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Does rente hinder democracy in Algeria

Amel Ouchenane

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A rapid look around the world demonstrates that few rentier countries can be classified as democratic states, especially those in the MENA region; therefore, scholars have suggested that oil wealth blocks democratization process. Other scholars linked the lack of democracy in rentier countries immediately to their dependence on oil rent. Furthermore, researchers clarified that rentier states have common characteristics like, weak civil society and low middle-class formation, no taxations on citizens and higher scales of suppression as participating to the dictatorial of rentier states. The aim of this article is to highlight the relation between rentierism and democracy.

Rentier effect Less taxation weak civil society

Algeria is very dependent on oil and gas, which accounts for 95 per cent of export earnings and one third of the national GDP. Oil economists claimed that any fall in oil prices could affect the Algerian economy, social and political stability; Algeria has a significant role in the international oil and gas market. It is the third largest natural gas producer in the Arab world after Qatar and Saudi Arabia, the leading gas exporter in Africa and an energy supplier to France, Spain, Italy, Turkey, US and China.  The Algerian dependence on oil created structural political, economic and social problems, one of them is authoritarianism, which has different manifestations, and the study dismantles this phenomenon in Algeria through three main aspects: political, economic and social through two levels domestic and international.

It is important and critical to understand how rent affects the nature of a rentier state, why oil-exporting countries are considered less democratic. One of rentier state scholars Beblawi argues that rent provides a source of income to oil-exporting countries that grant them to have very low and weak domestic taxation structures. Other scholars like Luciani present similar argument, who claim that high rents liberate the state from the need to increase income domestically. Moreover when citizens, do not pay for taxes, they are much less Demanding of the government, also government expensing on public goods preserves the indispensable support and acquiescence for standing authority, also since the state does not demand a financial contribution from the citizens, they resort to be satisfied with the expense of the state, even when benefits and interest are not equally distributed.

Another important factor which explains the rise of authoritarianism in rentier countries which is the social groups, In addition to minimal taxation in these countries, there are higher amounts of patronage spending, which helps to the government’s staying power. The government also utilizes oil revenues to prevent and stop the formation of certain social groups that would rise the demands and requests on the government for more democracy and less authoritarianism.

The taxation is not only an economic matter but also a political one, taxes means representation, rights and duties..etc. .The ‘neo-classical’ theory of the state developed by Douglass North clarified that taxes are connected with representation and democracy, therefore, less taxation means less democracy. In addition, Adam Przeworski and Fernando Limongi, claim that in rentier states, limited taxation decreases the people’s influence to keep the rulers responsible, because the rentier state allocates jobs, services, money to them. This manner of guarantying political obeisance and loyalty produces patron‐client relations, rather than democratic exchanges, between the governor and people.

In addition, the rentier state’s welfare policies create a huge bureaucracy, which prohibits the emergence of independent civil society. In addition, the revenues can badly affect individuals too, because it transforms to a serious barrier to the morals of work. Furthermore income is no longer a recompense of serious work but it is related to special coincidence and circumstances like chance, hazard.., etc., another important aspect is that  rents help authoritarian regimes with the monetary ability to enlarge their tyrannical security system and to use state‐owned means of communication like media and other propaganda mechanisms to attack  the opposition.

In Algeria, non-oil tax revenues constitute 10.2 %of the country’s GDP this figure is under the average index in developing countries and under the rate in the neighboring oil importing like Morocco and Tunisia. The IMF model 2014 argues that, Algeria has not attained its tax potential and should look into reducing costly tax exemptions. Moreover, according to Algerian statistics, 46 %of wage earners were unregistered workers .Some types of taxes are even non-existent in Algeria like property taxes. In addition,it argues that oil wealth supports authoritarianism through patronage. It faced with expended disturbance, as the very first countermeasure, Algeria agreed to repeat the subsidies for foodstuff, therefore, the import of food products rose by 60 %in comparison to 2010 and the invoice of imports reached 46 billion dollars as a result. Algeria also raised pays of civil workers by 46%. At the same time, the regime was determined to relieve the policies controlling the street vending in order to keep unpaid youth far from the protestation. 

