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	<title>Intelligence Quarterly</title>
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		<title>Azerbaijan’s military exercises in the Caspian: Who is the target?</title>
		<link>http://www.intelligencequarterly.com/2012/05/azerbaijans-military-exercises-in-the-caspian-who-is-the-target/</link>
		<comments>http://www.intelligencequarterly.com/2012/05/azerbaijans-military-exercises-in-the-caspian-who-is-the-target/#comments</comments>
		<pubDate>Fri, 18 May 2012 07:10:37 +0000</pubDate>
		<dc:creator>admin</dc:creator>
				<category><![CDATA[Central Asia]]></category>
		<category><![CDATA[Intelligence]]></category>
		<category><![CDATA[Iran]]></category>
		<category><![CDATA[Military]]></category>

		<guid isPermaLink="false">http://www.intelligencequarterly.com/?p=2662</guid>
		<description><![CDATA[Eurasian Daily Monitor:   In mid-April, Azerbaijan’s State Border Service (SBS) reported on the successful completion of week-long tactical exercises in the Azerbaijani sector of the Caspian Sea. The exercises, called “Protection of Oil and Gas Fields, Platforms, and Export Pipelines,” involved around 1,200 servicemen, 21 ships, 20 speedboats as well as eight helicopters (Defence.az, [...]]]></description>
			<content:encoded><![CDATA[<p><em>Eurasian Daily Monitor</em>:   In mid-April, Azerbaijan’s State Border Service (SBS) reported on the successful completion of week-long tactical exercises in the Azerbaijani sector of the Caspian Sea. The exercises, called “Protection of Oil and Gas Fields, Platforms, and Export Pipelines,” involved around 1,200 servicemen, 21 ships, 20 speedboats as well as eight helicopters (Defence.az, April 18). High-ranking military officials including SBS head, General-Lieutenant Elchin Gulyev, and Minister of Defense Safar Abiyev launched and attended the events.  The exercises were conducted in three stages and nine tactical tasks were implemented. The first stage involved neutralizing a conventional terrorist group. The group was eliminated with the help of the Igla anti-aircraft missile system. This suggests that the terrorist group was using a helicopter or other aircraft (Contact.az, April 18). The second stage involved helicopters and ships which monitored the designated area, and located and destroyed an enemy submarine. The last stage envisioned stopping ships that did not respond to inquiries; sending marines aboard the ships; and then searching for and locating explosives, drugs and components of weapons of mass destruction. Besides the above-mentioned arms and equipment, the exercise used anti-aircraft rocket launchers, heavy machine guns and various missile systems (APA, April 18). <span id="more-2662"></span></p>
<p>This is not the first time Azerbaijan has conducted military exercises in the Caspian Sea. However, the character of these exercises suggested that Azerbaijan is seriously worried about the security of its vital infrastructure in the Caspian. Events preceding the April 2012 exercises, such as a deterioration of relations with Iran as well as Baku’s quest to become a transit territory for a Trans-Caspian gas pipeline from Turkmenistan to Europe, may be a prelude for such high-scale exercises.</p>
<p>First, the nature of Azerbaijani military exercises suggested that actions are directed against an enemy possessing a helicopter, a ship and even a submarine. It is hard to imagine that certain terrorist group would be able to acquire such arms or equipment, especially when taking into consideration the fact that the Caspian Sea does not have direct access to open waters. Recent information leaks regarding an Azerbaijani-Israeli arms deal worth $1.5 billion revealed that Baku had purchased Israeli made Gabriel-5 anti-ship missiles (News.az, March 29). This raises the question: which Caspian neighbor is Azerbaijan most worried about? So far, Azerbaijan had only one small incident in the Caspian Sea. In 2000, an Iranian naval ship refused to allow an Azerbaijani exploration vessel to begin working on oil fields in the southern Caspian. The Iranian side claimed that Baku was violating Iranian territorial waters. A lack of serious arms and equipment and an unwillingness to escalate the conflict did not allow Azerbaijan to continue exploration of the “disputed” oilfield. Yuriy Bondar, a Russian military expert with the Russian-based Middle East Institute, believes that both US and Israeli assistance to Azerbaijan would likely allow Baku to push back against Tehran and regain control of areas that Iran considers “disputed” (Golos Rossii, April 20).</p>
<p>Also of note are Iranian actions for the last couple of years. Iranian naval forces formed the Third United Military District to oversee the Caspian Sea. The district includes divisions of the Navy, Army and the Corps of Guardians of the Islamic Revolution. Furthermore, the Third United Military District is equipped with Sana-type speed-boats, a small submarine armed with torpedoes as well as the Sabehat-15 mini-submarine, used for intelligence gathering and subversive actions (Golos Rossii, April 20).</p>
<p>Baku’s northern neighbor also did not ignore Azerbaijani military exercises. The exercises coincided with news distributed by the Russian media that Russian ships were to be deployed to the Caspian Sea’s operationally important areas. Colonel Igor Gorbul, the head of the press service of the Southern Military District, told Interfax on April 17 that a group of Caspian Flotilla vessels comprising the Astrakhan small artillery ship and support ships was completing preparations for Caspian Sea maneuvers. The exercise’s main aim was a showing of the flag and to display the Russian Federation’s naval prowess ensuring a Russian Naval presence in the Caspian Sea’s operationally important areas (Interfax, April 17). He added that other tasks included the protection of Russian shipping and oil production facilities at sea from potential threats and monitoring the extraction of hydrocarbons and bio resources.</p>
<p>Russian authorities are extremely worried about recent energy developments in the Caspian, which boosted the prospects for a Trans-Caspian pipeline from Turkmenistan via Azerbaijan to Turkey and further to Europe. Although Azerbaijan clearly stated that it would serve only as a transit country, Moscow has been trying to put pressure on both Ashgabat and Baku using these types of naval military exercises. On May 5, the Russian Navy’s Caspian forces conducted missiles launches using the recently installed Bal-E system. Anti-ship missiles successfully hit the conditional target located 50 kilometers away from the launch site in the Caspian Sea. A day earlier, “Tatarstan,” the flagship of the Russian Caspian Navy, also implemented missile launches in the Caspian Sea. Russia’s Caspian Flotilla plans to receive the small artillery ships Makhachkala and Volgodonsk as well as the missile ship Dagestan by the end of the year. Overall, 16 new ships will become part of the Russian Navy in the Caspian Sea by 2020 (Komsomolskaya Pravda, May 5).</p>
<p>The recent naval exercises by Azerbaijan and Russia suggest that Caspian littoral states continue to strengthen their military capacities in the area. So far, only Russia, Iran and Azerbaijan have the capacity to protect their claimed Caspian Sea areas. If Kazakhstan and Turkmenistan begin bolstering their own naval and coastal defense capabilities, however, a true militarization of the Caspian Sea could become inevitable.</p>
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		<title>Lebanon/Social unrest: 13-year-old boy killed and four people wounded by sniper in Tripoli</title>
		<link>http://www.intelligencequarterly.com/2012/05/lebanonsocial-unrest-13-year-old-boy-killed-and-four-people-wounded-by-sniper-in-tripoli/</link>
		<comments>http://www.intelligencequarterly.com/2012/05/lebanonsocial-unrest-13-year-old-boy-killed-and-four-people-wounded-by-sniper-in-tripoli/#comments</comments>
		<pubDate>Fri, 18 May 2012 07:08:09 +0000</pubDate>
		<dc:creator>admin</dc:creator>
				<category><![CDATA[Middle East]]></category>

		<guid isPermaLink="false">http://www.intelligencequarterly.com/?p=2659</guid>
		<description><![CDATA[On Thursday a 13-year-old boy was killed and at least four other people were wounded by a sniper in Tripoli, in the north of the country. According to the report, the majority of snipers are located in Talaat al-Omari area, which separates the rival neighborhood of Bab al-Tabbaneh and Jabal Mohsen.]]></description>
			<content:encoded><![CDATA[<p>On Thursday a 13-year-old boy was killed and at least four other people were wounded by a sniper in Tripoli, in the north of the country.</p>
<p>According to the report, the majority of snipers are located in Talaat al-Omari area, which separates the rival neighborhood of Bab al-Tabbaneh and Jabal Mohsen.</p>
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		<title>Diplomat: Confidential report finds Iran shipping arms to Syria</title>
		<link>http://www.intelligencequarterly.com/2012/05/diplomat-confidential-report-finds-iran-shipping-arms-to-syria/</link>
		<comments>http://www.intelligencequarterly.com/2012/05/diplomat-confidential-report-finds-iran-shipping-arms-to-syria/#comments</comments>
		<pubDate>Fri, 18 May 2012 07:07:04 +0000</pubDate>
		<dc:creator>admin</dc:creator>
				<category><![CDATA[Intelligence]]></category>
		<category><![CDATA[Iran]]></category>
		<category><![CDATA[Middle East]]></category>

		<guid isPermaLink="false">http://www.intelligencequarterly.com/?p=2657</guid>
		<description><![CDATA[(CNN) &#8211; A confidential draft U.N. report accuses Iran of exporting arms to the Syrian government in violation of a ban on weapons sales, a Western diplomat said Wednesday on condition of anonymity. The draft report describes three seizures of Iranian weapons shipments, including two bound for Syria, within the past year, said the diplomat, who [...]]]></description>
			<content:encoded><![CDATA[<p><strong>(CNN)</strong> &#8211; A confidential draft U.N. report accuses Iran of exporting arms to the Syrian government in violation of a ban on weapons sales, a Western diplomat said Wednesday on condition of anonymity.<span id="more-2657"></span></p>
<p>The draft report describes three seizures of Iranian weapons shipments, including two bound for Syria, within the past year, said the diplomat, who was not authorized to release details to the media.</p>
<p>The report was drafted by a panel of experts and submitted to the U.N. Security Council&#8217;s committee that monitors sanctions against Iran, the official told CNN.</p>
<p>There was no immediate reaction to the report on Iranian government-run Press TV.</p>
<p>The accusation came as al-Assad, in a rare interview, told <a href="http://www.vesti.ru/" target="_blank">Russia 24</a> that weapons bound for rebels were entering his country<strong> </strong>from<strong></strong>neighboring Lebanon and Turkey.</p>
<p>&#8220;You can&#8217;t simply close the borders and stop the smuggling, but you can reduce the flow,&#8221; he said.</p>
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<p><img src="http://i2.cdn.turner.com/cnn/dam/assets/120517010901-seg-assad-syria-00001930-story-body.jpg" alt="" width="214" height="120" border="0" /><cite>Syria&#8217;s Assad accuses media of bias</cite></div>
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<p><img src="http://i2.cdn.turner.com/cnn/dam/assets/120517015530-refugee-camp-on-turkey-syria-border-story-body.jpg" alt="" width="214" height="120" border="0" /><cite>Syrian refugees flee to Turkey</cite></div>
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<p><img src="http://i2.cdn.turner.com/cnn/dam/assets/120516083147-watson-syria-landmines-00010012-story-body.jpg" alt="" width="214" height="120" border="0" /><cite>Syrian man helps clear landmines</cite></div>
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<p><img src="http://i2.cdn.turner.com/cnn/dam/assets/120515025227-ac-ajami-syria-obama-clinton-rwanda-00002222-story-body.jpg" alt="" width="214" height="120" border="0" /><cite>Ajami: Syria is Obama&#8217;s Rwanda</cite></div>
<p>In recent days, violence has spilled over into Lebanon and Turkey, where thousands of Syrians have fled. At least one person was killed and an undetermined number were wounded Thursday in renewed clashes in the northern Lebanese city of Tripoli between factions supporting and opposing the uprising in Syria, Lebanon&#8217;s National News Agency reported.</p>
<p>Al-Assad put the blame instead on the so-called Arab Spring, during which popular revolutions have toppled the governments of Egypt, Libya and Tunisia.</p>
