| Egypt and Turkey: Middle East basket cases (Spengler) Posted: 22 Nov 2011 04:26 PM PST The big story that is finally being told.
From David P. Goldman (Spengler):
The mainstream media has finally picked up the story I've been telling since February about Egypt's impending economic collapse. The country is nearly out of money. Under the headline, "The Egyptian pound has a distressed future," The Financial Times reported Nov. 16, just before the last days' slaughter on Tahrir Square, "Investors are betting against the Egyptian pound, expressing their belief that it is soon to take a dive through the futures market while the spot market is held up by Egyptian government support. The pound's twelve-month non-deliverable forwards (NDFs) weakened 2.8 per cent on Wednesday on fears that Egypt's reserves, which are being used to support the currency, might be reaching critical levels. The spot market, in contrast, held steady – but for how long?" CAIRO Nov 22 (Reuters) – Egypt's pound fell to its weakest against the dollar since January 2005 on Tuesday as mass protests against army rule prompted the cabinet to tender its resignation and threw polls into doubt, giving a fresh jolt to a shaky business climate. The Central Bank of Egypt (CBE) has sought to defend the currency during the nine turbulent months since the overthrow of President Hosni Mubarak, but now traders said the pound could soon break through 6 to the dollar as investors run for cover. They said demand for dollars among local companies and individuals had grown with the street clashes that have left 36 people dead since Saturday. Voting in the three-phase poll for the lower house of parliament is due to start on Nov. 28. Egypt's stock market is in free-fall, down 50% since the overthrow of Hosni Mubarak. What's interesting is that Turkey's stock market isn't far behind. The economic crisis overwhelming the Middle East stretches from Libya all the way through to Turkey. The problems are of a different order, to be sure. As I reported earlier, Egypt's spendable foreign exchange reserves are down to just $13 billion and falling daily as the central bank buys its own unwanted currency from the market in order to postpone the inevitable collapse in the change rate. Why not just devalue? The probable answer is that the generals and their civilian front men are moving as much money as they can out of the country before Egypt goes bankrupt. Last month the generals fired all the private-sector board members of the central bank, as I reported at Asia Times Online. Everything that can be sold abroad for cash is being sold. Al-Ahramreported Nov. 19 that there is no enforcement of the ban on rice exports, because controls have simply broken down. Egypt subsidizes rice at a fraction of the world market price, so traders have an incentive to sell it overseas. Not only the country's capacity to buy food in the future, but its existing stocks of food are disappearing. And Egypt imports half its caloric consumption. No wonder the country is blowing up. An out-of-control kleptocracy is frantically trying to close on townhouses in Chelsea and apartments in the 16th arondissement before the central bank's foreign exchange reserves run out. What will ensue, will be horrifying. Turkey is in no danger of starvation, to be sure, but it faces a severe economic setback: Tayyip Erdogan, the country's Islamist prime minister, spurred the country's banks to lend huge amounts to consumers in advance of last June's national elections. Bank lending rose at by 40% in 2010 and by another 40% in 2011, and Turks bought consumer goods from abroad, running up a balance of payments deficit exceeding 10% of GDP (the same level as Greece). Most of that is financed by short-term debt. Turkey won't go bankrupt–it's overall debt levels are manageable–but its economy will have to shrink by a good 5% to staunch the bleeding. That will deflate the neo-Ottoman balloon that Erdogan has been floating, and make it much harder to suppress Turkish grievances in the impoverished Eastern corner of the country. There is no center of power, no reorientation, no neo-Ottoman empire, no Shi'ite crescent, no Arab Spring, no coherent description of what is occurring in the Middle East. There is only catastrophic social breakdown, civil unrest, despair and violence. If Iran gets nuclear weapons, they will be used. We cannot fix the Middle East. We can only protect ourselves from the fallout, starting with acquisition of WMD by a terrorist state. The last sentence of my book How Civilizations Die (and why Islam is Dying, Too) quotes Virgil's warning to Dante in Canto III of the Inferno: Non ragionam da lor, ma guarda e pasa. Nothing to see here, folks. Keep moving.