In Algeria the informal economy is predestined at 6 billion USD, which means 13 %of GDP outside the oil and Gas sector and provides jobs to nearly 2 million people22 %of the active force, any attempts to stop this business without inserting a real development and job creation had proved to be costly and risky. In addition, the government assigned fundamental amounts of money for interest-free loans for young people. Only in 2011, more than 50.000 small enterprises giving jobs to 70.000 young people were created with the financial help of the government; according to IMF, the Algerian government gaveto its citizens more than 23 billion dollars in public grants and retroactive salary and benefit increases. Algerian spending increased by 50% in 2011. The abundance of its financial reserves, standing at 182 billion dollars as of December 2011, which makes the Algerian regime able  to expand and develop  its patronage policy and facilely buy off popular opposition .

Therefore, the oil rents accrue directly to the state, which has discretionary power over how the revenues are spent. The state can subsequently afford to buy off or repress political opposition. The regime can purchase consent and acquire a form of legitimation through government expenditure on a welfare system. This includes spending on education, health, social security, employment, infrastructure and investment in the private sector.

Repression and the military role

 In this concern, Ross argues that there are at least two reasons why resource wealth might lead to larger military forces and elite. The first one is self-interest improving the self-defense and the capacity to respond militarily also get rid of the constant fear of the others and their  pressure so this is what an authoritarian government will do so. The second reason is that resources wealth provoke conflict and there is always a need to the military role to keep order

In the geopolitical Mediterranean context, Algeria represents a key country. Because it is the largest and most populous North African state and it has large oil and gas resources, in the mid-1980s under the Chadli presidency, Algeria started to give up the striped economy and became closer to the western model. Also during the social and economic crisis in 1988 the regime was convinced that it is time to adopt political reforms, but the process failed and the military dominated with a western support, France was especially against the rise of the Islamic Front The issues disturbing western countries are: security of investments, the fate of liberal economic reforms, an anti-western regime at the frontiers of Europe, and the access to oil and gas resources.

The Algerian army presented itself as the defender and the protector of democracy and as a credible partner for western interests. The Algerian army is still able to use the saving of energy resources and the readiness to improve the economy and to support from the West, which in turn will guaranty the existence and the survival of the regime. Furthermore, after the coup attempt, France gave $550 million in help to aid Algeria import food and a western consortium provided $1.45 billion in credits this aid could be explained as a payment to the Algerian military for a job well done.

The United States also supported the Algerian military, because of the oil company presence in the Algerian Sahara, the United States encouraged its oil and gas multinationals to invest in Algeria, the army preferred the security of the oil and gas production system.  The economy has been liberalized especially in the gas and oil domain, where companies are strongly investing; therefore, new pipelines have been established between Algeria and Europe. The Algerian military took the control of the country. From an economic perspective, persons near to the regime are earning hugely from the economic reformation, the generals themselves became very wealthy. Furthermore the economic reforms aid the regime to narrow the first on society as ‘private monopolies supersede  public monopolies and are caught by those with close relations to the powerful generals , from a political perspective , the regime is capable to survive due to the series of feral  inhibition and repression, façade democratic steps and outside help .

3/The luck of modernization effect through cultural and social change: it suggests that the oil wealth fails to create the social and cultural changes, which a democratic government demands due to some reasons:

Rentier states have low and weak developed industry capabilities, they lose the information they need to formulate development policies.

Being progressively independent of society, they are unaware, ignorant, of society and indifferent to the preferences and preferences of their populations.

There are ‘allocation’ and not ‘production’ states, therefore the state sector increases in immensity and importance –sometimes it become inactive, entrepreneurship is not promoted, and ‘rent-seeking,’ is in coalition with the state, is the important  key to social mobility.

Rents are used by the state to encourage obeisance and that way they block the formation of free social network and groups that could make demands and push for democracy.

The centralization of government and the ambiguity of efficient regulatory frameworks feed corruption and patrimonialism that have a negative effect on the law and the transparency of rent distribution.

An autocratic regime seeks to create loyalty through patron–client networks, which rise political stability and guarantee a certain degree of legitimacy. Such networks include the award of personal support in the format of public sector jobs and the distribution of public resources through permits, projects and contract. These activities will increase the level of corruption and decrease transparency and accountability.

