UK General Election: The Case for Transforming Political Institutions

by Elbay Alibayov | Politics & Policy

General election in any country, let alone in the United Kingdom, is closely followed by observers from all walks of life. Among many other interests, it is one central subject of political risk analysis. This year’s election appears to pose yet another risk from within—as the analysts claim, the Risk of a UK Hung Parliament: “This Thursday, British voters will finally cast their ballots in what has been a short and chaotic campaign. While the snap election had earlier been forecast as the likely collapse of the Labour Party, the position of Labour has significantly improved as the Conservatives have made several missteps. Labour has recovered from its 20+ point deficit and, depending on the pollster, is now behind somewhere in the low single digits. A leftwing alliance between the Greens, SNP, and Labour has been discussed earlier, though none of the parties have made major moves in that direction. Markets are beginning to become concerned about the possibility of a hung parliament.” Markets should worry not. To the contrary, as I argue in this piece, the hung parliament is the best possible outcome – for the British political system, in the medium and long term.

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There is a claim in social sciences that luck opens space for agency—which means that key critical junctures (such as leadership change, whether through gaining independence and coups or by means of referendums and elections in democratic systems) where accidents determine which leaders prevail have long-term implications for a country’s future though a certain governance systems set and policies and reforms implemented. They cite newly independent South Asian (think of India vs. Pakistan) and African countries to prove the point: some were fortunate, like Botswana, to have pro-democracy reformists while others got authoritarian rulers (as in Zimbabwe) and dictators (take Congo)—and the rest followed from this point on.

Sounds interesting, but I do not think that it explains the interplay between all the factors involved. Against the African post-colonial example, I will offer the case of post-Soviet states. The republics which tended towards authoritarian rule and had corruption embedded in public administration even at the Soviet times remained authoritarian and with systemic corruption when they became sovereign states (take Central Asian states Kazakhstan, Uzbekistan, Turkmenistan). At the same time, the Baltic states of Estonia, Latvia and Lithuania got leaders who immediately put their countries on the path of democratic reforms and European integration.

The difference is easy to explain. The former group of countries have not had a meaningful period of market economy or democratic governance in the past, and the tendency towards tribalism or authoritarian rule has been characteristic there before becoming the part of Russian Empire centuries back. The Baltic states, to the contrary, have had a certain period of democratic governance in the twentieth century, and long established practices of checks and balances. Therefore a lot depends on the political culture and tradition—in other words, on political institutions as “stable, valued, recurring patterns of behaviour” (in Samuel Huntington’s definition).” Leaders matter, but whatever change-oriented they are not aliens but rather products of political culture and the prevailing public mood.

Consider the last presidential elections in the United States. Was it sheer luck that Donald Trump won the contest in 2016, or the electorate was ready to embrace someone who would not shy away from criticizing the political system (being “anti-establishment”), who would spell their anger at inequality, address their concerns and grievances?

The fact that Hillary Clinton, a strong establishment representative, was selected as a Democratic Party nominee was rather disruptive decision, considering the prevalent mood across the country (which itself is a manifestation of processes that are running deep in the American society but have not been appreciated, for long time). Bernie Sanders better reflected the general public’s (especially the young generation’s) aspirations and attitudes, and it is my opinion that the entire election campaign (ugly, negative and divisive as it was) and its outcome (shocking to many so much that even today they refuse to recognize the results and to accept the winner as a legitimate president) and the US policies today could have been different (for better or worse) if Mr Sanders was given an equal support from the Democrats so that he could be Mr Trump’s rival in 2016.

Therefore I think that Donald Trump became president not because of some abstract luck at the ballot boxes or some technical mistakes made by Hillary Clinton’s team, but because he was lucky that the Democratic Party was so narrow-minded to nominate a candidate destined to lose due to gross mismatch with the prevailing public mood. Luck is still in game, but its role is clarified, along with other critical factors.

And this brings us to the general election in the United Kingdom.

Among many changes experienced by humanity due to globalization and technological revolution, there is one thing that I find profoundly troubling—we are becoming lazy. At my primary school times the only instrument to help with the math was abacus; that is why people of my generation generally are good in calculating, especially when compared to next generations which were allowed to use calculators at class. The same goes for elections—instead of talking to people and analyzing the contexts we simply rely on what pollsters would say. With all due respect, they frequently get it wrong (at least this was the case in the last election and the Brexit referendum). And what is shocking is that it appears that instead of keeping their finger on the constituency’s pulse through continuous engagement and reflections, the modern politicians also follow the polls to guess what is going on out there (at least the reaction of politicians to results not predicted by polls indicates of that).

I also follow the polls, and what I see this time is confirming my analysis—that Britain is firmly heading towards a “balanced” parliament (meaning no total dominance of any one party, the hung parliament being an ideal). Paradoxically, and perhaps for the first time in modern history, the hung parliament is the best outcome to expect from the general election this year. Because it is the only situation which demands the coalition building (if not “national unity”, at least demands more search for a common ground) and independently of who runs the government they cannot impose their will because of the sizeable opposition (especially important to reinforce checks and balances) in place.

That’s exactly what Britain needs to safely navigate a dual task of Brexit negotiations, on the one hand, and (re)establishing own bilateral and multilateral relations with the rest of the world (new tactical and strategic partnerships), on the other. Such a complicated endeavour demands a high degree of inclusiveness and consolidation, whereas it is apparent that the country (whether its political system or elites) is not ready for that, for a variety of reasons.

On the one hand, the British political system, its institutions are hopelessly outdated—so much that merely cosmetic or even not deep-enough reforms won’t do. For a long time Britain stood as an example of uninterrupted democratic governance with unique combination of localised features (such as monarch being the head of state, absence of a codified constitution, and a common law) which were interpreted as its ability to flexibly evolve, adjust to the changing environment while preserving its authenticity. Today, this system shows signs of decay; its public administration is plagued by inefficiency and incompetence (from policy to service delivery, and top down).

There is a need for fundamental, constitutional reform, and it has been evolving for quite some time. Britain’s membership in the European Union did not slow-down this process of decaying but somehow enabled it to go unnoticed—British politicians made it their golden rule (or an universal excuse) to blame Brussels for any failure at home, thus turning the spearhead of public criticism away from themselves. This game could not go forever, as the problems were mounting irrespective. Now, when the UK has opted to play solo, there is nobody to blame for the failures except for the national government.

Second and related is that the identity of the British political elites is outdated; it is out of touch with reality for quite a long period of time. They still appear to feel and behave like their predecessors did a hundred years ago, when Britain was the most powerful empire on the face of the earth. The world has changed since then; and there have been milestones, like each of world wars, end of colonial rule, new globalization, economic and social processes especially evident in the last, post-crisis decade etc. And here is the problem that they have not been appreciated as the incentives for adjustment. The shock of EU leaders at the behaviour of Prime Minister Theresa May as “delusional” is not accidental—it shows the big gap between the self-identity of British political class and the reality.

Everyone talks about economic effects of Brexit while in fact the reform of economic institutions is reliant on the reform of political institutions. They define the economic institutions, not the other way around. And the political reform is not going to happen (even if undertaken) overnight—it is an inherently cultural process, it will take generations to change the identity from one of self-centered “exclusiveness” to realistic and more inclusive one. It will also allow bringing political parties from the entire spectrum into the fore (environmentalists, leftists, social-democrats, conservatives, nationalists) so that to reflect the aspirations of all social groups, big and small.

In other words, inclusiveness is not luxury; it is demand of the day. The two-party rule does not meet this reality—the world today is much more diverse to be decided on a binary code of Left/Right (problems of the US point to and partly originate from the stiffness of this set-up). It acts more and more as a barrier, not enabler of change and evolutionary adjustment—the capabilities which define a system’s resilience.

Britain is indeed at its key critical juncture today. And it does not matter anymore, whether the citizens decided to leave or to remain in the EU, at the ballots a year ago. What matters is what you do with what you have got. And in order to get the best outcome for the British people, the political system has to start reforming. Inclusive government (whether through hung parliament and coalition government or/and a broad opposition alliance) can be the first step in this direction.

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Farewell to Arms? Seen Nowhere on the Horizon

Saudi special security forces show their

Saudi special security forces show their skills during a military parade at a base near Mount Arafat, southeast of the holy city of Mecca, on November 22, 2009  (Image credit: Mahmud Hams/AFP/Getty Images)

by Elbay Alibayov | Reflections on the week past

We are all defence and military this week. An arms deal with Saudi Arabia worth up to US$110 billion, followed by the Pentagon’s US$639 billion budget proposal for FY2018 (“dead on arrival” because apparently it was not big enough). And to complete it all, the NATO summit in Brussels.

All three security levels (country, regional, and global) are covered. An array of topics claimed to be targeted (from national defence interests to global threats like terrorism, to job creation) or flagged by independent observers as issues of concern (like civilian casualties and human rights). And this way or another, it is all about military spending; or, to be precise, about military spending (militarization) under the pretext of ensuring state and human security (eventually at the expense of other government expenditure). This is not a topic to be taken lightly—in the world of “limited resources and unlimited needs” we have to make (supposedly, rational) choices. Do we?

How much justified is, for example, US$1.69 trillion (which happens to constitute no less than 2.2 percent of global GDP) in military spending in 2016 alone? And this is at the time when according to Uppsala Conflict Data Program (UCDP), the same year the total number of deaths from violent conflicts across the world equalled to 103,330; of them 87,018 lives were lost in state-based violence; 9,034 in non-state violence, and 6,278 in one-sided violence. Add to this tens of millions of forcibly displaced people (both internally and refugees), those who are exposed to starvation and infectious deceases due to violence—and you quite get an idea of the scale of the problem. But to make sense of it, we first have to reflect on some basic questions.

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How should we think about relationship between militarization and security, stability? How important is it to maintain high military spending (which includes items from procurement of arms and equipment to wages, training and social benefits to research and development)? How justified is it to cut public funding from non-defence areas in order to build up further militarization? And finally, does organized violence (whether state-based and non-state-based armed conflicts or one-sided violence) persist because governments don’t spend enough on security or the use of armed force is driven by other (social, economic, political, ideological, psychological) factors and cannot be contained by ever increasing military budgets? Or is it the arms production and trade (both formal and trafficking) that itself contributes to fuelling many conflicts?

There is no single or simple way to answer those questions. Especially considering that universal rules (like the one by Steven Pinker in The Better Angels of Our Nature that there has been an extraordinary but little-recognized, millennia-long, worldwide reduction in all forms of violence) are difficult to establish, and they may not necessarily work in all regions and at all times (especially nowadays, when the pace of developments and changes, and thus volatility are uber-high).

