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The Alternative Deal between UK and EU on Brexit: Miles to Go

Boris Johnson seems to have secured a new Brexit deal from the European Union. The EU, which was not agreeable to any change in Theresa May’s has at least indicated to replace the controversial Irish border issue (called Irish Backstop)   replacing it with an alternative plan, offered  up by the UK Brexit negotiators on under Boris John. However, However, even if the EU has agreed with the Boris Johnson’s alternative plan, securing the Brexit would still be facing a tough Brexit process. The UK Parliament is sitting on October 19, 2019 for the first time in decades, where lawmakers will approve or disapprove the alternative Brexit plan.The immediate fallout of that vote could have profound consequences for the future of the United Kingdom.

Against the odds and at the last minute, the United Kingdom and the European Union struck a new Brexit deal on On October 17, 2019. Speaking at a joint news conference with European Commission President Jean-Claude Juncker in Brussels, UK Prime Minister Boris Johnson told reporters that the new withdrawal agreement “represents a very good deal for both the EU and UK” and that he hoped UK lawmakers would “come together to get Brexit done, to get this excellent deal over the line.” The latest alternative deal between the U.K and the EU has been possible after continued and hard negotiations,  two weeks before the Brexit deadline of October 31.

What is the new alternative deal?

The EU and the UK made changes to both the withdrawal agreement — the divorce settlement that sets the terms of the breakup and sets up a post-Brexit transition period — and the political declaration, which lays out the prospect of the future relationship between the EU and the UK.

Change in Withdrawal Agreement

The withdrawal agreement was one of the major sticking point in the Brexit deal for the better part of the past year. The changes could be understood if one knows about the Protocol on Ireland and Northern Ireland. The Protocol on Ireland and Northern Ireland, as it’s technically called, is a safeguard in the Brexit withdrawal agreement to guarantee that, no matter what happens with the future EU-UK relationship, the border between Northern Ireland (which is part of the UK) and the Republic of Ireland (which is an EU member-state) remains free of infrastructure and physical checks on goods. This commitment was seen as vital to the peace process in Northern Ireland. That’s because that border was heavily militarized during the Troubles, the decades-long conflict in Northern Ireland between “nationalists,” who identified more closely with Ireland and sought a united Ireland, and “unionists,” who identified more closely with Britain and wanted to remain part of the UK.

After the UK voted to leave the EU in June 2016, there was an apprehension once the UK left the Brexit, the Irish border wouldn’t just separate Northern Ireland and Ireland anymore — it would be the dividing line between the EU and the UK. And since the two would have different rules and regulations for trade and commerce, there would have to be some sort of inspection stations or checkpoints established on that border. That led many to fear that a “hard” physical border would have to once again be erected, potentially refueling violence.

How to balance the two positions — the UK’s desire to leave and the need to keep the Irish border open — has been the impossible issue of Brexit. So the two sides came up with a fudge: the “backstop.” Under the plan agreed to by May and the EU last year, the entire United Kingdom would remain part of the EU customs union, which would have kept all of Britain in the same trading scheme as the EU. But this was unacceptable to Brexiteers who wanted to full break with EU rules and institutions, and so they kept voting down the deal.

The New Alternative Replacement Backstop

The New replacement backstop will keep only Northern Ireland closely aligned with the EU rules, specifically on goods. This avoids any checks on the island of Ireland, though they will still have to happen on goods moving to or from the island of Ireland from the rest of Britain. But the whole of the United Kingdom — including Northern Ireland — will get to leave the EU customs union. The arrangements are kind of complicated — for example, the UK will have to apply and collect EU tariffs if any goods going from the rest of Britain are at risk of entering Ireland, otherwise known as EU territory.

So there are clearly some things to be worked out here; but all of the UK leaving the customs union means it can negotiate independent trade deals (something that’s really important to Brexiteers). It also means Johnson can say (and maybe run an election on the fact) that he took all of the UK out of the EU customs union, a big reason many opposed the previous Brexit deal. Another addition to this version of the deal is the ability for the Northern Irish government to have a say. The Assembly in Northern Ireland will be able to vote to continue the arrangements four years after they go into effect. (That’s 2021 or 2023, depending on how long the transition lasts.) It will just need a simple majority, rather than needing the majority of unionists and nationalists, which avoids one group getting a veto.

But both the EU and the UK made concessions. The EU stayed firm on its position that safeguards needed to be in place for the Irish border, and Johnson got the UK out of the EU’s regulatory regime. Despite claims for win-win by the U.K and the EU, it seems that this is an imperfect deal. Everything else in the withdrawal bill is pretty much unchanged, and the same as what May brought back last year.

Changes in Political Declaration

There were some small changes in the Political Declaration as well. It will set the framework for future negotiations on the EU-UK relationship. While there’s still likely something for everyone to hate, the political declaration points to a future relationship built on a much harder Brexit, rather than close alignment with EU rules.

Miles to Go

It doesn’t mean Brexit is a done deal: Johnson must still get the support of UK Parliament. And that remains a tall order. It is a perplexing question whether Boris Johnson would succeeed where Theresa May failed thrice?

There is one sure lesson from his predecessor Theresa May- getting a deal between the UK and the EU isn’t the hard part – getting the British Parliament to back it is. And it is still difficult for Boris Johnson to get the new UK-EU deal approved in the Parliament. There are 650 members of Parliament, but seven of them belong to the Irish nationalist Sinn Fein party. On principle, they never take their seats. The Speaker of the Commons, John Bercow   and his three deputies also don’t vote. That leaves 639 MPs who do vote, which means Johnson needs 320 – a simple majority – to get his Brexit deal through. Or to put it another way, if 320 lawmakers vote against it, it’s dead.The opposition Labour Party says they won’t back it. There are 244 Labour MPs, but a handful of them voted for Theresa May’s deal and might vote for Boris Johnson’s. Let’s figure around 240 Labour MPs will vote against – although Johnson will actually be hoping as many as two dozen will swing to his side. The Democratic Unionist Party, which props up the Conservative government, says they won’t vote for the deal. There are only 10 of them, but they’re a disciplined bunch with very clear views, so if they say they won’t vote for it, they probably won’t. That makes 250 against. The Scottish Nationalist Party, Plaid Cymru, Independent Group for Change and the one Green MP are all likely to vote against the Johnson deal – another 45 against, for a total of about 295. Then there are the Liberal Democrats, who are riding high on being the main national party that unequivocally opposes Brexit. There are 19 of them, one of whom could vote for the deal. If we assume 18 of them won’t, that’s 313 against, leaving Johnson’s deal dangerously close to defeat.

But could he corral all of the remaining lawmakers to back him so he squeaks out a 326-313 victory? Most of the Conservative Party will back the deal, as will many of the independents who were Conservatives until Johnson kicked them out of the party for voting against him in the past. The optimistic estimates put the number of current and former Conservatives in Johnson’s corner around 305. But that leaves between a dozen and two dozen votes that could go either way, even without a significant rebellion from the Conservatives who call themselves the European Research Group and are hardline Brexiteers. Boris Johnson started his premiership with an unprecedented string of seven defeats in a row in Parliamentary votes. Saturday’s vote will arguably be his most important yet. And as it stands, the result is too close to call.