 In Algeria, the economic development was not connected to the democratization process. Part of the manifestation can be found in Algeria’s social structure. At independence, the class structure was comparatively united and combined, in the last decade; Algeria gave most of the chances for economic development.  Within a mixt elite consisting of political parties, bureaucrats, and, much of the population was attached to the state through patronage networks and the economic interests of the private sector. In addition, trade unions were strongly under governmental control. As a result, the social grounds for opposition was very tight. When compression to reform spread, it did not come from the working or middle classes but from students and religious groups.

Therefore, The social structure in the rentier countries generally and Algeria specially is enfeeble, the social force with the powerful interest in the economic liberalization have to improve political pluralization, specifically  the bourgeoisie, however combining those most menaced by it specifically  workers, peasants and civil servants. Therefore, rentier states aimed to prevent the formation of a democratic coalition because they extremely menace the bourgeoisie, its ability leading force, and in combining the working class and peasants made them unavailable as shock troops of democratic revolution. Moreover, rent clientelist mentality and networks aimed to individualize political activity as actors look for personal wining through privileged relationship to power, therefore frittering the potential class action necessary for democratization process.

Conclusion

The article concludes that  the plenty of the oil prevents democratic transition and supports the strength and immovability of an authoritarian system, through providing for  dictator monetary capability to repel any democratic efforts, The case study on Algerian authoritarian regime demonstrated how an tyrannical system whose economy is largely dependent on oil and gas rents acted in the political crises, therefore the Algerian example shows well how oil wealth have played a significant role in blocking the social opposition to increase through repression and patronage, therefore rent is a structural variable in explaining authoritarianism.

Amel Ouchenane is a member of the organization of Security and Strategic studies in Algeria. She is also Research Assistant at the Idrak Research Center for Studies and Consultations. Ms. Ouchenane was researcher at Algiers University from 2011 to 2018. (Department of International relations and African studies).

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Middle East

Turkish Strengthened Parliamentary System

Muratcan Isildak

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“Corrected” or “enhanced” system of parliamentary debate, thoroughly sat on Turkey’s agenda in recent days. There are two reasons for this. First, it is unclear what, all from a single source power is collected, brought Turkey no balance-point of the current regime where there is no monitoring mechanism. Of democracy, of freedom, which abolished the rule of law, both inside and outside the war which, as all institutions of workers pouring connected to a single person, the economy of bottoming out, which is a record level of unemployment, inequality of well increase as a Turkey. Undoubtedly, the first step to get out of this darkness and tidy up the wreckage is to get rid of the one-man regime called the “Presidential Government System”. The question then arises of what kind of management system to replace. The second reason is the increasing signs that the MHP-backed AKP government is about to end. A transition period will begin after the end of AKP rule. But where is the transition? This question should be discussed and an answer should be sought.

The parliamentary system has led to the domination of the majority over the minority in Turkey. Since there are no mechanisms to prevent the executive from dominating the legislature, the power is meeting in the hands of the prime minister, who is the head of the ruling majority party. The end of the independence of the judiciary, the silencing of the press, the pressure on the opposition, the arbitrary administration all took place in the parliamentary system.

Such a new democracy changes the focus of politics. The subject of politics, political parties cease to be party heads, but become the people themselves. However, in order to create a grassroots popular movement, people need to unite within the framework of a project and not be a “mass”, but turn into a “people” that decide their future. Such “people” make decisions about their own problems and demand that governments implement these decisions. Such a people does not leave their future to the rulers, they take control of their future. Such a people becomes the engine of change in society, creates a libertarian, egalitarian, new society.

One of the most important features of participatory democracy is that it is based on equality. Equality in income distribution as well as in participation can be achieved in this way. We have seen the concrete application of this in the example of Porto Allegre in Brazil.

There are many different models of participatory democracy. These models cover a wide spectrum, from the budgeting powers of local units to different decision-making platforms. It is necessary to discuss these and, according to the results, the construction of local democratic institutions. 

However, no matter what model is adopted, participatory democracy has some unchangeable basic principles:

Participation is open to all who live in that place.

Participatory democracy institutions are independent from the state. The aim of the system is to realize a power sharing between representative democracy institutions and local democracy institutions. Representative democracy institutions will lose their power as they will transfer some of their powers to local institutions. 

But considering that representative democracy is not working well anyway, this weakening is not a loss for democracy.

Informing the public correctly. For this, there is a need for effective use of social media as well as the prevalence of freedom of expression and press in the country.

