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Italy and the Belt & Road Initiative

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There has been a growing scepticism with regard to the Belt and Road Initiative (BRI) project in many quarters, due to the lack of transparency with regards to terms and conditions as well as the economic implications for countries which are part of the project. A report published by the Center for Global Development (CGD) Washington in April 2018 flagged 8 countries (including Pakistan, Maldives, Laos and Djibouti where the level of debts are unsustainable.

Apart from red flag raised by a number of researchers, the removal of Pro-China leadership in countries like Malaysia, Maldives and Sri Lanka has also resulted in the problems of the BRI project, and China’s economic dealings (which are clearly skewed in favour of Beijing) with other countries drawing more attention.

The most vocal critic of China’s economic links has been by Malaysian Prime Minister Mahathir Mohamad. During a visit to China in August 2018, Mahathir not known to mince his words while alluding to China’s trade relations with poorer countries could lead to ‘a new version of colonialism’. Mahathir later on denied that his statement was targeted at China or the BRI. The fact is that the Malaysian Prime Minister did scrap projects estimated at well over 20 Billion USD (which includes a rail project, East Coast Link as well as two gas pipelines).

Top officials in the Trump Administration, including US Vice President Mike Pence, have also been critical of the BRI project for a variety of reasons. The major criticism from US policy makers has been the economic ‘unsustainability’ of the project as well as the point that the project is skewed in favour of China.

Italy to join BRI

As the debate carries on with regard to the BRI,no body can ignore the fact, that Italy (the world’s 8th largest economy) is likely to become the only G7 country to join the BRI.

During Chinese President Xi Jinping’s visit to Italy, later this month (March 22-24) a Memorandum of Understanding MOU, and could be signed. Senior officials in the government have been cautious, and have emphasised on the fact, that the MOU would be ‘non-binding’. Commenting on the status of the MOU, Undersecretary in Italy’s economic development ministry, Michele Geraci stated:

 ‘…it is possible that it will be concluded in time for [Xi’s] visit.”

Geraci a Sinophile, who has spent a fair amount of time in China, is said to be driving the ruling coalition’s policy (The Five Star Movement (M5S) and right leaning Lega joined hands to form a government in June 2018) towards China.

Italian PM, Giueseppe Conte while addressing a seminar, in Genoa, made the point, that while joining BRI would open new opportunities and horizons for Italy, Rome was likely to be cautious, and would not do anything in haste.

Current state of Italy-China relations

If one were to look at the state of China-Italy bilateral relations. China-Italy bilateral trade reached nearly 50 Billion USD in 2017. China is Italy’s largest trading partner in Asia. It would be pertinent to point out that ties between both countries are not restricted to the economic sphere.  There has also been a rise in Chinese tourists visiting Italy (over 1.5 million annually). Even in the sphere of education, linkages between both countries are rising. As of 2017, there were over 6,000 students Italian students in China and nearly 20,000 Chinese students in Italy.

The current government has given immense attention to China, and there have been 3 high level visits ever since the ruling coalition took over the reigns last June (senior officials who visited include – Italy’s Finance Minister Giovanni Tria, Geraci, and Deputy Prime Minister Luigi Di Maio — who also holds the charge of economic development minister). The Italian PM is also likely to attend the second Belt and Road Forum to be held in Beijing in April 2019.

The clear objective of becoming part of BRI, according to senior officials, is to get access for its goods and to also leverage its geo-political location within Europe.  During his visit to China in September 2018, the Italian Deputy PM had spoken in favour of Italy joining the project. The Deputy PM who had gone to attend the 17th Western China International Fair had made the point that Italy was identifying the possible avenues for participation in the project, and that the G7 country could benefit immensely, if it successfully harnessed it’s own economic and geographical strengths.

In  2018,the inaugural meeting of Italy’s China Task Force was held in Rome (this is headed by Michele Geraci). The key objectives of this task force are; to give an impetus to bilateral economic cooperation (to give a boost to Chinese investments in Italy, giving a push to Italian exports to China, cooperation in Research and Development) and also to explore how Italian companies could seek financing under the BRI initiative.  Italy has also been seeking to expand cooperation with China in Africa (the argument is that African growth will help in putting a check on immigration to Italy). Interestingly, former PM Paolo Gentiloni had urged EU and US to invest more in Africa, and to counter China’s growing influence.