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Fresh Sanctions on Russia over Ukraine

According to the US Treasury statement (March  2019), the United States, in coordination with Canada and the European Union, has slapped new sanctions on more than a dozen Russian officials and businesses, citing Moscow’s “continued aggression in Ukraine. Six Russian officials, six defence firms and two energy and construction firms were targeted, either over the seizure of Ukrainian vessels in the Kerch Strait, or for their activities in Russian-annexed Crimea or separatist eastern Ukraine. Measures target Russian officials over Moscow’s actions against Ukraine, including 2018 naval clash in the Kerch Strait.  These countries and EU have shared commitment to impose targeted and meaningful sanctions in response to the Kremlin’s attempts to disregard international norms and undermine Ukraine’s sovereignty and territorial integrity.

The US sanctions freeze all property and interests in property belonging to the designated individuals and entities, and prohibits US persons from transacting with them. Four of the individuals are border guard or coastguard officials, singled out for their role in a November 25, 2018, naval confrontation, in which Russian ships fired on and seized three Ukrainian vessels in the narrow Kerch Strait linking the Black and Azov seas near Crimea. The Russian navy captured 24 Ukrainian sailors during the clash. Canada imposed sanctions on 114 people and 15 entities in response to Russia’s military action against the Ukrainian ships, while the EU sanctioned eight more Russians over the standoff.

The decision takes the number of people blacklisted by the bloc over the crisis in Ukraine to 170 persons and 44 entities.  The EU said its sanctions affected senior security service officials and military commanders accused of preventing Ukrainian ships from reaching port. The US also imposed sanctions on two Ukrainian separatists – Aleksey Naydenko and Vladimir Vysotsky – involved in organising November elections in the breakaway east, which Washington says were a “sham”. The six defence firms were targeted over their operations in Crimea, where the US says several “misappropriated Ukrainian state assets to provide services to the Russian military”. Among them are Russian shipbuilding giant Zelenodolsk, the hydroacoustic equipment producer Okeanpribor, a diesel engine supplier to the Russian military, Zvezda, and an electronic parts supplier to the military, Fiolent.

Meanwhile, the US, Canada and the EU again pressed for Moscow to release the detained Ukrainian crew. Canada and its allies expressed their unwavering support for Ukraine’s sovereignty and territorial integrity. Chrystia Freeland, Canada’s foreign minister, said that Russia’s provocations in the Kerch Strait and its illegal invasion and ongoing occupation of Crimea will not go unchecked. Robert Palladino, a spokesman for the US State Department, called on Russia to respect Ukraine’s sovereignty and territorial integrity. They called upon Russia to immediately return to Ukraine the seized vessels and arrested crew members, and keep the Kerch Strait and the Sea of Azov open to ships transiting to and from Ukrainian ports.

Meanwhile, Russian businessman Oleg Deripaska sued the US alleging that it had overstepped its legal bounds in imposing sanctions on his companies for political reasons. The billionaire was slapped with sanctions in April last year, which targeted tycoons with close ties to the Kremlin. In a legal filing, Deripaska asked the US District Court in Washington to block the US Treasury Department from using the “devastating power” of such economic sanctions. He claimed his net worth has dropped by $7.5bn because of the measures.

Background

A prolonged crisis in Ukraine began on 21 November 2013 when then-president Viktor Yanukovych suspended preparations for the implementation of an association agreement with the European Union. The decision sparked mass protests from the proponents of the agreement. The protests, in turn, precipitated a revolution that led to Yanukovych’s ousting. After the ousting, unrest enveloped in the largely Russophone eastern and southern regions of Ukraine, from where Yanukovych had drawn most of his support. Subsequently, an ensuing political crisis developed after Russia invaded said regions and annexed the then-autonomous Ukrainian region of Crimea. As Russia’s invasion emboldened the Russophone Ukrainians already in upheaval, the unrest in the Donetsk and Luhansk oblasts devolved into a subnational war against the post-revolutionary Ukrainian government. Then, as that conflict progressed, the Russophone Ukrainian opposition turned into a pro-Russian insurgency often supported and assisted by the Russian military and its special forces.

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US will not reissue waivers for Iran oil imports

In an effort to increase economic pressure on Iran, US announced (April 22. 2019) to end waivers for countries importing Iran oil. The Trump administration told that waivers given by US to five countries – Japan, South Korea, Turkey, China and India with regard to importing oil from Iran would no more be available. The US sanctions on importing oil from Iran now would hold or apply in case of these countries as well.  – that they would no longer be exempt from US sanctions if they continued to import oil from Iran after their waivers ended on May 2. US Secretary of State Mike Pompeo told reporters after the White House made the announcement in a statement,  “There are no (oil) waivers that extend beyond that period, full stop.” adding that there would be no grace period for those economies to comply. “We’re going to zero. We’re going to zero across the board.” Waivers according to the US ‘won’t serve regional stability.Since November, three of the eight countries receiving waivers – Italy, Greece and Taiwan – have stopped importing oil from Iran. The other five, however, have not, and have lobbied for their waivers to be extended.

The purpose of sanctions on Iran oil

The United States which has engaged in a maximum pressure campaign against Tehran since Donald Trump came to office, had been giving the countries time to wean themselves off Iranian oil, but has decided that waivers would no longer be issued. Pompeo said, “The goal remains simply: To deprive the outlaw regime of the funds that it has used to destabilise the Middle East for decades and incentivise Iran to behave like a normal country.” The administration granted eight oil-sanctions waivers when it re-imposed sanctions on Iran after Trump pulled the US out of the landmark 2015 nuclear deal. The waivers were granted in part to give those countries more time to find alternate energy sources but also to prevent a shock to global oil markets from the sudden removal of Iranian crude.

Alternative sources of oil to maintain supply of oil in the world

The White House also claimed that the US, Saudi Arabia and the United Arab Emirates “have agreed to take timely action to assure that global demand is met as all Iranian oil is removed from the market”. Saudi Energy Minister Khalid al-Falih said in a statement that the kingdom was closely monitoring the oil market and “will coordinate with fellow oil producers to ensure adequate supplies are available to consumers while ensuring the global oil market does not go out of balance”.

Tehran’s reactions on sanctions of its oil exports

Tehran remained defiant over Washington’s decision, saying it was prepared for the end of the waivers, while the Revolutionary Guards repeated its threat to close the Strait of Hormuz, a major oil shipment channel in the Gulf, Reuters news agency reported, citing Iranian media. Such a move, the Trump administration said, would be unjustified and unacceptable. Iran’s foreign ministry said the US decision had “no value” but that Tehran was in touch with European partners and neighbours and would “act accordingly”, Iranian news agencies reported. It added that the sanctions were “illegal”. “The waivers … have no value but because of the practical negative effects of the sanctions, the Foreign Ministry has been … in touch with foreign partners, including European, international and neighbours and will… act accordingly,” the agencies quoted the ministry as saying.

