The difficult task of defeating ISIS and other terrorist groups that emulate them
Bruce Newsome.
ISIS (the Islamic State of Iraq and al-Sham; more transliterately known as the Islamic State of Iraq and the Levant, or ISIL; most derogatively known by its Arabic acronym “Da’ish”) is an effective state and must be defeated as a state, before its other risks (civil war, terrorism, insurgency, genocide) can be contained. Although many officials are unwilling to admit ISIS’ self-declared transition to an “Islamic State,” we should – for strategic purposes – admit its effective statehood, even though we should continue to deny its legitimacy. In fact, we should realize the advantages of fighting a state, but not with current strategy.
ISIS has declared a worldwide caliphate (Islamic government). This ambition is materially beyond al-Qaida’s: al-Qa’ida wanted to stimulate a cosmic war between its restrictive religious adherents and the infidel, but never led material aggrandizement on earth, except perhaps in Afghanistan in the 1990s.
ISIS’s reach
For now, ISIS does not govern the world, but it governs most of eastern Syria and north-western Iraq, while groups from Egypt (Ansar Bait al-Maqdis) through Libya (Barka Province) to Algeria (Jund al-Khilafah) have changed their names to match, and mature Jihadi groups have pledged allegiance or alliance as far away as Somalia (al-Shabab), Nigeria (Boko Haram), Pakistan (Jundallah), and Malaysia (Abu Sayyaf).The Islamic State’s territorial control has included Iraq’s third largest city (Mosul) since June 2014, and the northern suburbs of Baghdad since October 2014.
The Islamic State has captured military stockpiles in Syria and Iraq that include main battle tanks and surface-to-air missiles of almost the latest Russian and U.S. models. The Islamic State’s finances rival a wealthy state, including:
- some proportion of around $200 million in under-accounted charitable aid to Syria in 2014 alone;
- crude oil supplies worth from $1 million to $3 million per day;
- around $20 million from ransoms paid directly in 2014
- looted ancient archeology worth millions more;
- perhaps $1.5 billion in cash captured from Syrian and Iraqi banks;
- lucrative border crossings with Turkey, Syria, Kurdistan, Jordan, and Saudi Arabia; and
- taxes and tithes.
The Islamic State’s subjects include between 6 million and 8 million civilians – focused in the Syrian and Iraqi Sunni heartlands, more conformist with fundamentalist Sunni Jihadism than ever – by self-selection and genocide. The declaration of caliphate implies an obligation on “Jihadis of the sword” everywhere to join in its defense and expansion. Volunteers from more than 80 countries have joined ISIS – about half of them have emigrated from the relatively wealthy and free West. Where al-Qa’ida urged Westerners to take the great risks of striking locally, usually without outside help and without probable success, ISIS offers the psycho-social appeal of physical camaraderie in an enduring campaign. Material success reinforces the cosmic claims. If ISIS can establish a caliphate and survive, despite hostility from the rest of the world, then, so Jihadis claim, their divine superiority is proven. The persistence of the state is self-reinforcing.
Aerial bombing
Ironically, an Islamic State is more exposed than the non-state actors from which ISIS was formed. ISIS is occupying and governing territory, within a largely flat, unobscured natural environment, without significant air or water transport, moving between cities on a few bold highways, sometimes with captured military trucks, tanks, and tank transporters, which are the easiest weapons to observe from the air.The trouble with an air campaign is that aircraft alone cannot flush out ground forces. Jihadi insurgents normally travel in civilian vehicles, which are effectively indistinguishable from collateral traffic, unless ground intelligence has identified the particular vehicle in which a particular target person is travelling at a particular time. Jihadis have taught each other to hide these unobtrusive vehicles in buildings or under natural materials and to live among non-combatants. An air campaign against terrorists/insurgents inevitably causes collateral harm to the persons and infrastructures within which terrorists/insurgents operate, thereby apparently proving the non-state side’s frequent claims that the state is the real terrorist. If air campaigners want to avoid these collateral risks, then they must focus on large sedentary assets in barren areas, such as oil derricks in the desert. This is effectively the current counter-ISIS strategy. It cannot defeat ISIS.
A lot of nonsense has been written about current strategy, such as the claim that it is a counter-terrorist strategy. It is not; aerial bombing is a conventional modern counter-state strategy. It is the least efficient and least decisive strategy, even more so against the Islamic State in 2015 than against Germany in 1945. The Islamic State is not dependent on heavy industry or urban infrastructure; it does not mourn fatalities so much as glorify divine selection of the victims into heaven or hell; it presents collateral casualties as proof of the infidels’ moral illegitimacy; it uses air strikes as evidence of cowardly unwillingness to fight on land. The air strategy has been chosen not for its effectiveness in defeating ISIS (indeed, US President Obama has carefully promised to “degrade” ISIS), but for its effectiveness in reducing the exposure of friendly personnel, while still offering spectacular images of destruction.
Democracies favor remote strike weapons, as launched from expensive platforms such as aircraft and ships, because they offer great destruction at the target without necessary ground involvement. Personnel on the ground could be captured, wounded, and killed by simple technologies that cannot harm aircraft or ships (as simple as pistols, knives, and automobiles, in most of the latest Jihadi terrorism in Europe, Israel, and China). Democratic governments fear political punishment for ground casualties more than for the great material expenses and ineffectiveness of remote strike campaigns, which are not as easily accounted as are human casualties.
