Philippa Kaur

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    Joe Biden Faces Many Challenges in Latin America

    Donald Trump, the 45th US president, broke with decades of a relatively bipartisan foreign policy consensus by wreaking havoc on US bilateral relations with China and the European Union. Latin America was an exception to the Trump playbook.

    It is true that US relations with Mexico were rocky during the beginning of the Trump administration. Immigration from Central America and Mexico was a bone of contention. Paradoxically, despite a tumultuous beginning, both leftist Mexican President Andres Manuel Lopez Obrador and Trump found a strong common ground to work together. In fact, Lopez Obrador developed a close relationship with his US counterpart.

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    The Mexican president might even have wanted Trump reelected. AMLO, as Lopez Obrador is popularly called in Mexico, took longer than most world leaders to recognize Joe Biden’s election victory in November 2020. Curiously, AMLO and Brazilian President Jair Bolsonaro recognized Biden’s win after hesitating for six weeks and receiving much criticism. The AMLO-Trump camaraderie indicates that Trump made no radical break in US policy toward Mexico despite his inflammatory rhetoric.

    The same holds true for Venezuela. Trump regularly called for action against this oil-rich nation and threatened military intervention, but the main thrust of his policy was to tighten sanctions imposed by his predecessor, Barack Obama. Only with Brazil and Colombia did Trump change US policy somewhat. Trump saw Bolsonaro as a fellow populist of the right and embraced the Brazilian leader in a manner previous administrations would not have. Trump was also very supportive of the right-wing government of Colombia because of ideological reasons. 

    What Issues Need Urgent Attention?

    Unlike US policies toward the EU, China and Iran, President Biden’s Latin America policy does not need radical redefinition. Yet the Biden administration will have to address some issues in the short term and others in the medium or long term. 

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    There are three pressing short-term issues in the region that will require Biden’s attention. The first is the US border problem with Mexico. If Mexican authorities stop the flow of immigrants from Central America, the United States will have less of a crisis on its southern border. The second issue is the shoring up of weakened regional institutions, especially the Organization of American States (OAS) and the Inter-American Development Bank (IADB). The third issue involves developing a comprehensive policy to manage the Venezuelan crisis. 

    The first issue involving the southern border has reached crisis proportions because Mexico and Central American states have responded inadequately to the COVID-19 pandemic. There is also a public perception in these countries that the US will pursue a more open-border policy under Biden, leading to immigrants flocking to the US. The border issue has dented Biden’s popularity and many Americans believe it has not been handled well. In fact, March was the worst month in US history regarding the number of child refugees knocking at the US border. It was nearly 19,000 in that month alone.

    The key to any solution is held by Mexico. The country controls the flow of immigrants from Central America and can restrain people from reaching the US border. During the last three years of the Trump administration, the United States and Mexico had an informal agreement, as per which the latter served as a secondary gatekeeper for the US border. Mexico regulated the flow of immigrants to the US border and even absorbed significant numbers of migrants itself. This mechanism stopped as soon as Biden entered the White House. Mexico would use the resuscitation of this mechanism as leverage to gain concessions on other issues. 

    On December 29, 2020, the US Department of Homeland Security announced that Guatemala, El Salvador and Honduras had signed the Asylum Cooperation Agreement (ACA). The ACA was significant because more than 71% of migrants apprehended on the US southwest border came from these three countries. The ACA aimed to confront “illegal migration at the source” from a region in Central America that has come to be known as the Northern Triangle. Waves of migrants are fleeing poverty, violence and other challenges in this region and making their way to the US. The longer-term solutions that stop such waves of migrants will require resources to mitigate poverty and violence and will have to wait. 

    The second issue facing the Biden administration is restoring the influence of the OAS and the IADB. During the 1990s and the 2010s, these two organizations increased in importance. They were able to promote democracy and economic growth in the region. The OAS played a key role in political crises such as Peru in 1992 and Honduras in 2009. The Inter-American Human Rights Commission and Inter-American Court of Human Rights, two institutions created by the OAS, promoted and protected human rights in the American hemisphere. In recent years, both the OAS and the IADB have weakened.

    The late Venezuelan leader Hugo Chavez and his allies created new regional organizations to counter the OAS and the US. These organizations, such as UNASUR, ALBA and CELAC, sought to limit US influence in the region. Today, they have withered away. Yet the polarization in the region has chipped away at the credibility of the OAS. Its capacity to mediate in conflicts or mobilize the region on important issues has been affected. The OAS has been largely silent on the COVID-19 pandemic, raising questions about its irrelevance.

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    As well as the OAS, the IADB was born with very strong regional roots. By the end of the 20th century, the bank incorporated new members from outside the region. European nations, Japan and even China joined the IADB. Political controversies have plagued the organization for years. In recent times, they have gotten worse.

    In 2019, Venezuela’s opposition leader, Juan Guaido, whom many countries recognized as interim president, appointed Harvard University economist Ricardo Hausmann as the country’s representative to the IADB. China sided with Nicolas Maduro’s Venezuelan regime and barred Hausmann from attending the IADB meeting in Chengdu. In response, the IADB canceled its meeting in China that was meant to mark its 60th anniversary. Needless to say, recent developments have weakened the IADB.

    The Biden administration will need to relaunch both the OAS and the IADB. Washington will have to restore their credibility and efficacy. Both organizations will be essential for solving the longer-term issues facing the region.

    The Venezuela Conundrum

    The third issue that the Biden administration has to address is Venezuela. As per many analysts, the country is on the brink of collapse. Criminal gangs and other armed non-state actors control not only remote parts of Venezuela but also shantytowns and working-class neighborhoods in the national capital, Caracas. The economy is in a dire state. US economic sanctions and reserves mismanagement have led Venezuelan oil production to fall to its lowest level since the 1940s.

    After low figures of infection in 2020, COVID-19 has now spiraled out of control. In per capita terms, Venezuela has vaccinated the least number of people in Latin America. Even Haiti is doing better. As per The Lancet, “Venezuela does not have a known national COVID-19 vaccine plan, and the supply of vaccines is spasmodic, insufficient, and unplanned.” The reputed publication also observes that “the health-care system has collapsed and is incapable of responding to the ever-increasing number of patients who require hospitalisation.”

    Maduro has rejected most plausible options for mass vaccination. Only the Venezuelan elite, Maduro’s close supporters and the regime’s Cuban advisers have been vaccinated. The government rejected a deal with opposition leader Guaido to import the AstraZeneca vaccine through the COVAX mechanism of the United Nations at the last minute. Despite popular clamor for mass vaccination, it is unclear how the process will advance even though the funding for vaccination is available.

    Hunger has been on the rise and diseases like malaria are back. Such is the dire state of affairs that Venezuelans are fleeing the country. Over 5 million of them have left. This has led to the worst refugee crisis in the Western Hemisphere and rivals the Syrian crisis. Countries in Latin America have largely been hosting these refugees, but they are increasingly overstretched. Emulating the Biden administration, Colombia has designated “temporary protected status” for Venezuela.

    The Maduro regime has lost control of the country. Its military strikes against armed groups are only exacerbating an already terrible situation. The military’s offensive against Colombian illegal armed groups near the Venezuela-Colombia border has led to more Venezuelans fleeing the country. Venezuela’s recent economic measures to revive the economy such as reversing Chavez’s total control over PDVSA, the state-owned oil company, and privatization of a selected number of state-owned enterprises have not worked. The government suffocates business and has no talent for economic management.

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    Paradoxically, the COVID-19 pandemic has benefited the government in one significant way. By imposing a radical quarantine, the Maduro regime and its cronies exercise tight social control over the population’s movements in areas of their control. After putting the ruling elite in a difficult position and isolating it internationally during 2019 and the first quarter of 2020, the opposition has run out of steam. Nominally led by Guaido, the opposition is highly fragmented and has failed to come up with a common strategy.

    Trump’s “maximum pressure” policy of using sanctions to topple Maduro’s regime did not work. Cuba, Russia and China have ganged up to support Maduro and ensure his survival even as Venezuela increasingly becomes a failed state. The Biden administration needs fresh thinking and a new strategy for a state that is threatening the stability and security of Latin America.

