Exit the 'Axis of Evil'? - Chicago Tribune editorial
Into Africa Without a Map - David Ignatius, Washington Post
Kenya is a Strange Animal - Binyavanga Wainaina, New York Times
Kenya Too Important to Let Collapse - Jonathan Stevenson, Baltimore Sun
Another Day, Another Crooked African Election - Martin Meredith, The Independent
Moving Forward in Kenya - Warigia Bowman, Boston Globe
What's Tearing Kenya Apart? - Caroline Elkins, Washington Post
Aid Darfur's Outgunned Defenders - Gordon Barthos, Toronto Star
Iraq's Unknown Economy - Michael O'Hanlon, Washington Times
Middle East: Of Braveheart and Bush - Max Boot, Wall Street Journal
Keeping Palestine in Mind - Arnaud de Borchgrave, Washington Times
How Safe are Pakistan's Nukes? - Trudy Rubin, Philadelphia Inquirer
Pakistan is Troubled, But It's Home - Mohsin Hamid, Washington Post
In Defense of Musharraf - Jonathan Powers, Toronto Star
Why Not Fatima Bhutto? - Jemima Khan, London Daily Telegraph
Benazir's Hopes for Democracy Can Live On - Asif Ali Zardari, The Independent
New Day in the Americas - Roger Cohen, New York Times
N. Korea: Eine Kleine Nuke Music - New York Post Editorial
North Korea: Nuclear Credulity - Carolyn Leddy, Washington Post
Hong Kong's Long Wait - Toronto Star editorial
Hong Kong's Democracy Delayed, Again - Washington Post editorial
Rebuilding the CIA - Donald Gregg, Miami Herald
Stand by for U.K. Diplomatic Surge - David Miliband, London Times

Foreign Policy News and Commentary Update January 8, 2008 from Bronxville, New York

"President Bush is not doing a single thing I don't agree to ... He doesn't
support anything that I oppose.?

--Israel's Prime Minister, Ehud Olmert; cited in Jon Ward and David R. Sands,
"Bush bound for Mideast" (Washington Times, January 7)
http://www.washingtontimes.com/apps/pbcs.d...mplate=printart

Darker Shade Of Green Zone: In Baghdad, Low Expectations Have Supplanted
High Ideals - Karen DeYoung (Washington Post, January 5):
http://www.washingtonpost.com/wp-dyn/conte...0404125_pf.html

Voting for a Smile - Maureen Dowd (New York Times, January 6):
http://www.nytimes.com/2008/01/06/opinion/...agewanted=print

Confidence in America: The Best Change the Next President Can Make -
Madeleine K. Albright (Washington Post, January 7):
http://www.washingtonpost.com/wp-dyn/conte...0601827_pf.html

Why I Believe Bush Must Go: Nixon Was Bad. These Guys Are Worse - George
McGovern (Washington Post, January 6):
http://www.washingtonpost.com/wp-dyn/conte...0404308_pf.html

Ten Ways to Prevent Peace and Goodwill on Earth - Colleen Turner (Huffington
Post, December 29): Among them:
http://www.huffingtonpost.com/colleen-turn...ce_b_78701.html

Seeds of Hate [Review of Jihad And Jew-Hatred: Islamism, Nazism and the
Roots of 9/11 by Matthias Küntzel] - Jeffrey Goldberg (New York Times, January
6):
http://www.nytimes.com/2008/01/06/books/re...agewanted=print

Democracy Gets Small Portion of U.S. Aid:
http://www.washingtonpost.com/wp-dyn/conte...0502199_pf.html

Conspiracy and Democracy in Pakistan Editorial (New York Times, January
7):
http://www.nytimes.com/2008/01/07/opinion/...agewanted=print

The Duty My Wife Left Us - Asif Ali Zardari (Washington Post, January 5):
http://www.washingtonpost.com/wp-dyn/conte...0403074_pf.html

Hands Off Pakistan - Sheldon Richman (Commentary, Future of Freedom
Foundation, January 4):
http://www.fff.org/comment/com0801a.asp

It's Troubled, But It's Home - Mohsin Hamid (Washington Post, January 6):
http://www.washingtonpost.com/wp-dyn/conte...0404309_pf.html

46,000 Iraqis Have Left Syria: Returns Reflect Security Gains, Aid Workers
Say - Amit R. Paley (Washington Post, January 5)
http://www.washingtonpost.com/wp-dyn/conte...ml?hpid=topnews

A Year in Iraq - Adriana Lins De Albuquerque and Alicia Cheng (New York
Times, January 6): For those in uniform in Iraq, 2007 was the deadliest year
since the invasion.
http://www.nytimes.com/2008/01/06/opinion/...pagewanted=prin

Iraq's unknown economy - Michael O'Hanlon (Washington Times, January 6):
http://www.washingtontimes.com/apps/pbcs.d...mplate=printart

Washington, Ankara and the PKK Editorial (Washington Times, January 7):
http://www.washingtontimes.com/apps/pbcs.d...mplate=printart

Rehabilitating Libya Editorial (New York Times, January 5):
http://www.nytimes.com/2008/01/05/opinion/...agewanted=print

Bush's Mideast trip - Chuck Freilich (Washington Times, January 7):
http://www.washingtontimes.com/apps/pbcs.d...mplate=printart

Accountability for Pyongyang: Time to send North Korea a unified message:
Come clean - Editorial (Los Angeles Times, January 7):
http://www.latimes.com/news/opinion/editor...ment-editorials

Georgia's Way Back: It starts, but does not end, with elections today
Editorial (Washington Post, January 5):
http://www.washingtonpost.com/wp-dyn/conte...0403557_pf.html

Tomgram: Chalmers Johnson, An Imperialist Comedy (Tom Dispatch, January 6):
http://tomdispatch.com/post/print/174877/T...list%2520Comedy

Bush, forgotten man of 2008 - Jurek Martin (Financial Times, January 3):
http://www.ft.com/cms/s/0/ecf7843e-ba1f-11...?nclick_check=1

Everything is relative....

CHRISTIAN SCIENCE MONITOR
1/8/08
Look who's pro-U.S. now: Saudi Arabia
It's now one of the most pro-US and antiterrorist Muslim countries.

Kenneth Ballen

Washington

President Bush is expected to make his first state visit to Saudi Arabia Jan. 14. Saudi Arabia is the birthplace of Islam and home to its holiest places. It is also the home country of Osama bin Laden and 15 of the 19 Sept. 11 terrorists.

What Mr. Bush will find in Saudi Arabia would surprise most Americans – indeed, most Muslims around the world, who look to Saudi Arabia as their spiritual home.

For in this country most sacred to Muslims, Mr. bin Laden's countrymen have dramatically turned against him, Al Qaeda, Saudi fighters in Iraq, and terrorism itself. And they have also equally dramatically turned in favor of bin Laden's chief enemy: the United States. The people of Saudi Arabia are now among the most pro-American and antiterrorist of any in the entire Muslim world.

These are just some of the startling findings of a rare opinion survey conducted in Saudi Arabia last month by the nonprofit polling group I lead, Terror Free Tomorrow, and by D3 Systems.

Fewer than 1 in 10 Saudis has a favorable opinion of Al Qaeda, and 88 percent approve the Saudi military and police pursuing Al Qaeda fighters. Only 15 percent of Saudis have a favorable opinion of bin Laden himself. (A Saudi poll late in 2003 showed 49 percent favorable.)

Even for Saudis with a favorable view of bin Laden and Al Qaeda, addressing the problem of terrorism is one of their most important priorities, as it is to all Saudis, chosen by close to 90 percent. Only unemployment and inflation weighed more heavily on the Saudi public.

Saudis reject terrorism nearly unanimously. They aren't clamoring for radical rule from bin Laden and Al Qaeda. Indeed, more than two-thirds support stronger, closer relations with the US. Three-quarters of Saudis also said their opinion of America would significantly improve if the US took certain actions, such as increasing visas or signing a free-trade treaty with Saudi Arabia. These are practical, achievable steps that should be on Bush's agenda.

In fact, compared with the most populous Muslim countries, Saudis are among the most favorable to the US. While only 40 percent currently have a favorable opinion, that's twice or more the percentage of those in Pakistan, Turkey, Egypt, Jordan, Morocco, and Indonesia. For Saudis, this is a profound turnaround from just a year and a half ago, when, in a limited Terror Free Tomorrow survey, only 11 percent had a favorable opinion of the US. That figure has now more than tripled, while unfavorable ratings have plummeted from 89 percent to just half.

Two factors help explain this major shift: 1) US policies are perceived to be less hostile, and 2) Saudi King Abdullah has promoted moderation.