Turkey not happy with embargo on Iran oil by the US

 NATO ally Turkey had made perhaps the most public case for an extension, with senior officials telling their US counterparts that Iranian oil was critical to meeting their country’s energy needs. They have also made the case that as a neighbour of Iran, Turkey cannot be expected to completely close its economy to Iranian goods.  Turkey slammed the US decision, saying it would not serve regional peace and stability. Turkey “rejects unilateral sanctions and impositions on how we build our relationship with our neighbours,” Turkish Foreign Minister Mevlut Cavusoglu tweeted. “The US decision … will harm Iranian people.” The presidential spokesman and senior adviser Ibrahim Kalin told reporters in Washington, DC, that “people should not expect Turkey to turn its back on Iran just like that”. Turkey did not support US sanctions policy on Iran and did not think it would yield the desired result, Kalin said at the time, but added that Ankara would not want to violate sanctions if a waiver was not extended.”We will look for alternatives in terms of transactions and other things. We don’t want to break or violate the sanctions but at the same time we don’t want to be deprived of our right to buy oil and gas from Iran,” Kalin said last week.

China’s and others’reactions on sanctions on Iran oil imports

Geng Shuang, a Chinese Foreign Ministry spokesman, said at a daily news briefing in Beijing on Monday that it opposed unilateral US sanctions against Iran and that China’s bilateral cooperation with Iran was in accordance with the law. South Korea’s Yonhap news agency quoted the foreign ministry as saying the South Korean government had been negotiating with the US at all levels to extend the waivers and that it would continue to make every effort to reflect Seoul’s position until the May 2 deadline. In India, refiners have started a search for alternative supplies but the government declined to comment officially. Embassies of India, China and South Korea in Washington, DC, did not immediately respond to requests for comment, along with Japan, whose Prime Minister Shinzo Abe will be in the US capital on Friday for an official visit.

Implications: Oil prices rise

Oil prices rose following the Trump administration’s announcement. In morning trading on April 23, benchmark US crude surged $1.52, or 2.4 percent to $65.57 per barrel in New York. Brent crude, used to price international oils, jumped $1.84, or 2.6 percent to $73.80. Ritterbusch and Associates, an oil trading advisory firm, said in a morning note that “a complete elimination of Iranian exports is nearly impossible and that a reduction beyond current levels will likely prove limited”. It said that the overall effect “will hinge to a large degree on the Saudis’ response to what is likely to be some strong requests from the Trump administration to increase productions appreciably”.

Peter Kiernan, an energy analyst at the Economist Intelligence Unit (EIU) said: “A severe loss in (Iranian) volumes will put pressure on the supply side, given the political uncertainty currently blighting other oil exporters, such as Venezuela and Libya.” According to some analysts, ending the waivers was expected to hit Asian buyers, including China and India, the hardest. Kim Jae-kyung of the Korean Energy Economics Institute said the move “will be a problem if South Korea can’t bring in cheap Iranian condensate (for) South Korean petrochemical makers”. Takayuki Nogami, a chief economist at Japan Oil, Gas and Metals National Corporation (JOGMEC), said ending the waivers was “not a good policy for Trump”. Nogami said he expected oil prices to rise further because of US sanctions and OPEC-led supply cuts.

So far in April, Iranian exports were averaging below one million barrels per day (bpd), according to Refinitiv Eikon data and two other companies that track exports and declined to be identified. That is lower than at least 1.1 million bpd estimated for March, and down from more than 2.5 million bpd before the renewed sanctions were announced last May.

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Looking forward after Trump-Kim summit breaks down

Hanoi Summit

A summit between Donald Trump and the North Korean leader Kim Jong-un ended (February 28, 2019) without agreement after the US refused North Korean demands for sanctions relief. The Hanoi Summit, was a two-day summit meeting between North Korean Chairman Kim Jong-un and U.S. President Donald Trump, held at the Metropole Hotel in Hanoi, Vietnam. According to US President North Korea wanted the sanctions lifted in their entirety, but the US did not want to do that. On the other hand North Korea claimed that it had made “realistic proposals” at the summit. The summit had been called with an aim that the two leaders would announce progress on denuclearization, but expectations were belied as the talks broke. Later the US President said, “Sometimes you have to walk and this was one of those times.”

According to a BBC report, the original White House programme for the day had planned for a “joint agreement signing ceremony” as well as a working lunch for the two leaders, but expectations were abruptly dashed with the cancellation of both. Even after this the United States, Secretary of State Mike Pompeo said he was very hopeful that officials from both sides could resume talks before too long.

The two countries were not able to resolve the differences as they were rigid on their stances, but negotiations require proportionate give and take to succeed. The media reports pointed out that Mr Kim made a significant offer – to dismantle all of the Yongbyon complex, the research and production facility at the heart of North Korea’s nuclear programme and in lieu it wanted all sanctions on North Korea lifted, something the US was not prepared to offer. US thinks that there are nuclear network of facilities that extend beyond Yongbyon. Earlier, Stephen Biegun, the US state department special representative for North Korea had claimed that North Korea had committed in pre-summit talks to destroy all of the nation’s plutonium- and uranium-enrichment facilities, dependent on unspecified US measures in return. Yongbyon is North Korea’s only known source of plutonium but the country is believed to have at least two other facilities where uranium is enriched.

After the talks break down

The Guardian reported that Russian President Vladimir Putin in his meeting with Kim who was visiting Russia on April 25, 2019 said that North Korean leader Kim Jong-un would require “security guarantees” in order to abandon his nuclear program, following the first ever summit between the two leaders. Putin and Kim promised to forge stronger ties during a two-hour meeting in the Russian city of Vladivostok, where the Russian president also offered to help break the deadlock over North Korea’s nuclear weapons programme. Kim, who arrived in Russia on April 24, by armoured train, called the talks “very meaningful”. The leaders did not immediately announce any agreements and analysts cautioned that Russia could only offer modest diplomatic and economic support to North Korea. But the friendly tone contrasted with that of the failed summit between Kim and the US president, Donald Trump, in February.

Firing of two missiles without any provocation

North Korea fired two rounds of missiles on May 2, 2019, its second launch in a week. According to the South Korean authorities the missiles were fired east “from Sinori area located in Northern Pyongan Province” about 4:29 p.m. and 4:49 p.m. local time on May 2 . The launch came just days after North Korea on Saturday fired what were described as several short-range projectiles. A South Korean military official has said that the launch was thought to involve multiple rocket launchers, including “new tactical guidance weapons.”After Pyongyang’s firing of missiles, the president of South Korea said he believes his country’s northern neighbor is unhappy that a summit with President Donald Trump in Hanoi, Vietnam, fell apart earlier this year. South Korea President Moon Jae-in said in an interview that “If they have any discontent, North Korea should talk about it,” Moon said. “By acting like this, misinterpretations can accumulate, and this could aggravate the dialogue or negotiation mood, and we would like to let them know about this message.”