An air campaign does not expose friendly personnel on the ground until a pilot is shot down or crashes in enemy territory. This was the terrible fate of the Jordanian pilot (Moaz al-Kassasbeh) whom ISIS captured in December and burnt to death in February. In response to his capture, the United Arab Emirates had stopped air strikes pending some reassurance that the coalition’s capacity for rescuing downed pilots could be improved. In retaliation for his death, Jordan stepped up its air strikes in Iraq. UAE joined in. Egypt has stepped up its strikes in Libya, in response to ISIS beheading Egyptian nationals on the ground there, and has accepted inevitable criticism of the high collateral casualties
Retaliation is not a new or an effective military strategy – it just offers domestic political advantages over doing nothing. The retaliatory motivations of the latest air strikes, and the counter-productive collateral harm, increase the net disadvantages.
Ground forces
Air strikes alone are indecisive without a ground campaign to flush the terrorists/insurgents out of their hiding places and to contain them for separation from ordinary civilians. In response, terrorists/insurgents must fight, pretend to be non-combatants, or flee. Fighting against enemies on the ground offers a much higher chance of harm, since ground troops (unlike air-delivered missiles) can sustain and adapt the fight at short ranges. Terrorists/insurgents who pretend to be non-combatants are exposed to their enemy’s policing and their co-conspirator’s betrayal. Those who break free of their urban shelters expose themselves to air attack, helped by the reliable intelligence that only a ground presence can provide.
The ground component could be provided by local ground forces, but they are self-interestedly focused on securing their own claims, not on defeating ISIS. For instance, Kurdish ground troops and Western air strikes helped to drive ISIS out of Kobani, on the Syrian side of the Turkish border, but that battle lasted from October to January, when ISIS gave up, leaving few dead behind. In February, Kurdish troops advanced back to their self-declared borders short of Mosul, but the situation is properly described as a stalemate. Also in February, Turkish troops entered Syria to secure an Ottoman shrine, which they shortly evacuated to Turkey, again without any intent to defeat ISIS.
On 20 February, a careless spokesman at Central Command (the US military command responsible for the Middle East) gave background information to journalists about a plan for Iraqi ground troops to retake Mosul in April or May, supported by Western air strikes, but Mosul is under ISIS control because Iraqi troops largely abandoned their posts last year, and Iraq has not observably improved its military’s will since then, except to negotiate more US tanks and helicopters.The Shia regime in Syria has been most engaged in fighting ISIS and its allies since they joined the rebellion there in 2011, while Iran has expanded its presence in Iraq since the US-led coalition defeated the Sunni regime in 2003, and supports proxies (such as Hezbollah) in Syria, but the US government has repeatedly ruled out military cooperation with either state.
Each of the Middle Eastern actors has naturally selfish interests in fighting ISIS. Even if one expected that any of these actors would develop both the capacity and the will to defeat ISIS, rather than just selfish containment or retaliation, they are split by sectarian religious disputes (largely between Shia majority governments in Syria, Iraq, and Iran and Sunni majority governments elsewhere), as well as ethnic divisions (most obviously between Turks, Kurds, Arabs, and Persians).
To defeat the Islamic State and contain ISIS fighters, the ground campaign would need to be led by first-tier Western armies, would need to be of a scale equivalent to the invasion of Iraq in 2003, and would need the cooperation of Iraq’s neighbors, so that Iraq’s borders can be closed, otherwise ISIS fighters would escape to other failed states. This cooperation would need to include not just Western “allies” Kurdistan and Turkey, but at least tacit cooperation from Western “enemies” Syria and Iran. The greater challenge would be to keep Syria and Iran from expanding their presence in Iraq, which is another reason for the West to lead and to commit sufficient capacity to defeat ISIS without dependency on any foreign state. The West could not even rely on Iraq, but would need to plan to reconstitute Iraq’s central government as the representative secular state that the previous coalition failed to leave behind in 2008.
Terrible threshold
Western intervention of the scale and scope required to defeat ISIS will not happen, given popular aversion to further ground commitments of the type that failed to stabilize Afghanistan and Iraq already, and the elite’s political correctness and complacency about the true risks presented by a caliphate. For the West to even consider the commitments necessary to defeat ISIS, it would need to be provoked by ISIS with some diabolical outrage many times more lethal or more proximate to Western homelands than any of its outrages so far. Almost certainly a terrorist outrage like that of 11 September 2001, in a Western homeland, would provoke Western invasion of the Islamic State. However, that is a terrible threshold for which to wait. Politicians, even democratic politicians, have obligations to guide, as well as to follow, their citizenry’s popular will. This guidance should begin with honesty about both the ineffectiveness of the current strategy and the true risks of leaving an Islamic State to consolidate.
Without a Western-led invasion, ISIS will dominate its current territory indefinitely, in yet another lingering civil war, in yet another failed state, with yet more contagion to other states. Consolidating its territory over years if not decades (an average civil war lasts 7 years; some have lasted 30), it would certainly redirect its idle capacity to the homelands of its avowed but indecisive enemies, as Jihadists always promise.
Are critical national infrastructures safe from cyberterrorism?
Holly Ellyatt.
A cyberterror attack on vital national infrastructure such as power facilities, transport networks and the financial sector could be imminent—and international governments are ill-prepared, cybersecurity experts have warned.
"It's not easy to predict what will happen, but the worst terrorist attacks are not expected," Eugene Kaspersky, the co-founder and chief executive of global IT security firm Kaspersky Labs, told CNBC.
"So I am afraid that if we face this cyberterrorism, it will be very unpredictable in a very unpredictable place, but with very visible damage. Unfortunately, there are many possible victims."
In recent months, the business world and political establishment has seen an uptick in the use of debilitating digital attacks. As well as the Sony attacks, allegedly by North Korea, and the widespread hacking of international news agencies by the "Syrian Electronic Army," On Monday, Malaysian Airlines refuted that its website had been hacked by a group calling itself the "Cyber Caliphate" and claiming affiliation with the Islamic State (ISIS).
