Within an Islamic and non-Islamic context, dangerous for his Egypt, President Ahmed Fattah Al Sisi appointed ten new Ministers in the national government and also created some new Ministries. The government reshuffle, not foreseen even by the insiders of the Egyptian regime, took place on March 23 and regarded people and roles certainly not irrelevant in any government.
Undoubtedly the aim of the government renewal is the need to better tackle the economic crisis and its political consequences, which could undermine the stability of Al Sisi’s post-Nasser regime and, above all, its effectiveness in repressing the Islamist insurgency in the Sinai region, as well as its effectiveness in the internal struggle against the Muslim Brotherhood.
Let us analyze the professional and political biographies of the newly-appointed Ministers. The new Justice Minister is judge Hossam Abdel Rehim, appointed just after his predecessor’s unfortunate statement that he would have put in jail even Prophet Muhammad if he had broken the law.
Hossam Rehim was the President of the Egyptian Supreme Court of Cassation and the Supreme Legislative Council, a body which oversees the internal administrative matters of ordinary justice.
Any appointment in this body lasts four years and is not renewable.
Amr al Garthy is the new Finance Minister, replacing Hany Kadry Dimian, who had been appointed to that post before Al Sisi’s Presidency.
While preserving the small and insufficient Egyptian growth recorded in 2015, Garthy must above all solve the severe shortage of foreign currencies and hence a significant difficulty for imports.
Furthermore the outgoing Minister, Dimian, said that Egypt would record a funding gap ranging between 25 and 30 billion dollars over the next three years.
The funds that Dimian had obtained from the World Bank before his resignation will be granted only in connection with some tax and fiscal reforms that the Egyptian government must absolutely implement.
For the World Bank this applies above all to a value added tax which is still being examined by the Egyptian Parliament.
Garhy comes directly from the business world: he worked for the Qalaa Holding, an important Egyptian financial holding operating in the oil, agrifood, transport and logistics, cement and mining sectors.
Previously Garhy had worked for the El Ahli Bank of Qatar, which deals with corporate banking and has 16 branches throughout the Emirate.
Later, before working for Qalaa, Garhy operated in the EFG Hermes and the Egyptian National Investment Bank, where he focused his activity on the matters he should address as Minister: the privatization of the Bank of Alexandria and the sale of Egyptian government bonds on international markets.
EFG Hermes is also a bank and an industrial holding company operating in seven Middle East countries, since it is now the first investment bank for the whole region stretching from Morocco to Jordan.
As Minister for Investment, Al Sisi chose Dahlia Korshed, former vice-President and treasurer of Orascom Construction, as well as former vice-President of the Egyptian Citibank.
Currently there are four female Ministers in the Egyptian government.
Al Sisi’s idea of separating this Ministry from the Ministry for Industry and Trade is the sign that the Egyptian President wants to give priority to infrastructure and industrial investment rather than to the often unproductive spending for supporting the now massive and bloated State apparatus.
We will analyze this matter later.
The main problem is that, after the structural decline of Foreign Direct Investment (FDI) following the so-called 2011 “revolution” and despite the Conference on foreign investment held by Al Sisi in Sharm El Sheikh in 2015, which was certainly not a success, FDI does not take off at all.
From January to March 2015, the Egyptian FDI had reached 2.9 billion dollars, but fell dramatically to 690 million dollars in the following quarter, only to come back again to a still insufficient level of 1.39 billion US dollars in July-September 2015.
For the time being, the safest investment in Egypt comes mainly from Saudi Arabia, which promised 8 billion dollars in project financing over five years, and from China which signed some important contracts with Egypt during the recent visit of Xi Jinping in that country.
Egypt has a primary difficult to face: it does not always succeed in repaying foreign investors, who currently have credit with Egypt to the tune of 547.2 million US dollars.
In this connection, Egypt’s Central Bank has recently announced its offer of investment certificates in local currency at a 15% interest rate, but only in foreign currencies, considering the internal devaluation rate and the persistent overvaluation of the Egyptian currency.
The new Minister for Public Affairs, Ashraf Al Sharqawi, must monitor and supervise State-owned companies and support the growth of start-ups.
He is still the administrative Director of the Cairo University and is member of the Board of the State-owned bank Misr.
Sharqawi was President of the Egyptian Financial Supervisory Authority and member, as well as executive President, of the National Auditing Committee.
