The Globe & Mail’s Patrick Martin spent months inside Gaza learning more about, & getting acquainted with the leaders of, Hamas. Following are three of his observations :  

• The official line is that, when the first intifada began in the winter of 1987-88, young men armed with stones confronted Israeli soldiers (not unlike recent events in the Arab world when young people typically employed non-violent & lo-tech tactics to confront armed soldiers) but that, as time passed & Palestinian casualties mounted, stones gave way to fire bombs, & then to small arms. Furthermore, that the first suicide attack targeting Israeli civilians took place on April 6, 1994, six weeks after an Israeli settler, Baruch Goldstein, a physician & reserve army officer, had killed 29, & wounded dozens more, Palestinians at prayer in the mosque at Abraham’s tomb in Hebron. This, say Hamas leaders, changed the Israeli-Palestinian conflict; for if Palestinians at prayer could be attacked, why should Israeli civilians not be targeted? And although in 2005 Hamas renounced the suicide bombing methodology, a decision made by Khaled Mashaal, it’s Damascus-based leader, shortly after he became its leader, many Hamas extremists still justify attacks on Israeli civilians, incl. Ayman Batniji, the imam of a major Gaza mosque who asks “When Israeli planes hit a neighbourhood full of civilians, because they want to arrest a wanted person, and kill 30 or 40 people by using a one-tone bomb, isn’t that excessive use of force?”    
• While Ephraim Sneh, a retired brigadier-general & former Israeli Cabinet Minister, rejects the idea of a long-term truce, as mooted from time to time by Hamas, since “The long-term reality is that Hamas is never going to tolerate a Jewish state because it is against its religious beliefs”, Efraim Halevy, a former director-general of Mossad, was among the first to advocate talking to Hamas, saying “They’re not very pleasant people ... but they are very, very credible” and, while he called  two of the Quartet’s ‘principles’ (renounce violence & abide by all previous diplomatic agreements) “reasonable and imperative”, he called the third, recognition of Israel, “superfluous”; and
• In mid-May, after the Hamas/Fatah reconciliation, Israeli President Shimon Peres said negotiations with Hamas shouldn’t be ruled out, if it renounced terrorism. Indeed, to be broadly acceptable as a negotiating partner, Hamas will have to convince the Quartet it renounced violence - if Hamas were clever, it would seek to tilt world opinion in its favour, & force Netanyahu’s hand, by releasing Gilead Shalit, the IDF soldier kidnapped five years ago on the Gaza-Israel border.

It is unlikely Hamas will fade away even though many people in Gaza are frustrated by its inability to deliver a better life (which it may now be able to correct since the border with Egypt is more open). And though some people in the West Bank may be reluctant to jeopardize the good life they now enjoy, Hamas’ hardline stance towards Israel still appeals to many Palestinians. 

GLEANINGS VERSION II

No. 417SP - July 11^th,  2011 

LESSONS LEARNT FROM THE GREAT RECESSION

(Second Act, Karin Price-Mueller) 

• The recession has taught us that we can make it on less; we may not want to, but we can. Following are six lessons worth incorporating into one’s financial life :

• Use more cash & borrow less;
• Be sure to build an emergency fund;
• Setting priorities is critical;
• Budget is not a dirty word;
• Being a penny-pincher is smart, not cheap; and
• Take charge of your investments.

These are common sense concepts alien to much of the instant gratification generation(s).   

PROPER USE OF ASPIRIN FOR HEART DISEASE SPELLED OUT

(G&M, Andre Picard) 

• Many physicians tell patients to take a baby Aspirin daily after age 50 to avoid heart problems. But the first-ever ‘antiplatelet therapy guidelines’ published by the Canadian Cardiovascular Society on June 6^th warns that, while everyone who has had a heart attack or a stroke should take low dose ASA for the rest of their lives, since that can cut the risk of a repeat thereof by as much as 25%, those with no such history should not routinely do so; for there is no evidence its benefits its risks (among others, there is clear evidence regular use thereof can cause serious stomach problems).