Critical infrastructure'
Now, there are concerns that the next big attack will be against national critical infrastructure and could cripple a country's ability to function.
Kaspersky told CNBC that each country needed to make a "very serious audit" of the critical infrastructure within its borders. In order of importance, he noted that the infrastructure most vulnerable was the power network, "because if the power plants and power grid don't work, then nothing else works," followed by telecommunications, financial services and transportation.
"A security strategy needs to be made for all of these components," Kaspersky said.
He warned that governments needed to allocate a good part of their budgets over the next decade to making critical infrastructure systems more secure.
"Technically it's possible to make them immune from attacks, but it's complicated, it's expensive and it will take time and budgets," Kaspersky said.
A cyberterror attack on vital national infrastructure such as power facilities, transport networks and the financial sector could be imminent—and international governments are ill-prepared, cybersecurity experts have warned.
"It's not easy to predict what will happen, but the worst terrorist attacks are not expected," Eugene Kaspersky, the co-founder and chief executive of global IT security firm Kaspersky Labs, told CNBC.
"So I am afraid that if we face this cyberterrorism, it will be very unpredictable in a very unpredictable place, but with very visible damage. Unfortunately, there are many possible victims."
In recent months, the business world and political establishment has seen an uptick in the use of debilitating digital attacks. As well as the Sony attacks, allegedly by North Korea, and the widespread hacking of international news agencies by the "Syrian Electronic Army," On Monday, Malaysian Airlines refuted that its website had been hacked by a group calling itself the "Cyber Caliphate" and claiming affiliation with the Islamic State (ISIS).
'Critical infrastructure'
Now, there are concerns that the next big attack will be against national critical infrastructure and could cripple a country's ability to function.
Kaspersky told CNBC that each country needed to make a "very serious audit" of the critical infrastructure within its borders. In order of importance, he noted that the infrastructure most vulnerable was the power network, "because if the power plants and power grid don't work, then nothing else works," followed by telecommunications, financial services and transportation.
"A security strategy needs to be made for all of these components," Kaspersky said.
He warned that governments needed to allocate a good part of their budgets over the next decade to making critical infrastructure systems more secure.
"Technically it's possible to make them immune from attacks, but it's complicated, it's expensive and it will take time and budgets," Kaspersky said.
'War Games'
Speaking at the World Economic Forum in Davos, John Chambers, CEO of Cisco, says the number of cyberattacks on company's will be worse in 2015 than last year.</p>
Budget cuts in the U.K. and Europe have undoubtedly challenged government attempts to counter cyberterrorism, but a spokesperson for the U.K. Cabinet Office told CNBC that cybersecurity was a priority.
"Cybersecurity is already a tier-one national security priority and our investment of £860 million ($1.3 billion) over five years in the National Cyber Security Programme (NCSP) supports a wide range of projects to develop the U.K.'s cyber security capabilities. This is a clear signal of just how seriously the Government is treating the threat," the spokesperson said.
Kaspersky noted that there needed to be far stronger international cooperation against cyberterrorism, including in the sharing of information, in order to relay early warnings ahead of potential attacks.
The U.K. and U.S. have already pledged to work together in a bid to remain one step ahead of terrorism groups like Islamic State that are increasingly using computers as means of attack.
In particular, there are the so-called war games involve "cybercells" of U.S. and U.K. intelligence agents staging attacks against each another, in order to test the resilience of certain sectors to cyberattacks. The first exercise will test the financial sector, with simulated attacks on the City of London, including the Bank of England, and Wall Street.
Fighting the attacks
E.J. Hilbert, the heads Kroll's cyber unit for Europe, the Middle East and Africa, told CNBC that hundred, if not thousands attacks were already taking place—and that more attacks were coming.
"There are hundreds of attacks taking place against the U.K. and U.S. nuclear industry and financial system every day. There is this non-stop badgering of the system by hackers who are hoping that one day the system will crack," said Hilbert, a former FBI agent in the cybercrime and counterterrorism field.
He was emphatic that national governments were unprepared for a cyberattack on critical infrastructure. He said that the proposed "war games" would have limited effect in acting as a pre-warning to governments on the weaknesses of critical systems.
"These tests don't do what the bad guys are going to do, they don't go far enough. If the bad guys want to shut a system down, they'll shut it down and unless you've tested for that, you don't actually know if there's a way of bringing a system back," Hilbert said.
If an attack is so bad that all else has failed, governments can always choose to shut down their own infrastructure systems. But taking such steps can have alarming consequences, such as lack of power if power plants are shut down, lack of water if water facilities are closed, and permanent system failure.
With that in mind, Hilbert said "it might be better to fight the attack then shut down the system."
Cyberspaces and Global Affairs
Sean S. Costigan.
Reviewed by Andrew Whiting.
This book consists of a series of chapters covering a multitude of different topics under the title Cyberspaces and Global Affairs. Split into three parts, the book examines: cyberspace and security; the challenges ICT poses for politics, society and the individual; and finally, the difficulties surrounding both the ‘information overload’ (p. 319) and the ‘digital divide’ (p. 239). The scope of each contribution varies greatly, with some concentrating on broad international topics such as cyber-war, and others focusing on how ICT has impacted on particular case studies including, but not limited to, corporations such as Google, a national comparison between China and India, and a regional study of the Middle East. Each chapter adds to the fundamental argument in its own particular way: that ICT, and in particular cyberspace, has had a tremendous impact, both positively and negatively, across several different domains. This book is aimed at ‘scholars, students and lay people with an interest in this emerging and increasingly salient field’ (p. xxi) and, due to its breadth, would be appropriate for anyone looking for an introduction to the political and societal impact ICT has had.