There are also different forms of conflict and therefore the relation between each form and external factors (like military spending) may vary greatly. Moreover, the forms are also changing. Take for example state-based armed conflicts—that is, armed contests over power and/or territory where one of sides is the government. The established classification recognizes four forms of state-based conflict (called wars if they cause more than one thousand battle-deaths a year): inter-state conflicts (between states); extra-state conflicts (between a state and an armed group outside the state’s own territory); intra-state conflicts (between a government and a non-state group); and internationalized intra-state conflicts (when the government, or an armed group opposing it, receives military support from one or more foreign states). Well, how are we going to categorize the wars in Iraq and Syria? For the majority of states involved, both wars fall under more than one sub-category, and each sub-category in turn is subject to a different set of driving forces, contexts and circumstances.

Another challenge (as ever) is causality. We first look at the correspondence, and if there is any, then at the casual direction in relations between (extensive) military spending and security. What I am interested in here is, whether it is true that more military spending by governments leads to sustained improvements in both state and human security (where human security is not only saving lives from war, genocide, displacement, epidemics and famine, but means freedom from violence and from the fear of violence, with direct and indirect implications on fundamental freedoms and basic human rights). To answer this question one has to undertake a full-blown research based on empirical evidence, and perhaps employing a sophisticated computation and modelling (to cover a broad range of variables over extended periods of time). However, it is possible to make sense of developments without this heavy armoury, simply viewing them in right context.

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Take for example, the controversial arms deal between the US and Saudi Arabia signed this week. Let’s look first at the trend. In the last decade, the region’s governments have significantly increased their military spending, and weapons purchase in particular. In 2012-2016 their share among global importers of major weapons equalled to 29 percent, compared to (no small otherwise) 17 percent in 2007-2011. Out of top five arms importers in 2012-2016, three were from the Middle East and North Africa: Saudi Arabia with 8.2 percent, United Arab Emirates with 4.6 percent, and Algeria with 3.7 percent of global imports, respectively.

Note that this happens at the time when oil prices have dropped drastically and the global trend is leaning towards reliance on renewables and clean energy. The Gulf states being heavily dependent on commodity exports, find themselves in a dare financial situation. Never mind, they say. But the facts tell a different story: “Saudi Arabia faces an imminent economic crisis. … Riyadh cannot sustainably rely on oil as its principle source of national income. Over the last 18 months, the Kingdom has used 17% of its Public Investment Fund (PIF) to cover the government’s operating costs. If this trend persists, Riyadh will completely deplete the PIF by 2024.”

The true burden of military spending on the economy becomes apparent when we see it as a share of a country’s GDP: in 2016, in the Middle East it was at staggering 6.0 percent (compared to 2.0 percent in Africa, 1.6 percent in Europe, 1.3 percent in Americas, 1.8 percent in Asia). As mentioned above, this money is not spent out of some surplus magically appearing in the government coffers; it is spent at the expense/instead of something else. And this “something else” happens to be human, social and economic development. As pointed out by Stockholm International Peace Research Institute (SIPRI) in its 2016 yearbook, a comparison of trends in spending on the military, health and education since 1995 shows that whereas the majority of countries have increased health and education spending while reducing military spending, the trend in the Middle East has gone in the opposite direction. There is no better indication of where the governments’ priorities are.

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Of course, there is also a game in play. Bluff is always present in politics, whether at local or global level. Saudi Arabia is in acute need of cash. The regime knows that they cannot afford large military spending. Actually, they have decreased the military expenditure last year, and as a result are not in the top third position of spenders, giving up this “honourable place” in the rankings to Russians. But they are also aware that others know that too, and are watching them closely. So the deal so ambitious is (at least in part) to throw dust in someone’s (say, arch-rival Iran—which happens to be on ascending line thanks to Nuclear Deal-incited release of sanctions—or would-be partners in emerging Muslim countries of East Asia) eyes. The deal is not binding and can stay stalled for years (until each letter of offer and acceptance (LOA) it is comprised of is signed and paid for thus making it to the contract), but will send a signal to anyone around that Saudis are in no short supply of money, resolve, ambition and support to this matter.

Whether the others buy this bluff is another story, but the point is made—and with such a skillful showman as Mr Trump in game, it is performed quite theatrically to impress everyone, at home and abroad. (As a side note, such a show with inflated package price serves the US administration’s goals too—to demonstrate to the voters at home their power and influence, to claim more jobs and benefits to economy etc; Vice Adm. Joseph Rixey, director of the DSCA was quick to announce: “When completed, it will be the largest single arms deal in American history.”  What an accomplishment!)

Still, this does not change the overall intent of the affair. And just to be clear on that point: the rulers of Saudi Arabia will make sure to purchase big part of the arms package, especially considering that first, it is a political commitment before the strategic partner (who is so kind to take sides in the ages-long Sunni-Shi’a power contest); second, the delivery under contracts may take long years thus allowing some flexibility with regards to payments; and also, Saudi rulers want to build the military production capabilities at home by 2030, so part of contracts would work to this end.

That is all good, but the question is who will pay for this. Well, I have an answer: I assume this would be the young generation of Saudi Arabia (who are already frustrated by worsening life standards, unemployment and various barriers in social life) and of other countries in the region (who are either equally robbed by their governments of public investment in their future or are unlucky to be born in the neighbouring countries which serve as playground to use those weapons purchased). Whether they like it or not.

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Where is it all heading? Marc Lynch has nailed it in his recent article that, emboldened by such deals (and the Washington’s backing) the region’s regimes will find it easier “to sustain their crackdown on civil society and political dissent” when faced with difficulties and popular resistance to meet the militarization commitments, “but such repression will exacerbate the governance failures and political grievances which lay the ground for another round of instability. By almost every indicator—economic, political, security or social—the Arab regimes upon which Trump is doubling down are more unstable now than they appeared to be in the years leading up to the 2011 uprisings.”

So in response to the question posed in the opening part of this piece, it would be fair to say that militarization (through extensive military spending, among others) makes the Middle East governments more vulnerable and the entire region increasingly unstable—it encourages violent conflicts and contributes to their escalation instead of containing them. It is counterproductive, whether in immediate or long term. And I am sure we will arrive at similar conclusion when analyzing other regions. Think of Africa (military spending across the continent has increased by almost half in the past ten years). Think of South Asia (with the top importer of major weapons, India and no less ambitious Pakistan). Think… how much good could have been done instead.

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Untidy Thoughts on Sub-Saharan Africa’s Growth and Threats (part 2)

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Johannesburg’s business centers surrounded by slums (Image credit: Juda Ngwenya/Reuters)

by Elbay Alibayov | Political risk series

The leadership deficit, resource curse, and inequality

Last month, the 6th Tana Forum (Tana High-Level Forum on Security in Africa) held in Ethiopian city of Bahir Dar brought together former and current heads of state, government officials, diplomats, academics and civil society representatives to discuss the natural resource governance. As ever, the topic of the continent’s resource curse was in the focus. What was new, however, is that this time around the African leaders seemed to acknowledge (with initial hesitation though) that it is them who must bear the greatest responsibility for, as former Nigerian President and incumbent chairman of Tana Forum, Olusegun Obasanjo put it, “the way and manner natural resources are exploited and how revenues from them are harnessed and expended [that] have allowed social and political divisions to fester.” Thus, the old narrative pointing finger at usual suspects—foreign investors and multinational extractive companies—being primary and sole culprits started finally changing.

Just ten days later, the issue of serious leadership deficit was echoed at yet another high-profile event, the World Economic Forum held in Durban. Here, the South Africa’s President Jacob Zuma in his address to participants put the blame of persistent inequality across the globe, and particularly in Africa, on political elites and governments: “As leaders, we have not addressed adequately how we are going to close the gap between rich and poor in the world and achieve meaningful, inclusive growth.”  He went further by calling the African leaders and the international community to combat economic crimes, such as money-laundering and profit-shifting.

These are all broad topics and they have their country-specific root causes and present-day circumstances, but the point about local political leadership seems correct. When there is no political unity among key local players, when they are corrupt and together with their supporting clans try to coerce and dominate anyone else in the land, then their countries fall easy prey to various external actors, who take advantage of them. So the problem of “curse” should start with local leadership—if they abide by the land’s laws and serve their people with integrity, the chances are tiny for economic crimes and corruption to take a massive scale and become a systemic societal decease.

The list of economic crimes the African countries are actively engaged in is long and their scale is at times striking. In this piece I will share my initial findings and thoughts pertaining to one of them—that is illicit capital flight from and to sub-Saharan area of the continent. I was particularly interested in finding any relations between the illicit financial flows (IFF) and economic inequality, as one prime source (whether cause or exacerbating factor) of conflict and instability. No big theories, no conclusive statements—just an attempt to make sense of available evidence. The piece therefore, following Schopenhauer’s method, “by no means attempts to say whence or for what purpose the world exists, but merely what the world is.”

The recent emphasis in global and regional discourse, on the consistent lack of leadership in Africa is not incidental. If not for violent power struggles of political elites and corrupted practices in public institutions (and their local and foreign business accomplices) the continent’s countries would have been more socially stable, the well-being of their citizens higher, and their economies less vulnerable to external shocks. The real curse of Africa is its political institutions, not resources.

Illicit financial flows: trends, size and composition

A series of reports published by Global Financial Integrity (GFI) , the Washington DC-based research and advisory organization provide estimates of the illicit flow of money in and out of the developing world. For example, GFI’s estimates show that “since 1980 developing countries lost US$16.3 trillion dollars through broad leakages in the balance of payments, trade misinvoicing, and recorded financial transfers. These resources represent immense social costs that have been borne by the citizens of developing countries around the globe.

Individual sub-Saharan countries do not appear among top ten in the lists of either illicit inflow or outflow transfers in 1980-2012. Overall, compared to other regions sub-Saharan Africa has not been in the leading role in this business either; in absolute numbers much more has been taken from Asia, for example. In 2014 alone the outflows from sub-Saharan economies are estimated at between US$36 billion and US$69 billion and inflows between US$44 billion and US$81 billion. Therefore, overall IFF volume for sub-Saharan Africa is estimated at between US$80 billion and US$150 billion (midpoint US$115 billion). This makes the portion of sub-Saharan Africa in the global two-way illicit flows for that year very modest – a bit more than 6.5 percent.

However, this may be misleading. First, the global estimated capital flights (and those for Asia, in particular) are very much inflated because of China; thus each region’s contribution, when excluding China, would be much higher. Second, much more relevant is not the comparison with other regions but within the sub-Saharan part of the continent. And even here, by the size of economy and its growth rate and other indicators the economies of sub-Saharan Africa diverge greatly.