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| "Humanitarians" visit Gaza, vow to fight Israel Posted: 22 Nov 2011 12:15 PM PST From IMEMC: A solidarity convoy made it into the Gaza Strip on Monday evening, through the Rafah Border Terminal, between the Gaza Strip and Egypt. Members of the "Freedom Spring" convoy will be holding meetings with political and social figures in Gaza.
Representatives of Arab Spring movement are part of the convoy and plan to hold a meeting with Ismail Haniyya, Prime Minister of the dissolved Hamas-led government in Gaza, and several Palestinian officials, in addition to holding meetings with Gaza businessmen, representatives of women movements, and representatives of local NGO's.
Dr. Salah Sultan, head of the "Egyptian Popular Committee Against the Judaisation of Jerusalem", stated that convoy members came to Gaza to aid it and its people, and will "return as fighters and liberators of Jerusalem and the Al Aqsa Mosque", the Hamas-affiliated Palestine-Info reported.
"We will stand with you, the world will stand with you, to defend Jerusalem, especially after the Zionists declared plans demolish the historic Moghrabi (Magharba) Gate in Jerusalem that links between the Al Boraq Wall and the Al Aqsa Mosque", Sultan added.
On his part, Dr. Arafat Madi, head of the European Campaign to end the Siege on Gaza, stated that this convoy carries two messages; solidarity, as activists from more than 40 countries are part of this convoy, and to tell the people of Gaza "that they are not alone in the struggle against the Zionist occupation, that will vanish and end soon". So peaceful! 
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| What is the progressive case for Israel? Posted: 22 Nov 2011 11:00 AM PST An avowedly left-wing and pro-Israel organization in Great Britain, Engage, was set up to counter anti-Israel boycotts. Its website has some interesting articles. Here's part of one recent article by its founder, David Hirsh: What is the progressive case for Israel? Why should a nation state need somebody to make its case? What is the progressive case for France or for Poland? Before the French Revolution, the question of France was still open. Was Marseille to be part of the same Republic as Brittany? When there was a political movement for the foundation of France, then there was a case for and also a case against France. When Poland was half engulfed by the Soviet Union and half by the Third Reich, there was a progressive case for Poland. But today, thankfully, Poland exists. It doesn't need a 'case'.
There are reasons to be ambivalent about nationalism. Nationalist movements have often stood up against forces which threaten human freedom. Nationalism offers us a way of visualising ourselves as part of a community in which we look after each other. But being part of something also means defining others as not being part of it, as being excluded from it. The left should fight for freedom with the nationalists but we should also remember the dangers of nationalism. Like John Lennon, we should imagine a world where people no longer feel the need to protect themselves against external threat, but until it exists, it is wise for communities to retain the possibility of self-defence.
Progressives in France or Poland might hope to dissolve their states into the European Union, or into a global community. In that sense there is still a possible case to be made for Poland or for France. But nobody thinks that either has to justify their existences to anybody outside. Not even Germany after the crimes of the Second World War had to justify its existence.
...But as the Holocaust had defeated the Socialists and the Bundists, so these other criticisms were answered, not by argument or reason but by huge, irreversible events in the material world; in this case by the UN decision to found Israel and by the defence of the new state against the invading armies of neighbouring states which tried to push the Jews out. The Jews, armed by Stalin via Czechoslovakia, in violation of a British and American arms embargo, were not pushed out. About 700,000 Palestinian Arabs left, fled or were forced out during the war and were not allowed back by the new state of Israel. For them this was truly a catastrophe but the Israel/Palestine conflict was never inevitable. It was the result of successive defeats for progressive forces within both nations. It is still not inevitable. Neither could the fact of the conflict possibly de-legitimise a nation. Nations exist and do not require legitimacy.
