Press Play

It seems that Russian and Ukrainian leaders are simply waiting around till someone tells them to press play. After a huge row last week over a supposed humanitarian convoy purported to be poorly disguised military support, full-fledged war is occurring in all-but name across Eastern Ukraine. And it seems that the convoy will cross the border after all.

(Source: AP via BBC)

Meanwhile, a group of refugees fleeing the fighting were hit with "rockets and mortars," causing numerous fatalities and casualties. Both sides blame one another, naturally.

Victories in this war are reminiscent of recently-highlighted accounts of World War I on the centenary of its beginning - opposing sides fighting for mere feet and meters at great cost and little tactical advantage. Even the politics of soccer have been infiltrated, with teams in annexed Crimea beginning play in the Russian leagues.

But perhaps the real concern should be perspective. Everyone became worried for a week and half after pro-Russian rebels shot down an airliner at cruising altitude, but then the airlines and other nations decided they would just not fly over Ukraine anymore and all became well again. Perspective is in how a conflict is described, discussed, and referenced. Perhaps it is no longer appropriate to call it the "Ukraine Crisis," or the "Crisis in Ukraine" (also used by the Wall Street Journal). Perhaps we call it what is - war - because it's quite possible that reality may lead us toward a solution.

India and Pakistan: Domestic and Foreign Policies Collide

May 2014 brought the promise of progress in India-Pakistan relations.  After the historic swearing-in of Indian Prime Minister Narendra Modi - the first ever attended by a Pakistani prime minister - people were cautiously optimistic about relations between the feuding nuclear powers.  That optimism was extended when Modi and Pakistani Prime Minister Nawaz Sharif publicly exchanged letters of gratitude toward each other, which followed up on the meeting the two held after Modi's swearing-in.  In his letter, Modi also expressed India's sympathy toward Pakistan after the terror attack on Karachi's airport.

Prime Ministers Narendra Modi and Nawaz Sharif shake hands after Modi's swearing-in (source: The Guardian).

These developments were promising, and they may well continue.  Of course, it will take more than a meeting and a letter exchange to overcome decades of mistrust and border attacks.  Furthermore, both prime ministers must still deal with local populations that are not so quick to mend old wounds.  Moving too quickly toward improved relations will undercut the support both leaders need to rule.  Indeed, Sharif was condemned for the very decision to attend Modi's inauguration.

Unfortunately, both leaders have already gone back to the tried-and-true tact of using the other country as an easy target for domestic woes.  Last week, for example, Modi declared in a speech to Indian troops that Pakistan now wages a "proxy war of terrorism" because it lacks the capabilities to wage a conventional war.

Sharif, meanwhile, finds his own prime ministership at risk in the midst of large-scale protests.  Those protests are led by political rival Imran Khan of the PTI party.  Khan is calling for Sharif's ouster due to issues ranging from alleged vote-rigging in the 2013 elections to the "dynastic" nepotism of the Sharifs.  Although he has called on protesters to keep their actions peaceful, he has also called on them to stop paying taxes and bills as part of the larger protest.

Perhaps it should not come as a surprise that, in the midst of this internal challenge to Sharif's rule, Pakistani military forces attacked Indian border posts at 20 different locations yesterday.  Incidentally, none of Pakistan's major English-language outlets - Dawn, The News International, and The Express Tribune - reported on the attacks.

Ultimately, the political strategy of pandering to the local population while trying to present a more suitable international front is nothing new.  Its most recent notable iteration may be Iran's positions during the recent nuclear talks.  Iran may try to woo investors and welcome the UN nuclear watchdog, on the one hand, but talk about destruction of the U.S. in the event of an attack, on the other.  In the case of Pakistan and India, the effort to garner local support by castigating the other country is a short-term tactic.  It is also one that finds itself increasingly outdated in the digital age, where information from non-local sources is more readily available.  The longer-term strategy of mending old wounds is harder; it will involve less flashy developments like multiple trade summits, cooperation in counter-terrorism investigations, and regular regional meetings to address issues facing the two and their smaller neighbors.  This will take time, perseverance, patience, and restraint, none of which lend themselves well to the political arena.  Ultimately, the coming months will tell whether May 2014 was a new beginning or merely an aberration in the long-standing dispute.

Of Bombs & Air Strikes

(Source: Associated Press via Wall Street Journal)

What looks like a dust storm or the desert tracks of a very fast vehicle is actually the result of air strikes by American fighter jets on Islamic State (IS, formerly ISIL) militants not far from Erbil, Iraq. Friday's limited strikes resulted in limited damage, but also intend to send a warning message. However, without clearer objectives - what do the strikes intend to do? - the strikes will fail to resonate. In fact, they could spur the militants to redouble efforts or even drag American forces into a protracted, albeit likely arms-length, engagement.

Is the United States concerned with the exploding humanitarian disaster in Iraq? Among other minorities being displaced, both as refugees and internally, the Yazidis have gained special attention due to being surrounded by IS fighters (see map below). American aircraft dropped humanitarian supplies - water and food - to the besieged minority. Was this a tactical move? How does this specific situation differ from what IS militants have done elsewhere in Iraq, or Syria for that matter? The "why now" question is one that American officials would be hard-pressed to have a good answer for. There is a humanitarian disaster throughout the Middle East, perhaps one of unprecedented scale, that the United States and much of the West has thoroughly ignored.