Vast majority of sub-Saharan economies are small. These countries are also poor; many are very poor in fact (as of March 2016, out of 39 Heavily Indebted Poor Countries across the globe, 32 were in Africa; all but Sudan were in sub-Saharan part). And therefore those numbers translated into percentage of total trade or compared to GDP per capita tell a different story—those sums are direct losses, the money the Sub-Saharan poor are robbed of, and they are felt with much severe pain than significantly larger IFF sums in more prosperous parts of the world. The amount of one hundred and fifteen billion US dollars in one year is no small amount of money anywhere on this planet; for sub-Saharan Africa, the region home to almost half of the world’s extremely poor—this is an enormous amount of money. Just try to imagine the “opportunity cost”—what else this money could have been spent on. It hurts.

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And finally, trend is important. And here we have a mixed picture. On the one hand, the region has evidenced the highest rate of average annual IFF (outflows and inflows combined) for years 2005-2014: it is estimated (in midpoint terms) at approx 20 percent of total trade (average for all developing countries being 19 percent). On the other hand, and this is the only good news here, sub-Saharan Africa demonstrates a higher descending trend over the same decade: its rate has dropped from 22.8 percent in 2005 to 16.6 percent in 2014, while the rate for all developing countries has decreased from 19.5 percent to 18.8 percent, respectively.

Another difference of interest: in the course the decade 2005-2014, in all regions but sub-Saharan Africa the illicit capital inflows were approximately twice as large as outflows. In sub-Saharan Africa they were almost equal. The outflows/inflows had the following composition: 9.5 v 10.4 in percentage points (9:10) in sub-Saharan Africa, compared to 5.9 v 13.2 percentage points (1:2.2) for all developing countries. And even here the region is not homogeneous: for example, Mozambique and Cameroon both averaged at around IFF 7-7.5 percent of total trade in the course of 2005-2014; while the former had outflows/inflows composition as 2.5 percent and 5.0 percent, and the latter the reverse– 5.5 percent and 1.5 percent of the respective country’s total trade.

It is difficult to say with precision in the absence of additional data, but the difference seems in the purpose the developing countries are being used for either inflows or outflows of illicit capital. The countries of sub-Saharan Africa appear to be primarily siphoning the money out of their economies while being less attractive for money laundering and external investment (or reinvestment) in grey economy than other regions.

Irrespective of comparative absolute amounts, the illicit capital flights have probably been more painful to sub-Saharan Africa’s populations, in first hand poor, than in other regions of the world. Transferred through formal (recorded) channels, this money could have contributed to tax revenues and directed to strengthening social safety networks, pro-poor programmes and job creation, to benefit their citizens.

Assets in tax heavens vs. Official Development Assistance

One of the most shocking findings pertaining to (financial) relationship between developed and developing countries revealed in the recent reports is that for long time, “developing countries have effectively served as net-creditors to the rest of the world with tax havens playing a major role in the flight of unrecorded capital.” For example, in 2011 (most recent year of available data) holdings of total developing country wealth in offshore financial centers were valued at US$4.4 trillion. In the GFI assessment, “there is perhaps no greater driver of inequality within developing countries than the combination of illicit financial flows and offshore tax havens. These mechanisms and facilitating entities benefit the rich—we call them the ‘1 percent’ for convenience—and harm the middle class and poor.

The sub-Saharan African countries could have been much less dependent on external financial assistance while the quality of life of people living in those countries could have been tangibly higher. This is an issue of choice for political leadership, nothing else.

As the report shows, residents of developing countries held US$1.8 trillion in tax heavens in 2005 which increased to US$4.4 trillion in 2011. Sub-Saharan Africa’s share in that was rather modest, but the region’s assets held in offshore financial centers kept growing at the record rate of over 20 percent annually (almost four time the world average), in the course of 2005-2011. This (at least in part) explains the difference between sub-Saharan Africa and the rest of the developing world in terms of outflow/inflow ratio of capital flights mentioned above.

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There is even more surprising finding. Already in 2011 the total amount (foreign direct investment and private investment) of sub-Saharan Africa’s assets held in tax heavens was five times the official development assistance (ODA) from all sources (official development assistance, as well as other official and private funds) disbursed to the region the same year (US$52.6 billion : US$263.04 billion = 1:5). Actually, the total amount of ODA to sub-Saharan Africa in four years of 2012-2015 (according to OECD DAC data) equaled to US$252.26 billion which is less than the amount of assets from the region held in tax heavens the year before, in 2011. And the offshore investments kept growing since.

The very fact that a country is receiving quite significant amounts of international assistance in the form of technical advice and development programmes, loans, grants etc from public and private sources, and at the same time its corrupted politicians and their “business partners” (part of so called one percent) are pumping out amounts of money its five-fold (!) that has been illegally earned in the same country at the same time, to offshore accounts—is outrageous.

Diversity as it is

Of course, not all sub-Saharan countries are infected with this decease. So it would be correct (as in any other respect) to distinguish between those countries where illicit capital flight is massive and persistent and those where it is relatively small and/or random (similarly, say to the difference between “systemic” corruption and individual, sporadic instances of corrupt practice). There are countries like Mauritania and Angola (average 1 and 5 percent per annum over the decade of 2005-2014, respectively), and there are the region’s mid-performers like Nigeria (with estimated average 20 percent) and front-runners like Benin (average 114 percent of total trade). And then there is Liberia, the world champion and the current record holder—with estimated annual illicit capital flights at staggering 1,000 percent (i.e. ten-fold) of the country’s total trade over the decade, 2005-2014. To compare, the next to it in the global rankings are Aruba and Panama, with the rate twice less than that of Liberia.

Therefore, it makes sense to categorize the countries in terms of the economy’s size, income, growth rate, resource intensity, economic and social inequality, regime type and other indicators and compare them against the categories based on the IFF range—to find out how, if at all, they correspond to each other. That is what I entertained, and found this exercise quite insightful. The untidy thoughts on some of those comparisons will be presented in the next piece. Herein is the first set, by the economy’s size.

And one last note before we move forward. Individual characteristics and circumstances matter, of course. One of few countries falling under Very Low/Low category of IFF (0<3<5 percent of total trade) is Somalia, for example. It would be very naive to consider this low IFF range registered as representative of healthy economy and responsible leadership. What we know of Somalia for prolonged period of time has been quite the opposite. That is why the findings on country groups by certain criteria presented below and in the forthcoming piece are merely first impressions; those findings shall be looked at closely on a case-by-case basis to take into account the country-specific features, in order to arrive at plausible explanations.

Illicit financial flows vs. size of economy

To start with analysis, we first have to categorize the sub-Saharan African countries by the IFF ranges. In so doing, I refrained from building the (whatever imprecise and conditional) scale based on the global rankings. As explained above, the sub-Saharan region has its own characteristics, quite different from the rest of the world, and therefore what is considered as “low” here may be ranked as “medium” or “high” in other regions or on the global rankings.

I kept it simple. The countries of the region (47 altogether) divided into the following categories by the medium point value of their average annual IFF, as percentage of the respective country’s total trade in the same period (2005-2014): Very Low (0-3 percent); Low (3-5 percent); Medium (5-8 percent); High (8-10 percent); and Very High (above 10 percent). Given the conditionality of such a ranking, I also introduced borderlines, like Low/Medium, High/Very High, etc. to add more flexibility to the categorization.

Here is the full list by IFF categories, 2005-14:

–Three countries in Very Low category: Eritrea, Mauritania, Somalia;

–None in Low category;

–One country in Low/Medium category: Angola;

–Three countries in Medium category: Cameroon, Lesotho, Mozambique;

–None in Medium/High;

–One country in High category: South Africa;

–Twenty-one countries in High/Very High category: Botswana, Cabo Verde, Democratic Republic of Congo, Republic of Congo, Kenya, Madagascar, Namibia, Seychelles, Swaziland, Tanzania; and

–Twenty-nine countries in Very High category: Benin, Burkina Faso, Burundi, Central African Republic, Chad, Comoros, Cote d’Ivoire, Djibouti, Equatorial Guinea, Ethiopia , Gabon, Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Malawi, Mali, Mauritius, Niger, Nigeria, Rwanda, Sao Tome and Principe, Senegal, Sierra Leone, Togo, Uganda, Zambia, Zimbabwe.

The vast majority of countries in sub-Saharan Africa belong to the categories with high and very high illicit capital flight rates (above 8 percent of a country’s total recorded trade, and in many cases far beyond this benchmark, growing up to tens and hundreds of percent) by both the continental and global standards. No one appears to be immune to this corrupt and incredibly damaging practice.

I will use this categorization throughout the exercise. As it is clear from the list, 85 percent of sub-Saharan African countries belong to the categories demonstrating High and Very High rates of illicit capital flight, during the period studied.

Table below gives an idea of the diversity, depth and scale in terms of the correspondence between the IFF and the economy size (please note that there are no criteria behind selection, it is just a random collection for illustrative purpose). I used the World Bank data on Gross Domestic Product (GDP) for 2014 (as the last year in the period observed) as an indicator/measure of economy size.

SSA-PART2_CHART-3

It appears that there is no clear correspondence between the size of an economy and its IFF range. It especially concerns the High and Very High categories, where all economies, big and small, are represented.

In Sub-Saharan Africa, all but Somalia are exersizing, to varying degree, the illicit financial transactions. There is no obvious correspondence between the size of economy and the range of illicit capital flight. Economies of all size, from tiny to large, are represented in the categories characterized by especially high rates of illicit capital flight. This means that the size of economy is not a determining factor in illicit financial flows from and to Sub-Saharan Africa.

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I hope you are enjoying the ride. In the piece forthcoming I will share my untidy thoughts on the relations (or not) between the illicit financial flows in sub-Saharan African countries and such characteristics as the economy’s resource intensity and income level, poverty rates and shared prosperity, as well as the political regime type. Stay tuned!

For those who missed the first part in a series, here is the link.

Somalia: A Critical Juncture or Yet Another Missed Opportunity?

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by Elbay Alibayov | Reflections on the week past

Conferences and statements vs. harsh reality

This week, we witnessed two subsequent (and potentially very important) events pertaining to the grim humanitarian situation and the stabilization efforts in Somalia (under “we” I mean those who are interested in this sort of issues; otherwise they went unnoticed by the world that was occupied with the outcome of presidential elections in France and South Korea, and of course the US-Russia discussions, which went smoothly as predicted and “coincided” with quite theatrical dismissal of the FBI Director James Comey, who also happened to investigate the alleged Russian meddling in the US elections last year; Sergei Lavrov’s “Was he fired? You are kidding me” being a masterpiece—just to name a few).