In an interview on CBC Radio recently, a Montreal medical school professor who, among others, teaches a course on the use of placebos in medicine (incl. the prescription of dosages too low to do any good) said there is growing evidence they often work just as well as the real thing, even when patients know they aren’t, & that as many as 25% of doctors may routinely prescribe them.  

BIOFUEL BOOSTERS BLAMED FOR RISE IN FOOD PRICES

(Reuters, Charlie Dunmore) 

• A report by ten international agencies, incl. the World Bank, WTO, WFP, the IMF, FAO & OECD, mandated by the G-20, says governments should scrap all policies to support biofuels. For they say they force up, & add volatility to, food prices. It notes that in 2007-2009 20% of all sugar cane grown went into biofuels, as did 9% of all oilseeds & coarse grains, and 4% of all sugar beets. Biofuels have also been criticized for promoting deforestation especially to make room for palm (oil) plantations which can make their carbon footprint greater than that of fossil fuels. On the other hand, the report didn’t take into account the use of biofuel by-products as animal feed (which helps mitigate their impact on food supplies), which US producers now claim generates most of their profits.
• France has made food price volatility a priority of its 2011 G-20 Presidency & is leading the charge to crack down on speculation in commodities markets, blaming it for rising food prices. The G-20 Agriculture Ministers will meet in Paris on June 22^nd & 23^rd to discuss policy responses ranging from increasing market transparency (the French notion of a need for better food stock data gathering) to limiting the speculative positions taken by traders in the commodities markets, but biofuels are not on the agenda.

Much of the biofuel thing was ill-conceived. Thus the energy efficiency of grain-based, as opposed to sugar cane-based, ethanol is by the most favourable estimates marginally in excess of 1.00 & by the most critical ones actually negative (i.e. taking more energy to produce than the ethanol contains). But it is now so engrained in America’s farm landscape & political system, complete with a powerful cabal of lobbyists, that it will be difficult to dislodge (while earlier in the Republican-Democratic debt ceiling tussle the US$ 6BN that Washington spends each year on ethanol subsidies seemed to be an agreed-on candidate for the axe, that notion has since gone silent). Be that as it may, this approach treats symptoms, not the disease. The real reasons for the rising food prices are more fundamental. They include waste in the developed-, & a lack of infrastructure in the developing-, worlds, decades of First World farm subsidies that undermined the viability of developing country agriculture by the ‘dumping’ of the resultant surpluses, the loss of some of the world’s most productive farm land to urbanization, industrialization & salinization, declining availability of water for irrigation, and under-investment in agriculture (thus in Nigeria in 1997 17% of all bank loans went to farmers, while today it’s < 1.5%; so  it now imports, rather than exports, grain while half of its own harvest went to waste due to a lack of infrastructure), & (partially climate change-prompted?) natural disasters. All of these, except the last one, are amenable to correction by legislative action, if the political will was there (& even the effect of the last one could likely be mitigated by appropriate legislation). 

THE GREAT CORN CON (NYT, Steven Rattner) 

• In its myriad of corn-related interventions Washington has helped to drive up food prices, add billions to the deficit, boost energy use & harm the environment. Legislation in 2005 & 2007 turbocharged the production of ethanol by mandating specific, & rising, requirements for its use in gasoline. As a result, the share of the US crop, the country’s most important farm crop by far, that accounts for 40% of the world’s total corn crop, going into ethanol has quadrupled to 40% since 2004. Nevertheless, ethanol is a poor substitute for gasoline, packing less punch & requiring substantial amounts of water & energy in its production. In total its support programmes for the corn complex cost the US Treasury US$11BN/year (with a 45¢/gallon subsidy on ethanol accounting for half of it). There is also a 54¢/gallon duty on imported ethanol, most of it originating from Brazil where it can be produced far more energy efficiently from sugar cane (which avoids the energy-intensive corn-to-sugar conversion stage). Subsidies have made US ethanol so cheap that in 2010 we exported 397MM gallons (at a cost to the US Treasury of US$700+MM since each gallon produced costs it US$1.78). So we import costly foreign oil & export subsidized ethanol. And as to its environmental aspects, the CBO has calculated that the reduction in CO2 emissions from using ethanol comes at a cost of at least an incredible US$750 per ton of carbon. 

