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Saudi Arabia’s structural crisis

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It was the father of “Kim” Philby – he, too, a man of Her Majesty’s intelligence services – to support the American Standard Oil in Saudi Arabia, instead of the British and Dutch Royal Dutch Shell.

Whoever betrays once, always betrays, and his son “Kim” betrayed England so as to follow a Communist myth, at first as an infiltrator in the British intelligence services, and later as a refugee in the USSR – only to participate in the meeting held in the Andropov Institute where both perestroika and glasnost were decided.

However, what is the situation of the economies of the Arab and Sunni oil producing countries, which have always supported and are currently weakening the Vienna agency to better fight against Iran, the Russian-Asian region and even the United States, which are now the first producer, before the Saudis?

The issue is crucial not only for our economy, which still depends on oil, but for our political and strategic stability.

It is now clear that the Daesh/Isis is a military and political force which can change the political balance in Mesopotamia and, indirectly, in the same countries it contributed to create: Saudi Arabia and Qatar, which is fighting with Iran for the gas extraction area Pars-II, as well as the Arab Emirates, which use it as a force multiplier in the EU and Asia, as well as Turkey, which used it to destabilize Syria and fight the Kurds. Indeed, even some Western country supported the Daesh/Isis to oppose Iran.

Now, Al Baghdadi’s Caliphate has become too big and dangerous for everybody and this is the reason why the Russian Federation’s appropriate intervention has been seen with relief also by Russia’s Western competitors.

But Daesh/Isis is too strong a lure for many Muslims: 42 millions support it politically, as reported by a survey held in the Sunni Arab world – and 8.5 million Muslims might support it also militarily or financially.

In Syria 17% of the population supports the Caliphate, while in Algeria the Jund al Kilafah group is now part of this new jihadist international.

In Afghanistan the Caliphate’s network of Tehrik-e Taliban Pakistan is already operational, while in Uzbekistan the Islamic Movement has long been operating and refers to the experience of Daesh/Isis together with the Al Tawhid battalion operating in North Waziristan.

The Ansar al Sharia already operates in Libya and, in Derna, the Shura Council of the Islamic Youth. A Gaza Islamic State has emerged in Gaza and the Shura Council of the Mujahideen of the Jerusalem area is now in the Daesh/Isis orbit.

In the Lebanon we can find the Ahrar al-Sunna and the Baalbek Brigade (the “Baalbek free Sunnis”), while in Yemen the Shia Houthis are fought by Al Qaeda in the Arabian Peninsula, which supports the Caliphate against “the Iranian and American conspiracy”. In the Philippines the Bangsamoro Movement for Islamic Freedom has already set in, while in Jordan the Caliphate operates with the old Salafi networks. In Egypt the Jund al Kilafah in Egypt is operational.

In Tunisia, the Ansar al Sharia, namely the Isis “section” we have already found in Libya, is active.

Are we sure that all this jihad ferment in the Sunni Islamic world shall not lead us to think of building a new geopolitics of the Arab world, along with the Shanghai Cooperation Organization, Israel and Asia on the Pacific coast?

In other words, while currently not even the huge wealth of the Gulf petromonarchies can support the Caliphate’ “sword jihad”, considering its size, it is extremely likely for the Daesh/Isis to compete for oil with the Sunni OPEC and go back to Osama Bin Laden’s old project: to destroy the apostate “Takfiri” Islamic governments, which are friendly to the “Jewish and Crusader” West.

Nevertheless Saudi Arabia’s crisis, triggered off by the cycle of low oil prices, has radicalized with two important variables: the slow pace of economic diversification away from the oil cycle and the extraordinary “cost of politics”, namely the cost of the huge royal family and its hangers-on.

According to the forecasts and calculations made by the International Monetary Fund, if the situation goes on like this, with a view to preserving its standard of spending (and internal security), Saudi Arabia shall reduce to zero its deposits and financial investment within the next five years.