Reviewing this book as a whole fails to do the individual chapters justice. The book makes a compelling argument that ICT has played a significant role in changing politics and society. However, this in itself is not a particularly ground-breaking thesis. Additionally, read cover to cover, the different chapter formats and writing styles hinder the book's flow. Hence, the editors stress that ‘this book is meant to be sampled’ (p. xxi).
Reviewed as the sum of its parts, several of the chapters succeed in making significant and thought-provoking arguments, utilising well-researched empirical data, as well as an engaging combination of different analytical and methodological approaches. The mixture of qualitative and quantitative research, case studies and opinion pieces (viewpoints) provide a refreshing outlook and will appeal to a large audience. Split into 27 chapters, this book is ambitious and the breadth of the study does mean that particular topics feel underdeveloped, serving more as introductions than in-depth analysis. The foreword acknowledges that this book ‘can be no more than a chapter in what must inevitably be an ongoing examination’ (p. xx) and it serves as a well-written and topical series of engaging introductory articles that will, hopefully, encourage the reader to pursue some of the topics in greater detail.
Terronomics
David Gold and Sean S. Costigan.
Reviewed by James Boswell.
Today, no single issue dominates the global political landscape as much as terrorism. Aware of their unique position in the newly unipolar world, terrorist leaders have articulated that economic warfare is a key component of the new terrorist agenda. Governments have accentuated the role of economic tools in their counter-terrorism policies while maintaining emphasis on the application of military force, or 'hard power', even though such tools often prove unnecessarily blunt or even sorely inadequate. Given the complexity of the global threat posed by modern transnational terrorist groups, combating terrorism with a mix of 'hard' and 'soft power' is more important than ever.
As an invaluable new book in terrorism studies, Terrornomics brings together contributions from renowned international scholars and practitioners to provide a multifaceted view of contemporary financial counterterrorism and terrorist funding efforts. It employs key concepts, terms, case studies and policy recommendations to advance our understanding of the threats and possible courses of action, thus enabling us to grasp the critical financial and economic issues while providing potential counterterrorist strategies.
To make sense of what ails the Naira, you must understand this!!
The economics of exchange rates.
Countries have multiple choices when it comes to exchange rate policy. At one end are the floating exchange rate regimes where the price of the local currency is determined only by market forces. If travelers, importers, exporters, and international investors demand more (or less) of a certain currency, its price goes up (down).
At the other end are the fixed exchange rate regimes where the government does not allow the value of the currency to change. If the demand for the local currency increases, then the government starts selling local money to stop the appreciation. If the demand for the local currency decreases, the government starts to buy local money (using its reserves of foreign currencies) to stop the depreciation. These sales and purchases are called foreign exchange market intervention.
Note that the exchange rate of the Argentine peso was fixed during the 1990's and was flexible thereafter. In other words, countries could have different exchange rate regimes over time.
Fear of floating
There are very few countries that have a purely floating exchange rate. Only the very large economies such as the U.S., the eurozone, and Japan have policies that come close to that type of a currency policy. However, even these countries occasionally interfere in currency markets. Fixed exchange rates are more widespread but most countries have the so-called managed exchange rate regimes, also known as "dirty float." Under that policy, currency values are allowed to adjust to market conditions. However, if exchange rate changes become too large, the government or the central bank of the country intervenes to keep currency values within certain bounds.
Why so few countries have a floating exchange rate? The reason is that large changes in currency values create uncertainty and instability. If the local currency appreciates fast and by much, domestically produced goods and services become expensive on international markets and exports decline. If the currency depreciates fast and by much, the prices of imported goods would increase sharply and will cause high inflation.
Even if currency values don’t change much, the mere possibility that they might change drastically in the future creates problems. Would you buy investment assets in a country with an unstable currency? Probably not. Hence, we have the “fear of floating” phenomenon, a term coined by Guillermo Calvo and Carmen Reinhart, two well-known international economists.
Other exchange rate regimes
The fixed, flexible, and managed float regimes are part of the range of options available to countries. Other alternatives include dollarization when the local money is replaced with the dollar or the euro, currency boards when the government fixes the exchange rate and keeps very large foreign exchange reserves, and currency unions where several countries use the same currency. Another regime that is no longer in existence but was prevalent in the past is the gold standard.
What factors determine the exchange rates?
The exchange rate is the price of one currency expressed in units of another currency. For example, at the beginning of 2012, 1 U.S. dollar exchanged for about 13 Mexican Peso, 1 euro exchanged for 4.3 Polish Zloty, and one Brazilian Real exchanged for 0.57 Canadian Dollars. We say that a currency is appreciating/depreciating relative to another currency if it takes more/less units of the other currency to purchase it.
The exchange rate appreciates when the demand for the currency increases, i.e. when more people want to buy it and depreciates when the supply increases, i.e. when more people want to sell it. Look at it from the U.S. perspective. Foreigners want to buy dollars when they:
- Invest in the U.S.
- Buy goods and services from the U.S.
At the same time U.S. citizens sell dollars when then they:
- Invest overseas.
- Buy foreign goods and services.
Holding all else constant, if foreign investment in the U.S. increases, this will create more demand for dollars, and the dollar will appreciate. Similarly, when U.S. citizens increase their international travel, that creates additional supply of dollars and the dollar will depreciate.
Several examples
U.S. interest rates increase. That leads to greater foreign investment into the U.S., greater demand for dollars, and dollar appreciation.
New tariffs on U.S. exports to Europe. Now foreigners buy fewer U.S. goods, the demand for dollars declines, and the dollar depreciates.
The U.S. economy is growing rapidly. On one hand, that attracts foreign investment and causes dollar appreciation. On the other hand, U.S. imports increase since Americans can buy more international goods and services and cause dollar depreciation. We are not sure which effect would be stronger but usually a growing economy is associated with an appreciating currency.