Revival of Six-party dialogue: An option?

It may be recalled that President Vladimir Putin was reportedly considering (proposing a revival of the six-party talks on Pyongyang’s nuclear program while meeting North Korean leader Kim Jong Un on April 25.Russia has reportedly informed the United States and China of its intention to make the proposal. It may be recalled that the six-party talks were chaired by China and started in 2003. The other participants are the US, North Korea, Japan, South Korea and Russia. But the US and North Korea became increasingly at odds over how to verify Pyongyang’s commitment to scrap its nuclear development program. The talks have been stalled since December 2008.

Notwithstanding Russian President Vladimir Putin’s call for multilateral dialogue to provide an international security guarantee for North Korea through resuming six-party talks, experts opine that this is highly unlikely.US President Donald Trump’s national security adviser John Bolton, however, rejected a return to six-party talks just after Putin and North Korean leader Kim Jong-un held their first summit in Vladivostok. He said that the US president was not trying to exclude other countries from the nuclear talks but “I think it’s not our preference.” He expressed hope that there is still possibility of a third summit with Kim.

Uncertain future

The future still looks uncertain although nuclear power falling into the hands of impulsive leaders or irresponsible hands is a real fear. The US regime is taking tough stands on many issues in the belief that it will get the desired results on its own terms. The geopolitics, nevertheless, is now not uni-polar. Negotiations are not possible in a hegemony framework. Powers like Russia and China have their own reasons to back North Korea in a subtle way. Meanwhile the nucler issue with North Korea and Iran are again appearing to have slipped at the same level of uncertainty.

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US hikes tariffs on Chinese goods, Beijing retaliates

President Donald Trump’s administration again hiked tariff on Chinese goods, effective from May 10, 2019, much to the dismay of China which said it would retaliate. The negotiators from China and the US met On May 09, 2019 and the U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin briefed President Trump on the negotiations, before dining with the Chinese negotiators. The Chinese delegation was led by Vice Premier Liu He,.who asserted that he “came with sincerity.” He appealed to Washington to avoid more tariff hikes, saying they are “not a solution” and would harm the world.“We should not hurt innocent people. But all these gestures were of no avail and negotiations could not settle the issue.

Us Slaps another tariff hike on China

Another bout of tariff hike has escalated trade war between the two countries. The US is bothered about its highly skewed and adverse balance of payments, lack of market access provided to US products in Chinese markets and a concern against China’s technology ambitions efforts to become a world power.  The Trump administration raised duties on $200 billion of Chinese imports from 10% to 25%. China’s Commerce Ministry said would take “necessary countermeasures” but gave no details. This a matter of concern for the global economy as the trade war between the countries has disrupted billions of dollars in trade and shaken global financial markets. This hike in tariffs took place while the Chinese authorities tried to negotiate with the US. American officials accuse Beijing of backtracking on commitments made in earlier rounds of negotiations.

China retaliates as the trade battle goes ahead

The latest increase extends 25% U.S. duties to a total of $250 billion of Chinese imports. The US President later said he might extend penalties to all Chinese goods shipped to the United States. The latest higher U.S. import taxes don’t apply to Chinese goods shipped before May 10, 2019. By sea, shipments across the Pacific take about three weeks, which gives negotiators a few more days to reach a settlement before importers may have to pay the increased charges.

Beijing had set additional rates of 5% and 10% on 5,207 U.S. products worth $60 billion in September, in response to the U.S.’s initial 10% duty on the $200 billion worth of Chinese goods, and warned at the time that it would counter any higher tariffs imposed by Washington. It is notable that Beijing has so far retaliated for previous tariff hikes by raising duties on $110 billion of American imports before the latest retaliation. It is reported that Chinese regulators are running out of U.S. goods for penalties due to the lopsided trade balance. Chinese officials have targeted operations of American companies in China by slowing customs clearance for their goods and stepping up regulatory scrutiny that can hamper operations.

China didn’t want to escalate the trade war with the US. But when the US proceeded with its latest move of tariff hike against the Chinese products, China retaliated three days after. On May 13, 2019 China retaliated saying it would impose higher tariffs on most U.S. imports on a revised $60 billion target list, indicating further escalation of a bitter trade war. A total of 5,140 U.S. products will be subject to additional tariffs of 5%, 10%, 20% and 25% starting June 1, the finance ministry in Beijing said in a statement. The escalation, from rates of 5% and 10%, was announced hours after Trump warned China not to retaliate against the latest U.S. tariffs hike. The additional tariff of 25% will be levied against 2,493 goods including liquefied natural gas, soy oil, peanut oil, petrochemicals, frozen vegetables and cosmetics, the ministry said, and of 20% on 1,078 products.

Way ahead- No early signs of reconciliation?

China reiterated that its adjustment on additional tariffs is a response to U.S. unilateralism and protectionism,” the ministry said. “China hopes the U.S. will get back to the right track of bilateral trade and economic consultations and meet with China halfway.” The two countries are sparring over U.S. allegations that China steals technology and pressures American companies into handing over trade secrets, part of an aggressive campaign to turn Chinese companies into world leaders in robotics, electric cars and other advanced industries. The latest Chinese retaliation came as U.S. President Donald Trump signaled his intent to slap tariffs on all Chinese imports if Beijing does not give in, suggesting a prolonged standoff between the world’s two largest economies that could roil global markets for weeks or months to come. It does not seem that the two countries are inclined to resolve their problems by accommodation and understanding. China is a rising global power driving its power from its deep pocket resulting from trade surplus with its most of the big trade partners. The economies like the US feel that their technology and manufacturing jobs have been stolen by China which is indulging in exchange rate manipulation, patent violations, theft of technology and reverse technological innovation, all of which are eroding America’s comparative advantage. The battle does not show any sign to relent in immediate terms.

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Mueller report: Trump cleared of conspiring with Russia?

U.S. Special Counsel Robert Mueller’s 448-page report into Russia’s interference in the 2016 U.S. presidential election has been the cause of political confusion ever since it was submitted to Attorney General William Barr on 22 March 2019.  According to the summary of Special Counsel Robert Mueller’s report US President Donald Trump’s campaign did not conspire with Russia during the 2016 election. The allegation clouded the first two years of Mr Trump’s presidency and his allies see the report’s finding as a boost to his re-election chances.

But Attorney General William Barr’s summary is inconclusive as to whether Mr Trump obstructed justice. Opposition Democrats are demanding full access to Mr Mueller’s report. Having repeatedly described the inquiry as a witch hunt, Mr Trump said it was an “illegal takedown that failed”. Despite the inconclusiveness of the report regarding allegations he obstructed justice, the president said it constituted “complete and total exoneration”.

Mueller’s summaries took on special significance on 30 April 2019 when a letter he wrote to Barr the month before became public. Mueller wrote in that letter that he was dissatisfied with Barr’s own initial summary of the report because it “did not fully capture the context, nature, and substance of this Office’s work and conclusions,” so Mueller requested Barr release Mueller’s own summaries to the public.

