Lohatlha, South Africa: As the sun rose over South Africa’s dry and sparsely populated Karoo west of Johannesburg, more than 5,000 multinational troops launched a mock attack heralding a long-awaited African Union strike force for the troubled continent.
Men in fatigues peered through binoculars and crouched over maps, coordinating the movements of soldiers from more than a dozen African countries taking part this week in the first field exercise of the African Standby Force (ASF).
The script called for rapid deployment in response to reports of genocide in a fake country called Carana — a war game with a bitter touch of reality on a continent that has suffered the bloodshed of Rwanda and Darfur.
First proposed in 1997, the ASF aims to have forces from one of the continent’s five regional economic blocs on standby at any time, ready to respond swiftly to crises across Africa, with an overall force size of 25,000.
“Given our experiences, specifically in response to conflict in the past, the AU felt the international community very slow to respond,” the African Union’s head of peace support operations, Sivuyile Bam, told AFP.
“It takes time between the mandate being passed and the forces arriving on the ground — the rule of thumb is usually nine months.
“The types of conflicts we are dealing with simply do not allow for the luxury of time.”
The ASF aims to be able to move in and take action within 14 days of being mandated by African Union headquarters in Ethiopia, and it was that capacity that was being tested on a Karoo farm six hours west of Johannesburg.
But even as it strains for institutional independence, the AU remains heavily dependent on foreign donors — including for part of the estimated $15 million cost (Dh55 million) of the war games from October 19 to November 7.
“The current reality is that AU (peacekeeping) operations are funded above 90 per cent by partners including the United Nations, the European Union, the US and the UK,” said Bam.
The AU has estimated it will cost $1 billion for the standby force to be fully operational, and has proposed a model that would see it raise 25 per cent of the funds of an operation and then rely on the UN to fill the gap.
But for the standby force to be truly “on standby”, the funding behind it needs to be more predictable, said Bam.
The troops’ ability to respond rapidly is also constrained by the continent’s insufficient airlift capabilities, said defence analyst John Stupart.
#2
Totally opvokked! Has been from the start. Ten years to reach test and evaluation, and no established letters of agreement btwn stakeholders or dedicated airlift. Another attempt at "Afri solutions for Afri problems." What could possibly go wrong ?
No worries! Please continue to send money.
More than 90% of AU peace and security efforts are funded by the likes of the EU and the US, although AU member states have pledged to provide a quarter of the funding for operations by 2020.
However, the concern remains that if Africa does not control the purse strings of the military force, it cannot control the outcomes.
Underlining the problem, the EU is even bankrolling this month’s exercises, casting a shadow over the "African solutions for African problems" mantra espoused by politicians in national capitals and the AU headquarters in Addis Ababa.
Yemenis in cities near Taiz have started constructing an earth road linking the besieged governorate with Aden to break the rebel siege and ensure access of relief aid, a Yemeni news network reported on Sunday.
The road, stretching more than 150km, will pass through Taiz city, Dhabab and Turbia towns and end in the southern port of Aden, which was seized by the Saudi-led Arab coalition and the national resistance a few weeks ago.
“Work on the road has started. It is intended to break the siege imposed on Taiz city by the Houthis and forces loyal to deposed president Ali Abdullah Saleh,” Masdar Online said, quoting residents and resistance sources.
It said hundreds people are working on the road to ensure food, medicine and other relief aid into the besieged city, adding that the rebels are still preventing the entry of all relief items and water as they continue to shell residential areas there.
The network, meanwhile, quoted military sources as saying coalition warplanes launched several raids on coup rebel positions around Taiz on Saturday. It said one of the raids targeted a Houthi security headquarters.
Not even the mighty Middle East can survive cheap oil forever.
If oil stays around $50 a barrel, most countries in the region will run out of cash in five years or less, warned a dire report from the International Monetary Fund this week. That includes OPEC leader Saudi Arabia as well as Oman and Bahrain. Low oil prices will wipe out an estimated $360 billion from the region this year alone, the IMF said.
Huge budget surpluses are quickly swinging to massive deficits as oil prices have crashed to around $45 currently from over $100 last year. Many of these countries are being forced to tap into rainy day funds to weather the storm.
"Oil exporters will need to adjust their spending and revenue policies to ensure fiscal sustainability," the IMF wrote.
The depressed oil prices have come at a time when spending has gone up as many of these countries are grappling with regional violence and turbulence in financial markets.
Saudi Arabia, the world's largest oil producer, needs to sell oil at around $106 to balance its budget, according to IMF estimates. The kingdom barely has enough fiscal buffers to survive five years of $50 oil, the IMF said.