Politics these days has little to do with common sense, only with vote-gathering.  

FUTURIST WARNS OF MASS EXTINCTIONS (EJ, Dave Cooper) 

• Jeremy Rifkin told an Edmonton audience in May the world faces disaster as our fossil-fuelled civilization pushes the planet towards one of the greatest species extinctions in 450MM years and that, while we have the tools to lessen the damage & transform society in the next 30 years, it is already too late to avoid some damage as a warming atmosphere is creating more unstable weather & causing more species to go extinct. He says the latest research suggests the earlier forecast of a 3 C rise in temperature this century “is now looking optimistic” which “will put us back to the climate of three million years ago, when there was a much different ecosystem”, and that for every one degree of temperature rise ... , the atmosphere absorbs about seven percent more precipitation from the ground.”

A recent news ‘byte’ on CBC referenced a report the world’s oceans are in far worse shape than hitherto believed, and face an unprecedented extinction of species. 

PROTECTION FOR LIZARD MAY THREATEN WEST TEXAS OIL

(Houston Chronicle, Matthew Tresague) 

• The Tucson, Ariz.-based Center for Biological Diversity in 2002 petitioned US Fish & Wildlife to place the 3 inch-long sagebrush lizard on the endangered species list due to habitat destruction in its West Texas & Southeastern New Mexico sand dunes’ range from oil industry activities & cattle grazing (ranchers have been using herbicides to kill a local shrub called spinnery oak that is critical to the lizard’s survival). In 2004 USF&W agreed  but it didn’t finalize its proposal to do so until last  December with a final decision set for next December. But the lizard’s range is in the Permian Basin which accounts for 17% of the US domestic oil production. This is now pitting the oil industry and state & local officials against the environmentalists. The former claim that the 30,000 acres (50 square miles) involved will put the brakes on drilling and road- & pipeline construction in seven West Texas counties, incl. the state’s top two oil producing ones, with the State’s Land Commissioner, Jerry Patterson calling it a case of “reptile dysfunction”. On the other hand proponents say that even if 600,000 acres (i.e. 937 square miles, i.e. less than the average size of one of Texas’ 254 counties) were involved that would account for just  1% of the Permian Basin and Patrick Parenteau, a Vermont Law School professor, who in the 90's was special counsel at the Fish & Wildlife Service, says that “The notion that a listing will bring everything to a screeching halt simply isn’t true.”

The issue is further complicated by the fact that in Texas the proceeds of oil leases & royalties is earmarked for funding education.               

OUR FANTASY NATION (NYT, Nicholas D. Kristof) 

• The Tea Party Republicans insist on the need to ‘slay the beast of government, and cut taxes & regulations, and social services’, and want low taxes, a big defence budget, traditional religious values & no coddling of criminals. There are countries ranging from Congo through Columbia to Pakistan that have such systems : low taxes, free-wheeling business & high military expenditures and ... high levels of inequality. They have shiny tanks & jet fighters but cannot pay their teachers, and their societies are stratified by social class & held back by a limited sense of common purpose.
• The growing inequality in America pains me. Higher education has traditionally been the escalator to a better life; so reduced college access is a scandal. But the small global ueber-rich upper class that runs things doesn’t need social services. Their kids go to private schools. They can pay for their healthcare. They hire private security guards so as not to have to depend for their security on the police. And they often have their own diesel generators to ensure their air conditioning units keep humming. Our public policy debate is less about the debt ceiling & about cutting budgets than about our vision for the country.

Many Tea Party supporters have never been outside North America and, even if they have, likely saw life there from balconies high up in the local Holiday Inn .    