While Saudi citizens have been reported by the American military to make up almost half of the foreign suicide bombers in Iraq, the Saudi public itself is strongly opposed to any Saudis fighting in Iraq. Sixty-three percent of Saudis oppose their fellow citizens fighting against Shiite militias in Iraq. An even higher percentage – 69 – favors Saudi Arabia working with the US to resolve the Iraq conflict.

On many issues, Saudis fault the current US agenda, and sometimes even that of their own king. Particularly when it comes to the Arab-Israeli conflict, only a third of Saudis support the king's peace plan and a two-state solution. Roughly half favor all Arabs continuing to fight until there is no state of Israel. This is clearly an area where stronger leadership is needed to shift Saudi public opinion.

Yet to the question many in the West have repeatedly asked – "Where is the voice of the moderate Muslim majority who stand against Al Qaeda, bin Laden, and terrorism?" – the people of Saudi Arabia have delivered a definitive answer.

The people of Islam's spiritual home clearly and unequivocally reject Al Qaeda, bin Laden, Iraqi insurgents, and terrorism. They also just as forcefully look forward to the day when the US and Saudi Arabia can have closer and stronger relations.

This gives Bush a unique opportunity to forge a deeper alliance not just with King Abdullah, but the people of Saudi Arabia themselves – and Muslims everywhere.

Kenneth Ballen is president of Terror Free Tomorrow: The Center for Public Opinion. This nationwide survey of Saudi Arabia was conducted in partnership with D3 Systems by telephone in Arabic. It had a margin of error of +/- 3 percent.

We Still Need the Big Guns - Charles Dunlap, New York Times
Success in Irregular Warfare - Sam Holliday, American Diplomacy
A Surge Against Maliki - David Ignatius, Washington Post
Obama's Obscene Iraq Fantasy - Dan Senor, New York Post
Canada: Junior Partner in Global War - Linda McQuaig, Toronto Star
Iran: A Dangerous Game in the Strait, New York Times editorial
Iran: A Dangerous Game - San Diego Union-Tribune editoral
Next Time, Sink 'Em - New York Post editorial
Iran: Disaster Avoided, Just Barely - Boston Globe editorial
Iran 1, USA 0 - Ralph Peters, New York Post
How Safe are Pakistan's Nukes? - Trudy Rubin, Pittsburgh Post-Gazette
Mr. Bush in the Middle East - Washington Post editorial
Bush Trip: Gulf in Expectations - London Times editorial
Two-pronged Approach to Peace - Cohen and Chickering, Boston Globe
Dubya's Real Mideast Agenda - Amir Taheri, New York Post
No Time to Spare in Middle East - George Moffett, Christian Science Monitor
Bush's Almighty Israeli Traffic Jam - Tim Butcher, London Daily Telegraph
Changing the Middle East - Helle Dale, Washington Times
Peace Corps: Too Many Innocents Abroad - Robert Strauss, New York Times
Put Kenya's Motto in Practice - Christian Science Monitor editorial
A Firestorm in Kenya - San Francisco Chronicle editorial
Kenya's Real Problem (It's Not Ethnic) - Fish and Kroenig, Washington Post
Good Riddance to Castro. But What Next? - Oliver Kamm, London Times
What People Will Die For - Fareed Zakaria, Newsweek
Making Khadr a Martyr - Toronto Star editorial
Bolstering Homeland Defense - Washington Times editorial
Blueprint for Homeland Security - Rudolph Giuliani, Wall Street Journal
Fear and the Nuclear Terror Threat - Michael Levi, USA Today
CIA Tapes: What Do We Still Not Know? - Jane Harman, USA Today
Segregation: Muslim Style - Cal Thomas, Washington Times

bitterlemons-international.org Middle East Roundtable
Edition 2 Volume 6 - January 10, 2008



Arab stock markets and economic liberalization • PSE reflects Palestine's extraordinary circumstances - Sam Bahour

Addressing the weaknesses of the PSE must come within the framework of the entire Palestinian problem. • Dubai: Bridging time zones and boosting confidence - Christopher Davidson

The DIFX would now seem to represent an important opportunity for both domestic growth and access to international markets. • Overview: A two-way street - Riad al Khouri

A handful of key shares generally tend to dominate individual Arab bourses. • Jordan: ASE closes to good cheer - Yusuf Mansur

The outlook for the ASE in 2008 remains positive, even though there is evidence that it may be a difficult year for the economy as a whole.



PSE reflects Palestine's extraordinary circumstances
Sam Bahour

One of Palestine's many bittersweet economic achievements since the Oslo peace accords is the establishment of the Palestine Securities Exchange. Based in the troubled northern West Bank city of Nablus, the exchange shares the reality of a brutal military occupation alongside the never-ceding steadfastness and resilience of the Palestinian community's desire to build a normal life and a free market economy.

The establishment of the PSE was a sweet achievement in that it was set up under conditions of a yet-to-be nation state that was, and continues to be, under Israeli military occupation. The number of listed firms has grown even while the economic strangulation of the Palestinian economy by Israel and the international community continues unabated. The bitterness of the PSE is that many of the inherent structural weaknesses of the Palestinian economy and governance style are reflected within it. This leaves significant room for improvement.

There are only 35 companies listed on the PSE: six from the banking sector, four from the insurance sector, eight from the investment sector, 10 from the manufacturing sector and seven from the services sector. Shares are listed in either US dollars or Jordanian dinars.

Total market capitalization for the first eleven months of 2007 was $2,452,808,833 with the number of transactions 149,538, the value of traded shares $759,787,133 and trading volume reaching 283,218,841 shares. There are nine Palestinian brokerage firms located throughout the West Bank and Gaza Strip.

The market's blue chip stock is the Palestine Telecommunications Company (PALTEL); the Palestine Development & Investment Ltd. (PADICO) is the second largest company listed on the PSE. Despite a noticeable decline of the trading shares value of these two companies during the last period, their shares remain the most traded shares in the PSE and they command 78 percent of all traded shares in the market.

Over the past two-three years, growing numbers of non-Palestinian institutional and individual investors have entered the market in a significant way, one in particular from Kuwait that also acquired partial ownership in one of the leading brokerage firms.

It is relevant to note that PADICO owns a controlling amount of PALTEL shares and owns many of the traded companies listed on the Exchange, as well as the PSE itself. Until recently, the chairman of PADICO was also the chairman of the PSE, but more recently an ex-minister was appointed as chairman and also serves as the CEO. Plans to list the PSE itself on the exchange, opening a significant percentage of shares to public investment, have been floating for years but haven't materialized yet.

It has been repeatedly noted that non-institutional trading happens more on the impulse of individual traders following wealthy businessmen's (sadly all are men) investments rather than as a result of investors having any real data, analysis, knowledge or understanding of the firms they are investing in. Several leading investors have taken advantage of this market weakness to list more and more companies on the PSE, knowing that investors will follow them without understanding the core business of the companies they are investing in.

The result of this lack of individual shareholder savvy is that many IPOs are over-capitalized from the start, giving these start-up firms extra cash to create and trade securities portfolios in parallel to their main business. As the Palestinian market collapsed from the weight of the past seven years of intensified conflict and a depreciating dollar, many publicly traded firms quietly registered their traded portfolio losses with little repercussion from shareholders, who did not question why their investments were turned around and for investments in security portfolios instead of serving an intended business plan.

The Palestinian investment community is still in need of more media work, newsletters, workshops and seminars to educate it about the importance and risks of investments in securities. Specifically, the market is in dire need of independent, financial- and business-specific journalists that have the courage to undertake bold investigative reporting of the dealings of publicly traded (as well as privately held) firms.

Recently, however, the Palestinian Authority set up a Capital Markets Authority to regulate the PSE and the brokers, a proper and strategic step forward.

Brokerage firms play a pivotal role in spreading awareness among the community of investors, and their role is of great importance in attracting small investors to buy shares with their savings. However, a troubling development is the role of insider trading via the brokerage firms. With a weak legal system and a nascent regulatory authority, insider trading is taking its toll. When Gaza was overrun by Hamas in mid-2006, the market hardly even reacted, an indication that market dynamics are not the only factor at play in sustaining the stability of the PSE.

Prior to the creation of the CMA, the PSE at the outset of the second intifada placed a five percent upper and lower limit on daily trading to protect the market from collapsing. Since the CMA was established, the most significant action taken to date was to investigate and publicly announce wrongdoing in one of the major brokerage firms.

In a December 2007 front-page advertisement, the CMA announced serious infractions by the United brokerage firm and listed steps the CMA is taking to rectify the situation. The firm had been caught executing sale and purchase deals of shares in the Jordanian financial market through a Jordanian firm by using the names of several people without their knowledge and issuing fictitious vouchers on their accounts.

For Palestine, this was a bold public move that was welcomed in the marketplace and created a positive buzz that white-collar wrongdoing (in the financial markets and throughout the market as a whole) may start to be seriously and aggressively pursued and hopefully prosecuted as well.