Isaac Deutcher, Trotsky's biographer, who had been a Socialist anti-Zionist before the Holocaust, wrote the following in 1954:
I have, of course, long since abandoned my anti-Zionism, which was based on a confidence in the European labour movement, or, more broadly, in European society and civilization, which that society and civilization have not justified. If, instead of arguing against Zionism in the 1920s and 1930s I had urged European Jews to go to Palestine, I might have helped to save some of the lives that were later extinguished in Hitler's gas chambers.[2]
Deutscher was not embracing Zionism as an ideology, he was recognising that the debate was over. Israel now existed in the material world and no longer just in the imagination. Antisemitism treats 'the Jews' as an idea rather than as a collectivity of actual human beings; an idea which can be opposed was transformed into a people which could be eliminated. To think of Israel as an idea or as a political movement rather than as a nation state makes it possible to think of eliminating it too.
Israel needs to find the peace with its neighbours, amongst whom hostile and antisemitic movements have significant influence. It needs to continue to fulfil contradictory requirements, as a democratic state for both its Jewish and non-Jewish citizens, but also as a Jewish state, guaranteeing the rights of Jews in particular. There is nothing unusual about a social institution finding pragmatic and difficult ways to fulfil contradictory requirements.
But what if it turns out that Zionism's promise to build a 'normal' nation state was utopian. Perhaps the poison of the Holocaust is not yet spent. Maybe Israel is, as Detuscher thought, a precarious life-raft state , floating in a hostile sea and before a careless world. Perhaps the pressure on Israel from outside, and the unique circumstances of its foundation are creating too many agonising internal contradictions and fault-lines. Whereas people used to tell the Jews of Europe to go home to Palestine, now they tell the Jews of Israel to go home to Europe. Whereas 'the Jews' were thought to be central to the workings of capitalism, today Israel is said to be the keystone of imperialism. If the Palestinians have come to symbolise the victims of 'the West' then 'the Jews' are again cast in the symbolic imagination as the villains of the world. Perhaps Israel is precarious and perhaps we have not yet seen the final Act of the tragedy of the Jews. And if it comes to pass, there will be those watching who will still be capable of saying, with faux sadness, that 'the Jews' brought this upon themselves. (h/t D) 
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| Syria-phobia! Posted: 22 Nov 2011 09:45 AM PST You've heard of Islamophobia. You may have heard of Iranophobia. Now, we have Syria-phobia! Syria's U.N. ambassador is accusing Britain, France and Germany of declaring political and diplomatic war against his country by sponsoring a U.N. resolution that would condemn Syria's human rights violations.
Ambassador Bashar Ja'afari said the three European nations are "suffering from Syria-phobia." If it is a phobia, it must be irrational! I mean, that's science! 
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| Egyptian officials seek to assure Israel Posted: 22 Nov 2011 08:30 AM PST From Israel HaYom: Against the backdrop of a mass civilian uprising in Egypt, senior Egyptian diplomats have relayed a calming message to Israel declaring their commitment to preserving peace between the two countries, Army Radio reported Tuesday. The diplomats said the peace agreement with Israel was of strategic importance to Egypt.
Yitzhak Levanon, Israel's outgoing ambassador to Egypt, who recently returned to Egypt after being recalled in September when the Israeli Embassy was attacked by an angry mob, met with two senior Egyptian ministers who assured him that strategic ties with Israel would hold steady. Levanon was set to return to Israel on Tuesday.
Israeli officials had earlier expressed concern over the growing turmoil, telling Israel Hayom that "relations between our countries have actually improved recently, as evidenced by the Shalit deal, the release of Ilan Grapel, management of the gas pipeline issue, and ongoing cooperation in Sinai. We hope our cooperation will continue."
Egypt's calming message comes on the heels of the resignation of Egypt's government Monday, resulting from the rising civilian death toll and ever-growing rage from protesters who have streamed into Tahrir Square demanding an immediate end to military rule and the establishment of a civilian government. Meanwhile, Iran is trying to convey the exact opposite message. From FARS: Secretary-General of the Egyptian Amal Party Majdi Hussein condemned the Zionist regime for its hostile efforts to thwart the Egyptian people's uprising and revolution, and stressed once parliamentary elections are held in the country, Cairo will cut its ties with Israel.
"Although the relations between Egypt and Israel have been undermined after the collapse of Mubarak's regime, we are still unsatisfied with these conditions and serious efforts will be made after the elections to cut relations with the Zionist enemy completely," Hussein told FNA on Monday.