While Mueller made this request on 25 March 2019, the day after Barr released his four-page summary of the report, Mueller’s summaries weren’t available to the public until the full, redacted version of the report was publicly released on 18 April 2019. However, Robert Mueller’s investigation into possible obstruction of justice could not clear President Donald Trump, according to a redacted version of the special counsel’s report, which provided new details of Trump’s efforts to influence the investigation into his campaign and Russia. The report details numerous cases in which Trump asked his aides to take actions that would have obstructed the investigation, but stated they were unsuccessful because the aides refused his orders.The report claims that “The President’s efforts to influence the investigation were mostly unsuccessful, but that is largely because the persons who surrounded the President declined to carry out orders or accede to his requests,”

The 448-page report, which includes two volumes and appendixes, paints a starkly different picture than the one laid out by Attorney General William Barr. Barr said that Mueller’s investigation did not establish a conspiracy with the Russian government and that Mueller did not make a decision on obstruction. But the full report lays out a significantly more complicated picture as Mueller’s team weighed whether to prosecute cases.

The report includes multiple episodes that were previously unknown, stemming from both the collusion and obstruction investigations, which are likely to fuel investigations in Congress into Trump. It’s also likely to add to the wave of criticism Barr has faced from Democrats, who were infuriated that he held a press conference.

Mueller wrote he accepted the Justice Department opinion that a sitting President cannot be indicted. But the special counsel report rejected the Trump team’s legal argument that a President cannot commit obstruction of justice, leaving the door open for Congress to continue to investigate Trump.”With respect to whether the President can be found to have obstructed justice by exercising his powers under Article II of the Constitution, we concluded that Congress has the authority to prohibit a President’s corrupt use of his authority in order to protect the integrity of the administration of justice,” the report says

On May 16, 2017, Mueller interviewed with Trump to again serve as the Director of the FBI but was not hired. The next day, Deputy Attorney General Rod Rosenstein appointed Mueller to serve as special counsel for the United States Department of Justice. On May 17, 2017, former FBI Director Robert Mueller was appointed special counsel to take over the previous FBI investigation of Russian interference in the 2016 presidential election by Deputy Attorney General Rod Rosenstein after the recusal of Attorney General Jeff Sessions.

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International Current Affairs

2nd Belt and Road Forum: Assessing the Belt and Road Initiative

Last week, China hosted the second Belt and Road Forum (BRF) for International Cooperation in Beijing. This was an occasion to take stock, as well as introduce course corrections into the process of unrolling the six-year old Belt and Road Initiative.

37 countries and 29 international organizations participated in the event, with notable presence of Russian President Putin, President Pinera of Chile, President Ueli Maurer of Switzerland, Prime Minister Giuseppe Conte of Italy and  Malaysian Prime Minister Mahathir Mohamad. Prominent India’s  neighbors who marked their presence over there were President Bindiya Bhandari of Nepal, Prime Minister Imran Khan of Pakistan, State Counsellor Aung San Su-Kyi of Myanmar. The UN Secretary General Antonio Guterres and managing director of the IMF Christine Lagarde also attended the event.

The first phase of BRI was an unfolding of China constructing connectivity hardware — railway lines, highways, ports and pipelines. The emphasis now is to improve the software —­ international cooperation, trade agreements, customs and taxation procedures and financial processes, which is to be linked with China’s overall plans for transforming its domestic economy to emphasize “quality construction” based on innovation and science and technology. On the other hand there is a conscious effort to connect it to a new phase of Chinese global policy which seeks to expand China’s geopolitical reach by assisting developing countries to overcome poverty and joblessness.

The emphasis now is to improve the software —­ international cooperation, trade agreements, customs and taxation procedures and financial processes, which is to be linked with China’s overall plans for transforming its domestic economy to emphasize “quality construction” based on innovation and science and technology.

In recent past China had to face severe criticism for the way in which one its company gained control of the Hambantota Port in Sri Lanka. This compelled China to cut the price for its multi-billion dollar railway project in Malaysia by a third and scale down the plans for the expanded port of Kyaukpyu in Myanmar to a $ 1.3 billion project from the $ 10 billion being talked off earlier. Currently Maldives, too, is seeking a renegotiation of the loans granted by the Yameen government. However, as of now there does not seem to be a clear idea as to the extent of the debt.

On the eve of the event, the Office of the Leading Group for Promoting the Belt and Road Initiative issued a report on its progress, contributions and prospects. The central theme of the report is that the BRI may have originated as a Chinese national program, but it is now “a process of open, inclusive and common development,” open to all countries. According to the report, the BRI is now in a transition phase from planning to “intensive and meticulous implementation.”

Looking at the future prospects of BRI, the leading group report asked participating countries “to work together to foster a modern business environment which is corruption free and efficient.” In addition, the report highlighted the need to abide by laws and regulations during the process of tendering, construction and operational management of any project. It expressed China’s willingness to work in unison with other countries to improve legal systems, fight corruption and punish commercial bribery.

Xi Jinping’s speech

On April 26th’ Chinese President Xi Jinping   addressed the opening ceremony of the BRF. His focus was mainly on offering a 2.0 version of his signature foreign policy initiative, one that sought important modifications in lieu of the criticism that China has received in the past couple of years.

According to Xi, the new version, emphasized on consultation and joint action with other partners. It spoke of “open, green and clean” cooperation which stressed the need for protecting the environment, transparency and prohibits corruption. According to Xi, the new “people centric” BRI would stress sustainability and adopt international rules and standards in, ‘project development, operation, procurement and tendering and bidding of the same.’ According to Xi, the new “people centric” BRI would stress sustainability and adopt international rules and standards in, ‘project development, operation, procurement and tendering and bidding of the same.’

China would continue to fund the BRI through its financial institutions, but it will also “welcome the participation of multilateral and national financial institutions,” also encouraging “third market cooperation.” Thus — encouraging and endorsing liberalization and establishing new, “high standard” free trade agreements.

He also took the opportunity to combine BRI version 2.0 initiatives with issues related to economic policy raised by the US in its spat with China. He assured a series of “reform and stronger institutional and structural move to boost higher quality opening up.”

China aims to expand its market access for foreign investment in more areas by reducing their negative list and opening up of new free trade zones. Also, intensify efforts to boost intellectual property protection, which will help China to promote innovation driven quality development.

The Issue of ‘Debt Trap’ Diplomacy

Chinese trade financing policy of deliberately trapping countries into debt has irked the international trading community hugely attracting a lot of criticism of the Chinese policy. A company named China Merchants Port Holdings acquired a lease over the port and 15,000 hectares of land for a special economic zone in exchange for a write off, of a $ 1.12 billion debt that Sri Lanka had incurred. Chinese trade financing policy of deliberately trapping countries into debt has irked the international trading community hugely attracting a lot of criticism of the Chinese policy.

