion and groundwater pollution. Likewise, its road-improvement plan in Tajikistan, administered by the European Bank for Reconstruction and Development, will tactfully relocate a monument to Avicenna, a Persian polymath who memorised the Koran by the age of ten….

If international financial institutions make room for China, it may bypass them anyway, but if they do not, it definitely will. The AIIB’s first solo venture will bring electricity to 2.5m rural homes in Bangladesh. That is not the only kind of power distribution that needs modernising.

Excerpt from The AIIB: The infrastructure of power, Economist, July 2, 2016

Predator Instinct: tax avoidance in Luxembourg

luxembourg

Antoine Deltour and Raphaël Halet, two ex-employees of PwC, an accounting firm, and Edouard Perrin, a French journalist, had been tried in Luxembourg for their role in leaking documents that revealed sweetheart tax deals the Grand Duchy had offered to dozens of multinationals. ..The whistle-blowers faced up to ten years behind bars. However, the prosecutor—perhaps sensitive to the strong public and, in some places, political support for them abroad—called for suspended sentences of 18 months. In the end the judge handed Messrs Deltour and Halet suspended sentences of 12 months and nine months, respectively. But a conviction is a conviction; Transparency International, an anti-corruption group, called it “appalling”. Mr Perrin, who had published an article that drew on the leaked documents, was acquitted.

The “LuxLeaks” affair has highlighted the role played by certain European Union countries, including Ireland and the Netherlands as well as Luxembourg, in facilitating tax avoidance. Luxembourg is not a typical tax haven levying no or minimal income tax; its statutory rate is 29%. Instead, it is a haven “by administrative practice”, argues Omri Marian of the University of California, Irvine, who has studied LuxLeaks in detail. Luxembourg’s tax authority in effect sold tax-avoidance services to large firms by rubber-stamping opaque arrangements that helped them to cut their tax bills dramatically in both their countries of residence and their countries of operation.]

Excerpt from Tax avoidance: Grand dodgy, Economist, July 2, 2016

Tracking the Oil Movements

oil tanker. image from wikpedia

The oil he industry counts on a small group of little-known companies whose main job is to count the number of tankers leaving ports, at best using data gathered from satellites, at worst using simple binoculars. They then guess how much crude is being carried by measuring the depth of the vessels in the water.

Swiss-based Petro-Logistics S.A., one of those companies, calls its work “the art and science of tanker tracking,” with the aim being to discover what oil producers “are really doing as distinct to what they say they are doing,” according to a statement on its website. While the information produced by companies such as Petro-Logistics and U.K.-based Oil Movements serves as a main input for estimates by consultants, traders and official bodies, it’s not the only measurement stick in use.

The matter becomes even more complex for oil moved within pipelines. Russia, for instance, exports roughly 30 percent of its crude via pipeline, according to official data. That flow is most often measured by independent groups using infra-red photography, which provides only a rough approximation of output.

The Organization of Petroleum Exporting Countries traditionally has published a measure of production based on what the group calls “secondary sources,” in effect consultants who calculate flows from a variety of sources, including tanker tracking data. The cartel also publishes production figures based on what OPEC countries release publicly.

The IEA and the U.S. government also publish estimates, as do many news organizations, including Bloomberg. The most recent addition to this flood of information is the Joint Organisations Data Initiative (JODI), a project begun in 2002 that’s backed by some of the world’s richest countries.Although all of these sources rely on tanker-tracking data as a base of their data, each group also incorporates its own market intelligence and different methodologies to come up with their data

Excerpt from the Art and Science of Tanker Tracking, Bloomberg, Mar. 14, 2016

How to Cut a Girl

 

genital_mutilation

Of all the ways in which women and girls are made to suffer because of their sex, infibulation is perhaps the worst. Each year 400,000 are subjected to this atrocity in which the external genitals are excised and the vagina stitched almost completely closed. More than 4m undergo some form of female genital mutilation (FGM) each year—a range of practices, from infibulation at one end, through incisions or pricks that hurt but cause no lasting damage, to the merely symbolic, such as rubbing the genitals with herbs.

For three decades campaigners, led by the UN, have tried to end all FGM. They have pushed for bans and prosecutions; trained medical practitioners to refuse requests for it; lobbied religious leaders to oppose it (though FGM is not mentioned in the Koran, many Muslims regard it as part of their faith); and tried to persuade parents of its dangers. They have had some success. Between 1985 and 2015 the countries where FGM is most common saw the share of girls cut fall from 51% to 37%.

There are good arguments for a blanket ban on FGM. One is that medical procedures with no possible benefit are unethical—especially when inflicted without consent, on children. Another is revulsion at FGM’s misogynist roots: the motive is generally to cleanse the girl of some supposed impurity and tame her sexual desires, thus ensuring her virginity until marriage and fidelity thereafter. But progress has been slow, especially in the African countries where the worst forms are common. On current trends, most girls in Somalia and Djibouti will see their own daughters mutilated, too.

Excerpt from , Female genital mutilation: An agonising choice, Economist, June 18, 2016