He said as it was shown in the Egyptian youths' raid on the Israeli embassy in September, which forced the Israeli ambassador to flee Cairo, the relations between Egypt and Israel are declining. Everything is going to depend on the elections, assuming Egypt is still having them. But no matter who ends up winning, we can expect massive anti-government rallies in Tahrir Square will become regular occurrences. Having toppled two governments with rallies, Egyptians might think that a few thousand loud people are a substitute for real democracy. 
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| Jordan proposed EU deal to Abbas Posted: 22 Nov 2011 07:10 AM PST It looks like King Abdullah's visit to the territories yesterday was not simply a social visit. From Albawaba: Palestinian sources confirmed that Jordan's King Abdullah II, who visited Ramallah Monday conveyed to Palestinian President Mahmoud Abbas a European proposal to resume negotiations with Israel.
The Palestinian sources were quoted as saying that "the European initiative calls for the resumption of negotiations on the basis of the Quartet statement issued last September, without the Palestinian insistence on the freeze of settlement. This is in exchange for a promise by the European Union, including France and Britain, to support the application for U.N. membership of the State of Palestine within the 1967 territories in September 2012 if negotiations with Israel fail over the next year. " Al Quds al Arabi has the same story. If this is a real EU offer, it will not help peace at all. On the contrary. If there is anything we know about Palestinian Arab leadership it is that they are patient and willing to wait until circumstances are more favorable to them. Certainly they feel no pressure to act quickly. The idea that Israeli settlements are constantly gobbling up new land in the territories is a myth - if it was true then Palestinian Arabs would feel the need to make an agreement sooner rather than later before they lose their entire potential country. But they don't act the way that people act when time is not on their side. Instead, we hear words like this from Abbas: I will wait for Hamas to accept international commitments. I will wait for Israel to freeze settlements. Until then, in the West Bank we have a good reality . . . the people are living a normal life. Given all this, a deal like that would give carte blanche for Abbas to pretend to negotiate, stonewall at every meeting for a year, and then tell the UK and France that he held up his end of the bargain - time for them to push for a state of "Palestine" at the UN that would include all the territory he demands without having to negotiate. If the EU wants to provide incentives to get negotiations started again, there are other ways to do it. This one is a disaster waiting to happen. The funny thing is that Abbas very well might reject this anyway, because his fake Arab "honor" would not allow him even this symbolic backing down. That Arab sense of honor does not stop him from outright lies, though: For his part, Abbas said after the meeting "if Israel stops settlement activity and recognizes international authorities, we are ready to return to negotiations. These are not preconditions, but commitments and agreements between us and the Israelis." Of course, Israel has never agreed to stop building within existing settlements nor to base negotiations on the 1949 armistice lines (which is what he means by "international authorities.") Not that this is Abbas's first lie. He lied here, here, here, here, here, here, here and here, for starters. He habitually lies without anyone calling him on it, and therefore has no incentive to act like a responsible human being. (h/t CHA) 
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| How Hezbollah caught the CIA spies Posted: 22 Nov 2011 06:00 AM PST From AP: Hezbollah has partially unraveled the CIA's spy network in Lebanon, severely damaging the intelligence agency's ability to gather vital information on the terrorist organization at a tense time in the region, former and current U.S. officials said.
Officials said several foreign spies working for the CIA had been captured by Hezbollah in recent months. The blow to the CIA's operations in Lebanon came after top agency managers were alerted last year to be especially careful handling informants in the Middle East country.
Hezbollah's longtime leader, Sheik Hassan Nasrallah, boasted in June on television he had unmasked at least two CIA spies who had infiltrated the ranks of the organization, which the U.S. considers a terrorist group closely allied with Iran.
Though the U.S. Embassy in Lebanon officially denied the accusation, American officials concede that Nasrallah wasn't lying and the damage spread like a virus as Hezbollah methodically picked off the CIA's informants.
