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Iran and North Korea highlight pitfalls of Trump’s ‘maximum pressure’ strategy

Dr. James M. Dorsey

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Donald J. Trump’s hitherto failed ‘maximum pressure’ approach to Iran, as well as for that matter North Korea, begs the question what the US president’s true objectives are and what options he is left with should the policy ultimately fail.

In the case of North Korea, it remains to be seen whether the country’s reported rebuilding of a rocket launch site after the US president last month walked away from his summit in Hanoi with Kim-Jong-un constitutes a negotiating tactic or a breakdown. The site was partially dismantled as a goodwill gesture after the two men first met in Singapore last year.

A breakdown coupled with even harsher sanctions that similarly may not do the job risks leaving Mr. Trump with few good options beyond some kind of military operation.

Mr. Trump has so far credibly conveyed his intent of wanting to fully denuclearize North Korea rather than ultimately change its regime, a further indication of the apparent comfort he finds in dealing with at least some autocratic and authoritarian leaders.

The picture with regard to North Korea and Iran is both similar and different.

Iranian resilience backed by key players in the international community determined to salvage the 2015 international agreement that curbed Iran’s nuclear program could blunt the impact of harsh US sanctions, again leaving the United States with few good options beyond either backing away from its maximalist approach or weighing overt or covert military action.

Mr. Trump’s intentions regarding Iran, in contrast to North Korea, are far less clear. Increasingly strident language by the president’s hard-line national security advisor, John Bolton, as well as his Secretary of State, Mike Pompeo, coupled with the specific changes of Iranian policies that the US is demanding, suggest that regime change rather than reform may be the president’s true objective. It is hard to see how Iran could comply with the US demands without a change of regime.

For now, Iran’s strategy appears to be circumventing sanctions in every way it can, ensuring continued support by Europe, China and Russia, and waiting it out to see whether Mr. Trump gets a second term in the 2020 US elections in the hope that a Democratic president comes to office who would negotiate a return of the United States to the nuclear accord.

“A pressure campaign will only be effective if enough time is dedicated to it. In other words, there are no quick and easy victories, as the North Korean case demonstrates. And attempts to get them will only push the goalposts further away,” said political scientist Ariane M. Tabatabai.

In a twist of irony, carrot-and-stick-backed efforts by international regulators to get Pakistan and Iran to significantly upgrade their legal abilities to counter political violence potentially are proving to be more effective than maximum pressure.

Concern that Pakistan could be blacklisted by the Financial Action Task Force (FATF), the international anti-money laundering and terrorism finance watchdog, compounded by mounting tension with India, prompted Pakistan in recent days to crackdown on long tolerated militant groups.

Blacklisting potentially would have a debilitating impact on Pakistan’s crisis-ridden economy. It would restrict the ability of multilateral organizations like the International Monetary Fund (IMF), the World Bank and the Asian Development Bank (ADB) to aid or lend to Pakistan.

The fact that Iran faces a similar dilemma has sparked intense debate in the Islamic republic about how to deal with FATF demands that it join the watchdog and significantly upgrade its legal anti-money laundering and terrorism finance infrastructure to evade being blacklisted.

Iran’s parliament has so far passed two of four bills required for membership and together with the Expediency and Discernment Council is debating Iranian accession to the Combating the Financing of Terrorism Convention (CFT) and the United Nations Convention against Transnational Organized Crime or Palermo Convention.

The FATF demands have put Iran between a rock and a hard place.

Iranian ratification of those conventions coupled with FATF membership holds out the promise of more effectively and more quickly than US maximum pressure curtailing Iran’s ability to fund regional proxies.

Failure to comply could significantly increase the pain of US sanctions by prompting those banks and financial institutions still willing to do business with Iran to rethink their positions.

It would also likely restrict the ability of supporters of the nuclear agreement to help Iran soften the impact of the sanctions.

“If you want us to succeed in the talks with Europe, at least the four proposed bills must be ratified,” said member of the Iranian parliament, Abulfazle Mousavi.

“By joining, Iranian banks will be under what will be unprecedented international scrutiny. This will make it more difficult, although not impossible, for Iran to transfer money to terror organizations… such as Hezbollah, Hamas and the Islamic Jihad. Additionally, Iranian membership in the FATF would weaken the financial strength of the Iranian hard-liners, who have always called for a more aggressive foreign policy in the region,” said Iran scholar Meir Javedanfar.

That is what has fuelled opposition in Iran to acceptance of FATF’s requirements. Hardliners have warned that FATF would effectively impair Iran’s ability to pursue a defense strategy focused on fighting the country’s foreign policy and military battles far beyond its borders and would give US sanctions more bite.