President Xi Jinping addressed the issue of debt sustainability in his speech.  It also became a topic of discussion at the thematic forum on financial connectivity held on April 25th along with the BRF in Beijing. It was here that the Yi Gang, governor of the People’s Bank of China said that, ‘China would take measures to contain the debt risks related to the BRI projects and take a market based approach in financing projects, rely on commercial funds and private sector investment thus, reduce the amount of funds available for concessional financing. He said that henceforth investment and financing decisions should “fully consider a country’s overall debt capacity… to ensure debt is sustainable.”

Finance Minister Liu Kun said that China had published a “debt sustainability analysis framework” to prevent risks from spiraling out of control, based on World Bank and IMF research into low-income nations’ debt capacity.

In response to remarks made by Yi and Liu, IMF Chief Christine Lagarde welcomed the decision to focus on long-term success and debt sustainability in building safe and long-standing projects.

Several studies has suggested that pushing indebtedness to promote geopolitical goals is not really a part of Chinese policy. A recent article in Financial Times citing a study by the Rhodium Group has pointed out that developing countries have actually managed to renegotiate some $ 50 billion worth of loans that they had received from China and the resolution has been largely in favor of the borrower countries. It also suggests that the renegotiations shows a lack of competency among lending institutions.

Third Party Cooperation 

Another major development in the BRI has been the evolution of  the “third party cooperation model”  which aims at promoting shared development and spreading China’s risks. The origin of this model lies in the political decision of Japan to cooperate with the BRI in practice if not in name.  As part of this, in the year 2018, both the countries agreed to a joint execution of 50 infrastructural projects across Asia. This would combine China’s financial support and production capacity with Japanese rich overseas experience, advanced technology and risk management mechanisms.  BRI v.2.0 seeks to leverage such links to boost its own capacity and capability. As an Ernst & Young report notes, the model seeks to link the ‘competitive production capacity advantages from China, the advanced technology from developed countries and the vast development needs from developing countries.’ This can help China to export its production capacity and products to international markets, help developed countries explore new growth drivers and boost the economic prospects of developing countries.

Conclusion

As Klaus Schwab the founder and head of the World Economic Forum puts it in the year 2017, when the first BRF took place, the BRI was still a ‘growing child,’ but now it has become an adult which signifies its importance in the global economy.’

It has matured as the cutting edge of a Chinese push towards globalization.  The Chinese have laid out the vision of this collaborative BRI, what remains to be seen is the sincerity with which they implement it, as they face challenge from both external environment and domestic environment. The Chinese have laid out the vision of this collaborative BRI, what remains to be seen is the sincerity with which they implement it, as they face challenge from both external environment and domestic environment.

State owned financial institutions led the first phase of BRI, whose ways of doing business remained opaque. But, now the world community is demanding a level playing field, pushing Beijing to introduce greater transparency in tendering and bidding processes and adoption of norms to ensure sustainable debt levels.

The goal under the BRI is not merely to promote investment and trade but also create newer channels of transportation and directions of trade flow along with reshaping China’s economy at qualitatively higher levels of production and consumption. These cannot but have political consequences in terms of rejigging China’s perception of its interests, the challenges it will confront and the necessary steps it would need to take both military and diplomatic to preserve and further them. Henceforth — we should not play down the geopolitical consequences of the Chinese-led globalization that BRI v.2.0 represents.

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International Current Affairs

Major highlights of Annual Conference 2019 of Boao Forum for Asia

The 2019 forum was held in Hainan, from 26–29 March 2019. Chinese Premier Li Keqiang made the keynote speech at the opening of the annual conference. The forum intended to conduct around 50 official sessions, including the opening ceremony, sub-forums, CEO dialogues and roundtables are expected, categorized into five modules – Open World Economy; Multilateralism, Regional Cooperation and Global Governance; Innovation-Driven Development; High-Quality Development; and Critical Issues. It must be noted that:

  • The Boao Forum is a useful vehicle for China to propound its world views.
  • That importance has been heightened by the Trump Administration’s apparent turn to insularity.
  • The Forum ties in closely with China’s Belt and Road Initiative, being in the vanguard of Hainan Province’s ties with the ASEAN countries.
  • Hainan’s geographic location, coupled with the Forum’s increased salience, could make it the model for similar Chinese initiatives in the future.

At the opening ceremony, BFA Chairman Ban Ki-moon delivered a welcoming speech. Prime Minister Thongloun Sisoulith of Laos, Prime Minister Lee Nak-yeon of the Republic of Korea, Prime Minister Xavier Bettel of Luxembourg, Prime Minister Jorge Bom Jesus of Sao Tome and Principe and representatives from the business circle successively delivered speeches.

Keynote Speech by Premier Li Keqiang

On the morning of March 28, 2019, Premier Li Keqiang attended in Boao of Hainan Province the opening ceremony of the Boao Forum for Asia (BFA) Annual Conference 2019 and delivered a keynote speech titled “Jointly Tackling Challenges for Common Development”. Over 2,000 representatives from political and business circles and scholars from think tanks of more than 60 countries and regions in five continents were present. Li Keqiang expressed that the BFA, with its founding focus on Asia and a global perspective, has evolved into an influential high-level dialogue platform for Asia and beyond. At the opening of its annual conference last year, President Xi Jinping delivered a keynote speech. The conference this year has chosen a highly relevant theme of “Shared Future, Concerted Action, Common Development”. I hope various parties will build consensus and actively contribute to promoting peace and development in Asia and the world.

Major highlights of his speech are:

State of Chinese economy and major developments

Li Keqiang briefly introduced China’s economic situation, and pointed out that this year, the Chinese economy has maintained a steady momentum and showed some positive changes that have improved market expectations, with the increase of uncertainties and destabilizing factors as well as externally-generated risks. We will carry on with our policies and will not resort to massive stimulus measures, or return to the old approach of expansion in scale and inefficient growth. We will make greater efforts to ensure full delivery of our policies, firmly depend on opening-up and innovation, make good on the promises of larger tax and fee cuts, energize market entities, boost internally driven growth, and counter the downward pressure, so as to keep the economic performance within a proper range, and ensure the long-term, positive and stable development of the Chinese economy.

Need for mutually beneficial international cooperation amid today’s complex changes in the international landscape and economic headwinds

  Li Keqiang said that we meet at a time of profound and complex changes in the international landscape. In the face of world economic headwinds and other common challenges, no country can stay immune. It is time to jointly seize the opportunities and rise to the challenges, and seek an inclusive path of mutually beneficial cooperation. All parties need to jointly uphold the international system with the United Nations as the core and the rules-based multilateral trading system, and work together for common development. It is time to actively advance reform in the global governance system to move it toward a fairer and more equitable direction.

Taking regional integration to a higher level

Li Keqiang pointed out that Asia is an important force for world peace and stability, and a strong engine for global growth. In a complex and fast-changing world, Asian countries should, like passengers on the same boat who need to help each other, work together for common development. We must jointly uphold the overall environment of peace and development, deepen strategic mutual trust and preserve the sound momentum of peace and development in Asia. All parties concerned must jointly elevate regional integration to a higher level, work for an all-win outcome from the negotiations of the Regional Comprehensive Economic Partnership (RCEP) as early as possible, and advance the synergy between the joint construction of the Belt and Road Initiative and development strategies of other countries. We need to jointly break new ground in innovation-driven development, and make our business environment open, fair, transparent and predictable.