Not to mention that, although it is true that the size of Saudi Arabia’s reserves is a state secret, according to the Barclays Bank, the Saudi proven reserves still rank second among the major world producers’.

The Saudi idea could be to be the producer/trader of others’ oil to finance its power projection outside OPEC and its economic transformation also during very long phases of low oil prices.

The poorest country in terms of proven reserves is Nigeria, with 37.44 million barrels/day and then Libya, with 48.47 millions (and here we understand that the idiotic attack on Gaddafi was, first and foremost, an attack on ENI, which processed 50% of Libyan oil, possibly in view of buying it) and the Russian Federation with 80 millions.

Over and above the countries which have been destabilized, namely Libya and partially Nigeria, all the countries with medium-high proven resources are against the old Saudi hegemony.

And – to ask a nasty and tricky question – what would happen if it were not possible for the Saudis to fund Daesh/Isis with a view to harming their competitors within OPEC and possibly working or trading the oil extracted in the jihadist areas?

Reverting to the list of proven reserves, we have the United Arab Emirates, which do no longer passively follow Saudi Arabia’s strategic interest (97.8 billion barrels/day), Kuwait (104 billion barrels/day), Iraq (140.3 billion barrels/day) – and here we can easily understand how, with Daesh, the Saudis wanted to weaken and defuse a strong competitor – Iran (157,3 billion barrels/day), Canada (173.2 billion barrels/day), Saudi Arabia (268.8 billion barrels/day) and finally the less exploited country, Venezuela which, however, is in Latin America and plays no role in the Greater Middle East.

Taking possession of others’ oil, trading it and taking advantage of Iran’s relatively problematical situation so as to settle the long-standing match between Shiites and Sunnis.

These are all hypotheses which certainly circulate among Saudi decision-makers, who so far have enjoyed the US support, which might soon diminish.

Nevertheless the losses resulting from the drop in oil price could block all these Saudi projects: the Arabian peninsula region recorded revenue losses to the tune of 360 billion US dollars, while currently Saudi Arabia alone has a 21.6% public deficit, which will level off at 19.4% next year.

Meanwhile, despite the above limitations, Central Asian oil and gas producers can better differentiate their economy and attract non-oil foreign capital.

This is the future race, after OPEC being reduced to a semblance of what it used to be. It was a Cold War organization and it will certainly not survive the new shift of global strategic potential towards the East and Central Asian Heartland.

The Saudi oil industry, however, still generates 80% of State revenues.

The foreign currency reserves decreased by 59.8 billion US dollars out of a total of 664.5 billions while, for the first time in its history, last August Saudi Arabia sold 5.3 billion securities of its public debt.

Hence, if Iran holds out in its war by proxy against the Saudis, time may come when the effect of high levels of Saudi domestic spending, so as to support an increasingly insecure social peace, may combine with the effect of funding Sunni jihadists abroad, thus causing the rial collapse and destabilizing the region to an extent so far unimaginable.

Moreover, the US are increasingly less interested in managing the specific channel of petrodollars recycling set up by Kissinger after the Yom Kippur War. Currently the United States have to think about their shale gas and oil network, which requires massive investment.

Not to mention defence spending, another heavy drain on Saudi public finances: Yemen only and the activities in Syria, with or without the Daesh/Isis, cost Saudi Arabia an additional 7%. Nevertheless, with a view to preserving the current level of internal and external defence, the Saudis shall increase spending for the armed forces by 27% over the next five years.

This is likely to be an untenable situation, considering the size and the huge cost of the royal family, who will not easily step aside.

Hence working on the assumption of a Qaedist or Caliphate attack on their old Saudi backers, with increased internal and religious instability, not caused by the welfare State, as well as a seemingly long-lasting trend of low oil prices, the US stepping out of the Middle East, the irrelevant role played by Europe, Russia’s and China’s pressure on Iran and Central Asia, we do not think that Saudi Arabia’s future will be bright.