Participatory democracy leads to deepening democracy and creating a culture of participation. However, the main problem here is that the people adopt this culture with an active citizenship awareness. Successful pilot project implementations are required for this.

Let’s not forget that my imagination of the future determines what we will do now.

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Middle East

The Battle for Jerusalem: Turkey’s Erdogan stakes his claim

Dr. James M. Dorsey

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Turkish President Recep Tayyip Erdogan didn’t mince his words at this month’s opening of parliament. In his first assertion of a claim to a lost non-Turkic part of the Ottoman empire, Mr. Erdogan declared that Jerusalem is Turkish.

“In this city, which we had to leave in tears during the First World War, it is still possible to come across traces of the Ottoman resistance. So Jerusalem is our city, a city from us,” Mr. Erdogan said.

He went on to say that “the current appearance of the Old City, which is the heart of Jerusalem, was built by Suleiman the Magnificent, with its walls, bazaar, and many buildings. Our ancestors showed their respect for centuries by keeping this city in high esteem.”

Mr. Erdogan was referring to the 16th century Ottoman sultan, a sponsor of monumental architectural development, who is widely viewed as having protected his Jewish subjects.

In July, Mr. Erdogan described that month’s return of Hagia Sophia in Istanbul, a sixth century Orthodox-church-turned-mosque-turned-museum, to the status of a Muslim house of worship as paving the way for the “liberation” of Jerusalem’s Al-Aqsa mosque, Islam’s third holiest site.

Mr. Erdogan’s office released a month later a four-minute video clip suggesting that Turkey’s quest for leadership of the Islamic world was as much a military and nationalist endeavor as it was a religious drive. Laced with martial music, the clip meshed religious and Ottoman symbolism.  Entitled Golden Apple, the clip ended with a panorama view of Al-Aqsa.

The president, who embeds his often raw nationalism in a religious mantle, can have no illusion that Jerusalem would return to Turkish rule.

Yet, by putting forward his claim, Mr. Erdogan hopes to put his quest for leadership of the Muslim world on par with that of one Turkey’s staunchest rivals, Saudi Arabia. The kingdom is home to Islam’s two most sacred cities, Mecca and Medina.

Rather than seeking to regain lost Ottoman territory, Mr. Erdogan is staking a claim to custodianship of Jerusalem’s Haram ash-Sharif or Temple Mount and Al Aqsa mosque compound that currently rests with a Jordanian-controlled religious endowment known as the Waqf.

The president escalated his rhetoric at a moment that the Palestine Authority has reached out to Turkey as well as Qatar in the wake of the normalization of relations between Israel, the United Arab Emirates and Bahrain and a series of statements by prominent Saudi and other Gulf leaders taking President Mahmoud Abbas’ administration to task for squandering opportunities for peace with the Jewish state.

Mr. Erdogan’s claim adds to Jordan’s worries that Israel, in the wake of the formalization of its ties to Gulf states, could support Saudi ambitions to join the Hashemite kingdom, if not replace it, as the holy site’s administrator.

Israel Hayom, Israel’s most widely read newspaper that is supportive of Prime Minister Binyamin Netanyahu, quoted an unidentified Arab diplomat as saying that Saudi funds were needed to counter Turkish influence in Jerusalem.

“If the Jordanians allow the Turks to operate unhindered at the Al-Aqsa Mosque compound, within a matter of years their special status in charge of the Waqf and Muslim holy sites would be relegated to being strictly ‘on paper,’” the diplomat was quoted as saying in June.

Raed Daana, a former director of preaching and guidance at the Al-Aqsa Mosque Directorate, said in 2018, in the wake of US President Donald J. Trump’s recognition of Jerusalem as Israel’s capital, that Saudi Arabia had secretly invited Palestinian Muslim dignitaries in a bid to garner support for a Saudi role in the Waqf.

Mr. Daana attributed the secrecy in part to a refusal to accept the invitation by a number of Palestinian religious figures.

Jordan last year increased the number of members of the Waqf from 11 to 18 in a bid to give it a more a more Muslim rather than exclusively Jordanian  flavour and to fend off attempts by regional powers to muscle their way into the body.