China’s commitment to opening up and institutional reforms

Li Keqiang stressed that opening-up is China’s fundamental state policy. The Foreign Investment Law is a crucial step toward building a world-class and business-friendly environment governed by a sound legal framework. He assured that China will move quickly to formulate relevant matching regulations soon and to complete drafting of regulations by the end of this year to implement  the new regulations as of 1st January next year. He also assured to widen market access further for foreign investment. He revealed that the management system of pre-establishment national treatment plus a negative list will be implemented across the board. The opening up, according to Li will also extend to China’s financial sector and modern services sectors wider. All companies registered in China, be it domestic or foreign-invested, will be treated as equals. The premier also assured that China will strengthen the protection of intellectual property rights and safeguard the lawful rights and interests of foreign investors.

Maintaining stability and continuity of policies

Li said that China will maintain the continuity and stability of its policies for investors from Hong Kong, Macao and Taiwan, and continue to support their development. We will also promote trade facilitation at a faster pace. We will notably reduce the customs clearance costs this year and make the process more efficient.

Conclusion

The 2019 annual Boao Conference thus intended to highlight China’s intentions and policies with regard to Openness, multilateral cooperation and innovation. It also released four major academic reports including the annual reports of BFA Progress of Asian Economic Integration, BFA Asian Competitiveness, and BFA Development of Emerging Economies, a routine practice of the BFA. Furthermore, the forum had a plan to issue a new report on Asian financial cooperation this year, jointly compiled by the BFA Academy and three international organizations in Asia. Notably, in recent years, China has used the opportunity of scientific revolution and industrial transformation to promote the booming development of emerging industries, accelerating the upgrade of traditional industries. China said that it intends to continue to innovate new technology for its own growth and growth of other Asian Nations. The country has contributed over 30 percent to global economic growth for years, with innovation playing a significant role. According to China’s position expressed in the conference innovation-Driven Development module the major innovations on which China is working include 5G, artificial intelligence, and big data. It also showcased and used intelligent Connected Vehicle, one of China’s newest technologies, in Boao, the conference’s host city, to better serve the event.The technology combines the Internet of Vehicles and smart automobiles, and is equipped with advanced sensors and monitors. It can obtain information exchanges among the drivers, vehicles, roads and the system, and make driving safer, more comfortable and energy-friendly.

Background

The Boao Forum for Asia (BFA) is a non-profit organisation that hosts high-level forums for leaders from government, business and academia in Asia and other continents to share their vision on the most pressing issues in this dynamic region and the world at large. BFA is modelled on the World Economic Forum held annually in Davos, Switzerland. Its fixed address is in Bo’ao, Hainan province, China, although the Secretariat is based in Beijing. The forum, sometimes known as the “Asian Davos”, takes its name from the town of Boao, located in China’s southern Hainan province, which has been the permanent venue for its annual conference since 2002.

The Forum is committed to promoting regional economic integration and bringing Asian countries even closer to their development goals. Initiated in 1998 by Fidel V. Ramos, former President of the Philippines, Bob Hawke, former Prime Minister of Australia, and Morihiro Hosokawa, former Prime Minister of Japan, the Boao Forum for Asia was formally inaugurated in February 2001. The founding of the BFA was driven by the People’s Republic of China and founded by 26 Asian and Australasian states on 27 February 2001. The organisation held its first meeting from 12–13 April 2002.

Discussions at the BFA focus on economics, integration, cooperation, society and the environment. In the past the forum also addressed China’s entry into the World Trade Organization, as well as Southeast Asia’s economic crisis during the 1990s. The geopolitical strategy ‘China’s peaceful rise’ was a topic of discussion for the forum in 2004. In addition to its annual meeting, the BFA also sponsors other forums and meetings related to Asian issues.

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International Current Affairs

Spain General election 2019: Socialists win

The 2019 Spanish general election was held on Sunday, 28 April 2019, to elect the 13th Cortes Generales of the Kingdom of Spain. All 350 seats in the Congress of Deputies were up for election, as well as 208 of 266 seats in the Senate. Under an high turnout of 75.8%, the ruling Spanish Socialist Workers’ Party (PSOE) of Prime Minister Pedro Sánchez won a resounding victory, the first for the party in a nationwide election in eleven years, with 28.7% of the share and 123 seats, an improvement of 38 over its previous mark which mostly came at the expense of left-wing Unidas Podemos. the People’s Party (PP) under Casado suffered a spectacular collapse and scored its worst result in history after being reduced to 66 seats and 16.7% of the share in what was dubbed the worst electoral setback for a major political party in Spain since the collapse of the UCD in 1982. Cs saw an increase of support which brought them within 0.8 points and 9 seats from the PP, overcoming them in several major regions throughout the country. The far-right Vox party, the political novelty of the election, saw a strong perfomance but failed to fulfill expectations by scoring 10.3% of the share and 24 seats; nonetheless, the division of the centre-right vote into three parties ensured Sánchez’s PSOE would be the only political party able to command a majority in the Congress of Deputies throughout alliances.

Background

Following the 2016 election, the People’s Party (PP) formed a minority government with confidence and supply support from Ciudadanos (Cs) and Canarian Coalition (CC), allowed by the Spanish Socialist Workers’ Party (PSOE) abstaining in Mariano Rajoy’s investiture after a party crisis resulted in the ousting of Pedro Sánchez as leader. The PP’s term of office was undermined by a constitutional crisis over the Catalan issue, the result of a regional election held thereafter,coupled with corruption scandals and protests with thousands of retirees demanding pension increases. In May 2018, the National Court found in the Gürtel case that the PP had profited from the kickbacks-for-contracts scheme and confirmed the existence of an illegal accounting and financing structure, since 1989, kept separate from the party’s official accounts. Sánchez, who was re-elected as PSOE leader in a leadership contest in 2017, brought down Rajoy’s government in June 2018 through a motion of no confidence. Rajoy resigned as PP leader, and was succeeded by Pablo Casado.

Presiding over a minority government of 84 deputies, Pedro Sánchez struggled to maintain a working majority in the Congress with the support of the parties which had backed the no confidence motion. The 2018 Andalusian regional election, which saw the PSOE losing the regional government for the first time in history, resulted in a sudden and strong rise of the far-right Vox party and this Regional election result translated to nationwide opinion polling shortly thereafter. After the 2019 General State Budget was voted down by the Congress of Deputies on 13 February 2019 as a result of Republican Left of Catalonia (ERC) and Catalan European Democratic Party (PDeCAT) siding against government, Sánchez called a snap election to be held on 28 April, just one month ahead of the “Super Sunday” of local, regional and European Parliament elections scheduled for 26 May.