<p>&#8220;If we take into consideration the developments in Syria, the events in Libya and other countries, for the leaders of these countries, it&#8217;s becoming clear that this is not &#8216;spring&#8217; but chaos,&#8221; al-Assad said.</p>
<p>The Arab Spring movements inspired the uprising in Syria, which began in March 2011 with protests calling for political reforms. It devolved into a revolt with an armed opposition amid a crackdown by al-Assad&#8217;s forces.</p>
<p>The United Nations estimates that at least 9,000 people have died in the 14 months of conflict, while opposition groups put the death toll at more than 11,000.</p>
<p>CNN cannot independently verify reports of deaths and violence because the Syrian government has severely restricted access by international media.</p>
<p>At least 20 people were killed Thursday in attacks across the country, according to the Local Coordination Committees of Syria, an opposition network that collects casualty reports and organizes anti-government protests. The deaths include 10 in the Damascus suburbs of Daraya and Douma, three in Idlib, three in Daraa, two in Homs, one in Raqqa, and one in Swaida, the LCC said.</p>
<p>Syria blames violence in the country on &#8220;armed terrorist groups.&#8221;</p>
<p>Some groups &#8220;continued perpetrating massacres and targeting law enforcement members and citizens, and vandalizing public and private properties&#8221; on Thursday, state-run news agency SANA reported.</p>
<p>Thirteen &#8220;army, law enforcement and civilian martyrs&#8221; were buried Thursday, SANA said.</p>
<p>It added that 72 people from Aleppo, Idlib and Damascus &#8220;who were involved in the latest events but didn&#8217;t commit crimes, gave themselves up with their weapons to the authorities Wednesday.&#8221;</p>
<p>Opposition groups, including members of the rebel army, say al-Assad&#8217;s government has been trying to hamper their efforts by accusing them falsely of links to terrorism.</p>
<p>A video posted on YouTube purported to show thousands of anti-government protesters outside Aleppo University, where blue-helmeted men could be seen. The U.N. observes wear blue helmets. CNN could not confirm the authenticity of the video.</p>
<p>While rebel forces, called the Free Syrian Army, say their ranks are filled by defectors from Syria security forces, al-Assad described them as criminals.</p>
<p>&#8220;It&#8217;s not an army, first of all, and it&#8217;s not free because they get their arms from different foreign countries,&#8221; he said in the interview.</p>
<p>&#8220;That&#8217;s why they are not free at all &#8212; they are a bunch of criminals who have been violating the law for years and have been sentenced in various criminal cases. There are religious extremist elements among them, like those from al Qaeda.&#8221;</p>
<p>Al-Assad dismissed the international pressure brought to bear for him to end the violence and step down, vowing that Syria would not bow on any issue.</p>
<p>The United States, the European Union and the United Nations have targeted Syria with a number of economic sanctions targeting al-Assad and his government.</p>
<p>Al-Assad acknowledged the sanctions have hurt Syria&#8217;s economy.</p>
<p>&#8220;The world doesn&#8217;t consist just of Europe and the United States, and we find alternatives which allow us to overcome these difficulties,&#8221; he said. &#8220;We can support small and mid-sized business, the basic element of our economy is agriculture, and it&#8217;s hard to affect it with sanctions.&#8221;</p>
<p>He also called a boycott of recent parliamentary elections by the opposition a failure.</p>
<p>&#8220;It seems to some people that if we conducted the reforms earlier, the situation would have been better now. It&#8217;s not right for one reason &#8212; terrorists spit on reforms. They are not fighting for reforms, they are fighting to bring terror,&#8221; he said.</p>
<p>Meanwhile, the U.S. government distanced itself from <a href="http://www.cnn.com/2012/05/17/world/meast/syria-unrest/?hpt=hp_t2" target="_blank">a Washington Post</a> report that said more and better weapons are making their way into the hand of Syrian rebels.</p>
<p>The newspaper, citing unidentified officials and opposition activists, reported that the arms are being paid for by Persian Gulf nations and coordinated, in part, by the United States.</p>
<p>&#8220;The United States has made a decision to provide nonlethal support to civilian members of the opposition,&#8221; <a href="http://www.state.gov/r/pa/prs/dpb/2012/05/190159.htm#SYRIA" target="_blank">Victoria Nuland</a>, a State Department spokeswoman told reporters Wednesday. &#8220;&#8230; But with regard to any assertions with regard to lethal, we are not involved in that.&#8221;</p>
<p>The United States has expressed reservations about arming rebels, citing division among the opposition.</p>
<p>Meanwhile, those divisions deepened Thursday with the Syrian National Council, widely perceived by Western countries as a primary coalition for the opposition, coming under fire by a leading opposition activist group.</p>
<p>The LCC called the national council a &#8220;failure,&#8221; and vowed to withdraw from the group. The council has been under fire for failing to unify the opposition groups and bring in international support.</p>
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		<title>China: Icebreaking in the Arctic</title>
		<link>http://www.intelligencequarterly.com/2012/05/china-icebreaking-in-the-arctic/</link>
		<comments>http://www.intelligencequarterly.com/2012/05/china-icebreaking-in-the-arctic/#comments</comments>
		<pubDate>Sun, 06 May 2012 23:22:20 +0000</pubDate>
		<dc:creator>admin</dc:creator>
				<category><![CDATA[China]]></category>
		<category><![CDATA[Economy]]></category>

		<guid isPermaLink="false">http://www.intelligencequarterly.com/?p=2653</guid>
		<description><![CDATA[ISN: When we think of Chinese foreign policy most of us picture foreign direct investment in Africa and assertiveness in the Near Seas (Yellow, East China and South China). Few of us think ice breakers. China’s application to join the Arctic Council as permanent observer however suggests the Chinese are now looking north. Careful Diplomacy Estimates have it that [...]]]></description>
			<content:encoded><![CDATA[<p>ISN: When we think of Chinese foreign policy most of us picture foreign direct investment in Africa and assertiveness in the Near Seas (Yellow, East China and South China). Few of us think ice breakers. China’s application to join the Arctic Council as permanent observer however suggests the Chinese are now looking north.<span id="more-2653"></span></p>
<p><strong>Careful Diplomacy</strong></p>
<p>Estimates have it that half of China’s gross domestic product is dependent on export. If the Arctic would <a href="http://www.chathamhouse.org/sites/default/files/public/International%20Affairs/2012/88_1/88_1blunden.pdf" target="_blank">become navigable </a>during summer months, as a result of climate change, and shorten the trip from Shanghai to Hamburg by taking the Northern Sea Route instead of 6400 kilo-metres longer route via the Strait of Malacca and the Suez Canal, then it seems justifiable, even for a non-Arctic state, to have some interest in High North policy.</p>
<p>However, says <a href="http://www.isn.ethz.ch/isn/Digital-Library/Publications/Detail/?id=113395&amp;lng=en" target="_blank">Linda Jakobson </a>at <a href="http://www.isn.ethz.ch/isn/Digital-Library/IR-Directory/Detail/?id=13328&amp;lng=en" target="_blank">SIPRI</a>, despite strong incentives, Chinese officials will opt for a cautious ‘wait-and-see’ approach to Arctic developments. For obvious reasons, China’s foreign policy rests on a profound respect for territorial integrity and deters it from questioning the territorial rights of Arctic states.  At the same time China thinks Arctic multilateral forums should leave the door open for actors who have natural interests in the development of the region.</p>
<p><strong>Permanent Observer Status</strong></p>
<p>The <a href="http://www.arctic-council.org/index.php/en/" target="_blank">Arctic Council</a> is a multilateral forum for discussions on Arctic shipping, energy, environment and security. With its eight full members (Norway, Canada, Russia, the US, Finland, Sweden, Iceland and Denmark) Chinese diplomats have knocked on the door for<a href="http://www.arctic-council.org/index.php/en/about-us/partners-links" target="_blank">permanent observer status</a>. If accepted, they would like other observers (France, Germany, the Netherlands, Poland, Spain, and the UK) participate in discussions on policies for the region.</p>
<p>All decisions in the Council must be unanimous, which has put China on a charm offensive. During the last fortnight the Chinese Premier Hu Jintao has visited both Iceland and Sweden to talk cooperation on Arctic research, and has <a href="http://www.nunatsiaqonline.ca/stories/article/65674greenland_open_to_chinas_growing_arctic_interest/" target="_blank">promised</a> Copenhagen to buy their minerals from Greenland. While these states, together with Finland, are likely to vote yes to the Chinese application; Russia, the US, and Canada by nature regard applicants with more suspicion. Although, in time, they are likely to come around too.</p>
<p>But things are not that easy. It is unlikely that countries that have stood on the waiting list for a long time, including the EU, South Korea, and Japan, should be admitted any time soon; or that China could cut in line.  Moreover, even if the Chinese could cajole the Council, Norway still remains to be persuaded. But this is unlikely to happen as it stands today.</p>
<p>Beijing was outraged by the decision to give Liu Xiaobo, the Chinese dissident, the Nobel Peace Prize and has demanded an apology, which Norway refuses. As a result trade and policy has stood still between the two countries. But Chinese exports only accounts for less than 2% of Norway’s total, and with Norway’s steady growth, oil reserves and NATO membership they seem untouched by the clamors from Beijing.</p>
<p><strong>Ice Breakers</strong></p>
<p>If the Chinese are serious about their Arctic policy they need to assert this by concrete Arctic power – ice breakers and Arctic technology.  With serious skills in polar-conditions and research (it has organized over 30 expeditions the last couple of years), money, manpower and the world’s largest non-nuclear icebreaker ‘Snow Dragon’,  the Chinese already seem well positioned.</p>
<p>In 2009 the Chinese Cabinet decided that Snow Dragon would also need ‘brothers and sisters’ to meet the country’s expanding polar interest. The maiden-trip of the <a href="http://www.china.org.cn/china/2012-04/09/content_25092246.htm" target="_blank">new</a> ice-breaker is scheduled to 2014. With two icebreakers, China will have one more than the US, but still two dozen or so less than <a href="http://en.wikipedia.org/wiki/List_of_icebreakers" target="_blank">most other high north countries</a>.</p>
<p>Although there is still no coherent Chinese position on the Arctic, a general disposition seems discernible. Through trade agreements and research opportunities China prepares the ground for the vote in 2013 (to be held in Sweden) on their membership to join the Council. If granted, Beijing’s intentions are, as China expert David Curtis Wright put it, to “insert its hands” (chashou) into Arctic affairs.</p>
<p>This foreign policy will, in most likelihood, not deviate dramatically from the China in the Arctic we see today: namely, with sound foreign policy coated in diplomacy, economic interests and multilateralism.</p>
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		<title>Mexico/Cartel violence: 23 killed in drug related violence in Nuevo Laredo</title>
		<link>http://www.intelligencequarterly.com/2012/05/mexicocartel-violence-23-killed-in-drug-related-violence-in-nuevo-laredo/</link>
		<comments>http://www.intelligencequarterly.com/2012/05/mexicocartel-violence-23-killed-in-drug-related-violence-in-nuevo-laredo/#comments</comments>
		<pubDate>Sun, 06 May 2012 15:25:40 +0000</pubDate>
		<dc:creator>admin</dc:creator>
				<category><![CDATA[Americas]]></category>

		<guid isPermaLink="false">http://www.intelligencequarterly.com/?p=2650</guid>
		<description><![CDATA[Mexican media reported that on Friday 23 persons have been killed in drug related murders in the border city of Nuevo Laredo in the northern state of Tamaulipas. Friday appeared to have been one of the most violent day since the beginning of the year.  Nine bodies, including 5 men and 4 women, have been found hanged to [...]]]></description>