With specific reference to Misr, it is worth recalling that for 92 years this bank has been carrying out an activity of investment and collection of savings from regular clients and it has so far supported the establishment and growth of many companies in all Egyptian productive and commercial sectors. Currently it co-participates in over 202 projects, including agrifood, communications, finance and housing for the poor walks of society.
Furthermore, it also operates with Islamic financial criteria.
Hence, above all, Minister Sharqawi wants to reform and liberalize most State-owned companies.
This is also what Al Sisi has in mind, while announcing he will inject 25 billion US dollars in the Egyptian Central Bank to grant loans to small and medium-sized enterprises, as well as that loans to SMEs will account for at least 20% of all the loans granted by banks, at least for the next four years.
Clearly the Egyptian President’s goal is to recreate a strong and self-propelled internal market, by using foreign funds and internal financial leverage.
Nevertheless a 12.9% official unemployment rate, slightly decreasing as against last year, is a too strong political risk to run in a situation of great “youth bulge” (as we will see later on).
The financing envisaged by Al Sisi is functional and conducive to a youth employment expansion, which is the real sore point of the Egyptian society and economy.
The new Minister for Tourism, which is a key area for the Egyptian economy, is Mohammed Yehia Rashed, who replaces the previous Minister, Hisham Zaazou, who had been reconfirmed in September 2015 by Prime Minister Sharif Ismail.
A little score to settle in anticipation of Ismail’s confirmation as Prime Minister.
For many years Rashed worked in the international hotel chain, Marriot, and was responsible for the unit dedicated to Egyptian tourism within the Kuwaiti tourist agency Al Kharafi.
The Kuwaiti company Al Kharafi has been operating for over 100 years in the building and trading sectors and is currently active in the Middle East tourist sector.
Since 1960 it has been operating as a company for the building of real estate, especially in the tourist sector, and for civil construction throughout the Gulf area.
Al Sisi’s project is clear: to put builders, real estate agents and tour operators together for expanding Egypt’s tourist infrastructure.
Tourism is vital to Egypt and is also the sector floundering in the deepest crisis of its economy.
Before the shooting down of the Russian plane last October, the Egyptian tourist sector was worth 6.1 billion US dollars (and it was worth 12.5 billion US dollars just before the 2011 “revolution”) while, since the Russian plane crash, the Egyptian tourist business has fallen by 282 million US dollars per month.
These negative effects have been recorded even after Egypt hiring the international security consultancy firm Control Risks, while Russia has not yet resumed direct flights to Egypt.
Officers of the Russian security forces are still permanently deployed in Egyptian airports, while Italy has reopened all tourist channels, especially those regarding low cost airlines.
Nevertheless, through Thomas Cook and other national agencies, Great Britain still prevents travels to Sharm El Sheikh.
The task of Minister Rashed, who has a long experience in the luxury hotel sector, will be to convince Russia and Great Britain, in particular, to reopen their tourist routes to the South of Egypt and its archaeological sites.
As Minister for Civil Aviation, Al Sisi chose Sherif Fathy, former President of EgyptAir, who also worked at high levels both for the Dutch KLM and the American Northwest airlines.
The new Minister wants to develop new “unconventional” safety and security models and, together with his colleague of the Minister for Tourism, to convince Russia and Great Britain to return to Sharm.
Mohammed Safan is the new Minister for Manpower, a role which in Egypt is also related to the regulation of employment activities and young generations’ and unemployed people’s access to the labour market.
Before being appointed Minister, Safan had been the leader of the oil workers’ union and deputy-Secretary of the Egyptian Trade Union Federation (ETUF).
Al-Sisi appointed Mohammed Abdel Atty, former Head of Egypt’s Nile Water Authority as Minister for Irrigation and Water Resources, which have been a key factor of the Egyptian economy and society as early as the time of Ramses I.
Nile’s control is certainly a relevant strategic factor, considering that, as early as King Farouk’s days, it is strategically essential for Egypt to secure the supply areas of the Nile River in Africa.
“O Solon, Solon, you Greeks are always children: there is not such a thing as an old Greek. You are young in soul, every one of you. For therein you possess not a single belief that is ancient and derived from old tradition, nor yet one science that is hoary with age.