Advisory Board Co-chair Honoris Causa Professor Giancarlo Elia Valori is an eminent Italian economist and businessman. He holds prestigious academic distinctions and national orders. Mr. Valori has lectured on international affairs and economics at the world’s leading universities such as Peking University, the Hebrew University of Jerusalem and the Yeshiva University in New York. He currently chairs “International World Group”, he is also the honorary president of Huawei Italy, economic adviser to the Chinese giant HNA Group. In 1992 he was appointed Officier de la Légion d’Honneur de la République Francaise, with this motivation: “A man who can see across borders to understand the world” and in 2002 he received the title “Honorable” of the Académie des Sciences de l’Institut de France. “

Intelligence

USA and Australia Worry About Cyber Attacks from China Amidst Pegasus Spyware

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Pegasus Spyware Scandal has shaken whole India and several other countries. What will be its fallout no one knows as we know only tip of iceberg. Amidst Pegasus Spyware Scandal USA and Australia both have shown serious concerns about Cyber Attacks on US and Australian interests. Both say that China is hub of malware software and both face millions of such attacks daily.

I am trying to understand why a software is needed to spy on a particular individual when all calls, messages, data, emails are easily accessible from server. In most of cases these servers are located in USA and some cases these are located in host country. In certain sensitive cases Government Agencies have their own server like Central Intelligence Agency and hundreds of other agencies and military establishment world over including India. Now point is who installs those servers.

A couple of years back I had talked to Mr Mike Molloy who is Chief Executive Officer of Orion Global Technologies previously known as Orion SAS. He had explained me how his company installs servers in host countries on request of private or gov bodies. He talks about contract and trust. That means even when a company or Gov buys a server or software for designated uses the “Secrecy” Factor remain on discretion of company which has supplied server or software.

Now  if all data, e-mail, chat, messages, calls are accessible to Gov as per law and technology (Through Server all components of Communication are accessible and thats why  me and you see start seeing call recording of a person even after many years later), I am unable to understand why a Gov will be needing a software to Spy on any one.

Now coming to where Australia and USA wants to carry the whole debate.

Australian Foreign Minister Sen Marise Payne said, “Australian Government joins international partners in expressing serious concerns about malicious cyber activities by China’s Ministry of State Security.

“In consultation with our partners, the Australian Government has determined that China’s Ministry of State Security exploited vulnerabilities in the Microsoft Exchange software to affect thousands of computers and networks worldwide, including in Australia. These actions have undermined international stability and security by opening the door to a range of other actors, including cybercriminals, who continue to exploit this vulnerability for illicit gain”, She further added.

She opined, ”The Australian Government is also seriously concerned about reports from our international partners that China’s Ministry of State Security is engaging contract hackers who have carried out cyber-enabled intellectual property theft for personal gain and to provide commercial advantage to the Chinese Government”.

She warned China by saying, “Australia calls on all countries – including China – to act responsibly in cyberspace.  China must adhere to the commitments it has made in the G20, and bilaterally, to refrain from cyber-enabled theft of intellectual property, trade secrets and confidential business information with the intent of obtaining competitive advantage”.

On other hand USA’s The National Security Agency (NSA), Cybersecurity and Infrastructure Security Agency (CISA) and Federal Bureau of Investigation (FBI) released a Cybersecurity Advisory on Chinese State-Sponsored Cyber Operations. National Security Advisor said, ”Chinese state-sponsored cyber activity poses a major threat to U.S. and allied systems. These actors aggressively target political, economic, military, educational, and critical infrastructure personnel and organizations to access valuable, sensitive data. These cyber operations support China’s long-term economic and military objectives”.

The information in this advisory builds on NSA’s previous release “Chinese State-Sponsored Actors Exploit Publicly Known Vulnerabilities.” The NSA, CISA, and FBI recommended mitigations empower our customers to reduce the risk of Chinese malicious cyber activity, and increase the defensive posture of their critical networks. 