That's why Saudi Arabia is moving fast to preserve cash. The kingdom not only raised $4 billion by selling bonds earlier this year, but its central bank has yanked up to $70 billion from asset management firms like BlackRock (BLK) over the past six months.
Going to have to sell assets, and may take some losses to do so...
After years of huge surpluses, Saudi Arabia's current account deficit is projected to soar to 20% of gross domestic product this year, Capital Economics estimates. Saudi Arabia's war chest of cash is still humungous at nearly $700 billion, but it's shrinking fast.
Saudi Arabia is unlikely to jack up taxes, but it is poised to cut at least some forms of spending.
It's not likely to cut social and military spending programs as leaders fear a repeat of the 2011 Arab Spring uprising.
"In an environment with regional insecurity and domestic instability, to chip away at that social contract is a bit of a political gamble," said Henry Smith, a Dubai-based associate director with consultancy Control Risks.
Yet Smith said big government spending projects are already seeing far greater scrutiny.
"Some of the projects that are less economically essential are quietly being sidelined," Smith said.
Iran's break-even oil price is estimated at $72 and it could survive cheap oil for less than 10 years, the IMF estimates. It's a rosier outlook compared to its neighbors. But Iran's outlook is clouded by potential sanctions relief (which hasn't come yet) and a surge in oil production from its nuclear deal with the West.
Except Iran will get the big cash splurge from relief of the sanctions. That's a double insult: all Obama had to do was walk away from the deal, and the Iranians would have had to change course. Now the ayatollahs can get the cash they need to foment revolution and buy time at home.
Iraq has virtually no fiscal buffer remaining, according to the IMF. The country is grappling with internal strife and has lost large swaths of land to ISIS.
"Violence increasingly affects civilians, and has a particularly adverse effect on confidence and expectations, and consequently on economic activity," the IMF warned.
Bahrain is also under great financial pressure, with the likelihood of also running out of options in less than five years. The country already has lots of debt and has been running deficits for several years in a row.
"They are in a relatively tight spot. They are going to have to undertake a more significant tightening," said Jason Tuvey, a Middle East economist at Capital Economics.
However, a handful of countries are well positioned to face the storm. Topping that list are Kuwait, Qatar and the United Arab Emirates. That's partially because these countries don't need sky-high oil prices to balance their budgets. Kuwait's break-even oil price is estimated by the IMF at just $49, or just a tad higher than current levels. The magic number is believed to be $56 in Qatar, the host of the 2022 World Cup, while the UAE needs $73 oil.
But these three countries have built up mountains of oil money that protect them during the leaner times. The IMF said the UAE has enough fiscal buffers to withstand $50 oil for nearly 30 years. Qatar and Kuwait can sustain cheap oil for almost 25 years.
Posted by: Steve White ||
11/02/2015 00:00 ||
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#1
That's amazing.
At one time KSA's cost per barrel delivered to Andover Delaware was $0.75 per barrel due to the nationalization of most oil production and the fact that KSA oil is under pressure from vast gas deposits, requiring no pumping, just a Christmas tree and a spigot as it were to get the oil out of the ground.
If they need $106 a barrel oil with their minuscule cost of production, they have really been overliving their means.
Of course, the second oil gets above $75 a barrel, our buddies in South Texas and North Dakota crank up the oil shale, tar sand and fracking and cap price growth at about $80 a barrel,
The Saudis probably won't see $106 a barrel oil again and I hope they enjoy riding camels and living in their mansions without electricity or running water...sort of back to their roots.
#2
need to stop funding mosques/madrasses worldwide
Posted by: paul ||
11/02/2015 4:06 Comments ||
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#3
The biggest threat to Saudi Arabia and big oil cartels over the past few generations has been the small "independent" oil companies.
Oil prices are, of course, a function of supply and demand. But without the market leverage enjoyed by the oil giants, small independent companies have no choice but to undercut international oil prices in order to get their product to market. A tactic long despised by the oil giants.
In 2005 Saudi Arabia estimated that the optimal revenue for Saudi oil would be achieved at an international price of about $170 per barrel.
It was only the willingness of the independent oil companies to sell their oil in the $80 per barrel range that has kept the price of oil down to about $100 per barrel for most of the past decade.
Independent oil and gas producers increasingly account for a larger percentage of domestic production in the near offshore and lower 48 states. Independent producers' share of lower 48 states petroleum production increased from 45 percent in the 1980's to more than 60 percent by 1995. Today the IPAA reports that independent producers develop 90 percent of domestic oil and gas wells, produce 68 percent of domestic oil and produce 82 percent of domestic gas.