The PSE was created to address the need to attract long-term funding for productive infrastructure projects in Palestine as well as the savings of Palestinians inside and outside the country. It is considered one of the emerging securities exchanges in the Arab world, but operates under the extraordinary circumstances of having to mitigate market risks that are embedded in a 40-year ongoing military occupation. The Palestinian economy has not yet reached a state where it can be separated from the Israeli economy due to the nature of the Paris economic protocol that supplemented the Oslo agreement and linked Palestinian financial and economic institutions with their Israeli counterparts.

The PSE has been able to persist under the difficult economic conditions caused by the Israeli occupation practices that affect all areas of economic activity, including finance and business. But addressing the weaknesses of the PSE must come within the framework of the entire Palestinian problem.- Published 10/1/2008 © bitterlemons-international.org

Sam Bahour is a business consultant based in Ramallah/El-Bireh. He participated in the effort to list two national firms on the PSE: PALTEL and PLAZA.

Dubai: Bridging time zones and boosting confidence
Christopher DavidsonFor the last seven years the emirate of Dubai has been operating a domestic stock exchange, as part of wider attempts to create a vibrant, diversified economy that supports a range of non-oil related activities. Although it experienced a sluggish start and was exposed to a Gulf-wide crash, the original exchange would now seem to have consolidated its position and, most significantly, has recently been joined by a Dubai-based international financial center and an international exchange. This has attracted much interest given its pioneering regulatory framework and its ability to bridge the time zones of other global stock exchanges.

Founded in March 2000, the Dubai Financial Market grew to list several dozen companies, most of which were Dubai and UAE-based. Despite the bursting of the "Gulf bubble" in early 2006 and the loss of over 50 percent on the value of most listed shares, by the close of 2007 the DFM was nevertheless still listing about 60 domestic companies and was reporting a respectable total market capitalization of about $350 billion. Importantly, in 2004 it was decided that this DFM would be complemented by a Dubai International Financial Exchange--a new stock exchange that would permit foreign nationals to own shares and therefore allow Dubai to absorb some of the surplus liquidity being generated by hydrocarbon-rich economies in Abu Dhabi, Saudi Arabia and elsewhere in the region.

Crucially, in an effort to boost investor confidence, Sheikh Muhammad bin Rashid al-Maktoum, then the crown prince of Dubai, announced that this DIFX would be housed in a financial "free zone" that would be unencumbered by local legislation, in much the same way as the free zones for foreign internet and media companies that he had established in 2000, and in the same way that his father had allowed foreign manufacturers to set up free zone headquarters at Jebel Ali since the mid-1980s. Moreover, it was decided that the DIFX would operate in a US dollar-denominated environment and that the free zone's regulatory framework would be based on English law, not least because the majority of Dubai nationals and expatriates in the Gulf with a financial background had been trained in the City of London. Foreign experts were enlisted (from Standard Chartered and Julius Baer) to assist with the project, and in 2004 the Dubai Financial Services Authority was set up to administer the Dubai International Financial Center and its constituent DIFX. An impressive Arc de Triomphe-style headquarters building for the DIFC was constructed close to Sheikh Zayed Road and within months this gateway complex was home to a number of well-respected international financial institutions including KPMG, Swiss Private, Swiss International Legal, Merrill Lynch, and Credit Suisse.

Within the next few years, more banks, including Mirabaud and Volaw, are likely to open branches, with many citing the DIFC's impressive infrastructure, its solid reputation and its potential to serve as an alternative location to the City of London for Islamic banking products. Indeed, the DIFC's location close to emerging markets in Muslim-dominated Pakistan and East Africa is thought to be ideal, as is its proximity and historic linkages to Bombay--a market that is likely to become enormous when the rupee becomes fully convertible and as India continues to liberalize its economy. Significantly, in the wake of the 2006 crash, the DIFX has begun to gain momentum, with many international firms believing that it will soon serve as an important way station between the time zones of the much higher volume stock exchanges in Europe and Asia. Moreover, for domestic UAE companies, most notably Dubai's Emaar Properties (which became a 67 percent publicly owned company following its flotation), the DIFX would now seem to represent an important opportunity for both domestic growth and access to international markets.- Published 10/1/2008 © bitterlemons- international.org

Dr. Christopher Davidson is author of "The United Arab Emirates: A Study in Survival" and the shortly forthcoming "Dubai: The Vulnerability of Success".

Overview: A two-way street
Riad al KhouriIn the Arab world as elsewhere, stock markets mirror the economy as a whole. When Wall Street falls, Americans feel poorer, with often-serious implications for the rest of the economy; rising shares on the other hand make people feel richer. The rhythm of the markets is sometimes as significant as the direction of share prices, with a huge climb or drop in one day, for example, having a different effect on sentiment than the same price change spread out over a week. Volume is also important: a market with a handful of companies or a modest number of their shares traded daily is not usually an accurate mirror of business.

However, stock exchanges are more than just reflections of changes in the "real" sector, especially in emerging economies. Widespread share ownership is usually associated with open economic systems as business power devolves away from states or oligarchies. Bourses are also places where people or companies raise fresh capital to set up new businesses or to expand old ones--perhaps the most important of their functions.

In these and other respects, Arab bourses--where they existed--used to be laggards, but no more. Developing regional share markets over the past few decades have served to make doing business easier, and help people become richer. When the first oil boom began in the mid-1970s, most Arab countries did not have share markets; today, the majority of regional capitals can boast a stock exchange of increasing size and sophistication. In the context of overall economic liberalization in the Arab world, the establishment, development and reform of bourses has interacted positively with other change, as more transparent and professionally run share exchanges have emerged hand in hand with liberalizing economies.

Jordan is an example of how things have gone well in this respect, with the Amman Stock Exchange proving to be an important element of the positive economic change that has characterized the country. The year just ended confirmed this trend, as the ASE general index surged 36 percent during 2007. Market capitalization surged by 39 percent to $41.2 billion, representing 289 percent of Jordanian gross domestic product. This percentage is one of the highest in the world, reflecting the importance of bourse activity in Jordan's economy. Moreover, the trend in these important indicators is sharply up, with bourse capitalization having been a mere $11 billion in 2003, closer to the equivalent of the kingdom's GDP at that time.

Before readers of bitterlemons-international.org drop everything to rush out and buy stocks on the ASE, a word of caution: the Jordanian bourse remains a delicate one dominated by the share of one business, the Arab Bank, which still makes up a big chunk of market capitalization and activity. Though robust and soundly managed, if that august institution's chair so much as sprains his wrist the whole ASE can begin to look wobbly. Not that this isn't a feature of other Arab bourses: for example on the Beirut Stock Exchange, 74 percent of total trading activity of the last week of 2007 was in one company, Solidere, the real estate developer, typical of that firm's dominance of the Lebanese bourse.

The Beirut exchange wobbled nervously in 2007 due to the country's chronic political crisis, but still managed to record a 26 percent annual rise. Though that was not as strong as some other Arab bourses, the achievement was quite good considering that the country has become a laggard in both the growth of its economy and the reform and development of institutions. The same pattern looks to be emerging in 2008, as the first week of the year saw shares zooming upward on news of an Arab reconciliation initiative to bring feuding Lebanese factions together. I hope I am proved wrong, but sadly this trend will probably not last and the next few weeks or months will mostly be ones of economic instability coupled with further delays in implementation of much needed reforms.

Though Beirut is an extreme case, a handful of key shares generally tend to dominate individual Arab bourses, partly a reflection of the still-oligarchic nature of their systems. Nevertheless, regional stock exchanges continue to diversify. For example, the 2007 climb in the ASE general share price index was due more to the 31 percent rise in industrial shares than the 14 percent gain in the financial sector, which of course is dominated by the Arab Bank. Another reflection of diversity on the ASE is that among top gainers were shares of media companies, quarrying and mining industries, energy firms and information technology and telecom entities, their sub-indices going up by 81, 70, 59 and 38 percent respectively. Banks also did well, but were not market leaders.

Diversity in the nationality of shareholders is also becoming more of a feature of Arab markets. For example, net foreign investment on the ASE was almost 49 percent of overall market capitalization at end-2007, compared to the 2004 figure of 41 percent; non-Jordanian Arabs' contribution was close to 36 percent while that of others accounted for about 13 percent. Sectorally, non-Jordanian ownership of industry stood at 52 percent while that of the financial institutions was 51 percent and other services 36 percent. Though a more smoothly running stock exchange also helped, these high percentages would have been difficult to achieve under the kingdom's restrictive investment laws of a decade ago, a change toward liberalization paralleled in other Arab countries.

Look for more of the same in 2008.- Published 10/1/2008 © bitterlemons- international.org

Riad al Khouri is visiting scholar, Carnegie Middle East Center, Beirut, and senior fellow, William Davidson Institute, the University of Michigan, Ann Arbor.