    What Are the Long-Term Challenges?

    If short-term prospects are grim for Latin America, then the mid-term ones are anything but rosy. The commodities boom that enabled the region to grow continuously for nearly two decades is over. This boom brought tens of millions out of poverty. As per the International Monetary Fund, Latin America bounced back from the COVID-19 in 2020, but the pandemic’s resurgence “threatens to thwart an uneven recovery and add to the steep social and human costs.”

    Countries like Peru, which managed to grow at high rates despite a dysfunctional political system, have plunged back into grinding poverty and, lately, political chaos. The prospects in most other Latin American countries are similar. Economic hardship will inevitably heighten social and political tensions. Over the last two decades, many protests that mushroomed across the region against corruption or injustice quietened as public services improved. When the pandemic recedes, these protests may come back with a vengeance, reclaiming the relative prosperity the people have lost.

    Economic woes might also create new perils for democracy. Already, there is a worldwide trend of declining democracy. In Latin America, countries like Brazil, El Salvador and Nicaragua are worrisome examples of this trend.

    Bolsonaro, the populist right-wing politician, famously won the Brazilian election in 2018 on an anti-corruption agenda that implicated a host of politicians, including former President Luiz Inacio Lula da Silva, who was the most popular politician in decades and whose policies brought millions out of poverty. Bolsonaro has rolled many of those policies back. More importantly, he has mishandled the COVID-19 pandemic. More than 490,000 Brazilians have died. This number is the second-highest after the US. With more than 17.5 million confirmed cases of COVID-19, Brazil ranks third-highest in the world. Protesters blame Bolsonaro’s disastrous policies from downplaying the threat of COVID-19 and opposing lockdowns to mishandling vaccination and causing the near-collapse of the health system.

    In El Salvador, President Nayib Bukele has strengthened his grip over the legislature and the judicial system. His party has voted to “remove the magistrates of the constitutional chamber of the Supreme Court.” Earlier, Bukele ordered heavily armed troops to occupy the parliament to pressure legislators into voting to better equip the troops. 

    If the threats to democracies in Brazil and El Salvador come from the right, those to Bolivia and Nicaragua come from the left. In Bolivia, former President Evo Morales began dismantling democratic institutions when he sought to win a fourth consecutive term in 2019. In doing so, he contravened the provisions of the constitution. Bolivians had voted against Morales’ attempt to amend the constitution so that he could run for a fourth term, but he got around this vote by appealing to the nation’s highest court that was packed with his cronies. After a disputed election, Morales fled to Mexico after the military asked him to stand down, and Jeanine Anez took over as interim president. Anez promptly set out to persecute and prosecute Morales and his supporters.

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    Another election followed in 2020 and the socialist candidate Luis Arce won. He had served as economy minister under Morales. As president, Arce has turned upon Anez and other political rivals. They have been arrested for participating in a coup against Morales. This cycle of political vendetta has left Bolivia highly polarized, and the country’s political crisis is far from over.

    In Nicaragua, the decades-long president, Daniel Ortega, just recently imprisoned the four most important contenders of the opposition, in practice moving into a one-party system. Mexico also faces challenges too, but in more milder forms.

    Finally, there remains the thorny issue of Cuba that every US president since John F. Kennedy has had to face. In 2016, Barack Obama tried to turn back the clock on the Cold War by visiting Cuba and inaugurating a new era of engagement. Trump reversed almost all of Obama’s policies. Now, Biden has to craft a new policy on Cuba, a country that remains influential throughout the region. Along with Venezuela, Cuba is a magnet for attracting the attention of the two big external powers: Russia and China. This tripartite meddling of Russia, China and the US in Latin America could sow instability in the region.

    Already, Cuba is facing its worst economic crisis since the fall of the Berlin Wall in 1989. The new generation of Cubans has lost faith in the communist regime. The Cuban leadership is going through a highly choreographed transition of power to a younger generation. Given the flux, the Biden administration would be well advised to bide its time. Eventually, it may want to craft a new policy that avoids the bitter confrontation of the Trump era and the open engagement of the Obama years.

    In the long-term, the Biden administration needs a robust OAS and a strong IADB to restore democracy and rebuild the economy in Latin America. The region will need a robust reconstruction plan once COVID-19 recedes. If the US ignores Latin America, Russia and China will continue to make inroads. They will undermine the relative stability Latin America has enjoyed for the last few decades. Biden has no choice but to pay attention to a region that lies in the same hemisphere as the US and remains crucial to American strategic calculus.

    The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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    NATO’s New Challenge in East Asia

    US President Joe Biden used the occasion of his trip to Europe for the G7 summit to attend his first NATO meeting. His influence on the meeting appeared unambiguously when a communiqué by the NATO alliance designated China’s influence on the world stage as a military challenge. 

    NATO was born in the aftermath of the Second World War as the West’s response to the ambitions of the Soviet Union, which controlled large portions of Eastern Europe and represented an ideology considered inimical to Western political and economic culture. This gave rise to the Cold War, framed as the rivalry between two systems of social and economic organization: capitalism (supported by democracy) and communism (the dictatorship of the proletariat).

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    Because humanity had entered the nuclear age, the Cold War cultivated a permanent and universal feeling of potential terror, unlike tensions and wars of the historical past. Its name, “Cold War,” has been attributed to George Orwell, who didn’t live long enough to see how it would develop. The author of “1984” imagined “two or three monstrous super-states, each possessed of a weapon by which millions of people can be wiped out in a few seconds.” In the end, there were only two major players. The laws of hyperreality, just like the laws of conventional information technology, require reducing the governing logic to a binary opposition. The age of quantum logic, which humanity is only just now discovering, had not yet begun.

    The Cold War was cold in relative terms, simply because the heat that a real nuclear war might produce would have dwarfed anything humanity had ever experienced. As soon as a nuclear war started it would be over, as no one would be left standing. This too reflected the binary logic of the time. There were exactly two choices: hot war or cold war. There could be no warm war between the two proud rivals. A cold war was clearly preferable in the eyes of anyone who wielded power. The leaders in the US understood how to profit from that preference. It justified the creation and rapid growth of a powerful military-industrial complex at the core of the American empire.

    The Cold War marked a moment of history in which military technology was undergoing its most radical paradigm change, thanks to the invention of nuclear weapons in the US and their capacity for devastation demonstrated by their operational deployment in Japan that put an exclamation point on the end of the World War. The entire world became gripped in a state of permanent fear, attenuated only by the sense that because no leader would likely be suicidal enough to engage in open conflict, the actors of the economy were free to realize their boldest ambitions.

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    In the West, the Cold War produced an odd cultural effect of “carpe diem,” the feeling that it was necessary to “seize the day” and have fun, because there may be no tomorrow. This feeling drove both the rapid growth of the consumer society and the cultural liberation movements we associate with beatniks and hippies. It also proved fatal for the Soviet Union’s false utopia of worker solidarity that depended on accepting austerity for the good of the collectivity.

    NATO should have become obsolete after the fall of the Soviet Union in 1989. But the camp built around the clout of the US military-industrial complex could not simply be dismantled and put to pasture. Two presidents, George H.W. Bush and Bill Clinton, had little choice but to maintain NATO because the entire US economy now revolved around the logic of the military-industrial complex.

    That militarized economy had become the key to installing a global, neocolonial system capable of replacing Europe’s colonial system that was in the decades following World War II. Because it was industrial as well as military, it spawned the technologies that began to dominate the global economy. These new technologies conveniently straddled the pragmatic (civil applications) and the political (military applications), providing a new motor for the late 20th economy that we all live under today.

    Though NATO had lost its initial geopolitical justification, it continued to operate as a pillar of the new military-economic system. It influenced the evolution of the formerly isolated regime of communist China, destined to become a major actor in the global economy. There was only one model for any large nation that wished to participate effectively in the global economy. It had to encourage capitalism and have its own military-industrial logic. China has succeeded, thanks to the global consumer market spearheaded by the US. For various reasons, India, which might have moved in that direction, failed.