First, on Monday 8 May, Somalia’s National Security Council endorsed a political agreement on National Security Architecture reached between the Federal Government (FGS) and Federal Member States (FMSs) the last month. A couple of days later, on Thursday 11 May a high-profile conference on Somalia was held in London, with participation of the representatives of the United Nations, African Union, European Union, the League of Arab States and the Organisation of Islamic Cooperation, among the others, and all in all more than forty nations.

The London conference participants adopted a New Partnership for Somalia that “sets out how Somalia and the international community will work together to meet Somalia’s most pressing political, security and economic needs and aspirations, as set out in the National Development Plan.” In turn, a seventeen-page Security Pact outlined the mechanisms in support of the Somalia’s national security architecture and security sector reforms.

That is all fine. Documents are well written—structured, logical, with deadlines, roles and responsibilities, and so forth being all in place. Statements are appealing and impressive. Arguments sound convincing. And still there is a feeling that we have seen it all before and it is not as easy and simple as presented therein… give us a bit more money, a bit more troops and modern weaponry, a bit of this and that… and we will do marvels.

First of all, it is not merely “a bit”—the UN Secretary General Antonio Guterres called for an additional $900 million to allow aid agencies to tackle the severe drought facing the country, thus taking his total appeal to $1.5 billion. Do you hear me? One. And half. Billion. US dollars. And it is only humanitarian part of the story. One can only guess how much the military part will cost (to the taxpayers across the globe, including those in Somalia—given there are left any).

And also, I do appreciate the encouragement given to those in distress, but when the document starts with the phrase “After decades of civil war and state collapse, Somalia is making rapid progress towards peace, stability and prosperity” I become alerted. What are you talking about? Is it the same Somalia we mean here? At the same very conference, where the UN has pointed that six million Somalis (more than half the country’s population) were in acute need of assistance, with as many as 275 thousand malnourished children being at risk of starvation? And militants controlling vast territories of the country? “Rapid progress”… Really?

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Window of Opportunity

And still, the recent developments in and around Somalia (including the events of this week) may signal of a window of opportunity. Tiny one, but it is real. Can the Somalis and their international backers use this chance?

Thousands of decisions big and small related to particular set of issues are taken every minute across the globe. Mostly they are driven by individual and group considerations of institutional actors and may or may not match. However there are moments in time, which we call critical junctures when certain decisions coincide by sheer luck (for good or bad) to create synergic effects, those which go much beyond the cumulative outcome, may last longer, and moreover, have a potential to turn the course of developments irreversibly. It seems that such a moment has matured in respect to stabilization in Somalia.

Currently there are three political domains, closely related, which determine the present state and the future of Somali and the Somalis. They dominate any discourse about this trouble country, and it seems that the solutions to them have to be correlated too. One of them is famine (yes-yes, do not be fooled—it is not a malnutrition or environmental issue but inherently political problem) which has taken a scale of humanitarian disaster and demands immediate and well orchestrated action. Another is security related, and concerns primarily the fight against militant Islamists, notably al-Shabaab (and al-Qaeda, by extension) and infighting between various political opponents in their contestation of power. And the last but by no means the least is the quality of governance, its ability to perform key functions assigned to any state in serving its citizens.

Diverse factors driving the decision making of multiple local, regional and international actors involved directly or indirectly in each and all three domains in Somalia have driven us to a white wall with very simple and straightforward message on it: “Somali Ownership Needed.”

What does it mean? Humanitarian crisis (famine and cholera in first hand) demand an urgent and concerted effort. The fight against Islamist Militants needs a long-lasting solution beyond AMISOM. These two cry out loud for domestic ownership—without it nothing sustainable is going to happen, ever. And seems that with new President Mohamed Abdullahi “Farmajo” Mohamed taking office in February domestic political dialogue has taken a new, promising turn (which actually resulted in the security sector related political agreements, with significant element of the distribution of command and control over the army and police—thus power—between the FGS and FMSs).

Digging deeper

To me, this is the moment. Not frequently developments in various parts of a complex system, and decisions made in each of them, connect in such a complementary manner. Whether this opportunity will translate into “right kind of” action and bring about change—remains to be seen. There are questions. Many questions, understandably enough.

Take one of them. Military component of the African Union Mission in Somalia (AMISOM) comprises a contingent of regular troops from Uganda, Burundi, Djibouti, Ethiopia and Kenya deployed in six sectors covering south and central Somalia. They maintain the deployment of about 22,000 troops; add to them the Somali National Army of approx. 20,000 military personnel and you get more than forty-thousand-strong trained military force. To compare, al-Shabaab has an estimated 7,000-9,000 fighters. On the top of it, the allied forces are better equipped (although Somali President, in his bid to lift the arms embargo, complains that his army has the same weaponry as militants) and supposedly has a better access to intelligence and knowledge of modern warfare. So the question begs here: How it comes that the allied forces cannot defeat a group that is inferior to them by any measure of military capacity?

One answer is that the war against militant Islamists (and this has proven true with regards to many guerrilla groups and insurgents over decades, from Latin America to East and Central Asia) is political and ideological and as such it cannot be won by military means alone. There have been numerous Somali state failures over time, from inability to protect to inefficient and unequal delivery of basic services to citizens. This, firstly, created a fertile ground for militant groups to emerge, and secondly, allows them to flourish as they take advantage of the government weaknesses and hold control over vast territories (which effectively means that they “protect” and deliver services) and generate support (or at the very least earn the loyalty of local people) and are seen as legitimate representatives of the State.

To win hearts and minds of Somalis, and thus their allegiance to the legitimate state, the government has to demonstrate that it is ready, able, and willing (in the wording of full corporate offer) to perform its role effectively and efficiently. Can it?

Let’s have a quick test. If there are two domains that would serve as indicator these are provision of public security and delivery of public services. These are fundamental functions of any state, be it sultanistic regime or liberal democracy.

AMISOM

Public security

When it comes to public security, there are two sides of the coin: one is the law and order across the land (outcome); while the other is how it is maintained (process). They are equally important. I would even say that how is more important for society in terms of citizens’ trust, credibility of government and political processes, and sustainability of direct results than what. Dictators are much more effective in establishing order than democracies. We do not accept that. The way the societal problems (even organised crime) are handled matters to us. Rings the bell? Rodrigo “Rody” Duterte of the Philippines (as the freshest name on this otherwise long list)?

And in Somalia we have problems in both what and how of security, public order and law enforcement. Results do not need further elaboration—it suffices to see how al-Shabaab has been evolving while the government descending to the level of para-military forces, to comprehend the direction of the entire Somali affair.

What security

— According to the Africa Center for Strategic Studies most recent update, al-Shabaab has now surpassed Boko Haram as Africa’s most deadly militant Islamist group. Fatalities inflicted by them have increasing by a third in the course of one year—from 3,046 in 2015 to 4,281 in 2016.

— Large areas of Somalia are still in the hands of al-Shabaab. The group continues perpetrating terrorist attacks in Mogadishu. Among most notable were two attacks in June and one in December 2016, and two explosions in January this year. Each of those attacks left dozens killed and many more wounded, but as ever with terrorist attacks—created mayhem and sent a chilling message.

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— Morale is low. There are defections on both sides. Some al-Shabaab leaders have surrendered in line with the government’s amnesty provisions; at the same time the Somali National Army soldiers keep defecting to the militants’ camp (it is said that the reason being non-payment or delay with paying wages).

How security

According to Human Rights Watch report covering the events of 2016, the violence and maltreatment of civilians is rampant and it is not only al-Shabaab but all the sides, including the government forces, are complicit in abuses and crimes:

— Abuses by Government include mass security sweeps by national intelligence agency with no legal mandate to arrest or detain; arbitrary detention and recruitment of children by security forces; military court in Mogadishu trying cases that are not legally within its jurisdiction and in proceedings falling short of international fair trial standards;

— There is inter-clan and inter-regional fighting ongoing, primarily linked to tensions around the creation of new federal states. It has resulted in civilians’ deaths and injury and the destruction of property;

— Al-Shabaab kept committing targeted killings, beheadings, and executions, particularly of those accused of spying and collaborating with the government. The armed group continues to administer arbitrary justice, forcibly recruits children, and severely restricts basic rights in areas under its control;

— Reports persist of indiscriminate killings of civilians by AMISOM and other foreign forces, including during operations against al-Shabaab and airstrikes.

Public services

There are two facts that hardly would surprise anyone. Not because they are insignificant; to the contrary, both are appalling. It is because both problems are well known for quite a long period of time, and thus far they have either been ignored or not addressed properly.

One is about Somali’s poor human development record. According to UNDP survey data, 8.3 percent of Somalis lived in near poverty and another 63.6 percent – in severe poverty already in 2006. And we can go much deeper in time–it has been unfolding in front of our eyes for decades. Only “correct” statements and short-lived aid in response. The country was not even ranked in the last Human Development Report 2016.

Another fact about Somalia that does not surprise anymore—it is consistently ranked as the most corrupt country in the world. In the Transparency International’s Corruption Perception Index it scored no higher than 8-10 points (out of 100) for many years, and appears at the very bottom of the global ranking. As the global watchdog notes, “public sector corruption is so much more than missing money; it is about people’s lives.” It has direct bearing on the situation with delivery of public goods, distribution and redistribution of assistance, and in particular the international aid, in Somalia. The recent report by the TI’s Humanitarian Aid Integrity Programme points to the following:

— Corruption practices are perceived to be routinized in their application towards humanitarian aid across Somalia, primarily through well-established patronage networks which involve a redistribution of resources;

— Legislative and policy vacuum has allowed the government and local authority representatives create ad hoc rules and regulations to manipulate resources for their own gain. All forms of aid are affected by this environment;

— The extent of perceived corruption is reflected in the findings of 2015 study, where 87 percent of respondents viewed corruption as the single biggest impediment to receiving assistance, above insecurity and violence.

Resilience

With such a record the Somali political system hardly can pass the test. It is obvious that, in order to accomplish a quite ambitious task outlined in the documents produced and signed in Mogadishu and London in the last couple of months the country and its regional and international supporters have to consider addressing the root causes of present, long- and deep-seated problems. Otherwise, I am afraid even this tiny chance will be missed.

One thing should drive our analysis and planning: when it comes to humanitarian crisis in Somalia it is less a result of the drought and more a result of the country’s weakened resilient capabilities. In the environment of continuing infighting, lawlessness and lack of legitimate power, systemic corruption and poor public services (healthcare and education in first hand), high unemployment (especially among the youth), and human rights abuses at the hands of all the warring parties—Somali’s ability to respond and creatively adapt to the challenges posed by the rapidly changing environment has significantly decreased. It is pretty much compatible to the condition of a person with weak immune system. That is why famine, cholera, violence have taken over the land. In contrast, the adversary (as any terrorist group in fact) is highly mobile and adaptive. According to reports, the AMISOM Force Chief of Plans Salifu Yakubu has recently noted that al-Shabaab has been weakened but still has the capacity to attack, because it “remains resilient” and has resorted to asymmetric warfare. Exactly.