And this is the cause thereof: there have been and there will be many and diverse destructions of mankind, of which the greatest are by fire and water, and lesser ones by countless other means”.
Plato reports in his Timeaus this speech by an Egyptian priest to Solon, but it is worth recalling that the very ancient civilization which made the Egyptians already adults was linked to the Nile River cycle.
And Nile’s security at its sources is also a serious military and security problem, particularly with regard to the long standing instability coming from the African Great Lakes region.
In fact, Minister Abdel-Atty has excellent relations with the Ethiopian authorities, which are very useful to make the project of the “Grand Ethiopian Renaissance Dam” set again into motion.
Furthermore, in his public speeches, Minister Abdel-Atty has also always maintained the need to solve, in time, the predicament of structural water shortage in Egypt.
The new Minister for Transport is Galaal Al Saleed, a former Minister in the same Department under the Government of the Supreme Council of the Armed Forces in 2011.
Later, Al Saleed became Governor-General of Cairo.
Al Sisi chose Khaled Al-Anany as Minister for Antiquities.
In 2015 Al-Anany became general supervisor of the Grand Egyptian Museum but, previously, he had been the general manager of the National Museum of Egyptian Civilization.
Finally, the last new Minister appointed by Al Sisi is Nihal El Megharbel, as vice-Minister of the Ministry for Planning.
What is the political goal of these new appointments made by Al Sisi?
Probably the aim is to buy time at internal level, while the Egyptian government gets ready for a new strategy of suasion and actual new possibilities for foreign investment, as well as attempting a controlled liberalization of domestic markets.
The substance and essence of these choices make us foresee some Al Sisi’s pessimism on Egypt’s future economic potential.
In a 205-page document made public a few days ago, Prime Minister Sherif has already announced that the unemployment rate has risen from the 9% recorded in 2009-2010 to the current 13.3%.
If we consider that, from 2009 to 2014, the total Egyptian population grew from 77 million to the current 90, the situation gets extremely problematic.
Again from 2009 to 2014, public subsidies for food and fuels doubled and, as it was easy to foresee, inflation sky-rocketed so as to force the Egyptian Central Bank to carry out a devaluation of about 13% at the beginning of March.
Meanwhile, military spending has inevitably increased and, considering what we have already said on tourism and Foreign Direct Investment, growth has dropped significantly.
Moreover market signals show that the Egyptian currency is still overvalued and hence prices have risen further.
If another devaluation does not occur, an injection of fresh (foreign) capital will be needed to support the Egyptian currency.
This is an economic and social scenario similar to the one which allowed the fall of Hosni Mubarak’s regime, within the framework of a naive operation of North American coloured revolution.
But it was the Muslim Brotherhood – by providing the Praetorian Guard to the protesters gathered to demonstrate in Tahrir Square, among which the sister of Al Zarqawi, the leader of Al Qaeda, and the Head of Google in Egypt stood out – to build Mohammed Morsi’s electoral victory, guaranteed by the Muslim Brotherhood religious welfare for the countless Egyptian proletarians.
Then the well-known Al Sisi’s bloodless coup, the discovery of Morsi’s opening to jihad in the Sinai region, and the rest is very recent history.
Al Sisi is well aware that the problem lies in the fact that wages and subsidies account for 75% of public expenditure.
Both the fall of wages, with the resulting mass revolts, and the increase in prices, which would have the same political effect, must be avoided.
The public spending that Al Sisi can never reduce is the one for the Armed Forces, the real leader of Egypt’s economy. Nevertheless the rebellions being planned could thwart all the rational efforts for reforming the Egyptian economy imagined by Al Sisi.
If the new government succeeds in reforming the economy and, with a new internal security climate, in attracting the funds necessary for what the economist Walt Rostow defined the economic take-off (with specific reference to India in the 1960s), everything will turn out well and we will have strategic security in the Suez Canal and in the Sinai region, also for the European Union.
Otherwise the Egyptian crisis will recur, with two well-known scripts: the fundamentalist coup and the arrival of capital of the jihad and the countries sponsoring it.
Or Egypt’s endless economic decline, thus making the people of the most ancient country of the Mediterranean civilization add to the huge flows of people landing onto our shores.
It is also good to think about these facts, when we ask, with good reason, to know the truth about the assassination of the Italian researcher Giulio Regeni.
Will Oman Succeed In What The UN And US Envoys Failed In Yemen?