On the other hand, is the collapsing political situation the greater worry? IS controls a large share of Iraq today and atrocities perpetrated by its rank and file are making for gory headlines. The map below offers a glimpse into the scale the Iraqi government is faced with.

(Source: Associated Press via Wall Street Journal)

Recent reports express concern over IS control over the Mosul Dam, which could wreak havoc downriver if compromised. Such control over water in the delicate region could impact IS' primary target - Baghdad. The complications multiply very quickly. Whether limited air strikes will do anything to change the situation on the ground is questionable. In 1999, the United States conducted a 78-day air campaign to make an impact on the ground in Kosovo. Are a few missiles and bombs here and there going to change much?

Is the United States simply grasping at straws to ensure its legacy? Should IS continue its advance into Kurdistan, will the United States assist, or abandon the Kurds as it has in the past? These are all critical questions that help answer the larger question - what is the objective here?

Argentina: Return from Debt Mountain

Back in 2013, we provided a somewhat in-depth look at the ongoing legal battle between Argentina and debtors who declined to participate in its post-default restructuring plan.

So first, to recap: Back in 2001-2002, Argentina defaulted on its debt.  More than 90% of bondholders participated in one of the two restructurings that took place (2005 and 2010), accepting a repayment structure that would pay them a fraction of their original holdings.  Argentina steadfastly refused to make any payments to the holdout bondholders (which Argentina describes as "vulture funds").  The holdout bondholders, meanwhile, took Argentina to federal court for the full payments (the original bond agreements gave U.S. federal courts jurisdiction over any disputes).  The federal district court had ruled in the bondholders' favor in November 2012 -- mandating that Argentina pay the holdout bondholders in full if it make any payment on the restructured bonds -- but the opinion had been stayed pending appeal to the Second Circuit by Argentina.

Flash forward to August 2013: The Second Circuit upheld the district court's opinion, rejecting arguments put forth by Argentina (and the U.S. government, siding with Argentina) with respect to both the bond contract interpretation as well as sovereign immunity.  Specifically, the Second Circuit ruled that Argentina must pay the holdout bondholders in full before it makes any payments on the restructured bonds.  Importantly, it also held that anyone helping Argentina make payments on the restructured bonds in defiance of its ruling could be held in contempt of court:

Argentina could simply ignore the ruling and continue to make payments on the restructured bonds while ignoring the other ones. 

But the court also made it clear that it would view anyone who helped Argentina make such payments as “assisting in a violation of the injunction.” It directly ordered Bank of New York Mellon, the trustee for the restructured bonds, not to make the payments to bondholders if Argentina sends it the money. And it warned that others not named in the case might face legal problems if they helped Argentina.

Argentina expected the case would be heard by the U.S. Supreme Court.  In June, the Court declined -- without comment -- to heart the case.

A poster in Argentina decries the "vulture funds" of the U.S. (Source: Yahoo News)


Today, Argentina was found to be in "technical default" because its payments to restructured bondholders were thwarted by the court-issued injunction preventing payments on the restructured bonds unaccompanied by payments to the holdout bondholders.  Markets in both Argentina and the U.S. dropped today, after last-minute talks collapsed.  Argentina, meanwhile, denies that it is in default, asking restructured bondholders to demand payment from the U.S. federal court system while its chief cabinet member cried conspiracy:

“The credit rating agencies, the financial agents and opinionators who are trying to say that Argentina is in a supposed technical default are playing an absurd hoax that is aimed at destroying the restructuring process of Argentina debt,” he said.

He further went on to accuse the federal judge and the negotiations mediator of complicity in the supposed default conspiracy:

"If there's a judge who's an agent of these speculative funds, if the mediator is their agent, what is this justice you're talking about? There's a responsibility of the state here, of the United States, to create the conditions for the unconditional respect of other countries' sovereignty," he said.

Investors remain hopeful that some sort of deal will be reached in the coming weeks.  Argentina, meanwhile, must at some point backtrack from its anti-capitalist populism.  Such rhetoric is sometimes necessary in South American politics, but it is unhelpful when your country is in the midst of its second debt default in 13 years.  Argentina was able to successfully restructure the large majority of its defaulted debt.  The remaining 7% has remained a political football in Argentina, used by politicians to burnish their populist credentials.  Throughout the holdout bondholder litigation, meanwhile, Argentina has expressed indignation at the notion that the holdouts would prevail in U.S. courts (especially when the U.S. government itself sided with Argentina).  Furthermore, it has time and again expressed its lack of respect for the federal judge in charge of the case and expressed its intentions to not abide by U.S. court rulings.  This is certainly Argentina's right as a sovereign nation, unless of course it wishes to utilize the U.S. financial system to develop its economy.  If that's the case, then Argentina should meet its debt default with serious answers rather than conspiracy-laden propaganda.