Expected appreciation of the dollar. If for some reason investors believe that the dollar will appreciate in one year, they will want to buy it now. This creates additional demand for dollars and leads to appreciation now.
If you wonder what the effect of some macroeconomic variable on the exchange rate is, ask yourself how, holding everything else constant, that variable affects the demand or the supply of the currency. Based on that, you can determine if the change is likely to lead to appreciation or depreciation.
Forecasting currency values: short, medium, and long run
Of course, in reality there are multiple macroeconomic changes occurring at the same time. Interest rates may be changing in various countries, GDP growth rates differ, trade flows shift, etc. The combination of all these factors makes it virtually impossible to predict the exchange rate at short horizons (days, weeks). Too many fundamentals are moving in different directions at the same time. Therefore, economists say that the exchange rate follows a “random walk”, i.e. the best forecast of tomorrow’s exchange rate is today’s exchange rate. The likelihood of appreciation and depreciation are the same.
At medium-term time horizons (months, a few years) the effect of particular macroeconomic fundamentals on the exchange rate becomes more visible. For example, if the economy is growing rapidly its currency is likely to appreciate as the country attracts international capital that creates demand for the local money.
In contrast, in the long-run (many years, decades) macroeconomic fundamentals cease to have a role. Over such long periods of time, the economic growth rates, interest rates, as well as international trade and investment flows have stabilized at some “average” levels. Then, the only determinant of the exchange rate is the rate of money supply growth. Countries that print money more rapidly than the rest of the world will experience currency depreciation. In fact, the size of the depreciation would be equal to the increase of the money supply. Recall that the exchange rate is the price of a currency. If you create too much of it the price will come down.
The unholy trinity of international finance
The unholy trinity states that a country cannot have all of the following at the same time: free capital mobility, a fixed exchange rate, and independent monetary policy. It can have any two of these three but not all three. Let’s first explain what these three policies are:
Free capital mobility means that the country imposes no restrictions on international investment. Capital can flow in or out of the country with no restrictions. The country may want free capital mobility in order to attract capital for investment and development.
With a fixed exchange rate, the country maintains a fixed price of its currency to the dollar or another international currency. The country may want a fixed exchange rate to keep its inflation low. If the local currency starts to depreciate, then the government buys local money and sells dollars. This creates additional demand for the local currency and stops the depreciation. In the process, however, the government is losing foreign exchange reserves (dollars) that are limited.
Independent monetary policy means that, if it wants, the country can lower its interest rates to stimulate the economy. A lower interest rate allows people to get cheaper credit and to buy houses, cars, and other goods. This leads to faster economic growth.
Now why can’t a country have all these three? An actual example will make this clear. Think of the UK in the early 1990’s. It had a (pretty much) fixed exchange rate to the German mark and free capital mobility. However, its economy was in a recession. The government wanted to lower interest rates and to make it easier for people to take credit and buy goods and services.
However, when it lowered interest rates, international investment started to leave the country since the return on investment (interest rates) was now lower. Foreign investors were selling British pounds to leave the country and were putting pressure on the pound to depreciate. The government tried to stop the depreciation by buying pounds and selling foreign exchange reserves. However, their reserves were limited and at some point they would be depleted and the pound would depreciate.
So, the government had a dilemma: should they lower interest rates and stimulate their economy but risk devaluation of the pound. Or should they keep interest rates the same to avoid the capital outflows but at the same time leave the economy in a recession. Or restrict capital flows so investors cannot leave the country?
Stimulate the economy, keep the fixed exchange rate, and let capital flow: can’t have them all. By the way, the British government chose devaluation and lowered interest rates as the chart shows. They economy recovered very fast but the pound depreciated sharply.
The International Criminal Court takes on Laurent Gbagbo head on
Anna Holligan.
Inside the courtroom, Laurent Gbagbo seemed unsteady, leaning on his desk as he pleaded not guilty. His co-accused, Charles Ble Goude, gave a more defiant response, telling the judges: "I do not recognise the charges."
Prosecutors said Mr Ble Goude had acted as a spin doctor. He called himself the "street general". Archive footage played in court showed him comparing himself to former British Prime Minister Tony Blair's media adviser Alastair Campbell.
Chief prosecutor Fatou Bensouda used her opening statement to focus on the victims. She spoke of one woman who was arrested during a peaceful march in Abidjan and detained for three days. During that time, Ms Bensouda said, the woman was gang-raped by police officers - the very people who were supposed to protect her. Outside protesters playing on bongo drums complained of "victor's justice". To date none of President Alassane Ouattara's supporters have been charged by the ICC.
Mr Gbagbo sparked a crisis in Ivory Coast after he refused to step down following his loss to Alassane Ouattara in the 2010 presidential vote. There were bloody clashes between rival forces over five months in 2010 and 2011. Some 3,000 people were killed, with Mr Gbagbo basing himself in the presidential palace.
He was arrested in April 2011 by forces loyal to President Ouattara, backed by troops from former colonial power France, and later that year was extradited to The Hague. It will be the highest-profile trial yet for the ICC, which has only convicted two Congolese warlords since its establishment in 2002.
Reading out the charges, prosecutors cited cases including the alleged rape of 38 women at a pro-Ouattara rally and alleged killing of 10 people by shelling at a market. The prosecution said it currently planned to bring forward 138 witnesses. Chief prosecutor Fatou Bensouda said that when Mr Gbagbo "understood that the presidency was going to escape him... he began a campaign of violence orchestrated against those considered opponents. Nothing would be allowed to defeat Mr Gbagbo, and if politics failed, violence was seen as politics by other means," she said.
Presiding Judge Cuno Tarfusser said neither Ivory Coast nor its people were on trial, and that he would not allow the court to be used as a "political instrument". Dozens of Gbagbo supporters gathered outside the ICC on Thursday to back the ex-president, sparking some scuffles with police.