Scepticism with regard to Italy-China economic relations

While the government has unequivocally spoken out in favour of this decision. Many argue, that Italy will need to develop it’s own infrastructure – especially the rail system, if it needs to benefit significantly from BRI. Given Italy’s current fiscal situation, too much investment into infrastructure seems highly unlikely. With China having invested in Piraeus (Greece) it is important that the Venice Port becomes more competitive. This will require not just economic investments, but strategic thinking.

There are those who also argue, that the current Italian government has given too much attention to Beijing, at the cost of relations with other countries. The China policy, it is argued will also have an adverse impact on EU’s common China policy

Unlike other Western countries, Italy has not given a very strong reaction on the Huawei controversy

Italian Deputy Prime Minister was quick to state that “We are in no way tilting the geopolitical axis,”

Italian PM also made it clear, that while Italy will join the BRI, it will ensure that this benefits both, and that EU norms and values are not forgotten.

It is argued, that by reaching out to Euro skeptics in EU, Beijing is trying to create divisions within the bloc. Countries like Hungary and Greece, which are being increasingly dependent upon China, have taken a different stance from other EU countries on issues such as The South China Sea and Human Rights violations.

The EU has been critical of the BRI..

It has even come up with its own version of BRI. In September 2018, EU’s strategy for connecting Europe and Asia. Senior EU officials including High Representative/Vice-President Federica Mogherini made it clear, that EU’s strategy was to enhance connect between Europe and Asia, and to ensure it was beneficial for both. The project would also take into account financial and environmental sustainability.

US reaction to Italy joining BRI

US also took note of Italy joining BRI. As expected, the US was critical of Italy’s decision to join the BRI. A White House National Security Council spokesperson, Garrett Marquis in a media interview stated:

“We view BRI as a ‘made by China, for China’ initiative,”

As mentioned earlier, senior members of the Trump Administration too have flagged the shortcomings of the BRI project and how the dependence of certain countries in Asia and Africa is rising.

Conclusion

It is important for countries within the EU as well as other countries sceptical of the BRI to adopt a more pragmatic stance towards Italy’s decision. One must also keep in mind the fact, that while speaking about signing an MOU with China it has left room for manouevre. It is also important for countries vary of increasing Chinese influence to themselves stand up for liberal values, and greater economic integration. One of the reasons for Beijing’s increasing economic clout, is increasing the inward looking economic policies being adopted by a number of countries – not just the US. At the January 2017, World Economic Forum (WEF) Chinese President Xi Jinping had warned against the increasing scepticism with regard to globalisation. Said the Chinese President:

‘Some people blame economic globalization for the chaos in our world. Economic globalization was once viewed as the treasure cave found by Ali Baba in the Arabian nights, but now it has become the Pandora’s Box.’

Very few leaders have spoken up on this issue forcefully enough. Similarly, if the US has flagged problems of the BRI it should be willing to invest in an alternative narrative. So far even if one were to look about the narrative of a ‘Free and Fair’ Indo-Pacific, Washington has not made significant financial commitment (In July 2018, the Trump administration did make a commitment of 113 Million USD for areas like energy, digital economy and infrastructure). While it is believed that the US IDFC (International Development Finance Corporation) created through BUILD (Better Utilisation of Investment leading to development act)  may be able to give the much required boost to some important connectivity projects, but it’s total budget estimated at 60 Billion USD pales in comparison to China’s budget.

The only country which has attempted to put up a cohesive alternative to BRI is Japan’s ‘Partnership for Quality Infrastructure’ (PQI). Japan along with Asian Development Bank will be providing over 100 Billion USD (50 Billion from Japan and 50 Billion from ADB) for infrastructure in Asia. Japan’s economic presence in Africa is also steadily rising, though it is assisting Africa in a number of other areas like health, education through Tokyo International Conference on African Development (TICAD) ( which is co-hosted by the Government of Japan, The World Bank, United Nations Development Programme (UNDP), the African Union Commission and the United Nations).