			<content:encoded><![CDATA[<p align="justify">Mexican media reported that on Friday 23 persons have been killed in drug related murders in the border city of <strong>Nuevo Laredo</strong> in the northern state of <strong>Tamaulipas</strong>. Friday appeared to have been one of the most violent day since the beginning of the year. <span id="more-2650"></span></p>
<p align="justify">Nine bodies, including 5 men and 4 women, have been found hanged to a highway bridge; 14 other dismembered and beheaded bodies have been found in several public places such as the city hall and a customs station.</p>
<p align="justify">It appears that the 9 hanged victims could be members of the <strong>Zetas</strong> cartel meanwhile the 14 others could be members of the <strong>Gulf cartel</strong>. The two drug trafficking organizations (DTO) are indeed fighting for the control of the city. Nuevo Laredo remains a key entry point for narcotics into the<strong>United States</strong>.</p>
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		<title>NATO Calm in Face of Russian Threat of Pre-Emptive Military Action</title>
		<link>http://www.intelligencequarterly.com/2012/05/nato-calm-in-face-of-russian-threat-of-pre-emptive-military-action/</link>
		<comments>http://www.intelligencequarterly.com/2012/05/nato-calm-in-face-of-russian-threat-of-pre-emptive-military-action/#comments</comments>
		<pubDate>Sun, 06 May 2012 15:19:14 +0000</pubDate>
		<dc:creator>admin</dc:creator>
				<category><![CDATA[Europe]]></category>
		<category><![CDATA[Military]]></category>
		<category><![CDATA[Russia]]></category>

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		<description><![CDATA[NATO on Thursday responded coolly to a threat by Russia that it would use pre-emptive military force to destroy alliance antimissile systems in Europe should the missile defense buildup continue, the New York Times reported (see GSN, May 3). The top-ranking Russian military officer on Wednesday warned, &#8220;a decision to use destructive force pre-emptively will be taken in [...]]]></description>
			<content:encoded><![CDATA[<p>NATO on Thursday responded coolly to a threat by Russia that it would use pre-emptive military force to destroy alliance antimissile systems in Europe should the missile defense buildup continue, the <em>New York Times</em> reported (see <a href="http://www.nti.org/gsn/article/russia-warns-preemptive-military-force-against-nato-missile-shield/"><em>GSN</em></a>, May 3).<span id="more-2648"></span></p>
<p>The top-ranking Russian military officer on Wednesday warned, &#8220;a decision to use destructive force pre-emptively will be taken in if the situation worsens,&#8221; in reference to the United States&#8217; ongoing efforts implement its &#8220;<a href="http://www.whitehouse.gov/the_press_office/FACT-SHEET-US-Missile-Defense-Policy-A-Phased-Adaptive-Approach-for-Missile-Defense-in-Europe">phased adaptive approach</a>&#8221; for European missile defense.</p>
<p>NATO Deputy Secretary General Alexander Vershbow, though, was not particularly disturbed by the threat, noting to journalists in Moscow, &#8220;I think a lot of the countermeasures described by Gen. [Nikolai]  Makarov were familiar ones, but I’d have to go back and do research. Clearly it is not something we welcome, by any means.&#8221;</p>
<p>Vershbow is in the Russian capital attending an international antimissile forum organized by the Russian Defense Ministry; Moscow hopes to convince the attendees from some 50 countries that it is justified in being concerned about the strategic implications of U.S. and NATO plans to field increasingly capable missile interceptors in Eastern Europe (Andrew Kramer, <a href="http://www.nytimes.com/2012/05/04/world/europe/russian-general-threatens-pre-emptive-attacks-on-missile-defense-sites.html"><em>New York Times</em></a>, May 3).</p>
<p>Others, though, reacted with incredulity to Makarov&#8217;s threat.</p>
<p>&#8220;He must have been drunk,&#8221; Stimson Center fellow Barry Blechman was quoted by the<em>Washington Times</em> as saying. &#8220;I hope the Russian political leadership takes him to task for it.&#8221;</p>
<p>&#8220;It&#8217;s remarkable,&#8221; said Regina University international relations expert James Ludes of Makarov&#8217;s threat. That the general &#8220;would make this kind of threat in a public forum is chilling&#8221; (Shaun Waterman, <a href="http://www.washingtontimes.com/news/2012/may/3/russia-threatens-strike-nato-missile-defense-sites/"><em>Washington Times</em></a>, May 3).</p>
<p>Makarov hinted at what means Russia could use to neutralize the future NATO antimissile threat: &#8220;Science and technology have made such a big progress that it is possible to disable a huge number of missile defense elements without physically destroying them. These weapons are being developed in the Russian Federation,&#8221; Interfax reported (Interfax I, May 3).</p>
<p>Brussels and Washington maintain their envisioned ballistic missile shield is aimed at deterring a medium-range missile attack from Iran, however Moscow suspects the system would actually secretly be aimed at undermining its ICBMs.</p>
<p>In accordance with its phased adaptive approach, the Obama administration intends through 2020 to field Standard-Missile 3 interceptors in bases in Poland and Romania and on warships home ported in Spain. The Obama plan is to form the basis of a broader NATO effort to link up and augment individual member nations antimissile programs.</p>
<p>Vershbow said, &#8220;We think the system we are developing poses no threat to Russia, so the whole notion of retaliation or countermeasures has no foundation,&#8221; the <em>New York Times</em>reported.</p>
<p>The Kremlin has previously warned it could deploy air-defense systems and short-range Iskander missiles to the Kaliningrad, a Russian enclave that borders Poland, and pull out of the New START arms control accord with the United States if a deal on missile defense is not reached.</p>
<p>The No. 2 NATO official said interceptors planned for fielding in Europe would not be able to destroy a Russian ICBM launched against the United States as it was a &#8220;question of science and geography.&#8221; He pointed out that a number of Russian analysts and specialists have reached the same conclusion.</p>
<p>But Center for Strategic and International Studies fellow Andrew Kuchins said in a telephone interview with the <em>Times</em> the Russian military leadership was not &#8220;completely misguided&#8221; in its fears about the interceptors. &#8220;There is an element in the U.S. elite that does want complete invulnerability&#8221; (Andrew Kramer, <em>New York Times</em>).</p>
<p>Following the first day of the two-day antimissile conference, Makarov said, &#8220;We had an intense and frank exchange of opinions that confirmed the pressing character of missile defense problems. &#8230;The scope of problems we discussed is a complicated one and simple solutions to it are nowhere in sight,&#8221; ITAR-Tass reported.</p>
<p>NATO heads of state are set to hold a summit in May where an interim battlefield antimissile capability is to be declared and the future of the  missile shield discussed.</p>
<p>&#8220;We find it troublesome that new plans for the antiballistic missiles system may be adopted at a NATO summit in Chicago May 20, and yet we still believe in an opportunity to come to terms with our partners,&#8221; Makarov said.</p>
<p>&#8220;The European countries have grave concerns in the sphere, as they don’t want to see Europe turn into a hotbed of tensions once again,” according to Makarov.</p>
<p>The Russian General Staff chief said matters would come to a head in 2017 if a deal is not reached.  Under the third phase of the Obama plan, starting in 2018 next-generation SM-3 Block 2A interceptors with the ability to defeat short-, medium- and intermediate-range missiles are to be deployed.</p>
<p>&#8220;We still have some time left and we’re obliged to find a solution to the problem,&#8221; Makarov said, continuing that he is slated in July to hold separate talks with his U.S. counterpart, Gen. Martin Dempsey, and the head of the alliance&#8217;s military committee (<a href="http://www.itar-tass.com/en/c154/409003_print.html">ITAR-Tass I</a>, May 3).</p>
<p>Makarov said Moscow sees the U.S. missile interceptor threat evolving over time to the point when it can &#8220;block all Russian ballistic missiles launched both from the Russian territory and from submarines in the ocean,&#8221; Interfax reported.</p>
<p>&#8220;We are saying that until about 2017 the creation of the missile defense system is not affecting Russia&#8217;s strategic nuclear forces, but with the third and fourth stages [of the U.S. phased adaptive approach] they will be posing a threat,&#8221; he continued (<a href="http://www.interfax.com/newsinf.asp?id=329314">Interfax II</a>, May 3).</p>
<p>The Obama administration has said repeatedly it will not accept any limitations on its plan for European missile defense. Makarov, though, said Russia is not interested in technical restrictions but a commitment that &#8220;possible interception areas for modern-day and future missile defense means must not cross the Russian border,&#8221; according to Interfax (Interfax III, May 3).</p>
<p>Even though intercontinental ballistic missiles travel faster than more limited-range missiles and the technical requirements for destroying them are not the same, Moscow believes U.S. interception technology in Europe might evolve to the point where it can destroy ICBMs, Tufts University international security expert Robert Pfaltzgraff said to the <em>Washington Times</em>. (Shaun Waterman, <em>Washington Times</em>).</p>
<p>The United States has struck deals with  Romania and Poland to host next-generation SM-3 beginning respectively around 2015 and 2018, according to previous reporting.</p>
<p>Makarov&#8217;s deputy, Valery Gerasimov, explained to conference attendees why Russia sees those interceptors as a danger to its strategic missile forces, Interfax reported.</p>
<p>&#8220;We can see that the trajectory of the missile threat from the south is passing above the operating zone of the third-stage missile defense system. Therefore, target interception is potentially impossible,&#8221; the deputy chief of General Staff said.</p>
<p>&#8220;When the potential is increased to the ability to intercept strategic missiles with a range of up to 11,000 kilometers [approximately 6,800 miles], that is the fourth stage of the missile defense system deployment, at such parameters of the destruction zone interception will be possible,&#8221; Gerasimov asserted.</p>
<p>The general-colonel said the military was not worried about the first and second phase interceptors due to be fielded in Romania but &#8220;it is obvious that when reaching the characteristics of the design planned for the fourth stage the Romanian base will be potentially capable to intercept Russian missiles deployed in our country&#8217;s European part&#8221; (Interfax IV, May 3).</p>
<p>Russian Space Defense Forces head Lt. Gen. Oleg Ostapenko warned that U.S. interceptors could additionally be used as &#8220;anti-satellite weapons,&#8221; RIA Novosti reported.</p>
<p>The planned fielding of U.S. sea- and land-based interceptors around the planet would give the United States the capability to destroy space platforms no matter where they are orbiting, he claimed.</p>
<p>&#8220;In this context we regard the creation of effective air and space defense systems as a key element of modern warfare,&#8221; the lieutenant general said (<a href="http://en.rian.ru/world/20120503/173197831.html">RIA Novosti I</a>, May 3).</p>
<p>The Russian Defense Ministry&#8217;s Military Cooperation Department told conference participants the NATO missile shield could undermine China&#8217;s nuclear deterrent much faster than Russia&#8217;s, RIA Novosti reported.</p>
<p>&#8220;China&#8217;s nuclear potential will be &#8216;neutralized&#8217; much sooner than Russia&#8217;s. China has a much more limited capability,&#8221; noted department head Sergei Koshelev (<a href="http://en.rian.ru/mlitary_news/20120503/173195509.html">RIA Novosti II</a>, May 3).</p>
<p>Beijing this week urged other countries to abandon their ballistic missile defense plans, stating they represent a threat to strategic stability (see <a href="http://www.nti.org/gsn/article/china-calls-drastic-russian-us-nuclear-force-reductions/"><em>GSN</em></a>, April 30).</p>
<p>Despite the militaristic comments by senior Russian military officers, there is a growing belief in the Russian government that a compromise with Washington can be reached on its antimissile plans if U.S. President Obama wins the November presidential election, according to the<em> Wall Street Journal</em>.</p>
<p>A live microphone in March recorded Obama telling Russian President Dmitry Medvedev that he would have greater &#8220;flexibility&#8221; to negotiate a missile defense deal after the November elections.</p>