ERA OF LOW AIRFARES IS OVER (Business Aviation, Shweta Jain) 

• Brian Pearce, IATA’s Chief Economist, told Gulf News during its recent Annual Meeting in Singapore “We are looking at a fare increase of at least 5 percent this year, owing to a surge in oil prices ... and that is with the industry having hedged 50 percent of this year’s fuel bills ... Had they not done that, it would have been twice the impact.” And Emirates President, Tim Clark, said “Emirates is probably one of the most efficient airlines operating  ... and we are finding it difficult. So if we are finding it difficult, the industry will be finding it difficult.” (last year fuel accounted for 34% of Emirates’ costs).

We’ve heard this before. But airlines are their own worst enemy. They can always find reasons to buy more planes & right now are on a kick of buying more fuel-efficient ones to save money over the longer term. And once they get them, the marginal cost of putting one more ‘bum in a seat’ is so minimal, & the bottom line impact so great, that they always try to attract customers with fire sale fares. So for wise shoppers there likely will continue to be bargains to be had. 

THE GOOD BANKER (NYT, Joe Nocera) 

• The 77 year-old Robert G. Wilmers has run the Buffalo, NY-based M&T Bank for 30 years. On his watch its asset base grew from US$2BN to US$68BN & it became one of the most highly-regarded regional bank holding companies (& one of the best performers in the S&P 500, that maintained its dividend throughout the financial crisis). Its 2010 Annual Report says, among others, that most of the too-big-to-fail banks’ income is derived from trading profits “rather than the prudent extension of credit that furthers commerce”, that derivatives ought to be regulated, & that the CEO’s of these banks are “wildly overpaid”, averaging  US$26MM in 2007, more than  twice the average compensation of the top non-bank CEO’s in the Fortune 500, & a multiple of Wimers’ US$2MM.
• In a follow-up interview he expanded on this by saying the giant national banks had done things that deserve condemnation & “are still doing things that I don’t think are very good”, had turned banking into a casino rather than a service industry that helped people keep their liquid assets safe, and finance trade & commerce, that the six largest bank holding companies depended for three-quarters of their revenues on trading, giving them every incentive to take undue risks, & that the trading of derivatives had little, if anything, to do with the underlying purpose of banking (in contrast, JPMorganChase’s Jamie Dimon, supposedly one of the brighter knives in the bank CEO drawer, recently pooh-poohed the idea the system would be safer with smaller banks doing traditional banking by saying it would also be safer if we went back to horses & buggies.“

He has a point : while once trading provided a service to, & ‘added value’ for, those owning financial assets, today this service aspect has largely disappeared and been replaced by trading as an end in itself, rather than a means to an end, & it has become a game involving the reshuffling of the ownership of existing-, rather than the creation of new productive-, assets.   

SHRINKING SNOW PACK THREATENS WATER SUPPLY

(Postmedia News, Margaret Munro) 

• A study published June 9^th in Science by an international research team reported the Rocky Mountain snow pack has been dwindling for the last 30 years at an almost unprecedented rate. This, they warn, will have serious implications for the Colorado, Columbia & Missouri rivers which between them supply water to 70MM Americans, and is altering flows in rivers North of the border in Central BC & the Canadian Prairies, between “ 60% & 80% ... (of which) is snowmelt from the mountains.” Going back 800 years they found that the snow pack shrank more in the late 20^th century that during any period since about 1200 (these results were based on a study of tree rings, incl. Alpine larch at higher-, & Ponderosa pine at lower-, altitudes, in both living- & dead trees, with one of the study’s co-authors, Brian Luckman of the University of Western Ontario, saying “you can find trees lying on the ground that died 300 to 400 years ago and (thus) extend the chronology back.”

This is not the only place where such an event is threatening local water supplies. The same thing is happening in the Himalyas, the source of much of the life-sustaining water for a major portion of the one-third of the world’s population living in South & East Asia.     