Clearly, this is a situation that neither Saudi Arabia nor the major oil giants are willing to tolerate.
In 2012, it cost an independent oil company an average of $67.23 to produce a barrel of oil. It sold that oil for an average of $82.60 per barrel. That's a 22% margin... thin compared to some other oil giants. For example, it cost oil giant Exxon Mobil $9.28 to produce a barrel of oil. Its average global price over the same period was $100.79 per barrel. That's a 90% profit margin.
Because of their high operating costs, small oil companies have thin profit margins.
When oil prices rise, their thin margins can soar... along with share prices. But when oil prices fall, this leverage works the other way... and share prices can plummet causing investor panic.
Large global companies are well positioned to play the long game. But smaller companies have smaller budgets and are more exposed. They do not have the financial muscle to withstand a prolonged price fall. Hundreds of smaller and mid-tier oil and gas explorers - and their investors - will be rethinking their business plans urgently as analysts begin predicting waves of mergers and acquisitions as firms seek out rescue deals. The falling share prices create bargains for larger predators with deeper pockets.
It is telling that OPEC has boosted production by almost 1.5 million bpd since November 2014, which has helped cut oil prices more than half to below $50 a barrel today.
OPEC and the oil cartels have already proven during the 1970's, and again during the 1990's, that they are willing to drive oil prices to as low as $9.00 per barrel, if that is what it takes, to rid themselves of the smaller competitors they have despised for decades.
OPEC's strategy is to create the conditions for higher than $200 per barrel oil in the next couple of years' time.
Saudi Arabia and the oil cartels long-game strategy is clearly working out the same as in the past.
And Obama's over-regulation of U.S. oil companies plays directly into OPEC's hand.
The Saudis probably won't see $106 a barrel oil again ....
This is approximately as likely as the idea, widely accepted only a couple of years ago, that crude would never drop below ~$100/bbl again. The fundamental metric that everyone glosses over is that global oversupply is presently equal to approximately half a year's natural decline from existing wells. Thus: stop drilling, wait half a year and supply and demand come into balance with an attendant meteoric rise in prices. Drilling of course won't stop and thus it'll take a bit longer and the price rise will be more gentle but given the level of present investment it's unavoidable that prices will be going up in the not-too-distant future.
Also, consider the effect of the eventual, and likely unavoidable, instability in oil producing nations that will result from prolonged low prices as thugocracies the world over run out of money with which to buy the acquiescence of the yokels. See e.g., the million bbl/day (something on the order of half the present global oversupply) that the Hildebeeste's little Libyan war took off the market for a year. Now imagine what happens when it's Persians vs Jews, Shia vs Sunni, ISIS vs the House of Saud, etc. The present oversupply of crude is sufficient to absorb a modest geopolitical shock. A large one or multiple simultaneous shocks? Kaboom!
It's also worth considering that what just happened in the US oil patch was the horizontal driller's equivalent of the dot-com bubble. E&P's are almost exclusively (junk) debt financed entities and the finance kiddies who stuffed so many billions into the boom are mostly of an age that they were likely at mommy and daddy's house watching Power Rangers though the last real oil shock / boom and were thus unprepared for what comes next (now). Namely desperate production of as much as possible prior to capital exhaustion in hopes of surviving followed by defaults, consolidation and a much slower and more rational expansion by the survivors as markets recover. I'd wager that in a year half the E&P's with horizontal wells in the US will be tits-up. No one is going to be excited about issuing (or buying) new debt to finance expansion of production from assets that produce at, or anywhere near, the marginal cost of production. Think of it as market instability resetting the investment bar higher.
Then there's the relative strength of the dollar presently depressing prices, the socialist in the White House cutting the legs out from under the US economy, etc.
Personally I'd wager that we'll see oil top $100/bbl in the next five years and likely stabilize at prices significantly above today's much sooner.
#5
OPEC's strategy is to create the conditions for higher than $200 per barrel oil in the next couple of years' time.
The Treasury and Fed are working hard to make that come true by debasing the currency as fast as they can get away with it and the ruling caste keep a strangle hold on the Beltway. Keep printing and creating money without backing. The power brokers can lose half the value of their holdings and still be 'comfortable' which is not the same for the middle and lower class.
#9
Mehhh, given various Pert claims on the Net that both Alaskan + Dakotas Shale oil regions are running out of oil or very soon will be, I'm more concerned about the state of the KSA'S, ME's, + World oil reserves through 2050 + beyond.