Joining these conventions will lead to interference with Iran’s internal affairs, including financial and economic issues,” said Abolfazl Hasanbeygi, a member of the Iranian parliament’s National Security and Foreign Policy Commission.

Mr. Hasanbeygi warned that FATF would be the vehicle that the country’s detractors would use to gain access to the workings of Iran’s banking and economic system and its flows of funds.

As a result, Iran is at a crossroads more because of the application of a rules-based international and multilateral system than the coercion of punitive sanctions imposed by a world power. In reality, Iran is emerging as a litmus test of the effectiveness of varying forms of global governance.

If Iran “does not comply with the FATF regulations, the whole Iranian banking system could become thoroughly isolated from the global financial system. This means that it would be almost impossible to transfer the country’s oil revenue internationally and even into its national economy,” said political analyst Shahir Shahidsaless.

“And if it does comply, it will face complications such as the creation of an FIU, becoming exposed to sanctions as a result of its chaotic banking system, greater difficulty bypassing US sanctions and, finally, risk getting trapped in allegations of financing terrorism,” he added referring to FATF’s insistence that members create a financial intelligence unit that monitors and reports on the funding of political violence.

Dr. James M. Dorsey is a senior fellow at the S. Rajaratnam School of International Studies, co-director of the University of Würzburg’s Institute for Fan Culture, and the author of The Turbulent World of Middle East Soccer blog, a book with the same title, Comparative Political Transitions between Southeast Asia and the Middle East and North Africa, co-authored with Dr. Teresita Cruz-Del Rosario and three forthcoming books, Shifting Sands, Essays on Sports and Politics in the Middle East and North Africaas well as Creating Frankenstein: The Saudi Export of Ultra-conservatism and China and the Middle East: Venturing into the Maelstrom.

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Future of BRICS: BRAXIT or ‘Power Next’?

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The club of emerging political and economic powers of Brazil, Russia, India, China, and South Africa in response to new global challenges is famously known as BRICS. Since its inception in 2006, it has been a platform to highlight the prominence of multi-polar world order challenging the collision of G-7 members. These five countries account for 20 percent of world GDP and 40% of the world population. Further, they hold 40 percent of gold and hard currency reserves. Being collectively the largest market, their cumulative GDP has tripled in the last ten years.

With the president of Brazil, Jair Bolsonaro on 28th October 2018, many are skeptical about the future of the BRICS as he comes from the far-rightwing camp which seems to be antagonistic to the BRICS. Brazil is the most populous nation in South America with the world’s eighth-largest economy of the world. Bolsonaro wants Brazil to be great as Trump wants America to be great. Even during Bolsonaro’s campaign period, he has reiterated that his foreign policy would be changed from his precursor. Further, he is a follower of conservative Christianity who profoundly believes in restoring Judeo-Christian tradition against communism.

With this scenario, the future of BRICS has been subjected to controversial as to Jair Bolsonaro would lead Brazil to exit the BRICS moving towards the pro-western camp. Another argues that this collision would last long due to their close trade relations. 

The Origin of BRICS

In 2001 the term BRIC was firstly coined by Jim O’Neill, a British economist in a paper written for ‘Global Economic Paper’ of Goldman Sachs using the acronym stands for Brazil, Russia, India, and China. The first summit was held in 2009 at Yekaterinburg, Russia emphasizing the need of reformations to be made to the international financial institutions. In 2011, South Africa became a member of this group at the third Summit held at Sanaya, China making BRIC into BRICS. The primary purpose of BRICS is to broaden the cooperation among members and enhances the support for multipolar world order. It is mainly an indication of the movement of world power from the west to the South.  Since the inception BRICS conducts its annual summit of heads of the states to youth forums though the members don’t have their own permanent executive body or a secretariat.

Functions of BRICS

Two main functions of the BRICS are, to 1) liaise with meetings and international organizations such as IMF and G-20 Grouping and to 2) design a framework for BRICS members for multi-sectoral cooperation. Today it covers more than 30 sectors including agriculture, science and technology, culture, outer space, think tanks, Internet governance and security, social welfare, intellectual property, health, and tourism.  The forum called BRICS Business Council promotes and strengthens business, trade and investment ties amongst the business communities of the members. Think Tank Council formulates long term economic strategies of the members.

Further initiatives have been made for establishing New Development Bank (NDB) to finance the infrastructure projects in emerging economies and developing countries and also for entering into Contingent Reserves Arrangement (CRA) to promote mutual support among the members in situations of instability in the balance of payments. Demands have also been made to reformulate the IMF but, they were not yet successive because of the resistance caused by the Western power. Moreover, the BRICS are open to cooperation and constructive engagement with other countries, as well as open with international and regional organizations in dealing with current global issues.