ALFALFA A KEY BATTLE GROUND IN ORGANIC FARMING WAR

(G&M, Paul Waldie) 

• Monsanto has developed a genetically modified (GM) alfalfa, the main merit of which, like all its GM seeds, is that it is designed to withstand, & thereby promote the sale of, its herbicide Roundup (although it claims it helps boost crop yields & reduce production costs). It recently won approval in the US &and is under consideration for approval in Canada.
• Almost every organic farmer in Canada grows alfalfa. For it is both an important source of animal feed & a critical soil fertility builder that “fixes” nitrogen from the air into the soil, thus obviating the need to use commercial  nitrogen fertilizers. They argue GM alfalfa will destroy their industry that, while still small (at last report the sale of organic food & drink products accounted for just 3½% of North American sales) has been growing rapidly (worldwide its sales more than tripled in the decade ended in 2008). One problem, they say, is that, unlike crops like corn that are pollinated by wind, alfalfa is pollinated by insects that often travel miles as they do so. So they are pressuring Ottawa not to approve the GMit, and some have even joined a law suit filed against Monsanto in New York that attacks its seed patents & seeks legal protection for farmers if their crops are contaminated by GM products (the latter is critical since Monsanto has been very aggressive in going after farmers for alleged patent infringement, & often has been given the benefit of the doubt by judges, when it has detected traces of its patented seeds in the crops of farmers who aren’t on their customer list, even when there has been a real possibility this had been the result of wind-borne pollination, rather than of nefarious activities by the farmer in question).

There is a precedent, bovine somatotropin, a growth hormone (developed by … Monsanto but now marketed by Eli Lilly, that boosts dairy cows’ milk production, that is commonly used in the US, was never approved for use in Canada (albeit under government less prone to slavishly aping what the US does), or by any other English-speaking country. Besides. In the case of alfalfa the Monsanto argument is self-serving & not based on hands-on farming realities; for while Roundup can be said to be beneficial in crops like corn or small grain where weed control is a problem because they are grown in a manner that lets sunlight reach the soil, alfalfa is a ground-covering crop that smothers weeds (in addition cows will happily eat most, if not all, weeds that survive in a full shade environment. Also the Monsanto approach that a hitech approach to farming will solve the world’s food challenges is increasingly coming into question.

BIBI IS MIRED IN A WORLD THAT HAS GONE AWAY (Daily Star, Fareed Zakaria) 

• In 2008 then Prime Minister Ehud Olmert, a hard liner himself, told the Knesset “We must give up Arab neighbourhoods in Jerusalem and return to the core of the territory that is the state of Israel prior to 1967, with minimal corrections dictated by the realities since then”, a position similar to that taken by his predecessor in the 90's, & now Netanyahu’s Defence Minister, Ehud Barak. George Bush said that same year “I believe that any peace agreement between them will require mutually agreed adjustments to the armistice lines of 1949 (i.e. the 1967 borders) to reflect current realities and to ensure that the Palestinian state is viable and contiguous.” And last November Hilary Clinton & Netanyahu issued a joint statement that read in part “The United States believes that through good faith negotiations, the parties can mutually agree on an outcome which ends the conflict and reconciles the Palestinian goal of an independent and viable state based on the 1967 lines, with agreed swaps, and the Israeli goal of a Jewish state with secure and recognized borders that reflect subsequent developments and meet Israeli security requirements.”
• Netanyahu’s claim any discussion of the 1967 borders is “treason” seeks to prop up his fragile coalition & makes him look more interested in clinging to power for its own sake than in using to the benefit of his people. And in his reference to the “indefensible” 1967 borders he is mired in a world long gone : the threat to Israel today is not from a Palestinian army but from demographics as its democratic existence is undermined by it continuing to rule millions of Palestinians in serf-like conditions (& both the Palestinians & the bigoted settlers “outbreed” by a country mile the secular Israelis who just want to live in peace.