Since taking office on January 20, US President Joe Biden has made a priority for Yemen and appointed Tim Linderking as the US special envoy to Yemen to seek an end of the war that has been going on for more than six years, which made Yemen live “the worst humanitarian crisis in the world”, as described by the United Nations.
Nearly four months after his appointment as a special envoy to Yemen, and after several visits to the region, and several meetings through Omani coordination with representatives of the Houthi movement in Muscat, Linderking returned to the United States empty-handed, announcing that the Houthis are responsible for the failure of the ceasefire to take hold in Yemen. The US State Department said “While there are numerous problematic actors inside of Yemen, the Houthis bear major responsibility for refusing to engage meaningfully on a ceasefire and to take steps to resolve a nearly seven-year conflict that has brought unimaginable suffering to the Yemeni people”.
Two days only after the US State Department statement, which blamed the Houthis for the failure of the peace process in Yemen, an Omani delegation from the Royal Office arrives in Sana’a. What are the goals behind their visit to Sana’a, and will the Omani efforts be crowned with success?
Houthi spokesman Muhammad Abdul Salam said that “the visit of a delegation from the Omani Royal Office to Sanaa is to discuss the situation in Yemen, arrange the humanitarian situation, and advancing the peace process”. However, observers considered that the delegation carried an American message to the Houthi leader as a last attempt to pressure the Houthis to accept a ceasefire, and to continue the peace efforts being made to end the war and achieve peace, especially after the failure of all intensive efforts in the past days by the United Nations and the United States of America to reach a ceasefire as a minimum requirement for peace.
Oman was the only country in the Gulf Cooperation Council that decided not to participate in what was called “Operation Decisive Storm”, led by Saudi Arabia following its consistent policy of non-interference. Due to its positive role since the beginning of the crisis and its standing at the same distance from all the conflicting local and regional parties in Yemen, it has become the only qualified and trusted party by all the conflicting parties, who view it as a neutral side that has no interest in further fighting and fragmentation.
On the local level, Oman enjoys the respect and trust of the Houthis, who have embraced them and their negotiators for years and provided them with a political platform and a point of contact with the international parties concerned with solving the Yemeni problem, as well as embracing other political parties loyal to the legitimate government, especially those who had a different position to the Saudi-Emirati agenda during the last period.
At the regional level, Oman maintains strong historical relations with the Iran, and it is a member of the Gulf Cooperation Council, and this feature enables it to bring the views between the two sides closer to reach a ceasefire and ending the Yemeni crisis that has raved the region for several years as a proxy war between the regional rivalries Saudi Arabia and Iran.
Oman now possesses the trust and respect of all local, regional and international parties, who resorted to it recently and they are all pushing to reach a ceasefire and ending the crisis, after they have reached a conviction that it is useless. So the Omani delegation’s public visit to Sana’a has great connotations and an important indication of the determination of all parties to reach breakthrough in the Yemeni crisis.
The international community, led by the United States, is now looking forward to stop the war in Yemen. Saudi Arabia also is looking for an end to the war that cost the kingdom a lot and it is already presented an initiative to end the Yemeni crisis, as well as Iran’s preoccupation with its nuclear program and lifting of sanctions.
Likewise, the conflicting local parties reached a firm conviction that military resolution is futile, especially after the Houthis’ failed attempt for several months to control Marib Governorate the rich of oil and gas and the last strongholds of the government in the north, which would have changed the balance of power in the region as a whole.
Despite the ambiguity that is still surrounding the results of the Omani delegation’s visit to Sana’a so far, there is great optimism to reach a cease-fire and alleviate the humanitarian crisis and other measures that pave the way for entering into the political track to solve the Yemeni crisis.
The situation in Yemen is very complicated and the final solution is still far away, but reaching a ceasefire and the start of negotiations may be a sign of hope and a point of light in the dark tunnel of Yemenis who have suffered for years from the curse of this war and its devastating effects.
Saudi Arabia steps up effort to replace UAE and Qatar as go-to regional hub
Saudi Arabia has stepped up efforts to outflank the United Arab Emirates and Qatar as the Gulf’s commercial, cultural, and/or geostrategic hub.