"Our dream to see our president walk free starts today," said one supporter, Marius Boue. "He is truly a man of the Ivorian people."
Gbagbo: From professor to president
- Born in 1945, Mr Gbagbo's first career was in academia as a history professor; he was jailed for two years in 1971 for "subversive" teaching. By the 1980s, he was heavily involved in trade union activities; after years in exile, he returned to Ivory Coast to attend the founding congress of the Ivorian Popular Front in 1988.
- Mr Gbagbo was one of the first to challenge Ivory Coast's founding President Felix Houphouet-Boigny, after multi-party politics were permitted
- Became president with the Ivorian Popular Front in 2000
Campaign group Human Rights Watch warned that by only prosecuting one side of Ivory Coast's conflict the ICC gave a "perception of victor's justice". But ahead of the trial Ms Bensouda said investigations into the pro-Ouattara camp had been "intensified". Mr Gbagbo is the first ex-head of state to appear at the ICC, although Liberia's former President Charles Taylor also stood trial at The Hague.
Mr Taylor appeared before the Special Court for Sierra Leone and was given a 50-year jail sentence in 2012 on charges of aiding and abetting war crimes during the civil war in Sierra Leone, which neighbours Liberia. The ICC has been accused by some in Africa of unfairly targeting the continent. An attempt to prosecute Kenyan President Uhuru Kenyatta over post-election violence failed amid allegations witnesses had been intimidated.
Why did Ivory Coast descend into civil war?
The country had been divided since 2002, with rebels in control of the mainly Muslim north. They mostly supported Alassane Ouattara, a Muslim whose family originate in neighbouring Burkina Faso. So when Laurent Gbagbo refused to accept defeat to Mr Ouattara in the 2010 election, fighting soon broke out.
Was the conflict about religion?
Not really - more about identity. Mr Gbagbo and other southern, Christian politicians portrayed themselves as "true Ivorians", in contrast to northern Muslims, many of whom had foreign origins. Under Mr Gbagbo, many northerners were not allowed to vote, while Mr Ouattara was banned from standing for election until 2010. In western Ivory Coast, the conflict also took on ethnic lines.
What happened during the conflict?
In the worst cases, Ivorian security forces loyal to Mr Gbagbo shelled areas of the main city Abidjan, where many northerners lived. The ICC also accuses pro-Gbagbo militias of attacking members of ethnic groups believed to support Mr Ouattara. But pro-Ouattara forces were also accused of similar atrocities and these have not been prosecuted.
Once hailed as a model of stability, during the first decade of the twenty-first century Ivory Coast slipped into the kind of internal strife that has plagued so many African countries. An armed rebellion in 2002 split the nation in two. Since then, peace deals have alternated with renewed violence as the country has slowly edged its way towards a political resolution of the conflict. For more than three decades after independence under the leadership of its first president, Felix Houphouet-Boigny, Ivory Coast was conspicuous for its religious and ethnic harmony and its well-developed economy.
All this ended when the late Robert Guei led a coup which toppled Felix Houphouet-Boigny's successor, Henri Bedie, in 1999. Mr Bedie fled, but not before planting the seeds of ethnic discord by trying to stir up xenophobia against Muslim northerners, including his main rival, Alassane Ouattara.
This theme was also adopted by Mr Guei, who had Alassane Ouattara banned from the presidential election in 2000 because of his foreign parentage, and by the only serious contender allowed to run against Mr Guei, Laurent Gbagbo.
When Mr Gbagbo replaced Robert Guei after he was deposed in a popular uprising in 2000, violence replaced xenophobia. Scores of Mr Ouattara's supporters were killed after their leader called for new elections.
In September 2002 a troop mutiny escalated into a full-scale rebellion, voicing the ongoing discontent of northern Muslims who felt they were being discriminated against in Ivorian politics. Thousands were killed in the conflict. Although most of the fighting ended in 2004, Ivory Coast remained tense and divided. French and UN peacekeepers patrolled the buffer zone which separated the north, held by rebels known as the New Forces, and the government-controlled south.
After repeated delays, elections aimed at ending the conflict were finally held in October 2010. But the vote ushered in more unrest when the incumbent, Laurent Gbagbo, refused to concede victory to the internationally recognised winner, Alassane Ouattara. The ensuing four-month stand-off was only ended when Mr Ouattara's forces overran the south of the country, finally capturing Mr Gbagbo and declaring him deposed. In November 2011, Mr Gbagbo was transferred to The Hague to stand trial at the International Criminal Court on charges of crimes against humanity. Officials have blamed several security incidents since then on disgruntled supporters of Mr Gbagbo.
More worries as more Kenyan youths become radicalized
Tonny Onyulo.
Three years ago In Nairobi, Kenya, Solomon Osman woke up in a dimly lit room in Garissa, Kenya, after armed men grabbed him and stuffed him into a truck as he was selling clothes on the street in Mombasa 280 miles away. He said al-Shabab, the Somalia-based radical Islamic terrorist group that killed 148 students and others at Garissa University College in April, had kidnapped him and 20 other youths. “We lost our senses, only to wake up in a mosque in an unknown place,” he said. “We were all forced to convert to Islam, given new Muslim names and scarves and warned not to contact anybody outside the mosque.”
Osman previously had been a Christian. Osman, who surrendered to the Kenyan government earlier this month following an amnesty offered to al-Shabab fighters, said his captors subjected him to three months of training with AK-47 rifles, rocket-propelled grenades and other weapons. Some of the other approximately 150 youths in Osman’s group might have volunteered to join the extremists. But most were pressed into service, he said. “Our masters told us that Kenya was the targeted enemy because it had invaded Somalia,” he said, referring to Kenyan troops stationed in Somalia since 2011 to help Somali government forces fight al-Shabab. “He said it was our right to fight for our religion.”