And Obama encouraged him George Bush-like by condoning his refusal to have any truck or trade with Hamas, & not refuting his demands for the total demilitarization of any future Palestinian state. Harvard & Cambridge-educated Prof. Theodor Meron, a teenage Holocaust survivor, started teaching at the NYU School of Law in 1977, & more recently has been was a member of the International Criminal Tribunals for Yugoslavia & Rwanda. But earlier in his career, at the time of Israel’s Six-Day War in 1967, he was the Israeli Ministry of Foreign Affairs’ legal advisor &, in that capacity, he was asked by the then Israeli Prime Minister, Levi Eshkol, if Israel could legally transfer its citizens to settlements in the conquered Arab territories. His unequivocal opinion, presented in a top secret memo to Eshkol, was “civilian settlement in the administered territories contravenes explicit provisions of the Fourth Geneva Convention” (which, however, did not stop the Prime Minister from launching the settlement movement). In 2007 Prof. Meron confirmed his authorship, stating he wouldn’t change his opinion the settlements are illegal & in violation of international law.

ISRAEL STRIKES WATER PLANT DEAL (Bloomberg) 

• Last month Israeli Finance Minister Yuval Steinitz announced a US$400 MM plan to build what he said would be the world’s second-largest desalination plant. It will be Israel’s fourth such plant & he said that, once it comes on stream, “desalinated water will constitute 65 percent of domestic water consumption”. It is being built by a joint venture company owned by IDE Technologies Ltd. (51%), a JV of Israel Chemicals Ltd. & the Delek Group Ltd., and Hutchinson Water International Holdings Pte, and is being financed by the EIB & local banks, incl. Bank Leumi Le-Israel Ltd & Bank Hapoalim Ltd.

The Eastern Mediterranean is basically a backwater. So one can only wonder  about the long term effect of desalination plants dumping the salt removed from its water back into it. On the other hand, the more Israel can meet its water needs from the sea water, the less need it has, in theory at least, for the water from the river Jordan & the aquifers underlying its West Bank settlements.      

IRAQ’S RECONSTRUCTION BILLIONS ‘MAY HAVE BEEN STOLEN’ (BBC News) 

• During the era of severe economic sanctions against the Saddam Hussein regime the New York Fed accumulated US$6.6BN of Iraqi oil money in a special account. In 2003 & 2004 the Bush Administration sent it back to Iraq on C-130 military cargo planes on pallets in shrink-wrapped bundles of bank notes. It went missing & the Special Inspector-General for Iraq Reconstruction, Stuart Bowen, told the Los Angeles Times this may well be the “largest theft of funds” in national history. And the paper reported some officials in Baghdad are now threatening to sue the US to recover the missing cash.

Bowen has since denied having said anything of the kind & that his finding had been that it was “virtually impossible to account for what happened to the money”. He also denied having  been the source of the US$6.6BN figure. Be that as it may, it is hard to imagine anyone being stupid enough to choose this method of money transfer & not expect grievous losses. 

THE WAR BEHIND THE WAR IN YEMEN (G&M, George Clarfield) 

• Some call it a struggle between a Sunni-dominated government in the former communist South Yemen & the Shiite tribes from the once independent North Yemen, and others a battle between national elites fighting over scarce resources amidst a population explosion. The latter is closest to the truth. Yemen has one of the world’s highest birth rates : in 1953 its population was 4.3MM, today it’s 24+MM (half under the age of 15) & by mid-century it is expected to be 60MM (i.e. close to, if not greater than, Germany’s population). It has no industry to speak of. Most government revenue comes from oil fields that may be depleted  by 2017. Half the population is functionally illiterate & 70% lives in rural areas under customary tribal laws. Many Yemenis are addicted to khat, a narcotic leaf the cultivation of which is pre-empting more & more farm land. And different inheritance rules under customary tribal laws & national, sharia-based inheritance laws add to the potential for conflicts over land & water (one favours a family’s sons & the other that of the wife). And it is one of few countries in the world where citizens are revitalizing their tribal structures with the motto “Yemen for the tribes & the tribes for Yemen.”

So much for this aspect of the Arab Spring. 