Despite this, one of the vital political demands that the BRICS has made to the United Nations Organization is to expand the number of members of the Security Council covering the BRICS members and making decisions of the UNO more democratic and accountable. This shows the importance of BRICS to balance the prevailing world order and also to voice for the global south in international relations.

Challenges Ahead

However, as it is mentioned the foreign policy of Bolsonaro is opposite to the leftist approach which was a blessing to accelerate the activities of BRICS. It is more similar to the protectionist approach followed by the US President, Trump. Once, Bolsonaro said at a press conference as “It is about aiming for a great Brazil like that – the way Trump wants America to be great”. This approach is contrary to the joint statement made at the 2nd summit of the heads of the states held at Brazil where the members pledged to resist all forms of protectionism and fight disguised restrictions on trade. Further, criticisms made concerning multilateralism and pulling out Brazil from Global Compact for Migration also support Bolsonaro’s protectionist approach. With respect to the crisis in Venezuela, Bolsonaro supporting the USA rejects Nicolas Maduro as the duly elected President, while all other BRICS members accept Maduro as democratically elected president.
Moreover, distant relations between China and Brazil also a reason to make BRICS in a more controversial position.  With the Xi Jinping’s rise in China from 2013, China took the leadership of the BRICS group and proposals were made at the Fortaleza Summit in 2014 to establish NDB to mobilize resources for infrastructure and sustainable development projects in BRICS and other emerging economies, as well as in developing countries. However, Bolsonaro’s far right and anti-communist ideology is contrary to fundamental policies of China. His early visit to Taiwan and South Korea and China’s reaction on his visit has greatly influenced on assuming Bolsonaro would choose between BRICS and OECD members.

 Nonetheless, since 2009 China is the top trading partner of Brazil and on the other hand export of soy to China from Brazil is as crucial as the arrival of Chinese investment into Brazil. According to a recent study carried by the Started Charted Bank, China will become the largest economy of the world in 2020. Hence, though there is much ideological dissimilarity, both the countries are dependent on each other concerning their trade relations.

Conclusion

If Bolsonaro is more driven by his far-right ideology than by pragmatism, he will not deal closely with the BRICS members. However, it is difficult to assume that he will abandon this BRICS group as Brazil is highly dependent on Chinese imports. It would be challenging for him to dramatically shift in his trade relations having with China and also with Russia. More importantly, in the middle of this year, it is Brazil’s turn to host the BRICS summit of 2019. Though there are no valid reasons for BRAXIT, i.e. for Brazil to exit from BRICS, Brazil would not be an active player in BRICS making BRICS into the most powerful allies of the South as it happened during LuizInácio Lula da Silva’s tenure. Skepticism arose even when Narendra Modi appointed as Prime-Minister in India coming from the far right wing that how BRICS is going to maintain cooperation among members with the rivalry between India and Russia. Further, Brazil was not prominent in BRICS during his predecessors Dilma Rousseff and Michel Temer’s period. Conversely, it’s not only stance of Brazil has been changed even China doesn’t seem to be willing to invest much on the BRICS as in the past. As Lord Palmerston once stated, “in international relations, there is no eternal allies and no perpetual enemies. Only the interests are eternal and perpetual”. Hence, BRAXIT seems to be far away than we assume.

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Sanders will criticize Trump

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Of course, during the upcoming presidential elections in the United States, there will be a lot of criticism from the White House and the U.S. president. This is a matter of great concern to Donald Trump. On the other hand, Democratic Party elections will begin shortly. The common point of all candidates for this election is criticism of Trump’s policies.

Bernie Sanders, the old American senator, and one of Democratic nominees for the 2020 presidential election, continues to oppose U.S. President Donald Trump. This confrontation started at the time Trump entered the White House (by early 2017). Sanders called for an end to Washington’s support for Riyadh in the Yemeni war. Sanders also condemned Trump’s stance on the murder of Jamal Khashoggi. At any rate, Sanders’s recent position against Trump has led to the U.S. President’s concerns.

Sen. Bernie Sanders says it would be an “impeachable offense” if President Trump were to fire Robert Mueller the special counsel leading the federal probe into ties between Trump campaign associates and Russia.

“I’ve been very reluctant to talk about impeachment until we have all the information coming in from the investigation. But that would be a major, major, major obstruction of justice. That would be an impeachable offense in my view,” Sanders said in an interview for The Intercept’s newly launched podcast “Deconstructed” released Friday.