<p>If Obama wins re-election, &#8220;I am sure we will reach an agreement that brings no harm to them or to our security,&#8221; an unidentified high-ranking Russian official said to an official news service on Thursday. &#8220;It it&#8217;s someone else&#8221; elected U.S. head of state, &#8220;surely, it will be difficult.&#8221;</p>
<p>The presumed Republican presidential nominee, Mitt Romney, has castigated Obama for his flexibility remark and accused him of being soft on U.S. national security matters, particularly with regards to Russia (see <a href="http://www.nti.org/gsn/article/medvedev-accuses-romney-cold-war-thinking/"><em>GSN</em></a>, March 28).</p>
<p>Medvedev in provided remarks read on Thursday to conference attendees said he felt certain both sides &#8220;are capable of finding a formula that would allow us to avoid any division into winners and losers. Medvedev is to hand over the presidency to Prime Minister Vladimir Putin on Monday (Richard Boudreaux, <a href="http://online.wsj.com/article/SB10001424052702303877604577382211875199348.html"><em>Wall Street Journal</em></a>, May 3).</p>
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		<title>Iran says it recovered data from captured US drone</title>
		<link>http://www.intelligencequarterly.com/2012/04/iran-says-it-recovered-data-from-captured-us-drone/</link>
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		<pubDate>Mon, 23 Apr 2012 09:25:03 +0000</pubDate>
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				<category><![CDATA[Intelligence]]></category>
		<category><![CDATA[Iran]]></category>
		<category><![CDATA[Military]]></category>

		<guid isPermaLink="false">http://www.intelligencequarterly.com/?p=2646</guid>
		<description><![CDATA[TEHRAN(AP) &#8211; Iran claimed Sunday that it had recovered data from an American spy drone that went down in Iran last year, including information that the aircraft was used to spy on Osama bin Laden weeks before he was killed. Iran also said it was building a copy of the drone. Similar unmanned surveillance planes [...]]]></description>
			<content:encoded><![CDATA[<p><img class="alignleft" title="Drone" src="http://c.o0bg.com/rf/image_371w/Boston/2011-2020/2012/04/23/BostonGlobe.com/Foreign/Images/23iran_photo.jpg" alt="" width="150" height="150" />TEHRAN(AP) &#8211; Iran claimed Sunday that it had recovered data from an American spy drone that went down in Iran last year, including information that the aircraft was used to spy on Osama bin Laden weeks before he was killed. Iran also said it was building a copy of the drone.<span id="more-2646"></span></p>
<p>Similar unmanned surveillance planes have been used in Afghanistan for years and kept watch on bin Laden’s compound in Pakistan. But US officials have said little about the history of the particular aircraft now in Iran’s possession.</p>
<p>Tehran, which has also been known to exaggerate its military and technological prowess, says it brought down the RQ-170 Sentinel, a top-secret drone equipped with stealth technology, and has flaunted the capture as a victory for Iran and a defeat for the United States.</p>
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<p id="skip-target">The United States says the drone malfunctioned and downplayed any suggestion that Iran could mine the aircraft for sensitive information because of measures taken to limit the intelligence value of drones operating over hostile territory.</p>
<p>The drone went down in December in eastern Iran and was recovered by Iran almost completely intact. After initially saying only that a drone had been lost near the Afghan-Iran border, American officials eventually confirmed the plane was monitoring Iran’s military and nuclear facilities.</p>
<p>Washington has asked for it back, a request Iran rejected.</p>
<p>The chief of the aerospace division of the powerful Revolutionary Guards, General Amir Ali Hajizadeh, told state television the captured drone is a national asset for Iran and that he could not reveal full technical details.</p>
<p>But he did provide some samples of the data that he said Iranian specialists had recovered from the aircraft, state television reported.</p>
<p>“There is almost no part hidden to us in this aircraft,’’ Hajizadeh said. “We recovered part of the data that had been erased. There were many codes and characters. But we deciphered them by the grace of God.’’</p>
<p>Among the drone’s past missions, he said, was surveillance of the compound in northwest Pakistan where bin Laden lived. Hajizadeh said the drone flew over bin Laden’s compound two weeks before the Al Qaeda leader was killed there last May by US Navy SEALs.</p>
<p>He also listed tests and maintenance that the drone had undergone, all of which, he said, had been recorded in the aircraft’s memory. According to Hajizadeh, the drone was taken to California on Oct. 16, 2010, for technical work and then to Kandahar, Afghanistan, on Nov. 18, 2010.</p>
<p>He said it carried out flights from Afghanistan but ran into some problems that US specialists were unable to fix. Then the drone was taken in December 2010 to Los Angeles, where the aircraft’s sensors underwent testing, Hajizadeh said.</p>
<p>“If we had not achieved access to software and hardware of this aircraft, we would be unable to get these details,’’ he said.</p>
<p>The US Defense Department said it does not discuss intelligence matters and would not comment on the Iranian claims.</p>
<p>The semiofficial Mehr news agency said Iran had reverse-engineered the aircraft and has begun using that knowledge to build a copy of the drone.</p>
<p>Senator Joe Lieberman, an independent from Connecticut who chairs the Senate Homeland Security and Governmental Affairs Committee, said on “Fox News Sunday’’ that he views the reports with skepticism.</p>
<p>“There is a history here of Iranian bluster, particularly now when they are on the defensive because of the economic sanctions against them,’’ Lieberman said.</p>
<p>He acknowledged that it was “not good for the US when the drone went down in Iran and not good when the Iranians grabbed it.’’</p>
<p>But the senator said he did not “have confidence at this point that they are really able to make a copy of it.’’</p>
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		<title>Witness: Sudanese warplanes strike at South Sudan border towns</title>
		<link>http://www.intelligencequarterly.com/2012/04/witness-sudanese-warplanes-strike-at-south-sudan-border-towns/</link>
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		<pubDate>Mon, 23 Apr 2012 09:23:40 +0000</pubDate>
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				<category><![CDATA[Africa]]></category>

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		<description><![CDATA[(CNN) &#8211; Sudanese war planes crossed a disputed border region to conduct airstrikes in South Sudan on Monday, a witness said, escalating fighting that threatens to return the neighboring African countries to full-scale war. The report of the bombing of the towns of Bentiu and Rubkona comes days after South Sudan pulled its troops at the [...]]]></description>
			<content:encoded><![CDATA[<p><strong>(CNN)</strong> &#8211; Sudanese war planes crossed a disputed border region to conduct airstrikes in South Sudan on Monday, a witness said, escalating fighting that threatens to return the neighboring African countries to full-scale war.<span id="more-2644"></span></p>
<p>The report of the bombing of the towns of Bentiu and Rubkona comes days after South Sudan pulled its troops at the request of the United Nations from the disputed, oil-rich region of Heglig, though Sudan claims its soldiers retook the area from South Sudanese soldiers.</p>
<p>Two fighter jets fired four missiles at the neighboring towns, divided by a river, hitting an open air market and killing at least one person, said journalist Alan Boswell, who is in Bentiu.</p>
<p>Boswell was in his car crossing the bridge between the two towns when anti-aircraft fire erupted. That was followed, he said, by missile strikes.</p>
<p>&#8220;I saw one boy who about 10-years-old, who was completely burned,&#8221; he said by telephone. &#8220;There are other casualties.&#8221;</p>
<p>The remains of thatch-covered stalls in Rubkona smoldered for hours after the bombing, which occurred in the morning, Boswell said.</p>
<p>In the hours following the airstrikes, Boswell said the military presence in the area increased. Two South Sudanese generals who were arriving near the towns said the airstrikes were &#8220;a clear escalation&#8221; by Sudan, he said.</p>
<p>In addition to the airstrikes, South Sudan&#8217;s military spokesman, Philip Aguer, said fighting continued Monday in several areas of the border region.</p>
<p>South Sudan has accused its northern neighbor of repeatedly crossing its border since Sunday to launch ground and aerial attacks.</p>
<p>A spokesman for the Sudanese military could not be immediately reached for comment. Claims from both sides are difficult to confirm, as often journalists and independent observers do not have access to the front lines.</p>
<p>But on state-run TV, a Sudanese government spokesman said Khartoum would respond to South Sudan&#8217;s use of force with its own force.</p>
<p>The latest attacks come after Barnaba Marial Benjamin, South Sudan&#8217;s minister of information, said his country&#8217;s army withdrew from Heglig to bases near the border and inside South Sudan. Sudanese forces crossed the border and attacked them there over the weekend, he said.</p>
<p>&#8220;They are trying to drag us back into a war, and that&#8217;s what the Security Council didn&#8217;t want,&#8221; he said. &#8220;They must tell them to stop these attacks.&#8221;</p>
<p>Benjamin said the bases near the border have been repeatedly attacked in the past by Sudanese troops based in Heglig, and those previous attacks prompted South Sudan to take the area on April 10.</p>
<p>Sudanese President Omar al-Bashir had vowed to &#8220;never give up&#8221; the disputed region.</p>
<p>While both countries claim Heglig, Sudan continued administering the region after South Sudan declared independence last July following a two-decade civil war.</p>
<p>The south took with it three quarters of the formerly united country&#8217;s oil reserves, a loss that sent Sudan&#8217;s economy reeling.</p>
<p>Sudan&#8217;s oil industry further suffered when fighting in Heglig forced a halt to oil production in those fields, which account for about half of the country&#8217;s entire production of 115,000 barrels a day. Satellite images suggest that infrastructure in the Heglig oil fields may have been severely damaged by the fighting.</p>
<p>The Satellite Sentinel Project released images Sunday that suggest a critical part of the oil pipeline infrastructure was destroyed. The collection manifold, which allows oil flows to be separated or combined without interrupting the flow, appears to have been damaged by an explosion.</p>
<p>The two countries have accused the other of being behind the destruction.</p>
<p>Sudan has accused South Sudan of destroying oil infrastructure and said it would attempt to force South Sudan to pay for damages; South Sudan has said Sudan bombed Heglig field&#8217;s central processing facility.</p>
<p>Serious damage to the facility would prevent companies from resuming production and would require substantial investment to repair or rebuild.</p>
<p>The renewed fighting follows a weekend appeal by U.S. President Barack Obama, urging the countries to &#8220;choose peace&#8221; and return to negotiations.</p>
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		<title>Latin America economic risk from European debt</title>
		<link>http://www.intelligencequarterly.com/2012/04/latin-america-economic-risk-from-european-debt/</link>
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		<pubDate>Sun, 22 Apr 2012 20:07:54 +0000</pubDate>
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				<category><![CDATA[Americas]]></category>
		<category><![CDATA[Economy]]></category>
		<category><![CDATA[Europe]]></category>
		<category><![CDATA[South America]]></category>

		<guid isPermaLink="false">http://www.intelligencequarterly.com/?p=2638</guid>
		<description><![CDATA[International financial markets are worried about a resurgence of the euro zone debt crisis, with eyes squarely on Spain and whether it could become the fourth country to require a financial rescue. While Latin America has thus far weathered Europe’s troubles relatively well, it has not been immune. Growth in the region has slowed, although [...]]]></description>