More weapons, more food and medicine are needed to address the most urgent manifestations of the problem; while to resolve the problem itself there must be a locally-owned long-term programme aimed at institutional (political, social, economic) root causes of it. Without restoring its resilience, the Somali state would not be able to cope with daunting problems and will further disintegrate and fall even deeper into chaos and suffering. No money in the world can buy the nation’s resilience. It must be built, from within. And this is where the international assistance must be directed.

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Untidy Thoughts on Sub-Saharan Africa’s Growth and Threats (part 1)

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Port of Cape Town                                                                                                Image credit: SkyPixels / published under Creative Commons 4.0 International license

by Elbay Alibayov | Political risk series

Africa, diverse and dynamic

Diversity across the African continent is truly impressive. And it is not only broadly varied (and gorgeous) geography and richness of natural resources or incredibly colourful indigenous culture, artefacts and tradition. Or almost full spectrum of political systems—from democracies to presidencies for life to authoritarian regimes and dictatorships to fragile states and those where chaos is the ruling regime in town. These are things more or less known and studied (and rather well appreciated). What is (or rather has been for long time) underrated about Africa, and especially its Sub-Saharan part, is its immense human potential and the capacity to innovate.

It is also a continent very dynamic—numerous events of various scale and importance are taking place across the continent every day; much more than in any other continent. One has to admit though, that this dynamism is mostly reflected in the media through “negative reporting”—violent clashes, terrorist attacks, casualties of natural and human-made disasters, corruption scandals, you name it (sub-Saharan Africa is true to its diversity in this sort of things, too). Obviously this is a distorted reality as presented by the media in their ever-lasting search for sensations. The rest (that is, more cheerful events and developments) can be picked up from the government, think tank and development organisation reports (one warning here being that many of those, including international assistance, projects appear to be prone to exaggerating the success of their joint efforts).

To feed my brain with daily news on Africa while doing a political risk research on Sahel and broadly into sub-Saharan part, I used my old tested method—subscribed to daily media reviews compiled by specialized organisations. These compilations are very informative—it is not only about quick references and short summaries; even titles, when categorized by key words, may give the first (and frequently correct) idea of what is happening on the continent today. Yes, you are right—our subconscious mind immediately grasps the hidden code and gives us an impression of the “mood” prevalent at the continent these days. Try one such compilation of headlines I put together from the daily list of the Africa Center for Strategic Studies (see it at the end as an appendix, and feel free to entertain even the simplest methods of content analysis, through words and combinations). In the meantime, I will proceed with (rather random, mosaic-like) reflections triggered by the events of the week past and share some “untidy thoughts” (Myśli nieuczesane, to borrow from Stanisław Jerzy Lec) or rough ideas popping up along the road.

Famine vs. resources

According to information released by the Famine Early Warning Systems Network (FEWS Net) earlier this year, there are about 70 million people who may be in need of urgent food assistance in 2017. Of them, 20 million live in four countries that have a “credible risk” of facing famine–South Sudan, Nigeria, Somalia and Yemen.  In all but Somalia the mass starvation is human-made—it owes to internal violent conflicts (whether between warring political actors as in South Sudan, or the government and militant extremists Boko Haram in Nigeria, or with participation of both local and external forces in Yemen). Three out of four countries are located in sub-Saharan Africa. Of these, two are (mineral) resource rich. What is even more alarming is that they are not alone—most of Sahel and countries to the south of it are, to varying degree, “acutely food-insecure.”

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Even resource rich countries in sub-Saharan Africa are not immune to extreme situations, such as food insecurity among large parts of population. That is because the cause often-time is not natural but human-made

Resources vs. conflict

This is an old question: whether natural (primarily mineral) resources act as the catalyst of intrastate violent conflict or, to the contrary, enable governments to deliver basic services, uphold the rule of law and thus sooth tensions, avoid violence (or at least prevent from further escalating). For long time, Africa has been viewed as the prime location for natural resource driven conflict. However, the recent research covering the period from 1946 to 2008 proves that the “empirical relationship between natural resources and conflict in Africa is not very well understood. Contrary to conventional wisdom, we find no evidence of natural resources triggering conflict in Africa after controlling for grid-specific fixed factors and time varying common shocks. Resource discovery appears to have improved local income measured by nightlights which could be reducing the conflict likelihood.”  

Oilfield and Minefield Discovery Location and Armed Conflict

Conflict in sub-Saharan Africa is not natural resource driven. In some cases it is other way around—resources help governments playing tensions down (at least in short term)

Extractive institutions vs. state failure

On a broader spectrum of correlation between economic incentives and civic conflict, political economy school of thought has claimed for decades that “greed and grievances” were the main driving forces of conflicts. However the analysis of conflicts worldwide does not necessarily support this emphasis on the economic drivers—much more powerful forces, such as poor governance and corruption and resulting inequality, political polarization, social exclusion, and ethno-sectarian divides frequently are the root causes of violent conflicts. Today, we can add the disruptive technological change to this list of usual suspects. They all are also increasingly recognized as the major contributors to violent extremism.

This puts institutions at the centre of the phenomenon dubbed by the economists Acemoglu and Robinson as “failed nations”. They hold that nations fail because their political and economic institutions encourage and support extraction to benefit few, instead of creating incentives for people to save, invest, and innovate. This results in “economic stagnation and civil wars, mass displacements, famines, and epidemics, making many of these countries poorer today than they were in the 1960s.”  Let’s see how this proposition proves itself in sub-Saharan Africa.

The nature of political and economic institutions (extractive vs. inclusive) matter to the nation’s economic and social performance more than resource abundance

Inclusion vs. competitiveness

The remedy against the state failure is seen in inclusive growth—one which builds upon the equitable contribution from all sectors of society and benefits all of them, thus fairly distributing the wealth and stimulating innovation and domestic investment in sustainable growth. Not surprisingly then, Achieving Inclusive Growth through Responsive and Responsible Leadership was the main topic on the agenda of the World Economic Forum on Africa held last week (3-5 May) in Durban, South Africa. The meeting brought together more than thousand regional and global leaders from business, government and civil society to explore the avenues for creating opportunities for all economic participants in Africa.

A lot of interesting discussions, propositions, lessons shared from successful innovations across the continent. They can be followed on the WEF’s website; so I instead want to draw your attention to the subject of my interest. A few days before the meeting in Durban, Africa Competitiveness Report 2017 was published thus offering detailed competitiveness profiles for 35 African countries along with the summary of the drivers of productivity and competitiveness within the continent. According to the report, out of ten most competitive African economies seven are in sub-Saharan Africa. The best performing country, Mauritius, holds the 45th place in the global competitiveness ranks (Global Competitiveness Report 2016-17 comprising 138 economies) while Cote d’Ivoire (at the bottom of the top-ten list) is in the 99th place.

WEF AFRICA-2017-PIC

This means that the rest of Africa is ranked in lowest quarter of the global list. No good for a continent as resource and talent rich and as demographically mobile (having one of the highest and rapidly growing rates of youth in its population–Africa’s working-age population is expected to soar by 450 million people, or close to 70 percent, by 2035).

There is another relevant ranking released recently. According to WEF data (Inclusive Development Index 2017), the list of most inclusive sub-Saharan economies looks as the following: 1 – Tanzania; 2 – Ghana; 3 –Cameroon; 4 – Senegal; 5 – Mali; 6 – Zimbabwe; 7 – Chad; 8 – Namibia; 9 – Uganda; 10 – Kenya. Two things immediately caught my eye. First is that only Namibia and Kenya are present in both lists of best performers, meaning that competitiveness and inclusiveness do not necessarily match (at least in Sub-Saharan economies).

Competitiveness and Inclusiveness of sub-Saharan economies do not necessarily go hand in hand. This may mean that they are driven by different set of contributing factors and faced with diverging constraining forces

Second is that population of some of these successfully growing countries are considered to be at acute risk of starvation. Millions of people in each case (as presented in the first map above): in Kenya which is both competitive and inclusive, but also in Uganda and Chad. Also, half of the world’s extreme poor live in sub-Saharan Africa. The number of poor in the region fell only by 4 million with 389 million people living on less than US$1.90 a day in 2013, more than all the other regions combined (according to the latest available data by the World Bank).

Even in countries with competitive economies and those enjoying an inclusive growth the population (at least part of it) may live in extreme poverty and/or under threat of starvation—whether due to natural and/or human-made disasters

Thank you for flying with us. This was the end of part one. Stay with us. Part two comes soon. Meanwhile, as promised…

Appendix: Africa Media Reviews for the week of 1-5 May, 2017

Headlines only (unedited):

Monday 1 May, 2017: French Forces Kill or Capture 20 Militant Fighters Near Mali-Burkina Faso Border– Mali Extends State of Emergency in Bid to Quell Islamist Attacks– Pope’s Timely Egypt Visit Comforts Grief-Stricken Christians– South Sudan Armed Opposition Rejects Declaring Unilateral Ceasefire– Kiir Reaches Out to Opposition to Revive National Dialogue–Can Funding Uncertainty Improve Peacekeeping in Africa?– DR Congo: UN Peacekeepers Face Fresh Sexual Abuse Claims–Libya Seizes Oil Tankers after Shootout at Sea–Sudan’s al-Bashir Calls on Opposition to Join New Govt–The ANC is Mandela’s Legacy. Now His Granddaughter Has Renounced South Africa’s Ruling Party–UAE’s Battle-Hardened Military Expands into Africa, Mideast–UN Security Council Backs New Western Sahara Talks Push–Tanzania’s President Magufuli Sacks 10,000 over Fake Certificates–UN Airlifts Aid Into Angola for DRC Asylum Seekers–Tunisia Forces Kill Fighters Planning Ramadan Attack–My Life Is in Danger, Says Burundi Opposition Leader–Yoweri Museveni: A Five Times-Elected Dictator?–China’s Appetite Leaves Nets Empty.