Political Uncertainty for quite sometime

Spain has been witnessing political uncertainty for quite some time. The general election in June 2016 had resulted in the People’s Party (PP) gaining votes and seats relative to its result in the December 2015 election and a round of coalition talks throughout the summer saw Mariano Rajoy obtaining the support of Ciudadanos (C’s) and Canarian Coalition (CC) for his investiture, but this was still not enough to assure him re-election. On the other hand,  Spanish Socialist Workers’ Party(PSOE) leader Pedro Sánchez  opposing Rajoy’s investiture led to his ouster from the left part and a caretaker committee was appointed by party rebels led by Susana Díaz, who subsequently set out to abstain in Rajoy’s investiture and allow a PP minority government to be formed, preventing a third election in a row from taking place. However, Díaz’s bid to become new party leader was defeated by party members in a party primary in May 2017, with Sánchez being voted again into office under a campaign aimed at criticising the PSOE’s abstention in Rajoy’s investiture. Pressure on the Spanish government increased after a massive constitutional crisis over the issue of an illegal independence referendum unravelled in Catalonia. Initial actions from the Parliament of Catalonia to approve two bills supporting a referendum and a legal framework for an independent Catalan state were suspended by the Constitutional Court of Spain. The government’s crackdown on referendum preparations—which included police searches, raids and arrests of Catalan government officials, as well as an intervention into Catalan finances—sparked public outcry and protests accusing the PP government of “anti-democratic and totalitarian” repression.

Mishandling of the Catalan Crisis and the allegations of corruption

Public outcry against government’s high handedness with Catalan protestors and corruption led to decline in the image of PP. After Ctalan crisis, Rajoy immediately dissolved the Catalan parliament and called a regional election for 21 December 2017, but it left his PP severely mauled as Cs capitalised on anti-independence support in the region. The scale of PP’s collapse in Catalonia and the success of Cs had an impact on national politics, with Ciudadanos skyrocketing to first place nationally in subsequent opinion polls, endangering PP’s stand as the hegemonic party within the Spanish centre-right spectrum. Massive protests by pensioners groups, long regarded as a key component of the PP’s electoral base, demanding pension increases, further undermining the PP’s standing. On 24 May 2018, the National Court found that the PP profited from the illegal kickbacks-for-contracts scheme of the Gürtel case, confirming the existence of an illegal accounting and financing structure that had run in parallel with the party’s official one since 1989 and ruling that the PP helped establish “a genuine and effective system of institutional corruption through the manipulation of central, autonomous and local public procurement”.

No-confidence Motion

This event prompted the PSOE to submit a motion of no confidence in Rajoy and in Cs withdrawing its support from the government and demanding the immediate calling of an early election. An absolute majority of 180 MPs in the Congress of Deputies voted to oust Mariano Rajoy from power on 1 June 2018, replaced him as Prime Minister with PSOE’s Pedro Sánchez. On 5 June, Rajoy announced his farewell from politics and his return to his position as property registrar in Santa Pola, vacating his seat in the Congress of Deputies and triggering a leadership contest in which the party’s Vice Secretary-General of Communication, Pablo Casado, defeated former Deputy Prime Minister Soraya Sáenz de Santamaría and became new PP president on 21 July 2018.

For most of his government, Sánchez was reliant on confidence and supply support from Unidos Podemos and New Canaries (NCa), negotiating additional support from Republican Left of Catalonia (ERC), Catalan European Democratic Party (PDeCAT) and Basque Nationalist Party (PNV) on an issue-by-issue basis. ERC, PDeCAT and En Marea withdrew their support from the government in February 2019 by voting down the 2019 General State Budget, with the government losing the vote 191–158 and prompting a snap election being called for 28 April.

The New Government’s Commitment

In his victory speech, Mr Sánchez said the party’s big challenges were to fight inequality, advance co-existence and halt corruption. “The future has won and the past has lost,” he told cheering supporters. During his time in office he has raised the minimum wage, appointed a female-dominated cabinet and promised to strengthen rape laws, defining it as sex without clear consent.

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International Current Affairs

Sri Lanka: Ghastly Easter attacks

On Easter Sunday, i.e., April 21, 2019, suicide bombers killed at least 253 people and injured some 500 at churches and top-end hotels across Sri Lanka. Starting from  08:45 Six blasts took place within a short space of time. Three were at churches – in the Kochchikade district of the capital, Colombo; in Negombo, to the north; and in the eastern city of Batticaloa. The other three blasts rocked the Shangri-La, Kingsbury and Cinnamon Grand hotels in Colombo. Two further explosions were reported later as police searched for suspects – one in Dehiwala in southern Colombo, and another one near the Colombo district of Dematagoda, during a police raid. And again on April 22 another blast rocked a street near a church in the capital. Police were attempting to defuse explosives in a vehicle used by the attackers when it blew up.

Most victims were Sri Lankans, but at least 38 foreigners are among the dead, including British, Indian and US citizens.The official death toll had reached 359 by April 25. However, the Sri Lankan government then revised the figure down, blaming a calculation error. The confirmed international casualties are from the UK, Denmark, Portugal, India, Turkey, Australia, the Netherlands, Japan, Switzerland, Spain, Bangladesh, the US and China.

The doubt for this terrorist bloodshed was raised on local jihadists linked to the Islamic State (IS) group and police have made a number of arrests. Sri Lankan authorities said on April 22 that they believed a little-known local militant Islamist group known as National Thowheed Jamath (NTJ) was to blame. On the same day, police raided the  a house in the eastern town of Sainthamaruthu where relatives of the bombers’ suspected mastermind, Islamist preacher Zahran Hashim were hiding. About 15 relatives of the alleged mastermind were killed. Although, Sri Lankan officials pinned the blame on the NTJ at a news conference one day after the attacks, the  NTJ did not admit carrying out the wave of bombings.

 The NTJ is believed to have splintered off from another hardline Islamist group in the country, the Sri Lanka Thowheed Jamath (SLTJ).It was founded by Zahran Hashim, the suspected leader of the suicide bombers who blew himself up at a hotel in Colombo. However, Hashim is said to have been expelled from the NTJ after making hate speeches and may, in turn, have founded another splinter group. While still relatively unknown, the SLTJ is a bit more established. Its secretary, Abdul Razik, was arrested in 2016 for inciting hatred against Buddhists. He later issued an apology. But the NTJ is an extremist fringe group within an already small religious minority – only 9.7% of Sri Lanka’s population of about 21 million are Muslim. Its social media presence is sparse, too. Although it has a Facebook page, it is only updated every few weeks or so. The NTJ Twitter feed has not been updated since March 2018.

Meanwhile, On April 29, Sri Lanka banned its citizens from wearing face coverings under an emergency law, after terrorist attacks at prominent churches and upscale hotels left hundreds dead in the small island nation. President Maithripala Sirisena said the ban was meant to ensure national security, helping authorities to identify people. He did not specifically mention the niqab and burka, types of facial coverings worn by Muslim women across the world, but critics say the new measure violates their rights. Amid heightened safety concerns, a body of Islamic scholars in Sri Lanka advised last week that Muslim women “should not hinder the security forces in their efforts to maintain national security by wearing the face cover (Niqab).”