<a name="860">Jordan: ASE closes to good cheer
Yusuf MansurThe Amman Stock Exchange (ASE) closed with a big bang in 2007. The surge in activity buoyed by trading in stocks of the relatively large listed companies and trading contracts, enabled investors to recoup some of the losses sustained in 2006 (although 2005 remains the star year as far as the performance of the ASE is concerned). The outlook for stocks in 2008 is mixed albeit positive; however, the overall economy paints a different picture.

The ASE General Weighted Price Index rose by 36 percent and market capitalization increased by 13 percent from the previous year. The number of listed companies expanded from 227 in 2006 to 245 in 2007. Trading volume reached JD12.3 billion (JD=US$1.41, pegged since 1995), a decrease of 13 percent from the trading volume of the previous year, while the number of traded shares increased from 2006 by 9 percent to reach 4.5 billion shares. Market value of the listed stocks in the ASE rose to JD29.2 billion (representing 289 percent of GDP) by the end of the year, a sustained increase of 39 percent over the same period in 2006.

But such a marked improvement in performance is still a far cry from that of 2005, which was a great year for anyone who dabbled in the stock market. In 2005, market capitalization doubled to more than triple GDP, value traded and daily turnover more than quadrupled, number of traded shares doubled, turnover ratio was close to 100 percent, the change in ASE General Weighted Index almost doubled, the price/earnings ratio was up 30 percent and so forth. In short, the market was a jackpot for anyone with some change to spare and spare it they did. Even non-Jordanians, wanting a share of the pie, contributed 45.3 percent of total market investment that year. Accordingly, the stock price index closed in 2005 at 9500 points, compared to 7519 in 2007.

The strong performance of the ASE in 2007 was not in synch with the GDP growth rate, which was lower in 2007 than in 2006, according to initial estimates that place GDP growth at 5.8 percent compared with 6.3 percent in 2006. Such a de- buckling may be viewed as paradoxical if it weren't for the fact that the Jordanian economy is heavily affected by regional developments and the price of oil.

Petrodollars from the Gulf countries have continued to find their way into the ASE as oil prices continued to skyrocket in 2007. Almost half the market capitalization is owned by non-Jordanians, the majority from Gulf countries. Net investment by non-Jordanians increased to JD469 million by November 2007 compared with JD181 million by the end of 2006. Also, non-Jordanian ownership increased to 48.2 percent in 2007, compared with 45.5 percent in 2006.

Another factor that contributed to the growth in the ASE in 2007 had more to do with the deceleration in the real estate market and falling levels of liquidity, which shifted investors from the real estate market to the stock market in search for quick turnaround and short term liquidity gains. Additionally, investors went for the large companies instead of the smaller speculative stocks, an indication that money was being more selective and sophisticated in 2007 than in previous years and that small investors have shied from trading in 2007.

The outlook for the ASE in 2008 remains positive, even though there is evidence that it may be a difficult year for the economy as a whole. One reason for the expected positive performance of the ASE is that inflation will be higher in 2008, which will reflect in higher stock prices. In 2007, the average Jordanian household consumed 20 percent more than it earned, the disparity between rich and poor grew to an alarming rate, and even though prices of oil derivatives were not increased, the prices of other basic commodities, consistent with the world trend, increased in spite of the introduction of some price controls. Also, failing to evaluate the JD against the US dollar added to the inflationary pressure in an economy that is a net importer with a trade deficit that reaches more than half of GDP, the majority of it in currencies that have appreciated against the US dollar.

Inaction by the government will most likely lead to a greater erosion of the purchasing power, increase stock prices, distance small investors from the market, and increase the disparity between those who have and those who have not. A mixed bag indeed.- Published 10/1/2008 © bitterlemons- international.org

Yusuf Mansur is the managing partner of the Envision Consulting Group (EnConsult) and former CEO of the Jordan Agency for Enterprise and Investment Development.





Bitterlemons-international.org is an internet forum for an array of world perspectives on the Middle East and its specific concerns. It aspires to engender greater understanding about the Middle East region and open a new common space for world thinkers and political leaders to present their viewpoints and initiatives on the region. Editors Ghassan Khatib and Yossi Alpher can be reached at ghassan@bitterlemons-international.org and yossi@bitterlemons-international.org, respectively.

When nothing but bluntness will do: Editorial

Religion and Foreign Policy


FPIF's latest strategic focus zeroes in on the role of religion in global affairs. This fall, read about missionaries, monks, and the intersection of monotheism and modernity. Photo: T.C. Davis.

The Israel Lobby exists, Stephen Zunes reports, but has nowhere near the influence that Mearsheimer and Walt claim.

The Catholic Church in Latin America is no longer the only game in town, writes Phillip Berryman.

Missionaries are busy saving souls. But what else do they want to transform, John Feffer asks, and are they standing with the powerful or the powerless?

Religion has permeated the history and politics of Pakistan. Now it's time, Najum Mushtaq argues, to keep religion out of it.

Previous essays: The Story of Religion, Greening the Pews, Liberation Theology Lives On, Dancing in the Earthquake, How and Why to Promote Religion Overseas, Monks Versus the Military, The Theology of American Empire, My Meeting with Ahmadinejad, Neo-Zionism, Religion, and Citizenship, The Religion of Divide and Conquer, Faith and Conflict, Pope Versus President, The Esther Strategy, America's Armageddonites, A Foreign Policy for Foreign Religions

Foreign Policy News and Commentary Update January 10, 2008


Bush Tries Personal Diplomacy In Mideast: President Tries To Solve Israel-Palestine Conflict - Helen Thomas (KITV.com, January 9):
http://www.kitv.com/helenthomas/15015519/detail.html

America vs. Americans - how the rest of the world sees us - Shadi Hamid (Democracy Arsenal, January 8): http://www.democracyarsenal.org/2008/01/america-vs-amer.html

Voinovich goes candid on Bush, Obama, Clinton, Romney, McCain and Giuliani (Update: Obama camp responds) - Stephen Koff (Plain Dealer, January 8): http://blog.cleveland.com/openers/2008/01/...id_on_bush.html

Century Foundation's Best and Worst of 2007: Middle East Developments - Michael Wahid Hanna (Ascribe, January 7): http://newswire.ascribe.org/cgi-bin/behold...08&public=0

Bush's Israel Problem -- And Ours - Ira Chernus (Foreign Policy in Focus, January 8): http://www.fpif.org/fpiftxt/4877

Abroad, fresh image of U.S.: Many see Obama, Clinton successes as fitting the ideals of US democracy and diversity - Robert Marquand (Christian Science Monitor, January 10)
http://www.csmonitor.com/2008/0110/p01s02-wogn.html

Rebranding America Obamania dreaming - Andrew Stuttaford (National Review, January 9): http://article.nationalreview.com/?q=YzA2N...2JhNTBlYmY2MWU=

Europeans watch U.S. elections with heightened interest John Simon (USA Today, January 10)
http://www.usatoday.com/news/politics/elec...nterstitialskip

New U.S. president won't fulfill all Europe's desires - Judy Dempsey (International Herald Tribune, January 10): http://www.iht.com/articles/2008/01/10/europe/letter.php

U.S. levies sanctions on Arab channel: Al Zawraa TV, run by an Iraqi out of Syria, broadcast images of attacks on American soldiers. An Iranian general and two alleged Iraqi militants are also targeted - Paul Richter (Los Angeles Times, January 10): http://www.latimes.com/news/nationworld/wo...267,print.story

Diplomats Give Rice Low Marks - Karen DeYoung (Washington Post, January 8):
http://www.washingtonpost.com/wp-dyn/conte...0703030_pf.html

Survey: Diplomats Oppose Iraq Policy Matthew Lee, Associated Press
(Washington Post, January 8): Nearly half of U.S. diplomats unwilling to volunteer to work in Iraq say one reason for their refusal is they don't agree with Bush administration's policies in the country, according to a survey released Tuesday.
http://www.washingtonpost.com/wp-dyn/conte...0802052_pf.html

Study Puts Iraqi Death Toll at 151,000: Estimate Varies Widely From Previous Reports; Lack of Records Is Hurdle - John Hechinger (Wall Street Journal, January 10): http://online.wsj.com/article/SB1199912965...s_us_whats_news
http://www.csmonitor.com/2008/0110/p99s01-wome.htm

The Lancet's Political Hit Review & Outlook (Wall Street Journal, January 9): Three weeks before the 2006 elections, the British medical journal Lancet published a bombshell report estimating that casualties in Iraq had exceeded 650,000 since the U.S.-led invasion in March 2003. We know that number was wildly exaggerated.
http://online.wsj.com/article/SB1199840878...days_us_opinion