[Ynet] The military base in Bahrain is aimed at helping Britannia and its allies "reinforce stability in the Gulf and beyond," says British Foreign Secretary.
An interesting decision, given they're still downsizing their military to get closer to balancing their budget.
For the first time since before the Yom Kippur War, the UK is to have a permanent military base in the Middle East, the BBC reported Sunday. The base, which is being built at Mina Salman Port in Bahrain, is intended to support deployments of Royal Navy vessels in the Gulf.
The BBC reported from the inauguration of the HMS Juffair, which is also being built at the port. British Foreign Secretary Philip Hammond, acknowledging Bahrain's record of alleged human rights ...which are usually entirely different from personal liberty... abuses, said at the event that "Bahrain is not perfect by any means, but at least it knows what it has to do and how to do it."
He also referred to the fact that the Bahraini government is seeking Britannia's help with reforming its judiciary, police force and prison service, the BBC report continues.
According to Hammond, the new base will help Britannia and its allies "to reinforce stability in the Gulf and beyond."
Bahrain is a Shia-majority Gulf state with a ruling Sunni minority. In 2011, inspired by the Arab Spring, Shi'ites began demonstrating in mass popular protests against the regime. Many of the protests were suppressed by police violence, mass arrests and alleged torture of detainees.
#2
My guess is the host nation will pick up the tab. Smart move actually. If things get a bit wobbly in the nearby Magic Kingdom, Emir Hamad bin Isa bin Salman Al Khalifa has an insurance policy.
#5
Need to open a large "base" in southern Libya or there abouts to house all those trying to get into the UK via the Chunnel. Could make some coin renting space to France, Italy, Hungary, etc.
President Recep Tayyip Erdogan has won a decisive victory in the Turkish parliamentary election, with his Justice and Development Party (AKP) winning a majority of seats and defeating the other three opposition parties.
With 98 per cent of the vote counted, the AKP had won 49.4 per cent and 316 seats in the 550 seat parliament, a far better performance than predicted by the polls. These had mostly forecast that the AKP would fail to win back the majority it lost in the last election on 7 June.
“Today is a victory for our democracy and our people ... Hopefully, we will serve you well for the next four years and stand in front of you once again in 2019,” Prime Minister and AKP leader Ahmet Davutoglu said last night.
The pro-Kurdish Peoples’ Democratic Party (HDP) had a surprisingly sharp fall in its vote from 13 per cent in the last election, which denied the AKP its majority, to bring it dangerously close to the 10 per cent threshold below which it would lose all its members of parliament. This would have left Turkey’s Kurdish minority, with its long history of confrontation with the state, without any effective parliamentary representation.
As president, Mr Erdogan is theoretically above the political fray, but has clearly directed the AKP’s strategy which has confounded all forecasts. These had strongly suggested a repeat of the stalemate of the last election and the likelihood of a coalition government or even a third election.
In the wake of the AKP’s spectacular victory, it will be in a strong position to take control of all remaining levers of power: army, security services and media. Ever since it first formed a government in 2002, the AKP has been progressively eliminating all opponents in positions of authority in the secular Turkish state founded by Kemal Ataturk. Almost all the state and private media has already come under AKP control, which is one factor explaining its gain in votes. State television has given blanket coverage to Mr Erdogan and the AKP, while largely ignoring its opponents.
Posted by: Steve White ||
11/02/2015 00:00 ||
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It's not these who vote, but these who count the votes?
[Rudaw] Multiple groups of Islamic State ...formerly ISIS or ISIL, depending on your preference. Before that al-Qaeda in Iraq, as shaped by Abu Musab Zarqawi. They're very devout, committing every atrocity they can find in the Koran and inventing a few more. They fling Allah around with every other sentence, but to hear the pols talk they're not really Moslems.... , or ISIS, fighters have surrendered to Peshmerga forces in recent days at varios points along the Gwer-Makhmour front some 60 km southwest of Erbil.
"Since Saturday night, at least 19 ISIS bandidosLions of Islam have surrendered to Peshmerga forces in two phases. Eight of them surrendered on Saturday and 11 of them surrendered on Sunday at dawn," said Qadir Qadir, a senior Peshmerga officer on the Gwer front, told Rudaw on Sunday.
"One of those who surrendered claims to be a police brass hat," Qadir added
Officials on Gwer front estimate that this year at least 100 ISIS bandidosLions of Islam have surrendered to Peshmerga forces.
"Those who have submitted themselves to the Peshmerga will be questioned and transferred to the Ministry of Peshmerga," Qadir said
On Monday, a Peshmerga official said nine ISIS bandidosLions of Islam also surrendered on the Gwer-Makhmour front.
