Jerusalem News 867. Views, Jews, Ten Tribes News
19 July 2009, 27 Tammuz 5769
Contents:
1. Iraq Suffers as the Euphrates River Dwindles
2. The 9/11 Families' Case Against the Saudi Princes and Me
by Daniel Pipes
3. Is Israel Relatively Safe Financially?
How 'Safe and Boring' Investments Saved One Nation From Financial Contagion
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1. Iraq Suffers as the Euphrates River Dwindles
http://www.nytimes.com/2009/07/14/
world/middleeast/14euphrates.html
By CAMPBELL ROBERTSON
Extracts:
 | The Euphrates is drying up. Strangled by the water policies of Iraq's neighbors, Turkey and Syria; a two-year drought; and years of misuse by Iraq and its farmers, the river is significantly smaller than it was just a few years ago. Some officials worry that it could soon be half of what it is now. |
The shrinking of the Euphrates...has decimated farms along its banks, has left fishermen impoverished and has depleted riverside towns as farmers flee to the cities looking for work.
The poor suffer more acutely, but all strata of society are feeling the effects: sheiks, diplomats and even members of Parliament who retreat to their farms after weeks in Baghdad.
Along the river, rice and wheat fields have turned to baked dirt. Canals have dwindled to shallow streams, and fishing boats sit on dry land. Pumps meant to feed water treatment plants dangle pointlessly over brown puddles.
The drought is widespread in Iraq. The area sown with wheat and barley in the rain-fed north is down roughly 95 percent from the usual, and the date palm and citrus orchards of the east are parched. For two years rainfall has been far below normal, leaving the reservoirs dry, and American officials predict that wheat and barley output will be a little over half of what it was two years ago.
It is a crisis that threatens the roots of Iraq's identity, not only as the land between two rivers but as a nation that was once the largest exporter of dates in the world, that once supplied German beer with barley and that takes patriotic pride in its expensive Anbar rice.
Now Iraq is importing more and more grain. Farmers along the Euphrates say, with anger and despair, that they may have to abandon Anbar rice for cheaper varieties.
Droughts are not rare in Iraq, though officials say they have been more frequent in recent years. But drought is only part of what is choking the Euphrates and its larger, healthier twin, the Tigris.
The most frequently cited culprits are the Turkish and Syrian governments. Iraq has plenty of water, but it is a downstream country. There are at least seven dams on the Euphrates in Turkey and Syria, according to Iraqi water officials, and with no treaties or agreements, the Iraqi government is reduced to begging its neighbors for water.
At a conference in Baghdad, where participants drank bottled water from Saudi Arabia, a country with a fraction of Iraq's fresh water, officials spoke of disaster.
"We have a real thirst in Iraq," said Ali Baban, the minister of planning. "Our agriculture is going to die, our cities are going to wilt, and no state can keep quiet in such a situation."
Recently, the Water Ministry announced that Turkey had doubled the water flow into the Euphrates, salvaging the planting phase of the rice season in some areas.
That move increased water flow to about 60 percent of its average, just enough to cover half of the irrigation requirements for the summer rice season. Though Turkey has agreed to keep this up and even increase it, there is no commitment binding the country to do so.
With the Euphrates showing few signs of increasing health, bitterness over Iraq's water threatens to be a source of tension for months or even years to come between Iraq and its neighbors. Many American, Turkish and even Iraqi officials, disregarding the accusations as election-year posturing, say the real problem lies in Iraq's own deplorable water management policies.
"There used to be water everywhere," said Abduredha Joda, 40, sitting in his reed hut on a dry, rocky plot of land outside Karbala. Mr. Joda, who describes his dire circumstances with a tired smile, grew up near Basra but fled to Baghdad when Saddam Hussein drained the great marshes of southern Iraq in retaliation for the 1991 Shiite uprising. He came to Karbala in 2004 to fish and raise water buffaloes in the lush wetlands there that remind him of his home.
"This year it's just a desert," he said.
Along the river, there is no shortage of resentment at the Turks and Syrians. But there is also resentment at the Americans, Kurds, Iranians and the Iraqi government, all of whom are blamed. Scarcity makes foes of everyone.
The Sunni areas upriver seem to have enough water, Mr. Joda observed, a comment heavy with implication.