FIVE REASONS TO AVOID CHINA’S UNRAVELLING ECONOMY

(G&M, Avner Mandelman) 

• Banking problems - This is nothing new; the only thing that’s new is that potentially bad loans likely skyrocketed during its post-2008 aggressive growth in bank lending;
• Currency pressure - A higher yuan may actually help to alleviate inflationary pressures;
• Legal vacuum - That isn’t new either; nor is it uncommon throughout the developing world;
• Hard line leaders - Xi Jinping, the supposed President-in-waiting has a hardline reputation. But even he may be reluctant to ‘kill the goose that lays the golden eggs’, & spoil the party for the hundreds of millions of his compatriots trying the grab the brass ring, with some Tiananmen Square replay. For much has changed in the 22 years since then; and
• Lack of transparency - nobody in his right mind has ever trusted its official statistics; but those like the otherwise highly respected Austin, Texas-based Stratfor that call it an unsustainable Ponzi scheme may be going too far (if only because of its poor choice of words : all Ponzi schemes by definition are “unsustainable).

Right now it is fashionable for some people to decry China, for others the US, for still others Europe & for some the lot of them. But in the end Beijing’s policy makers may have the easiest time adapting; for their system is still totalitarian enough to allow major policy changes to be made quickly with a minimum of fuss, & they have the financial wherewithal to hide a multitude of sins.    

CHINA TOLD TO REDUCE FOOD PRODUCTION OR FACE ’DIRE’ WATER LEVELS

(The Guardian, Jonathan Watts) 

. Zheng Chunmiao is one of China’s leading ground water experts. In an interview he said  the country will have to focus more on demand-side restraints for water because it is becoming more costly & difficult to tap finite groundwater supplies, and that it will be cheaper to import grain. He believes “the government must adopt a new policy to reduce water consumption ... The main thing is to reduce demand. We have relied too much on engineering projects but the government realizes this is not a long-term solution.”

All this is based on his study of the aquifers beneath the North China Plain, the country’s main wheat-growing region, that led him to conclude their water level is dropping by at least one metre a year, mainly due to the demands from agriculture (that accounts for 60% of the total usage). He estimates that over the past decade the annual water deficit in North China has been 4BN cubic metres, met largely by drawing down underground sources (that account for two-thirds of the nation’s total water supplies, and that while some of the 10,000 year-old aquivers are still all right, others are being depleted at an alarming rate. 

This runs counter to Beijing’s drive for greater self-sufficiency in a number of critical goods, incl. food.  For it operates from a different song sheet. Decades ago already Mao Tse-tung opined “Southern Water is plentiful, and Northern water scarce ... borrowing water would be good” (conveniently ignoring that borrowing implies paying back). This prompted a massive engineering project, the South-North Water Transfer Project, the latest stage of which is to bring water from Southwestern China, home to the headwaters of, among others, the Mekong & Brahmaputra rivers, to the North. But this will reduce the supply of water for China’s Southern neighbours, incl. Bangladesh, Vietnam &, India (Zheng Chunmiao is a full professor at the University of Alabama & in recent years has also been the Founding Director of Peking University’s Water Research Centre, and at various times in the past was a Visiting Scientist with, among others, the University of Sheffield, Stanford University, the US geological Survey, Menlo Park).     

PUBLIC KILLING SHOCKS COUNTRY (AF-P) 

• Pakistan on June 9^th arrested five members of its Rangers paramilitary after amateur film footage on local TV, & then on YouTube, showed them threatening, and then shooting an unarmed young man, & leaving him to bleed to death in a park in Karachi’s most exclusive neighbourhood. But when human rights activists & lawyers called this proof of how brutalized their country had become after years of bomb attacks, kidnappings & a Taliban insurgency in the Northwest Frontier region, & MPs referred to the paramilitaries as “terrorists in uniform”, Prime Minister Raza Gilani told them that under the Constitution abusive language can’t be used against the judiciary & the armed forces.

Often, most recently in Tunisia, such martyrdom turns a smouldering, sub-surface fire of public discontent into a raging conflagration. But many Pakistanis are so inured to violence, & others so pro-actively support it, that this likely will blow over quickly, & disappear without a trace.   