Tuesday 2 May, 2017: South Africa’s Zuma Quits May Day Rally after Boos from the Crowd– Advance Team of UN Peacekeepers Arrive in South Sudan– Humanitarian Crisis Deepens in CAR Amid Resurging Violence– Nigerian Civil Society Leaders Urge Buhari to Take Medical Leave– Polisario Says Ready for Western Sahara Talks with Rabat–Morocco Wins Battle over Guerguarat without Firing a Single Bullet– Congo Inks $5.6 Million Lobbying Deal Amid Election Strife–Egypt Denies Plans to Build Military Base in Eritrea–Zimbabwe: Alliance to Defeat Mugabe Comes Under Fire–Germany Pledges 70 Million Euros to Aid Somalia Fight Hunger–U.S Africom Commander Meets Somali President in Mogadishu– Ethiopia Is Facing a Killer Drought. But It’s Going Almost Unnoticed– Illicit Capital Flows in Developing World as High as $3.5 Trillion in 2014-Study– Egypt Violence: Three Police Killed in Cairo Attack– How I Smuggle People from Nigeria to Europe (Video)– Kenya Set to Make History with First Female Governors– Why EU Is Sending Poll Observer Mission to Kenya But Not Rwanda– Former Tanzanian President Mkapa Talks Magufuli, Burundi and Slavery– Sudan Threatens to Apply Similar Deportation Measures Against Egyptians– Ghana Crackdown on Illegal Gold Mining Inflames Tensions with Beijing– Echoes of Colonial Conflict in Algeria Reverberate in French Politics.

Wednesday 3 May, 2017: Eight Malian Soldiers Killed in Military Convoy Ambush–Britain Sending 400 Troops to Join UN’s S Sudan Force–Scores Killed in Central African Republic Ethnic Clashes–Rifts Deepen in South Africa’s Ruling Alliance–Pravin Gordhan: From Freedom Fighter to Finance Minister to ‘Accidental Hero’–Bid to Topple Zuma Leaves South African Opposition in Catch 22–SANDF Troops Gearing Up for DRC Rotation–As Oil Prices Dip, African Countries Spend Less on Military–UAE Says ‘Significant Breakthrough’ Reached in Libya Talks–Libya Has Become a Hub for Online Arms trading, Report Says–Piracy Attacks Off West Africa Nearly Doubled in 2016–Ethiopia’s Bloggers Face Detention, Restrictions–Journalists ‘Suffocating’ in Magufuli’s Tanzania–150 Journalists Banned from Algeria–A Desperate Plea for Help as Four African Nations Near a Famine Crisis–Protests to End Slavery in Mauritania–ISIS Militant Reportedly Burned Alive in Act of Revenge by Members of Bedouin Tribe in Egypt’s Sinai–Is Egypt Using Passports to Punish Its Opponents?– Zambia: Africa’s Silence Encourages Lungu’s Bad Behaviour–Mission Accomplished – UN Operation in Cote d’Ivoire–Burundi Refugees Still Streaming into Rwanda.

Thursday 4 May, 2017: Somali President Visits Ethiopia … At Last–Somali, African Union Forces Recapture Central District–Somali Minister Shot Dead in Car After Being Mistaken for Militant: Police–At Least Six Journalists Arrested in Uganda on Press Freedom Day–South Sudan ‘Suspends’ Al Jazeera English: Report–Crisis-hit South Sudan Hikes Fees to Register Aid Agencies–Libya’s Rivals Eye ‘Strategy’ for ‘Unified Army’–Child Soldiers Reloaded: The Privatisation of War (Video)– Nigeria’s Ailing President Buhari Misses Third Cabinet Meeting–Boko Haram Leader Shekau ‘Injured in Air Strike’–Africa’s Inequality Stifles Growth, Says Report–Algeria Parliament Poll looms, But Voters Busy Watching France–Media Freedom in Africa ‘Not Great’–Rocket Attack on UN Camp in Mali Kills 1, Wounds 9–Can African Leaders Stop Money Laundering?– What to Know About Zambia: Hichilema’s Treason Trial Sheds Light on Political Tensions–Health Overtakes Democracy as US Spending in East Africa Drops–US Congress Rejects Trump’s Cuts in Aid to Africa–Tanzania Extradites to US Suspected Drug Kingpin–Morocco Phosphate Ship Held in South Africa Port over Western Sahara Claim–Eight Chinese Vessels Detained off West Africa for Illegal Fishing.

Friday 5 May, 2017: Mozambique Rebel Movement Renamo Extends Truce Indefinitely–Aid Groups in Central African Republic Retreat amid Threats–South Sudan: ‘They Are Killing Civilians House to House’: Crowded UN Camp Filled with Horror Stories–South Sudan President Wants Home-Grown Solutions–Sudanese Party to End Almost 20 Years in Opposition–Votes Counted in Algeria Parliamentary Elections–Algerians Vote in Parliamentary Poll Marked by Apathy–For Uganda and Ethiopia, It’s $200m Less in US Aid–Surviving Against All Odds – And Court Judgments: How Jacob Zuma Does It–Zuma Told by South African Court to Explain Cabinet Changes–He’s a Real Contender to Lead Congo, if Only He Could Get In–Millions of Nigerians Face Hunger in Wasteland Recaptured from Fighters–Boko Haram: Nigeria Winning the Battle But Losing the War?–No Amnesty For Crimes Under Former Gambian President : Govt–Migrants Who Survive Sahara Face New Torture in Libyan Oasis Town–Boris Johnson Meets Rivals for Power in Libya–Société Générale to Pay $1.1 Billion to Settle Dispute With Libya Fund–How African Governments Use Advertising as a Weapon Against Media Freedom–Complacency Warned Amid Piracy Hijackings off Somali Coast–Kenya Election Plans Include Dispute Resolution–Ex-Guinea Minister Convicted of Laundering Bribes.

Source: compiled from ACSS daily newsletters, 1-5 May 2017

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Nobody is in Charge in Libya

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by Mohamed Eljarh | The Cipher Brief

The Cipher Brief’s Bennett Seftel sat down with Mohamed Eljarh, former political consultant to the Libyan Mission to the European Union, to discuss the ongoing conflict in Libya, the current terrorist threat in the country, and prospects for peace.

The Cipher Brief: What is the current state of political affairs in Libya?

Mohamed Eljarh: It has been more than 16 months since the signing of the UN-brokered Libyan Political Agreement (LPA) in the Moroccan city of Skhirat and more than 12 months since the arrival of the UN-backed Presidential Council headed by Prime Minister Faiez Serraj in the capital of Tripoli.  However, Libya remains a deeply divided and polarized country – one that lacks any representative or fully legitimate government – and it has witnessed various camps compete for legitimacy and control of key state institutions, such as the Central Bank of Libya (CBL), the National Oil Corporation (NOC) and Libyan Investment Authority (LIA). In addition, an ongoing armed struggle is taking place in various parts of the country. [The conflict] is linked to the ongoing political struggle for control of resources and state institutions.

Within Libya, there are three centers of political power: the UN-backed Presidential Council based in Tripoli, the State Council (formerly known as the General National Congress), which is also based in Tripoli, and the House of Representatives based in Tobrouk. The failure of these three institutions to implement the Libyan Political Agreement has resulted in significant deterioration in living conditions and a precarious security situation where the risk of a full-fledged civil war and reemergence of violent Jihadist groups, such as ISIS, is real.

Additionally, these institutions and competing governments failed to unify key state institutions that were divided back in 2014 when certain Islamist and revolutionary factions in control of the capital Tripoli refused to recognize the June 2014 national election results and the subsequent move of the newly elected House of Representatives to the eastern Libyan city of Tobruk where it has been sitting ever since. Today, Libya has two central banks, two national oil corporations and three competing managements of the Libya’s sovereign fund, the Libyan Investment Authority.

As a result of these failures and the ongoing conflict, a growing number of Libyans, as many as 40 percent, are now living under the poverty line. The poverty issue in Libya is exacerbated by the ongoing conflict and deteriorating economic and financial situation plagued by widespread corruption and poor governance. Three different governments are printing and spending their own cash and allocating their own budgets.

The value of the Libyan dinar has dropped significantly from a rate of 1.32 Libyan dinars to 1 U.S. dollar to as low as 10 Libyan dinars for 1 U.S. dollar in recent weeks. Additionally, there is a major cash liquidity crisis and shortages in fuel, medicine, cooking gas, and basic goods supplies with significant hikes in prices throughout the country.

TCB: Last year, ISIS was kicked out of the coastal city of Sirte by Libyan forces, but there are reports that ISIS may establishing a base in southern Libya. Does the group still maintain a presence in the country?

ME: Political instability, poverty and conflict are key contributing factors to the emergence and rise of jihadist groups. Although ISIS was defeated militarily in Libya and does not control any towns or cities in the country, the environments and factors that gave rise ISIS still exist today, and if not dealt with urgently and properly, will give rise again to ISIS or a much worse Jihadist phenomena.

Currently, there is violent escalation between Libyan National Army forces under the command of General Khalifa Haftar on one side and forces loyal to the authorities in Tripoli and Misrata on the other. There is no doubt but that ISIS and other al Qaeda-linked jihadist groups will aim to regroup, strengthen their presence, and potentially expand their control over territory in the southern region.

Local forces in the southern region of Fezzan have already spotted an increase in jihadist activities. There is a real threat that jihadist groups will form deep-rooted connections and networks with criminal gangs in southern Libya. [These gangs] are involved in human and drug trafficking and smuggling activities [that] would provide jihadist groups with a generous source of income to fund their activities and regrouping efforts and would have dangerous consequences not only for Libya, but the entire Sahel and North Africa regions, and of course Europe.

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TCB: Has Russia become involved in Libya in any capacity? If so, how?  Should the U.S. play a role in Libya, either militarily or by helping to broker a peace deal? If so, to what extent? 

ME: Instability in Libya and the legitimacy crisis have created a vacuum in Libya that since 2014 has been filled by jihadist groups such as ISIS or Ansar al-Sharia. But it is not just Jihadist groups that are filling the vacuum in a chaotic Libya. Regional players such as Egypt, Turkey, UAE, and Qatar have been backing opposing sides in the Libyan conflict.

Last year, Russia started to weigh its options in Libya.  It seems that Libya is now part of Moscow’s expansionist ambitions in the region. Initially, Russia seemed to favor the Eastern Libyan Commander Khalifa Haftar, as the Russians treated his wounded soldiers, have him medical supplies, and provided private contractors to help with war related activities. However, recently, Russia started to reach out to all Libyan stakeholders and has been working to push forward the peace process and the Libyan Political Agreement. Regionally, Russia is coordinating efforts with Algeria, Egypt, and the United Arab Emirates.

It is clear that Russia is neither keen nor capable of getting involved militarily in Libya. Hence, political and diplomatic involvement is the best option available for Moscow. However, it is important to keep in mind that Libya is important to Russia for obvious economic reasons. Libya is also important to Russia because it is very important to Europe. For Moscow, Libya is another battlefield where [Putin] could twist Europe’s arm.

Russia is getting more involved in Libya while everyone waits to see the Trump Administration’s strategy towards Libya. On April 20, President Trump said, “I do not see a (U.S.) role in Libya” during a joint news conference, moments after Italian Prime Minister Paolo Gentiloni called the U.S. role in the country “critical.” This confirms fears of many EU leaders that the U.S. might be heading for disengagement in Libya.