The kingdom has recently expanded its challenge to the smaller Gulf states by seeking to position Saudi Arabia as the region’s foremost sport destination once Qatar has had its moment in the sun with the 2022 World Cup as well as secure a stake in the management of regional ports and terminals dominated so far by the UAE and to a lesser extent Qatar.
Saudi Arabia kicked off its effort to cement its position as the region’s behemoth with an announcement in February that it would cease doing business by 2024 with international companies whose regional headquarters were not based in the kingdom.
With the UAE ranking 16 on the World Bank’s 2020 Ease of Doing Business Index as opposed to Saudi Arabia at number 62, freewheeling Dubai has long been international business’s preferred regional headquarters.
The Saudi move “clearly targets the UAE” and “challenges the status of Dubai,” said a UAE-based banker.
A latecomer to the port control game which is dominated by Dubai’s DP World that operates 82 marine and inland terminals in more than 40 countries, including Djibouti, Somaliland, Saudi Arabia, Egypt, Turkey and Cyprus, the kingdom’s expansion into port and terminal management appears to be less driven by geostrategic considerations.
Instead, Saudi Arabia’s Red Sea Gateway Terminal (RSGT), backed by the Public Investment Fund (PIF), the kingdom’s sovereign wealth fund, said it was targeting ports that would service vital Saudi imports such as those related to food security.
PIF and China’s Cosco Shipping Ports each bought a 20 per cent stake in RSGT in January.
The Chinese investment fits into China’s larger Belt and Road-strategy that involves the acquisition regionally of stakes in ports and terminals in Saudi Arabia, Sudan, Oman, and Djibouti, where China has a military base.
RSGT Chief Executive Officer Jens Floe said the company planned to invest in at least three international ports in the next five years. He said each investment would be up to US$500 million.
“We have a focus on ports in Sudan and Egypt. They weren’t picked for that reason, but they happen to be significant countries for Saudi Arabia’s food security strategy,” Mr. Floe said.
Saudi Arabia’s increased focus on sports, including a potential bid for the hosting of the 2030 World Cup serves multiple goals: It offers Saudi youth who account for more than half of the kingdom’s population a leisure and entertainment opportunity, it boosts Crown Prince Mohamed bin Salman’s burgeoning development of a leisure and entertainment industry, potentially allows Saudi Arabia to polish its image tarnished by human rights abuse, including the 2018 killing of Saudi journalist Jamal Khashoggi, and challenges Qatar’s position as the face of Middle Eastern sports.
A recent report by Grant Liberty, a London-based human rights group that focuses on Saudi Arabia and China, estimated that the kingdom has so far invested in US$1.5 billion in the hosting of multiple sporting events, including the final matches of Italy and Spain’s top soccer leagues; Formula One; boxing, wrestling and snooker matches; and golf tournaments. Qatar is so far the Middle East’s leader in the hosting of sporting events followed by the UAE.
Grant Liberty said that further bids for sporting events worth US$800 million had failed. This did not include an unsuccessful US$600 million offer to replace Qatar’s beIN tv sports network as the Middle Eastern broadcaster of European soccer body UEFA’s Champions League.
Saudi Arabia reportedly continues to ban beIN from broadcasting in the kingdom despite the lifting in January of 3.5 year-long Saudi-UAE-led diplomatic and economic boycott of Qatar.
Prince Mohammed’s Vision 2030 plan to diversify and streamline the Saudi economy and ween it off dependency on oil exports “has set the creation of professional sports and a sports industry as one of its goals… The kingdom is proud to host and support various athletic and sporting events which not only introduce Saudis to new sports and renowned international athletes but also showcase the kingdom’s landmarks and the welcoming nature of its people to the world,” said Fahad Nazer, spokesperson for the Saudi Arabian embassy in Washington.
The increased focus on sports comes as the kingdom appears to be backing away from its intention to reduce the centrality of energy exports for its economy.
Energy minister Prince Abdulaziz bin Salman, Prince Mohammed’s brother, recently ridiculed an International Energy Agency (IEA) report that “there is no need for investment in new fossil fuel supply” as “the sequel of the La La Land movie.” The minister went on to ask, “Why should I take (the report) seriously?”
Putting its money where its mouth is, Saudi Arabia intends to increase its oil production capacity from 12 million to more than 13 million barrels a day on the assumption that global efforts to replace fossil fuel with cleaner energy sources will spark sharp reductions in US and Russian production.