The Lebanon crisis is the latest mishap involving CIA counterintelligence, defined as the undermining or manipulating of the enemy's ability to gather information. Former CIA officials have said the once-essential skill has been eroded as the agency shifted from outmaneuvering rival spy agencies to fighting terrorists. In the rush for immediate results, former officers say, tradecraft has suffered.
CIA officials were warned their spies in Lebanon were vulnerable. Those told include the chief of the unit that supervises Hezbollah operations from CIA headquarters in Langley, Va., and the head of counterintelligence.
The State Department last year described Hezbollah as "the most technically capable terrorist group in the world," and the Defense Department estimates it receives between $100 million and $200 million per year in funding from Iran.
Backed by Iran, Hezbollah has built a professional counterintelligence apparatus that Nasrallah — whom the U.S. government designated an international terrorist a decade ago — proudly describes as the "spy combat unit." U.S. intelligence officials believe the unit, which is considered formidable and ruthless, went operational around 2004.
Using the latest commercial software, Nasrallah's spy-hunters unit began methodically searching for traitors in Hezbollah's midst. To find them, U.S. officials said, Hezbollah examined cellphone data looking for anomalies. The analysis identified cellphones that, for instance, were used rarely or always from specific locations and only for a short period of time. Then it came down to old-fashioned, shoe-leather detective work: Who in that area had information that might be worth selling to the enemy?
The State Department last year described Hezbollah as "the most technically capable terrorist group in the world," and the Defense Department estimates it receives between $100 million and $200 million per year in funding from Iran.
Backed by Iran, Hezbollah has built a professional counterintelligence apparatus that Nasrallah — whom the U.S. government designated an international terrorist a decade ago — proudly describes as the "spy combat unit." U.S. intelligence officials believe the unit, which is considered formidable and ruthless, went operational around 2004.
Using the latest commercial software, Nasrallah's spy-hunters unit began methodically searching for traitors in Hezbollah's midst. To find them, U.S. officials said, Hezbollah examined cellphone data looking for anomalies. The analysis identified cellphones that, for instance, were used rarely or always from specific locations and only for a short period of time. Then it came down to old-fashioned, shoe-leather detective work: Who in that area had information that might be worth selling to the enemy? No doubt Iran has been heavily involved in Hezbollah's anti-espionage efforts. Even so, there have been stunning failures in both Israeli and US intelligence in Lebanon. 
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| The Israeli mother who helped bring Sadat to Israel Posted: 22 Nov 2011 03:08 AM PST Yesterday's podcast on the BBC "Witness" series adds an interesting detail to the story of how Sadat decided to go to Israel. According to the interviewee, Sadat's cameraman who videotaped his original speech where he said he would go to Israel, the process started a number of years earlier. An Israeli woman, Ruth Liss, wrote a letter to Anwar Sadat's wife Jihan after the 1973 war. As People magazine wrote in 1980: After the 1973 Yom Kippur War Jihan received a letter from an Israeli mother, Ruth Liss, whose frogman son had been killed placing explosives in an Egyptian harbor. The woman appealed to Mrs. Sadat "as a woman and a mother" to help find her son's body. "Believe me, I was crying," Jihan recalls. "The letter was so human. I too have a son." Impulsively, she asked the minister of defense to search for the body (it was never recovered)—and wrote back to Liss without consulting her husband. "All my friends advised me not to do it," she recalls. "They said I could not write to the enemy and that I would harm my husband politically." Later, after the letter was mailed via France, she told Sadat. He reprimanded her and subsequently, on learning she had answered another letter from an Israeli student, Anwar grumped, "You are making trouble for me." According to the interview, up until then Israelis were not recognized in Egyptian society except as caricatures, of Golda Meir's big nose and Moshe Dayan's eyepatch. In the podcast, the interviewee says that Sadat was furious when Jihan told him she wrote to an Israeli, asking how dare she write to the enemy, but then he saw that the Israeli media were very appreciative towards Jihan's letter. He told his wife that he had never seen such a warm reaction from the Israeli people. "I want to reach the Israeli people as much as you did in two sentences," he is reported to have said. So part of the impetus for Sadat's gamble may have been from how Israeli society embraced his wife's contact with a grieving Israeli mother. (h/t Mike) 
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