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<p><strong>International financial markets are worried about a resurgence of the euro zone debt crisis, with eyes squarely on Spain and whether it could become the fourth country to require a financial rescue. While Latin America has thus far weathered Europe’s troubles relatively well, it has not been immune. Growth in the region has slowed, although we expect it to remain stronger than the global average. Still, under a scenario where conditions in Europe worsen—or there is another shock, like a spike in oil prices—there could be more fallout on Latin America’s economies, asset prices and financial flows.<span id="more-2638"></span></strong></p>
<p>&nbsp;</p>
<p>Following a strong rebound in 2010 to 6% on the back of a surge in global stimulus, growth in the Latin American region as a whole slowed to 4.4% in 2011. The Economist Intelligence Unit forecasts a further deceleration to 3.7% in 2012, in a context of outright contraction in the euro zone (we expect shrinkage of 0.7%) and below-par growth in the US (of 2.2%).</p>
<p>&nbsp;</p>
<p>Growth in the region&#8217;s largest economy, Brazil, is off to a sluggish start this year after plummeting to 2.7% in 2011 from 7.5% the year before. On the positive side, commodity exporters in South America will continue to benefit from strong Chinese demand. Several factors—such as sound macroeconomic policies, resilient domestic demand and recovery in growth in the OECD—will boost Latin American growth from 2013 (with average growth of 4.2% in 2013-16). However, many countries in the region will remain vulnerable to shifts in market sentiment and rising inflationary pressures.</p>
<p>&nbsp;</p>
<p>The region&#8217;s external balance sheet has become stronger over recent years, which will help provide a cushion against external shocks. External debt is lower relative to GDP and exports and foreign-exchange reserves are at record levels. Nevertheless, growth in import bills, fuelled by domestic demand and by strong local currencies, will exceed export revenue growth, resulting in large current-account deficits in the region—even for commodities exporters. This situation is particularly problematic for Argentina, for which current-account surpluses have been a pillar of stability in the last decade, given the government&#8217;s limited access to international capital markets, use of foreign reserves to repay its external debts and vulnerability to capital flight.</p>
<p>&nbsp;</p>
<p><strong>Swings in sentiment</strong></p>
<p>&nbsp;</p>
<p>Given the close integration of the major Latin American economies in global financial markets, local currencies and asset prices have been hit by swings in investor sentiment. But thanks to flexible policies these shocks have been absorbed relatively well. In September 2011 the region suffered an increase in risk aversion associated with Europe’s woes (with the Brazilian Real and Mexican peso down by 16.6% and 12.3% respectively against the US dollar in that month). Since the start of 2012, risky asset markets have registered large gains, as risk aversion abated, thanks to the liquidity operations of the European Central Bank. As the effects of these have worn off, however, risk aversion has returned.</p>
<p>&nbsp;</p>
<p>In addition to fluctuations in investor sentiment, Latin American policymakers face other challenges. In monetary and credit policy they are striving to strike a balance between supporting domestic demand (to offset weak export markets in the OECD) while keeping inflation under control amid price pressures stemming from high food and oil prices. Brazil’s aggressive string of interest-rate cuts (with its latest reduction of 75 basis points on April 18th putting the policy rate at 9%, close to a record low of 8.75%), attests to the government’s aim of supporting growth. This has raised concerns over the Central Bank’s commitment to achieving the central inflation target (4.5%), and inflationary expectations for 2012 and 2013 have continued to drift upwards.</p>
<p>&nbsp;</p>
<p><strong>What if?</strong></p>
<p>&nbsp;</p>
<p>A worsening of the European debt crisis, which would damage both sovereigns and European banks (which are heavily invested in sovereign debt and are already showing higher rates of non-performing loans in their other portfolios) would complicate matters. The Economist Intelligence Unit currently assigns a moderate (40%) probability to the exit of Greece from the euro zone within the next two years, and a lower, though not insignificant chance, of a break-up of the currency zone (which we define as the withdrawal of several countries, including at least one of the major economies).</p>
<p>&nbsp;</p>
<p>But even without dissolution of the euro zone, a full-blown financial crisis engulfing Spain or Italy, the weakest of the larger European economies, would hurt. Spanish banks, for example, have been very heavy buyers of government debt since the European Central Bank gave them access to cheap three-year loans, designed to boost liquidity across the euro zone. The government cannot let the banks fail, any more than the banks can survive a run on government bonds. Even if the country can avoid a bailout its banks might need one soon.</p>
<p>&nbsp;</p>
<p>If the banks did weaken, credit lines to Latin America (including trade finance, which has already been affected by euro zone woes so far) from European entities and their subsidiaries in Latin America could shrink, as a first step. The impact on international credit lines would also be felt more broadly, given that a new euro zone credit &#8220;event&#8221; would cause global financial stresses and cause investor risk aversion to surge.</p>
<p>&nbsp;</p>
<p>Besides tighter international credit conditions, other transmission channels would include weaker demand and prices for Latin America’s exports, and there would be a knock-on impact on business and consumer sentiment in the region. A deeper debt crisis would also damage foreign direct investment (FDI) flows to Latin America, as Europe is an important source of FDI to the region. In the event that China’s economic growth were to slow more sharply than expected (currently we envisage GDP growth of 8.3% this year), demand and prices for South American commodity exporters would suffer even more.</p>
<p>&nbsp;</p>
<p><strong>European banks retrench</strong></p>
<p>&nbsp;</p>
<p>Pressures on European banks since mid-2011 have already caused a few to sell some of their assets in Latin America to strengthen their balance sheets. These local assets have been acquired by Latin American financial institutions, so the impact on regional credit has so far been muted. Further deleveraging by European banks would lead to further asset sales. Where buyers step in, the impact on credit in the Latin America would be limited. But there is a risk of disruptions to credit should purchases not materialise in a timely way.</p>
<p>&nbsp;</p>
<p>European banks in the periphery countries would be most adversely affected by a European debt shock. Spanish banks account for just over 40% of total foreign claims on Latin America. Loans to regional banks from Greece, Ireland, Italy and Portugal are less significant. There may also be indirect channels, namely non-European banks which are exposed to a European debt event and also lend to Latin America. These credit lines might also suffer.</p>
<p>&nbsp;</p>
<p><strong>Local banking systems should hold up</strong></p>
<p>&nbsp;</p>
<p>The impact on local banking systems would vary in relation to the shares in total assets of affected European banks in each market. The impact would be mitigated because many of the European (and other foreign) banks operating in Latin America get most of their funding locally.</p>
<p>&nbsp;</p>
<p>Moreover, banking-sector indicators suggest that most Latin American financial institutions would be relatively resilient to a European credit event. Local banks are fairly well capitalised and liquid. Credit growth, buoyed by expansionary policies after the 2008-09 global financial crisis, is now mostly decelerating. Policymakers in most countries would be able to loosen monetary policy (including lowering reserve requirements) to help ease financial stresses.</p>
<p>&nbsp;</p>
<p>There would also be some room for counter-cyclical fiscal policies in order to support economic growth during the crisis period, although there would be less capacity for stimulus policies this time around, since not all the prior stimulus has been withdrawn and structural fiscal deficits are slightly higher now. Some countries (Mexico and Colombia) have contingency credit lines from the IMF, and other countries (in the Caribbean and Central America, for example) would probably approach the Fund successfully for contingency credit.</p>
<p>&nbsp;</p>
<p>However, the region would still suffer, much in the same way it did in the aftermath of the Lehman Brothers collapse of late 2008. A more severe European recession triggered by a worsening financial crisis there would probably be longer-lasting than was the US recession after the Lehman collapse, and this would have adverse effects on European-Latin America trade and investment flows. In the event, Latin America might suffer a loss of up to three percentage points in GDP in the first year or fall into a mild recession. It would recover gradually thereafter, but more slowly than its rebound of 2010 that followed the 2008-09 global financial crisis.</p>
<p>&nbsp;</p>
</div>
</td>
</tr>
</tbody>
</table>
<div>The Economist Intelligence Unit</div>
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		<title>Updates on Yemen and Sudan internal conflicts</title>
		<link>http://www.intelligencequarterly.com/2012/04/updates-on-yemen-and-sudan-internal-conflicts/</link>
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		<pubDate>Sun, 22 Apr 2012 20:06:11 +0000</pubDate>
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		<description><![CDATA[New Yemeni Resolve to Defeat al-Qaeda Bearing Results in Lawdar The battle for southern Yemen has intensified since the succession of Abd Rabu Mansur al-Hadi to the Yemen presidency and his subsequent vow to suppress the Islamist insurgency. The latest battleground in this struggle is the strategically located city of Lawdar in Abyan Governorate, where [...]]]></description>
			<content:encoded><![CDATA[<p><strong>New Yemeni Resolve to Defeat al-Qaeda Bearing Results in Lawdar</strong></p>
<p>The battle for southern Yemen has intensified since the succession of Abd Rabu Mansur al-Hadi to the Yemen presidency and his subsequent vow to suppress the Islamist insurgency. The latest battleground in this struggle is the strategically located city of Lawdar in Abyan Governorate, where local volunteers bought time for state security forces in rebuffing an attempt by al-Qaeda in the Arabian Peninsula (AQAP) and their Ansar al-Shari’a allies to take the city and expand their occupation zone in Abyan.<span id="more-2636"></span></p>
<p>The battle in Lawdar comes at a time when the Yemeni armed forces are still badly divided and in the opening stages of major reforms and changes in the leadership, which is dominated by members of ex-president Ali Abdullah Salih’s family. State forces engaged in the battle in Lawdar include the 111<sup>th</sup> Infantry Brigade and the 26<sup>th</sup> Republican Guard Brigade (<em>al-Mu’tamar</em>[Sana’a], April 14). The locally raised People’s Defense Committees (PDC) have played a vital role in the battle, despite having no formal military training. Some of the ex-president’s relatives have proven dangerously reluctant to relinquish their posts – Yemen’s main airport was recently closed for a day after Yemen’s Air Force commander, Muhammad Salih al-Ahmar (a half-brother of the ex-president) responded to his dismissal by shelling the airport before surrounding it with loyal tribesmen and military personnel (Yemen Times, April 7; Marib Press, April 9). An attempt to assess the combat-readiness of the Republican Guard was derailed by its commander, Ahmad Ali Abdallah Salih, the eldest son of the ex-president, who submitted a report containing “major errors and inaccurate numbers” (<em>al-Ahali</em> [Sana’a], April 14; <em>al-Jumhuriyah</em> [Ta’izz], April 15). The ex-president’s nephew, Tariq Muhammad Abdallah Salih, has refused to hand over command of the 3<sup>rd</sup> Republican Guard Brigade (<em>Akhbar al-Yawm</em> [Sana’a], April 10). The new president has come under fierce attacks from local media outlets still loyal to the ex-president’s family that oppose the dismissal of family members from top posts in the military and security services (<em>al-Ahali</em> [Sana’a], April 14).</p>