Officials say nothing will improve if Iraq does not seriously address its own water policies and its history of flawed water management. Leaky canals and wasteful irrigation practices squander the water, and poor drainage leaves fields so salty from evaporated water that women and children dredge huge white mounds from sitting pools of runoff.
In the southeast, where the Euphrates nears the end of its 1,730-mile journey and mingles with the less salty waters of the Tigris before emptying into the Persian Gulf, the situation is grave. The marshes there that were intentionally reflooded in 2003, rescuing the ancient culture of the marsh Arabs, are drying up again. Sheep graze on land in the middle of the river.
The farmers, reed gatherers and buffalo herders keep working, but they say they cannot continue if the water stays like this.
2. The 9/11 Families' Case Against the Saudi Princes and Me
by Daniel Pipes
June 30, 2009
updated Jul 14, 2009
http://www.danielpipes.org/blog/2009/06/the-9-11-families-case-against-the-saudi-princes
The U.S. Supreme Court today declined to hear an appeal on a lawsuit brought by the families of 9/11 victims against Saudi princes whom they accused of helping the terrorists, thereby ending a legal process some seven years in duration. (In contrast, the case against several hundred Saudi commercial banks accused of laundering money for Al-Qaeda continues for they, unlike the princes, cannot hide behind the skirts of "sovereign immunity.")
The origins of the case go back to Jan. 29, 2002, when Allan Gerson, counsel to Jeane Kirkpatrick at the United Nations and the lead lawyer for the Lockerbie families suing Libya, met me for coffee in Washington. I told him my thoughts about the money trail going back to the Saudi government and how it should be held accountable for the atrocity ideas I presented publicly a few days later at "Sue the Saudis."
Gerson thought I had a good point and he followed up on Feb. 28, 2002 with a confidential memo, "Deterrence Through Accountability," where he wrote that 9/11
presents the central challenge for dealing with international terrorism. A key weapon in this war is the potential use of civil suits against those who helped finance and thus enabled the operation. It would have demonstrated that financial contributions to the Taliban regime was equivalent to contributions to OBL [Osama bin Laden], whose murderous ambitions were clear. Under American and universal principles of tort law, those whose conduct resulted in wrongful death bear responsibility for the consequences. This is also true for donations to charities that could have reasonably been expected to make their way to agents of OBL.
Being connected in the right legal circles, Gerson took the case to the powerhouse lawfirm of Motley Rice, which quickly accepted the case and (with help from other law firms, including Cozen O'Connor, which directly sued the Saudi government) went after the Saudi princes, an effort that culminated in an appeal to the Supreme Court.
3. Is Israel Relatively Safe Financially?
How 'Safe and Boring' Investments Saved One Nation From Financial Contagion
http://www.foxbusiness.com/story/markets/economy/safe-boring-investments-saved-nation-financial-contagion/
Liz Claman, Anchor and Correspondent
FOXBusiness
Extracts:
In September 2008, just as countries around the globe -- including the U.S., Iceland and Great Britain -- were fighting for their financial lives, one country watched the story unfold from the sidelines. Israel was barely scratched by the global banking and credit crisis, thanks to a series of pre-emptive actions taken by its central bank more than a year before the contagion hit.
In an exclusive interview at the Bank of Israel headquarters in Jerusalem, the Governor of the Bank of Israel said foresight and "some luck" not only helped the tiny nation in the Middle East avoid the credit crisis, but stabilized and subsequently strengthened its own currency in the process.
Stanley Fischer has held the Governor's post at the Bank of Israel for four and a half years. With a tour as Vice Chairman at Citigroup along with positions held at the International Monetary Fund, the World Bank, and as the chairman of MIT's Economics department, Fischer is familiar with global financial crises. Having worked on the Mexican peso crisis of 1994, the Asian financial crisis of 1997, and the one he calls the "most frightening" -- the Russian Ruble/Long Term Capital Management Crisis of 1998 -- Fischer says that in July of 2007 the Bank of Israel began shoring up its foreign exchange reserves.
"Nothing risky," said Fischer. "Safe and boring."
By March of 2008, as Bear Stearns began to falter, he and his team decided to step up foreign currency reserves purchases along with long-term government treasury purchases in anticipation of more instability. At the same time, the Israeli government stuck to stringent spending limitations.