Johns Hopkins' Iraq numbers Editorial (Washington Times, January 8): It would be nothing short of horrific to contemplate 600,000 excess Iraqi deaths as a result of the war. This number, produced by a Johns Hopkins research team shortly before the 2006 midterm elections and published in the British journal the Lancet, continues to be cited in public debate today -- even though the number has never been independently corroborated, and even though reasons to doubt its origins and veracity continue to pile up.
http://www.washingtontimes.com/apps/pbcs.d...mplate=printart

9 US Troops Killed; 250,000 Civilians Dead in Bush's War? Juan Cole (Informed Comment: Thoughts on the Middle East, History, and Religion, January 10): http://www.juancole.com/2008/01/9-us-troop...-civilians.html

A Surge Against Maliki - David Ignatius (Washington Post, January 9): Rather than dumping Iraq's Prime Minister Maliki, the Bush administration hopes to work around him.
http://www.washingtonpost.com/wp-dyn/conte...0803489_pf.html

The Surge Worked - John McCain and Joe Lieberman (Wall Street Journal, January 9): http://online.wsj.com/article/SB1199926654...days_us_opinion

Iran's Provocation - Walter Russell Mead (Wall Street Journal, January 9): If Iran wants a large-scale military conflict with a U.S. that is angry, aroused and united, endangering American naval vessels in the Straits of Hormuz is the right way to get one.
http://online.wsj.com/article/SB1199925660...days_us_opinion

Iran's naked ambitions - Uzi Rubin (Wasington Times, January 8): The Iranians are committed to no less than a fundamental change in the existing world order.
http://www.washingtontimes.com/apps/pbcs.d...mplate=printart

Disaster avoided, but just barely Editorial (Boston Globe, January 9): http://www.boston.com/bostonglobe/editoria...ut_just_barely/

Bush's Mideast Muddle - Michael Oren (Wall Street Journal, January 9): .
http://online.wsj.com/article/SB1199841462...days_us_opinion

Israel's ties that bind: Shared history and values, not the lobby, unite Israel and the U.S. - Mitchell Bard (Los Angeles Times, January 9)
http://www.latimes.com/news/opinion/la-oew...-opinion-center

Changing the Middle East - Helle Dale (Washington Times, January 9): Changing the Middle East has turned out to be even harder than changing the political culture of Washington. Mr. Bush has said that this will be "the work of generations," but will his successor carry the ball forward?
http://www.washingtontimes.com/apps/pbcs.d...mplate=printart

Mr. Bush in the Middle East: The president should make the rescue of Iraq the diplomatic focus of his last year Editorial (Washington Post, January 10)
http://www.washingtonpost.com/wp-dyn/conte...8010803571.html

In The Middle East, No Time To Spare: Bush must push hard for a two-state solution - George Moffett (Christian Science Monitor, January 9)
http://www.csmonitor.com/2008/0109/p09s01-coop.html

Two-pronged approach to peace - Stephen P. Cohen (Boston Globe, January 9): http://www.boston.com/bostonglobe/editoria...o_peace?mode=PF

The Incredible Shrinking Agenda - Dan Froomkin (washingtonpost.com, January 9): http://www.washingtonpost.com/wp-dyn/conte...0901704_pf.html

Bush of Arabia - Fouad Ajami (Wall Street Journal, January 8): http://online.wsj.com/article/SB1199758384...days_us_opinion
Pakistan's sovereignty: The U.S. wants to fight terrorism; most Pakistanis want America to stay away. Whose rights should prevail? Editorial (Los Angeles Times, January 10): http://www.latimes.com/news/opinion/editor...ment-editorials

Dumbageddon: Bush's Delusional Policy Pushes Pakistan to Brink of Catastrophe - China Hand (CounterPunch, January 10)
http://www.counterpunch.org/china01102008.html

Tempting fate in Pakistan Editorial (Boston Globe, January 10): A decision to land US troops on the ground in the tribal areas of Pakistan is almost certain to make that nuclear-armed country more unstable, not less.
http://www.boston.com/bostonglobe/editoria...akistan?mode=PF

Meddling in Pakistan - Simon Jenkins (Huffington Post, January 10): If indeed Pakistan becomes a "failed state", the failure will in large part be one of democratic imagination in Washington and London. We simply refuse to practice what we preach.
http://www.huffingtonpost.com/simon-jenkin...an_b_80902.html

Democracy: inevitable no more -- Defenders of democracy, once the gold standard, now must stand firm to prevail - Madeleine K. Albright (Los Angeles Times, January 8): http://www.latimes.com/news/opinion/commen...omment-opinions

Don’t Forget Foreign Policy - Pierre Atlas, Indianapolis Star
Presidential Wannabes Ignore Perils Abroad - Con Coughlin, London Daily Telegraph
There is Hope for Democracy - Errol Mendes, Ottawa Citizen
Petraeus' Victory - New York Post editorial
The Surge at One - Ralph Peters, New York Post
GOP Surge Protection - Jennifer Rubin, American Spectator
Forging Ties with Iran - Brzezinski and Takeyh, Boston Globe
Gulf Speedboat Guff - Austin Bay, Washington Times
Pakistan, Afghanistan in Tandem - Washington Times editorial
Bush's Mideast Mission - Washington Times editorial
Bush's Mideast Trip - Philadelphia Inquirer editorial
U.S.-Israeli Fault Lines - Barbara Opall-Rome, New York Post
Lebanon in Limbo - Lee Smith, Weekly Standard
An American University in Beirut - Los Angeles Times Q&A
Fears Grow Over Pakistan's Future - The Australian editorial
One Year of Military Rule in Bangladesh - Maneeza Hossain, Weekly Standard
Kenya: Democracy by Other Means - Aidan Hartley, New York Times
Kenya's Woes, Think Britain - Caroline Elkins, Philadelphia Inquirer
North Korea's True Colors - John Bolton, Wall Street Journal
Foul Play at the Pentagon - Diana West, Washington Times
Homeland Security on the Hustings - New York Times editorial
CIA Tapes: No Immunity Deal - New York Times editorial
Wiretap Politics - Wall Street Journal editorial
Waterboarding and its Discontents - Paul Greenberg, Washington Times
Hollywood Misconstrues the Cold War, Again - John Podhoretz, Weekly Standard

Iran: Bush's Tonkin Gulf Tale Unravels
by Gareth Porter, IPS News

http://www.atimes.com/atimes/South_Asia/JA12Df01.html
Pakistan takes a step backwards
By Syed Saleem Shahzad

KARACHI - At a time when Pakistan's national decision-making institutions are suspicious of international plans to make the country's nuclear program controversial, there is serious consideration for repositioning the country's foreign policy as neutral in the United States-led "war on terror".

This would mean non-interference in the restive tribal areas on the border with Afghanistan. These are virtually autonomous areas where Taliban and al-Qaeda militants have established bases andvital supply lines into Afghanistan.

Such a move would have devastating effects on the North Atlantic Treaty Organization's (NATO) efforts to control the ever-growing insurgency in Afghanistan.

Following a meeting of the Pakistan corps commanders headed by the new chief of army staff, General Ashfaq Kiani, a press release said there would be a review of the situation in the tribal areas and, instead of citing any plans for military operations there against militants, the release said the military's decisions would be based on "the wishes of the nation".

Islamabad's rethink has been prompted by the violence and political crisis resulting from the assassination of former premier Benazir Bhutto in Rawalpindi last month. In turn, this has fueled intense speculation in the Western media of the possibility of Pakistan's nuclear arsenal falling into the hands of militants.

Most recently, Mohamed ElBaradei, the head of the United Nations' atomic watchdog, the International Atomic Energy Agency, voiced concerns over the this possibility. "I fear chaos ... an extremist regime could take root in that country, which has 30 to 40 warheads," ElBaradei told the pan-Arab daily al-Hayat.

Such comments are viewed in Pakistan's strategic quarters as deliberate mischief on the part of the West. On the one hand it insists that Islamabad come down hard on militancy, but when this is done, the militants react against the government. The West then points to the problem of rising extremism and projects the danger posed to Pakistan's arsenal.

The former chief of the powerful Inter-Services Intelligence and former ambassador to Saudi Arabia and Germany, retired Lieutenant General Asad Durrani, told Asia Times Online, "I don't consider such statements [about Pakistan's nuclear arsenal] even worth commenting on. These are settled issues, any debate on settled issues is unnecessary. Washington is aware of the mechanisms for the protection of those weapons. There is no need to react. Reactions only generate confusion and there is no need to be confused about Pakistan's nuclear arsenal. It is in safe hands."

Durrani, who regularly attends international sessions of British and American policy think-tanks, said Pakistan's military operations in the tribal areas as a part of the "war on terror" had resulted in problems in Pakistani cities.

When asked about the corps commanders' conference and the possibility of peace dialogue between the tribals and the government instead of military operations, Durrani said, "I don't know about the exact agenda of the conference, but you can't tell me of any disagreement anywhere in the country that Pakistan should shun military operations and initiate dialogue."