However, Trump’s position on Libya could easily flip, as it did in Syria. But it is important for the Trump Administration to have the right strategy in Libya and not just a reactionary, ad-hoc figure-it-out-as-you go approach.

There are two key issues that any strategy towards Libya has to deal with. First, the legitimacy crisis that led to the current constitutional and legal vacuum. Second, there is the issue of political participation of all Libyan factions in producing a legitimate and representative government. The UN-led peace process was meant to solve the legitimacy issue through the dialogue and consensus process, but has failed.

TCB: Where do you see the situation headed in the short term?

ME: It is very likely that the current status quo will continue throughout 2017. It is important to point out that the term of the LPA and the UN-backed government of national accord ends on December 17, 2017. The president of the House of Representatives has already called for the Higher National Elections Commission to prepare for general presidential and parliamentary elections in February 2018. Given that negotiations based peace process did not yield the anticipated results, a democratic, free and fair elections could be the best way to solve the legitimacy and participation issues highlighted above.

What the United States, Europe and the international community at large can do is to put in place mechanisms and guarantees to support the election processes and ensure they are transparent and fair. Most importantly, the international community, through the UN Security Council, must ensure that elections results are respected and protected.

Additionally, Libya would require two key agreements that need to happen simultaneously:  first, a Libyan Economic Agreement that deals with the management and distribution of Libya’s wealth and ensures equitable and efficient management and distribution of oil revenues between Libyans; and, second, a Libyan Security Agreement that deals with the issue of disarming militias, collection weapons, and the rebuilding of Libyan Armed Forces under civilian oversight and authority, as well as the protection of borders, vital sites, and installations.

TCB: What do you make of the recent meeting between Prime Minister Serraj and General Khalifa Haftar in the UAE earlier this week.

ME: The meeting in Abu Dhabi and the joint communique issued by Prime Minister Serraj and General Khalifa Haftar is a major breakthrough and a significant step in the right direction. However, there are still many details to be worked out. Additionally, there are enough spoilers in Libya that could ensure the meeting does not result in any real progress on the ground. Some Islamist factions that are loyal to the Libyan Grand Mufti in Tripoli, Jufrah and the city of Derna are likely to reject the meeting and its outcomes. Within the city of Misrata some hardline factions have forcefully closed down the city’s democratically elected municipal council and the city is extremely polarized and divided. The hardliners within the city of Misrata are likely to reject the meeting and its outcome. Most importantly, the meeting must be followed by other steps that widen the participation and support base for the new agreement and the upcoming elections.

The key obstacle facing Libya today is the legitimacy crisis that resulted in institutional and legal vacuum. One way out of this conundrum would be holding parliamentary and presidential elections after speeding up the constitution drafting committee and agreeing a constitution for the country. This will ensure the end of the current institutional divide and restore some confidence in governance and the economy. However, any democratic elections will require guarantees from the international community that the electoral process would be free and fair and that the election results are respected.

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This piece was originally published on The Cipher Brief

Can Hamas Afford the Cost of Ending Gaza’s Isolation?

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Palestinian students and supporters of Hamas during a rally ahead of Student Council elections at Bir Zeit University, West Bank, Palestine, April 26, 2016 (Image credit: Majid Mohammed/AP).

by  | World Politics Review

EDITOR’S COMMENT: Observers are watching closely as Palestinian President Mahmoud Abbas meets with U.S. President Donald Trump today at the White House, where the two leaders will discuss prospects for a possible peace agreement. A potential Palestinian-Israeli deal hinges in part on a push for Palestinian unity; Abbas, who leads the Fatah party that governs the West Bank, has recently increased financial pressure on Hamas, the militant group and political party that controls the Gaza Strip, in a bid to soften its hard-line against Israel. Earlier this week, Hamas issued a new charter that moderates its stance on Israelis and Jews, accepts 1967 borders, cuts ties to the Muslim Brotherhood, and seeks to develop stronger ties with Egypt.

These were some of the moves Khaled Hroub outlined last May, as he assessed ways for Hamas to end its ever-growing isolation. According to U.N. reports, Gaza will become “uninhabitable” by 2020—a spiraling humanitarian emergency that only a shift in Hamas’ political positioning could alleviate. “The group’s strategy to defend itself was largely based on strengthening its military while immersing itself in the lives of Gaza’s 2 million residents, making any effort to extract it from power without inflicting unbearable cost on Gaza’s population virtually impossible,” Hroub wrote. “This of course has had great repercussions for Gazans, as some in the outside world have come to view Hamas and Gaza as almost synonymous.” With a new set of principles aimed to improve its international image and promote reconciliation, is Hamas ready to cede ground?

“The real question is whether Hamas can make a concerted push for national reconciliation, which could be the least-costly way out of today’s deadlock.”

Read the full article.

The Significance of the Turkish Referendum

 

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The campaign slogan in Istanbul reads: “YES: Both the Word & the Decision Belong to the Nation” Image credit: CNN

On Sunday, 16 April Turkish voters will decide in a national referendum on the type of their country’s government—whether to retain the (hard fought for) parliamentary system or to opt for an executive presidency. The new constitution (incorporating 18 proposed amendments) abolishes the prime minister’s office and divides power between parliament, as legislative, and the president, as both the head of the state and the chief executive. But that is not all. Technically, the decision making and especially oversight functions of the parliament will be diminished. On the top of it, the new system will give the president an authority to keep control over his/her political party and dominate the legislative branch, politically.

In its opinion published last month, the Venice Commission (a body of constitutional experts of the Council of Europe) concluded that “the substance of the proposed constitutional amendments represents a dangerous step backwards in the constitutional democratic tradition of Turkey.” Moreover, the Commission stressed “the dangers of degeneration of the proposed system towards an authoritarian and personal regime” and warned that the “the timing is most unfortunate and is itself cause of concern” due to the state of emergency in Turkey (a concern shared by many analysts that the current situation gives the new constitution’s main proponents–that is, President Recep Tayyip Erdogan and his ruling Justice and Development party (AKP)–a high hand in promoting their stand).

These and other arguments expressed by various international organisations and independent think tanks mostly concern the implications of the proposed constitutional amendments on the state of democracy and human rights in Turkey. What about its foreign policy and the role Turkey has traditionally played in regional affairs? In his analysis published through Reality Check series of the Geopolitical Futures, Jacob L. Shapiro claims that the referendum outcome does not matter in this respect, for regardless of the result, Turkey will continue rising as a regional power.

“Regardless of whether Erdoğan stays in power or another leader takes over, Turkey will continue maturing as a nation and becoming a regional power surrounded on almost all sides by unenviable threats. If the referendum passes … [nothing] will be as determinative as the geopolitical constraints forcing Turkey back into the pantheon of the world’s major powers. On that, Turkey doesn’t get a vote – and its increase in power will define the country’s future more than any referendum can.”

Read more via Geopolitical Futures

Tied-up in the Rashomon Controversy: Information Warfare & Political Divides

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Reflections on the week passed

by Elbay Alibayov

The Rashomon effect

Perspective matters. The way we look at things, especially if we have a strong emotional connection with the object, has a potential to (at times, profoundly) influence what we will arrive at in the conclusion. And given our natural inclination to explain things by either establishing strict cause-effect relations between two or more events or finding a pattern (trend) of the things occurring this conclusion often-time is not exactly reflecting what is out there (put simply, is false) but comes with appearance of being reasonable.

How else would you explain a circumstance when a number of witnesses offer their own—contradictory but equally plausible—accounts of the very same event? Moreover, this happens in a situation when there is no other (“verifiable and objective”) evidence to counter any and all of those statements. This is known as the Rashomon effect, owing its name to Kurosawa Akira’s 1950 famous film. In the original story it concerns the human recollection, but is equally applicable to perception. Interestingly, the film’s plot is based on two short stories by a brilliant Japanese writer of the early 20th century, Akutagawa Ryūnosuke, who also happened to hold that how the story was told was more important than its content and plot—quite a relevant hint to understanding the psychological effect he coined.

The campaign

Psychologists have studied this sort of phenomena (known as biases and fallacies) for decades, yet in controlled, lab conditions. While there are numerous real life cases unfolding right in front of our eyes. Take for example the ongoing story about the alleged Russian (dis)information campaign in an attempt to influence the outcome of the last year’s presidential election in the United States. Not one, but three separate investigations have been set up to look into the issue—the House, the Senate, and the FBI-led. And I suspect the story is only gaining momentum.

Everyone is excited, this way or another. Especially politicians and the media—as soon as they smell blood, they are instinctively driven there with the growing hype. This explains (in big part I assume) the overwhelming number of articles, posts and reposts, statements, comments and opinion pieces in the mainstream and social media alike—ringing alarm bells that the American democracy is under threat. Quite a campaign, in its own right.

In turn, those who reject any connection with the alleged Russian information attack, and especially dismiss its influence on the election outcome, build their counter-argument. Customarily, President Trump also took the issue to the social media, in a tweet which became instant classic (if to measure by the number of media referencing it): “Mike Flynn should ask for immunity in that this is a witch hunt (excuse for big election loss), by media & Dems, of historic proportion!”

The real threat

Well, to be fair, everyone can be caught up in the perspective trap. And I mean it—everyone. Even experienced political analysts and intelligence experts for whom the propaganda/counter-propaganda game is daily bread (including those who join a certain camp because they have to). I read this week numerous comments on the subject, and what I found common among those otherwise politically distinct view holders was almost unanimous conviction that a Russian disinformation campaign targeting the 2016 election was (almost solely) responsible for generating deep social and political divisions within the American society and aggravating the mistrust to a degree that poses a direct threat to the underlying values of liberal democracy.

Really? One propaganda campaign? By a well-known rival? Let’s not fool ourself: no external actor (whatever strong and technically savvy) can create “serious socio-political divisions” (and especially in such a short time span) anywhere, let alone in America. Those divisions are there as a result of decades-long (and mostly overlooked) processes—that are continuously influenced (constrained or reinforced) by and, in turn, themselves exert influence onto a set of internal, country-specific (e.g. wealth redistribution) and external (e.g. globalisation) contexts and structures—that signal their existence through a broad range of manifestations, at any given point in time. And it is not something specific to America—today, almost all countries across the globe, from liberal democracies to those run by authoritarian regimes, face similar social, political and ideological problems.

And to be sure, it was not a “conflict-ridden” election campaign of both the Republican and the Democrat candidates that divided the society, but to the contrary—they merely resulted from, reflected the existing divides. To sum up, if there is a serious threat posed to American democracy, it definitely comes from within. I understand that it is very tempting to find someone from the outside (especially if this “someone” is a decades-long foe who does not need further introduction to the audience) and blame all the problems on them… but it is not the case I am afraid.