    NATO now finds itself in an odd position. Contested by the mercurial Donald Trump, its members greeted with a sigh of relief the electoral victory of a conventional Cold War establishment politician, Joe Biden. For the past five years, Biden’s Democratic Party has sought to revive the ambience and ethos of the Cold War, focusing on Russia. But Russia simply isn’t a serious rival of the US. Both major US parties have designated China as the bugbear to focus on. But China falls way outside NATO’s “North Atlantic” purview.

    Nevertheless, Biden appears to have persuaded NATO to include China in its official discourse. The communiqué from this week’s meeting makes the case: “China’s stated ambitions and assertive behaviour present systemic challenges to the rules-based international order and to areas relevant to Alliance security.”

    Today’s Daily Devil’s Dictionary definition:

    Systemic challenge:

    A politically correct euphemism for “serious threat,” applied to anything that calls into question the weaknesses and vices of an existing system, especially when that system’s weaknesses and vices have become dramatically visible

    Contextual Note

    The unresolved pandemic that has been raging for nearly a year and a half and the growing crisis of climate change have created a situation in which the system now being challenged has been found seriously wanting. Defending the status quo has become an ungratifying task. All lucid observers agree that the political and economic system inherited from the 20th century needs either to evolve radically or be replaced by something new. 

    It is equally clear that Beijing has no alternative system to propose. This is partly because China’s success is due largely to its adaptation to and integration within the system being challenged, but equally because the Chinese system of autocratic communism is a failed model itself and the Chinese themselves know it.

    NATO worries about China’s “stated ambitions and assertive behaviour.” But in reality, its ambitions appear modest and the behavior, while certainly assertive, cannot compare with the historically aggressive behavior of the US, so clearly demonstrated in Korea, Vietnam and the Middle East.

    Historical Note

    As for the “systemic challenges to the rules-based international order,” the rules that existed at the time of the creation of the United Nations and the establishment of the Bretton Woods system have long been challenged by the Western powers, to the point of being distorted beyond recognition.

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    Even the reference to “areas relevant to Alliance security” needs to be put in historical perspective. NATO is nominally focused on one area in the world: the North Atlantic. But for the past two decades, it has ventured further and further, not only into Eastern Europe, but also Afghanistan, presumably turning Central Asia into an area of “Alliance security.” With the political turmoil that emerged in 2016 in both the US (Donald Trump) and Europe (Brexit), there should be enough to feel insecure about within NATO’s traditional sector of the North Atlantic. Reaching out to China’s area of influence would be a real stretch.

    It’s true that China’s Belt and Road Initiative (BRI) seeks to extend its influence across both Asia and Europe. This could be interpreted as potentially encroaching on the North Atlantic military fiefdom. But the BRI’s character is economic and clearly not military. It is soft power rather than hard power.

    Most lucid observers in the West, conscious of the current system’s growing incapacity to deal with any global problem — whether it’s a pandemic, war, migration, domestic tranquility or climate change — find themselves looking for something that could be called a “systemic challenge” to the current unproductive and often unjust system of doing things. At the end of the day, the systemic challenge at home will likely have more impact than China’s.

    *[In the age of Oscar Wilde and Mark Twain, another American wit, the journalist Ambrose Bierce, produced a series of satirical definitions of commonly used terms, throwing light on their hidden meanings in real discourse. Bierce eventually collected and published them as a book, The Devil’s Dictionary, in 1911. We have shamelessly appropriated his title in the interest of continuing his wholesome pedagogical effort to enlighten generations of readers of the news. Read more of The Daily Devil’s Dictionary on Fair Observer.]

    The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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    UAE Diplomats Accused in International Gold Smuggling Syndicate

    The United Arab Emirates is one of the world’s major gold trading hubs. In 2019, it was the fifth-biggest importer and fourth-biggest exporter globally. During the COVID-19 pandemic, international demand has surged. But as Reuters reported in 2019, much of this gold is smuggled from West Africa and produced by artisanal and small-scale gold mining, a trade that funds armed conflict, costs producing countries in lost tax revenue and has significant consequences on public health and the environment.

    This is a story that has long been in the public domain: In 2020, the Financial Action Task Force published a report that stated: “The UAE’s understanding of the risks it faces from money laundering, terrorist financing and funding of weapons of mass destruction is still emerging … The risks are significant, and result from the UAE’s extensive financial, economic, corporate and trade activities, including as a global leader in oil, diamond and gold exports.”

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    In 2018, a UN report stated, “In every state [in the Economic Community of West African States region], it was reported that most of the gold exported from the region is destined for Dubai. Most of this gold is thought to be exported by plane; gold is thought to be smuggled, for the most part, out of the region through airports.”

    The UAE authorities have been facing increasingly strenuous calls to clean up their bullion trade. In 2019, an International Crisis Group report called on them to ensure income from the gold trade is not used to finance terrorism. In December 2020, the UK Home Office national risk assessment stated: “These deficiencies expose the UAE, and other countries, to abuse by international controller networks which continue to launder the proceeds of crime to and from countries including the UK. These criminal networks exploit features of the UAE’s laws and systems, in order to move cash and gold easily into and out of the country, as well as engage in money laundering through the UAE property market, international trade, and newer areas such as crypto assets.”

    Last year, the London Bullion Market Association (LBMA), the world’s most influential gold market authority, threatened to stop UAE bullion from entering the mainstream market if it failed to meet regulatory standards. Since gold was the UAE’s largest export after oil in 2019, a trend that in a post-oil age looks only set to grow, the authorities responded by quickly pledging support for an LBMA initiative in December 2020 to crack down on illegal gold trading and improve regulation around issues like money laundering and unethical sourcing.

    Gold Discovered in India

    But recent developments in a court case in India are once again calling into question the UAE’s commitment to clean up its bullion trade. In June 2020, Indian customs discovered over 30 kilograms of gold worth — at the official market rate — more than $2.1 million. The gold was found in diplomatic baggage addressed to the UAE Consulate-General Office in Thiruvananthapuram, the capital of the southern Indian state of Kerala; it had been listed as bathroom fittings, noodles, biscuits and dates. The subsequent investigation has opened a Pandora’s Box of organized crime that has already led to around 30 arrests, including a host of alleged facilitators, financiers, gold traders, former employees of the UAE Consulate and a principal secretary to the Kerala chief minister.

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    The National Investigation Agency (NIA), which is India’s counterterrorism task force, and at least four other central government agencies are now conducting separate but related investigations into a US dollar smuggling operation from Thiruvananthapuram airport to Cairo via Muscat. The operation was allegedly run by the former UAE Consulate Finance Department head, Khaled Ali Shoukry, an Egyptian national. The other investigations involve corrupt schemes related to various local government projects in Kerala, including the Wadakanchery LIFE Mission housing project, which is funded by the UAE Red Crescent, and the Kerala Infrastructure Investment Fund Board.

    This is the first time UAE diplomats have ever been publicly implicated in gold smuggling. Emirati authorities have promised to cooperate, claiming they were duped by their Indian and Egyptian staff. But the former UAE consul general, Jamal Hussain al-Zaab, and Admin Attaché Rashed Khamis Ali Musaiqri both fled home last year before they could be questioned and are now claiming diplomatic immunity.

    However, a steady stream of information has been coming to light through disclosures in Kerala High Court. The NIA said 150 kilograms of gold was smuggled through Thiruvananthapuram airport in the last six months in a similar fashion, and most of the money was used for funding terrorism. According to sources quoted in Indian media, over 20 such consignments allegedly came to India from Dubai since September 2019, around 19 of which were addressed to the UAE consul general and one was in the name of the admin attaché. At the same time, senior Indian politicians linked to the case were enjoying five-star trips to the UAE.

    The Claims

    In March, the political temperature rose significantly when two of the key accused, Indian nationals employed in the consular office, testified that the UAE consul general was personally involved in the criminal enterprise. Swapna Suresh, formerly the consul general’s Arabic-language translator, and another employee, Sarith P.S., stated in an affidavit that the consul general, as well as several senior Indian politicians, were aware of the gold and dollar smuggling activities and were coordinating illegal financial dealings under the cover of various projects run by the state government.