Durrani, who participated in the joint Pakistan-Afghanistan peace efforts in the Pakistani city of Peshawar last year, continued, "Nobody is in favor of operations, not even those who are actually doing the operations. Even people from [the port city of] Karachi, who are considered ultra-liberal [are against operations] and on the Lal Masjid [Red Mosque] operation, I found them calling it irrational." Durrani was referring to security forces storming the radical mosque in Islamabad last year to root out militants.

Should Pakistan scale down or halt its operations in the tribal areas, where it has thousands of troops, the US might be forced to act. Reports have been swirling for some time of US plans to undertake aggressive covert operations inside Pakistan.

The George W Bush administration is concerned over intelligence reports suggesting that al-Qaeda and the Taliban are intensifying their efforts to destabilize the Pakistani government. Reports say that US Secretary of State Condoleezza Rice, Vice President Dick Cheney and top national-security advisers recently met to discuss the proposal, which is part of a broad reassessment of US strategy following the death of Bhutto. Bhutto had been promoted by Washington as an acceptable liberal face to soften the image of President Pervez Musharraf and his administration.

The meeting also discussed how to handle the period from now to the February 18 general elections and the aftermath of those elections. Several of the participants are said to have argued that the threat to the Musharraf government is now so grave that both he and Pakistan's new military leadership are likely to give the United States more latitude. Asia Times Online investigations suggest that Pakistan might submit to US demands and conduct operations in the tribal areas, but they will be half-hearted at best.

Maulana Fazlur Rehman, former leader of the opposition in Parliament and probably the most fervent pro-Taliban cleric in the country, told Asia Times Online, "We are hearing a lot of news about operations in the tribal areas. Everybody is talking about the mobilization of troops in the coming days for an extraordinary military operation in Waziristan [tribal area] which would amount to an all-out war.

"A logical outcome of this would be a delay in the election process. But believe you me, we are experiencing an extremely normal situation in the tribal areas, especially in Waziristan. Everything is normal and I don't sense any operations from the Pakistani army. I cannot talk about the American initiative, but as far as the Pakistani army is concerned, I don't see any escalation."

Rehman is head of the Jamaat-ul-Ulema Islam Pakistan (Islamic Party of Religious Leaders) and was the main driver behind the peace agreements of 2006 between the Pakistan Taliban and the government, and he also mediated British- and US-sponsored peace efforts between the Taliban and NATO troops in Afghanistan. These resulted in an agreement to start jirgagai (small tribal councils) which would for the first time give the Taliban representation. The process was stopped when the Pakistani military began intensive operations to combat militancy in the Swat Valley in North-West Frontier Province towards the end of last year.

"Though the government has not contacted me for any mediation, I tell you that I don't foresee any operations in the tribal areas - if it happens, it would be a result of immense US pressure - and there is no indication that Pakistan wants that," said Rehman.

"This has been our principle position, that peace should be given a chance and that's why my party and I have always tried for reconciliation. However. I feel that some vested interests don't want peace in the region," Rehman responded when asked about the chances of successful dialogue between the Taliban and NATO.

"Military operations in Pakistan and Afghanistan have only bred extremism. Pakistan should avoid that. The West should learn the lessons of British India days, when the empire stayed away from the tribal areas and even signed an agreement for the independent nature of the tribal areas, and Pakistan also abides by the same agreement with the tribes," Rehman said.

Ironically, while the US is talking about military operations against al-Qaeda and the Taliban, and Pakistan is leaning towards peace accords, al-Qaeda itself is against any peace overtures in the tribal areas. This, in a sense, puts al-Qaeda and the US on the same side. A few days ago, al-Qaeda killed nine tribal leaders trying to make peace agreements.

A senior security analyst commented to Asia Times Online, on the condition of anonymity, "Pakistan is once again at a strange crossroad where its national interests are at stake. We have been under immense US pressure because of which we abandoned our national Afghan policy [support for the Taliban]. We don't actually have any option because of the huge American pressure. But it should be recalled, we didn't actually succumb on the Kashmir issue. We did compromise in our support for the armed opposition of Kashmiris against Indian forces, but not completely. And I think this is the time for us to reconsider our options and priorities in the region."

Washington may be in the process of losing a friend.

Syed Saleem Shahzad is Asia Times Online's Pakistan Bureau Chief. He can be reached at saleem_shahzad2002@yahoo.com

(Copyright 2008 Asia Times Online Ltd. All rights reserved. Please contact us about sales, syndication and republishing.)

Bin Laden turns heat on Saudi Arabia
By Michael Scheuer
http://www.atimes.com/atimes/Middle_East/JA12Ak03.html

Al-Qaeda leader Osama bin Laden's latest message is one of the richest, most comprehensive and starkly realistic he has issued since the start of the Iraq war. This essay considers al-Qaeda's dour recognition of its inability to control post-occupation events in Iraq as a small vanguard organization and a non-Iraqi presence in the country.

On December 29, 2007, bin Laden issued a 56-minute statement that addressed Muslim insurgents in Iraq [1] and built on his earlier message from October 22 [2]. The new statement was issued via al-Qaeda's media arm, al-Sahab, and appeared on several Internet sites without pre-publication excerpts on al-Jazeera television. Al-Jazeera's editing of the October 22 audiotape distorted bin Laden's message, incorrectly giving the implication that he was saying "all is lost" for the mujahideen in Iraq [3]. Al-Jazeera customarily deletes anything critical of the Saudi regime from bin Laden's messages. This occurred in the case of the October 22 tape and al-Qaeda apparently did not want to take a chance on al-Jazeera's penchant for politically correct editing with its most recent message [4].

Focus on Iraq
The latest bin Laden tape is - like its October 22 predecessor - pre-eminently a post-Iraq war tape. In both tapes, bin Laden declares that the United States recognizes that its Coalition has been militarily defeated in Iraq and predicts that US and other foreign forces will leave. Bin Laden does not provide the date US-led forces will withdraw; he focuses his attention on working with Islamist insurgents in Iraq to ensure the Americans and their Arab-government allies cannot build a national unity government that is an "agent to America", dominated by non-Islamists and ready to permit the US basing rights and access to Iraqi oil.

Because US-led forces have accepted military defeat, bin Laden argues, Washington and its allies must look for other means to prevent the consolidation of an Islamic state in Iraq. "My talk to you," bin Laden explained, "is about the plots that are being hatched by the Zionist-Crusader alliance, led by America, in cooperation with its agents in the region, to steal the fruit of the blessed jihad in the land of the two rivers, and what we should do to foil these plots."

History's lesson
As always, bin Laden speaks as a product and close observer of the Afghans' jihad against the Soviet Union. In appealing for unity among the Iraqi mujahideen, he makes no demand that they join al-Qaeda and follow its instructions. He points rather to the failure of the Afghan insurgents to consolidate victory after the Red Army's 1989 withdrawal: "It would be useful here to recall an effort in the past to unify the leaders of the Afghan mujahideen, which includes important lessons that are related to our topic," bin Laden tells the Iraqi fighters in an almost avuncular tone.

We had made these efforts with Sheikh Abdullah Azzam [bin Laden's late Palestinian mentor in Afghanistan], may God have mercy on him. After months of seeking to achieve unity among [the Afghan leaders] and removing the obstacles that some of them used to claim that they obstruct unity, [but then] after removing these obstacles...they [would] claim that there was another obstacle [preventing unity], and so on and so forth... One of the mujahideen had a strong opinion about these [obstructing] leaders. He was an old wise person who had long experience in life with people. At the time we used to reject his strong-worded statement about them. I will try to convey to you some of what he said. The conclusion is that those leaders are tradesmen who care more about their leadership and give priority to their personal interests over the cause. We used not to believe what he said about them. This has delayed our realization of the sound conception of persons and events [presented by this mujahid]. The harmful consequences of this are no secret ... In fact, developments have come to confirm things that we had never expected due to the fact that we were young and lacked experience at the time.

In Iraq, Riyadh is the main enemy
Bin Laden urges the Iraqi fighters to heed the lesson of the Afghans' historic post-Soviet debacle because "the same thing applies to Iraq today"; leaders are more interested in their own power and status than in making Islam and the ummah (Islamic community) victorious. And while bin Laden warns that Washington is using promises of money, military training and arms to entice the "Islamic Party and some fighting groups [to] support America against Muslims", he leaves no doubt that the Islamists' main enemy in Iraq is now Saudi Arabia, not the supposedly militarily defeated United States. After the Soviets' withdrawal from Afghanistan, bin Laden reminded the Iraqi fighters that "America exerted great efforts ... to convince the Afghan leaders through the governments of Riyadh and Islamabad to join a national unity government with communists and secularists from the West." Bin Laden explained that the Saudi regime was then - and is again today in Iraq - the main enemy of the mujahideen:

[In post-Soviet Afghanistan] the government of Riyadh sought the help of its unofficial scholars to infiltrate the ranks of the mujahideen. These were influential speakers who incited the people to perform jihad and collect huge funds for the leaders of the mujahideen. At the set time, [the Saudi regime] asked the Afghan leaders to unite with the communists and secularists under the so-called national unity state. [The Saudis] obstructed the plan to achieve unity among the leaders of the mujahideen when they tempted one of them with a big amount of money and promised him to be the president of Afghanistan ... We do not have much time here for more details. So the current situation [in Iraq] is similar to the past one [in Afghanistan]. The government of Riyadh continues to this day to carry out the same malicious roles with many Islamic action leaders and commanders of the mujahideen in our nation [5].