"We began increasing our U.S. dollar reserves. We bought the equivalent of 10% of Israel's GDP. " For such a small nation, it was a huge endeavor. "That would be like the U.S. buying up $1.5 trillion worth of foreign exchange," said Fischer. "By July of 2008 we knew a serious crisis was coming. Lucky we had started buying [ForEx] when we did, when the crisis hit, Israel looked safer so Israelis brought their overseas money back home."
In turn, Israel's currency, the Shekel [NIS], strengthened and Israel's seven major banks, among them Bank Leumi and Bank Hapoalim, remained stable. (Both Leumi and Hapoalim are publicly traded on the Tel Aviv Stock Exchange.) While the main stock index took a 45% dive in 2008, its performance is up more than 30% over the past five years, while the U.S.-based Standard & Poor's 500-stock index is down more than 20% over the same period of time.
"I feel much, much better that if there's any [future] crisis, we are in a very strong position, much stronger than a year ago, because of our currency purchases," said Fischer.
Israel isn't totally in the clear. It is still heavily dependent on the health of the U.S. economy. Israel has an export-based economy and, according to Fischer, a full one-third of its exports head to America. Any further weakening of the U.S. consumer's ability to purchase foreign goods could seriously affect such a small country.
And what of the much-anticipated eventual weakening of the U.S. dollar? With Israel holding so many U.S. dollars, would a serious inflationary event the likes of which many economists expect destabilize Israel's solid monetary position?
"Forecasters have been predicting a weaker dollar forever. More often they've been wrong than right," said Governor Fischer.
Still, Fischer says the credit crisis that gripped the U.S. in September was startling to observe, even from 6000 miles away.
"To lose the investment banks in six months, formally nationalize the government-sponsored entities Fannie Mae (FNM: 0.57, 0, 0%) and Freddie Mac (FRE: 0.61, -0.0019, -0.31%) ?and to have the American financial system facing a meltdown? that was very bothersome. It affected sentiment here enormously. Up until August of 2008, the average Israeli thought, 'We're relatively safe.' Then Lehman happened."
Fischer says the collapse of Lehman Brothers caused shock waves around the world. As a former IMF and World Bank executive, the Zambian-born Fischer realized how frightening the situation could become. "I could imagine how to fix the problems as long as U.S. and Western banks were stable, but there was a short while where it looked like, 'My goodness, this could really spread.'"
With a nod to Federal Reserve Chairman Ben Bernanke, he says the Fed made the right moves. "If the Fed hadn't acted so decisively by adding liquidity to stabilize the commercial paper market, it could have been a much more serious event."
In Israel, The BOI's focus rests on maintaining price stability. Inflation, according to Fischer, stands at 2.8%, with a target of 2%. The Bank is quantitatively easing, with the interest rate currently at 0.5%.
Israel's economy is just around 1.5% the size of that of the U.S., so in an effort to attract foreign business and keep domestic businesses from fleeing challenging regulations, he says the country aims for a free-market economy with few obstacles to stymie foreign investment.
"Intellectually, people here recognized very early on that for a country this size to have a modern economy, you have to have a very open economy," said Fischer.
Foreign companies, particularly from the high-tech industry, appear to be attracted by business conditions in Israel. Microsoft (MSFT: 24.29, -0.15, -0.61%), Motorola (MOT: 6.3, -0.02, -0.32%), Google (GOOG: 430.25, -12.35, -2.79%), Yahoo (YHOO: 16.84, 0.65, 4.01%) and Intel (INTC: 18.79, 0.29, 1.57%) are among those that have opened production and development operations here.
Currently, the corporate tax rate in Israel (including income tax and corporate tax) is fixed at the rate of 26%. (In 2008 it was 29%.) The rate isn't exactly the lowest in the world, and Fischer says there are other challenges to overcome.
"There's still too much bureaucracy. It takes to long to get a building permit here. While we have a strong, educated work force and intellectual capital, to get a building built? That's tough."
While the free-market economy Fischer talks about appears to be in full-swing, Israel has a stringent regulatory system for the banking industry which has pushed some local banks to seek growth abroad.
The strict regulations may be a double-edged sword: while they may slow some bank officials hopes for speedy growth, the regulations also are credited with keeping Israeli banks stable during the crisis. None of Israel's banks has failed in the wake of the global contagion. When I asked Fischer for his thoughts on the U.S. Treasury Department's bank stress tests, the former Citigroup Vice Chairman intimated that Israeli banks have been conducting similar tests "on the inside" for years.
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