The new members included officials of Palestinian President Mahmoud Abbas’ Palestine Authority as well as figures with links to Turkey and Gulf states like Sheikh Ekrima Sabri, a former grand mufti of Jerusalem and Holocaust denier who has defended Mr. Erdogan’s militancy regarding Jerusalem; and Mr. Sabri’s successor, Muhammad Hussein, who had close ties to the United Arab Emirates until he last month barred Emiratis from visiting Al Aqsa in protest against the UAE’s recognition of Israel.

Mr. Erdogan has in recent years been laying the groundwork for his claim with millions of dollars in donations to local Islamic organizations as well as Turkish religious activists and pilgrims in Jerusalem whom Israel has accused of instigating Palestinian protests.

Turkey’s Directorate General for Religious Affairs (Diyanet), that is part of Mr. Erdogan’s office, lists Al-Aqsa as a site for the umrah, the lesser Muslim pilgrimage.

Israeli sources say Turkey’s cultural center in Jerusalem as well as a Turkish renovated coffeeshop two minutes from the city’s Western Wall that is adorned with Turkish and Palestinians flags as well as portraits of Mr. Erdogan and Ottoman Sultan Abdul Hamid II serve as a meeting point for activists and pilgrims.

“Turkey is working diligently to deepen its involvement and influence on the Temple Mount, in the Old City of Jerusalem, and in east Jerusalem neighbourhoods. It is encouraging welfare-religious (dawa) activities…aimed at drawing the Palestinian public toward the Turkish-Islamic heritage and at weakening Israel’s hold on the Old City and east Jerusalem,” said conservative Israeli journalist and analyst Nadav Shragai.

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Middle East

Kingdom’s journey from ultra-conservatism to ultra-modernism

Abdul Rasool Syed

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Saudi Arabia, currently, is undergoing a phenomenal metamorphosis; a country widely known for its ultra-conservative posture is now gradually moving towards liberalism. It is witnessing a remarkable transformation in its socio-economic-cultural contours. The kingdom, once influenced and controlled by orthodox clergy, did not let women come out of their domestic confines but, now, the situation has diametrically changed. It has allowed the womenfolk incredible latitude to not only come out of home but also to travel abroad independently. They are, thus, supposed to contribute to country’s socio-economic development by working shoulder to shoulder with men. Economy, too, is being diversified; the kingdom is jettisoning its chronic dependence on oil revenues and is moving towards rapid Industrialization. Acculturation, once regarded as taboo by Saudi society is now, being appreciated bit by bit.

The man, who masterminded this movement of colossal change, is none other than Crown prince Mohammad bin Salman (MBS); He is the real catalyst that is working devotedly and diligently to improve his country’s image nationally and internationally. His ideology is described as nationalist and populist, with conservative attitude towards politics and a liberal stance on economic and social issues.

However, His style of governance came under severe stricture by journalistic community. He has been dubbed as “extremely brutal” by journalist Rula Jabrael and “authoritarian” by Late Jamal khashoggi. On contrary, his move to reform the country has been widely lauded and supported by Saudi populace.

Prince Mohammad is of opinion that his country has been severely harmed by traditional clergy that considered any reformative move as a sin and hence, has kept the country stagnant economically and socially. He emphatically stated at one occasion: “we are returning to what we were before, a country of moderate Islam that is open to all religions and to the world. We will not waste 30 years of our lives dealing with extremist ideas. We will destroy them today.” He later added that Saudi Arabia “will remain committed to the principles “of Islam, “the religion of tolerance and moderation”. The kingdom “will keep on fighting against extremism and terrorism”—a message directly meant to counter the outrageous edicts released by leading clerics against anything they perceived a threat to Saudi society.

The crown Prince took the clergy as a great hurdle in the way of kingdom’s socio-economic development. He, therefore, trimmed its wings of power by stripping it of its policing powers. Instead, the government took the reins into its hands to guide the society. Now, with the passive and emaciated clergy, Prince is aggressively pursuing his agenda of reforms.

“Vision 2030” is the bedrock of Prince Mohammad’s scheme of socio-economic change. Under this vision, he is going to transform country’s economic physiognomy. Vision 2030 aims at steering Saudi’s economy towards more diversified and privatized structure. It expounds goals and measures in various fields, from developing non-oil revenue and privatization of the economy to e-government and sustainable development.