Bin Laden goes on to claim that the Saudis are trying to co-opt some of the Sunni mujahideen in Iraq by allowing "some groups to confidently move in the Gulf to receive [financial] support". Riyadh is careful to avoid officially funding its Iraqi insurgent favorites, so its support "is channeled under the banner of raising donations by some unofficial scholars and preachers". Bin Laden warns that "many of them ... are loyal to the state and seek to implement [Riyadh's] policy by pulling the rug from under the honest mujahideen's feet" and forcing them to support a national-unity government that is designed to be the agent of the United States and Saudi Arabia.

He asks the Iraqi mujahideen how they can trust Saudi King Abdullah, who is the "malignant foe" of Islam, the "main US agent in the region" and a man who took it on himself "to tempt and tame every free, virtuous, and honest person with the aim of dragging him to the path of temptation and misguidance ... [and] the path of betraying the religion and nation and submitting to the will of the Crusader-Zionist alliance". The Americans are defeated, bin Laden concludes, but to assure God's victory the Iraqi mujahideen must reject Saudi overtures and direction if they are "not to waste the fruit of this chaste and pure blood that was shed for the sake of consolidating religion and entrenching the state of Muslims".

A way out?
Bin Laden and his senior lieutenants are reliving what for them is a familiar nightmare. In one of the greatest ironies of the post-1945 era, Islamist fighters have proven that with great, prolonged and bloody effort they can claim the military defeat of superpowers - the USSR and the United States - but cannot consolidate victory when confronted by the wiles, funds and religious establishment of the Saudi leadership. While it is clear in the December 29 tape that bin Laden rates the Saudis as the main obstacle to God's victory in Iraq, there is little indication of what he intends to do to destroy Riyadh's ability to stymie the mujahideen there as it did in Afghanistan.

One possibility - though bin Laden did not allude to this - would require a rethinking of al-Qaeda's grand strategy. Although bin Laden and al-Qaeda have been consistent in their three-fold grand strategy - to drive the United States from the Muslim world, destroy Israel and incumbent Muslim regimes and settle scores with the Shi'ites - they now face a situation where the Saudi regime has not only so far prevented the unification of Islamist leaders, but is allegedly preparing the Sunni Iraqi insurgents it supports for a civil war with Iraq's Iranian-backed Shi'ites.

Bin Laden, of course, is correct in arguing that Riyadh wants no genuine national-unity government; the Saudis may be intending to fund and equip a Sunni insurgent force that could join forces with the US-armed and trained Sunni Awakening Councils to battle for control of post-US Iraq against the Shiites and seek the establishment of a Saudi-like Sunni theocracy in Baghdad. If this occurs, the third step of bin Laden's grand strategy - settling scores with the Shi'ites - will immediately become the top priority of the Islamic world, as both Sunnis and Shi'ites focus on assisting their brethren in the Iraqi civil war. This scenario would severely erode bin Laden's ability to keep Sunni militants focused on the "far" US enemy.

If bin Laden's assertions are true, and Saudi Arabia's Afghanistan-like intervention in Iraq continues to prevent the mujahideen unity bin Laden advocates, the al-Qaeda chief and his shura (consultative) council may soon confront the very unpalatable necessity of having to break with their traditional grand strategy and move to try to destroy the Saudi regime.

In such a scenario, al-Qaeda would abandon the pinprick insurgency-and-terrorism campaign it has conducted in the kingdom since September 11, and employ all the force it commands and can incite there—and bring in from Iraq - to take on the well-infiltrated Saudi military and security services. Such a campaign probably would combine attempts to assassinate the king, the interior minister and senior intelligence and military officials with attacks to disrupt Saudi oil production.

The latter operations would be staged in the hope of forcing Washington to a Hobson's choice between standing back and allowing havoc to reign in the world's oil market - with the immense damage it would entail for the US economy - and ordering US military forces into action against Muslims in order to restore oil production on the sacred soil of the Prophet Mohammad's birthplace and what bin Laden refers to as "the land of the two holy mosques".

The foregoing clearly is not an option that al-Qaeda is eager to undertake; it is an option that amounts to an almost desperate gamble. But that said, if such a campaign successfully triggered a US military response in the kingdom, the focus and militancy of the entire Muslim world - both Sunni and Shi'ite - would be switched from Iraq to Saudi Arabia, and the enmity and weapons of all Muslims would, at least temporarily, be refocused on the "far enemy" in North America.

Notes
1. Osama bin Laden, "The Way to Foil Plots", al-Sahab Media Production Organization, December 29, 2007. All quotes from bin Laden in the text are from this statement unless otherwise noted.
2. Osama bin Laden, "A Message to Our People in Iraq", Threat and Claim Monitor, IntelCenter.com, October 22, 2007.
3. Al-Jazeera, October 23, 2007. By censoring bin Laden's statement, al-Jazeera unwittingly seems to have done al-Qaeda a great service. The "all-is-lost" message yielded by al-Jazeera's editors has become the common wisdom among Western media and governments, thereby obscuring for those entities the fact that bin Laden was discussing how all Iraqi insurgents should proceed to consolidate Islam's victory over the United States and its allies in Iraq.
4. Al-Jazeera's editing earned it some outrage and condemnation from Islamists. See, for example, Bilal al-Khaldi, "And thus Osama's message has gone to waste. An invitation to a proactive response." Islamic al-Fallujah Forums (Internet), November 16, 2007.
5. Bin Laden says that the Saudi effort to prevent post-Soviet Afghan unity was led and managed by "the Riyadh intelligence chief", who was at the time Prince Turki al-Faisal. This is the same Prince Turki who - while serving as the Saudi ambassador to the United States - unexpectedly and hurriedly departed Washington in early 2007 when a Sunni-Shi'ite civil war seemed imminent in Iraq. Not much has been heard from Prince Turki since his departure, but if bin Laden's claims about the current Saudi campaign to co-opt Iraq's Sunni mujahideen are true, it is hard to imagine anyone more qualified by past experience to lead the effort than Prince Turki.

Michael Scheuer served as the chief of the bin Laden Unit at the Central Intelligence Agency's Counterterrorist Center from 1996 to 1999. He is now a senior fellow at The Jamestown Foundation.



(This article first appeared in The Jamestown Foundation. Used with permission.)

(Copyright 2008 The Jamestown Foundation.)

In Bhutan, China and India collide
All's not well in Shangri-la. As the world's newest democracy, the Himalayan Kingdom of Bhutan has earned high praise from around the globe, but as the country's first elections come to a close the new government has to determine whether the country will stand on its own or become caught between the expanding powers of China and India. - Mohan Balaji (Jan 11, '08)

Ants and pyramids: China scams abound
It was a pyramid scheme with Chinese characteristics that suckered more than a million investors who thought a US$1,300 box of ants would make them a fortune. Its collapse led to the one thing China's leaders fear most, "social unrest" in the form of a demonstration turned riot. Now the authorities are taking official notice of scams. - Kent Ewing (Jan 11, '08)

A man-made storm in a strait
The incident involving Iranian speed boats and three US Navy vessels has served well to keep the pressure on Iran as being a threat. Yet new evidence suggests the "confrontation" did not involve any menace to the US ships and that no US commander was on the verge of firing at the Iranian boats. - Gareth Porter (Jan 11, '08)

US beats a Middle East policy retreat
With its "new Middle East" policy in tatters, the US is attempting to readjust some of its positions. But the US failures - both military and moral - have led the region's capitals to re-examine their priorities, even as President George W Bush comes knocking at the door.(Jan 11, '08)

Indians in China feel left out
The Indian diaspora is 25-million strong, but only some 20,000 live in China. This could explain why Delhi failed to fete them at its annual celebration for overseas Indians, even though the small but growing Indian community in China can help change cultural perceptions of Indians. - Sudha Ramachandran (Jan 11, '08)

Captain Ahab and the Islamic whale
Unremitting rhetoric from the George W Bush administration, compounded by the "incident" in the Persian Gulf involving Iranian speed boats and the US Navy, has unquestionably resulted in "mounting tensions with Iran". Against this backdrop, Bush's seven-nation Middle East trip is aimed to yield a gainful harvest in terms of coalition-building against the "Iran threat". - Kaveh L Afrasiabi (Jan 10, '08)