Getting it right

This is not to say that the Russian intelligence services haven’t disseminated certain symbols (words, images, etc.) and manufactured information products (like “fake news”) with an intention to deliberately influence perceptions, attitudes and behaviours of the Americans. They do it all the time, to be sure. This is known as propaganda. But they are not alone—reciprocally, so does the intelligence service of any major player on the territory of their rivals (and allies too, at times), be it the intelligence community of the United States, Britain, China, or Israel.

Nothing new here. Simply this time around the FSB (or GRU) took advantage of what was already there. Just like the CIA did to the Soviet Union back in the late 1980s (when the latter struggled to reform while facing deep social, economic and political divisions married with the rise of nationalism, lack of trust in the system and institutions of power, particularly the elites). As a respected security advisory firm has rightly observed: “The U.S. is already so politically divided that Russia and its online army have had to do little more than plant a conspiracy theory, fan the flames, and then watch as it burns across social media and into the belief systems of millions of Americans.” Now this looks as correct perspective.

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Ukraine and the Game of Geopolitical Go

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Image Credit: Sasha Maksymenko

by Elbay Alibayov

Political skills are frequently compared to chess-playing. However, it is the game of Go that comes closest to the art and craft of geopolitics. Go is a territorial game, where objective is to control more territory than the opponent. And the playground is big enough to allow performing poorly (or failing) in some areas but still winning the game by doing better on the board as a whole. Ukraine is the case in point.

Another milestone

Three years ago, on 18 March 2014, the self-proclaimed independent Republic of Crimea signed an accession agreement with Russia that resulted in forming new constituent entities within the Russian Federation. The agreement was signed two days after the citizens of Ukraine’s then Autonomous Republic of Crimea and city of Sevastopol voted to join the Russian Federation at the independence referendum (which was not recognized by the Ukrainian authorities). The move was (and still is) regarded in Russia as an historic act of “reunification”, while it was met with an outcry on the West and in the neighbouring countries, and was largely branded as the final act in “Russian annexation” of the Crimean peninsula (further to military occupation in February that created the conditions for the referendum).

For those observers who are familiar with historic background of the Russo-Ukrainian relations and their geopolitical context, it did not come as surprise though: the issue of Crimea (and especially the port of Sevastopol) and subsequent eastern Ukraine separatism are just another milestones on a long route of settling the relations between Russia and Ukraine in contemporary, post Soviet, history. Which itself is just a small section of a millennium long common history, with its numerous zigzags, highs and lows, infightings, controversies and moments of common pride (it is enough to remind that the Russian and Ukrainian statehood has started from Kievan Rus’ of 9-13th centuries; while Crimea becoming firmly part of the Russian Empire after the 1783 annexation and then changing hands in the course of the 20th century).

Sevastopol and national security

The irony of Russian geography is that, in spite of having a vast territory stretching from East Europe to the Far East, Russia is comparable to a land-locked country in terms of useful naval access to the world’s main theatres of action. That is why Crimean peninsula scores high in Russia’s national security strategy, and she cannot afford losing it. It is obvious that Crimea’s annexation was only an issue of time. The work in this direction started early in the post-Soviet times—already in the 1990s some Russian nationalist politicians were declared persona non grata, for meddling into Ukrainian internal affairs (under the pretext of protecting the interests of ethnic Russian or “Russian speaking” population).

Since the collapse of the Soviet Union, Russia and Ukraine were negotiating the division of fleet and military and naval bases inherited by the newly independent states. From 1997 Russia was leasing the military bases of Sevastopol port from Ukraine, as per Partition Treaty. For quite some time, the sides were using their bargaining chips (gas supply and transit from Russia vs. Sevastopol bases of Ukraine) within tolerable margins.

Things became complicated once the United States and the European Union backed pro-democracy opposition groups started challenging the established status quo. Even worse for Russia, once coming to power after the so-called “orange revolution” of 2004-05, they began openly threatening to discontinue the leasing (which was due to expire in 2017). The situation temporarily normalized when the pro-Russian president Viktor Yanukovych was installed in Kiev. The agreement was immediately renewed and extended for another twenty-five-year period until 2042 (known as the Kharkiv Accords).

However, the Euromaidan protests of the opposition forces in 2014 saw Yanukovych ousted, and that was a signal for the Russian military that the time has come for action. Russia simply could not allow this happening. Honestly speaking, no one (at least among actual or those aspiring to be great powers) would.

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Crimea: a done deal

So where is Crimea now? The answer is simple and clear: Crimea is gone; forget it. It has quickly passed a grey zone (limbo, if you wish) of “no return—no further transformation” and has comfortably integrated into the Russian state. And it seems that, over time, everyone has accepted this stand of affairs.

No return means that there is no chance Crimea will be part of Ukraine ever again, given its strategic, even existential, importance to Russia: Crimean peninsula is the only place that hosts its Black Sea Fleet—one of very few outposts from where Russia can defend its southern borders and geopolitical interests in the region, as well as project its strategic offensive capabilities globally. Moreover, since the annexation Russia has deployed additional forces to strengthen its surface and sub-surface combatants and amphibious primary based in Sevastopol, Karantinnaya and Streletskaya Bays, as well as naval aviation and air defence located in nearby bases along with naval infantry.

On the other hand, there was a smallish chance that Crimea would be formally recognized as an independent state by other states and the UN any time soon. That meant no transformation into a fully fledged sovereign state; and declaring independence while being de jure part of Ukraine and de facto Russia’s satellite did not seem a feasible option, either. The only transformation from the grey zone practically justifiable (and the one that Russia did not hesitate undertaking) was integration—that is, Crimea becoming formally the part of Russian Federation. Therefore, for Russia (and by extension for all others) Crimea can be considered (at the very least, for the visible future) as fait accompli.

Eastern Ukraine: a prize no one dares to win

Eastern Ukraine, particularly people’s republics of Donetsk and Lugansk of the Donbass region (acronym for Donetsk [Coal] Basin), is following suit. The circumstances of Donbass are different from those of Crimea, but the destination is the same—into the grey zone where it becomes a low intensity irritant and a bargaining chip. The principal difference being that the Donbass entities are going to stay there at least in the immediate to medium term, if not indefinitely. There are reasons for that.

First comes the superiority of objectives. For Russia, the Donbass uprising has served as a supplement, to distract attention from Crimea and allow settling the primary issue (i.e., everyone to accept Crimea’s secession and integration, or annexation, even though without overwhelming formal recognition internationally) while creating a buffer zone and a constant irritant in Ukraine that will make the neighbor’s government vulnerable and more dependent on Kremlin, to extent necessary for keeping it on a safe distance from the meaningful, full-blown Euro-Atlantic integration.

Moreover, there is a principal difference between Crimea and Donbass in terms of conflict dynamics and political economy. The former was taken in a clinically performed operation and today is firmly controlled by Kremlin and does not seem to create any problems neither within its federal entity borders nor to its neighbours (I even read the reports in Russian media about how much Crimean Tatars, who initially were opposed to secession from Ukraine, come to “appreciate their newly obtained liberty”). For anyone raising their voice of concern (it still occasionally happens nowadays), the Russian Foreign Minister Sergey Lavrov has an immediate response pointing to Kosovo. Legalists may debate the nuances of course, but it hardly would affect the real situation on the ground.

This is not the case with Donbass and its two self-declared entities—Donetsk and Lugansk people’s republics. Political economy of the conflict here includes numerous non-state actors, ranging from separatist groups to anti-Russian paramilitary battalions with diverse ideologies and allegiance, and various gangs who proliferate from the chaos and lawlessness and thus are interested in sustaining the present situation rather than ending the war. They have seized control of many industrial sites and are engaged in all sorts of illicit production and smuggling activities as within the region so across the borders.

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According to reports, separatists have seized control of steel mills, coal mines and other enterprises, and up until recent were trading with the government controlled territory.  In turn, paramilitary battalions (such as Azov, Aidar, Tornado), as revealed in international investigations, ignore the rule of law and “have been involved in widespread abuses, including abductions, unlawful detention, ill-treatment, theft, extortion, and possible executions.” Paradoxically, such groups may be of lesser headache in a low intensity conflict and lack of state control than in post-conflict situations when they play a destabilizing role and undermine the rehabilitation and state-building attempts of central authorities.

Next, Donbass is not of existential importance to Russia. Given the outdated infrastructure, degraded condition of coal mines and steel mills of the region (all demanding quite urgent and considerable investment with doubtful prospects of competitiveness), it does not represent such a great economic value to Ukraine either. The cost of physical rehabilitation is estimated in tens of billions dollars; who is going to pay for that?

To sum up, today neither Russia nor Ukraine has an appetite for fully embracing the Donbass, for it will come at prohibitive economic, social and political cost. The intricacy of Ukraine’s position is well summed in one of recent articles: “The good news is that Ukraine is prepared for all-out war with Russia; it is also prepared for and could cope with aid cutoffs from Washington and the end of sanctions. The bad news is that Kiev is thoroughly unprepared for the one scenario that could destroy Ukraine at little cost to Putin: Russia’s return of the Donbass.”

Power the aim, people not in equation

For the time being the strategic positioning of sides to the conflict over control of territories in Crimea and eastern Ukraine has been temporarily settled. “Temporarily” here may mean without meaningful change for decades to come, however. It appears that such a solution serves the interests of all state and non-state actors involved, directly or indirectly.

This is true for the status of Crimea, but becomes increasingly so with regards to Donbass and the implementation of Minsk II agreement that ought to bring peace to the troubled region. Two years after its signing, some analysts observe that “as the Minsk 2 process is now merely a self-sustaining diplomatic fiction, it has consequently become pointless; but it has also become indispensable. The present status quo and ‘neither war nor peace’ scenario is benefiting everybody, including the international community, as it justifies its lack of deeper involvement.”

“Benefits everybody”… well perhaps it is fair to say that it serves all but the ordinary citizens. And they are those who are paying the ultimate cost of the conflict. According to UN Human Rights Commissioner’s data, about ten thousand people have been killed (including two thousand civilians) and close to twenty-three-and-half thousand injured since the mid-April 2014. And it does not count the displacement, loss of jobs and hard earned property, the minimalist services and quality of life, insecurity of daily life and uncertain future, etc.

But hey… let me put it straight: people (whether human lives or their well-being) are never taken into geopolitical calculus by group actors, independently of what they claim in their public statements. Just look around… Whether we like it or not, the rule established by humankind since the dawn of civilization is that in political game, including the geopolitical game of Go, anything else but power can be sacrificed.

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