"At around 6am on Monday, nine ISIS bandidosLions of Islam surrendered to the Peshmerga in the village of Sultan Abdulla on the Gwer front," said Saifulla Shamsaddin, a Peshmerga lieutenant. "The surrendered bandidosLions of Islam were in civilian clothes and crossed the river and reached Peshmerga front lines."
One of the members of this ISIS group was questioned by Rudaw about the reasons for deserting.
"We fled for two reasons: fearing death and starvation," the turbans told Rudaw.
"There is no trust within the organization [ISIS]. If they suspect a holy warrior they will kill him right away."
Posted by: trailing wife ||
11/02/2015 00:00 ||
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(IraqiNews.com) Baghdad – Prime Minister Haider al-Abadi stressed on Sunday, that Iraq has achieved impressive victories in battles, despite the financial crisis, pointing out to securing Baghdad militarily.
Abadi said in a speech today followed by IraqiNews.com, “despite the financial crisis, we have achieved impressive victories and liberated hundreds of kilometers,” adding that “political differences in the democratic process is normal, but we should not disagree on the service of the citizen, the advancement of the economy, reconstruction, investment and supporting our fighters in the frontlines.”
Abadi noted that “the capital Baghdad has been militarily secured,” stressing that, “We cannot allow a decline in the issue of the war.”
They were coming for him and his people. Friends were being killed or fleeing for their lives. So Andrew White did what he always does when faced with an enemy. “I invited the leaders of Isis [Islamic State] for dinner. I am a great believer in that. I have asked some of the worst people ever to eat with me.”
This extraordinarily self-confident priest is best known as the vicar of Baghdad, leader of a church in the chaos outside the protected Green Zone. He made his offer last year as the terrorist forces threatened to take the city. Did he get a reply?
“Isis said, ‘You can invite us to dinner, but we’ll chop your head off.’ So I didn’t invite them again!”
Continued on Page 49
Posted by: Steve White ||
11/02/2015 00:00 ||
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how can you reason with people who do not know Christianity/other religions eg.saudi in their own countries. all they are taught is to hate and destroy other religions.
Posted by: paul ||
11/02/2015 4:14 Comments ||
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[AlAhram] The European Union ...the successor to the Holy Roman Empire, only without the Hapsburgs and the nifty uniforms and the dancing... on Sunday said it was allocating an extra 28 million euros to Jordan to help it meet the urgent needs of Syrian refugees as winter sets in.
EU humanitarian affairs commissioner Christos Stylianides made the announcement during a visit to the Zaatari camp in northern Jordan that is home to 80,000 refugees from across the border in Syria.
"Today I'm announcing the allocation of 28 millions euros ($30.8 million) specifically for Jordan. This money will assist the urgent needs of Syrian refugees and their host communities," Stylianides told news hounds.
The latest aid raises the overall EU humanitarian assistance to 198 million euros since Syria's conflict broke out in 2011.
"The Syrian refugee crisis is well into its fifth year and the needs of refugees and the hardships they are facing are greater than ever. As winter approaches, daily life is set to become even tougher, which is why this help is so important."
The funds are expected to be used to provide the refugees with basic needs such as health care, clean water, shelter, rent and education, the EU says.
Stylianides toured the Zaatari camp and met UN officials who work there as well as refugee families.
Later he visited a Syrian family living in the town of Mafraq near Zaatari and who depend on EU funds to survive.
The United Nations ...a formerly good idea gone bad... refugee agency UNHCR estimates that more than four million Syrians have fled the civil war that has ravaged their country and reportedly killed more than 250,000 people.
Jordan says it has taken in 1.4 million Syrians fleeing the war but the UNHCR puts the figure at 600,000.
Around 80 percent of Syrians in Jordan live outside camps.
A multi-volume chronology and reference guide set detailing three years of the Mexican Drug War between 2010 and 2012.
Rantburg.com and borderlandbeat.com correspondent and author Chris Covert presents his first non-fiction work detailing
the drug and gang related violence in Mexico.
Chris gives us Mexican press dispatches of drug and gang war violence
over three years, presented in a multi volume set intended to chronicle the death, violence and mayhem which has
dominated Mexico for six years.
Rantburg was assembled from recycled algorithms in the United States of America. No
trees were destroyed in the production of this weblog. We did hurt some, though. Sorry.
Not even the mighty Middle East can survive cheap oil forever.
President Recep Tayyip Erdogan has won a decisive victory in the Turkish parliamentary election, with his Justice and Development Party (AKP) winning a majority of seats and defeating the other three opposition parties. 