COMMENT
The three Rs: Rivalry, Russia and 'Ran
The declining United States-Russia relationship (and that of Europe and Russia) does not occur in a strategic vacuum. If the US wants to calm Iran's nuclear ambitions, it is going to need to brush up on its diplomatic basics. This means that Moscow has to be convinced its long-term interests are best served by full-fledged cooperation with the West. - Robert D Blackwill (Jan 10, '08)

Pakistan wrestles with a 'soldier of peace'
Suspected in the assassination of Benazir Bhutto and blamed for 80% of last year's suicide bombings in Afghanistan, 34-year-old Pakistani Taliban leader Baitullah Mehsud is a jihadi on the move. He's said to command 20,000 fighters and is being called al-Qaeda's triggerman in the strategic border region with Afghanistan. (Jan 10,

Peace and Security
Revisiting Intelligence Reform
Tim Shorrock
Congress and the next president must take U.S. intelligence agencies away from the Pentagon and put them under civilian control.
Empire and Nuclear Weapons
Joseph Gerson
The United States has used its nuclear weapons in many ways. Like cannibalism and slavery, however, nuclear weapons can be abolished.
Beyond the Green Zone
Dahr Jamail
An honest look at Iraq and the U.S. occupation from an unembedded journalist.

For an Iran Policy, More Nixon, Less Bush
Nathan Gonzalez
Jan 10, 2008

Barack Obama on the Middle East
Stephen Zunes
Jan 10, 2008

Letter to South Korea's New President
John Feffer
Jan 9, 2008

Iraq Outlook 2008
Erik Leaver
Jan 9, 2008

Unfinished Debate on Iraq - New York Times editorial
A War Report Discredited - Jeff Jacoby, Boston Globe
Implications of New Kurdish-Sunni Alliance - Ramzy Mardini, Jamestown Foundation
Standing Strong on the Home Front - New York Daily News editorial
A Cornered Foreign Policy - Weber and Jentleson, Los Angeles Times
U.S. Enemies Excel at Bumbling - Mark Bowden, Philadelphia Inquirer
Hotheads of Hormuz - Oliver North, Washington Times
Peace Promise - National Review editorial
A Middle East Commitment - Washington Post editorial
Latin America Is Lagging - Andrés Oppenheimer, Washington Post
Colombia: Miscue on a Rescue - Ray Walser, Washington Times
Kenya's Stolen Democracy - Chicago Tribune editorial
A Terror-able Ruling - New York Post editorial
Using Terrorists to Fight Terrorism - Joshua Kurlantzick, Baltimore Sun
A Terror Threat in the Courts - John Farmer, New York Times
Crucial Cold War Secret - Paul Kengor, Washington Times
MOD: A Dereliction of Duty - London Daily Telegraph editorial
China's Dark Triumph - Ian Buruma, Los Angeles Times
Ten Rules for No. 44 - Madeleine Albright, Boston Globe

Foreign Policy News and Commentary Update January 13, 2008

Foreign Policy News and Commentary Update January 13, 2008

Best and Worst America This Week - Rami G. Khouri (Agency Global, January 9): American military bases, secret prisons, outsourced torture chambers, and covert operations around the Arab world and Asia are expanding at a rapid rate, while American democracy activists and public diplomacy officials are widely viewed around the region as anathema.
http://www.agenceglobal.com/Article.asp?Id=1449

Our Pakistan Problem: Turmoil Requires a Shift in U.S. Policy - Brian Katulis, Caroline Wadhams (Center for American Progress, January 11): The US government has overemphasized military solutions to fighting terrorism, and has not focused sufficiently on democracy promotion, economic development, and public diplomacy.
http://www.americanprogress.org/issues/200...html/print.html
Baghdad Embassy Is Called A Fire Risk: 'Serious' Problems Were Ignored, Says State Dept. Official - Glenn Kessler (Washington Post, January 12): Originally expected to be completed by July 1, 2007, at a cost of $592 million, the largest U.S. diplomatic mission in the world has been plagued by poor planning, shoddy workmanship and design changes that have added to the cost. .
http://www.washingtonpost.com/wp-dyn/conte...1103772_pf.html
For U.S., The Goal Is Now 'Iraqi Solutions': Approach Acknowledges Benchmarks Aren't Met - Thomas E. Ricks and Karen DeYoung (Washington Post, January 10): With little progress in Iraq, U.S. officials in Baghdad now are simply looking for something that works, frequently spotlighting the Iraqi government's top economic milestone -- passing a national budget and spending some of the appropriated funds.
http://www.washingtonpost.com/wp-dyn/conte...0903701_pf.html
Promises, Promises - Dan Froomkin (washingtonpost.com, January 10): rather than admit the surge in Iraq has failed in its primary task (political reconciliation), Bush is calling it a success. It's not just the surge in Iraq; Bush's predictions about the Middle East in general have been almost uniformly wrong.
http://www.washingtonpost.com/wp-dyn/conte...1002194_pf.html

Normalcy returns to Baghdad, block by block - Richard Tomkins (Washington Times, January 13)
http://www.washingtontimes.com/apps/pbcs.d...mplate=printart
A war report discredited - Jeff Jacoby (Boston Globe, January 13): There was great interest when the British medical journal Lancet published a study in October 2006, three weeks before the midterm US elections, reporting that 655,000 people had died in Iraq as a result of the US-led war. But the truth, it turns out, is that the report was drenched with politics, and its jaw-dropping conclusions should have inspired anything but confidence, as demonstrated by a cover story last week in the National Journal.
http://www.boston.com/bostonglobe/editoria...redited?mode=PF National Journal article at
http://news.nationaljournal.com/articles/databomb/index.htm

Gross Distortions, Sloppy Methodology and Tendentious Reporting: How the New England Journal of Medicine Undercounted Iraqi Civilian Deaths - Andrew Cockburn (CounterPunch, January 12): A new result compiled by the Iraqi Ministry of Health under the sponsorship of the World Health Organization and published in the once reputable New England Journal of Medicine, (NEJM) estimate the number of Iraqis murdered, directly or indirectly, by George Bush and his willing executioners at 151,000 -- far less than the most recent Johns Hopkins estimate published by the Lancet magazine. The new report is guilty of sloppy methodology and tendentious reporting -- evidently inspired by the desire to discredit the horrifying Hopkins/Lancet findings, which, the NEJM study triumphantly concludes, "considerably overestimated the number of violent deaths".
http://www.counterpunch.org/andrew01122008.html
Lancet report at
http://www.thelancet.com/webfiles/images/j...73606694919.pdf
Unfinished Debate on Iraq - Editorial (New York Times, January 13): The United States must be prepared to use military force to pre-empt another attack on American soil. In Iraq, Mr. Bush went much further, invading a country that he imagined might someday pose a threat to the United States -- not pre-empting an imminent threat but preventing the possibility of a threat. To justify his actions, he persuaded Americans that Saddam Hussein had chemical, biological and, especially, nuclear weapons programs -- a claim that proved to be specious.
http://www.nytimes.com/2008/01/13/opinion/...agewanted=print

Iran Shows Its Own Video of Vessels Encounter in Gulf - Thom Shanker and Nazila Fathi (New York Times, January 11)
http://www.nytimes.com/2008/01/11/world/mi...agewanted=print
US Video of Iran Speedboats Doctored; Iranians Charge Fabrication Juan Cole (Informed Comment: Thoughts on the Middle East, History, and Religion, January 11): The Bush administration's assertion that 5 small Iranian boats confronted big, well-armed US ships in the Straits of Hormuz and threatened to blow up the American vessels is looking more and more like a serious error if not a Republican Party fabrication. http://www.juancole.com/2008/01/us-video-o...ats-flawed.html
Gulf speedboat guff - Austin Bay (Washington Times, January 11): The best long-term U.S. strategy toward Iran is political and economic -- encouraging an active domestic political opposition to Iran's clever religious leaders while whittling away at the clerics' graft-crammed Swiss bank accounts.
http://www.washingtontimes.com/apps/pbcs.d...mplate=printart

Will Naval Incident Undermine Bush's Iran Message? - Trita Parsi (antiwar.com, January 10): The idea of an US-Arab-Israeli alliance being formed to counter Iran's rise -- a key impetus for President Bush's Mideast tour -- seems more farfetched than ever. In this context, the incident between five Iranian vessels and three US Naval ships in the Strait of Hormuz this past Sunday may not, as the Bush administration may have hoped, clarify the threat Iran poses to the region.
http://www.antiwar.com/ips/parsi.php?articleid=12184

Bush Fails Again Charley Reese (antiwar.com, January 12): Bush