Osman’s story suggests disturbing new possibilities about the number of radicalized Kenyans and their future plans, just as the country is still grappling with how to best counter increasingly emboldened militants in the wake of the attacks at Garissa University that left 148 dead in April. Gunmen took hundreds of students hostage, and killed those who identified as Christians. In its amnesty offer, the government gave individuals who went to train with al-Shabab 10 days in return for reintegration, then extended the deadline another two weeks.
Interior Cabinet Secretary Joseph Nkaissery said youths who fail to report “will be treated as criminals living in our midst and will face the full force of the law,” according to media reports. So far, around 255 people have left to join al-Shabab since 2013, according to Kenya’s Interior Ministry. Eighty-five youths surrendered following the amnesty, meaning 170 fighters are potentially roaming the country and ready to strike elsewhere. A handful of al-Shabab militants staged the 2013 Westgate shopping mall attack and three-day-long siege in Nairobi that resulted in 67 deaths. Most of 170 missing extremists hailed from Garissa, a town near the Somali border where al-Shabab purportedly has often fled to escape the Somali government forces. “We don’t know their whereabouts,” said Garissa County Commissioner Abdi Hassan. “We’ve intelligence that shows they joined al-Shabab. We encourage parents to continue reporting incidents of their missing children to the government.”
The terrorist group has long been recruiting young men throughout Garissa. “Al-Shabab militants are no longer focusing only on mosques, schools or madrassas for recruitment but also our football grounds,” said Adan Duale, the Kenyan parliament’s majority leader, and lawmaker from Garissa. “Parents should be on the lookout on what their children are doing on these sports grounds.” Poverty plays a major role in the lure of terrorism. The unemployment rate in Kenya is 40 percent, with young people suffering even higher levels, according to government statistics. In 2006, before the worldwide recession hit two years later, unemployment was less than 13 percent.
More people, especially young men, will flock to the militants if the government fails to tackle the unemployment issue, said analysts. “Al-Shabab are targeting youths who are idle and languishing in poverty and depression,” said Prof. Edward Kisiang’ani, a political scientist at Kenyatta University in Nairobi. “All it takes is a strategy to give them a passionate cause or belief of fighting injustice and we have on our hands the extremes of radicalization.” Kenyan Muslims — around 11 percent of the country’s population — and the approximately 600,000 Somali refugees in Kenya who have fled their war-torn homeland have also complicated the authorities’ search for militants.
Ethnic Somalis easily cross back and forth over the Kenyan-Somali frontier, providing a route for al-Shabab members. Many Kenyans believe that some ethnic Somalis in Kenya have joined al-Shabab and are awaiting orders from their leaders to carry out terror attacks, prompting Kenyan politicians to call for the ouster of Somali refugees. Still, Muslim leaders say Islam per se isn’t the problem. “They need to tackle the root causes of radicalization in communities,” said National Muslim Council of Kenya chair Nazlin Umar Fazaldin Rajput. The Kenyan government might have contributed to the problem, too, say analysts.
Around 4,000 Kenyans recruited six years ago to fight alongside Somali troops have returned home bitter after the government failed to pay their salaries. Osman, who fled to Kenya when al-Shabab ran out of money, said he did not want to work for the militia group when he was abducted. But then they promised him a steady wage. “I didn’t like it, but when I arrived in Somalia, I was promised a monthly salary of $1,000,” he said. “This changed my mind and I vowed to work for the group.” He said he came to accept their harsh version of Islam but has since softened his views. “Mohammed himself fought the jihad war and won,” he said. “It’s commanded that we should also kill all non-believers to inherit the kingdom of Allah and get preserved virgins. I participated in several attacks but not in Kenya because I believed in all the teachings of revenge. But now I live in fear of being tracked by the militants because I ran from the camp.”
Kenyan authorities are now acting swiftly to crack down on al-Shabab based on intelligence gleaned from ex-fighters and others. Mombasa police recently arrested Moris Mwakina Tolle — also known as Idris Hassan Tole, 45 — on charges of recruiting for al-Shabab. Tolle vanished from his home in 2013 and returned last month carrying Somali currency, Arabic literature and documents showing he traveled to Somalia. He claims he did not go to Somalia and converted to Islam in Garissa. Mombasa Police Commander Benjamin Muhia said he believed Tolle was radicalized and sharing extremist Islamic teaching with Kenyan youths. Muhia also said he arrested several youths of Somali origin who have been living in a one-room apartment where they were being radicalized by an al-Shabab imam in Mombasa. It’s not clear if they are among the 170 unaccounted-for fighters. “We raided the house after a tip-off from the public,” he said. “We found and arrested the imam and the youths who hail from northeastern Kenya. We suspect the youths were from Garissa.”
Norway comes on board on the global war against organized crime and terrorism
The Norwegian government launched a new white paper on global security challenges in Norway’s foreign policy, which includes efforts to strengthen information and analysis capacity against the rapidly rising threat of organised crime in supporting terrorism, cyber crime and even state conflicts, working across fields of Defence, Police, Justice and development at a new scale. This is intended to ensure a more effective and more coherent effort to address global security challenges.
At a joint launch event today with INTERPOL Secretary-General and Global Initiative founding member Jurgen Stock, Minister of Foreign Affairs Børge Brende has announced that against this strategic framework, Norway will allocate NOK 200 million (US$25.6 million) annually to the fight against terrorism, organised crime, piracy and cyber threats. This will be divided into two development programmes: one to support efforts to combat serious and organised crime and one to combat and prevent violent extremism and terrorism.