<p>The battle began on April 9 when Ansar al-Shari’a attacked the military barracks near the power station on the outskirts of Lawdar and seized a large variety of weapons that would be used in their attempt to take the city, including tanks, anti-aircraft guns, artillery and missile launchers (Ma’rib Press, April 10). The Yemeni Army initially withdrew, but the defense of the city was quickly taken by local youth and other civilians using their personal weapons, mainly AK-47s (<em>al-Sharq al-Awsat</em>, April 10).</p>
<p>Yemeni fighter-jets were also active in striking militant training camps and other positions held by the Islamists in Abyan, though Ansar al-Shari’a claims U.S. drones have been responsible for some of the targeted attacks from the air (<em>Akhbar al-Yawm</em>, April 5; Reuters, April 16).</p>
<p>Dozens of militants were reported killed, including two senior commanders, in an April 11 operation to clear Islamist checkpoints from the highway outside of Lawdar. The Defense Ministry said that Saudis, Somalis and Pakistanis were among those killed (26September.net, April 11; Saba [Sana’a], April 11).</p>
<p>Pro-government forces claimed on April 13 to have arrested two al-Qaeda leaders, Jalal al-Saydi and Abd al-Ra’uf Nasir, though the latter’s family has denied the report (<em>al-Mu’tamar</em>, April 13;<em>al-Masdar</em> [Sana’a], April 14). Nasir was reported to have been seized by members of the Lawdar Youths Gathering, a local militia formed to defend the city (<em>al-Sharq al-Awsat</em>, April 15).  Two senior al-Qaeda militants, Akram al-Hafizah and Ahmad Darawish, were reported killed on April 11 (<em>al-Mu’tamar</em>, April 11; Yemen Post, April 12). Yemen’s Defense Ministry has also reported the death of Ansar al-Shari’a leader Ra’id al-Sa’id in Zinjibar, which is still held by the movement (Yemen Post, April 15; for Zinjibar see <em>Terrorism Monitor</em>, August 12, 2011).</p>
<p>Two hundred men of Yemen’s American-trained Counter Terrorism Unit (CTU) arrived in Abyan on April 14 to join the battle against the Islamist militants for the first time.  Under the command of the ex-president’s relatives, this elite unit was withdrawn from counterterrorist operations in the provinces and deployed as a presidential guard in Sana’a last year after anti-government protests began (Yemen Times, April 16).</p>
<p>Arriving with the CTU was the new Abyan governor, Jamal al-Aqil, whose motorcade came under fire on his way to meet with local military commanders and leaders of the popular committees. Like al-Aqil, both President al-Hadi and Defense Minister Major General Muhammad Nasir Ali are from Abyan, which encourages those hoping for a greater government focus on reversing the successes the militants have achieved there during Yemen’s political turmoil.</p>
<p>As the militants begin to crumble under military pressure in Abyan, AQAP has intensified its campaign of suicide bombings in Abyan and elsewhere in Yemen (AFP, April 6). Nonetheless, the battle for Lawdar is a major propaganda blow for the Islamist militants, who rather than being met as liberators, were instead repulsed by Lawdar’s residents in league with military forces loyal to the new regime. If al-Hadi can unify the military (still no easy task) and maintain the momentum established at the battle for Lawdar, this may be remembered as the moment when the tide turned against AQAP and its allies in Yemen.</p>
<p>&nbsp;</p>
<p><strong>Border Clashes Shut Down Oil Production as the Two Sudans Prepare for New Round of War</strong></p>
<p>In response to South Sudan’s surprise occupation of its northern neighbor’s most productive oilfields, Sudanese president Omar al-Bashir announced on April 12 that South Sudan had “chosen the path of war” (Sudan Tribune, April 12).</p>
<p>With the support of the United States, South Sudan declared its independence in July 2011 without having first reached an agreement with Khartoum on vital issues such as oil revenues, transfer fees and border demarcation. Juba’s occupation of the Heglig field goes well beyond applying pressure on Khartoum; it deprives its northern neighbor of revenues, foreign currency reserves and fuel. It also places an already unpopular regime in a corner from which it may feel it necessary to return to a state of war for its own survival. Khartoum might be able to buy peace with Juba and the return of Heglig by looking favorably on Southern claims in other border disputes, but this would be a humiliating response by a military/Islamist regime that cannot afford to show any weakness. In the meantime, the Sudanese pound is rapidly dropping in real value and lineups for petroleum products are growing longer by the day.  However, South Sudan, which possesses no refineries, is also suffering a rapid decline in the value of its currency and is running short of hard-currency reserves needed to purchase refined petroleum products, much of these reserves having already been spent on Juba’s massive re-armament program and expansion of its military.</p>
<p>The South Sudan maintains that Heglig was part of the southern region according to administrative divisions existing at the time of independence in 1956 and now appears to be rejecting a 2009 ruling by the Permanent Court of Arbitration in the Hague that Heglig lays inside the northern Sudan rather than the South. The Heglig oil fields, which are in gradual decline but still provide over half of Sudan’s remaining oil production, are operated by the Greater Nile Petroleum Operating Co. (GNPOC), a Chinese, Malaysian, Indian and Sudanese consortium. China, a major arms supplier for Khartoum, is reported to be shipping arms to South Sudan through the Kenyan port of Mombasa (<em>Nairobi Star</em>, April 8).</p>
<p>The occupation of Heglig is the latest stage in a growing battle over Sudan’s oil wealth. Khartoum lost roughly 75%<strong> </strong>of its oil production with the separation of the South Sudan<strong>, </strong>where most of the oil is found. However, the only outlet for this oil is via pipeline through the north to Port Sudan, which gave Khartoum the idea of replacing its lost revenues by charging transfer fees of $36 per barrel rather than the going international rate of $1 per barrel as well as siphoning off significant amounts of southern oil for its own use. Juba turned off the taps in January in protest even though oil exports account for 98% of South Sudan’s budget (see <em>Terrorism Monitor</em>, March 22). Khartoum has not backed down on the transfer fees, so Juba has apparently decided that if South Sudan must do without oil, so must Sudan.</p>
<p>South Sudan’s information minister has indicated a withdrawal of Khartoum’s forces from the disputed Abyei region would be among the conditions required for a South Sudanese pullout from Heglig (al-Jazeera, April 12; for Abyei see <em>Terrorism Monitor</em> Brief, May 27, 2011). On March 15, South Sudan President Salva Kiir told an audience in Wau that border demarcation cannot begin until Khartoum acknowledges the Abyei region belongs to South Sudan. [1] President Kiir has been unresponsive to international pleas to pull his forces back, complaining that he has been unable to sleep because of telephone calls from international leaders: “The UN secretary-general [called] yesterday; he gave me an order… to immediately withdraw from Heglig. I said, “I’m not under your command” (al-Jazeera, April 12; Sudan Tribune, April 12).</p>
<p>The Sudan People’s Liberation Army (SPLA) maintains their advance into Heglig came in response to an incursion into the oilfields of South Sudan’s Unity State with two brigades of Sudan Armed Forces (SAF) regulars, 16 tanks and various pro-Khartoum militias. The SAF were defeated by the SPLA’s 4<sup>th</sup> Division under General James Gatduel Gatluak and pursued as far as Heglig, where they have remained (Sudan Tribune, April 11). Sudanese forces are reported to be moving on Heglig gradually, with SAF spokesmen citing delays caused by mines laid by South Sudanese troops (Sudan Tribune, April 15).</p>
<p>Sudan’s military maintains that the SPLA were joined in the April 10 attack on Heglig by fighters belonging to Darfur’s Justice and Equality Movement (JEM). An AFP reporter said they had observed dead bodies in Heglig bearing JEM insignia and two destroyed land cruisers with JEM emblems. JEM denied the allegations, providing the unlikely suggestion that the SAF may have dressed their own dead in JEM uniforms (AFP, March 28). In June, 2011 the Darfur-based rebels claimed to have carried out a long-distance raid on the Heglig Airport (see <em>Terrorism Monitor</em>, July 1, 2011).</p>
<p>The SPLA claims to have shot down one of Khartoum’s Russian-built Mig-29 fighter jets during an April 6 air raid in the Heglig region, though this was denied by an SAF spokesman (al-Jazeera, April 6). According to South Sudanese intelligence and other sources, Mig-29 air strikes targeted a strategic bridge in Abiem-nhom County in Unity State, a target at Ajakkuac in Warrap State and the main bridge in Bentiu (capital of Unity State), killing five people and wounding five others (Sudan Tribune, April 11; April 14; April 15). The SPLA does not yet possess a combat-capable air force, but is believed to have plans to develop an air arm for their military.</p>
<p>Sudan’s defense minister, Abd al-Rahim Muhammad Hussein, says the SPLA offensive is part of a cooperative effort with components of the recently formed Sudan Revolutionary Front (SRF) to occupy Heglig and the South Kordofan capital of Kadugli (Sudan Tribune, April 11; for the SRF, see <em>Terrorism Monitor</em>, November 11, 2011). The SRF includes JEM and the SPLA-North, which operates in Sudan’s South Kordofan and Blue Nile States. Hussein said SPLA-North forces in South Kordofan consist of 22 battalions of 500 men each, while JEM and Darfur’s Sudan Liberation Movement – Minni Minnawi (SLM-MM) have a combined 125 Land Cruisers across the South Sudan border in Bahr al-Ghazal preparing to launch cross-border attacks (Sudan Tribune, April 11). While the deployment of large numbers of Darfur rebels in the border region of South Sudan cannot be confirmed, it is consistent with Khartoum’s claims of greater cooperation between the rebels and the SPLA over the last year. If JEM actually was involved in the attack on Heglig, it would be the first sign that the SRF<strong> </strong>alliance was becoming a military reality with the support of Juba.</p>
<p>Note:</p>
<p>1. “The Crisis in Abyei,” The Sudan Human Security Baseline Assessment Project, Small Arms Survey, March 28, 2012, <a href="http://www.smallarmssurveysudan.org/facts-figures-abyei.php" target="_blank">www.smallarmssurveysudan.org/facts-figures-abyei.php</a></p>
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		<title>South Sudan says Sudan launches attacks</title>
		<link>http://www.intelligencequarterly.com/2012/04/south-sudan-says-sudan-launches-attacks/</link>
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		<pubDate>Sun, 22 Apr 2012 20:03:47 +0000</pubDate>
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		<guid isPermaLink="false">http://www.intelligencequarterly.com/?p=2633</guid>
		<description><![CDATA[BENTIU, South Sudan (AP) — Sudanese armed forces launched an attack more than six miles (nine kilometers) inside South Sudan&#8217;s border, an official said Sunday, days after the south announced it was pulling its troops from a disputed border town to avoid an all-out war between the two countries. Ground troops from Sudan launched three [...]]]></description>
			<content:encoded><![CDATA[<p>BENTIU, South Sudan (AP) — Sudanese armed forces launched an attack more than six miles (nine kilometers) inside South Sudan&#8217;s border, an official said Sunday, days after the south announced it was pulling its troops from a disputed border town to avoid an all-out war between the two countries.<span id="more-2633"></span></p>
<p>Ground troops from Sudan launched three waves of attacks, Deputy Director of Military Intelligence for South Sudan Maj. Gen. Mac Paul said.</p>
<p>A soldier&#8217;s body and two wounded soldiers were brought to a hospital, the clinical director at the Rubkona Military hospital, Dr. Zecharia Deng Aleer, said. Aleer said the soldiers were brought in from around the Pariang Junction, in South Sudan&#8217;s Unity State.</p>
<p>Paul said it was the first major engagement between the two armies since South Sudan announced it would pull out from the contested border town of Heglig.</p>
<p>Paul said the Sudanese forces &#8220;have come deeply in the south&#8221; and attacked with artillery and tanks. He said the attack was part of a &#8220;continuous provocation from the Sudanese Army.&#8221; Paul said Sudan also used &#8220;militias&#8221; in the attack.</p>