In his tweet, Sanders was referring Jeff Sessions, Trump’s Justice Minister, and his forced resignation. Trump fired Attorney General Jeff Sessions, replacing him with a loyalist who has echoed the president’s complaints about the special counsel investigation into Russia’s election interference and will now take charge of the inquiry.

Among all Democrat candidates, Sanders has a lot of motivation to challenge the trump!The fact is, according to polls conducted in 2016, Sanders had a much greater chance of winning the U.S. presidential elections. Many Democratic voters believed that Sanders could have an important role in regulating power in America as a symbol of change in the United States. Although such an idea was wrong due to the political structure in the U.S., it was, however, strongly accepted by some Democrat supporters.

 On the other hand, Hillary Clinton, the Democratic candidate who was supported by her husband, Bill Clinton, and many influential figures in the party, managed to defeat Sanders with her secret lobbies, and went to fight Trump as Democrats’ final candidate. Anyhow, if Sanders were to reach the final round of the 2016 presidential competitions, he could have defeated Trump and enter the White House. Sanders, however, was the victim of Democrat leaders and Hillary Clinton’s secret lobbies. It was not without a reason that many Sanders advocates voted for Hillary Clinton’s rival, Donald Trump!

Ultimately, the tensions between Trump and Sanders in the U.S. presidential election of 2020 will be of great interest to many Americans. If the Sanders win in the Democratic Party, this conflict will become more intense and more serious. A topic that the president of the United States and his entourage are scared of.

First published in our partner Tehran Times

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The collapse of American empire is a warning to Europe

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The wars in Iraq, Syria, Yemen and threats and violence against Latin America, and imposition of sanctions on various nations, all can deface the United States and its unpopular policy in the international community, set to protect U.S. financial institutions.

Although the U.S. empire has already begun to crumble, U.S. President Donald Trump’s policy has sped the process. The wrong policy of the U.S. administrations has brought the nations to stand against the U.S. led-world order.

The U.S. has turned into the biggest threat to world peace with its duel policies, violence in Iraq, Libya, Syria, and Yemen, and support for Saudi Arabia and Israel. Obviously, the “regime change” in Venezuela, on the pretext of democracy, is nothing but a cover-up in the U.S. policy to seize Venezuela’s oil reserves.

 American democracy means supporting U.S. foreign policy, privatization of public infrastructure, non-compliance with domestic laws and compliance with U.S.-dominated global institutions. Decades of war and U.S. military intervention, have brought nothing but violence, killing, and destruction on planet earth.  

To the U.S., a country is considered democratic that follows its leadership such as Israel and Saudi Arabia, otherwise, that country is non-democratic and a foe. This policy is challenged by states like Iran, Russia, China, Venezuela and others which don’t bow down to Washington’s policy and seek to defend their own national interest.

Any international control system requires the rule of law to mediate in the world challenges.  However, U.S. diplomacy contradicts international law. The American diplomats claim their better judgment on the world allows other nations to adopt a more prosperous lifestyle, and they don’t allow the intervention of international laws in the U.S. policy and diplomatic system. 

The U.S. has the “power of veto” in the United Nations that enables Washington to prevent the adoption of any “substantive” resolution. In the World Bank and International Monetary Fund (IMF), they can easily veto any policy or loan. Without such powers, no international organization will join the United States.

Without having the power of veto, the U.S. doesn’t recognize the verdict of and authorities in the international court of Justice. If sentences issued by The Hague Court oppose the U.S. policy, they will be considered inadmissible to the U.S. For example, the verdicts issued on U.S. war crimes in Iran and Afghanistan, human rights abuse, and illegal sanctions are not recognized by Washington. 

In September of last year, Trump National Security Advisor John Bolton, a hawkish politician, strongly criticized the International Criminal Court and said, “The United States will use any means necessary to protect our citizens and those of our allies from unjust prosecution by this illegitimate court.”

Senior judge Christoph Flugge from Germany resigned from one of the UN’s international courts in The Hague in objection to the U.S. that had threatened judges after moves were made to examine the conduct of U.S. soldiers in Afghanistan. 

Bolton vowed that the United States would retaliate by banning ICC judges and prosecutors from entering the U.S., imposing sanctions on any funds they had in the States and prosecuting them in the American court system. “If the court comes after us, Israel, or other U.S. allies we will not sit quietly,” he said, also threatening to impose the same sanctions on any country that aided the investigation. Bolton held a speech last September in which he wished death on the international criminal court. “We will let the ICC die on its own. After all, for all intents and purposes, the ICC is already dead.”