    “Swapna and Sarith [the accused] stated that it was a common practice among foreign nationals, including diplomats working at UAE Consulate, to carry currency notes above permitted limits. We suspect that they were engaged in hawala activities to fund smuggling of gold from Dubai to Kerala. Similarly, they also smuggled goods from abroad using diplomatic privileges and sold them in the Kerala market. Many Indian employees of the consulate were aware of such activities and they will be questioned soon” an Indian customs official reportedly said.

    The UAE consul general, Swapna alleged, split a 3-million UAE dirham ($817,000) commission for the Wadakkanchery project three ways between himself, Shoukry and her. Another accused claimed the consul general and Shoukry were carrying out illegal gold smuggling activities while working in the UAE Mission in Vietnam before coming to Thiruvananthapuram.

    The Indian Ministry of External Affairs recently issued permission to arraign the former consul general and admin attaché who served at the UAE Consulate in Thiruvananthapuram. “Both of them assisted Swapna Suresh and Sarith PS to clear the baggage containing gold that arrived from the UAE. They also were receiving remuneration as per the quantity of gold smuggling on 21 occasions. They are equally involved as other accused persons,” an Indian customs official reportedly said.

    *[This article was originally published by Arab Digest, a partner organization of Fair Observer.]

    The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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    Should Billionaires Be Taxed Differently?

    As a columnist for The Washington Post, Megan McArdle works for the Post’s owner, a man named Jeff Bezos. Over the past two decades, McArdle has had numerous other prestigious bosses. She boasts a solid career in high-level journalism, having worked for The Atlantic, Newsweek, The Economist and Bloomberg, among others. Bloomberg View’s executive editor, David Shipley, once called her “an extraordinary writer and thinker.”

    Early on, in 2001, McArdle broke onto the scene as the author of a blog, “Live from the WTC,” at a time when most people were not yet addicted to the internet and few even knew what the word blog meant. Making her mark as a blogger required one of two talents: the ability to come up regularly with remarkable scoops and cutting insights, or developing a shrill, brutally opiniated voice capable of irritating the right class of adversaries and resonating with a crowd of equally opinionated followers. McArdle long ago branded herself a libertarian. That quite naturally helped to define her as the second type of celebrated blogger. She has consistently lived up to that billing, even as an opinion writer for the revered Washington Post.

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    McArdle has now weighed in on ProPublica’s blockbuster scoop last week concerning the tax returns of the 25 richest Americans. New York Times editor Spencer Bokat-Lindell prudently commented: “Depending on your point of view, it was either one of the most important stories of the year or an invented scandal.” The Times author exposes the significant complications when wishing to address the issue of taxing the super-rich. He coyly conceals his own point of view. 

    In her column in The Washington Post bearing the title, “Think Twice Before Changing the Tax Rules to Soak Billionaires,” McArdle doesn’t hesitate to trumpet her point of view urbi et orbi. “Think twice” of course means: Read my article and stop complaining. She suggests that taxing the rich more would be undemocratic because it would mean treating them differently from other citizens. That would be an injustice. Her jibe, “soak billionaires,” suggests that taxing them would be torture similar to waterboarding.

    Then McArdle offers this: “We talk a lot about rich people ‘paying their fair share,’ but we’re rarely clear on what exactly we mean by that.”

    Today’s Daily Devil’s Dictionary definition:

    Fair share:

    An amount corresponding to the implicit rules of equitability that apply in any society that values solidarity, meaning that no such amount can be determined in a society with an ideological bias against solidarity

    Contextual Note

    McArdle may have been inspired by former UK Prime Minister Margaret Thatcher who, to the rhetorical question, “Who is society?” gave this response: “There is no such thing! There are individual men and women.” That means fairness is in the eye of the beholder. It also means all’s fair in love and war… and tax avoidance. In any case, the two ladies appear to share a similar train of thought. In the idea of “fair share,” it isn’t the concept of “fair” that upsets either of the ladies. It’s the idea of “share.” In McArdle’s mind, the noun “share” simply designates a unit of ownership in a corporation’s stock. Society, in this sense, is hardly different from a community of shareholders, some owning many more shares than others.

    The columnist speculates about what it would mean if the wealthy were taxed on the added value of the stocks they own. She imagines a melodramatic scenario in which “they might be forced to sell off stock of a business they spent decades building.” Shares cannot be shared, so they must be sold. That would be downright tragic because the builders might just stop building and then where would society be? But having made her melodramatic point, she doesn’t even try to imagine how such things would play out in the real world. Like Kurtz in Conrad’s “Heart of Darkness,” she simply invokes “The horror! The horror!”

    McArdle’s shock at the idea of entrepreneurs losing their life’s work makes no sense for two fairly obvious reasons. The first is theoretical, the second pragmatic. In theory, a wealthy person could be forced to sell stock to pay a percentage of capital gains. That person’s share of the company would be correspondingly diminished, but in almost all cases only slightly, since the tax would only represent a percentage of the gain in value. Owning 10% of a company valued at $1.5 billion is better than owning 12% of a company valued at $1 billion. In the long term, having to sell those more shares could end up reducing the person’s future wealth. It would not reduce their current wealth.

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    But because real billionaires tend to be well advised and own portfolios that allow them a wide range of options, they never make such sacrifices. Whether it is to buy a yacht or pay taxes, they rarely if ever liquefy any assets. They borrow against those assets, which has the added value of reducing their declared income on which they would normally pay taxes.

    For most people, income represents the money they must earn to survive or maintain a lifestyle. Because wealthy owners of businesses decide on their own remuneration, they avoid having a substantial taxable income by living lavishly off money they borrow from a bank and pay back with interest. The interest is the only “penalty” they pay for their prodigality. It is nowhere near what they would pay in taxes. It’s an ideal solution. Banks love lending money to the rich because there is zero risk. The wealthy avoid taxes. Their tax lawyers and accounts earn a decent fee. The society of ordinary taxpayers reaps no benefit other than whatever trickles down from the high profit margins of those who sell yachts and luxury goods.

    McArdle doesn’t want to know about such systemic truth. Instead, she returns to her imaginary vision of a system obsessed by its envy of the rich and intent on invoking the idea of fairness to constrain their freedom. She confesses that, “given a choice between letting billionaires spend fortunes reaching for the stars, or destroying those fortunes so that the rest of us don’t have to look at them, then personally, I’ll take the rockets.”

    Historical Note

    The rockets that Megan McArdle refers to are those that her boss, Jeff Bezos, is building thanks to his astronomic fortune, some of which he has invested in his space venture, Blue Origin. Is it a coincidence that she works for Bezos’ newspaper and that she uncritically assesses his personal indulgences?

    Her previous column, with the title “Why Aren’t We Talking More About UFOs?” clearly advances the interests of Blue Origin. The more concerned Americans are about alien invasions — whether from outer space, China or Russia — the more public money (provided by ordinary taxpayers) will be available to support Blue Origin, a company that is about to receive a gift offered by Congress of $10 billion to colonize the moon, even after losing out in a public bid to fellow billionaire Elon Musk’s venture, SpaceX. 

    McArdle probably thinks of Blue Origin as yet another example “of a business [Jeff Bezos] spent decades building.” His lobbyists have convinced the government to spend billions on it, while Bezos himself skirts his tax obligation. She complains that the argument demanding “‘taxes on untaxed capital gains’ is what you come up with if you just don’t think anyone should have enough money to be able to shoot themselves into space.” The “you” she refers to is ProPublica, which dared to make that case, and anyone else equally feeble-minded enough to begrudge billionaires their private pleasures. 

    Bezos’ ownership of the Post is paying off. When making the decision to buy the paper in 2013, he reasoned: “The Washington Post has an incredibly important role to play in this democracy. There’s no doubt in my mind about that.” Had he waited a year to consider the findings of a Princeton study published in 2014 with the title, “Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens,” he might have more accurately explained: The Washington Post has an incredibly important role to play in this plutocracy.

    *[In the age of Oscar Wilde and Mark Twain, another American wit, the journalist Ambrose Bierce, produced a series of satirical definitions of commonly used terms, throwing light on their hidden meanings in real discourse. Bierce eventually collected and published them as a book, The Devil’s Dictionary, in 1911. We have shamelessly appropriated his title in the interest of continuing his wholesome pedagogical effort to enlighten generations of readers of the news. Read more of The Daily Devil’s Dictionary on Fair Observer.]