<p>Sunday&#8217;s military attack came hours after a Muslim mob burnt a Catholic Church in Sudan frequented mostly by South Sudanese. The church in Khartoum&#8217;s Al-Jiraif district was built on a disputed plot of land, but the Saturday night incident appeared to be part of the fallout from ongoing hostilities between Sudan and South Sudan over Heglig.</p>
<p>Witnesses and several newspapers said a mob of several hundred shouting insults at southerners torched the church. Fire engines could not put out the fire, they said.</p>
<p>Sudan and South Sudan have been drawing closer to a full-scale war in recent months over the unresolved issues of sharing oil revenues and the disputed border.</p>
<p>The international community, led by the U.S., has called for the two countries to stop all military actions against each other and restart negotiations to solve their disputes.</p>
<p>President Barack Obama on Friday asked the presidents of Sudan and South Sudan to resume negotiations and said that conflict is not inevitable.</p>
<p>Talks between the two countries over the unresolved disputes that were being mediated by the African Union, broke down in Ethiopia earlier this month.</p>
<p>The African Union on Sunday called on Sudan and South Sudan to end &#8220;senseless fighting.&#8221;</p>
<p>&#8220;The commission urges the two parties to immediately and unconditionally resume negotiations &#8230; to reach agreements on all outstanding issues,&#8221; AU Commission Chairman Jean Ping said in a statement.</p>
<p>Last week, South Sudanese troops seized Heglig, which the southerners call Panthou, sending Sudanese troops fleeing. The Khartoum government later claimed to have regained control of the town.</p>
<p>A U.S. monitoring group said Sunday satellite imagery appear to shows the fighting around Heglig had caused major damage to oil pipeline infrastructure</p>
<p>The Satellite Sentinel Project said the images shows severe damage and in such a critical part of the oil infrastructure, that it would likely stop oil flow in the area.</p>
<p>South Sudan broke away from Sudan July last year after an independence vote, the culmination of a 2005 peace treaty that ended decades of war that killed more than 2 million people. Despite the treaty, violence between the two countries has been on the rise.</p>
<p><em>Associated Press writers Mohamed Saeed in Khartoum, Sudan and Kirubel Tadesse in Addis Ababa, Ethiopia contributed to this report.</em></p>
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		<title>Hollande, Sarkozy heading for runoff in France presidential vote</title>
		<link>http://www.intelligencequarterly.com/2012/04/hollande-sarkozy-heading-for-runoff-in-france-presidential-vote/</link>
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		<pubDate>Sun, 22 Apr 2012 20:02:37 +0000</pubDate>
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		<guid isPermaLink="false">http://www.intelligencequarterly.com/?p=2631</guid>
		<description><![CDATA[Socialist challenger Francois Hollande and incumbent Nicolas Sarkozy will advance to a runoff presidential election after an initial round of balloting Sunday, but a far-right candidate shocked the political establishment by running a strong third. Early returns released after polls closed showed Hollande with about 28% of the vote to Sarkozy&#8217;s 26%, a margin consistent with pre-election polls. Eight other [...]]]></description>
			<content:encoded><![CDATA[<p style="text-align: center;"><img class="aligncenter" title="France" src="http://latimesblogs.latimes.com/.a/6a00d8341c630a53ef016304987984970d-pi" alt="" width="452" height="328" />Socialist challenger Francois Hollande and incumbent Nicolas Sarkozy will advance to a runoff presidential election after an initial round of balloting Sunday, but a far-right candidate shocked the political establishment by running a strong third.<span id="more-2631"></span></p>
<p>Early returns released after polls closed showed Hollande with about 28% of the vote to Sarkozy&#8217;s 26%, a margin consistent with pre-election polls. Eight other candidates trailed.</p>
<p>The biggest surprise was the strong showing of far-right candidate Marine Le Pen, who received about 20%. That would be the strongest electoral showing her party has ever made &#8212; about double the percentage her father Jean-Marie Le Pen received in 2007.</p>
<p>Marine Le Pen knocked left-wing firebrand Jean-Luc Mélenchon into fourth place, becoming the kingmaker in the May 6 runoff between Hollande and Sarkozy. At least half of her voters are expected to support Sarkozy.</p>
<p>During a fiery campaign, Le Pen, a 43-year-old lawyer, relentlessly challenged the &#8220;established&#8221; candidates and in many ways defined the campaign landscape, forcing Sarkozy to veer to the right.</p>
<p>At Socialist Party headquarters, the atmosphere had been one of tense optimism as supporters waited for the results, with a crowd of young Hollande supporters gathered outside awaiting the news.</p>
<p>Former Socialist Culture Minister Jack Lang called for restraint. &#8220;We must not consider that it&#8217;s already won. The battle will be difficult. It&#8217;s when you believe it&#8217;s in the bag that you end up losing,&#8221; he said.</p>
<p>Early indications suggested that about 80% of the electorate turned out.</p>
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		<title>A No-Confidence Vote for France</title>
		<link>http://www.intelligencequarterly.com/2012/04/a-no-confidence-vote-for-france/</link>
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		<pubDate>Sat, 14 Apr 2012 10:53:53 +0000</pubDate>
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		<guid isPermaLink="false">http://www.intelligencequarterly.com/?p=2629</guid>
		<description><![CDATA[Socialist leader Francois Hollande is likely to be the next president of France, beating incumbent Nicolas Sarkozy. That&#8217;s bad for business, and worse for the French economy. French President Nicolas Sarkozy seems destined to be the next electoral casualty of the euro-zone sovereign-debt crisis. Sarkozy is deeply unpopular at home, but his expected defeat in [...]]]></description>
			<content:encoded><![CDATA[<p>Socialist leader Francois Hollande is likely to be the next president of France, beating incumbent Nicolas Sarkozy. That&#8217;s bad for business, and worse for the French economy.<span id="more-2629"></span></p>
<p>French President Nicolas Sarkozy seems destined to be the next electoral casualty of the euro-zone sovereign-debt crisis. Sarkozy is deeply unpopular at home, but his expected defeat in this year&#8217;s presidential elections could be a setback for France.</p>
<p>The likely victor, François Hollande, is a socialist whose policies would create uncertainty in the short term and foment further economic stagnation in the longer run. Like much of the euro zone, France is plagued by diminishing competitiveness, high unemployment, and excessive government spending. Hollande has proposed raising the state&#8217;s tab, which could worsen the other problems and punish business.</p>
<p>Sarkozy and Hollande will lead in the first round of voting on April 22, but neither is likely to garner enough votes to declare an outright victory. All polls point to a win for Hollande in the May 6 runoff, but the French have pulled surprises in the past.</p>
<p>Sarkozy, 57, was elected president in 2007, and is paying the price for failing to deliver on his campaign promises amid the worst financial downturn in Europe since World War II. He has earned plaudits for persuading Germany, Europe&#8217;s largest economy, to take a softer approach to the euro-zone crisis, but domestic issues matter more to French voters. France is flirting with economic recession, and in January was stripped of its prized triple-A credit rating by Standard &amp; Poor&#8217;s.</p>
<p>Hollande, also 57, is a graduate of France&#8217;s prestigious École Nationale d&#8217;Administration, which boasts presidents and prime ministers among its alumni. But his political experience is limited, encompassing a decade as secretary of the Socialist Party and a stint as mayor of a provincial town. Ségolène Royal, his former partner and mother of his four children, lost to Sarkozy in &#8217;07. Hollande secured the party&#8217;s nomination last year, after scandal enveloped the favorite, Dominique Strauss-Kahn.</p>
<p>A pro-European, Hollande is a protégé of former European Commission President Jacques Delors, one of the architects of the euro. To maintain stability and continuity in Europe, he will need to emulate Sarkozy&#8217;s cozy relationship with German Chancellor Angela Merkel. But the relationship could be complicated, as they occupy different sides of the political spectrum. At some point, Merkel may need to check Hollande&#8217;s soft Keynesian tendencies: Germany doesn&#8217;t have the resources to bail out France.</p>
<p><a name="U302991635481AI"></a></p>
<p>Hollande&#8217;s economic policies would do little to boost France&#8217;s competitiveness, and his goal of eliminating the budget deficit by 2017 is apt to remain elusive. He aims to kick-start the economy by adding jobs and creating growth, but that means even greater government outlays. Government expenditures currently equal 57% of gross domestic product, one of the highest levels in Europe and nine percentage points more than in Germany.</p>
<p><a name="U30299163548O2"></a></p>
<p>Following Sarkozy&#8217;s lead, Hollande looks to raise taxes, and favors imposing an astonishing 75% tax rate on those earning more than a million euros ($1.32 million). The backlash could be catastrophic, sparking a wealth exodus. After all, London, Frankfurt, and Zurich aren&#8217;t far away.</p>
<p>Vania Mareuse, managing director at Bryan Garnier in Paris, worries that Hollande&#8217;s spending plans would aggravate France&#8217;s budget deficit and hurt the euro, which has been resilient until now. Mareuse is trying to reduce his exposure to the common currency. &#8220;If there is a move, it will go to $1.15 or $1.10,&#8221; he says. The euro traded last week at $1.32.</p>
<p><strong>HOLLANDE ALREADY HAS TAKEN</strong>aim at the financial world, declaring it his enemy. He plans to separate banks&#8217; retail and investment operations, and bar French institutions from operating in tax havens. Higher income-tax rates would hit banks and utilities hardest. Other tax changes, such as the cancelation of credits for research, would crimp the aerospace and defense sector and the media industry. Brokerage Cheuvreux identifies potential losers as the bank <a href="http://online.barrons.com/public/quotes/main.html?type=djn&amp;symbol=kn.fr">Natixis</a> (ticker: KN.France), the utility<a href="http://online.barrons.com/public/quotes/main.html?type=djn&amp;symbol=gsz.fr">GDF Suez</a> (GSZ.France), and <a href="http://online.barrons.com/public/quotes/main.html?type=djn&amp;symbol=ca.fr">Carrefour</a> (CA.France), the giant supermarket chain.</p>
<p><a name="U30299163548SPE"></a></p>
<p>French companies such as <a href="http://online.barrons.com/public/quotes/main.html?type=djn&amp;symbol=mc.fr">LVMH Moët Hennessy Louis Vuitton</a> (MC.France),<a href="http://online.barrons.com/public/quotes/main.html?type=djn&amp;symbol=cap.fr">Capgemini</a> (CAP.France) and the catering outfit <a href="http://online.barrons.com/public/quotes/main.html?type=djn&amp;symbol=sw.fr">Sodexo</a> (SW.France), which generate most of their sales in international markets, could fare better. But France&#8217;s fortunes, in general, won&#8217;t revive until it finds a leader willing to whip its public finances into shape.</p>
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		<title>Robert Mugabe strikes secret deal to hand Zimbabwe power to Emmerson Mnangagwa</title>
		<link>http://www.intelligencequarterly.com/2012/04/robert-mugabe-strikes-secret-deal-to-hand-zimbabwe-power-to-emmerson-mnangagwa/</link>
		<comments>http://www.intelligencequarterly.com/2012/04/robert-mugabe-strikes-secret-deal-to-hand-zimbabwe-power-to-emmerson-mnangagwa/#comments</comments>
		<pubDate>Wed, 11 Apr 2012 11:08:06 +0000</pubDate>
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				<category><![CDATA[Africa]]></category>

		<guid isPermaLink="false">http://www.intelligencequarterly.com/?p=2627</guid>
		<description><![CDATA[Robert Mugabe has struck a secret &#8220;gentleman&#8217;s agreement&#8221; to hand over power in Zimbabwe to his feared defence minister, Emmerson Mnangagwa, sources close to the two men have revealed. Telegraph: Insiders say that Mr Mugabe, aged 88 and now in office for three decades, will stand as Zanu PF&#8217;s candidate in elections one last time [...]]]></description>