‘Norway is facing growing and more complex security challenges, such as more frequent and more advanced cyber attacks, an increased terror threat level, and criminal networks that are financing militias and terrorist groups. These challenges are occurring at the same time and they are occurring globally. Our response must also be global, using instruments from development policy, foreign policy, justice policy and defence policy,’ said Minister of Foreign Affairs Børge Brende.
The global security landscape has changed fundamentally in the past few years. To an increasing extent, we are seeing that non-traditional security threats and certain non-state actors are having an impact on the situation in Norway and globally.The Government attaches importance to using development policy instruments to promote stability and prevent radicalisation, violent extremism, organised crime, piracy, cyber threats and conflict. The Government also intends to use this vehicle to enhance the exchange of information and cooperation between Norwegian ministries, agencies and other actors working in these fields.
Two new forums for cooperation will be established to this end, and private sector actors, civil society organisations and academic and research groups will also participate in these forums with a view to contributing their knowledge and expertise.‘ Norway’s security is now more directly affected by developments in other countries and other parts of the world than it was in the past. Problems of governance and development in fragile states affected by violent conflict are increasingly becoming our own security concerns,’ said Mr Brende.
‘The new security strategy represents a leap forward in the ability to intervene or prevent threats in much earlier stages of development against security and development,’ said Global Initiative Network Member, Christian Nellemann, of the RHIPTO-Norgian Center for Global Analysis. It essentially pioneers the recent request from Resolution S2195 from the UN Security Council to strengthen the analytical capacity of member states to address this threat, and makes Norway a serious player in innovating integrated approaches in the global arena in response to multi-dimensional security threats.
Battling Terrorism in the horn of Africa
By Robert Rotberg.
Reviewed by Thomas Sanders.
Although Afghanistan and Iraq are at the epicenter of America's war on terror, terrorist groups threaten other parts of the world as well. One of the most dangerous is the greater Horn of Africa region—Djibouti, Eritrea, Ethiopia, Kenya, Somalia, and the Sudan, along with Yemen, their volatile neighbor. Al Qaeda has already struck in the region, and the area's complex history, shared poverty, poor governance, underdevelopment, and renowned resistance against Western colonizers have created an intricate web of opportunity for potential terrorists.
In this timely book, Robert Rotberg and his coauthors provide authoritative insight into the struggle against terrorism in the Horn, analyzing what has been done and what work remains. The contributors—prominent scholars and practitioners, including several current and former U.S. ambassadors—argue that Washington needs to craft a nuanced new policy appropriate to the region and its individual countries. They stress that there is no substitute for greater U.S. involvement in any and all forums.
But U.S. efforts alone are insufficient to deal with the ongoing threats of al Qaeda and homegrown terrorism. Seamless regional and international responses are also necessary. The United States must promote good governance throughout the region by strengthening diplomatic understanding of the area and increasing support to those countries that already play a key role in counterterrorism operations, but that suffer from poor employment, education, and social services. At the same time, the United States can proactively support internal democracy in areas where the suppression of liberties is common.
Battling Terrorism in the Horn of Africa provides valuable lessons on what needs to be done at the tension-filled crossroads of Africa and the Arab world. It is important reading for all those concerned with understanding and combating international terrorism, as well as those with an interest in African or Middle Eastern affairs.
Contributors: Robert D. Burrowes (University of Washington), Timothy Carney (former U.S. ambassador to Sudan), Johnnie Carson (former U.S. ambassador to Kenya), Dan Connell (Simmons College), Kenneth J. Menkhaus (Davidson College), Lange Schermerhorn (former U.S. ambassador to Djibouti), and David Shinn (former U.S. ambassador to Ethiopia).
Tough times ahead for Nigerians and their currency, the Naira
Richard Guest.
It was a tough Christmas for traders in Nigeria and their international counterparts, as the ongoing dollar crunch limited the ability of many to pay suppliers. Since June, the Central Bank of Nigeria has limited the availability of hard currency to importers and placed restrictions on interbank dealing as it tries to mitigate an oil price crash that has gutted the government’s revenues. There could be more hard times to come.
Analysts predict that the naira will inevitably be revalued this year, causing further pain in a country that is heavily dependent on imports. The currency is trading at nearly 270 to the dollar on the unofficial market, against the official range of 197-199, and the CBN has spent billions from Nigeria’s already dwindling dollar reserves to shore up the currency. “The issue is when, not whether they will [devalue]”, says Gaimin Nonyane, chief macroeconomist at Ecobank Capital.
Currency forwards have been rising; the three-month naira non-deliverable forward price hit 238 this week, suggesting that traders are also increasingly convinced that a devaluation is on the cards. Both the president, Muhammadu Buhari, and the governor of the CBN, Godwin Emefiele, have declared themselves opposed to any devaluation, and may continue to resist the move for as long as possible. The country imports much of its food and refined fuel needs, and consumers and small businesses would suffer price rises in the short term.
The government announced an expanded 2016 budget, which included a doubling of capital expenditure aimed at providing a jolt to the slowing economy. This is also likely to increase the demand for imports of capital goods, giving another powerful disincentive for devaluation. The budget deficit is forecast to expand to $11 billion, and the government is widely expected to return to the international capital markets to raise financing. Yields on frontier market debt have risen substantially over the past two years, and analysts expect that a Nigerian hard currency issue in 2016 would attract a coupon in double-digits.
These countervailing pressures mean that the CBN — which the market believes is mainly taking its cues from the federal government — will resist devaluation as long as it can. “Usually you would expect a rational government to do it on a gradual basis, but given that the president and the central bank governor are opposing devaluation, I think it might come as a sudden surprise to everyone, maybe in Q2,” Nonyane says. “In the short term, things will be rather bleak for Nigeria and its currency.”