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Intelligence

Afghan issue can not be understood from the simplistic lens of geopolitical blocs

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pakistan-terrorism

Authors: Tridivesh Singh Maini  and Varundeep Singh*

On July 14, 2021 a terror attack was carried out in Khyber Pakhtunkhwa (KPK) province in which a number of Chinese engineers, working on the Dasu hydropower project (a project which is part of the China Pakistan Economic Corridor) were killed. The attack predictably evinced a strong response from China. The Chinese foreign minister, Wang Yi speaking before a Shanghai Cooperation Organisation (SCO) Foreign Minister’s meeting asked the Taliban to disassociate itself from ‘terrorist elements’ and in a meeting with Pakistan Foreign Minister, Shah Mehmood Qureshi, asked Pakistan to bring the perpetrators to book. Earlier in April 2021, a car bomb attack took place at Serena hotel in Quetta which was hosting China’s Ambassador to Pakistan (four people were killed and twelve were injured)

Wang Yi significantly praised the Ashraf Ghani government, for its attempts towards building national unity and providing effective governance. Beijing clearly realizes that its economic investments in the country as well as big ticket infrastructural projects can not remain safe if there is no security. Afghanistan also criticized Pakistan for its role in sending 10000 Jihadis to Taliban, this is important in the context of the region’s geopolitics.

 Like all other countries, Beijing and Islamabad, would have expected uncertainty after the US withdrawal of troops but perhaps over estimated their capabilities in dealing with the turbulence which had been predicted by many.

Importance of Chinese Foreign Minister’s statements

Wang Yi’s statements are important because days earlier a Taliban spokesman, Suhail Shaheen had praised China and welcomed its role in the country’s reconstruction. He had also assured China that those involved in the insurgency in Xinjiang would not be given refuge in Afghanistan (one of China’s major concerns has been the support provided by Taliban to the East Turkmenistan movement)

While Beijing may have opened back channels with the Taliban and realized that it needs to adapt to the changing geopolitics, recent developments would have increased its skepticism vis-à-vis the Taliban. On the other hand, Russia has been more favorable towards the Taliban. Russia’s Deputy Chief of Mission in India, Roman Babushkin argued that the Taliban are a reality which needs to be accepted, and also that any military activities without a political process are insufficient.

Babushkin did make the point that for successful negotiations, Taliban needed to end violence.

‘that Taliban should deal with the problem of terrorism and other related issues in order to become legitimate, in order to [get] delisted [at the UN Security Council], in order to go ahead with the future Afghanistan and creation of the inclusive government

It would be pertinent to point out, that Zamir Kabulov, Russian President’s Afghanistan envoy went a step further and said that the Afghan government was not doing enough to make talks with Taliban a success.

China’s statements subtle warning to the Taliban, indicating its reservations, and praise of Ghani indicate a possibility of greater understanding between Washington and Beijing (even though Beijing has repeatedly attributed the current troubles in Afghanistan to Washington’s decision to withdraw troops).

Can US and China find common ground

 It remains to be seen if Biden who has exhibited dexterity on a number of complex issues reaches out to Xi Jinping to find common ground with regard to Afghanistan. Significantly, while US-Turkey relations had witnessed a downward trajectory and Biden has been critical of Turkish President Recep Tayyip Erdogan’s authoritarian tendencies and Human rights record, both leaders met on the sidelines of the NATO Summit in June 2021. During the meeting Turkey agreed to secure Kabul Airport. US National Security Advisor Jake Sullivan while commenting on Turkey’s assurance said

‘The clear commitment from the leaders was established that Turkey would play a lead role in securing Hamid Karzai International Airport, and we are now working through how to execute to get to that,’

Taliban earlier this week warned Turkey of ‘consequences’ if the Middle Eastern nation increased its troop presence in Afghanistan.