			<content:encoded><![CDATA[<h2>Robert Mugabe has struck a secret &#8220;gentleman&#8217;s agreement&#8221; to hand over power in Zimbabwe to his feared defence minister, Emmerson Mnangagwa, sources close to the two men have revealed.<span id="more-2627"></span></h2>
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<p>Telegraph: Insiders say that Mr Mugabe, aged 88 and now in office for three decades, will stand as Zanu PF&#8217;s candidate in elections one last time before handing over to Mr Mnangagwa, a former spy chief nicknamed &#8220;The Crocodile&#8221; for his ruthless reputation.</p>
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<p>In the clearest sign yet that he is being groomed for the top job, Mr Mnangagwa, 65, was recently dispatched to Tehran where he met Iranian President Mahmoud Ahmadinejad, a key anti-Western ally.</p>
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<p>Having another Zanu-PF strongman succeed Mr Mugabe would help ensure that other powerful party members avoid any future scrutiny about wealth gained through illegal land seizures, and avoid possible prosecution at The Hague.</p>
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<p>Mr Mnangagwa, the former head of Zimbabwe&#8217;s Central Intelligence Organisation, was appointed campaign manager by Mr Mugabe during the 2008 presidential election and was widely blamed for the brutality unleashed after his rival, Morgan Tsvangirai, edged ahead in the first round of voting.</p>
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<p>The prospect of taking over from the ageing leader gives him a clear incentive to ensure that elections tipped for later this year go Zanu-PF&#8217;s way again. Last month, Mr Tsvangirai&#8217;s party, the Movement for Democratic Change, claimed that the army was already recruiting and training jobless Zanu PF youths &#8220;on a massive scale&#8221; for a new programme of vote-fixing.</p>
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<p>Mr Tsvangirai, who is prime minister in a shaky coalition government with Mr Mugabe, says he has been told by senior security officials that &#8220;anyone other than President Mugabe, even if they win an election, will not be able to take up their mandate&#8221;.</p>
<p>Mr Mnangagwa, 65, helped orchestrate Mr Mugabe&#8217;s battle against white rule in the 1970s, during which he was arrested and tortured by white Rhodesian policemen, rendering him deaf in one ear.</p>
<p>Zanu-PF colleagues say he is the one man feared even more than Mr Mugabe, a reputation he gained as CIO head during the suppression of the rival Zapu party in 1980s, in which thousands of civilians were killed and in some cases forced to dance on the freshly-dug graves of relatives.</p>
<p>In later years he has been seen as Zanu-PF&#8217;s chief &#8220;money man&#8221;, helping organise lucrative concessions linked to gold and diamond mining.</p>
<p>Last month he met Mr Ahmadinejad to discuss further co-operation between Zimbabwe and Iran, which is known to be eyeing Zimbabwe&#8217;s uranium for its disputed nuclear program. Mr Ahmadinenjad said that their shared difficulties as targets of Western sanctions could be converted into &#8220;new opportunities for further development and progress&#8221;.</p>
<p>In return, Iran&#8217;s defence minister, Brigadier General Ahmad Vahidi, pledged to help beef up Zimbabwe&#8217;s armed forces. &#8220;We will help strengthen their military so that they are able to protect their land and culture, especially so they are prepared against the pressures and threats from Western countries,&#8221; he said.</p>
<p>The pact between Mr Mugabe and Mr Mnangagwa is alleged to have taken place at State House in Harare in April 2008, after the president failed to secure an outright majority over Mr Tsvangirai.</p>
<p>According to a long-serving Zanu PF minister who witnessed the meeting, the embattled Mr Mugabe offered Mr Mnangagwa the future presidency if he could help ensure that things went Mr Mugabe&#8217;s way in the second round.</p>
<p>&#8220;It is common knowledge within the high ranks of the party that Mnangagwa delivered the presidency to Mugabe, and that we are in power today because of his efforts,&#8221; the minister said.</p>
<p>&#8220;It is on the basis of this understanding that Mugabe said in his own words that the &#8216;job is yours when I leave&#8217;, receiving nods from senior military generals who were also present that day.&#8221;</p>
<p>Another source close to senior defence chiefs told <em>The Sunday Telegraph</em>: &#8220;Mnangagwa was told that he had to deliver victory for Mugabe by whatever means or he would go down with the old man. After that, the two are glued together so tightly unless Mnangagwa commits a cardinal sin, he is assured of the succession.&#8221;</p>
<p>Others insist that there are still considerable hurdles – most notably the feisty Joice Mujuru, Zimbabwe&#8217;s vice-president who is known to be favoured by Zanu-PF moderates as Mr Mugabe&#8217;s successor for her friendly relationship with Mr Tsvangirai.</p>
<p>Together with her husband Solomon, a retired army chief, she led a rival faction to Mr Mnangagwa. But last year, Mr Mujuru died in a mysterious fire at his rural farm, depriving his wife of a real power base. Some suspect foul play in his death, although it has never been proved.</p>
<p>So far no date has been planned for future elections. While Mr Mugabe wants them held this year, opponents say they should be postponed until new constitutional changes designed to guarantee a fair political playing field are finalised.</p>
<p>However, one minister claimed that if any election result did not go Zanu-PF&#8217;s way, Mr Mnangagwa&#8217;s backers also had a plan to roll out &#8220;choreographed anarchy&#8221; which would allow them to declare a state of emergency.</p>
<p>&#8220;In a state of emergency, civil and political rights get suspended, thus the constitution itself gets suspended, meaning that the army can potentially impose a ruler of its choice under the pretext of enforcing peace and stability,&#8221; the minister said.</p>
<p>While Mr Mnangagwa has personally profited from white land seizures &#8211; he owns a 1,000 acre farm &#8211; in public he strikes a less anti-British tone than Mr Mugabe.</p>
<p>In a rare<strong> <a href="http://www.telegraph.co.uk/news/worldnews/africaandindianocean/zimbabwe/8584312/Emmerson-Mnangagwa-vs-Morgan-Tsvangirai-the-two-opposing-faces-of-Zimbabwe.html">interview with The Sunday Telegraph</a></strong><a href="http://www.telegraph.co.uk/news/worldnews/africaandindianocean/zimbabwe/8584312/Emmerson-Mnangagwa-vs-Morgan-Tsvangirai-the-two-opposing-faces-of-Zimbabwe.html"> </a>last year, he told after Zanu-PF first came to power, he had even offered promotions to the white policemen who tortured him in the name of reconciliation. He dismissed talk of Britain having a vendetta against Zimbabwe &#8211; a common claim of Mr Mugabe &#8211; and described himself as a &#8220;humble man&#8221;, baffled as to why so many spoke his name in fear.</p>
<p>In 2010, he also claimed to have found God, telling mourners at his brother&#8217;s funeral: &#8220;For those of us comrades who were taught to destroy and kill and have seen the light in the last days of our lives&#8230; our rewards are in heaven.&#8221;</p>
<p>Among those backing Mr Mnangagwa are said to be air force chief Perence Shiri, police commissioner general Augustine Chihuri, secret service chief Happyton Bonyongwe, and prominent Zanu PF politburo member Jonathan Moyo.</p>
<p>They are said to have been told to keep quiet about it, but Maj-Gen Nyikayaramba, recently promoted into post by Mr Mnangagwa, could not resist a boast at a recent rally in Bikita in Masvingo province: &#8220;President Mugabe will rule for a while and then leave office for his top lieutenant, the Crocodile,&#8221; he told shocked villagers.</p>
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		<title>Israeli air strike options against Iran</title>
		<link>http://www.intelligencequarterly.com/2012/04/israeli-air-strike-options-against-iran/</link>
		<comments>http://www.intelligencequarterly.com/2012/04/israeli-air-strike-options-against-iran/#comments</comments>
		<pubDate>Sun, 08 Apr 2012 23:19:58 +0000</pubDate>
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				<category><![CDATA[Intelligence]]></category>
		<category><![CDATA[Iran]]></category>
		<category><![CDATA[Middle East]]></category>
		<category><![CDATA[Military]]></category>
		<category><![CDATA[Uncategorized]]></category>

		<guid isPermaLink="false">http://www.intelligencequarterly.com/?p=2621</guid>
		<description><![CDATA[Israel maintains a very capable and potent air force.  With a mix of domestically developed technologies and a steady supply of modern fighters from abroad, it’s main limitation is it’s long range strike capabilities to penetrate Iranian defenses. With more than 350 aircraft, Israel’s main options are the F-15I and F-16I fighters, of which is [...]]]></description>
			<content:encoded><![CDATA[<p><a href="http://www.intelligencequarterly.com/wp-content/uploads/2012/04/Screen-Shot-2012-04-08-at-6.28.42-PM.png"><img class="alignleft size-medium wp-image-2623" title="Screen Shot 2012-04-08 at 6.28.42 PM" src="http://www.intelligencequarterly.com/wp-content/uploads/2012/04/Screen-Shot-2012-04-08-at-6.28.42-PM-300x262.png" alt="" width="300" height="262" /></a>Israel maintains a very capable and potent air force.  With a mix of domestically developed technologies and a steady supply of modern fighters from abroad, it’s main limitation is it’s long range strike capabilities to penetrate Iranian defenses.<span id="more-2621"></span></p>
<p>With more than 350 aircraft, Israel’s main options are the F-15I and F-16I fighters, of which is essentially a modified F-16 Advanced Block 52 with conformal fuel tanks and upgraded radar.   The main features developed by Elisra, include jammers, radar and missile warning systems, and most importantly has the ability to carry a diverse range of weapons that can cause significant damage to Iranian facilities.</p>
<p>It is understood, that with Israel’s new additions to the F-16I, it could attack targets within Iran using Rafael Popeye 1 and Popeye 2 missiles from a safer distance of 80km from Iranian air defenses.</p>
<p>The F-15I Ra’am is an Israeli modified version of the Boeing F-15E Strike Eagle with domestically developed jamming, radar/missile warning and other various upgrades.  It carries the GBU-28/B penetrating  laser guided bomb which has the ability to penetrate 30 m of earth and 6 m of concrete is could possible inflict major damage to Iranian underground nuclear facility of Natanz with multiple hits.</p>
<p>In any strike scenario, significant intelligence would be needed on Natanz and Fordow to calculate penetration capabilities and explosive power needed to locate and destroy critical elements of Iranian nuclear work.</p>
<p><strong>Attack Routes</strong></p>
<p>Strategic Iranian air defenses would require Israel to use indirect flight paths to avoid detection and increase the likelihood of success.  The direct route would be over Jordan and Iraq with neither sure to give permission to use its air space and risk domestic unrest.    The most likely and safest route would be south of Amman, Jordan and though Saudi Arabia avoiding HAWK surface to air missile systems and over Iraq.  A northern route is nearly off the table with Turkey and Israeli relations at a low point.</p>
<p>Ballistic missiles which Israel has developed under the Jericho name, could theoretically possess the necessary range to strike Iran.  Increased range and a payload of 1500 kg, Israel could fit nuclear warheads up to one megaton.</p>
<p>The Jericho 3 missile has been rumored to be active since last year with a range of nearly 5,000 km.  It carries 3 re-entry vehicle warheads and could have its range increased to 6,500 km however any Israeli nuclear strike would not be the the first option with its air force capable of better accuracy and nuclear fallout being disastrous for the entire region. <a href="http://www.intelligencequarterly.com/wp-content/uploads/2012/04/Screen-Shot-2012-04-08-at-6.30.46-PM.png"><img class="aligncenter size-medium wp-image-2624" title="Screen Shot 2012-04-08 at 6.30.46 PM" src="http://www.intelligencequarterly.com/wp-content/uploads/2012/04/Screen-Shot-2012-04-08-at-6.30.46-PM-300x262.png" alt="" width="300" height="262" /></a><a href="http://www.intelligencequarterly.com/wp-content/uploads/2012/04/Screen-Shot-2012-04-08-at-7.04.37-PM.png"><img class="aligncenter size-full wp-image-2625" title="Screen Shot 2012-04-08 at 7.04.37 PM" src="http://www.intelligencequarterly.com/wp-content/uploads/2012/04/Screen-Shot-2012-04-08-at-7.04.37-PM.png" alt="" width="511" height="366" /></a></p>
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