The kingdom’s operating assumption is that demand in Asia for fossil fuels will continue to rise even if it drops in the West. Other Gulf producers, including the UAE and Qatar, are following a similar strategy.
“Saudi Arabia is no longer an oil country, it’s an energy-producing country … a very competitive energy country. We are low cost in producing oil, low cost in producing gas, and low cost in producing renewables and will definitely be the least-cost producer of hydrogen,” Prince Abdulaziz said.
He appeared to be suggesting that the kingdom’s doubling down on oil was part of strategy that aims to ensure that Saudi Arabia is a player in all conventional and non-conventional aspects of energy. By implication, Prince Abdulaziz was saying that diversification was likely to broaden the kingdom’s energy offering rather than significantly reduce its dependence on energy exports.
“Sports, entertainment, tourism and mining alongside other industries envisioned in Vision 2030 are valuable expansions of the Saudi economy that serve multiple economic and non-economic purposes,” “ said a Saudi analyst. “It’s becoming evident, however, that energy is likely to remain the real name of the game.”
Iranians Will Boycott Iran Election Farce
Iran and elections have not been two synonymous terms. A regime whose constitution is based on absolute rule of someone who is considered to be God’s representative on earth, highest religious authority, morality guide, absolute ruler, and in one word Big Brother (or Vali Faqih), would hardly qualify for a democracy or a place where free or fair elections are held. But when you are God’s rep on earth you are free to invent your own meanings for words such as democracy, elections, justice, and human rights. It comes with the title. And everyone knows the fallacy of “presidential elections” in Iran. Most of all, the Iranian public know it as they have come to call for an almost unanimous boycott of the sham elections.
The boycott movement in Iran is widespread, encompassing almost all social and political strata of Iranian society, even some factions of the regime who have now decided it is time to jump ship. Most notably, remnants of what was euphemistically called the Reformist camp in Iran, have now decided to stay away from the phony polls. Even “hardline” former president Mahmoud Ahmadinejad realizes the extent of the regime’s woes and has promised that he will not be voting after being duly disqualified again from participating by supreme leader’s Guardian Council.
So after 42 years of launching a reformist-hardliner charade to play on the West’s naivety, Khamenei’s regime is now forced to present its one and true face to the world: Ebrahim Raisi, son of the Khomeinist ideology, prosecutor, interrogator, torturer, death commission judge, perpetrator of the 1988 massacre of political prisoners, chief inquisitionist, and favorite of Ali Khamenei.
What is historic and different about this presidential “election” in Iran is precisely what is not different about it. It took the world 42 years to cajole Iran’s medieval regime to step into modernity, change its behavior, embrace universal human rights and democratic governance, and treat its people and its neighbors with respect. What is shocking is that this whole process is now back at square one with Ebrahim Raisi, a proven mass murderer who boasts of his murder spree in 1988, potentially being appointed as president.
With Iran’s regime pushing the envelope in launching proxy wars on the United States in Iraq, on Saudi Arabia in Yemen, and on Israel in Gaza and Lebanon, and with a horrendous human rights record that is increasingly getting worse domestically, what is the international community, especially the West, going to do? What is Norway’s role in dealing with this crisis and simmering crises to come out of this situation?
Europe has for decades based its foreign policy on international cooperation and the peaceful settlement of disputes, and the promotion of human rights and democratic principles. The International community must take the lead in bringing Ebrahim Raisi to an international court to account for the massacre he so boastfully participated in 1988 and all his other crimes he has committed to this day.
There are many Iranian refugees who have escaped the hell that the mullahs have created in their beautiful homeland and who yearn to one day remake Iran in the image of a democratic country that honors human rights. These members of the millions-strong Iranian Diaspora overwhelmingly support the boycott of the sham election in Iran, and support ordinary Iranians who today post on social media platforms videos of the Mothers of Aban (mothers of protesters killed by regime security forces during the November 2019 uprising) saying, “Our vote is for this regime’s overthrow.” Finally, after 42 years, the forbidden word of overthrow is ubiquitous on Iranian streets with slogans adorning walls calling for a new era and the fall of this regime.
Europe should stand with the Iranian Resistance and people to call for democracy and human rights in Iran and it should lead calls for accountability for all regime leaders, including Ebrahim Raisi, and an end to a culture of impunity for Iran’s criminal rulers.
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