While it is true, that globalization may not be perfect and some scholars went overboard, but there is also no denying the point that populist policies which have favoured economic isolationism may have helped in achieving political successes, but their limitations are beginning to show in the economic sphere. It is for this reason, that even leaders like Mahathir who are critical of Chinese projects have stated, that if he were to chose between China and an ‘unpredictable US’ he would choose the latter.  Italy on its part must be cautious and should astutely balance its own interests and not allow Beijing to have a free run. Differences with the EU, should not lead to Italy and other countries becoming excessively dependent upon China.

There is no denying the fact, that Italy’s acceptance of the BRI has important implications which go well beyond EU.

Tridivesh Singh Maini is a New Delhi based Policy Analyst associated with The Jindal School of International Affairs, OP Jindal Global University, Sonipat, India

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Ethnic tensions in Montenegro

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On Sunday, July 7, the citizens of Montenegro had the opportunity to witness another incident, that is, the open provocation of radical Albanian elements in Montenegro. Traditionally, on the feast of the Nativity of St. John the Baptist, in Svac, near Ulcinj (a town on the southern coast of Montenegro) liturgy is served at the ruins of a 1, 000 year-old medieval church.

The Metropolitanate of Montenegro and the Littoral held this year the liturgy in Svac, but at the entrance to the locality, where the ancient church is located. As the Montenegrin police, at the request of Albanian politicians, did not allow the liturgy service in the church. At the gathering, strong police forces were present, especially on the entry to the site.

Priest Slobodan Zekovic, who served the liturgy, stated:

“We are no strangers here, we come here for decades. We come here on the foundations of our statehood and spirituality. With a single goal, not to forget our holy ancestors, aware of the graves that are here. I am sending the blessing of Metropolitan Amfilohije, who was supposed to bring the hand of St. John the Baptist. But, due to tensions, that will be done next yеаr. The President of the municipality said that the access to the site has been banned until December, because archaeological research is being done“.

However, last year also there were tensions in Svac. Then, about ten local Albanians blocked the road, so that Metropolitan of Montenegro and Littoral Amfilohije and the believers of the Serbian Orthodox Church could not come to Svac. The leader of this group was Hadzija Sulejmani, a member of the Ulcinj Assembly and a member of the Democratic Party of Albanians. Sulejmani tried to explain his shameful act by saying that the church has never been an Orthodox holy place, and that he, as a Muslim and a representative of the Ulcinj municipality, does not allow access to the church.

Everything becomes much clearer after seeing a monument that the local Albanian politicians set up in 2005 in the form of a memorial plaque, which says: “In the name of our ancestors Illyrians who founded this ancient town of Svac as the legacy of our Albanian culture …” In other words, then the Albanians marked their territory and now slowly begin with violent means to “defend” it.

History is clear about the Svac. The city of Svac has never been the city of Illyrians, and especially not the city of Albanians. In 2012, the Ministry of Culture of Montenegro started exploring Svac. The research team, led by archaeologist Mladen Zagarcanin, discovered Serbian and Roman pottery in the same layer, which clearly shows the centuries-long presence of Serbs in that area. Stefan Nemanja, the Serbian Grand Prince (Veliki Župan), merged Svac to Serbian Grand Principality (also known as Raška, lat. Rascia) in 1183. When the Mongol hordes in 1242 conquered and demolished the city of Svac, it was restored by the Serbian queen Jelena, the wife of King Uros, who lived in Ulcinj at the time. For architectural decoration, the painters and masters are brought from Serbian Grand Principality Raška (lat. Rascia) . The remains of the Church of St. John are still visible in the city today, where still writes that it was built in 1300. In 1571, the town of Svač was completely destroyed by the Turks. However, what is important to mention is that the Albanians took part in the destruction of the Svac, together with the Turks. So today we have come to a crazy situation that the people who ruined Svac, and that’s the Albanians, want to acquire the historical heritage of that medieval city. In a doctoral dissertation “The influence of the Austro-Hungarian Empire on the creation of the Albanian nation”, Bulgarian historian Teodora Toleva, who studied the Vienna imperial archive, writes:

”After thorough studying of the archives we may claim that at the beginning of the 20th century the Albanian population did not still represent a formed nation. The ethnical groups in Albania live isolated; they do not have connections between themselves, except when fighting. The possibilities for their convergence were practically nonexistent; murders are common, even for the people from the clan. There were two basic dialects in the country that were so different that people could hardly understand each other. There was no unique literary language, but more than twenty different manners of writing in local dialects. The coefficient of literacy did not even exceed 2%. The population belonged to three religious confessions – Muslims, Orthodox and Catholics. The Albanians did not have national awareness, they did not have general interests, they did not express solidarity and they did not develop in the direction of waking the national feeling. Hence, at the beginning of the 20th century there was no Albanian nation.” Toleva also noted that:

“At a time when Vienna decides to implement a new plan for Albania, there are about twenty different transcripts of Albanian dialects. Three are basic: one uses the Arabic letters, the other is Cyrillic, the third is Latin. ” Official Vienna also had a decisive influence on the unification of the Albanian language. A letter that the Albanians still use today was accepted at a congress in Bitola in 1908. The decisive role was played by the Austro-Hungarian consul Karl. Grammar, literary books, history books, all printed in Vienna. The promotion of the Albanian language was carried out at every step. The reason why Austro-Hungary did all this was Serbia, which was then the main enemy of the Austro-Hungarian Empire. Through the creation of the Albanian nation, the Austro-Hungarian Empire wanted to weaken Serbia. And,  they did it.

Today, the Austro-Hungarian Empire policy has been taken over, dominantly by the United States and United Kingdom, but also from some other Western states.  The main goal is to create Greater Albania. Recently, the self-proclaimed Kosovo and Albania decided to implement a common foreign policy. Unlike the West, which supports that unlawful act, which raises tensions in the Balkans, the Russian Ministry of Foreign Affairs condemned that act.

“The provocative steps of Tirana and Pristina, which are in line with the realization of the concept of ‘Greater Albania’, cause serious concern. In this context we see the signature on July 2, the Albanian-Kosovo agreement on unification of diplomatic missions in third countries. We note that the US and EU prefer not to respond to such destructive measures and to effectively cover the ‘Greater Albanian events’ that are destructive for the region “, stated Russian Foreign Ministry.

In accordance with the support from the West, political representatives of Albanians in Montenegro every day behave more and more insolently. The current Montenegrin authorities do nothing to make Albanian politicians know that they have to respect the laws of Montenegro. While Serbs in Montenegro are strictly forbidden to display Serbian flags, Albanians in the places where they are majority display Albania’s national flag. Albanians every day show more clearly that Greater Albania is the only thing that would satisfy their national interests. The recent event that happened in Svac is something that previously could be seen in Kosovo and Macedonia. Therefore, now, while the fire is still weak, it is necessary to extinguish it. Otherwise, the Greater Albania’s fire can swallow both Ulcinj and other parts of Montenegro.

 From our partner International Affairs

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New “executive branch” of EU and Russia: EU hostile, but not united

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The recent decision by the European Council to nominate Ursula von der Leyen of Germany for the post of European Commission Chairperson and Christine Lagarde of France for President of the European Central Bank has caused many eyebrows to raise. Nevertheless, since this “feminist” set of candidates will surely receive the approval of the European Parliament, it’s these people that Russia will have to deal with. (Nominees for the posts of European policy chief  and president of European Council – Josep Borrell of Spain, and Charles Micheln of Belgium – became less of a surprise: their victory in the European Parliament is a sure thing too.)

Significantly, both the “prime minister” and the “foreign minister” from the European Union’s new team have been spotted making outrageously averse remarks regarding Russia. Ursula von der Leyen, holding the post of Minister of Defense of the Federal Republic of Germany, said less than a year ago that one ought to speak with Russia from a position of strength. In response, Russian Defense Minister Sergei Shoigu advised Ms. von der Leyen and other Germans to ask their grandfathers what happens when Germans try to speak with Russia from a position of strength. Josep Borrell, speaking in an interview with the Spanish El Periodico, described Russia as “an old enemy” of Spain and Europe that is somewhat  “posing a threat again,” whereas China, in his words, is but a “rival”.