    The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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    Modi’s BJP Lost to Mamata’s TMC Because of Bengali DNA

    In early May, the eastern Indian state of West Bengal went to the polls. The state elections attracted global attention. The BBC’s analysis of the election was headlined, “West Bengal Election: Modi Loses a Battle in the ‘War for Indian Democracy.’”

    Such attention to a state election is surprising. West Bengal is not the richest, the largest or the most populous state in India. Yet it has always been an important part of the country. The British started the colonization of the Indian subcontinent by winning the Battle of Plassey in 1757. Calcutta, or Kolkata as it is now called, was the capital of British India for more than a century. Of course, West Bengal did not exist then. Bengal was the name of the British province and included modern-day Bangladesh, Bihar and Orissa then.

    History Matters

    It was Bengali intellectuals such as Raja Rammohan Roy, Ishwar Chandra Vidyasagar, Bankim Chandra Chattopadhyay, Swami Vivekananda and Rabindranath Tagore who led the first Indian cultural renaissance. The founder of the Bharatiya Jan Sangh, the forerunner of the ruling Bharatiya Janata Party (BJP), was Syama Prasad Mukherjee, a Bengali. Manabendra Nath Roy, the founding father of Indian communism and the founder of the Mexican Communist Party, was Bengali too. So was Subhas Chandra Bose, India’s iconic freedom fighter who defeated Mahatma Gandhi’s candidate, in the party elections of the Indian National Congress.

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    Suffice to say, Bengal has played a larger than life role in the political and cultural life in modern India. Yet it is important to remember that this region has always sung to its own tune. Whenever a Delhi-based empire weakened, Bengal was the first province to sound the bugle of independence. Since independence, West Bengal has continued this timeworn tradition. Iconic chief ministers of West Bengal, such as Bidhan Chandra Roy and Siddhartha Shankar Ray, dealt with powerful Indian prime ministers such as Jawaharlal Nehru and his daughter Indira Gandhi as equals.

    The first sustained challenge to the Congress party came from West Bengal. It was here that the communists won a historic electoral victory in 1977 and remained in power until 2011. Bengal has thrived on an us-versus-them mindset vis-à-vis the national capital, New Delhi. Bengalis believe they have been wronged by New Delhi and have to retain their independence from India’s overbearing capital. In this narrative, West Bengal is the last bastion standing against the invaders from the north, and this is the essence of Bengali pride.

    Mamata Banerjee overthrew the longstanding communist government in 2011 and has been in power since. She is a feisty leader whom her admirers call “Didi,” a Bangla word for elder sister. This spinster in Kolkata has taken on the bachelor in New Delhi and won. Fittingly, a meme doing the rounds on social media adapts Asterix to Indian political lore: “One small state of Ben-Gaul still holds out against the invaders. And life is not easy for the Gow-Man believers who make the camps of Fascism, Hindutvam and Religious Extrememum…” Other variants spoke about Ben-Gaul holding out against the all-conquering North Indian invaders and their emperor, “Modius.”

    How Ben-Gaul Knocked out the BJP?

    Before the election, many deemed Banerjee’s victory in West Bengal unlikely. Two BJP members of parliament confidently told one of these authors that their party was headed to a victory. Banerjee’s All India Trinamool Congress, abbreviated as TMC, was facing local anger. Many accused the TMC of “misgovernance — including corruption, nepotism and high-handedness— seemed” to have put the party in peril. The BJP was promising Bengalis rapid industrialization and high growth after years of economic stagnation.

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    Banerjee’s right-hand man, Suvendu Adhikari, decamped to the BJP, as did many other key party members. In fact, Adhikari went on to defeat Banerjee in Nandigram, her own constituency. When the dust settles, it is clear that the BJP had reasons to be confident. Yet India’s ruling party led by Prime Minister Narendra Modi was stung by Didi’s ferocious counterpunching and was eventually knocked out. What happened?

    First, the BJP did not announce a local chief ministerial candidate. It did not promote any “son-of-the-soil Bengali leader” and even mighty Adhikari was left to play a supporting role to Modi. In India’s largest state of Uttar Pradesh (UP), this strategy had worked. In West Bengal, the strategy backfired. The mother of one of the authors grew up in Kolkata and presciently remarked that Modi’s speeches in Hindi would not go down well among a people with immense linguistic pride. Modi did not even use an interpreter to translate his speeches into Bangla. Banerjee portrayed herself as the local Didi and slammed the BJP as outsiders insulting Bengali pride and even identity. It turns out that her narrative resonated with the voters.

    Second, the local BJP leaders acted sycophantically. This was not in keeping with the Bengali traditions of local leaders acting as equals of leaders in New Delhi. Bengalis feared that the BJP would reduce West Bengal into vassal status. The historic suspicion of Gujaratis and Marwaris, the trading castes who once collaborated with the British, also kicked in. Modi and his chief aide, Amit Shah, are both Gujaratis. When local leaders invoked the two national leaders repeatedly as Modiji and Amitji, they offended Bengali sensibilities and triggered old suspicions.

    Third, the BJP failed to take into account the legacy of India’s first cultural renaissance. This intellectual, social and cultural movement that began in the late 18th century and continued till the early 20th century continues to shape the Bengali ethos. It challenged pernicious customs such as caste, dowry and sati, the burning of wives on their husband’s pyres. Inspired by secularist, modernist and humanist ideals, Bengali intellectuals set out to modernize not only Bengali but also Indian society. Middle-class Bengalis have long seen themselves as “bhadralok,” well-mannered persons. Modi himself constantly pays homage to Swami Vivekananda, a charismatic Bengali spiritual figure. Yet he was unable to appeal to the bhadralok legacy of West Bengal. Too many Bengalis saw Modi as peddling a revanchist version of Hinduism that they had fought hard to reform.

    A case in point is the BJP’s crusade against the consumption of beef. Unlike much of India, meat eating has never been taboo in the Bengali tradition. Even saints have not ordained against eating meat or fish. West Bengal remains one of the few states where beef is freely sold. The BJP used strategies that worked elsewhere in states like UP and Bihar. The party failed to keep its finger on the unique Bengali pulse that beats to a more self-proclaimed liberal rhythm. The caste-based politics by the BJP had limited success, as did the specter of moral policing as under UP’s hardline Hindu chief minister, Yogi Adityanath.

    Fourth, the BJP’s narrative of local Hindus getting subsumed by Bangladeshi Muslim immigrants failed against the TMC’s narrative of New Delhi reducing Kolkata to feudatory status. Under Banerjee, Bangladeshi immigration has increased and caused unease among many voters. Yet there is a strong linguistic and regional identity in West Bengal. The partition of 1947 has not cast such a bitter memory as in Punjab. Bangladesh itself broke away from Pakistan in 1971 on linguistic grounds. Bengali pride trumped Hindu identity at least this time around.

    Fifth, Banerjee deserves much credit for campaigning with great energy and a clear message. West Bengal has done well in reducing poverty and achieving higher agricultural growth than in the rest of the country even if overall economic growth has been low. Also, Banerjee’s schemes for the rural poor and women have won her much support. Modi has won a majority of the women’s vote because of his last-mile welfare programs. Here, Banerjee won most of the women’s votes in a fundamentally matriarchal society that worships the goddesses Durga and Kali. 

    Finally, there is a politically incorrect point that analysts often overlook. One of the authors is Bengali and can attest that bhadralok culture has prized learning over wealth. In part, this might have been a defense mechanism to cope with the poverty the British inflicted on this part of the world. In part, this might be a reaction to the Marwari pursuit of wealth by collaborating with the British. To this day, many Bengalis distrust Gujaratis and Marwaris, whom they see as money-grubbing soulless creatures. The older generation still professes wistful love for the old multinational firms that dominated Kolkata till the 1970s such as Burn Standard, Andrew Yule and Balmer Lawrie. 