To this end, Bin Salman, in October 2017, at the inaugural conference of Future investment initiative in Riyadh, announced the plan for the creation of NEOM, a $ 500 billion economic zone to cover an area of 26000 sq km on Saudi Arabia’s Red Sea cost, extending into Japan and Egypt.  NEOM aims at attracting investment in sectors of renewable energy, biotechnology, robotics and advanced manufacturing.

 A project to build Saudi Arabia’s first nuclear reactor was also announced by Prince Mohammad in November 2018. The kingdom aspires to build 16 nuclear facilities over the next 20 years. Efforts to diversify Saudi energy sector also include wind and solar energy.

Apart from this, a much awaited high-speed railway line connecting two holiest cities of Islam Mecca and Medina was inaugurated by Mohammad bin Salman (MBS) in last week of September 2018. The Harmain Express is 450 km line travelling up to 300 km/h that can transport around 60 million passengers annually.

In addition, before the outbreak of corona virus, in order to boost tourism industry, the kingdom started issuing e-visas to tourists. It  opened up its borders to fans of live sport, music and culture for the first time with the launch of a new online visa process dedicated to welcoming international tourists.

Moreover, in 2016, Prince Mohammad Bin Salman (MBS) shared the idea for “Green cards” for non-Saudi foreigners with Al-Arabia Journalist Turki Al-Dakhil. In 2019, Saudi cabinet approved a new residency scheme “Premium Residency” for foreigners. The scheme will enable expatriates to permanently reside, own property and invest in the kingdom.

Prince MBS is staunch proponent of women emancipation. He contends that dream of progress and sustainable development cannot be realized unless women become part and parcel of workforce. He, therefore, has brought about many reforms pertaining to the status of women in Saudi society.

For this very purpose, he allowed women to drive in the kingdom. Driving licenses are, therefore, being issued to women at a very fast pace; the number of women drivers on the road, according to Saudi officials, is expected to grow to 3 million by 2020. Further, Saudi women may now attend soccer matches and sporting events. Gyms and fitness centers for women are being established. They can also join the military and intelligence services. They are allowed to open their own business without male’s permission and to travel abroad independently without male guardian. In this very spirit, Saudi Arabia appointed its first woman to head Saudi stock exchange.

On entertainment side, Saudi government has established an entertainment authority that began hosting comedy shows, professional wrestling, live music concerts and monster truck rallies.

In April 2017, Prince MBS announced a project to build one of worlds largest cultural, sports and entertainment cities in AL-Qidiya, southwest of Riyadh. The plan includes a safari and a six flags theme park.

Additionally, cultural transformation of the kingdom is also underway. It held its first public concert by female singer in December 2017. And in January 2018, a sport stadium in Jeddah became the first in the kingdom to admit women. In April 2018, the first public cinema opened in Saudi Arabia after a ban of 35 years, with plans to have more than 2000 screens running by 2030.

This all became possible, when clerical hold over the kingdom was eviscerated. The orthodox clergy with its antiquated and rigid doctrines was the biggest obstacle in the way of progress and development of the kingdom. Addressing this issue, Prince MBS said that he aimed to have Saudi Arabia start “Returning to what we were before—a country of moderate Islam that is open to all religions and to the world.” He told the country’s clerics that the deal the royal family struck with them after the 1979 siege of Grand Mosque in Mecca was to be re-negotiated.

The crown prince believes that industrialization and wahhabism are mutually exclusive. The wahhabies are committed to fixed social and gender relationships. These are consistent with an economy built on oil sales, but industrialization requires a dynamic culture with social relations constantly shifting.

 Inter alia, Ayaan Haris Ali, a celebrated author and human rights activist claimed that if MBS “succeeds in his modernization efforts, Saudis will benefit from new opportunities and freedoms, and the world will benefit from curtailing Wahhabi radicalization agenda. A decade from now, the kingdom could look more like the UAE, its prosperous and relatively forward looking neighbor”.

In the end, I would like to quote Prince Mohammad bin Salman who while addressing to packed audience at the Future Investment Initiative forum in Riyadh said that Middle East can be the “New Europe” and that he would like to see the economic transformation of the region happen within his life time. He said: “his ‘war’ was restoring the Middle East to its past glory. “I believe that the new Europe is the Middle East”. “Saudi Arabia in five years, he added,” will be completely different”.

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