The Russian Foreign Ministry reacted by demanding that Borrell account for these words, which clearly do not fit into the framework of friendly relations between Russia and Spain. The EU’s foreign policy chief-to-be came out of this situation with an elephantlike grace, chiding the Russian Foreign Ministry for “excessive” reaction and explaining his position by saying the following: “I said that Europe’s old defender – the United States – is no longer defending it, causing the rise of Europe’s former rival – the USSR “. Thus, the European diplomat has managed to strengthen a prejudice-based lie (about Russia as an enemy) with another (about the notorious “attempts by Putin to restore the USSR”). And there is a third lie – a hint at the now dishonored theory of a conspiracy between Trump and Russia. For someone  burdened with the responsibilities of the head of European diplomacy, there seem to be too many prejudices and stereotypes. In all likelihood, these new representatives of the EU will not be easy to deal with.

Nevertheless, the near victory of von der Leyen and the removal from the race of the Dutch socialist Frans Timmermans, and representative of the European People’s Party (i.e.”Democratic Christian”) Manfred Weber of Bavaria, speaks of serious differences, bordering on hatred, within the EU. After all, it’s these two nominees (plus Danish liberal Margrethe Vestager, who served as European Commissioner for Competition) that were considered favorites for the post of  European Commission chief right up to the G20 summit in Osaka. Chancellor Angela Merkel, who openly supported Weber’s candidacy and wanted the job of European Central Bank chief for the current head of the German Central Bank, Jens Weidmann, appears to be on the losing side, given the current layout of forces. Even such a well-informed player in European affairs as George Soros, predicted on the platform of the globalist Project Syndicate that in the event of Weber’s “failure” to head the European Commission, Merkel’s ambitions would be offset by the appointment of Jens Weidman. But this just didn’t happen: the EU’s top finance position went to Christine Lagarde.

Why did the options planned for so many weeks for the above mentioned candidates, which cannot be seen as 100% losers (Timmermans will remain vice-chairman of the European Commission, and Weber is set to become chairman of the European Parliament) were dropped?

The European Union makes it no secret that countries of the “Visegrad group”, first of all, Poland and Hungary, came out against Timmermans. And this is no wonder: it was Timmermans, as vice-president of the European Commission, who “oversaw” Poland’s punishment for its “sins against democracy” and has called for sanctions against Warsaw if it does not abandon so unwelcome for the EU judicial reform. As for Hungary, Timmermans was as harsh with its Prime Minister Viktor Orban. As a result, even Andrei Babis, the Prime Minister of the Czech Republic, which did not have time, unlike Poland and Hungary, to experience the negative rhetoric of Timmermans, said bluntly: “Timmermans is not the person who can unite Europe.”

As it happens, by voting against Timmermans, the current Polish leadership took revenge for their own failure last year, when they made an attempt to remove Donald Tusk, former Polish prime minister considered to be EU-loyal political opponent of the current ruling party in Poland, “Law and Justice”.

Thus, the current choice of candidates has become a sign of ever increasing instability and unpredictability of the European Union, including in its relations with Russia. In my opinion, two trends are gaining strength at the same time. Firstly, the selection of candidates for top jobs in the European “mainstream” is based, among other things, on the principle “who speaks harshiest of Russia will win” ( this guaranteed success of von der Leyen and Borrell). Secondly, as Eastern European countries are slowly gaining weight, their attitude towards Russia ranges from hostile ( Poland and the Baltic States) to neutral and conciliatory ( Hungarian Prime Minister Orban).

The Orban factor, according to a variety of reports, became a key one for “not supporting” Manfred Weber’s candidacy on the part of France, which eventually led Weber to defeat. President Macron did not conceal his discontent with the fact that Weber, as head of the European People’s Party faction in the European Parliament, did not exclude Viktor Orban and his party Fides from this faction.

The French newspaper Le Monde carries detailed reports on the issue. For the French president, who deems Orban, along with Italian Interior Minister Matteo Salvini,  his personal enemies over disagreements on migration issues, any means will do to fight against the Hungarian politician. Le Monde carries reports about Macron’s attempts to cut down EU payments to the Hungarian budget due to Hungary’s unwillingness to bear its share of the migration burden on the EU. And although Macron has not succeeded in these attempts,  the battle between the “progressists” (Macron) and the “traditionalists” (Orban and the Visegrad Group, which is behind him) is driving the main wedge into the European Union, including its position towards  Russia. Both the elections to the European Parliament and the differences over the candidacies for the “executive branch” of the European Union have clearly demonstrated this. 