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    Arguably, the Bengali distrust of money has led to low growth in the state. The Bengali diaspora around the world wax lyrical about the preservation of their distinctive “Bangaliyana” and how they are culturally different from the rest of India. Yet, unlike Gujaratis, very few Bengalis invest in their home state. They invest in West Bengal only when they return to retirement in Kolkata. Like many cities in Italy, Kolkata is becoming a city of geriatrics with the young leaving in droves for jobs elsewhere.

    Even in 2021, Bengalis tend to be employees, not entrepreneurs. They flock to all parts of India and indeed much of the world to work as doctors, lawyers, accountants, academics, administrators and more. In the last few years, startups have taken off in India, including economic backwaters like Kerala and Odisha. Yet West Bengal still lacks any meaningful startup culture.

    The BJP’s constant championing of development, industrialization and growth might have rubbed off this deep-seated suspicion of entrepreneurship, business and wealth in the Bengali psyche. It did not help that Modiji and Amitji were Gujaratis spouting Hindi in a state that is proud of its distinctness from India. As mentioned earlier, the province of Ben-Gaul has historically been the first to secede from pan-North Indian empires. No wonder Didi beat Modi.

    The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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    Saudi Seeks to Replace UAE and Qatar

    Saudi Arabia has stepped up efforts to outflank the United Arab Emirates and Qatar as the commercial, cultural and/or geostrategic hub in the Gulf. The Saudis recently expanded their challenge to the smaller Gulf states by seeking to position Saudi Arabia as the region’s foremost sports destination, once Qatar has had its moment in the sun with the 2022 FIFA World Cup. The kingdom seeks to secure a stake in the management of regional ports and terminals, which have so far been dominated by the UAE and, to a lesser extent, Qatar.

    The kingdom kicked off its effort to cement its position as the Middle East’s behemoth earlier this year. In February, Saudi Arabia announced it would cease doing business by 2024 with international companies whose regional headquarters were not based in the country. 

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    The UAE ranks 16th on the World Bank’s 2020 Ease of Doing Business Index as opposed to Saudi Arabia at number 62. As a result, freewheeling Dubai has long been the preferred regional headquarters of international firms. The Saudi move “clearly targets the” United Arab Emirates and “challenges the status of Dubai,” said a UAE-based banker.

    Saudi Arabia is a latecomer to the port control game, which is dominated by Dubai’s DP World. That company operates 82 marine and inland terminals in more than 40 countries, including Djibouti, Somaliland, Saudi Arabia, Egypt, Turkey and Cyprus. The kingdom’s expansion into port and terminal management appears to be less driven by geostrategic considerations. Instead, Saudi Arabia’s Red Sea Gateway Terminal (RSGT), backed by the Public Investment Fund (PIF), the Saudi sovereign wealth fund, said it was targeting ports that would service vital Saudi imports, such as those related to food security.

    In January, PIF and China’s Cosco Shipping Ports each bought a 20% stake in RSGT. The Chinese investment fits into Beijing’s larger Belt and Road Initiative (BRI), which involves the acquisition of stakes in ports and terminals in Saudi Arabia, Sudan, Oman and Djibouti, where China has a military base.

    Jens Floe, the chief executive officer of RSGT, said the company planned to invest in at least three international ports in the next five years. He said each investment would be up to $500 million. “We have a focus on ports in Sudan and Egypt. They weren’t picked for that reason, but they happen to be significant countries for Saudi Arabia’s food security strategy,” Floe said.

    Saudi Sports

    Saudi Arabia’s increased focus on sports, including a possible bid to host the 2030 World Cup, serves multiple goals. First, it offers Saudi youth, who account for more than half of the kingdom’s population, a leisure and entertainment opportunity. Second, it boosts Crown Prince Mohammed bin Salman’s burgeoning development of a leisure and entertainment industry. The Saudis believe this could allow the kingdom to polish its image tarnished by human rights abuse, including the killing of Saudi journalist Jamal Khashoggi in 2018, and challenge Qatar’s position as the face of Middle Eastern sports.

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    A recent report by Grant Liberty, a London-based human rights group that focuses on Saudi Arabia and China, estimated that Riyadh has invested $1.5 billion in the hosting of multiple sporting events. These include the final games of Italy and Spain’s top football leagues, Formula 1 races, boxing, wrestling and snooker matches, and golf tournaments. So far, Qatar is the Middle East’s leader in the hosting of sporting events, followed by the UAE.

    According to Grant Liberty, further bids for events worth $800 million have failed. This did not include an unsuccessful $600-million offer to replace Qatar’s beIN Sports as the Middle Eastern broadcaster of the UEFA Champions League. Saudi Arabia reportedly continues to ban beIN from airing in the kingdom, despite the lifting of the Saudi-Emirati-led diplomatic and economic boycott of Qatar in January.

    Oil Exports

    Mohammed bin Salman’s Vision 2030 plan to diversify and streamline the Saudi economy and ween it off dependency on oil exports “has set the creation of professional sports and a sports industry as one of its goals,” said Fahad Nazer, spokesperson for the Saudi Arabian Embassy in Washington. “The kingdom is proud to host and support various athletic and sporting events which not only introduce Saudis to new sports and renowned international athletes but also showcase the kingdom’s landmarks and the welcoming nature of its people to the world.”

    The increased focus on sports comes as Saudi Arabia appears to be backing away from its intention to reduce the centrality of energy exports for its economy. Energy Minister Prince Abdulaziz bin Salman, the crown prince’s brother, recently ridiculed an International Energy Agency (IEA) report, saying “there is no need for investment in new fossil fuel supply” as “the sequel of the La La Land movie.” He went on to ask, “Why should I take [the report] seriously?”

    Putting its money where its mouth is, Saudi Arabia intends to increase its oil production capacity from 12 million to more than 13 million barrels a day. This is based on the assumption that global efforts to replace fossil fuel with cleaner energy sources will spark sharp reductions in American and Russian production. The Saudis believe that demand in Asia for fossil fuels will continue to rise even if it drops in the West. Other Gulf producers, including the UAE and Qatar, are following a similar strategy.

    “Saudi Arabia is no longer an oil country, it’s an energy-producing country … a very competitive energy country. We are low cost in producing oil, low cost in producing gas, and low cost in producing renewables and will definitely be the least-cost producer of hydrogen,” Prince Abdulaziz said. He appeared to be suggesting that the kingdom’s doubling down on oil was part of a strategy that aims to ensure that Saudi Arabia is a player in all conventional and non-conventional aspects of energy. By implication, he was saying that diversification was likely to broaden Saudi Arabia’s energy offering, rather than significantly reduce its dependence on energy exports.

    “Sports, entertainment, tourism and mining alongside other industries envisioned in Vision 2030 are valuable expansions of the Saudi economy that serve multiple economic and non-economic purposes,” said a Saudi analyst. “It’s becoming evident, however, that energy is likely to remain the real name of the game.”

    The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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    How the Tech Giants Work for the Security State

    The United States proudly believes in its uniqueness as the one nation in this corrupt world that remains dedicated to the freedom of its citizens. That belief is part of the nation’s founding myth. Americans see their nation as representing an ideal, a model for all other nations to emulate. They continue to believe that their government is committed to their own unassailable freedom, even after the increasingly visible stranglehold over all of its institutions by the military-industrial complex, a process already well underway when President Dwight Eisenhower denounced it 60 years ago. 

    The takeover has been confirmed by numerous events, including a series of costly and futile wars in Southeast Asia and the Middle East. Despite the obvious lessons of recent history, Washington’s political class consistently demonstrates its inability to oppose policies that lead to more failed wars or to rein in an ever-expanding military budget. It would be more accurate to call the USA the UCA, the United Complex of America. Militarism in body and spirit defines its unity.

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    As a corollary of their conviction that their system of government represents an ideal the rest of the world should emulate, Americans believe that all other nations, even their Western allies, have less freedom. The populations of these nations willingly accept being ruled over by invasive governments that exercise unjustified control over their citizens’ lives, limiting their right to the pursuit of happiness.

    After all, every one of them boasts one form or another of the tyrannical practice known as “socialized medicine.” Most of them even have national identity cards, symbols of all-seeing, all-controlling administrations. Those two horrors — socialized medicine and identity cards — define cowardly peoples who have renounced their basic rights (including the right to arm oneself for rebellion), something Americans will always refuse to do.