Conclusion

Russia’s statements with regard to the Taliban indicate that it is not totally on the same page as China (its prior experience in Afghanistan has made it more cautious and circumspect), and that the Afghan issue can not be understood from the simplistic lens of geo-political blocs and traditional lenses. All major stakeholders in Afghanistan, both within the region and outside, seem to be understandably befuddled by the turn of events. It is not just the US, but even China which would be worried not just from an economic stand point but the overall security implications of the turmoil in Afghanistan. The terror attack in KPK indicates that other CPEC related projects could also face threats from militant groups. Beijing would thus need to be quick to react to the overtures from the Taliban in order to secure its economic assets and lives of Chinese workers in neighbouring Pakistan.

 It is especially important for Washington, Beijing and other important stakeholders in the region to work together for dealing with the near term turbulence as well as long term challenges Afghanistan is likely to face.

*Varundeep Singh is an Independent Policy Analyst.

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Intelligence

Pegasus: Human rights-compliant laws needed to regulate spyware

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The UN human rights chief on Monday said the apparent widespread use of Pegasus spy software to illegally undermine the rights of those under surveillance, including journalists and politicians, was “extremely alarming” and confirmed “some of the worst fears” surrounding the potential misuse of such technology. 

“Various parts of the UN Human Rights system, including my own Office, have repeatedly raised serious concerns about the dangers of authorities using surveillance tools from a variety of sources supposed to promote public safety in order to hack the phones and computers of people conducting legitimate journalistic activities, monitoring human rights or expressing dissent or political opposition”, said High Commissioner Michelle Bachelet in a statement

According to reports, the Pegasus data leak allegations which surfaced through a consortium of media organisations over the weekend, suggests widespread and continuing abuse of the software, which the manufacturers insist, is only intended for use against criminals and terrorists. 

The Pegasus malware infects electronic devices, enabling operators of the tool to obtain messages, photos and emails, record calls, and even activate microphones, according to the consortium’s reporting. The leak contains a list of more than 50,000 phone numbers which reportedly belong to those identified as people of interest, by clients of the company behind Pegasus, including some governments.  

‘Indispensable role’ 

Surveillance software has been linked to the arrest, intimidation and even killing of journalists and human rights defenders, according to the senior UN official.  

Reports of surveillance also trigger fear and cause people to censor themselves.   

“Journalists and human rights defenders play an indispensable role in our societies, and when they are silenced, we all suffer”, she said, reminding all States that surveillance measures can only be justified in narrowly defined circumstances when necessary and proportional to a legitimate goal.  

‘Deep intrusions’ 

Given that Pegasus spyware, “as well as that created by Candiru and others, enable extremely deep intrusions into people’s devices, resulting in insights into all aspects of their lives”, the UN rights chief underscored, “their use can only ever be justified in the context of investigations into serious crimes and grave security threats.” 

If recent allegations about the use of Pegasus are even partly true, she maintained that the “red line has been crossed again and again with total impunity”. 

‘Due diligence’ 

Companies developing and distributing surveillance technologies are responsible for avoiding human rights abuses, she said, and they must take immediate steps to mitigate and remedy the damage their products are causing, or contributing to, and carry out “human rights due diligence” to ensure that they no longer play a part in “such disastrous consequences” now, or in the future. 

States also have a duty to protect individuals from privacy rights abuses by companies, she added.  

One key step in this direction is for States to require by law that the businesses meet their human rights responsibilities by becoming more transparent in their design and use of products and by putting in place effective accountability mechanisms. 

Better regulation key 

Reports also confirm “the urgent need to better regulate the sale, transfer and use of surveillance technologies and ensure strict oversight and authorization.” 

Governments should not only immediately stop using surveillance technologies in ways that violate human rights, but also “take concrete actions” to protect against such invasions of privacy by “regulating the distribution, use and export of surveillance technology created by others”, the High Commissioner said.  

Without human rights-compliant regulatory frameworks, Ms. Bachelet upheld that there are “simply too many risks” that the tools could be used to intimidate critics and silence dissent.

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