From our partner International Affairs

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North Macedonia and Albania not allowed even in EU “waiting room”

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The recent decision by an EU summit to postpone until October the solution on welcoming in Albania and North Macedonia as new members marks yet another setback for the European Union, which testifies to lack of unity among its members. Both Albania and North Macedonia have done all they could in the past few years to prove their loyalty to NATO and the West with a view to secure early admission to the European Union. Albania has joined NATO and supports Kosovo separatists, while the former Yugoslav regional capital Skopje chose to change the name of its country from Macedonia to North Macedonia, despite the unconvincing results of the de facto failed referendum on this issue in February this year. All these efforts were not rewarded, not even by a formal announcement on the start of the membership talks.

The matter is that European capitals make no secret of the reasons for such a postponement: the parliaments of Germany and the Netherlands opposed the entry of North Macedonia, and Albania in particular. These parliaments have thereby refused to implement the recommendations of the European Commission of May 29 which advised member states to speed up the process of welcoming new members into the Union from countries of Western Balkans.

Instead of information on the beginning of the negotiations, North Macedonia and Albania received a humiliating communiqué of the European Council, calling on these “hopefuls” of the EU membership to do more to secure the rule of law, strengthen democratic institutions, etc.

Macedonians and Albanians feel deceived also because the EU’s Commissioner for Enlargement, Johannes Khan, promised last year that membership negotiations would begin in June 2019 if both countries carried out reforms of their judiciaries and security services.

Albanian Prime Minister Edie Rama said that his country has fulfilled the reforms required by Brussels and that Tirana has thus earned the right to enter admission negotiations.

“I want to say that the European Union should proceed from geostrategic and geopolitical considerations, and it also should take into account the achievements of candidate countries,” – Prime Minister Rama was quoted as saying on June 11, 2019. “If candidate countries deserve to be admitted, the European Union should not deny them this right.”

The Prime Minister of North Macedonia, Zoran Zaev, went as far as stating that postponement of negotiations on his country’s accession to the EU could lead to the fall of his government and the victory of nationalist forces “hostile to the European Union”.

Behind all these statements lies demonization of Russia and the attempts to present it as a “destabilizer” of the situation in the Balkans, just as it was done by  Montenegrin leader Milo Djukanovic, who accused Moscow and so-called “Serbian nationalists” of an attempt to stage a coup in his small country for the purpose of preventing Montenegro from entering NATO.

The version of what happened was provided by a Montenegrin court, which blamed leaders of the opposition Democratic Front for an attempt to seize power in Podgorica with the help of two dozen Serbian militants. The court described the incident as a typical conspiracy and a “high-profile process” in the style of Andrei Vyshinsky. Nevertheless, the Western press has accepted this version, telling its to readers about plans by wicked Russians and Serbs to kill Mr. Djukanovic, who positioned himself as a Serbian-Montenegrin nationalist during the “Yugoslav Wars” of the early 1990s.

Will North Macedonian Prime Minister Zaev succeed in performing the same trick, will the EU accept his version that “forces hostile to the European Union” will take over if his country does not join the European Union in the near future? It seems that the European Union is skeptical about Zaev’s “warnings”. It knows only too well that Zaev himself came to power as a result of a Macedonian “color revolution” that removed the former leader Nikolu Gruevsky, who led the left-wing party VMRO-DPNE. This party is still the largest opposition party in the parliament of Northern Macedonia.

Shortly after coming to power Zaev reoriented the country to NATO, hoisting a NATO flag in front of the Macedonian government building.  Taking advantage of people’s hopes for joining the European Union, Zaev ensured the victory in the presidential election of his henchman Stevo Pendarovsky. But now that the prospect of starting negotiations looks remote and indefinite, Zaev and his entourage may indeed face a destabilization. The position of Albanian government of Edi Rama, who is facing powerful protests across the country, is hardly better. 

From our partner International Affairs

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