    In an article detailing the complex relations between tech giants and law enforcement, three New York Times reporters reveal how, in the home of the brave and the land of the free, the citizens deemed to be brave have ended up accepting a truly invasive system they naively believe makes them free. Without having to invent a visibly centralized system of control, their government has perfected its strategies for spying on, managing and when necessary, directly controlling the lives of its citizens.

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    Thanks to the culture of the consumer society, the methods devised turned out to be simple to put in place. It begins with an immediately acceptable ideological principle that already applies to practically everything in the American way of life. The most powerful government in the world delegates an important part of the task of control to private enterprises. Just as American foreign wars, once prosecuted by a national, conscripted army, have veered toward the logic of mercenary armies, the US government’s surveillance — though clearly present in its vast, centralized intelligence community and security state — relies on private tech companies to provide the direct interface with its citizens. Distracted by the glitz, glamor and freebies offered by successful tech enterprises, the American people fail to recognize how they are being monitored and manipulated. 

    The hyperreal illusion is facilitated by Americans’ belief that because private companies are focused on profit, they, as the customers who enable the firms’ profitability, are in good hands. Profit, they have been taught, is the secret weapon that preserves apolitical virtue. Americans feel they can entrust every aspect of their life to companies like Google, Facebook, Apple, Microsoft and Amazon, who have no political agenda other than expanding the boundaries of citizens’ freedom by offering them access to platforms that, in turn, offer them more and more free or discounted goods and services.

    Focusing on the example of Apple, the Times article highlights the kind of ambiguity that exists when politically motivated persons of authority use that authority to subpoena not people, but the data collected by the admittedly greedy but supposedly politically neutral tech companies. Users have nothing to fear because the companies all have policies designed to protect the confidentiality of their customers’ data. It is written into their contracts.

    But in a world where the population has been told terrorism is always lurking in the shadows, law enforcement and national security sometimes need to access that data. They use the law to accomplish their goal. The companies, to respect their contract with users, have the right to refuse. “But more frequently than not,” the article tells us, “the companies comply with law enforcement demands. And that underlines an awkward truth: As their products become more central to people’s lives, the world’s largest tech companies have become surveillance intermediaries and crucial partners to authorities, with the power to arbitrate which requests to honor and which to reject.”

    Today’s Daily Devil’s Dictionary definition:

    Surveillance intermediaries:

    Supposedly uninvolved, neutral bystanders who have been given the task of hoarding the data that can be used, when needed, to restore order or achieve any other ends deemed essential to the security of those in power.

    Contextual Note

    These practices are now being exposed in the courts. According to the understanding Americans have of a democratic system based on the subtle play of “checks and balances,” freedom and justice, even when challenged, will always prevail. Or will they? It is one thing to know how the system was designed. Another is to understand how it works.

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    The Times reporters reveal that “more frequently than not, the companies comply with law enforcement demands.” The number of those requests “has soared in recent years to thousands a week.” Analyzing the statistics, they note that over a six-month period in 2020, for example, Apple challenged 238 demands. That corresponds to 4% of the total. Blind compliance with the government thus occurs 96% of the time. That translates as the same figure for non-compliance with the terms of their own contract with their customers.

    President Joe Biden’s attorney general, Merrick B. Garland, justifies this arrangement, not because it is founded in law but because it is the result of “a set of policies that have existed for decades.” Blame it on tradition. Or rather don’t blame it at all. That is the ransom people pay to their need for security. The article describes the use of “gag orders that authorities placed on the subpoenas.” Apple and Microsoft agreed, under constraint, not to inform those whose information was targeted. “In Apple’s case, a yearlong gag order was renewed three separate times.”

    Historical Note

    In 2013, Edward Snowden revealed to the world that the US spies on its own citizens. The shock of 9/11 put in place a state of permanent paranoia that allowed Americans to accept any measure proposed to protect them from terrorists. All the data that exists about the citizens themselves, most of it now generated and stored by private companies, may play a role in controlling their behavior. It helps the government detect sedition and terrorism. For the companies, it is merely the key to generating profits by understanding and influencing the behavior of consumers.

    In recent years, the media have reported extensively on the social credit system China is currently putting in place. It appears to use invasive technology to produce the equivalent of George Orwell’s Big Brother in “1984.” For that reason, it is anathema to freedom-loving Americans. What the Times article reveals is that, contrary to China, whose government exclusively defines and operates the system, Americans get two surveillance operators for the price of one.

    If an intrusive government is the enemy of the people’s freedom, the Chinese at least have the advantage of knowing who the enemy is. In the US, where the government has set up a central system of what we might call “control of acceptable values” (i.e., values that do not lead toward terrorism), there is a second set of operators: the platforms that organize all the data that may prove useful to the needs of the central surveillance system. The people trust the companies, who are only interested in the cash advantages produced by citizens’ data. But the government is interested in everything else, from basic security to partisan political exploitation.

    Americans traditionally fear “big government,” a Godzilla-like monster that may be surveilling them. That fear is so deeply instilled, they will never notice, let alone fear surveillance intermediaries.

    *[In the age of Oscar Wilde and Mark Twain, another American wit, the journalist Ambrose Bierce, produced a series of satirical definitions of commonly used terms, throwing light on their hidden meanings in real discourse. Bierce eventually collected and published them as a book, The Devil’s Dictionary, in 1911. We have shamelessly appropriated his title in the interest of continuing his wholesome pedagogical effort to enlighten generations of readers of the news. Read more of The Daily Devil’s Dictionary on Fair Observer.]

    The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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    in World Politics

    A Modi-fied India Has Weakened on the World Stage

    Narendra Modi, the prime minister of India, has completed seven years in office. At the same time, his autocratic leadership has brought the simmering discontent in the foreign policy establishment out in the open. Some members of the Forum of Foreign Ambassadors of India signed an open letter slamming critics of Modi’s foreign policy. On May 31, the government notified the Central Civil Services (Pension) Amendment Rules, 2020, to further muzzle dissent by retired bureaucrats.

    Although rare, such vocal disagreements are not new in India. However, with its economy in shambles and a spate of downgrades by reputed international agencies on democratic values, human development, press freedom and hunger index, the foreign affairs discord will further diminish its global stature.

    India Is Slowly Evolving Into a Market Economy

    READ MORE

    Over the decades, India has seen several significant changes in the way it looks at the world. It went from the idealistic Non-Aligned Movement in the 1950s to a close relationship with the Soviet Union during the Cold War. Now, India has cozied up to the United States to form the Quad, a strategic partnership to counter China that also includes Japan and Australia. India also flirted with BRICS nations for a brief while to form a coalition of developing countries — Brazil, Russia, China and South Africa — which seems to be dying a quiet death.

    All along, India has prided itself in maintaining strategic autonomy. Modi’s megalomania made him believe that he would suddenly catapult India to global power status. Unfortunately, his terms in office have left a muddled mess in its wake.

    Strong Start

    In today’s world of modern warfare and geopolitics, which includes nuclear-armed neighbors in Pakistan and China, Modi’s early years saw inane chatter about “Akhanda Bharat,” the ruling Bharatiya Janata Party’s (BJP) term for undivided India. This idea seeks to regain ancient India’s lost glory by spreading Hinduism’s influence across South Asia. Barring such misplaced euphoria, Modi rode the wave of international goodwill to regularize the border with Bangladesh.

    In western Asia, the Middle East was warming up to Indian influence. Progress was made on a deal to develop Iran’s strategic Chabahar port, which would facilitate overland access to Afghanistan. In 2017, Modi became the first Indian prime minister to visit Israel. India has also improved its relationships with Saudi Arabia and the United Arab Emirates. Yet since the 2017 Doklam standoff on the India-China border that Modi’s team handled well, Beijing has succeeded in building more infrastructure in the region than New Delhi. Though it could also be considered a strategic tie. Despite US objections, the decades-old India-Russia defense partnership evolved from New Delhi being a technology buyer to the recipient of technology transfer and, finally, a defense research and development partner — an evolution that has continued under Modi.