The central banks of states have long maintained their gold and other monetary reserves in the U.S. and UK. Perhaps the approach seemed logical in 1945; however, the U.S. and UK orchestrated 1953 coup d’état against Mohammad Mosaddegh, Iran’s prime minister, who nationalized Iran’s oil, and the Iranian revolution of 1979 which led to overthrow of the Shah, the American courts blocked Iran’s assets in the U.S. The movements showed that the IMF is an arm of the U.S. Department of State and the Pentagon. In today’s global politics, international finance and foreign investment have become leverage against nations who won’t bow down to U..S policies.

Lately, foreign countries are apprehensive about their gold holdings in the U.S. They know full well that their assets can be blocked unilaterally by the U.S. if Washington’s interests are threatened. That is why in 2017, Germany decided to repatriate half of its gold reserves from the U.S. The U.S. authorities have considered the act an insult to their own civilized state. 

Now, it’s Venezuela’s turn. The country called on the Bank of England to return $1.2 billion of its reserved gold to repair the economy, which has been hurting by the American sanctions.

The Bank of England, however, froze Venezuelan gold asset following Mike Pompeo United States Secretary of State and Bolton’s instruction. Bloomberg wrote that the U.S. handed control of Venezuela’s bank accounts in the U.S. to the opposition leader Juan Guaido to have a better chance to control the self-claimed government. 

In late January, a rumor broke out that a Russian Boeing 777 that had landed in Caracas to spirit away 20 tons of gold from the vaults of the country’s central bank, amounting to $840 million in return for food and medicine. Although Moscow rejected the report, the Nicolás Maduro government has the right to purchase food for the Venezuelans who are under brutal U.S. sanctions by the country’s gold reserve. U.S. Senator Marco Rubio called the act “stealing money” as if Maduro is a criminal for trying to reduce the pressure of U.S. unfair sanctions against his people.  

The European countries, too, have to abide by the U.S. policy, otherwise, they will be threatened to sanctions. For instance, if the European Union wishes to remain committed to the Iran deal, it will have to surrender to the U.S. pressure and sanctions. European states have realized that Bolton and Pompeo’s threats can lead to confiscation of their assets by the U.S.  

The U.S. threats are not merely military but a cyber-attack is a way of confronting an enemy and crashing its economy. The main cyber money transfer is led by Society for Worldwide Interbank Financial Telecommunication (SWIFT) which is based in Belgium. Some countries are developing an alternative money transfer system to protect themselves against U.S. threats.
 
In late January, Germany, France, and England launched INSTEX, a trade tool to counter U.S. sanctions in support of trade with Iran and other countries. Although for Iran, INSTEX is nothing but a similar U.S. humanitarian aid to Venezuela, for Europe it may be a way out of U.S. opposition to transporting Russian gas from Nord Stream to the European continent.

The U.S. energy official warned European official of the risk posed by relying too heavily on Russia’s cheap gas and offered plans to sell America’s liquid natural gas (LNG) at a higher price to Europe through ports, which don’t exist for high volume yet. Trump stresses The North Atlantic Treaty Organization (NATO) members spend two percent of its gross domestic product (GDP) on weapons, preferably from the U.S. and not German or French.
 
It seems the IMF is administered from the Pentagon in Washington. Undoubtedly, Europe is aware of losing its international financial ties.
At the funeral of George H. W. Bush, EU diplomats were at the bottom of the list of candidates to sit in their seats; the United States no longer considers the European Union as a credible entity.
 In December, Mike Pompeo delivered a speech on Europe in Brussels, in which he admired the virtues of nationalism, criticized multilateralism and the European Union, and said that “international institutions” that dominated national sovereignty “must be corrected or deleted. 

On Twitter, Pompeo says with a mockery: “Europe was an enemy of Europe. But it was Germany in World Wars 1 and 2. How did that work out for France? They were starting to learn German in Paris before the U.S. came along. Pay for NATO or not!”
The idea of creating a European army has been discussed in the European Union. The initial offer was from Germany, and then Macron in the commemoration of the centennial of the end of the First World War in France.

Sigmar Gabriel, former foreign minister of Germany, said in February 2018 at the Foreign Policy Forum in Berlin “that it’s time for Germany and Europe to put their agenda on the agenda because the United States no longer sees the world as a global community or shared interests.

French President Charles de Gaulle long ago believed that no nation could be considered an independent state and ordered the withdrawal of France from the North Atlantic Treaty Organization in 1996.

Europe is at risk and knows it too, but it doesn’t have many options ahead. It has to choose either to use the historic opportunity to gain political, and economic independence, or give in to U.S. policy while it awaits the fall of U.S. which will jeopardize its economic and political future. 

First published in our partner Tehran Times

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