SINGAPORE TO OVERTAKE VEGAS (AF-P) 

• Singapore is about to overtake Vegas as the world’s second-largest gambling hub (after Macao). After the opening of two new casinos last year, its gaming revenues are expected to rise 25% YoY to US$6.6BN, vs. Vegas’ US$ 6.4BN (down from US$11BN in 2007).

The Asian economies are doing much better than that of the US, & their moneyed middle classes are now in the aggregate far bigger than the entire North American population.  

MUSLIM COUPLE TO CHALLENGE NIQAB BAN (AF-P) 

• A French couple living in England has lodged a challenge of France’s ban on full-face coverings with the Strasbourg-based European Court of Human Rights, on the grounds it is “unnecessary, disproportionate & unlawful” & restricts their right to free movement across the EU, with the wife seeking US$16,400 in damages. Their lawyer says that “As a result of the ban, they have had to leave the country of their nationality, as the ban restricts their freedom of choice, and that of their daughters.”

Another potential challenge to the concept of a United Europe. The Court has often sought to impose its will on national parliaments. And while its decisions have so far largely prevailed, or at least have not been altogether ignored, if it did so in this case, it may in the current environment go over like a lead balloon, with major long-term consequences (the supposed freedom of movement across national borders under the Schengen Agreement is already being widely circumvented, most actively by France. 

POLICE IN AUSTRALIA CAN ORDER REMOVAL OF MUSLIM VEILS

(DT, Jonathan Pearlman) 

• The government of the state of New South Wales has rushed through legislation allowing police to force the removal of head coverings to identify suspected criminals & providing for persons who refuse to remove a head covering for police to face up to a year in jail, with the state’s premier, Barry O’Farrell, saying “I don’t care whether a person is wearing a motor cycle helmet, a niqab, a face veil or anything else, the police should be allowed to require ... people to make their identification clear.” This followed the recent furor after a Sydney woman was charged with falsely accusing the police of assault, claiming police had tried to rip off her veil after her car was pulled over, but was cleared by a judge who ruled she could not be positively identified because of her head covering. 

Australian politicians have long been unequivocally vocal that the law applies equally to all, regardless of race, ethnicity or religion, and that newcomers must conform with local laws & traditions regardless of those of their country of origin & that those who don’t want to, or feel they cannot, had better decamp to some place else where the rules are more to their liking (like Canada?).

DATA SHOW HUGE SUMS LEFT ANGOLA (Reuters, Ed Stoddard) 

• The Washington-based anti-corruption group Global Financial Integrity (GFI) claims that in 2009, the last year for which data are available, almost US$6BN was spirited out of Angola,  i.e. nearly one-sixth of its annual budget, 75% of it by “trade mispricing”. i.e. importers pretending to pay foreigners more for imports than they owed with the overpayment ending up in their bank accounts overseas. The secretive ruling MPLA party around President Jose Eduardo dos Santos, who has been in power for the last 32 years has long been accused of plundering the nation’s oil wealth. Transparency International rates Angola 168^th out of 178 countries and, while most of the people living in its capital are destitute, consulting firms rate it one of the world’s most popular destinations for foreigners.
• Angola is Africa’s second-largest producer of crude oil & a strategic supplier to the US. On the other hand, GFI estimated that in 2009 US$27.5BN  left Nigeria, Africa’s largest oil producer with a population 8x that of Angola’s 18½MM (but only 2½x its US$75BN GDP).

Trade mispricing, like all corruption, takes two to tango, a corruptee, always a local, & a corruptor, typically a foreigner,  in this case the foreign oil buyer, or the convenient middleman acting on his behalf, who facilitates the practice (& while Western countries have little, if any, hold on the former, they do have the potential ability , but seldom make much of an effort, to deal with the latter, possibly due to the realization that their countries’ firms must compete with others from the emerging economies for whom bribery & corruption is all but a way of life.