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    India’s perpetual see-saw with Pakistan has continued throughout Modi’s tenure. His initial outreach by inviting then-Prime Minister Nawaz Sharif to his inauguration in 2014 and a surprise stopover in Lahore a year later quickly fizzled out. In 2016, Pakistan-based militants carried out terrorist attacks near the town of Uri in the Indian state of Jammu and Kashmir. In response, India conducted “surgical strikes” across the Line of Control (LoC), which separates the disputed Kashmir region. In 2019, Pakistani militants attacked Indian soldiers in Kashmir. For the first time since 1971, India entered Pakistani airspace to bomb locations that New Delhi claimed to be terrorist training camps.

    The situation between India and Pakistan did not change much. Tensions between the two countries persist. But Modi was reelected in 2019 on the promise of this altered equation of India swiftly and boldly following up on terrorist attacks by Pakistan-based militants.

    The reality was much more nuanced. Despite Indian claims and Pakistani counterclaims, international observers concluded that the two cross-border raids by India were not particularly effective. By blocking access to bombed sites, Pakistan’s side of the story seemed flimsy. However, Islamabad’s downing of an Indian fighter jet in February 2019 and capturing an Indian pilot, who was returned a few days later, appeared to expose holes in India’s defense preparedness. Nonetheless, Modi managed to isolate Pakistan globally and, in 2018, have it included in the gray list of the Financial Action Task Force, the global agency tracking terror financing.

    India’s relations with the West did not improve much. In Europe, other than the Rafale warplanes agreement in 2016, the Modi government was unable to make progress on the stalled trade deal with the EU. To be fair, Brussels was busy rebuilding after the Great Recession and the chaos caused by Brexit. Across the Atlantic, there was optimism in the air. During his final term, US President Barack Obama reluctantly embraced Modi. Later, the bonhomie between Donald Trump and Modi could not prevent a trade war.

    However, India-US defense and strategic cooperation strengthened as Modi built on the hard work of his predecessors, Atal Bihari Vajpayee and Manmohan Singh. The rising threat of China also played its part in developing this relationship. The 2015 agreement between Obama and Modi on nuclear liability issues was followed by a bilateral Logistics Exchange Memorandum of Agreement in 2016 and a Communications Compatibility and Security Agreement in 2018. The Quad seems to be a natural extension of this closer US-India partnership, India’s Act East policy and the Asian pivot of the United States.

    What Changed?

    After a reasonably strong start, Modi’s India has found itself in a muddle. India’s foreign policy failures closely follow the country’s economic decline since 2017-18 and steadily rising majoritarianism. Trump’s erratic, isolationist policies and India’s widening geopolitical deficit vis-à-vis China played a role, but most of Modi’s wounds are self-inflicted.

    For his narrow domestic agenda and to pass the Citizenship Amendment Act (CAA), Modi selectively gave a pathway to citizenship to non-Muslims from the neighboring countries of Afghanistan, Bangladesh and Pakistan. Because it excluded Muslims, even persecuted ones, from these countries, the CAA was criticized and deemed discriminatory.

    In doing so, Modi alienated Bangladesh, which is rapidly modernizing and leaving India behind on most human development and economic indicators. Bangladesh swiftly showed India its place through a diplomatic snub and demonstrated its desire to walk into China’s open arms. Sustained diplomacy over the past year, combined with Modi’s recent trip to Bangladesh and India’s donation of COVID-19 vaccines, repaired some of the damage. While cooling down the CAA rhetoric might help, India’s weakened economy could still push Bangladesh closer to China.

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    Under the Trump administration, the US held a tough stance against Pakistan over what it called “Islamabad’s failure to take action against militant groups.” Aid from Saudi Arabia also dried up due to strained relations between Riyadh and Islamabad. As a result, Pakistan is beholden to China. The China-Pakistan Economic Corridor (CPEC), which passes through Gilgit and Baltistan, a disputed region that both India and Pakistan claim sovereignty over, has cemented China’s grip on Pakistan. New Delhi has not approached the recent ceasefire agreement with Islamabad and the resumption of peace talks from a position of strength. Rather, it is a tacit admission by both weakened parties that peace is mutually beneficial.

    Relationships with the Arab world and Israel remain strong, but Modi has lost the plot with Iran and is losing some ground with Russia. Beijing recently signed a 25-year strategic deal with Tehran and, with its economic clout, is pulling the Kremlin into its sphere of influence. In the pre-Modi era, as a rising economic power, India managed to carve out exceptions for itself to bypass US sanctions against Iran and Russia. Throughout Modi terms in office, China has steadily widened the economic and geopolitical gap with India. New Delhi’s growing weakness vis-a-vis Beijing has resulted in India kowtowing to the US and losing its strategic autonomy.

    Britain’s need for trade partners following its departure from the European Union might lead to a favorable India-UK deal. But a free trade agreement between India and the EU has not seen any significant movement under Modi. US President Joe Biden does not seem to be in any rush to end the trade war his predecessor began with India.

    For all the buzz surrounding The Quad, India is the junior partner that has little to offer to others in terms of economic benefits. New Delhi will enhance its strategic and military cooperation with other like-minded democracies, but it is unlikely to intervene if there is a full-scale confrontation between India and China. Unless the Indian economy becomes efficient and tightly integrates itself with Quad countries, its usefulness to other partners will be limited to its size and strategic location.

    In the Cold War, the US aligned with autocrats and religious fundamentalists, most notably in China and Pakistan, to defeat the Soviet Union. In the new brewing cold war between Washington and Beijing, Quad countries will pay lip service to building democratic institutional capacity in India. However, if push comes to shove, they will partner with an authoritarian India to counter China, which will serve their narrow self-interests.

    India-China Relations

    Modi’s biggest foreign policy failure is India’s frayed relationship with China. His misplaced overconfidence forced him to reject conventional wisdom and embark on a charm offensive with Chinese President Xi Jinping. Modi ignored the Doklam warning and kept expecting Xi to treat India as an equal, despite the crumbling Indian economy. Meanwhile, China had already started reducing New Delhi’s sphere of influence through its outreach to India’s neighbors and offers of economic and strategic partnerships. In 2019, Modi scrapped Article 370 of the Indian Constitution to downgrade the state of Jammu and Kashmir to a union territory status. His deputy, Amit Shah, made unrealistic claims about taking back the China-controlled Aksai Chin. In response, Xi directly occupied Indian territory in Ladakh for almost a year.

    China’s strength and India’s decline are best captured through the different ways the countries approach bonds. China is selling its government bonds internationally at a negative interest rate despite a raging pandemic, ongoing border clashes with India and a 300% debt-to-GDP ratio. Indian bond investors are demanding higher yields even though India’s debt-to-DGP ratio is below 100%.

    With a sizable military and tactical superiority, India was unlikely to lose territory to China. However, through emergency weapons purchases during the Doklam standoff, India paid dearly for Modi and Shah’s hubris and prioritizing domestic politics over national interest.

    Weakened on the World Stage

    Through his speeches, photo-ops with world leaders and tweets, Modi keeps peddling lies and projecting strength to voters. While India’s financial health has deteriorated significantly, the BJP has raised — through anonymous electoral bonds — millions in political donations that fuel Modi’s formidable propaganda machine.

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    The world knows that India is run by a narcissist who has built a false domestic narrative of the country’s global standing to keep winning elections. The West will keep hoping that India gets its act together economically and stops destroying independent institutions so that it becomes a democratic counterweight to China. But that is a battle only Indian voters can lead.

    As India warms up to the Quad, where does it go from here? As a new cold war brews, lessons from the past are informative. While the US used China and Pakistan to dismantle the Soviet Union, China cleverly used its leverage to strengthen its economy and authoritarian communist rule. Meanwhile, Pakistan indulged its military and majoritarian religious leadership to destroy itself from within.

    With his dismantling of democratic institutions and promotion of religious bigotry, Modi has left Indian foreign policy in doldrums. If voters want it to become a vibrant, democratic counterweight to China and a global player that does justice to its potential, India will have to find a leader who understands that issues like a strong economy, independent judiciary and social stability cannot be divorced from its foreign policy but are integral to it.

    The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More