Building on Trust: Why the US Isn't Getting Very Far in Israel

Israel and Hamas are, by all accounts, at war in Gaza. US Secretary of State John Kerry is in the Middle East, frantically working with Israelis and Egyptians to nail down some sort of halt to hostilities, since the United States cannot work directly with Hamas - a designated terrorist organization. He's not getting very far and it's not entirely surprising. 

(Source: Jack Guez/AFP/Getty Images via The National Post)

Kerry next travels to France, where anti-Semitic rioting has flared in recent days, to attempt to gain support for a ceasefire among European leaders. Earlier, the Israeli cabinet rejected Kerry's ceasefire proposal, which the US has since downplayed as a disagreement on final wording - that no proposal was formally put forth. Part of that rejection involves Israel asserting its objective to continue to destroy tunnels during any ongoing ceasefire. Nonetheless, Israel and Hamas have agreed to a 12-hour humanitarian ceasefire, beginning at 8 AM local time.

It's not shocking to see Israel and the US disagree lately; there's very little substance to the US-Israel relationship under the Obama administration. In fact, it could be argued that there's likely no trust at all among leadership in the two countries. Just this past week, Kerry was caught criticizing the Israeli operation in Gaza. In backtracking, Kerry could only come up with the something trite: "...war is tough. We defend Israel's right to do what it is doing..." Well, of course. In 2011, at the G20 meeting, President Obama was also caught making an offhand remark about Israeli Prime Minister Benjamin Netanyahu, suggesting that he was "fed up with him" and perhaps even agreeing with then-French President Nicolas Sarkozy that Netanyahu was a liar. Earlier in 2011, Obama rebuffed meeting Netanyahu in the US, a surprise given the close US-Israel relationship in the past. The two have met as recently as this past March, with Netanyahu clearly stating that he would do nothing that would hinder Israeli national security. The two have spent more time attempting to lecture one another than to truly discuss options for peace.

The nonexistence of any legitimate relationship clearly undermines cooperative efforts to bring peace to the region. The damage done to the relationship may prove to solely be superficial - something a change in leadership on either side (or likely both sides) may correct. At the same time, the failure to secure any significant gains, not only in Israel, but in the greater Middle East as a whole, is a legacy that the Obama administration does not desire. In addition to the current Israeli-Hamas war, there are wars, on one level or another, in Syria, Iraq, Libya, Yemen, and Mali and political strife in Egypt, Tunisia, Turkey, Bahrain, and Iran (I'm sure I missed some). The toll in Syria alone may be as high as 160,000, not something that history or the administration can (continue to) easily brush aside.

The only options that remain during Obama's final few years in office are to make significant and serious decisions. The Washington Post suggests disarming Hamas; after all, how many political parties typically have a military wing (though it is important to note that some have in the past, including Israeli ones). Such bold action will not be easy, but any easy solutions have long since passed. It is time to make difficult decisions that bring change. Only with change can there be peace.

Bahrain Expels U.S. Diplomat

Earlier this week, Bahrain, which has been criticized for its response to demonstrations during the Arab Spring, ordered the expulsion of U.S. diplomat Tom Malinowski after he dared to meet with an opposition political party. Ironically, Bahrain attempted to reaffirm its relationship with the U.S. at the same time, while the U.S. Department of State rebuked Bahrain's position and request.

This incident is an opportunity for the U.S. to reaffirm its commitments to human rights and the political process in all countries, even those that may be strategic or military allies. In agreement with the Washington Post editorial, failing to make policy positions clear could encourage other nations to challenge U.S. priorities. Otherwise, the U.S. should just as well and give up on the moral high ground that it sometimes claim to lead.

Not (Yet) Safe: The Karachi Airport

The details remain sketchy and the perpetrators remain mysterious, but the terrorist attack has been rebutted and the intent is clear: ten terrorists attempted to take over the Karachi, Pakistan airport. All ten are now (supposedly) dead (interesting to note that hospitals remain on high alert in the area); however, the attack once again raises concerns about safety and security in Pakistan. Up to 13 others were killed, including security forces and airline staff, in an attack that took upwards of five hours to subdue.

(Jinnah International Airport, Karachi, Pakistan, Source: Wikipedia)

Jinnah International Airport in Karachi is Pakistan's largest and busiest airline hub for both passengers and cargo. Gunmen stormed past security, possibly by might, possibly by deception, possibly both, through the cargo section of the airport, which is housed in the old terminal complex.

The attack, though unsuccessful, brings to light the precarious security situation in Pakistan. How could an airport in a city of over 20 million and a country with strong military and security apparatuses come under such brazen attack by a detachment of ten? With airport security high on the list, reviews of cargo operations and security deficits in outdated terminals will undoubtedly become prioritized around the world.

At the same time, Pakistani military operations to flush out Taliban terrorists from Waziristan may intensify as part of a tit-for-tat game that has been ongoing for years. In fact, the military had warned of a possible attack in response to its own recent incursion. Moving forward, will Pakistan choose retribution, or will the nation's leaders opt to take a page out of Sri Lanka's book, and end the strife once and for all, regardless of the political, economic, and social costs? Neither option is particularly pleasant.